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Political farce fuels wall street melt down

30 September 2008

It is back to the drawing board for the Treasury's proposed $700 billion rescue plan for the US financial industry. In the meantime stock markets are floundering and credit markets drying up.

After more than a week of intensive negotiations the bailout bill failed in a vote in the House early Monday afternoon, Sept. 29. Washington, and the financial markets, were stunned.

The vote started at 1:30 p.m. and was supposed to have been completed quickly. And, given the bipartisan support the reworked measure got over the weekend—with Treasury Secretary Henry Paulson and President George W. Bush winning the backing of key Democrats like Speaker of the House Nancy Pelosi and the likely support of Presidential candidates Barack Obama and John McCain—the House leadership was counting on a positive outcome. But by a little after 2 p.m., only 205 House members had backed the bill, vs. 228 against. The bill needed 218 to pass.

Most of the shortfall came from the President's own party. This is remarkable. Only 66 House Republicans voted for the bill, with 132 against. Congressional leaders predicted they needed at least 80 supporters from the GOP and at one point hoped to get 100. Among Democrats, 141 backed the bill and 94 voted against. The legislation, as has been obvious since Secretary Paulson and Federal Reserve Chairman Ben Bernanke first told congressional leaders help was needed 11 days ago, lacked support from a rebellious band of conservative Republicans who are dead set against the plan and the notion of the government taking such an extensive role in fixing the private sector's woes.

It is now far from clear how the bill can be revived. Lobbyists from both sides of the aisle were equally stunned. There is no Plan B. Congressional leaders held a series of meetings to try to find a way forward, in hopes of getting a revised deal passed by week's end. But Conservative Republicans, who see the costly bailout as an affront to their free-market values, remain the most strongly opposed to it.

The political gamble is significant. Are the Republicans thinking that they are appealing to Main Street America by opposing government intervention and a bail out? It is telling that so few Republicans supported the Bill. McCain found himself in a particularly awkward position after bragging about his role in building a coalition behind the rescue package yesterday morning, hours before it was defeated. There was np coalition.

But McCain and his top aides then accused Obama and the Democratic leadership in Congress of orchestrating the bill's failure to embarrass McCain, even though many more House Republicans voted "no" than did Democrats.

Here is the problem: Americans are worried, they want Congress to do something, but they don't trust the Bush Administration plan. And while they're unhappy with everyone involved, they're more unhappy with Republicans.

Bad news for McCain; bad news for the economy. Bad news for stockholders. And for anyone who still though America plays a leading role in the world economy - think again.

The contagion spreads

29 September 2008

During the course of Sunday and Monday European governments stepped up their support for the continent's beleaguered banking system bailing out four banks, while the Russian government pledged $50.0 billion to domestic corporations to pay off foreign debts.

But the steps seem unlikely to relieve the pressure on the sector, as the seizing up of the inter-bank lending market showed little sign of slack.

And to add to the global woes the House of Representatives in the USA failed to approve the US$700 bail-out package.

Late on Sunday the governments of Luxembourg, the Netherlands and Belgium said they were pooling $16.3 billion Euros to rescue Fortis while the British government stepped in to nationalize Bradford & Bingley, a mortgage lender for landlords that relied heavily on borrowing from other banks to fund its activities. The German government extended a 35.0 billion euro ($51.0 billion) credit facility for lender Hypo Real Estate (other-otc: HREHF - news - people ), while the Icelandic government bought a 75.0% stake in the country's third-largest bank, Glitnir.

This was the same day that Citi Group acquired the banking assets of Wachovia in the USA.

There are potentially other casualties. We just don’t know who they are.

The focus for European banks has shifted from their exposure to toxic assets linked to the American mortgage market to one of funding as money markets have paralyzed as banks have chosen to hoard cash rather than lend to each other.

The Bank of England pumped 40.0 billion pounds ($72.1 billion) of three-month funds into the system, while the European Central Bank lent banks 120.0 billion euros ($172.9 billion) of 38-day funds in an auction.

However their actions did little to quell fears. The three-month euro London interbank offered rate rose to 5.22250%, its highest rate ever, while for three-month dollar loans that rate rose to 3.88% from 3.76%.

Perhaps the most spectacular action came from Russia where Prime Minister Vladimir Putin said that $50.0 billion would be made available to Russian companies to help them payoff foreign creditors. However here too the move did little to allay fears, with Russia's dollar denominated RTS index falling 7.1%.

A rough day !

Tuesday is first day of Eid Al Fitr in UAE

29 September 2008

Tuesday is the first day of Eid Al Fitr, the UAE Moon Sighting Committee announced on Monday.

The committee, headed by Mohammad Bin Nakhira Al Daheri, Minister of Justice, was quoted by WAM as saying that after a number of legitimate measures, as well as several contacts with neighbouring countries, it was established that Tuesday is the first day of Shawwal and hence the first day of Eid Al Fitr in the UAE.

Al Daheri and the committee members extended greetings to President His Highness Shaikh Khalifa Bin Zayed Al Nahyan; His Highness Shaikh Mohammad Bin Rashid Al Maktoum. Vice-President and Prime Minister of the UAE and Ruler of Dubai, Their Highnesses Members of the Supreme Council and Rulers of the Emirates, and other leaders.

Dubai's stinking beaches

29 September 2008

You will not see this in the tourist marketing material for Dubai but the Dubai beaches are in crisis. But it is at least making the local newspapers.

The illegal dumping of sewage into the sea off Dubai has caused a massive, smelly and dangerous pollution problem. Dubai has been known for its clean beaches and for the five star hotels along the UAE’s coastline.

Sewage truck drivers, frustrated by long waits and costs to dump their loads, are illegally pumping the waste on the beaches or into storm drains that empty onto the beaches. The extent of the pollution would cause serious health and safety problems.

The Dubai Municipality has responded swiftly to the issue. It has taken comprehensive action by drawing upon laws and fines already in place and increasing its surveillance.  The first phase of the new, 300,000 cubic metre Jebel Ali Sewage Treatment Plant will also help deal with the problem as it will ease pressure on the overloaded Al Aweer plant.

Contributing to the problem are made made breakwaters and the new land reclamations of the Palms and the World. These new land blocks reduce the tidal currents which would otherwise help wash the beaches clean. Stagnating seawater only makes the sewage problem worse.

Emirates such as Fujairah also face the problem of illegal dumping of oil and bilge water damaging coastal environment and affecting tourism.

UA lays off Thai staff

29 September 2008

All 120 Thai cabin crew on United Airlines (UA) flights based in Bangkok have been replaced by US-recruited (unionised) staff as part of major cutbacks due to continuing high fuel prices and a slump in demand.

Another 100 crew recruited in Singapore have also been laid off as the US airline moves to close its flight attendant bases in Bangkok and Singapore at the end of next month.

The redundancies reflect a contractual obligation that UA made to its powerful union in the US that foreign nationals based in Asia would be discharged before the airline thins the ranks of its US-based workers.

UA's laid-off Thai staff, some of whom have worked for the airline for more than 20 years and are in their late forties, seem to have accepted redundancy with regret but no complaints. The airline gave them two years of free UA flights on top of the legally required severance payments.

Thai staff had been informed about the possible lay-off about six months in advance as the airline's management negotiated with the UA union.

UA flight attendants recruited in Bangkok and Singapore were reportedly paid much less and enjoyed fewer benefits than their US-recruited colleagues.

Thai attendants will now be replaced by US-recruited UA staff - a mix of nationalities including Americans, Japanese and a few Thais - on flights to Tokyo, Bangkok, Hong Kong and Seoul.

UA currently operates Boeing 777 jetliners, which can carry about 270 passengers, on its daily flights between Bangkok and Tokyo. By the end of next month it will replace the jetliners on this route with bigger Boeing 747-400s, with about 340 seats, as a result of revised aircraft utilisation plans and stronger winter-season travel demand.

There will be no change in flight frequency from Bangkok to Tokyo, where many passengers connect with UA flights to six US cities - Honolulu, Los Angeles, Washington DC, San Francisco, Seattle and Chicago.


Electing dead officials may be the answer

27 September 20008

The spirit of democracy may not be present at Government House in Bangkok, but it was demonstrated by villagers at Ban Nong Ta Ruang in Phitsanulok.

They voted on Tuesday for incumbent Banjong Wangchao-na, 47, to be the village headman in a local election - even though he was dead. This could be perfect for political non interference!

The dead candidate won by 111 votes to 88 in the race, which saw a high turnout of 68% of 291 eligible voters.

The former village headman died of heart failure on Aug 26. But 40 supporters of his could not let him rest in peace and on Monday petitioned provincial governor Somboon Sriwattanawat to keep him in the competition.

The bewildered governor had to consult the Provincial Administration Department for help. The department decided the elections could go ahead as planned but in case Banjong got elected, a by-election would follow.

Without Banjong, the other candidate, Sudjai Taijan, 44, could have enjoyed a one-candidate race.

Many voters, anxious for the results, hung around for the vote count in the afternoon. The provincial office was informed of the results. A new round of candidate registration will be held in the near future.

 

Should we laugh or cry?

26 September 2008

I have been ignoring Thai politics over the last week; and it is time to bring my dear reader up to date on some of the bizarre goings on in the new government and in the campaign to become mayor of Bangkok.

Let's start with the election for Governor of Bangkok

 A publicity stunt by candidate Ms. Leena Jangjanya went terribly wrong when a campaign staff drowned as they bathed in a canal to highlight the plight of residents who have no access to clean water.

Thing is: He was crying for help. But staff thought he was putting up a show for the TV cameras. According to Ms. Jangjanya the 32-year-old Thirasak Sitanont drowned as she and other staff were showing journalists the rashes they got from washing in the filthy water.

She told Reuters: “One of my staff saw him waving and crying for help, but we thought he was pretending and he was far away from us, posing for two TV crews.

Ms.Jangjanya has herself fallen conveniently into another canal in front of the TV cameras on Wednesday as she was trying to show her support for riverboat commuters. to continue to campaign after his death, I would be no better than an animal," she said.

To continue on the campaign for governor of Bangkok - there are some interesting new proposals from the 16 candidates that go well beyond the usual suspects such as increasing green areas, cleaning up canals, or putting more bins on Bangkok streets.

How about:

Nappies for dogs, closed-circuit cameras installed at massage parlours to keep a record of the married men who visit and the setting up of a dedicated cockroach-busting unit.

"To keep public areas clean from dog mess, dog owners will be asked to put nappies on their pets," said independent candidate Kriangsak Charoenwongsak, who enters the race with the slogan "Dr Dan Can Do". He is also promising to free Bangkok of cockroaches and rats.

Leena Jangjanja vowed to strengthen married life by installing closed-circuit cameras at the entrances of massage parlours across Bangkok. "If I become city governor, I will help you keep track of your husband. He can no longer escape you to enjoy visiting such places," Ms Jangjanya said. The klong water must have affected her! 

Meanwhile in other news three members of the new Cabinet of Prime Minister Somchai on Friday attended their trial in the two and three-digit lottery case at the Supreme Court’s Criminal Division for Holders of Political Office.

The three were Deputy Prime Minister Chavalit Yongchaiyudh, Labour Minister Uraiwan Thienthong and Industry Minister Pracha Promnok. They turned up at the court at 10 am. This could ne a new record. The new government was sworn in officially on Thursday and within 24 hours three of the team are in  a courtroom as defendants.

And for anyone who wants to build a potash mine in Thailand; the Industry Minister is a policeman. Police General Pracha Promnok.

Bartlet's advice to Barack

26 September 2008

“West Wing” creator Aaron Sorkin wrote this advice for Barack Obama as part of a fictional meeting between Obama and President Jeb Bartlet:

BARTLET: "GET ANGRIER! Call them liars, because that’s what they are. Sarah Palin didn’t say “thanks but no thanks” to the Bridge to Nowhere. She just said “Thanks.” You were raised by a single mother on food stamps — where does a guy with eight houses who was legacied into Annapolis get off calling you an elitist? And by the way, if you do nothing else, take that word back. Elite is a good word, it means well above average. I’d ask them what their problem is with excellence.

While you’re at it, I want the word “patriot” back. McCain can say that the transcendent issue of our time is the spread of Islamic fanaticism or he can choose a running mate who doesn’t know the Bush doctrine from the Monroe Doctrine, but he can’t do both at the same time and call it patriotic. They have to lie — the truth isn’t their friend right now. Get angry.

Mock them mercilessly; they’ve earned it. McCain decried agents of intolerance, then chose a running mate who had to ask if she was allowed to ban books from a public library.

It’s not bad enough she thinks the planet Earth was created in six days 6,000 years ago complete with a man, a woman and a talking snake, she wants schools to teach the rest of our kids to deny geology, anthropology, archaeology and common sense too? It’s not bad enough she’s forcing her own daughter into a loveless marriage to a teenage hood, she wants the rest of us to guide our daughters in that direction too?

