An Irish lesson for Thailand

There is no simple one size fits all solution for economic management but in the following article Thomas Friedman outlines how Ireland has moved in four decades from basket case to most envied nation. Most of the solutions are simple. Transparency is key. Allow foreign companies to compete; give them access to talented people. Eliminate corruption at all levels; separate big business from political control. De-politicize economic development.

Thailand sits on the ocean wonderfully placed between SE Asia and China. The country has great natural resources; a young work force and a decent power, water and road infrastructure. Great progress has been made but it is held back by the lack of a clear message; by corruption scandals; by lack of investment in education and by an economy that is not a level playing field for all.

The end of the rainbow

Thomas L. Friedman; The New York Times

Here's something you probably didn't know: Ireland today is the richest country in the European Union after Luxembourg.

Yes, the country that for hundreds of years was best known for emigration, tragic poets, famines, civil wars and leprechauns today has a per capita gross domestic product higher than that of Germany, France and Britain. How Ireland went from the sick man of Europe to the rich man in less than a generation is an amazing story. It tells you a lot about Europe today: All the innovation is happening on the periphery by those countries embracing globalization in their own ways - Ireland, Britain, Scandinavia and Eastern Europe - while those following the French-German social model are suffering high unemployment and low growth.

Ireland's turnaround began in the late 1960s when the government made secondary education free, enabling a lot more working-class kids to get a high school or technical degree. As a result, when Ireland joined the EU in 1973, it was able to draw on a much more educated work force.

By the mid-1980s, though, Ireland had reaped the initial benefits of EU membership - subsidies to build better infrastructure and a big market to sell into. But it still did not have enough competitive products to sell, because of years of protectionism and fiscal mismanagement. The country was going broke, and most college grads were emigrating.

"We went on a borrowing, spending and taxing spree, and that nearly drove us under," said Deputy Prime Minister Mary Harney. "It was because we nearly went under that we got the courage to change."

And change Ireland did. In a quite unusual development, the government, the main trade unions, farmers and industrialists came together and agreed on a program of fiscal austerity, slashing corporate taxes to 12.5 percent, far below the rest of Europe, moderating wages and prices, and aggressively courting foreign investment. In 1996, Ireland made college education basically free, creating an even more educated work force.

The results have been phenomenal. Today, 9 out of 10 of the world's top pharmaceutical companies have operations here, as do 16 of the top 20 medical device companies and 7 out of the top 10 software designers. Last year, Ireland got more foreign direct investment from America than from China. And overall government tax receipts are way up.

"We set up in Ireland in 1990," Michael Dell, founder of Dell Computer, explained to me via e-mail. "What attracted us? (A) well-educated work force - and good universities close by. (Also,) Ireland has an industrial and tax policy which is consistently very supportive of businesses, independent of which political party is in power. I believe this is because there are enough people who remember the very bad times to de-politicize economic development. (Ireland) also has very good transportation and logistics and a good location - easy to move products to major markets in Europe quickly."

Finally, added Dell, "they're competitive, want to succeed, hungry and know how to win. Our factory is in Limerick, but we also have several thousand sales and technical people outside of Dublin. The talent in Ireland has proven to be a wonderful resource for us. Fun fact: We are Ireland's largest exporter."

Intel opened its first chip factory in Ireland in 1993. James Jarrett, a vice president, said Intel was attracted by Ireland's large pool of young educated men and women, low corporate taxes and other incentives that saved Intel roughly a billion dollars over 10 years. National health care didn't hurt, either. "We have 4,700 employees there now in four factories, and we are even doing some high-end chip designing in Shannon with Irish engineers," Jarrett said.

In 1990, Ireland's total work force was 1.1 million. This year it will hit two million, with no unemployment and 200,000 foreign workers (including 50,000 Chinese). Others are taking notes. Prime Minister Bertie Ahern said: "I've met the premier of China five times in the last two years."

Ireland's advice is very simple: Make high school and college education free; make your corporate taxes low, simple and transparent; actively seek out global companies; open your economy to competition; speak English; keep your fiscal house in order; and build a consensus around the whole package with labor and management - then hang in there, because there will be bumps in the road - and you, too, can become one of the richest countries in Europe.

"It wasn't a miracle, we didn't find gold," said Mary Harney. "It was the right domestic policies and embracing globalization."

