Archive for the ‘Asian’ Category

Japan Slides Into Recession; Obama Presidency Seen as No Help

November 17, 2008

Japan’s economy slid into a recession for the first time since 2001, the government said Monday, as companies sharply cut back on spending in the third quarter amid the unfolding global financial crisis.

The world’s second-largest economy contracted at an annual pace of 0.4 percent in the July-September period after a declining an annualized 3.7 percent in the second quarter. That means Japan, along with the 15-nation euro-zone, is now technically in a recession, defined as two straight quarters of contraction.

The result was worse than expected. Economists surveyed by Kyodo News agency had predicted gross domestic product would gain an annualized 0.1 percent.

Japan’s Economy Minister Kaoru Yosano said following the data’s release that “the economy is in a recessionary phase.”

But the worst may be yet to come, especially with dramatic declines in demand from consumers overseas for Japan’s autos and electronics gadgets. Hurt also by a strengthening yen, a growing number of exporters big and small are slashing their profit, sales and spending projections for the full fiscal year through March.

Toyota Motor Corp., for example, has cut net profit full-year profit forecast to 550 billion yen ($5.5 billion) — about a third of last year’s earnings. And Sony Corp., whose July-September profit plunged 72 percent, expects to make 59 percent less this fiscal year than last year.

“What we’re starting to see is the extent of deterioration in external demand start to weigh more heavily on the Japanese economy,” said Glen Maguire, chief Asia economist at Societe Generale. “And I think looking forward, there’s every indication that dynamic is going to continue.”

Read the rest:


For Japan, Obama Signals A Shift Closer to China, Away From “Traditional” Asian Allies
The Japanese do not share the jubilation seen almost everywhere following the election of Barack Obama. 

Economically, Japan sees an Obama White House funding the American Big Three Automakers: GM, Chrysler and Ford.  And that’s bad for Japan’s automakers.

Japan, for one nation, prefers to allow the “system” to work without more government intervention.

On the foreign policy level, Japan fears North Korea’s erratic behavior and nuclear capability.  It also fears China as a tradition enemy of immense wealth, population and size which can easily overwhelm the economy of Japan.

Japan fears the presidency of Barack Obama.  “So far, no good,” one senior diplomat told Peace and Freedom.

John E. Carey
Wakefield Chapal, Virginia

Obama Not Such A Hero In Japan

How Old is Too Old? You Make Your Case and You Stay Or Go….

November 15, 2008

College football coach Steve Spurrier said today on the ESPN pre-game show that he would stop coaching before he was in his 70s.  He said he could never be a “figurehead” football coach like Joe Paterno at Penn State or Bobby Bowden at Florida State who both “let their assistant coaches do everything.”

Spurrier in March 2007
Spurrier, head coach of the University of South Carolina football team.

I was taken aback by what, to me, seemed an insult from Spurrier to the older men.  But I am not a rabid football fan any longer and somewhat detached from the sports news.

Apparently Bowden and Paterno have taken a lot of heat and grief for their age, longevity and fading football glory.

Greg Stoda of the Palm Beach Post wrote on September 26, “Bowden should have been escorted out the door a few years ago surrounded by garnet-and-gold pomp and circumstance for all the glory he has brought the Seminoles. Instead, he’s wandering in the wilderness in his 33rd season at Florida State after warm-up acts at Samford and West Virginia.”

Joe Paterno has suffered similar attacks.

I say if the coach is breathing, enjoys his work and can convince a school that he is important to have in their program then that is between the coach and the school.  Oldster John McCain couldn’t convince voters to elect him but apparently Paterno and Bowden have made their cases successfully so far.

It should be all about performace and never about age.

But we do seem to live in an American culture that dismisses older people quickly; and often too quickly.  My Asian relatives and friends respect, hold close and love their elders much better and longer than many Americans and would never think of sending Mom or dad to a nursing home.  My 90 year old Grandmother makes the food, shops, does laundry and has a bunch of household jobs she would never surrender.

An Ethiopian friend said when he gets older he’ll return to Ethiopia where the older men are respected and not rejected…..

Poisoned Milk Scandal Sours China’s Soft Power

October 9, 2008

By Willy Lam

China’s formidable state machinery was able to stage the largest Olympics in history and to have a “Taikonaut” perform a 20-minute spacewalk last week. Yet the world-scale scandal emanating from contaminated milk products has exposed the worsening malaise in the country’s political and administrative structure.