It’s not enough that a woman shouldn’t have the right to choose, it should be the law of the land that she has to carry and deliver her rapist’s baby too? I don’t know whether or not Governor Palin has the tenacity of a pit bull, but I know for sure she’s got the qualifications of one. And you’re worried about seeming angry? You could eat their lunch, make them cry and tell their mamas about it and God himself would call it restrained. There are times when you are simply required to be impolite. There are times when condescension is called for!"

Please, please, please - on November 4th - vote for Barack Obama. There is no credible alternative.

Opening Up the airways

26 September 2008

A free-for-all is about to kick in on the lucrative Singapore-Kuala Lumpur route, with budget airlines Tiger Airways and Jetstar Asia significantly bumping up flights between the two cities from Dec. 1.

Jetstar Asia has announced that from Dec-08, they will be increasing their services between Singapore and Kuala Lumpur from 7 times weekly to 19 times weekly.

Tiger Airways will add 400% more capacity on the Singapore–Kuala Lumpur route, which means that the currently daily service will turn into a five-daily service.

The extra capacity will be spread throughout the day, from early in the morning to late at night. Departing Singapore the flights leave at 06:10, 13:10, 14:30, 17:10 and 20:50.

The Singapore and Kuala Lumpur routes used to be one of the most heavily regulated. Historically Singapore to Kuala Lumpur has only been serviced by legacy carriers Singapore Airlines and Malaysian Airlines. But as of the 1st of February this year, budget airlines have been granted limited rights to start operations.

From liberalisation, Tiger Airways, Jetstar Asia and AirAsia have all raced for a market share on this lucrative route.

Tiger Airways first flight was to Bangkok on 15 September 2004; the airline is now carrying over 6 million passengers across the group and importantly trading profitably.


China's Capricorn One

25 September 2008

The question is whether the Sinonauts are already in space. Because in a sublime error China’s state news agency earlier today published an "in space" conversation among the trio even before they left Earth.

The foul-up by the Xinhua news agency involved an article posted on its website well before the launch this evening of the Shenzhou VII space craft that described the vessel in orbit and quoted entire conversations from the crew.

The story, titled “Sleepless Night on the Pacific, Sidelights on the Observation and Control of the 30th Lap of the Shenzhou 7 Spaceship”, had disappeared by the end of the day and was described as a technical error.

But it was great evidence of China’s frequent manipulation of the media and the readiness of Communist Party officials and propaganda mandarins to resort to sleight of hand, if not fakes, to ensure perfection in the public image.

With a burst of flame and smoke, China really did send into orbit this evening the riskiest mission so far of its fledgling space programme, seeing off three astronauts on a voyage whose highlight will be the country’s first space walk.

President Hu Jintao was on hand at the desert launch centre with some parting words of encouragement for the three air force colonels who were blasted off at 9.10pm (1310 GMT) on China’s third manned space venture.

Standing in front of the three astronauts – or taikonauts as they are known in China from the Mandarin word for space – President Hu said: “This will be a major step forward for our country’s aerospace technology. You can certainly fulfil this glorious and sacred task. The motherland and its people await your triumphant return."

The space walk, essential if China is to fulfil its extra-terrestrial ambition to build a permanent space laboratory, is expected to take place on Friday or Saturday and to be carried out by the team leader, 41-year-old Zhai Zhigang. But the Xinhua story, dated September 27, was able to report conversations that Mr Zhai and his two fellow astronauts would hold in two days.

Whether the reported conversation will actually take place, and whether it will be reported again verbatim by Xinhua, the world may now have to wait until Saturday to find out.

The spacecraft is due to land somewhere on the grasslands of Inner Mongolia later that day.


Singapore leaders enjoy predictable win

25 September 2008

The Singapore High Court has ruled that the publisher and editor of the Far Eastern Economic Review (Feer) defamed Minister Mentor Lee Kuan Yew and Prime Minister Lee Hsien Loong in a July 2006 article in the magazine.

The Lees were awarded damages, which will be assessed at a later date.

Review Publishing and Mr Hugo Restall are also restrained from publishing, selling or disseminating the libellous allegations in Singapore.

There was no trial. Instead the rulling, released this week by Justice Woo Bih Li, four months after he heard an application by the Lees' lawyers for a summary judgment. This is an application made for a court ruling without the need for the case to go to trial because the applicants are of the view that the defence arguments are baseless.

The lawyers for the Lees said, among other things, that the article was calculated to disparage both leaders. They argued that it suggested that they were corrupt and unfit for office, and would sue and suppress those who question them as the questions would expose their corruption.

In its defence, the Hong Kong-based magazine argued that the article, titled "Singapore's 'Martyr', Chee Soon Juan,"  was based on facts and fair comment, concerned matters of public interest and was a neutral report.

But Justice Woo said Feer's defences failed or did not apply in Singapore. Public interest and what is and is not fair comment have always had a rather different interpretation in Singapore whenever there is a perceived criticism of the leadersip.

In a 234-paragraph written judgment, he said there was no doubt that the defamatory words in the article referred to both the Lees.

Meanwhile The Wall Street Journal Asia, another Dow Jones publication, and two of its senior editors are defendants in an application for contempt proceedings initiated this month by Singapore's attorney general. The action is related to two editorials and a letter to the editor written by Mr. Chee. A hearing in the case has been set for Nov. 3-7.

Singapore's political leaders have won damages against a number of foreign news publications for defamation. Indeed, it is unlikely that they have ever lost a case.....

Michael Palin for President

21 September 2008


Did John McCain pick the wrong Palin. OK, the British passport might be a problem, but he is intelligent, witty, well-travelled, debonair and has a strong support base. So why not vote for Michael Palin for US president?

Sure, Sarah Palin has generated a lot of headlines for the Republicans, and put some fizz in John McCain's campaign, but has he picked the wrong Palin?

Hundreds of thousands of people have been watching a YouTube video pushing the case for the former Python. As the Sunday Times notes, you can interpret Palin's policies from his Python ouvre, such as a stance on the environment: "I'm a lumberjack and I'm okay."

See below:

Looking after no 1.

21 September 2008

I don’t know how or where this financial meltdown will end, and neither do any of the experts.

The Bush solution is a US$700 billion buyout with tax payers money. We don't have that luxury so what should we do? The temptation is to either make drastic changes in your financial life or do nothing and hope that the impact is not too severe.

So here’s another idea, a middle path of sorts. Consider a few modest but concrete things you can do that could reduce your exposure to four of the big areas of risk — investments, job security, your mortgage and insurance — that have been front and center this week.

Some of these suggestions may have more impact for you than others, but they all can help you feel as if you’ve taken back some measure of control.

Investments

Before you do anything with your portfolio, ask yourself this: Do you still believe in capitalism?

Several financial planners I spoke with felt the need to stop and reaffirm the fact that companies will still need to raise money from investors — any quasi-Socialist, short-term federal government intervention aside.

Index funds allow investment across multiple companies that seek to generate earnings and pay dividends. This is just a part of protecting yourself against the biggest investment risk of all, outliving your savings. Unless you’re saving a huge chunk of your income in cash, you’ll need consistent exposure to more risky investments like stocks to produce a suitable retirement balance. Keep your stock allocation lower if you must for a few months to sleep at night, but don’t get rid of it altogether.

Most people get back into stocks once you explain this. A bigger challenge now is the one facing those who are in or close to retirement and whose portfolios have declined in the last year.

Even if you can’t bring yourself to make big changes to your portfolio, spending just a bit less money in retirement may make a huge difference. Just look for the small changes in retirees’ cash burn rate will affect them far greater than what the market will do today. Spending on grandchildren is often a huge item for retirees. If you can’t bring yourself to cut back there, consider the cost of eating out. He says he is often surprised by the amount people spend on that.

Job Security

Aside from the job losses at financial services companies in the news, there was also concern the economy could slow significantly and ultimately affect employment levels everywhere.

This week, people who work for themselves seemed to feel better about their prospects than those who work for large companies. Use skills and experience to develop a sideline business. Second sources of income are important in uncertain times.

Mortgages

A fixed-rate mortgage means no risk that the rate will rise. If you have an adjustable-rate mortgage and have enough equity in your house to refinance, get a fixed-rate loan.

Here’s another certainty for those skittish about investing: If you put extra money beyond the minimum toward the monthly payment on a 6 percent mortgage, you’re effectively earning 6 percent by ridding yourself of that extra debt (though the number may be a bit less if you’re taking advantage of the mortgage interest tax deduction).

A few caveats here. Given the tightened policies among home equity loan providers, you may not be able to easily get this money back out of your house anytime soon. Also, it makes more sense to first pay down 18 percent plus credit card debt even if you’re parking the money in cash.

Insurance

A.I.G.’s crisis suggests one simple tactic to reduce your exposure to troubled institutions: Split your life insurance policies and annuities among more than one provider.

And that's about it for now; diversify; stay reasonably liquid, spend cautiously.
 

The cost of bailing out the markets

21 September 2008

Financiers in New York and London's Square Mile have enjoyed an extraordinary decade of global dominance; bonuses have been huge and their expenditure lavish. Convinced of their own invincibility, they also blinded politicians into believing the alluring myths of the unfettered market.

But while the banks were chalking up impressive profits, and driving growth, they were selling Western consumers cheap credit to fund an unparalleled spending spree. The UK piled up the biggest debts in the G7 group of industrialised nations, sending up the price of homes nation-wide; Britsh consumers were saving less than at any time since the 1950s.

The events of the past week may have played out among the larger-than-life characters of Wall Street, but on a smaller scale they have finally slammed down the shutters on the era of cheap credit. For Britain and America the buy-now-pay-later, shop-till-you-drop economy is now in for a major correction.

In the USA as Greenspan keeping the cheap money flowing, the banks became increasingly creative. Not content with the old-fashioned banker's job of taking in savers' deposits, and handing them out to worthy borrowers, they devised ever more ingenious methods of channeling billions of dollars of investors' cash, much of it from overseas, into high-risk loans to unsuspecting members of the public.

Now the banks are paying the ultimate price for this frenzied growth; merger or nationalisation.

In the USA the very financial masterminds who have spent the past decade urging governments to set free the 'wealth creators' and safeguard their 'competitiveness' have been brought under the control of Washington. And the government most associated with free-market capitalism and suspicion of state intervention has been forced to undertake the most costly nationalisation programme in living memory.

The recovery package is estimated to cost $700 billion. This is in addition to an $85 billion agreement on a bailout of the insurance giant American International Group, plus $29 billion in support that the government pledged in the marriage of Bear Stearns and JPMorgan Chase. On top of all that, the Congressional Budget Office says the federal bailout of the mortgage finance companies Fannie Mae and Freddie Mac could cost $25 billion.

And who pays for this; the American taxpayers. Maybe the final cost will be less than $700 billion. After the Treasury buys up those troubled mortgages, it will try to resell them to investors. The Treasury’s involvement in the crisis and the speed with which Congress is responding could generate long-range optimism and raise the value of those mortgages, although it is impossible to say by how much.

What is happening here is that Americans who are neither rich nor reckless are being asked to rescue the people who were.  No one is running to save responsible homeowners of modest means who might be forced out of their homes.

People who cannot tell soybean futures from puts, calls and options are being asked to clean up the costly mess left by Wall Street. The government argues that action is better than inaction which could imperil the retirement savings and other investments of Americans who are anything but rich. Elected officials in both US parties are convinced that, while a couple of venerable investment banks could fade into oblivion or be absorbed by mergers, the entire financial system could not be allowed to collapse.

The risk is that good money is being poured after bad money. It is a hard sell that the governments of the USA and Britain are having to bail out the very people who have lived off a decade of excesses and that somehow propping up the failings of capitalism is somehow good for the majority of decent hard working folk.
 

China's sour milk

21 September 2008

The world is still applauding the successes of  the Beijing Olympics and Paralympics. Yet the scandal of China's poisonous milk has demonstrated another and quite shocking side of Chinese life — the drive to profit, whatever the social or welfare costs.

At the heart of the poisoning of powdered milk for babies and at least 10 percent of all China’s liquid milk from its three biggest dairies, lies the deliberate mixing in of the industrial chemical melamine used in the production of plastics.

The substance was added to milk that had been deliberately watered down, to boost its nitrogen content, thus allowing it to pass protein quality-control tests. What is so remarkable is that food scientists who were smart enough to come up with this scam, presumably with the approval of their bosses who must have signed off payment for large shipments of melamine, were not also aware that this was a poison which would end up killing and damaging people who bought the products.

At what point did those in charge consider the reputational damage not just to their own companies but, as it turns out, to China’s international commercial standing as well? Malaysia and Singapore have banned Chinese dairy imports and other countries will follow.