Time to reassess Mao

30 June 2005

Mao Zedong's portrait looms large over Tianenmen Square. His mausoleum is at the centre of the square. His face is on the country's bank notes. His communist ideology is still given credence by the current leaders.

Mao and his communist ideology are both out of place in modern China. And it may be that authors Jung Chang and John Halliday's new biography of Mao ("Mao; the unknwon story") is the key to a reassessment of Mao's place in modern China.

Many Chinese fled Mao and the communist threat to head for Taiwan and Hong Kong and overseas. They are proud of being ethnically Chinese. It is the party and its history that scares them. This book, after ten years of research and writing, re-writes modern history.

Mao instilled obedience through fear. During his rule modern estimates are that 27 million people died in the work camps, where they were sent to reform their bourgeois habits; some 38 million died of starvation and related sickness in the infamous and misnamed Great Leap forward from 1958 to 1961 and millions more in the Cultural Revolution of 1965 to 1976.

29 June 2005

It is a little surreal to wake up in a Beijing hotel room at 5am, to turn on CNN and to be watching a live re-enactment of the 200 year old Battle of Trafalgar. Weapons then were cannon balls and muskets. The 19th century belonged to Europe; the 20th century shifted that power to America; the 21st century moves that power to China. But is China ready to assume that responsibility? Are nations like India able to provide the checks and balances to China's headlong rush to world power.

200 years ago - say 8 generations ago - was still before the Industrial Revolution. Britannia ruled the waves; empire was still in relative infancy. 100 years later the motor car was just about to be invented and the Wright brothers had flown 100 yards. The new revolution is in information, the use of technology and the use and abuse of power.

The question is what happens in the next 100 years? What foundations are we laying down now that will shape the future? Or will we simply drive ourselves to extinction.

The dependence upon oil has to change. The motor car must become obsolete; there will have to be new forms of transportation. Maybe cities will become increasingly obsolete as we move to home working  and outsourcing.

Communication will become simpler - the keyboard interface to the pc is already obsolete.  Will we have the equivalent of a universal translator; your own personal  earpiece that allows two people who do not speak a common language to be able to interact without the need for a human translator.

In 100 years we will probably not be living solely on this planet. Man explores, man colonises, but will he do it peacefully, or will space conquest lead to the same nationalism and war as in the 20th century.

What is the impact of smaller families and rapidly aging populations? What will it mean for our retirement years. Will we ever be able to retire. In the last 50 years around the world family sizes have shrunk as people delay or simply ignore parenthood. How will we be written in the history books. Will our technology look as obsolete now as Nelson's cannons look from 200 years ago?

A very Thai tragedy

25 June 2005

It is a very Thai tragedy; Greek tragedies at least had pathos and some semblance of good and bad. In the following story there is little evidence of good. It is a classic tale or power, politics, mistresses, abuse and death. A tale of everyday life in the land of smiles. Sadly the truth is unlikely ever to be told for reason's explained below by the girl's father.

On Wednesday of this week a Thai Rak Thai MP from Udon Thani, Atthapol Sanitwongchai fell to his death from the condominium kept for his student girlfriend, Wassana Sunnee. Police have not yet determined whether his death was murder, suicide or an accident. They do believe that the lovers had a fight.

Prime Minister and Thai Rak Thai leader Thaksin Shinawatra, and the late MP's father, ex-MP Chalermpol Sanitwongchai, believed Atthapol was not the kind of person who would commit suicide.

Ten witnesses have been questioned. Video footage from closed-circuit cameras showed that at the time of the MPs death there was no one else in the condo unit other than the MP and his girlfriend.

Certainly the mysterious death of the girlfriend is making it hard to investigate and confirm the reasons for the MP's death.

Wassana's, who was 25, had lived with Atthapol for six years as a mistress. Her father says that she sometimes complained to her sister that the MP was jealous.

The father has suggested that his daughter killed herself due to stress after a day-long police questioning and having no one to console her. It appears that she was not given access to a lawyer; and despite presumably being more than a little traumatised at her lover and sponsor's death she was given no police escort of counseling help to take her home.

To add to her stress members of Attaphol's family, including his father, came to the apartment to claim his belongings. When she allegedly launched herself from the apartment balcony there were four other people in the room. All say that they had turned away from where she was standing and claim not to have witnessed Wassana's fall.

