Tuesday, January 31, 2012

The Elephant in the Middle East

I just had the experience of earning the dislike of an ambassador from a major a trading nation. It happened at a lecture oragnised by the Institute of South Asian Studies (ISAS), on the topic of the Non-Proliferation Treaty, the cornorstone of the world's rules regarding nuclear energy. The lecture was conducted by His Excellency, Mr Oliver Caron, the French Ambassador.

The lecture itself was factual. His Excellency outlined what the treaty was about and described his views on where he thought things would be going. Then, question time came and things got interesting. Mr Ameer Jumabhoy, sicon of one of Southeast Asia's most prominent families brought up the issue of the “Elephant in the Middle East.” Mr Jumabhoy brought up the much valid but unmentioned point that while much has been made of Iran's alleged threats to “wipe Israel from the face of the earth,” and it's alleged attempt to gain nuclear weapons, nobody ever mentioned the fact that Israel has nuclear weapons and happily steals land with the blessings of the West.

His Excellency reffused to answer Mr Jumabhoy, dismissing what he said as a matter of opinion rather than a question. At that point, I phrased what Mr Jumabhoy had said into a question and then made the point that Western Powers, lead by the USA have been notoriousl quick to send troops into the Middle East against people who may have nuclear weapons but have very keen to negotiate with Asian states that openly test nukes and make it clear that they have every intention of using them. His Excellency fudged the issue and avoided getting into a long conversation with me or Mr Jumabhoy during the tea reception.

To be fair to His Excellency, addressing the issue of Israel's nuclear arsenal is tricky for Western Nations. Israel has mastered the art of controling powerful interest groups in Western Nations and in a wonderful exhibition of political judo, the Jewish Nation has turned the victimisation of the Jewish people at the hands of various European Nations through various times in history into an asset. When the European Nations started complaining about Israel's behaviour during the Second Intifada of the late 1990s, Shimon Peres, who was then foreign minister in Ariel Sharon's government, flew to Europe to remind the various European Head of Governments to remember their history against the Jewish people. The then foreign minister of a small desert nation with no resources to speak off was like a school master to a group of naughty boys towards the heads of governments of a group of the world's largest trading nations.

Like their American counterparts, European politicians criticise Israeli policies at their peril. When former Malaysia Prime Minister, Tun Dr Mohammed Mahathir made his 'infamous' remarks about Jews controling the world by proxy at the Organisation of Islamic Nations Conference (OIC), in 2003, the Europeans, lead by the US State department condemed him for being “Anti-Semetic.” Ironically, the condemnation by the West proved what many in the East suspected – the good doctor was right.

How serious is this? Well, it doesn't take a genious to realise that the Western World, which has shapped much of the rest of the world, is in a dilema. This is particularly true in an age where the Western World, lead by the USA has positioned itself as the “Guardian of Global Morality.” World Peace is basically “Pax Americana,” or peace and prosperity underwritten by America and the Western World that it leads.

Let's start with some obvious pointers. The West, especially America, has on the whole been a force of good. Even the rise of China and India has been fueled by American ideals and even in the most rapidly Anti-American parts of the Middle East, young people cannot wait to go to school in America or American institutions in the region.

Let's also aknowledge the fact that Europeans nations did commit attrocities against the Jewish people. Hitler's Germany masacred six million of them but that's not only case of Jews being abused. Russia for example has had a long history of having progroms against Jews.

The modern state of Israel is also a wonderous invention. Despite having no resources in a desert, Israel has managed to become an agricultural powerhouse and its economy built by an army of dynamic technology start-ups has given Israel a very boyant economy, despite the fact that Israel has been in a constant State of War since its inception. Small, dynamic Israel is particularly shinny when compared to the vast amount of poverty and illiteracy in its neighbours.

Having said all of that, it does not excuse actions by Israel, which are blatantly illegal and the Western World becomes complicit in Israel's crimes when it either ignores them or defends them – who can forget the image of Condoliza Rice proudly talking about “The Birth Pangs of a New Middle East,” as Israel proceeded to bomb Lebanon back to the “Stone Age,” back in 2006.

The facts of International Law are that Jewish Settlements in the West Bank and Gaza are illegal. The same is true of Israel's hold on the Golan Hights. Yet, no American or European nation has made a public criticism of continued land-grabs and building of illegal settlements. American politcians have even gone as far as condeming Israeli politicians who tried to do the right thing under International Law (Pat Robinson openly declared Ariel Sharon's coma as a punishment from God in retaliation for Sharon's removal of illegal settlements from the Gaza Strip). How does a neutral observer not come to the conclusion that the Western World endorses a violation of the same international law its trying to uphold when it kicks Sadam Hussein out of Kuwait for invading Kuwaiti soverignty but happily encourages Bibi Nethanyahu to build settlements in land that nobody recognises as Israel.