China has some of the most comprehensive health and safety and food hygiene laws in the world. The problem is that such regulations are not worth the paper they are written on unless they are enforced.

Part of the problem is that throughout its history China has been careless of individual as opposed to communal rights. This is China’s way, as it is in a subtly different fashion in Japan and Korea. But this outlook will challenge China’s assumption of its new place in the world, as well as fostering further disasters like the poisoned milk.

The more that emerges about China's tainted-milk crisis, the worse it appears - the more widespread and dangerous its effects, and the more deliberate and deceitful the perpetrators. But at least the crisis is unfolding much more publicly than used to the case in such matters.

As always, the coverup outrages people as much as, or more than, the offence. One major milk company ordered distributors to remove its baby formula from stores in early July, but the Chinese public learned of the contamination only Sept. 11.

Not so long ago, outrages like this were hushed up in China. Public outcry (however late) and stern punishments will go a long way toward preventing the next such debacle.

EK's 2009 plans

19 September 2008

Emirates has the following plans under review for 2009:

GRU (sao Paulo) - to be increased to double daily nonstop flights i.e. daily B 772LR + daily A 345. The new daily flight using an A 345 is expected to be a same plane service originating from NGO-Nagoya, Japan. This is because a majority of EK's passenger on board the GRU-DXB-GRU flights are bound for China and Japan.

LTN - new daily flights to London Luton are expected to be launched using a 2 class A 332. This would be Emirates third London destination - and reflects the good loads that Silverjet was able to generate from Luton during its short all business carrier life.

CPH - new daily flights expected to Copenhagen to be launched using a 3 class A 332.

PER - capacity confirmed to Perth from February 1st 2009 to daily B 773ER + daily A 345.

BKK - 4th daily nonstop flight using a 2 class A 332 to be launched.

CGP - new flights to Chittagong, Bangladesh are expected to be launched.

CAI - an additional daily flight to Cairo (a crew favourite - not !) is planned to commence from Summer 2009.

BHX - capacity to be increased to daily B 773ER + daily B 772ER.

NGO - in-flight product to be upgraded from daily A 343 to daily A 345.

Watch this space for confirmations.

A New Architecture for the Financial World

By Neil Irwin and David Cho
Washington Post Staff Writers
Monday, September 15, 2008; 12:26 PM

The U.S. financial system this weekend faced its gravest crisis in modern times, as regulators resorted to triage on Wall Street to contain the spreading damage from a meltdown in the housing and mortgage market.

Two of the world's biggest investment banks, Merrill Lynch and Lehman Brothers, were disappearing, Merrill into the arms of banking behemoth Bank of America and Lehman into bankruptcy. American International Group, once the country's largest insurer, was seeking a financial lifeline. This came just seven days after the government took over housing finance giants Fannie Mae and Freddie Mac.

For all the drama of the weekend, these were the first steps -- but far from the last -- in finding a fundamentally new architecture for the financial world. The titans of Wall Street have, over the past 72 hours, been forced to reckon with the reality that the financial sector they built is, in its current form, too big, uses too much borrowed money and creates too much risk for the broader economy.

In a weekend of intensive and almost nonstop meetings behind the massive stone facade of the Federal Reserve Bank of New York, Treasury Secretary Henry M. Paulson Jr. and New York Fed President Timothy F. Geithner oversaw a series of meetings that essentially forced the chief executives of every major firm to grapple with a crisis of their own making.

The work proceeded along parallel tracks. Paulson and Geithner were trying to find a buyer for Lehman Brothers. But from the beginning, they were also running meetings to try to game out the problems that could result if Lehman did fail. This morning will offer an acid test of whether that contingency planning was enough.

However things go on Wall Street and financial capitals around the world today, the reworking of the global financial system will continue apace.

Among the issues likely to be scrutinized: How much of a day-to-day role should the government and regulators take in financial markets? Which agencies should oversee financial institutions? Should the basics of the financial world be rethought?

Paulson has offered a blueprint to overhaul this financial regulation, and Congress plans to take it up next year. The deepening of the financial crisis will almost certainly make that effort more pressing.

Wall Street firms have been allowed to grow with relatively few restrictions; the regulator that oversees their financial soundness, the Securities and Exchange Commission, is historically more focused on protecting investors than preventing a run on a bank. Indeed, the investment banks -- there were, as of March, five major ones, but after this weekend there now appear set to be only three -- agreed voluntarily to that "prudential supervision."

The Federal Reserve, the agency that has more explicit focus than any other on rooting out risks to the financial system, has little authority over institutions that aren't commercial bank holding companies.

Regulators of all stripes have had difficulty getting the information they need to fully understand the risks that financial firms are taking. The $50 trillion corporate derivatives market is a model of obscurity. The same could be said of many structured debt products, which slice up mortgages, credit card debts, or corporate loans in such ways that understanding how risky they are requires a PhD in mathematics.

Indeed, it is increasingly clear that Wall Street chief executives themselves didn't fully understand the risks they were taking on during the boom years of this decade; they have seemed as blindsided as any regulator.

The problems on Wall Street may go deeper. Financial firms have expanded vastly in the past decade, hiring tens of thousands of bright business school graduates to engineer new financial products, find ever more complicated ways to manage other peoples' money, and dream up new ways to combine, divide, and recombine corporate America.

Some large portion of that work, it now appears, wasn't really creating any value for the company's clients or for the U.S. economy. No matter how many times crummy mortgage loans are recombined into clever packages, they're still crummy.

In a perfect world, those excesses would be corrected by a gradual, orderly decline, in which a few firms get bought out by competitors, some modest layoffs occur, and Wall Street cuts back on its hiring for a few years.

In the real world, that correction is occurring before our eyes, through a series of convulsive weekends in which the entire financial world appears at risk of coming off the rails.

So far, the conflagration has only singed the broader U.S. economy. Gross domestic product grew at a 3.3 percent annual rate in the second quarter, and the unemployment rate has risen sharply this year but, at 6.1 percent, is not as high as it has been in past bad economic times. The question that remains is: How much more of Wall Street's problems can the rest of America take?


Wall Street woes - global implications

15 September 2008

It is bad on Wall Street; and it hurts global financial markets. Over a single weekend the great names collapsed led by the failure of Lehman Brothers, the shock sale of Merrill Lynch, and the revelation that AIG, the world's largest insurance firm, may need to raise as much as $40bn

With massive real-estate-related losses, Lehman Brothers on Monday filed for Chapter 11 protection after a feverish weekend of negotiations to attract a potential buyer. But the two most likely suitors, Bank of America and Barclays PLC, walked away after the U.S. government said it would not backstop Lehman's troubled assets to facilitate a sale.

Meanwhile Merrill Lynch, in a rushed bid to ride out the storm sweeping Wall Street, agreed to be taken over by Bank of America in a $50 billion all-stock transaction. Through the weekend, federal officials strongly encouraged the deal, fearing Merrill would be the next financial house to approach the brink after Lehman. But the deal may do little to resolve the problems faced by both firms, which are heavily mired in the US sub-prime home debacle.

AIG is hobbled by credit default swap investments that have gone sour and spent the weekend trying to raise $40 billion to avoid a credit downgrade which would let counterparties pull their capital from deals with the firm.

U.S. regulators Sunday announced a series of steps - including an expansion of the Federal Reserve's credit facilities - in hopes of stabilizing financial markets after a tumultuous weekend. The moves are designed to make it easier for banks to gain access to emergency credit.

There was no US treasury bail out as the treasury has reached the limit of taxpayer funds it is willing to gamble on propping up investment banks. US$6 trillion was committed last week to saving Fannie Mae and Freddie Mac. If they had failed, the mortgage market in the US would have collapsed and hundreds of banks around the world that invested in US property would suffer huge losses.

Speculation on who is next: Washington Mutual is named by several analysts as the next to find itself in serious trouble. It was the subject of a rescue led by private equity firm Texas Pacific group in the spring. But the billions poured into its coffers no longer look sufficient to satisfy investors and they are taking flight. It is possible shareholders will also flee Bank of America, if they consider Merrill Lynch a bad buy.

Another victim could be the US mono line insurers, so called because they only insure the bonds of large companies, including mortgage lending institutions. Like AIG, the insurance cover they provide could be invoked by customers and simply overwhelm their finances.

In the UK, mortgage banks such as Halifax owner HBOS, Alliance & Leicester and Bradford & Bingley, could suffer further if investors switch to safer havens. Expect credit card defaults to grow quickly as well. HBOS saw an 18% fall in its share price today.

What does it all mean for the economy:  The USA, UK and Europe have seen five years or so of reckless lending. People have spent money they don't have and when they stop it will spell the end for many jobs in retail, hospitality and may other industries. A fall in the value of US, Pound and Euro currencies may help exporters and that will offset the worst of the economy's problems. But without banks willing or able to lend money to millions of people, except at sky-high interest rates, a long and deep recession could be inevitable.

Thaksin's dynasty

15 September 2008

The People Power Party's has nominated Somchai Wongsawat as Prime Minister but he does not have the full support of the ruling party. More than 70 PPP MPs vowed to veto the nomination led by influential Newin Chitlob, another political dinosaur!

Somchai is the brother-in-law of self-exiled Thaksin Shinawatra through marriage to Thaksin's younger sister, Yaowapa! Predictably the People Alliance for Democracy has declared its rejection of his nomination. The PAD rejected Somchai's nomination on grounds that he is too close to former prime minister Thaksin. That was predictable!

The Constitution Court disqualified Samak as prime minister on September 9 for violating the constitution. Somchai then became acting prime minister and he has scored a major political point by lifting the state of emergency which was imposed by Samak. Parliament is scheduled to meet Wednesday to vote on the next prime minister.

Anti-government protesters initially said their goal was to remove Samak. Now they are saying they will not accept any successor from his party or any successor considered an ally (or worse still a relative!) of Thaksin.

Meanwhile Wyncoast Industrial Park Plc and MLink Asia Corp Plc stocks, companies that are politically connected to Somchai Wongsawat, the acting prime minister, jumped significantly on speculation that he would become Thailand's next prime minister.

MLink stock prices jumped 21.48 per cent at the end of the first trading session to close at Bt1.64, while Wyncoast stock rose dramatically by around 40 per cent to Bt0.99.

The two stocks enjoy strong price surge despite collapsing stock markets following the collapse of Lehman Brothers.

The Wongsawat family has earlier sold out Wyncoast stocks but many still believe the stock is related to the family. The family still has majority stake in MLink. So help me here; the constitution will not let Samak host a cheap tv cooking show; but the family assets of the new Prime Minister designate can rise on massive speculation that the companies will somehow benefit from Somchai's new responsibilities.

Amazing Thailand!

Beyond the Palin

14 September 2008

Sarah Palin's nomination has livened up the election campaign in the USA. There is a risk that rather than focusing on her extreme political and social views the media and the Democrats are all getting carried away by the colour of her lipstick and by a family that is a role model for an extreme day time soap opera. So the UK's Observor newspaper in its leader today asks that he focus on her politics - and they are not pretty,

Editorial - The Observor - 14 September 2008

"To many Europeans, especially of a liberal bent, the emergence of Sarah Palin as one of the dominant forces in American politics is a cause for dismay.

At first glance she seems to represent the triumph of the personal over the political. Her looks are remarked upon, her fashions critiqued. For supporters her status as a mother of five is touted as her greatest virtue. For others the Palin family is a source of sniping gossip. Her breezy, straight-talking style is hailed by admirers as a key to unlocking the vital support of the latest fad in polling demographics: Wal-Mart Moms. Others see it as a sign of a political ingenue possessing little in the way of sophistication beyond her background as a small town mayor.

This is to overlook the substance of her beliefs. Palin represents an extreme form of conservatism. She is not just anti-abortion, she opposes abortion even in cases of rape or incest. And Palin supports the introduction of creationist ideas into the classroom, alongside evolution. She is sceptical of global warming, only recently accepting that human activities might play a role, flying in the face of vast bodies of scientific opinion - even the US government's own advisers. She is pro-drilling for oil in environmentally sensitive areas in a world that needs to wean itself away from fossil fuels. Her grasp of foreign policy is limited to a series of hawkish and naive soundbites on Russia, terrorism and Iran.

America has had eight years of a government that has held similar views. The result has been to put ideological and emotional distance between it and large parts of Europe, Asia and Latin America. Apart from isolationist Republicans, this is bad news both for America and the rest of us. America needs a friendlier world to do economic and political business. The world needs an America more in tune with its natural friends and allies.

The political beliefs exemplified by Palin and her fellow religious conservatives are not the answer, no matter how well presented by her considerable political skills.

Change is the watchword of the American election. But McCain, in putting Palin on his ticket, is trying to pull off an audacious con trick. Palin does not represent change, but more of the same. And then some."