What was said to her by the family; why did Attaphol's father allegedly offer her money. Why was a girl left apparently suicidal after a day of such high emotion. The police and the family appear to have knowingly or otherwise applied a huge amount of pressure on this girl.

During dinner earlier that night witnesses have suggested that Attaphol and Wassana had driven back to the apartment leaving had left his chauffeur, Phichet, to pay the bill; they also say that Atthapol had slapped his driver in the face during dinner due to his belief that the chauffeur was having an affair with Wassana. Phichet was forced to leave his mobile phone at the restaurant as a guarantee after failing to cover the bill with cash - an account confirmed by waiting staff at the restaurant.

Security guards at the condominium said they saw Phichet arrive at the scene in a taxi 15 minutes after Attaphol's fall.

It also appears that Wassana and Atthapol had fought at the apartment, evidenced by the girl's bruises on her face and a cut to her lips which were seen on television after she left from police questioning.

Chao, Wassana's father, said rather sadly that "it's useless for ants like us to fight with elephants. Let bygones by bygones. Now they [Attaphol and Wassana] are together again."

No Thai Rak Thai MPs or party representatives had attended Wassana's funeral service at Wat Pa Samakkhee Nong Kaew in Udon Thani's Muang district. About 30 of Wassana's friends and relatives attended the service.

20 June 2005

On 8 June (see below) I was giving the Canadians a hard time for failing to deliver on their Tsunami promises. But actually it is the Australian's who are falling woefully short and who are jeopardising their relations hip with Indonesia and their role in Asia.

Reuters Alertnet service provides an updates monitoring service of Tsunami aid pledged and received. It can be found here.

Microsoft's China censorship; localisation or capitulation?

16 June 2005

Microsoft grew rapidly to be a great company because it is an American company; because market forces, education, freedom of action and opportunity all gave the company's founders the opportunity to grow unshackled by politics.

It is therefore particularly depressing to see Microsoft so readily agree to censoring the Chinese version of its blog tool, "MSN spaces". The system automatically rejecting words including "democracy" and "Dalai Lama". When a Chinese blogger attempts to post a message containing terms such as "democracy", "Dalai Lama", "Falungong", "4 June" (the date of the Tiananmen Square massacre), "China + corruption", or "human rights", a warning displays saying, "This message contains a banned expression, please delete this expression."

How far is Microsoft willing to go to collaborate with the Chinese authorities? If the authorities asked Microsoft to provide information about Chinese cyberdissidents using its services that it would agree to do so, on the basis that it is was legally obliged to do so.?

Generally "subversive" messages are displayed on Chinese-hosted forums and blogs but the banned words are automatically replaced with blank spaces.

The Chinese version of the MSN portal, along with the blog tool, were launched as a joint venture with a local state-controlled company, Shanghai Alliance Investment Ltd (SAIL).

The Chinese authorities are trying to impose self-censorship on all search engines and blog tools that that wish to operate on its territory. Microsoft is following Yahoo !, which was the first, agreed to remove all "subversive" news and information from its search results.

Microsoft's argument is that with despite the filters they are helping millions of people communicate, share stories, share photographs and build relationships. But please do not offend the non-elected authorities or question issues of history, unless  the authorities have launched their own campaign, such as the recent anti-Japanese rallies.
 

Here is the problem: is there a workable alternative? The Chinese market is too big for Microsoft and others to close up operations in that country, or to face litigation from the government. Microsoft wishes to be a blog host in a land with billions of eyeballs—rewriting foreign public policy is not part of the business plan. Boycotting China would be a noble choice. But simply ignoring Chinese law would just stir up international friction to little positive effect.

So is this adapting to local laws bona fide and necessary localisation or is it capitulation?

Jacko not guilty - told you so !!

The Milkshake Murder

13 June 2005

The eight week long trial of Nancy Kissel has started in Hong Kong. Ms. Kissel and her Merrill Lynch investor husband lived in Parkview, an exclusive and expensive tower block on top of the hills of Hong Kong island, often shrouded in mists and cloud in Hong Kong's winter months.

Ms. Kissel killed her husband; either pre-meditated or in self defense - that is for the court to determine.

The prosecution alleges that the American woman gave her husband a sedatives-laced strawberry milkshake before beating him to death with a heavy metal ornament.