Much is made of the fact that Israel is “The ONLY democracy” in the Middle East. Yet when the Palestinians elected Hamas to their Parliament in 2006 in an election established as “fair” by international observers, the Western World lead by the USA couldn't place sanctions on the Palestinians fast enough. Funnily enough, the Western World hasn't made life for “the good” Palestinian in the shape of President Mahmoud Abas any easier either. The Palestinians who follow Hamas are branded as terrorist and placed under sanctions. The Palestinians who follow Abas are merely squeezed out of their homes as Israel continues to grab more of their land for illegal settlement building – either way the Palestinians are screwed.

As a neutral observer, it's virtually impossible not to see why the Palestinian people are frustraed and angry and very willing to take things out on the West. When they break a law its called terrorism. When the Israeli side breaks it, its called “righteous self-defence” and the West, lead by the USA endorses genocide. Khalid Almaeena, the former editor of Arab News summed it up best when he said:

“When you say Hezbollah and Hamas, you MUST say backed by Iran. When you say Israel you are not allowed to say backed by USA and UK.”

These examples are only enforced by the nuclear issue. Today, the world is making a song and dance of the Doomsday scenario of Iran ever getting hold of weapons grade plutonium. Say what you like about the regime in Tehran but it has signed up to the NPT and IAEA. Iran for all its faults has signed up to play by international rules and international rules also provide Iran with scope to do certain things. Yet, despite all of this, every Western Politician can't place sanctions on Iran quickly enough and every candidate in the upcomming American Presidential Election is declaring “ALL Options are on the table.”

By contrast Israel has not signed a single treaty – hence the Israeli's have exempted themselves from playing by International Rules. Israel's official stance is, “We neither admit nor deny.” Former US Defence Secratery Robert Gates was slapped by the media for suggesting that Israel had Nuclear Weapons. In Israel's case there is no obligation to play by the rules and the Western world is perfectly fine with that.

I can be branded as an “Anti-Semite” for pointing these facts out. Yet, how does a reaonable mind not come to the conclusion that “Western Fairness” is exceedingly selective when it comes to dealing with Israel? Its terrorism when Palestinians vote for Hamas but its democracy in action when Israel has Avigdor Liberman as a deputy Prime minsiter.

Nobody has ever said that Israel does not have the right to self-defence. However, why is it such that Israel's right to self-defence includes ownership of Weapons of Mass Destruction and theft of land that it does not own. If the West endorses theft and violations of international law in the case of Israel, how does it claim any moral right to police the world and administer International Justice.

During September 11, 2001, many Americans were shocked that someone wanted to damage them. In the American mindset, they are the good guys. Americans could not get it round their head that someone would want to hurt them. To a large extent Americans are right, they are good people. However, when you look at the crimes they've endorsed by Israel, its clear why this group of people have an issue with the USA and the Western World.

I think of President Obama's former pastor, the Rev Jeremiah Wright, who quoted an American Ambassador to Iraq who said that “America's Chickens had come home to roost.” The man was villified as a “nut job.” This is a pity, Rev Wright makes sense and has a good grasp of issues and if his views are adapted by American and other Western politicians, we might find that the Elephant in the Middle East gets smaller and may become more bearable for the rest of the world.

The youtube clips of Rev Wright's speeches. Tell me if you think this is a nut job or as close to a sensible Godly man as America gets?


Wednesday, January 11, 2012

The World's Local …......

If I had to give an opinion on what I thought was one of the world's best advertising campaigns in recent years, I'd have to say it is HSBC's (Hong Kong Shanghai Banking Corporation), “The World's Local Bank.” This simple slogan not only made good advertising – but it was also a beautiful business strategy. This London based bank showed that it understood the way the world was going, namely the old fashioned human desire to deal with people like you but at the same to deal with someone who knew the world.

This HSBC campaign reminds me of one of the more commonly discussed topics of university days – namely the issue of “glocalisation.” This idea was simple – globalisation is here to stay and the world will only get smaller thanks to modern communications like the internet. However, as the world gets smaller people would get more attached to their local communities. Proponents of the “glocal” theory argue that if businesses want to thrive, they need to be both global and local.

Doing this is trickier than it sounds. HSBC succeeded in displaying this in its advertising campaign. They were so successful at it that I never realised that HSBC was a Colonial British Bank until they took over Midland Bank back in the early 1990s. As a child, my dad banked with HSBC and I always saw them as being from Hong Kong and therefore Hong Kong Chinese. Seeing a White Briton as a CEO was something of a shock to me. Unfortunately, outside HSBC I can't think of a global business that has been successful at making itself local. Why is that so?