A less appealing view of Dubai

13 September 2008

Here is my evening. I drive over from Millennium to Falcon Tower this evening along the dirt track that passes for access to the two buildings. I park the car by the side of the building and say a silent prayer that the construction site next door will not be launching concrete over parked cars.

By the building is the nightly sewage truck - the smell is a strong and unpleasant as always.

In the elevator someone has spat on the floor.

The good news is that my neighbour does not appear to be partying tonight. So I dont have to listen to all her friends.

The bad news is that they are pumping concrete on one of the two building site behind Falcon; either the next door car park or the water cooling plant. Both seem to have 24/7 building permits. These are TECOM sites apparently so Dubai Municipality cares not at all for my sleepless nights.

To add insult to injury every time I take the care out I am now paying at least one Salik. Salik is meant to make drivers consider alternative routes. There is only one exit from Business Bay; and that leads right under the Safa Park salik.

And these pictures are the late evening view outside Millennium Tower where the site in front of the building has been turned into this very attractive and growing garbage tip. This is not the Dubai that is shown on Emirates pre-landing Dubai tourism video. But for many people living here this is reality.



 

Et tu Samak

13 September 2008

Political treachery has always been a favourite sport of the governing classes. And Thailand is no different. When Thai lawmakers turned up at Parliament Sept. 12 to elect a new prime minister, they found they were too few in number to form a quorum. That was convenient.

The reason for the absentees? The six-party coalition government couldn't agree on its candidate to replace Samak Sundaravej, who was stripped of his office by the constitutional court on a half-baked cooking technicality earlier this week.

Samak's People Power Party, which leads the coalition, had reaffirmed Sept. 11 that it would renominate Samak, as it said it would before the court's decision was handed down. It has now had to reverse course.

Its partners, and some in its own party, believe that Samak's return would be too great an obstacle to resolving the impasse between the government and a group of conservative and mainly middle-class and urban protesters, who under the banner of the People's Action For Democracy, have occupied the grounds of the prime minister's office since Aug. 26, forcing the imposition of a state of emergency.

This is just the latest instalment of the three-year old struggle between the country's traditional political elite and the populist parties in the countryside that brought exiled former billionaire and ousted prime minister Thaksin Shinawatra to power before he was ousted in a military coup in 2006.

The PAP is calling for a curtailment of the country's democracy, which they say is prone to vote buying and manipulation by populist politicians. Samak was widely seen by his opponents as a proxy for Thaksin and the PPP as a descendent of the former prime minister's banned party. Should his brother-in-law become Prime Minister the PAD will have further grounds to protest.

Parliament is now scheduled to vote on a new prime minister on Monday. Whoever ends up with the job will have to persuade both the demonstrators occupying the grounds of his office to abandon a protest that has paralyzed the government and driven tourists away, and the crowds of pro-Samak supporters assembling in the capital to stand down.

With another court battle over election irregularities in the offing that threatens to throw the PPP out of office Thailand's self-inflicted political crisis remains acute.


Jetstar Vietnam goes international

13 September 2008

Jetstar Pacific, the Vietnam-based low-cost carrier, is making its first foray into the international market with scheduled services from its Ho Chi Minh City hub to Bangkok and Siem Reap.

The airline, owned partly by the Qantas-owned budget airline Jetstar, will be competing with Thai airlines already operating on the route including Thai Airways International, Bangkok Airways and Thai AirAsia.

It will also run against Bangkok Airways on the Ho Chi Minh City-Siem Reap which is due to begin a daily service on the route on Oct 26, using Airbus A319 jet, according to industry sources.

The daily Ho Chi Minh-Bangkok service is set to begin on Oct 31 while the Ho Chi Min-Siem Reap flights, also daily, will start on Nov 3.

These services will initially be operated with a fleet of Boeing 737 jetliners before transitioning to a future fleet of new Airbus A320 aircraft.

Land of trials

13 September 2008

The “Land of Smiles” has become the “Land of Trials.” And tourists and businesses are voting with their feet and heading to new destinations.

A combination of Thailand's southern unrest and continued political uncertainty is making people question whether Thailand is really as developed as they thought it is.

Brand Thailand suffers. It’s all about perception. For most people in Bangkok and in the country life is no different under emergency law.  But in the international media this does not play out well. There were the murders of the so called war on drugs, SARS, the tsunami and the 2006 coup.  And since the coup it has been a series of political trials and tribulations.

Thailand enjoys a veil of internationalism, modernity and developed society. But there is significant polarization across society. Just take the stock market’s capitalization losses. Political uncertainty has wiped off nearly 1.5 trillion baht this year, reports the Stock Exchange of Thailand.

Where are Thailand’s tourism minister and tourism authority doing about this. Staying silent. Worse still, Thailand’s tourism body is expected to slash global marketing spend as the country’s international image continues to be battered.

XL is latest failure

12 September 2008

Thousands of holidaymakers have been left stranded after Britain's third largest tour operator went into administration overnight. XL Airways fleet of 21 planes has been grounded.

A total of 85,000 people who booked holidays or flights through XL Leisure Group are thought to have been affected.

The company blamed the move on volatile fuel prices and the economic downturn.

All XL Airways flights have been cancelled and customers advised not to go to the airport.

It estimated there are 50,000 customers abroad who had booked through an XL tour operator, 10,000 on holiday with XL Airways, and 25,000 with other tour operators who shared the XL flights.

People who booked package holidays through The Really Great Holiday Company, Kosmar Holidays, Freedom Flights, and Aspire Holidays are protected under the Air Travel Organiser's Licenses (ATOL) scheme.

They will be able to complete their holiday if they are already abroad and a flight will be arranged by the Civil Aviation Authority to bring them home.

Anyone who has booked a holiday with one of the four companies but has not left yet has been advised to contact their travel agent to make a claim.

But it is estimated that more than 10,000 people are not ATOL protected because they booked separate flights and accommodation or flights only.

The CAA will be able to make arrangements for stranded holidaymakers to fly home - but they are not eligible for refunds.

Thomson and First Choice have said they will step in to help those on ATOL protected flights or holidays. For a stiff price.

XL Airways provided flights to more than 50 destinations in Europe, Africa and America. It operated via 12 airports in the UK.

Samak stirs the pot

11 September 2008

The Thai constitutional court's impeachment this week of Prime Minister Samak Sundaravej for illegally appearing on a cooking show was always just a part of the country's political civil war.

On Thursday, as promised before the court handed down its decision, Samak was renominated for the post of Prime Minister by the Peoples Power Party, a descendent of the banned party of his patron, exiled former billionaire and ousted prime minister Thaksin Shinawatra. Samak could be reelected as soon as Friday, when parliament reconvenes. The six-party coalition the People Power Party heads has a sufficient majority to enforce its choice at the same time directly challenging the constitutional court..

Samak was dismissed on a legal technicality in what his supporters see as an overtly political judgment that had not harmed him in their eyes nor convinced them that any alternative candidate would be a more able leader in this political civil war, which could included a more substantial legal challenge over alleged election fraud.

Banharn Silpa-Archa, the leader of Chart Thai, the largest of the smaller parties in the ruling coalition, has advised against renominating Mr Samak. He may still have longer term political ambitions.

Who is pulling the strings? That became clearer today when a PPP official virtually admitted that Thaksin Shinawatra, the ousted prime minister who is once again self-exiled to London, tried to influence yesterday's party meeting.

Before the meeting, deputy PPP spokesman Suthin Klangsaeng said the party members had received advice on "a direct line from London" -- a clear reference to Mr Thaksin.

The acting Prime Minister is Somchai Wongsawat. Guess what. He is Mr Thaksin’s brother-in-law. Now that should upset the PAD.

Clinging to power; confronting the constitutional court. This appears to all be leading to a showdown. What form that takes and when are the great unknowns.


Menasa to be world's next economic powerhouse

By Karen Remo-Listana on Tuesday, September 09, 2008                                                     

Emirates 24/7

The Middle East, North African and South Asian (Menasa) region is well positioned to claim a higher stake in the global economy than ever before, said a new report by McKinsey & Company.

The region – home to about 25 per cent of the world's population – is now in the midst of unprecedented economic developments and is poised to dramatically increase its share in the world economy, said the United States-based international management consulting firm.

The report, Perspective on the Menasa region, said the region is set to generate nine per cent of the world's total growth in gross domestic product in the next 10 years, up from its current five per cent share. And during this period it is slated to achieve real growth rates of six to seven per cent.

This is still relatively small compared to the US gross domestic product, which according to the International Monetary Fund, amounts to more than $13 trillion (Dh47.75trn) and constitutes more than 25.5 per cent of the gross world product. But the ongoing momentum in Menasa and its resilience to the sub-prime crisis and the burgeoning food inflation is set to give the region a definite edge in contrast to the slowing down of the world's remaining superpower.

The report, obtained by Emirates Business, said the growing level of financial liquidity is increasingly being invested back into the region as both governments and entrepreneurs witness the need for – and opportunity in – regional investments. It said $3trn was invested in the development of the region, amounting to 4.3 per cent of the global investment between 2002 and 2007, and over the next 10 years cumulative investments could exceed $15trn.

The total market capitalisation of the equity markets has also been increasing significantly in the past four years, with levels approaching those found in developed Western markets including the US and United Kingdom. For example, the combined Menasa market capitalisation is 92 per cent of the combined GDP, versus 117 per cent in the US and 131 per cent in the UK.

The region – which under the report's scope comprises the six Gulf Co-operation Council countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE – Turkey, the Levant (Jordan, Lebanon and Turkey), North Africa (Algeria, Egypt, Libya, Morocco and Tunisia) and South Asia (India and Pakistan) – currently accounts for 29 per cent of international oil production and 15 per cent of global gas production.

This share is expected to increase as the booming region houses 45 per cent of the world's proven oil reserves and 28 per cent of the proven gas reserves.

McKinsey estimates cumulative financial inflows from hydrocarbon exports in these countries could exceed $9trn by 2020, up from last year's $500 billion.

The region's fortunes – especially in the GCC – have risen and fallen with the price of and demand for oil over the years. However, recent trends indicate that the economy of these countries is moving away from the boom-bust-boom past to a more secure and sustainable economic future.

And while some countries are hydrocarbon endowed – the GCC countries, Algeria, Libya and to a lesser extent Egypt account for 99 per cent and 96 per cent of Menasa's total oil and natural gas reserves – some states are endowed with large pools of talented labour.

India, Pakistan, Egypt and Turkey account for 92 per cent of the region's population.

This leads to these countries exploiting their resource richness: hydrocarbon-rich countries invest in other parts of the region, and workers from population-rich countries migrate to those parts of the region where they find opportunities to work. Menasa countries thus received more than $59bn in remittances of which $16bn originated from the region itself, predominantly the GCC states, shows World Bank data.

At the same time, the widespread use of English in India, Pakistan and Egypt and French in Morocco, coupled with these countries' significant pool of skilled people and the relatively low labour costs, make them attractive destinations for companies looking to outsource support functions and value-added services such as legal and accounting services.

Revenues from information technology and business process offshoring in India alone were $40bn in 2007.

The region's leaders have also been initiating and implementing reforms that will liberalise the economies of their countries. Governments are promoting the role of the private sector and foreign investments, while they move towards more regulatory and monitoring roles.

"Never before has the inflow of financial liquidity into the region from hydrocarbons and the availability of skilled labour been so large, and never before has economic development in the region been accompanied by comprehensive government reforms," said the report by McKinsey.

The total liquid assets owned by institutions and nationals from the GCC and Egypt alone were estimated to be $3trn in 2006, and are expected to grow to between $4.5trn and $5trn by 2012.

In addition to hydrocarbon-related inflows and the monetisation of the large labour force, McKinsey also attributed the wealth creation across the region to the increased foreign direct investment (FDI).

Increased investor confidence has pushed total foreign direct investment in the Menasa region from $16bn in 2002 to $128bn in 2007, which is more than the combined foreign direct investment of China and UK.

India, UAE and Turkey all ranked in the top 20 on AT Kearney's list of global foreign direct investment index, which was released in July 2007. Turkey, which currently has the highest foreign direct investment in the region, has increased its investment eight-fold, from $2.9bn in 2004 to $23bn in 2007.

The increased financial liquidity and investment of this liquidity into the economy are fuelling development of other sectors in these countries.

Hydrocarbon upstream expansions in the region are set to account for 34 per cent of total global planned expansion through 2017. These expansions will require significant investments. In the GCC alone ongoing and planned upstream projects are valued at nearly $275bn.

In addition to extraction, these countries are also expanding their capacity in downstream oil refining, petrochemicals and energy-related products.

Over the next decade the region will account for 36 per cent per cent of the global growth in refining capacity, 27 per cent growth in the petrochemical business, and 40 per cent of the planned growth in global aluminum production.