As of early October, four children died and more than 60,000 children were sickened after having consumed milk powder tainted with melamine, an illegal chemical used by farmers to fake the protein content of their milk. Not only rich countries such as the United States and Britain, but also Asian and African nations ranging from Singapore and Vietnam to Gabon and Ghana, have banned Chinese made dairy goods and a wide range of biscuits and candies made with Chinese ingredients.

A dairy farmer leads her cow to a milking station in Shelawusu ...
A dairy farmer leads her cow to a milking station in Shelawusu village in Inner Mongolia region of China on October 7. China published Thursday a new number of children hospitalised after drinking tainted milk, more than tripling the official figure to nearly 47,000.(AFP/Peter Parks)

More than a dozen big-name manufacturers within China’s $20 billion dairy industry – as well as the country’s food safety regulatory system – have been found guilty of either conniving in the use of the chemical or failing to spot the malpractice, according to reports.

The milk powder scandal has dealt a severe blow to the “made in China” brand even as the growth of China’s exports – the most important driver of the Chinese economy – has been slowed by economic downturn in its major markets.

More significantly, China’s export of tainted milk products – which has come on the heels of contaminated cosmetics and pet food as well as dangerous toys and furniture – has severely damaged the goodwill and “soft power” that the Chinese Communist Party (CCP) has tried to gain through multi-billion dollar “prestige-engineering projects” such as the 2008 Beijing Olympics and the 2010 Shanghai World Expo.

In an emotional meeting with the parents of children who had fallen sick after imbibing tainted milk, Premier Wen Jiabao said he felt “very guilty” about the poisoned milk, adding “I sincerely apologize to all of you.”

While appearing at the United Nations General Assembly as well as the World Economic Forum (WEF), Wen assured the international community of Beijing’s ability to fix the problem. Referring to the milk disaster, Wen said at the WEF last weekend: “This issue is not over yet, but please be assured that we will soon unveil plans to boost the food industry. My government and I will lead our people through this hard journey.”

While Wen has a well-deserved reputation as a “premier who puts people first”, his words may not sound that convincing. Only weeks after the Beijing Olympics, China has witnessed man-made disasters of gargantuan proportions.

More than 250 residents in Xiangfen County, Shanxi province, perished in a mudslide in early September. The accident was triggered by the collapse of the retaining wall of an illegal mining dump containing tons of liquid iron ore waste. In nearby Henan province, 37 miners were killed in an accident in Dengfeng County. The cause of the disaster was again lax regulations and poor inspection. Then came the fire in Wu Wang Nightclub, an illegal, unlicensed outfit in Shenzhen, the boomtown just across the border from Hong Kong. Forty-three revelers, including five day-trippers from Hong Kong, perished.

Farmers pour fresh milk onto the ground at a milk collection ... 
Farmers pour fresh milk onto the ground at a milk collection station in Wuhan. Farmers in this large milk-producing region of north China said governmental safety measures taken in the wake of a tainted milk scandal that shocked the world had been rigorous, but apparent flaws remained.(AFP/File)

Even assuming that party and government authorities are really serious this time, they face an uphill battle in eradicating unscrupulous and malfeasant manufacturers and businessmen in China. A key reason behind the recent spate of scandals is that particularly in the provinces and cities, entrepreneurs and regional officials enjoy cozy relationships. And this is not solely because large corporations are major tax contributors.

Sanlu Dairy Co, the epicenter of the milk scandal, contributed 330 million yuan (US$48.5 million) of taxes to the municipal government of Shijiazhuang, Hebei province, last year. Many companies invite local officials to become “silent partners” in their corporations – in return for “protection” rendered by the powers-that-be.

Former Sanlu chairman Tian Wenhua, for example, is said to be on “comradely terms” with Shijiazhuang officials. It is perhaps for this reason that Tian was given the honorary position of deputy to the provincial people’s congress. Similarly, the Wu Wang Nightclub in Shenzhen has been operating without a license for more than a year. This could only have been possible due to what Chinese call a “protective umbrella” proffered by well-placed officials in the city.