I think the answer is pretty simple. We live in a world where “Globalisation” is the buzzword. If you're not “Global” or at least “Regional” in everything you do, you're going to be regarded as something of a “bumpkin.” If you live and opperate in a small place like Singapore, you need to have a somewhat reasonable claim to being “global” or at least “regional” in your outlook. Singapore on its own is such a small market that even the big multinationals don't treat the budgeting for the local market seriously. Luckily, Singapore is regional headquarters and regional budgets are set from Singapore – so Singapore based business do have a chance at fighting for Asia-Pacific or South Asian budgets.

Its not just businesses that are going “global.” Thanks to the 'internet' any clown can be “global.” I've bashed out this blog in Singapore over the last six years. While my audience is primarily Singaporean, I've had readers from the USA, UK, parts of Europe and even darkest Africa. I don't need to be part of a big publishing company to be read around the world.

There's no doubt that globalisation has on the whole been a good thing. I live in Asia, which is at the time of writing the ONLY part of the world with any money. The Asian growth miracle is a product of globalisation. It started with the four NICS (South Korean, Taiwan, Hong Kong and Singapore) and today its spread to the giants of China and India. The success story has been simple – we opened up ourselves to global talent, competition, expectations etc. Our companies make and service according to global rather than local standards.

India comes to mind as an example as a country that has benefited from being “global.” I remember a time when the only thing you could do with anything coming from India was to place it in New Age Shrine and chant endlessly around it. In a space of less than three decades, India is moving up the ladder and today, people take Indian companies very seriously. Everyone knows about IT and call centres. However, India is more than that. The American FDA approves an ever increasing amount of drugs based on clinical research done in India.

How is it that a large, underdeveloped nation managed to become a serious player in a number of brain industries? The answer is simple – the brain bits of India is highly open to the “global” grid while the bits of India that are continuing to fail are still stuck in “provincial” mud.

Globalisation is not just a business idea. Its helped raise the standard of life in other aspects too. The great hope in Asia is that the major Asian Giant, China, will be unable to return to the brutal days of Maoist dictatorship. While China remains a Communist Dictatorship in many ways, the Communist Party Chief's of today cannot turn the clock back – too many Chinese people have lived the way the rest of the world does and nobody envisions the people allowing those in power to turn the clock back.

While being “global” is undoubtedly a good thing, there is such a thing of being damaged by being so global that you forget the local. I think of the “dot.com” boom that went spectacularly bust in 2000. What happened?

Simple – we got so caught up in the hype of the internet and being “global” that we forgot about our “real” presence. I look at myself as an example. This blog entry will be read by people beyond Singapore. I've arranged for clients to be interviewed in foreign lands without leaving Singapore. While I can do things beyond Sinapore's shored – I have to remember that I remain physically present in Singapore and therefore my “real” existence remains within the local Singapore context.

Now, let's translate this into something larger. Marketing is filled with examples of how global brands with their power of global budgets, expertise etc etc have become unstuck when they've assumed that the locals will abandon their culture just to be “global.”

One of my favourite examples is the Ford “Nova,” which failed miserably in the Latin America market. It took some bright spark to realise that “No – Va” in Spanish is “No-Go” - not exactly the message you want to convey to car buyers - “Buy my “No Go” car!”

There are other examples. One good Asian example is Jollibee, a Fillipino fast-food joint which prevented McDonalds from conquering their local market by simply appealing to local taste.

Americans are particularly guilty of disregarding “local” sensetivities. In a way, you can't blame them for it. People around the world have an incredible “love” for things American. Perhaps you could say its thanks to Maddison Avenue but America and American cultural icons have found a way of sticking into our psyche.

However, as much as the rest of the world loves things America, we don't exactly want to lose our local culture either nor do we want Americans overwhelming us telling us how to run our lives – something which has become especially true with the recent financial crisis. I mean do you really want the people who screwed up the world by hidding and playing roulette with your money telling you about how to manage your money?

When Americanisation, which is a lot of ways the same thing as “globalisation” gets too overwhelming – the locals fight back and they can win.

This was brought home to me at a recent work-shop on Afghanistan, organised by Singapore's Institute of South Asian Studies (ISAS).

One of the most interesting (I use the term politely) was a talk given by Mr Muhammad Sabir Siddiqi, Director Development and Public Awarness, Afghanistan. The poor man had the unenviable task of admitting that the current Afghan government and its international allies (USA and its NATO allies) were losing the propoganda war against the Taliban.