The region's financial sector has been growing at an average rate of 25 per cent per year since 2002, with the total value of banking assets in select Menasa countries reaching $2.3trn in 2007.

Today, these countries account for three per cent of the global assets, and these assets are expected to grow to $4.9trn by 2012.

According to the Economist Intelligence Unit, between 2007 and 2012, these countries are projected to account for nine per cent of overall growth in total worldwide banking assets.

The telecommunications industry is also growing very rapidly. The number of mobile phone subscribers grew from 62 million to 476 million from 2002 to 2007. Today the Menasa countries account for 15 percent of mobile phone users worldwide.

By 2017, the number of mobile phone users in the region is expected to increase to more than one billion, Euromonitor forecasts.

This would represent 26 per cent of overall growth in the number of mobile phone users worldwide.

The tourism industry has grown from 62 million international visitors in 2002 to 104 million visitors in 2007, accounting for six per cent of the global tourism market. By 2017, this industry is expected to grow to 167 million. During the next 10 years, more than seven per cent of overall growth in global tourism is expected to be from the region.

In addition, more industries are expected to increase their international share, most notably aerospace and aviation, logistics and real estate.


So Far, It Just Isn't Looking Like Asia's Century

By Joshua Kurlantzick
Sunday, September 7, 2008
The Washington Post

Anecdotal, rather shallow, but rightly focuses on the rise of nationalism - big in China. Still an interesting read.

"So much for the Asian century. The Thais are bickering with themselves, and when they're done doing that, they'll bicker with the Cambodians -- again. China may be Japan's biggest trading partner, but they hate each other anyway. Malaysia and Indonesia? Two countries divided by the same language.

I've spent a lot of time in Asia over the past decade, as an expat and a traveler. From where I stand, the place is a geopolitical mess. Hogtied by nationalism and narrow self-interest, the countries of the East won't be banding together to replace the West as the seat of global power -- at least not anytime soon.

Asia's troubles have been on prominent display in recent weeks as anti-government demonstrations, fueled in part by anti-Cambodian nationalism, rocked Bangkok. Earlier this summer, Thailand and Cambodia moved onto war footing because of a dispute over a mountaintop temple -- not exactly a living example of the Beijing Olympics' motto: "One World, One Dream."

Of course, an Asian version of the European Union isn't out of reach, as many Asian leaders know. But today, the continent battles a kind of split personality. On the one hand, many cultural, economic and political trends suggest that Asian nations are becoming more integrated than ever before. But on the other, a virulent nationalism is spreading in the region, one that feeds on reinterpreted -- or even imaginary -- history to gin up hatred and push small-minded agendas.

Elites in Asia clearly understand the benefits of integration, and businesses and officials together are promoting the trend. In 2004, China replaced the United States as Japan's biggest trading partner. Chinese yearly trade with the ten Southeast Asian nations will likely surpass $200 billion by 2010.With the expansion of satellite television, Asian airlines and regional hiring by Asian conglomerates, businesspeople watch the same news, cool their heels together in a slew of space-age international airports and mingle at cocktail parties and pan-Asian business summits. Fads that start in Tokyo or Seoul, such as drinking red wine or dying hair blond, sweep through the region. At summits of the Association of Southeast Asian Nations (ASEAN), I've seen packs of diplomats gathered at bars swapping stories in fluent English about their hijinks during graduate school at Johns Hopkins University.

Despite all that love, most of the region's multilateral institutions do little more than meet for the sake of meeting. In Cambodia and Laos, local officials and fishermen despair that dams built by China on the upper portion of the Mekong River are blocking water flow -- and ravaging fishing in the southern stretch of that river that snakes through their countries. "But when we . . . try to bring this up at ASEAN meetings," Sokhem Pech, a leading Cambodian Mekong expert, told me, "no one even wants to talk about it." The committee officially monitoring the Mekong, which doesn't include China, is so feeble that it rarely speaks out on the issue.

The problem: Calls to nationalism and an obsession with sovereignty are drowning out calls for cooperation. The passage of time since World War II, when nationalism led to catastrophe, has allowed politicians to wield it more freely for short-term gain. "The Chinese are ignorant, so they are overjoyed," Tokyo Governor Shintaro Ishihara quipped after China launched a manned spaceship in 2003. "That [spacecraft] was an outdated one. If Japan wanted to do it, we could do it in one year."

This sort of nationalism isn't the stuff of a few firebrands. Across the continent, populist politicians have scrubbed school textbooks, whether to minimize Japan's atrocities in South Korea and China during World War II or to erase the memory of the Khmer Rouge in Cambodia -- perhaps because Prime Minister Hun Sen was an officer in the genocidal regime before he turned against it. Traveling to Cambodia, I meet teenagers who know practically nothing about what happened in their country in the 1970s. China, too, has whitewashed the memory of the Tiananmen Square crackdown of June 4, 1989. When a "Frontline" documentary crew went to Beijing University a few years ago and showed students the iconic 1989 photograph of the man who stopped a tank in its tracks, no one recognized it.

Politicians aren't the only ones embracing nationalism. In 2002, when Thailand was still recovering from its financial meltdown, government-backed filmmakers produced "The Legend of Suriyothai" to restore their country's wounded pride. One of the most expensive pictures in Thai history, it told the story of an ancient Thai queen who died fighting Burmese invaders -- and compounded Thais' hostility toward Burma, their neighbor to the west.

The Internet has further empowered Asian nationalists, allowing them to air their vitriol unchecked. On Chinese online bulletin boards such as the "Strong Nation Forum," which is run by the People's Daily, respondents compete for the most aggressive stance and ridicule Chinese leaders for compromising on issues such as relations with neighboring countries or Tibet or Taiwan. In Japan, the blogosphere helped spark sales of the manga comic book "Hating the Korean Wave." And in Indonesia, online writers helped fuel anger at neighboring Malaysia for the use of a supposedly Indonesian jingle in a tourism campaign and for the mistreatment of an Indonesian karate referee. These are petty grievances, but the Internet amplifies even the smallest outbursts, and reactions can be fierce. Just last week, Vietnam's foreign ministry called in China's ambassador to protest the appearance on Chinese Web sites of "invasion plans" that purported to detail the occupation of Vietnam by the People's Liberation Army.

Whenever I visit Asia, I meet young people who detest neighbors they barely know. "The Thais, all they care about is money. Nothing else," one Burmese acquaintance told me in Rangoon, despite the fact that he'd never actually been to Thailand. In one study taken last year by a leading Japanese nongovernmental organization, two-thirds of the Chinese polled said they had either a "very bad" or "relatively bad" impression of Japan.

As any politician can tell you, public opinion counts. In an open society such as the Philippines, rising anti-Chinese sentiment helped force the government in September 2007 to suspend China-funded projects valued at $4 billion. Even countries that have little history of animosity toward each other can be swept into a rage by the new nationalists. In 2006, after Singaporean state investment fund Temasek Holdings purchased Thai telecommunications giant Shin Corporation, Thai bloggers and online columnists condemned the deal, arguing that a Singaporean company would have control over sensitive Thai communications infrastructure. Thousands of Thais marched to Singapore's embassy in Bangkok -- a move that left urbane Singaporean diplomats, more accustomed to managing business deals than bullhorns, a bit flat-footed.

All these problems don't seem to have resonated in the United States, where an entire industry has developed around predictions that the Asian century will replace the American one. And maybe it will -- a few centuries from now."

Joshua Kurlantzick is a visiting scholar at the Carnegie Endowment for International Peace and a fellow at the Pacific Council on International Policy


Half baked politics

9 September 2008

Thailands' half baked politics took the most bizarre turn today; The Thai prime minister, Samak Sundaravej, must resign in the next 30 days after a court ruled today that he had breached the constitution by hosting four cookery shows after he took office.

Its not like he was running both Shin Corporation and the country. He was getting about US$500 a show to cover all his expenses and food purchases. Yet the constitutional court has by a 6-3 verdict thrown the entire government into turmoil as Samak's cabinet will also have to step down once replacements have been nominated.

The court ruled (or were they told?) that "his position as prime minister has ended". Samak's PPP party and political allies in the six-party coalition said they would nominate him as prime minister again. The constitution sanctions no penalty for the breach.

Samak, 73, had been hosting the television show "Tasting, Grumbling" for the past eight years, while he was the governor of Bangkok. He gave up in April, two months after he became prime minister.

The popular programme featured the prime minister cooking up traditional Thai recipes, such as pork leg in Coca-Cola, before indulging in a ranting monologue on subjects of his choosing. The grumpy right-winger would often visit restaurants or food stalls offering cooking tips. His other preferred haunts were Bangkok's food markets, where he would cast an eye over the produce.

But the money that he received for transport and the purchase of the ingredients for each of the four shows filmed after he assumed office constituted his cultivating a business interest, according to today's ruling.

Samak denied that he been employed by the show's producers, but the judges ruled that he had breached a clause in the constitution, which was rewritten after the 2006 military coup that ousted his predecessor, Thaksin Shinawatra.

In what is bound to be controversial interpretation, the judges said he had contravened a rule that barred ministers from holding outside business interests while in office. The clause was designed to eliminate the conflicts of interest that were part of Thaksin's rule.

The People Power Party will call an urgent meeting tomorrow to renominate Samak Sundaravej as prime minister, deputy party leader Kan Thiankaew said on Tuesday following the verdict to disqualify Samak.

Should Samak decline his nomination, the main coalition party would advance the name of its alternate candidate, Kan said, ruling out speculation that Chart Thai Party leader Banharn Silapa-archa might replace Samak. Dont be so sure; the six coalition parties have scheduled to meet tomorrow to search for a new prime minister. Banharn's name is likely to be high on the list.

Under the verdict, Samak is disqualified from his job on grounds for conflict of interest relating to his involvement in two cooking shows. The Cabinet is allowed to act as the caretaker administration pending the formation of a new government.

Truly half-baked. But just possibly the end for Samak and that start of yet more confusion.
 

Asif Ali Zardari: the godfather as president

by Tariq Ali in The Guardian

September 07 2008

"Asif Ali Zardari – singled out by fate to become Benazir Bhutto's husband and who, subsequently, did everything he could to prevent himself from being returned to obscurity – is about to become the new President of Pakistan. Oily-mouthed hangers-on, never in short supply in Pakistan, will orchestrate a few celebratory shows and the ready tongues of old cronies (some now appointed ambassadors to western capitals) will speak of how democracy has been enhanced. Zardari's close circle of friends, with whom he shared the spoils of power the last time around and who have remained loyal, refusing all inducements to turn state's evidence in the corruption cases against him, will also be delighted. Small wonder then that definitions of democracy in Pakistan differ from person to person.
There will be no expressions of joy on the streets to mark the transference of power from a moth-eaten general to a worm-eaten politician. The affection felt in some quarters for the Bhutto family is non-transferable. If Benazir were still alive, Zardari would not have been given any official post. She had been considering two other senior politicians for the presidency. Had she been more democratically inclined she would never have treated her political party so scornfully, reducing it to the status of a family heirloom, bequeathed to her son, with her husband as the regent till the boy came of age.

This, and this alone, has aided Zardari's rise to the top. He was disliked by many of his wife's closest supporters in the People's Party (or the Bhutto Family Party, as it is referred to by disaffected members) even when she was alive. They blamed his greed and godfatherish behaviour to explain her fall from power on two previous occasions, which I always thought was slightly unfair. She knew. It was a joint enterprise. She was never one to regard politics alone as the consuming passion of her life and always envied the lifestyle and social behaviour of the very rich. And he was shameless in his endeavours to achieve that status.

Today, he is the second richest person in the country, with estates and bank accounts littered on many continents, including a mansion in Surrey worth several million. Many of Benazir's inner circle, sidelined by the new boss (Zardari did rub their noses in excrement by having his apolitical sister elected from Larkana, hitherto a pocket borough of the Bhutto family) actively hate him. Benazir's uncle, Mumtaz Bhutto (head of the clan) has sharply denounced him. Some even encourage the grotesque view that he was in some way responsible for her death. This is foolish. He is only trying to fulfill her legacy. He was certainly charged with ordering the murder of his brother-in-law, Murtaza Bhutto, when Benazir was prime minister, but the case was never tried. Characteristically, one of Zardari's first acts after his party's victory in the February polls was to appoint Shoaib Suddle, the senior police officer connected to the Murtaza Bhutto ambush and killing, as the boss of the Federal Intelligence Agency. Loyalty is always repaid in full.

In the country at large, his standing, always low, has sunk still further. The majority of Pakistan's 190 million citizens may be poor, illiterate or semi-literate, but their instincts are usually sound. An opinion poll carried out by the New America Foundation some months ago revealed Zardari's approval ratings at a low ebb – less than 14%. These figures confirm the view that he is the worst possible slice of Pakistan's crumbly nationhood. The people has had no say in his election. parliamentary cabals have already determined the result. I do not take too seriously the recent revelation that a psychiatrist had pronounced him suffering from acute dementia, incapable of recognising his children due to a chronic loss of memory. This was, as is known, designed for the courtroom had he been prosecuted in London or Geneva for large-scale money-laundering and corruption. All that is in abeyance now, since he has been elevated into a crucial figure in the "war on terror".