Despite the “serve the people” credo of the Hu-Wen administration, supervision over food and industrial safety remains lax and ridden with loopholes. Last year, the former director of the State Food and Drug Administration, Zheng Xiaoyu, was executed for taking bribes from pharmaceutical firms whose shady products were responsible for the deaths of at least 10 consumers.
A Chinese baby drinks coconut milk mixed with water instead ... 
A Chinese baby drinks coconut milk mixed with water instead of baby formula in Shanghai. China insisted it is being open about the impact of milk tainted with the toxic chemical melamine, but declined to make public the latest data on how many children had fallen ill.(AFP/Mark Ralston)

The issue of fake or tainted milk powder is not new. In 2004, at least 12 infants died after taking in baby formula with no nutritional value. The General Administration of Quality Supervision, Inspection and Quarantine (GAQSIQ), which is responsible for checking milk and related merchandise, has been aware of the illegal use of melamine for a long time. Just last year, Chinese-made pet food was banned in the United States because it contained high dosages of melamine.

Inexplicably, the GAQSIQ has in the past couple of years awarded dairy giants Sanlu, Meng Niu, and Yili – whose products were found to be tainted with the chemical – the coveted “famous brand” designation. This status meant their products were exempted from routine inspection by quality-control watchdogs.

The muddleheaded nature of the Chinese bureaucracy is also evident from rescue operations mounted by the State Council (or cabinet) in the wake of major disasters. The modus operandi of choice is setting up a multi-departmental “emergency leading group” to find out the causes of the mishaps and to recommend remedial measures. Thus, soon after the milk powder fiasco broke in early September, Beijing established a leading group consisting of cadre from seven state units – the Health Ministry, the GAQSIQ, State Administration of Industry and Commerce, Ministry of Agriculture, Ministry of Public Security, the State Food and Drug Administration, and the provincial government of Hebei.

This so-called inter-departmental approach to problem-solving has also been used by the Wen cabinet to tackle illegal land-zoning practices, real-estate speculation and other malpractices in the regions. For example, the State Council in early September sent a work group consisting of cadre from several ministries to check on illegal education charges levied by different provinces. These units included the National Development and Reform Commission, the Education Ministry, the Ministry of Supervision, the Ministry of Finance, the National Audit Administration and the National Press and Publication Administration.

The simultaneous involvement of several departments reflects the fact that the line of responsibility is not clear; no one single ministry seems to be in charge of matters ranging from food safety and education to housing and land use.

Quite a number of observers believe that the root of bureaucratic malaise lies in an outdated, non-transparent political structure.

Hu Xingdou, a reformist professor at the Beijing Institute of Technology, thinks that Beijing must take bold steps to overhaul governance. “Every time there is an incident, the relevant department takes medicine to cure the headache. That only fixes the problem, not the system,” he indicated. “Now is the time to transform the way of thinking, to repair the system.”

The basic structural shortcoming is excessive concentration of power in the party. Thanks to the CCP’s near-monopoly of most political and economic resources, there are no meaningful checks and balances within the system. Institutions that could provide some oversight over party and government authorities – for example, the legislature, the courts or the media – are tightly controlled by CCP apparatchiks.

Compounding this endemic malaise is the long-standing tradition – subscribed to by leaders from Chairman Mao to President Hu – of regarding “upright rulers” as more important than good systems. For generations, the CCP has been trying to nurture “virtuous and competent” cadre for leadership posts rather than designing systems with built-in checks and balances.

The imperative about propagating saintly fumuguan (“parents-like officials”) harks back to the Confucian ideal of a benevolent mandarin. Mao wanted all cadres to emulate the legendary Lei Feng, the incorruptible, ultra-altruistic model proletariat. Speaking on the recent spate of horrendous industrial and food-safety incidents, Hu said late last month in the People’s Daily that this was due to the fact that “some cadres lack a consciousness about their [proper] goals, knowledge about the overall political requirements, a [proper] estimation of future dangers, and a sense of responsibility.” The party chief urged senior officials nationwide to “resolutely uphold [the ideal] that the CCP is based on public service, that administration is for the sake of the people … and that cadres must always bear in mind the safety and well-being of the masses”.

An important achievement in personnel reform under the Hu-Wen leadership is the concept of “cadre responsibility”, whereby senior officials have to take political responsibility for serious “mass incidents”. Thus, a number of cadre either resigned or were fired in the wake of the milk powder scandal. They included the GAQSIQ director Li Changjiang and the Party Secretary and the Mayor of Shijiazhuang, respectively Wu Xianguo and Ji Chuntang. In mid-September, Shanxi Governor Meng Xuenong and Vice-Governor Zhang Jianmin were sacked due to the mudslide incident. In Henan, the Party Secretary of Dengfeng County, Zhang Xuejun, received a severe reprimand while Mayor Wu Fumin was forced to step down.

