Political news on anti-globalisation trend?

In Europe

In UK, the big vote for Ukip in the European elections is notable:

• Ukip wins European elections with ease to set off political earthquake; http://gu.com/p/3pgzf
• Europe: the continent for every type of unhappy | Timothy Garton Ash; http://gu.com/p/3ph7e
• Labour needs a politics of hope to counter Ukip's politics of despair | Owen Jones; http://gu.com/p/3ph5j
• Ukip supporters I met weren't racist – they felt disenfranchised and frustrated | Rupert Myers; http://gu.com/p/3ph2v
• Damning verdict: Nick Clegg and Lib Dems face wipeout; http://gu.com/p/3ph9e

France: Front National's success not surprising to heartland supporters; http://gu.com/p/3ph95

European Stocks Brush Off Election Results - WSJ.com; http://m.us.wsj.com/articles/SB10001424052702304587704579585273906888720?mg=reno64-wsj

Video - The Rise of the Euroskepti​c Right in Europe - WSJ.com; http://live.wsj.com/video/the-rise-of-the-euroskeptic-right-in-europe/2D6EF382-F8C0-4FB7-B379-DCA54004482D.html?mod=djemTEW_h#!2D6EF382-F8C0-4FB7-B379-DCA54004482D


In Southeast Asia

Singapore: New Singapore political party to be announced; https://sg.news.yahoo.com/new-singapore-political-party-to-be-announced-002557100.html; Ex-presidential candidate Tan Jee Say will be announcing the registration of a new Singapore political party on Sunday.The 60-year-old will be unveiling the 11 founding members, party logo and manifesto, according to an email to the media. More members might be recruited before the next election.  Tan ran for the general election in 2011 under the Singapore Democratic Party. He was also the principal private secretary to the then Deputy Prime Minister Goh Chok Tong.....  Tan's Radio Australia interview: http://www.radioaustralia.net.au/international/radio/program/asia-pacific/singaporeans-first-aims-to-be-a-political-force-for-the-people/1317288

Malaysia: Discovery that new young Malay candidate of the DAP (Chinese-controlled party in opposition coalition) has previously, while her mother was involved with Perkasa# helped out at this important ultra-right Malay nationalist group; http://www.themalaymailonline.com/malaysia/article/daps-dyana-admits-helping-mum-with-perkasa-drive. Thus, her apparent swing from Perkasa to DAP is apparently a remarkable political epiphany. Here's an almost advertorial-looking piece on DAP's Dyana Sofya: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=290171:a-new-political-star-in-malaysia-dyana&Itemid=2#axzz32sMqzfjB with a super slick photo (below) to go with it. The Malaysia media has up till the Perkasa revelation been extremely good to her. Dyana Sofya: From UMNO supporter roots to DAP rising star (2013; Lim Kit Siang's political secretary): http://www.youtube.com/watch?v=8s5AXfXx9t8. She is expected to win and become the new (opposition) MP for Teluk Intan, Perak. 

#http://en.wikipedia.org/wiki/Perkasa: "Perkasa is a non-governmental Malay supremacy organization that was formed by Ibrahim Ali in the aftermath of the Malaysian general elections in 2008. This conservative, extreme-right, ethnic Malay organisation is led by its president Ibrahim Ali, with Tun Dr. Mahathir Mohamad, the former Prime Minister of Malaysia, as advisor. The group claims to have a membership of 420,000, though outsiders estimate the actual figure to be much lower. There are substantiated allegations that more than 60% of its membership consists of UMNO members." Accessed, 27 May 2014.

Krugman on need for growth

Last Wednesday, I managed to get a spot at a talk of deflation risk by Paul Krugman. Skidelsky (Keynes biographer) was on the panel. The talk was led by Sanjaya Lall Foundation and Malaysia's Khazanah sovereign wealth fund had a presence. Maybe they paid for the cocktails after. I didn't have time to get enough of those smoked salmon blinis.

Krugman talked about problem of demographic and real estate drags (-4 pctage points pa on the latter) on economic growth. He seems to be painting Japan post 1980s scenario for US and perhaps more so Europe. On US data he showed how each recession needed ever lower interest rates to boost growth again (see photo), but with the previous two post recessions booms feeding into the Internet and housing bubbles. Krugman was very confident that economics knows what to do get us out of the current morass. One should be unconventional and aggressive with deep negative interest rates to force people not to save and thus boost aggregate demand (AD) for employment and growth. But he was disappointed that the politicians have not taken up this obviously low cost policy option. The dismal conclusion seemed to be that politicians and others would be too conventional and not use this simple cheap solution.

His 24 October 2013 op-ed is a good summary of his point against those who don't get it : "They just assume that it would cause soaring interest rates and economic collapse, whenboth theory and evidence suggest otherwise. Don’t believe me? Look at Japan, a country that, like America, has its own currency and borrows in that currency, and has much higher debt relative to G.D.P. than we do. Since taking office, Prime Minister Shinzo Abe has, in effect, engineered exactly the kind of loss of confidence the debt worriers fear — that is, he has persuaded investors that deflation is over and inflation lies ahead, which reduces the attractiveness of Japanese bonds. And the effects on the Japanese economy have been entirely positive! Interest rates are still low, because people expect the Bank of Japan (the equivalent of our Federal Reserve) to keep them low; the yen has fallen, which is a good thing, because it make Japanese exports more competitive. And Japanese economic growth has actually accelerated...."