A small mystery remained. Why did the US suddenly withdraw support from General Musharraf? An answer was provided on August 26 by Helene Cooper and Mark Mazzetti in the New York Times. The State Department, according to this report, was not in favour of an undignified and hasty departure, but unknown to them a hardcore neocon faction led by Zalmay Khalilzad, the US ambassador to the Security Council, was busy advising Asif Zardari in secret and helping him plan the campaign to oust the general:

"Mr Khalilzad had spoken by telephone with Mr Zardari, the leader of the Pakistan Peoples party, several times a week for the past month until he was confronted about the unauthorised contacts, a senior United States official said, "Can I ask what sort of 'advice and help' you are providing?" … Mr. Boucher wrote in an angry email message to Mr Khalilzad. "What sort of channel is this? Governmental, private, personal?" Copies of the message were sent to others at the highest levels of the State Department; the message was provided to the New York Times by an administration official who had received a copy."

Khalilzad is an inveterate factionalist and a master of intrigue. Having implanted Hamid Karzai in Kabul (with dire results as many in Washington now admit), he had been livid with Musharraf for refusing to give 100% support to his Afghan protege. Khalilzad now saw an opportunity to punish Musharraf and simultaneously try and create a Pakistani equivalent of Karzai.

Zardari fitted the bill. He is perfectly suited to being a total creature of Washington. The Swiss government helpfully decided to release millions of dollars from Zardari's bank accounts that had, till now, been frozen due to the pending corruption cases. Like his late wife, Zardari, too, is now being laundered, just like the money he made when last in office as minister for investment. This weakness will make him a pliant president of Pakistan.

The majority of the population is deeply hostile to the US/Nato presence in Afghanistan. Almost 80% favour a negotiated settlement and withdrawal of all foreign troops. Three days ago, a team of US commandos entered Pakistan "in search of terrorists" and 20 innocents were killed. Zardari was being tested. But if he permits US troops to enter the frontier province on "search-and-destroy" missions his career will be short-lived and the military will return in some shape or form. The High Command cannot afford to ignore the growing anger within its junior ranks at being forced to kill their own people.

The president of Pakistan was designed in the 1972 constitution as an ornamental figure. Military dictators subverted and altered the constitution to their advantage. Will Zardari revert to his late father-in-law's constitution or preserve its existing powers?

The country desperately needs a president capable of exercizing some moral authority and serving as the conscience of the country. The banished chief justice, Iftikhar Chaudhry, automatically comes to mind, as do the figures of Imran Khan and IA Rehman (the chairman of the Human Rights Commission), but the governing elite and its self-serving backers in Washington have always been blind to the real needs of this country. They should be careful. The sparks flying across the Afghan border might ignite a fire that is difficult to control."

Dubai to buy into Manchester United - rumour?

7 September 2008

Last week Sulaiman Al Fahim, the representative of the Abu Dhabi United Group for Development and Investment, acquired Manchester City football club from the former Thai Prime Minister Thaksin Shinawatra.

But don't for a moment think that this purchase was due to a love of the game or a love of Manchester.  It is part of a battle for the future of the UAE after the oil runs out and also of a competition between two city states.

In 1958 Abu Dhabi discovered oil reserves worth 9% of the world’s prime energy supply. The money flowed with the black gold. The first concrete buildings began to appear and in 1961 the city built its first paved road. Independence from Britain, of which it had been a protectorate since 1892, followed in 1971.

The surge in oil prices since the US-led invasion of Iraq in 2003 has seen the emirate’s fortunes soar. Analysts estimate that every time the oil price rises by $1, Abu Dhabi gains to the tune of $500m a year.

Last month Forbes magazine reported that the current ruler, Sheikh Khalifa bin Zayed bin Sultan Al Nahyan was the second richest monarch in the world with personal wealth of $23 billion. Incidentally the King of Thailand came first.

But it has been Dubai that has grown fastest.  Dubai has less than 1% of the oil reserves of Abu Dhabi and the wells are projected to run dry in 20 years. This has led to the ruling Maktoum family sanctioning a massive development programme. New islands have been built alongside the world’s deepest man-made port. The world’s biggest airport the 1km-high Burj Dubai tower are under construction. Add to that 500 hotels being built as part of an estimated £500 billion spend on new infrastructure.

The cities have copied eachother with their own international airlines and stockmarket; both are building new transit systems; both are investing massive amounts globally.

The Premiership is global and the owners are now as recognised as the players. Briefly Manchester City is the richest club in football. So what could change that - the gossip circulating this weekend is that the American owners of Manchester United will soon receive an offer to buy the club that they cannot refuse – from the Dubai royal family.

Watch this space......

The Mirror has 60 million faces

7 September 2008

Interesting commentary from the Bangkok Post

"One night in October 1973, my mother (who was 8 months pregnant with me at the time) was sitting at home, worrying and crying. My father, an officer in the riot prevention unit, was trapped in a police station surrounded by left-wing militants.

He was cradling in his arms one of his subordinates, who had been shot in the guts. He was bleeding profusely.

There were between 15 to 20 policemen trapped in the station, surrounded by hundreds of the opposition. The situation was hopeless. Snipers were everywhere. The policeman who was shot eventually died from blood loss.

Late in the night, my father ordered his subordinates to strip off their uniforms and put on civilian clothes. Under the cover of darkness, they escaped from the police station.

A few hours later, my father made it back home to my mother.

Thinking of all the coups, the protests and the bloodshed that Thailand has been through, I wonder: What have we been fighting for? What have we achieved?

The majority still live in poverty. Our children still beg in the streets. Not just politics, but our society as a whole is still corrupt. And we still have no clue what democracy is.

Coups, protests and conflicts are nothing more than the squabbling between rich and powerful men, whose fiery rhetoric, fancy tactics and deep pockets are able to rouse the people to flock to their banners.

I am no fan of prime minister Samak Sundaravej, nor am I a fan of the five leaders of the PAD. However, I am a fan of everyone who wakes up in the morning, goes to work, provides for his or her family, lends a helping hand to the less fortunate and lives an honest life, regardless of the colour of their shirts.

Getting rid of Prime Minister Samak and dissolving the parliament would make a lot of people happy, it would make me happy. But then what?

Would there be less corruption? Less social injustice? Less income disparity? Would it better the lives of the people?

We want to get rid of him because he is corrupt. But is he any more corrupt than the average Thai person? How many among us never cut corners, go under the table, use connections, or hand over a hundred baht bill?

We want to get rid of him because we don't want Thaksin-style mega projects. But then - look at our media, look at our society - why are we so obsessed with materialism and superficiality?

We don't want him to change the constitution to serve his (or his boss's) agenda. But then why do we the people each and every day bend the rules and manipulate the laws to serve our own agenda?

If we want to change Thailand for the better, getting rid of a few individuals won't do it. The change starts with us.

We march to get rid of one man, but do we march to save the lives of our children begging in the streets?

We march to get rid of one man, but do we march to save the lives of our brothers and sisters in the three southernmost provinces?

We march to get rid of one man, but did we march when Thaksin mandated the murder of innocent men and women on the streets?

If we want to change Thailand for the better, getting rid of a few individuals won't do it. The change starts with us.

The PAD has the right to protest, and Samak has the prerogative say he was democratically and overwhelmingly elected.

We can say the election was bought, but which election wasn't? Buying an election is just a matter of supply and demand, it can't be bought if the people aren't willing to sell it. And the people is us, the Thai people. It is us who sell our freedom, our democracy.

If Samak resigns, there are thousands and thousands more Samaks ready to replace him. The idea and being of the likes of Thaksin or Samak is like the proverb "fish in the water and the rice in the field".

Yes, like fish and rice, there are an abundance of Thaksins and Samaks in Thailand, in all level of society, from the poor to the rich.

The jealousy, the factionalism, the close-mindedness, the hate, the cronyism, the corruption, the politicking, the manipulation, the exploitation, the selfishness and self-righteousness, the refusal to change for the better - the things that we see play out in the political landscape, that we the people never cease to complain about in disgust - are we also guilty of the same in our families, in our social circles, in our schools, in our work places?

Samak is merely a reflection of our society, a mirror of who we are - the writer of this column not excepted.

Finding scapegoats and blaming others is easy. The rich blame the poor, the poor blame the rich. Failing that, we blame karma or black magic - and of course, we blame foreigners.

Yes, we should take to the streets against corrupt politicians, but not much good can come of it if we simply huff and puff every few years and then go back to our daily corruption, apathy and superficialism.

The fact is: Each and every one of us is responsible and accountable for our country, our society and the future of our children.

Whatever that is wrong with Thai politics and society, we 60 million plus people all have a hand in it - we are responsible for it.

We make Thailand. Not just Thaksin. Not just Samak. But all 60 million plus of us.

Samak is not worth one act of violence, not worth one drop of blood, not worth a single tear. He is not even worth the insults and hates the PAD throw at him each and every day.

Take to the streets and protest for the right reason: march not because we hate Samak, rather march because we love Thailand.

What we do in life each and every day, individually and collectively, is what will change our country, for better or for worse.

We should continue to fight corrupt politicians. But if we truly want better things for Thailand, the change starts with us, the Thai people."

India's mushrooming nuclear ambitions

6 September 2008

I find India's nuclear ambitions alarming; that does not mean that the world's most populous nation should not benefit from nuclear energy; it just worries me that there are sufficient extremists in the nation that their nuclear ambition could grow unchecked .

Earlier today forty-five nations approved a U.S. proposal on Saturday to lift a global ban on nuclear trade with India in a breakthrough towards sealing a controversial U.S.-Indian atomic energy deal.

One hurdle remains before the U.S.-India deal can take force - ratification by the U.S. Congress. It must act before adjourning in late September or the deal could be left to an uncertain fate under a new U.S. administration. Assume President Bush will be pushing this deal hard in the next three weeks.

The U.S.-India deal has raised international misgivings since India has shunned treaties meant to stop the spread, production and testing of nuclear weapons and mandate gradual disarmament. India has never ratified the non -proliferation treaty (NPT).

Washington says the fuel and technology deal would forge a strategic partnership with the world's largest democracy, help India meet exploding energy demand in an environmentally sound way and open a nuclear market worth billions of dollars. See; it is all about trade and influence to the Americans. If it was not US technology where would India turn to - China ? Not a situation the Americans want to see.

Nuclear Suppliers Group nations adopted a one-off waiver allowing them to do business with India after several small NSG states agreed under heavy U.S. pressure to weaker language than they had sought to ensure India does not test atomic bombs again. The six holdout states reluctantly accepted an Indian declaration on Friday reinforcing a commitment to a voluntary test moratorium. The declaration also said that India  would not join any future nuclear arms race, would permit broader U.N. inspections and adhered to the NSG anti-proliferation export control regime.

NSG critics and disarmament campaigners fear Indian access to nuclear material markets will let it tap into more of its limited indigenous resources, such as uranium fuel, to boost its nuclear arsenal, and drive Pakistan into another arms race. Given the volatile nature of regional politics (Pakistan, Sri Lanka and Nepal are all in some form of civil unrest) the fears are real.

The next step is with the US senate. India and the USA are the big winners here. There really is nothing in it for anyone else except fear.

Worse than a coup

6 September 2008 - from the Economist

An authoritarian rabble should not be allowed to turf out a deeply flawed but popularly elected government

STANDING up for democracy sometimes entails standing up for some unappealing democrats. Thailand’s pugnacious prime minister, Samak Sundaravej, is an especially hard man to defend. A ferocious rightist, Mr Samak was accused of inciting the policemen and vigilantes who slaughtered dozens of unarmed student protesters in Bangkok in 1976. On becoming prime minister following the election last December that restored democratic rule after a 2006 coup, Mr Samak chose for his cabinet some of the most unsavoury figures linked to the government of Thaksin Shinawatra, the prime minister deposed in the coup. But with the army on the streets of Bangkok again, Mr Samak is for once, if not in the right, then at least less wrong than those calling for his head.

His government is deeply flawed. But it would be wrong and dangerous if the authoritarian rabble who have seized Government House in Bangkok forced it out of office. After violent clashes between supporters and opponents of the government, Mr Samak this week declared a state of emergency in Bangkok. The army chief backed his decision, but by mid-week was still ruling out the use of force to clear the squatters out. If the protesters, the woefully misnamed People’s Alliance for Democracy (PAD), do succeed, democracy in Thailand—not so long ago a beacon, by Asian standards, of pluralistic politics—will be in grave danger.