However, the fate of these disgraced cadre has raised a number of questions about whether the CCP leadership has followed fair and judicious principles in meting out punishment. If the governor of Shanxi was sacked for the sorry state of his provinces’ mines, why has Hebei Governor Hu Chunhua escaped censure for the milk powder scandal?

There is also the question of whether the party chief – or the governor or major – of a province or city should shoulder responsibility for lapses. The fall of both the party chiefs and mayors of Shijiazhuang and Dengfeng seems to indicate that senior members of both the party and government should take the rap. However, in the case of Shanxi, only the governor and the vice-governor – but not the more senior-ranked party secretary of the province, Zhang Baoshun – took the fall.

One explanation is that Hubei’s Hu, 45, and Shanxi’s Zhang, 58, have been spared because of their closeness to President Hu. In particular, Hu Chunhua, who, like the president, is a former head of the Communist Youth League, is regarded as a possible “core” of China’s sixth-generation leadership. The Hu-Wen leadership’s apparent failure to come up with a laudable cadre responsibility regime is one more illustration of deep-seated woes in the political structure.

Willy Wo-Lap Lam is a Senior Fellow at The Jamestown Foundation. He is the author of five books on China, including the recently published Chinese Politics in the Hu Jintao Era: New Leaders, New Challenges.

Gridlock On U.S. Financial Crisis Rattles Asian Markets

September 26, 2008

By Danny McCord

HONG KONG (AFP) – Asian stock markets fell Friday as political wrangling held up a 700-billion-dollar bailout package for the US financial system despite earlier hopes that a deal was near.

Talks over the rescue proposal were gridlocked Thursday as lawmakers were at loggerheads over the way forward, with Democrats accusing the Republicans of dragging their feet.

Tokyo’s Nikkei closed down 0.94 percent, Hong Kong was off 2.0 percent at the break, Sydney ended the day 0.5 percent down and Taiwan shares shed 2.2 percent.

Some stocks had risen earlier, taking a cue from Wall Street, which closed 1.82 percent up on prospects that an agreement could be reached.

US Democrats said Republican White House contender John McCain had sabotaged the rescue package, which they said had largely been agreed upon.

“John McCain did nothing to help, he only hurt the process,” Senate Majority Leader Harry Reid told a joint news conference with Senate banking committee chairman Christopher Dodd.

Under the proposal the government would buy 700 billion dollars of toxic mortgage-related assets at the heart of the global credit crisis. The move would be the biggest government bailout since the 1930s Great Depression.

Read the rest:

Woori Finance fell 4.5pc on concern the credit crisis is deepening after Republicans splintered over the proposed $700bn bailout and WaMu was seized by regulators. Mitsui OSK Lines, Japan’s largest operator of dry-bulk ships, lost 3.8 pc.

“The assumption is that the bailout will take longer than expected, which is negative,” said Tsuyoshi Shimizu, a senior fund manager at Mizuho Asset Management Co., which oversees $26bn.

“As with Washington Mutual, the longer it takes to pass something, the more victims we’re going to see.”

The MSCI Asia Pacific Index fell 1.1pc to 113.52 by lunchtime in Tokyo, erasing an earlier 0.9pc advance. The index has declined 0.6pc this week, a fourth weekly retreat.

Japan’s Nikkei 225 Stock Average lost 1.4pc to 11,843.98. New Zealand’s NZX 50 Index dropped 0.9pc after government data showed the economy contracted in the second quarter, driving the nation into its first recession in a decade.

Standard & Poor’s 500 Index futures slid 1.7pc after a group of House Republicans led by Eric Cantor of Virginia said they wouldn’t back a plan based on the approach outlined by Treasury Secretary Henry Paulson and backed by President George W. Bush and Democratic leaders.

Read the rest:

Asian markets surge on Wall Street rally

April 2, 2008
By THOMAS HOGUE, AP Business Writer 

BANGKOK, Thailand – Asian stocks surged Wednesday as investors took heart from an overnight rally on Wall Street amid a growing belief that the worst of the credit crisis is over.

Traders work on the floor of the New York Stock Exchange April ...
Traders work on the floor of the New York Stock Exchange April 1, 2008. U.S. stocks extended gains on Tuesday, lifting the benchmark S and P 500 and the Nasdaq up more than 3 percent, as Lehman Brothers Holdings Inc’s move to bolster its balance sheet calmed worries about the financial sector’s stability.(Brendan McDermid/Reuters)

In Tokyo, the region’s biggest bourse, the Nikkei 225 index jumped 3.3 percent in morning trade to 13,077.5. Hong Kong’s Hang Seng Index soared as much as 4.6 percent to 24,195.3.