Hong Kong's media loves this story; a Chinese reporter commented that: “For us, this case is a throwback to the colonial era. It has all the ingredients our readers are most interested in - sex, murder, gweilos (Cantonese slang for white foreigners) and lots and lots of money.”

Canada's failed commitments

8 June 2005

Five months ago South and South East Asia were starting to pick up the pieces after the year end's devastating tsunami. This week scientists are raising the alarm of massive earthquakes and the potential for another  tsunami based on their studies of regional seismic activity.

Five months ago government ministers from every capital on earth were announcing on CNN every 10 minutes more and more millions of relief aid. What ahs happened since.

In May it was reported that five hundred containers, representing one-quarter of all aid sent to Sri Lanka were still sitting on the dock in Colombo, unclaimed or unprocessed.

At the Indonesian port of Medan, 1,500 containers of aid were still sitting on the dock. There are many more examples.

So why pick on the Canadians. For deception basically. In January Canadian Prime Minister Paul Martin flew into Sri Lanka to pledge multi millions aid. Bush was on his ranch and Blair on his vacation. But Prime Minister Martin walked along the ravaged coast of Kalumnai and was, reported Canada's CTV network, "visibly shaken."  Martin boldly committed Canada to giving $425 million to tsunami relief. "Mr. Paul Martin Has Set A Great Example For The Rest Of The World Leaders!" raved the LankaWeb news service.

So how much of that $425 million has been spent so far? Not a lot. The Government says that $90 million has been released to Canadian non-governmental organizations (NGOs) for projects that will support relief and rehabilitation work in communities. Note that the money has gone to Canadian NGOs. Much of it is still in Ottawa. Canada enjoys a reputation as the perfect global citizen, renowned for its commitment to the U.N. and multilateralism. But Canada's contribution to tsunami relief is fraudulent.

Martin's visit to Sri Lanka and pledged aid looks like the photo-opportunity of a man whose political support is withering.

So I wrote to the Tsunami Secretariat of the Canadian International Development Agency to ask what was going on - the following (unedited) is their reply. So there appears to be a further C$335million to spend. Or maybe the commitment was never real anyway.

Dear Mr. Scott,

Thank you for your recent email dated May 19th, 2005 regarding Canada's contribution to immediate and long-term assistance to people affected by the Indian Ocean tsunami. As you may know, the Canadian International Development Agency (CIDA) is leading Canada's response to the relief, rehabilitation and reconstruction phases of the tsunami affected areas. The Canadian government has committed $425 million over five years toward a comprehensive response to the Indian Ocean earthquake and tsunami. These funds will be used for relief and rehabilitation ($265 million), as well as reconstruction ($160 million) in the most affected countries.

While relief, rehabilitation, and reconstruction activities can overlap, they are considered as distinct phases:

· humanitarian relief concentrates on mainly short-term and temporary activities to ensure that the basic needs of people are immediately met (e.g. emergency food, clean water, shelter, etc.);

· rehabilitation entails restoring local services related to the provision of immediate needs (e.g. sanitation, power, transportation, law and order, etc.);

· reconstruction represents longer-term development assistance which would help people in the affected areas rebuild their lives and meet their own current and future needs.

As part of its initial contribution, Canada allocated over $53 million for relief to both UN agencies and non-governmental organizations (NGOs). Canadian embassies and high commissions in the affected countries also made $1.5 million available to help them respond quickly to initiatives proposed by local organizations. In addition, the Canadian government offered a debt moratorium to affected countries.

To date, close to $90 million has been released to Canadian non-governmental organizations (NGOs) for projects that will support relief and rehabilitation work in communities affected by the tsunami. This funding, delivered through CIDA, comes from the $425 million set aside for Canada's response to the tsunami disaster.

I hope this addresses your concerns. Please feel free to contact us should you have any further queries.

Best Regards,

Tsunami Secretariat Canadian International Development Agency

200 Promenade du Portage, Hull, Quebec Canada K1A 0G4

Drop the debt, make poverty history; this sounds right but the real change will come from those with political power engaging with the issues in all their complexity, rather than simply making us all feel just a little bit responsible.

The greater majority of us work hard to feed ourselves and those around us. Many of us quietly do our bit for causes that we care about; there is something irritating about multi-millionaires telling us to stop being so bloody selfish, telling us that the world is full of inequality (we know, believe me)  and to give more.