Some in the crowds at PAD rallies are liberals, appalled both at the abuses of power in Mr Thaksin’s government and the sad signs that Mr Samak’s is no better. The PAD’s leaders, however, are neither liberals nor democrats. A gruesome bunch of reactionary businessmen, generals and aristocrats, they demand not fresh elections, which they would lose, but “new politics”—in fact a return to old-fashioned authoritarian rule, with a mostly appointed parliament and powers for the army to step in when it chooses. They argue that the rural masses who favour Mr Thaksin and Mr Samak are too “ill-educated” to use their votes sensibly. This overlooks an inconvenient electoral truth: the two prime ministers had genuinely popular policies, such as cheap health care and credit.

The palace and a Burmese road to ruin

As in the build-up to the 2006 coup, PAD leaders are trying to oust a popular government on the bogus pretext of “saving” Thailand’s revered King Bhumibol from a supposed republican plot. Some of the PAD protesters reportedly believe their sit-in has the crown’s tacit backing. Almost anywhere else, the police would have removed them, forcibly if necessary, by now. But it is whispered that the PAD has protectors “on high”—hardline army generals and possibly figures in the royal palace (though not the king himself). This may be nonsense; but by preventing the discussion and hence refutation of such royal rumours, Thailand’s harsh, much-abused lèse-majesté law has the ironic effect of helping them spread.

In the official version of modern Thai history, the king is the great defender of peace and democracy, who comes to the rescue at moments of crisis. Now would seem to be one such moment: some wise words from the king could do much to defuse tension. Thais like to believe they are good at seeking compromise to avoid conflict. But there has been little sign of compromise in the past three years, and there is now the risk of a bad one. The elected government might be forced out of office to pacify the PAD’s demagogues, it might be made to share power with the undeserving opposition Democrat party, which has shown little leadership while waiting for power to be handed it on a plate, or, as in Bangladesh, a civilian front might provide a cloak for de facto military rule.

It is just possible to imagine a decent compromise in which Mr Samak gives way to a more emollient figure from the ruling coalition—and the PAD and its supporters in the army, the bureaucracy and (if they exist) the royal palace accept the verdict of the people. But the PAD’s leaders may well not stop until they have imposed their own, undemocratic vision of Thailand. In this sense they are even more pernicious than the coupmakers of 2006, who at least promised to restore elected government and, under popular pressure, did so.

Prosperous, modern and open, Thailand has so far inhabited a different era from the dark ages in which its dismal neighbour, Myanmar, languishes under a thuggish, isolationist junta. Thailand’s foreign friends should make clear to the Thai elite that toppling elected governments would be a step backwards. As Myanmar has found, it might also court sanctions. Foreign tourists, seeing the unchecked disorder on their television screens, including blockades of some airports, may soon be imposing a boycott of their own.
 

Emirates A380 takes sick leave

6 September 2008

Emirates sole A380 has been returned to Toulouse for repairs by Airbus. The 3 times weekly A380 flights to JFK are currently being operated by 777s.

Their are rumours that the water heater for the showers burned out an electrical board? Whatever happened it must be something serious to send the plane back to the
manufacturer for repairs.

This is just speculation as Emirates and Airbus are managing the story in the media.

Questions for John McCain

5 September 2008

John McCain, in his acceptance speech as the Republican presidential candidate last night, made his capture and imprisonment by the Vietnamese part of the rationale for his running for the highest office in the USA.

Well maybe there are some questions that should be answered openly and honesty now that he has made that time a part of his campaign platform.

Can McCain prove to the American people that the 5 1/2 years he spent at the mercy of communist interrogators did not leave him with mental health issues that could hinder him in making snap decisions "if the White House phone rang at 3 a.m."

Is McCain taking any kind of pain or "nerve" medicines? If so, do the medicines cause emotional and physical reactions?

McCain was once treated for Posttraumatic Stress Disorder (PTSD) which is said to get worse over time for former POWs, what is the status of his treatment?

Does McCain still harbor stress triggered suicidal tendencies?

Where was McCain and what was happening to him during the months he was missing from the POW camp?

McCain implies that he made only one propaganda broadcast for the communists, but Senate Foreign Relations Committee staffers say he made over 30. How many did he make and what did he get in return?

Why does McCain still deny that the Soviets were involved in the interrogation of U.S. POWs in Vietnam?

Does McCain's former interrogators, the communist Vietnamese, Russians, Chinese and Cubans have anything in their secret intelligence files about his behavior as a prisoner with which they could blackmail a President John McCain?

The gloves are off now. Being an American hero does not allow him to evade the questions. The pain and suffering must have been terrifying. The memories must be scarred. McCain wants to America's oldest President. He has to prove he is fit to govern.

Thaksin's legacy

5 September 2008

On reason that the PAD cannot roll back democracy and recreate a feudal Thailand is the legacy of the economic changes implemented by the Thaksin government after 2001.

Thaksin's economic policy endures, not just at home but with a widespread appeal across the developing world. "Thaksinomics" was a plan to to elevate rural Thais from poverty.

It was simple, popular and long-lasting. His initiatives quickly reversed the devastation wrought by the 1997–98 Asian financial crisis and made Thailand's fast growth the envy of Southeast Asia. Now similar schemes are ramping up across developing Asia to address the issues that plagued Thailand in the late 1990s and now threaten the entire region: overdependency on export markets, unequal development at home and yawning rich-poor income gaps.

Critics decried Thaksin's programs as pork-barrel populism, but skeptics quickly became converts as rural debt holidays and village-level business loans energized grass-roots manufacturing and services, and improvements to Thailand's weak social safety net—particularly the creation of a nearly free system of basic medical care—liberated rural households to save less and spend more.

Thaksin called it "dual track" development, building a vibrant local market alongside the export sector, and it worked.

Public debt rose, but the boost in growth and tax revenues more than compensated. Thailand's economy expanded by nearly 6 percent a year from 2001 to 2006, dependency on foreign investment and exports decreased and the country's income gap actually narrowed during a period when the distance between the haves and have-nots widened virtually everywhere else in Asia.

The logic of Thaksin's approach—that access to capital, employment opportunities and basic social services can transform disadvantaged regions into growth engines—is now accepted wisdom. Indonesian President Susilo Bambang Yudhoyono has followed it in his support for poor households hit hardest by a rollback in fuel subsidies. India's Manmohan Singh has created millions of rural jobs; his ultimate growth goals very much echo Thaksin's. In the Philippines, President Gloria Macapagal Arroyo once declared, "I am an unabashed disciple of Thaksinomics." And since 2006, when China unveiled a sweeping plan to redirect state investment to create a "new socialist countryside" in the hinterland, Beijing has repealed farm taxes, channeled millions to rural enterprises and otherwise sought to revitalize poor interior provinces (China reportedly sent a team to Thailand to study Thaksinomics back in 2003).

Chinese leaders reaffirmed the importance of what President Hu Jintao calls "harmonious" growth when the National People's Congress met last March, and in recent weeks Chinese and foreign analysis have suggested that Beijing soon could unveil a massive fiscal stimulus package targeting disadvantaged sectors of the economy.

With growing wealth comes a more educated people and a growing political awareness. Thaksin changed Thailand. Sure he and others around him used their positions to create their own wealth. But the PAD and others who attempt to roll back change do so at their own peril.

Thai impasse

5 September 2008

My reader must know by now that I am very fond of Thailand and saddened by the continuing political uncertainities; the violence on the south and the deaths and shootings that have now become a part of the battling mobs in Bangkok.

What happens next is far from clear. Prime Minister Samak has proposed a referendum on his continuing as Prime Minister. This delaying tactic solves nothing. Neither the resignation of Prime Minister Samak Sundaravej nor the dissolution of Parliament will put an end to the deadlock.

At the other extreme the anti-government People's Alliance for Democracy (PAD) appears determined to establish nothing less than their so-called "New Politics".

Yet in any general election, the ruling People Power Party (PPP) or its clone appears likely to gain the most votes and form a government yet again. The PAD's so called New Politics will automatically reduce every citizen's right to elect their own representatives and should be rejected in its totality.

The rural and urban poor are the largest block of voters, that is a fact. But why should they be returned to feudal times and be made to accept rule by a small group of self-righteous elite. Feudalism died in the 18th century.

The PAD advocates rule by the few - which could easily degenerate into rule by the fewer for the fewer. The solution for the Thai media appears to be the re-education of the rural poor about the meaning and mechanism of elections and democracy. Dont underestimate this group. They understand only too well that their vote has given them a say in the country's wealth.

The longer the "educated" middle class and elite continue to fail to see that an election does not ensure an honest and morally upright government - but it does ensure that every voter has a say in choosing their own representatives - the longer the political crisis and confrontation will linger.

The current drama could take years, if not decades, to resolve itself.

Thailand is embarking on a class war with two opposite groups of elites backing their respective sides. No referendum will solve that.

Doha flight will be first departure from new terminal

5 September2008

Dubai's new airport terminal will open on 14 October 2008 and passengers flying with Emirates Airline to GCC countries and the Americas will be the first to use the new Terminal Three.

From October 14, Emirates will fly 40 flights a day, about 15 per cent of its total services, from its new home, including services to New York’s JFK Airport.

Flight EK843 to Doha, an Airbus A330-200, will be the first scheduled Emirates flight to leave the US$4.5 billion (Dh16.5bn) terminal, which will have five gates specifically designed to accommodate the airline’s upcoming fleet of 58 Airbus A380 superjumbos.

The airline said it was unable to give firm dates for the start of the remaining three phases, revealing only that a new phase would begin once the previous one was running smoothly.

Phase two will include flights to the airline’s remaining Middle East destinations and Africa, increasing operations to 99 flights every day, or 37 per cent of all flights.

Flights to Europe will take off in the next phase, escalating operations to 168 daily flights, or 60 per cent of all Emirates’ services.

The fourth and final phase will include flights to the Indian subcontinent, East Asia and Australasia and bring the total to 269 flights every day.

The new terminal has a built-up area of 515,000 square metres, with more than 250 check-in counters, including 126 for economy class passengers, 32 for first and business classes and 60 self-service kiosks for those with and without baggage.

In addition, 10 counters will be dedicated to Skywards premium members and 18 will be set aside for oversized baggage.

Despite a huge investment in the new terminal, it is  still regarded as a stopgap until the much larger Al Maktoum International Airport in Jebel Ali opens in the next decade.



SQ crew detained in Abu Dhabi

4 September 2008

A Singapore Airlines (SIA) steward has been held in Abu Dhabi on suspicion of raping a colleague at a hotel there.

The airline yesterday said a member of its cabin crew was detained by the authorities in the United Arab Emirates, following allegations made against him by another crew member.

The victim is said to have been a relatively new recruit, although the suspect is supposedly more senior and in a supervisory role.

The man and his alleged victim are said to have served on the same route between Singapore and Abu Dhabi, but arrived in the city one day apart.

The incident is said to have occurred last Saturday and the victim made a police report there.

According to Chinese evening newspaper Lianhe Wanbao, the man is married with a young child and his wife is pregnant.

It is believed a hotel worker let the suspect into the victim's room, where he then raped her.

The Straits Times understands the victim arrived back in Singapore soon after the alleged rape was reported. The accused is still in remand in Abu Dhabi.

'Singapore Airlines is providing both the crew with the maximum possible support,' said the airline's spokesman Stephen Forshaw.


United closing Asian bases -again

5 September 2008

United Airlines has announced its intention to eliminate 1,550 flight attendant jobs effective October 31, 2008. This is as a result of management's decision to reduce domestic capacity in the fourth quarter by approximately 14 percent compared with last year and to cut flight attendant staffing onboard United aircraft.

United is obliged to offer a voluntary redundancy first and also to lay off its "Foreign Nationals" who are based in Singapore and Bangkok prior to any redunancy of an AFA Member.

The Singapore and Bangkok based crews have been given notice and will be released no later than October 30, 2008.

Almost exactly seven years ago; after the 9/11 attack on the USA, United went through exactly the same closures of its Asian crew bases.

Many of the originally laid off crew were re-employed and will now be laid off for the second time.

These crews almost made United a decent airline; at least in Asia.

Bangkok Post show its true colours

5 September 2008

The Bangkok Post does not like; forget that he was democraticaly elected.

The Post published yesterday its strongest attack on the country's Prime Minister:

"Step down, now!
SANITSUDA EKACHAI

If you did not know then, you should know by now. The man who died in a pool of blood during the free-for-all when your supporters attacked the protesters at Makkhawan Bridge was your man.

There was little information about him when you held the press conference to defend your decision to declare a state of emergency.

When reporters asked you about the dead man, you shot back belligerently: "Whose side was he on?"

Your eyes tell all. The heartlessness. The cruelty. When you started dividing even among the dead, we knew we could not let you carry on.