The question is simple – How? If there's anyone you should be able to beat in a propoganda fight – it should be the Taliban. You are talking about a group of religious thugs who spent nearly a decade setting the entire country back by several decades by banning any form of communication with the outside world as “Un-Islamic.” The Taliban are the very people who held mass executions (read stonnings) for things as simple as “witch craft” and they had a habit of beating up girls (read throwing acid) who had the audacity to go to school. This is the type of brand equity that usually gets you barred for life from people's toilet bowls.

By comparison, you have the Afghan government and its American allies who have the experience of Maddison Avenue behind them. America's brand equity is “pursuite of happiness.”

I asked Mr Siddiqi how it was possible for the brand equity of the Taliban (read – murderous thugs) was beating the Afghan government and its American patron (read – sweet hot blonde). His answer was - “The Taliban and its backers know the system in Afghanistan.”

I think the situation goes beyond communications. However, Mr Siddiqi made a very valuable point. The Afghan government of Hamid Karzai and its American backers disgregarded local sensitivities. They invested heavily in things like internet and TV campaigns in a country that had no internet. This might have worked in the US or Europe – but in Afghanistan?

By contrast, the Taliban communicated through the Mosque and the Maddrasah's. They went out to meet the people. They also learnt how to become very effective users of modern communications like the Inernet and TV.

Like it or not, the group that most sensible people would have imagined should have been flushed into the toilet bowl of history have made a “come back” and they've now set up an office in Qatar with the full blessing of the Americans.

How did this happen? Simple – the Taliban were open to using global technologies but remembered the local. Unlike the American backed Karzai government, they slowly rebuilt their base from the bottom up rather than trying to impose anything from the top-down.

I remember a local inventor telling me his frustrations in dealing with a local authority in Singapore. He describes how he provided a solution to them and they told him, “No one else in the world does it the way you do?” His reply was “nobody else has the unique needs that we do.”

Businesses and governments should be global. However, they ignore the local needs. At best this is expensive. At worst – we get a situation where the likes of the Taliban can make a “come back.”

Saturday, January 07, 2012

The Distraction Over Salaries

Singapore has started out 2012 with a bit of a bang. Everyone had a major talking point this week – namely the topic of salaries or more precisely the salary of the cabinate. The Committee that had been established in the aftermath of last year’s General Election to look into the issue of Ministerial Salaries, finally revealved its findings.

In a nut shell the Committee decided that there would be an all round pay cut from the President down to the most junior cabinate minister. The President took the largest pay cut of about 51 percent while the Prime Minister and his colleagues took pay cuts ranging from 30-40 percent. Both the President and Prime Minister made the annoucements that they would accept the recamendations of the Committee.

This was good politics. The issue of Ministerial Salaries had been a hot button issue in the General Election and the Presidential Election. Taking a pay cut was a signal that the powers-that-be were going to listen. Furthermore, there’s the issue of good timming. The Finance Minister had spent the preceeding days telling us to get ready for an economic slowdown and the announcement that the Prime Minsiter was willing to take pay cut of slightly less than 40 percent was good old fashioned leadership by example. A few members of the opposition make the point that Singapore’s Ministers remain the world’s best paid (Our Prime Minister still makes four times more than the US President) but by and large we, the people were satisfied.

However, I don’t think we should get too satisfied. Taking a pay cut was the easy part. Analysing why a pay cut was necessary in the first place is another matter.
Let’s start with the basics. For many years, we the tax payer were told that we needed to pay our ministers exceedingly well because it was the only way to keep them honest and it was necessary to pay top-dollar for top talent (always a precious commodity).

It was acceptable until the government services became less than exemplary. One only has to think of the limping man waltzing out of a secured facility as an example.

Unfortunately, that wasn’t the only one. In the years preceeding the General Election we got a dose of things one associates more with a third world backwater than a premium metropolis – think of floods, over-crowded buses, a lack of affordable housing and violent youth gangs. All of that is before you throw in the various losses made by our Soverign Wealth Funds, who insisted on keeping things secret thus giving the impression that they had something to hide.

In these various instances, the government spent a significant amount of time and resources justifying its handling of the situation. The case of Mas Selamat was particularly poignient. The public wanted an offer of resignation by the Minister but what we got was a scolding from our founding Prime Minister for being complacent in expecting the government to do its job.

This wasn’t exactly top-talent in action nor did the powers-that-be seem terribly honest. So, suddenly paying the expensive ministerial salaries became ….well harder to justify.

The government needs to recognises this. The Prime Minister has sold the fact that his is a “Rolls Royce” government and he has to ensure that Ministers perform like a “Rolls Royce.” Ministers who perform below par without justification should be ruthlessly dismissed.