The panel and Q&A did not bring strong challenge to this view. It was developed country centric. On a question on climate change, Krugman saw environmental stresses as another business opportunity to push AD. I suppose this is happening as standards imposed in developed economies and on developing nations via trade standards is growing a new sub sector of activity. But there is the argument that all this is not really changing the outlook for the environment but merely helping us more efficiently destroy the environment.

I chatted with several people about Krugman's policy views. Most talked about inequality, housing and asset bubbles. My demography professor remarked on bigger negative rates: but what would happen to aged pensioners?

An Asian businessman said: 

My concern with Krugman's prescriptions is that the world effectively goes into competitive devaluations. Imagine every major economy doing likewise. Some say that Japan needs to create excess liquidity of US$9 trillion to deflate away the fiscal debts. That's 3 times US QE. And now Euro zone talking of the same.  Surely, China will deflate too to protect exports. Then what? Yes, aggregate demand grows. But surely we fall right back into hyper inflation? The excess reserves are not yet translated into money supply. That will happen the moment agg demand expands.

Expand the pool of money even more? I don't believe in a free ride. Printing money does not sound right. Maybe I am too traditionalist. Frankly, the world has enough wealth. It has enough production. It needs to balance disparity. And it's not all that bad to allow nature a rest, from excessive exploitation. If we have enough housing stock and with less population, why keep building? We should not grow for the sake of growth. The fear of deflation is real as in Japan and maybe elsewhere. Japan was in stagflation the last 2 decades but the world grew... China, the rest of Asia etc. Europe may go into stagflation due to its population profile but Africa will grow. I think the agendas are different. It's about western growth by exporting on devalued currencies.

Bottom line: Krugman says we are in unprecedented depression economics. But others ask if we are too addicted to growth and bubble cycle and beggar thy neighbour policies?

Visit with David Butler

Today, I met up with Prof David Butler. I had attended his seminars while at college. Maybe that's why I retained some interest in psephology. Enough anyway to get me through work on the Felda and Johor papers. It was a treat to see him at Nuffield and to attend a Friday 5pm seminar at the aptly named Butler Room. He asked me many questions on the state of Malaysia and shared updates on his work and observation that the Election Commission in India seems well functioning in its role. Butler is famous for the Swingometer.

Energy enviro-trade politics and WTO concerns on private standards

Just sharing some nice coverage of Canada - Keystone energy-enviro (geo)politics. Investigative articles by Bloomberg looks at the problem that Canada (considered an ethical oil exporter) has had in now trying to export product from its new Alberta oil frontier to the US and China:

http://yuleng-resource-newslinks.blogspot.com/2014/04/us-canada-energy-trade-and-keystone.html
 

I find this quite interesting in two areas of resource-based industry and Malaysia research interest: a) that it parallels changing enviro-trade requirements on palm oil (although this is happening via private standards and not at G2G level**) and b) with Petronas' exposure in Canada and the changing global oil trade.

 

On trade issues, I just read the useful newsletter update that crossed my desk from trade lawyers, Fratini Vergano; writing on 2 May: "WTO SPS Committee Members fail again to advance their work relating to private standards - At a meeting of the WTO Committee on Sanitary and Phytosanitary Measures (hereinafter, SPS Committee) on 25-26 March 2014, WTO Members continued discussions relating to private standards for food safety and animal and plant health, but failed to resolve any issues. WTO Members have raised concerns regarding private standards for almost 9 years, yet little progress has been made.....In 2013, China and New Zealand submitted proposed definitions of the term ‘private standards’, which differed greatly, but they continued working on a joint proposal for a working definition of the term. Following an SPS Committee meeting on 16-17 October 2013, it was announced that China and New Zealand had produced a compromised draft definition and were in the process of working with other WTO Members to draft a definition that could be accepted by the entire SPS Committee...At the most recent SPS Committee meeting on 25-26 March 2014, some Members were not able to accept the draft... The issues relating to regulation of private standards have dragged on for almost 9 years. Reportedly, at the most recent SPS Committee meeting, China maintained that it would be “disaster” if a definition is not agreed upon soon. Additionally, it was reported that China’s concerns were shared by El Salvador, India, Ecuador and Belize, which is said to be concerned for its papaya and citrus exporters. As the focus of market access has shifted from tariff measures to non-tariff measures, private standard requirements imposed by retailers are one of many (de facto, if not de jure) non-tariff barriers that can create additional unjustified costs for exporters when those costs are not justified for SPS reasons...."

 

 

LMC International

1 May 2014, I've joined LMC International Ltd's Singapore office, as Research Head for Southeast Asia. Company website: http://www.lmc.co.uk/.

I shall continue updating this blog, on-and-off with my personal research and views.