For your information, the dead man was Narongsak Kobthaisong from Korat, Nakhon Ratchasima, a Thaksin supporter. And since you are Mr Thaksin's proxy, he supported you.

Narongsak was a nobody in your eyes. He was just a pawn in a larger ploy to incite violence so the state of emergency could bring in the military to eradicate the protesters.

Say what you like. Deny all you can, that you had nothing to do with your supporters attacking the protesters.


But who will believe it?

The violence may very well be the work of Mr Thaksin's other generals whom you cannot control.

But you still cannot deny responsibility.

One man has died, and the game isn't going according to plan.

The military has refused to carry out your order to crack down on the gathering of the People's Alliance for Democracy (PAD) at Government House.

So what's next?

Allowing Mr Thaksin's men to send their thugs on a killing spree, so you can hold on to power over a country in ruins?

Indeed, couldn't you see the blood ahead when you allowed the protesters from both sides to become confrontational, or when you ordered the military to do the dirty job for you?

Why do you have no qualms in dispensing with other people's lives?

Don't you believe in heaven and hell?

You might think you are in a different league from your pawn, the late Narong-sak. But haven't you, as a Buddhist, ever been taught that we are all equal in birth, ageing, illness and death?

Haven't you been taught that we all die, and we cannot take anything with us after we die but our karma?

That our next life is crucially determined by the last thoughts and feelings when we take our last breath?

Narongsak's life was cut short by violence. What could possibly have been the last thing on his mind when anger and physical pain from the wounds subsided and darkness entered?

Happy, carefree moments in childhood before the harsh reality of poverty and violence in life set in?

The warm embrace of his mother?

Ironically, the nation owes much to him.

Because he was treated just like a pawn by his masters, he died in obscurity. Had he been a PAD supporter, he could have been turned into a martyr for the PAD leaders to whip up more anti-government anger.

Can you imagine what could have happened?

You know the PAD wants to see blood spilled so the military can intervene. Why did you fall into the trap?

Is the anger and greed too blinding?

The whole country is hanging precariously by a thin thread because of your stubbornness.

You might sincerely believe that you are protecting a democratic system, but history will remember you for puttting yourself first before the country.

That is a very expensive price to pay for being a Thaksin lackey.

Is it worth it?

You can turn things around.

If you haven't already taken that step - or have already been forced to do it - do it now.

Forget the PAD. Its leaders have their own karma to answer to.

If you do the right thing, it will not only save the country, it can also save your soul when your time comes.

Step down.

Before it is too late."

Sanitsuda Ekachai is Assistant Editor (Outlook), Bangkok Post.

 

Is Samak about to resign?

3 September 2008

from The Nation newspaper

"Prime Minister Samak Sundaravej is expected to address the public on national radio this morning, with high prospects that he will step down.

A well-informed source said Samak's resignation would pave the way for three possible scenarios, all of which will take place within the current constitutional framework.

1. Samak could dissolve Parliament.
2. He could resign to pave the way for a new coalition government.
3. Samak's resignation could result in the formation of a national unity government.

In the third scenario, Parliament will need to support an amendment of Article 171 of the Constitution, under which the prime minister must be a Member of Parliament, the source added.

Samak has been driven into a tight corner, suffering two blows in a row yesterday. The first blow came when Army chief Anupong Paochinda told Samak that he would not use force to disperse anti-government protesters from Government House despite Tuesday's declaration of a state of emergency.

The second blow for Samak yesterday came when Foreign Minister Tej Bunnag resigned. Anupong's tough stand and Tej's resignation plan spawned intense rumours last night that Samak was ready to call it a day. However, Samak's booking of a Public Relations Department radio network at 7.30 am for a public address this morning was later played down as an effort to "explain" the current situation, including Tej's resignation, to the people.

Army chief Anupong told Samak that he will not use force to crack down on the People's Alliance for Democracy (PAD) protesters, according to First Army Region Commander Prayut Chanocha. "It is difficult to use military and police forces against the people. Using force could worsen the situation. It would go step by step and take time. Please don't expect that the state of emergency could finish everything quickly. The officials need time to work," Prayut quoted Anupong as saying to Samak. Samak had expected tough action against the protesters. But the soft approach of the military gave Samak no sword to bring down the PAD.

Meanwhile, members of the Privy Council yesterday reportedly were granted royal audience with His Majesty the King to report on the situation. People Power Party MP Panya Sripanya said it is possible that his party would press Samak to step down rather than dissolve the lower House. The party's MPs from the northeastern region will hold a meeting today to take a stand over the situation. But another MP, Kan Thiankeow, said the option to dissolve the house of representatives was likely but it was the prime minister's decision.

Democrat Party leader Abhisit Vejjajiva said he only had information that Samak would be on radio this morning to clarify the political situation. Abhisit turned down the suggestion that he could be proposed as new prime minister if Samak resigns, and also declined to comment if he would accept the proposal. However, Abhisit said even if Samak resigns, the passing of the 2009 Budget Bill would not be affected as the deliberation belongs to the Parliament, not the government."

 

Lese-Majeste charge for Aussie

3 September 2008

An Australian writer has been arrested in Thailand and faces a lese-majeste charge for publishing a novel deemed defamatory to the country's royal family, police and the Australian embassy said on Wednesday.

An embassy official identified the man as a 41-year-old from Melbourne and police named him as Harry Nicolaides, who was unaware there was an arrest warrant out for him when he tried to fly out from Bangkok to Australia on Sunday.

"An arrest warrant was issued in March for a book he wrote in 2005 deemed defamatory to the crown prince," Police Lieutenant-Colonel Boonlert Kalayanamit told Reuters.

He has been charged with lese-majeste, a crime that can carry a 15-year jail sentence in Thailand, and was being held at a remand prison pending further interviews, Boonlert said.

Nicolaides, a regular visitor to Thailand and briefly a resident, when he taught English and wrote for Australian newspapers, had not been granted bail, police said.

Police identified the novel in question as "Verisimilitude", described in publicity dated June 2005 on the phuket-info.com website as a "trenchant commentary on the political and social life of contemporary Thailand".


Tyranny of a minority

1 September 2008

In other civilised countries, provocation and occupation of the seat of government would bring swift enforcement of the law. The PAD's revolting rampage has been met with tame official responses.

By Thitinan Pongsudhirak Bangkok Post

The writer is Director of the Institute of Security and International Studies, Faculty of Political Science, Chulalongkorn University.

Over the past three years, Thai politics has degenerated from the tyranny of a majority under former prime minister Thaksin Shinawatra to that of a minority led by the People's Alliance for Democracy (PAD).

Prior to the military coup in September 2006, Mr Thaksin exploited his Thai Rak Thai party's electoral successes to abuse power and monopolise political outcomes, reaping rents and rewards for businesses of his family and associates and lining pockets of his cronies. But now his erstwhile opponents have abused their unelected power from a different direction, holding the entire country hostage to their demands and revealing their distrust and disdain for the majority of the electorate.

The ongoing political crisis took a turn for the worst on August 26 when PAD demonstrators moved from their regular street protests to arbitrarily take over a state TV station, several ministries and Government House. They resorted to physical force by breaching and tearing down the fences and walls of these state agencies, and have since encamped at Government House. These unlawful efforts were an unprecedented provocation.

In other civilised countries, such a provocation and occupation of the seat of government would have been met with a swift and complete enforcement of the law to regain the state properties. Instead, the PAD's revolting rampage has been met with tamed official responses. Even at Makkhawan Bridge in an old and historic area of Bangkok where altercations between the authorities and protesters ensued following a police attempt to dismantle the three-months-old protest site, injuries were limited. More protesters were injured when they marched and confronted police at the gates of the Metropolitan Police Bureau. Stationed inside the gates with the PAD crowds massing outside, the police reportedly deployed several tear gas canisters.

The adverse public reactions to the authorities over these scuffles are understandable. State-perpetrated violence against the people is deeply etched in the Thai psyche, imprinted by the military's gruesome suppression of university students in October 1976 and middle-class demonstrators in May 1992. Prime Minister Samak Sundaravej's role in the October 1976 suppression also constrains him from being seen as trigger-happy. As a result, Mr Samak has allowed the PAD to rule the streets and illegally occupy Government House.

In addition, as the PAD bullies its way in a unilateral and anti-democratic effort to bring closure on the Samak government, its many sceptics and critics are cowed into silence. Dissent against the PAD brings personal attacks and character assassinations.

Yet this is the time for those myriad Thais - the silent majority - who never liked Mr Thaksin then and despise Mr Samak now - to come out and condemn the PAD's blatant hijacking of Thailand's democratic system. They lack the PAD's voice, vehicle and organisation, but they must find a way to speak out. The white ribbon campaign, initiated by Thammasat University law professors, should be revived for those who are no fans of Mr Samak and his government but who oppose the PAD's methods and intentions. Other campaigns to give voice to the columns of people sandwiched between the PAD and the Samak government should also be considered and tried.

As fledging and fragile as it is, Thailand's democratic system is still in operation. It staged a general election just eight months ago. The voices of people who spoke at the polling booths then should still be respected. Moreover, these voices are now reinforced by a restoration of institutional checks and balances after the coup. Even the PAD leaders have not doubted the current integrity of the independent agencies such as the Election Commission, National Counter Corruption Commission and Constitution Court. Nor has anyone disputed the rulings of the Supreme Court and Criminal Court, which have taken Mr Thaksin to task and issued a conviction and three-year jail sentence on his wife. Mr Thaksin and his wife even had to flee from the law by their exile in England. This judicial process and its several critical verdicts to come on Mr Samak's conflicts of interest and the ruling People Power party's dissolution, among other cases involving government officials, should be respected and allowed to run their course.

But the PAD knows that in the end the majority of the electorate is likely to opt for a party with Thai Rak Thai and PPP's winning policy platform. As a result, it has nakedly revealed its hand. The PAD wants to bring Thai politics back to a bygone era of appointed representatives, of keeping Mr Thaksin, Mr Samak, Thai Rak Thai and PPP out of power for good through its own seizure of power.

The forces in cahoots with the PAD are now conspicuous. The Democrat party, which has lost the elections time and again and is still unable and unwilling to focus on appealing policies, has never categorically rejected the PAD methods and objectives. Leading Democrats have visited the PAD at Government House, and a Democrat MP has been a PAD organiser from the outset.

Democrat party canvassers and their networks are reportedly involved in the closure of Phuket and Krabi airports. If this is untrue, it is imperative on the Democrats' leadership to categorically deny their members' handiwork in the unrest in the southern provinces, their electoral stronghold.

Mr Samak now faces dire choices. The PAD leaders have staked their movement exclusively on Mr Samak's resignation. Caught between a rock and a hard place, Mr Samak cannot crack down on the illegal occupants of Government House for fear of what is perceived as his past sins and the potential for a broad-based confrontation and violence. But allowing the PAD's rampage to settle in makes the prime minister look lame duck and ineffectual.

The bicameral legislative meeting yesterday was a good way forward but unlikely to resolve the crisis. As Mr Samak's position becomes more untenable, his resignation and the PAD's blackmailed success would be an event of infamy in Thai political annals, a huge setback for Thai democracy. Even those who abhor Mr Samak but who want to see Thailand's longer-term political maturation would have to root for him to weather this round of PAD-instigated maelstrom.


Funny old game

1 September 2008

Funny old game - football. And football club ownership may be even funnier. Last Monday Manchester City club chairman Garry Cooke insisted that  owner Thaksin Shinawatra was committed to the club despite speculation over his financial muscle raised by corruption charges in Thailand.

Today Thaksin sold out. The buyers, Abu Dhabi United Group for Development and Investment, said in a statement that it had completed the buyout late Sunday night. Financial terms were not immediately available, but the group described it as a "huge takeover" that gave it "all the management rights."

The group said the deal was a "massive achievement" that it hoped would help make Abu Dhabi a global sports capital.

Thaksin bought Manchester City in May 2007 for £81.6 million, or $163 million at the time. But his assets in Thailand were frozen, and he fled to Britain last month to escape corruption charges in his native country, claiming that he could not be assured of a fair trial there.

Sulaiman Al Fahim, a member of the group's board and the chief executive of Hydra Properties, completed the deal at the Abu Dhabi Emirates Palace Hotel with Thaksin and Khalid Kadfour Al-Muhairy, the legal chief of the Emirates Group.

Al Fahim pledged to clear any pending payments and solve the club's financial problems, which have left Thaksin resorting to obtaining loans from the club's former chairman, John Wardle.

Thaksin is to stay on as Honorary President with no administrative duties. This seems a little unnecessary given that he is a fugitive.

Meanwhile Thailand's Supreme Court on Monday agreed to hear a fourth case against Thaksin Shinawatra, accusing the ousted and exiled Thai premier of amending tax policy to enrich his business empire.