You cannot expect a customer to pay for a “Rolls Royce” but receive a “Fiat” and be greatful for it because the neighbours in Malaysia and Indonesia only have “Proton Saga.” The customer in this case is no longer willing to be greatful that he has a car in the first place. Nor will the public accept a discounted “Rolls Royce” government performing below par. We the paying public were told that we need to pay for a “Rolls Royce” government and that’s precisely what we expect to receive.

A more important issue is the fact that Singapore has become an exceedingly unequal society. The Gini Coefficient points to the fact that two thirds of Singaporeans earn well below the national average of S$4,500 a month. The remaining third earns way over that benchmark.

This is in itself not an issue. America has exceedingly unequal yet there have been relatively few riots since the Rodney King incident in 1994. How this happened? The simple answer is that while the rich have gotten richer, so have the poor. Societies start facing social unrest when the rich get richer while the poor get poorer and even more importantly the rich are seen to get richer at the expense of the poor.

The US provides another example – “Occupy Wall Street.” This movement is driven by the fact that poor and Middle Class people are pissed off with very rich bankers getting rich by messing up their mortgages through fraudulent means.

In Singapore, we’ve been lucky to have governments that have been smart enough to move in to redistribute the pie when things look a little uneven. However, there is a sense that the government has a role in keeping the wages of the poor and now the Middle Class down. I remember someone telling me, “In Singapore, the policy is – KILL THE SME.”

The most prominent area where this can be seen is in the area of rental space. Fact remains, the government is the largest landlord in town. It has the power to raise and reduce rents for small businesses.

The government is not only the landlord of land space. It rents out taxis – which is supposed to be the job of last resort for Singaporeans. Taxi drivers rent their cars from the National Trade Union Congress (controlled by the government) and they have to pay all the expenses of running a taxi (petrol etc). In return they are theoretically allowed to make as much money as they can.

However, the government makes things harder. Renting a taxi is expensive (around $90 –a day and it has to paid daily). Certain roads on the desired routes come with a toll and you’re allowed to stop in certain places. To make matters worse, we actually had a former Minsiter of Transport who publically declared that he wanted to move local Singaporeans off cars (including taxis) and onto the public transport (buses and trains) as part of a national effort to go green. So there you have it – the taxi driver has to collect money for the same government that’s actively trying to put him out of business.

This is the most obvious example of how the government works to keep wages or the earning capacity of the citizens low. I’ve mentioned it more than once – whenever cleaning aunties earning a few hundred a month for 12-hour daily shifts want a few cents a year more, the powers that be rush out to warn the public about creating inflationary pressures (which doesn’t seem to apply when Ministers want several hundred thousand a month more).

Its one thing to earn less than your peers. I take myself as an example. I am a writer and the industry I deal with is publishing. I’m likely to make way less than my peers in investment banking, oil&gas or shipping. Those industries are more capital intensive and so the money floating around them is likely to be greater.

It’s a completely different thing when I’m earning less because the people in power take an active role in keeping my wages down. Look at the taxi drivers. Its tough enough looking for customers to pay for the daily rental. The effort of making a living becomes a joke when a government minister publically declares war on your business.

It is a nice gesture of the cabinate to take a hefty pay cut. However, whether the Prime Minister is paid $20billion or $2 does not affect me. What affects me is my ability to make a living. I can accept that I struggle for a living. However, that struggle becomes somewhat unacceptable when the powers-that-be are actively increasing my burden.

Cutting the pay of the top national leaders makes good politics but it does not make better social or economic policy. The answer for Singapore lies not so much in cutting the money for the top but in allowing the bottom two –thirds earning below the national average to rise their incomes.

The concept of a minimum wage has been rejected as a socialist tool to scare off foreign investors. I don’t think this is necessarily true. Singapore has long past the stage where it sells on being “cheaper” (Whatever you can make cheaply, China will make even cheaper and India will service cheaper).

However, this is NOT the ONLY way to raise incomes for the lower part of society. At the very least the government can lower rents during tough economic times so as to ensure small businesses like hawkers and taxi-drivers keep more of the money they make. (Interestingly enough the government won’t lose since it will probably collect more by way of tax).

The government should look at creative ways to help lower income people earn more. Subletting of flats should be encouraged as should car pooling. Employers who come up with creative ways to compensate people should be recognised.

These are just some possiblities one can think of in working towards the most pressing issue of the day – namely helping the poor get richer. We need to give the poor a sense that they can achieve if we’re move forward. This rather than getting a few well paid ministers to take a pay cut (which they’ll take for political purposes) is the most pressing issue that we need to work towards