In mainland China, the Shanghai Composite Index rose more than 3 percent, and benchmark indices in Australia, the Philippines, Singapore, South Korea and Taiwan all gained more than 2 percent.

“Investors believe the credit crisis in the U.S. is over,” said Francis Lun, a general manager at Fulbright Securities in Hong Kong. “They think the worst has gone.”

Wall Street began the second quarter with a big rally Tuesday as investors rushed back into stocks amid easing worries about the credit crisis that has battered many major banks and optimism that the U.S. economy — a major export market for Asia — is faring better than expected.

Financial stocks were among the big winners in U.S. and Asian trading after Lehman Brothers Holdings Inc. and Switzerland‘s UBS AG issued new shares to help bolster their balance sheets. The news was viewed as upbeat and offset even an announcement that UBS will take a fresh $19 billion write-down due to additional declines in the value of its mortgage assets and other credit instruments.

 Read the rest:

America’s Naval Supremacy Slipping

March 18, 2008

During a recent trip to China with Adm. Timothy Keating, American reporters asked General Chen Bingde, chief of staff of the People’s Liberation Army, “Should the United States have anything to fear from China’s military buildup?”

The general responded: “That’s impossible. Isn’t it? There’s such a big gap between our military and the American military. If you say you are afraid, it means you don’t have enough courage.”
Courage or not, China’s rapid and massive military buildup (particularly in terms of its expanding submarine force and progressive aircraft-carrier R&D program) has analysts concerned. And the U.S. Navy — the first line of defense against any Chinese expansionism in the Pacific — continues to struggle with the combined effects of Clinton-era downsizing, a post –9/11 upsurge in America’s sealift and global defense requirements, and exponentially rising costs of recapitalization and modernization of the Navy’s surface and submarine fleet, aircraft, and related weapons systems. 
A warplane takes off from the USS John C. Stennis aircraft carrier ... 
F/A-18 takes off from the U.S. Navy
Aircraft Carrier USS John C. Stennis.

Currently, America maintains a 280-ship Navy (including 112 ships currently underway) responsible for a wide range of seagoing operations, as well as air and land missions, conventional and unconventional. 
The fleet is small — a dwarf fleet compared to the nearly 600-ship Navy under President Ronald Reagan — but its responsibilities aren’t.
Among them are defense of the U.S. homeland and American territories and interests abroad.
Keeping the sea lanes open and safe from terrorism, piracy, and weapons smuggling. Maintaining air superiority above the Navy’s areas of operation. Maintaining sea-basing and amphibious landing and landing-support capabilities (this includes the Marine Corps, which technically and traditionally falls under the Department of the Navy). Maintaining light, fast forces capable of operating in rivers and along the coastal shallows (littorals). Maintaining a strategic nuclear capability (through its ballistic missile submarine force). Maintaining superior information and intelligence collection and counterintelligence capabilities. And maintaining its ability to engage in direct action — like the recent cruise-missile strike against Al Qaeda targets in Somalia — and providing support for special operations worldwide. 

USS Greeneville off the coast of Honolulu, Hawaii.
The Navy’s enemies and potential enemies include everyone from global terrorists like Al Qaeda to previous Cold War adversaries China and Russia.
And not only is the Navy fleet small, it is rapidly aging, and gradually losing the depth and flexibility needed to accomplish all of its current missions and strategic requirements.
The Navy currently maintains 11 aircraft carriers. The USS Enterprise is slated to retire in 2012, but the under-construction USS Gerald R. Ford could be delivered by 2015.The fleet is also comprised of an array of cruisers, destroyers, frigates, attack and ballistic missile submarines, amphibious assault and sealift-capable ships, support vessels of all kinds, and a variety of special warfare craft.
USS Wasp LHD-1.jpg
USS Wasp
Sounds formidable, and in 2008 it is. But the Navy is not even close to where it needs to be if it hopes to match, deter, or outfight the emerging sea powers that will continue to grow over the next 10, 20, or 30 years.
“Even though we obviously have a strong eye toward what’s going on in Iraq and Afghanistan for our ground forces, we still must have a balanced force that can deal with a range of threats,” says Peter Brookes, former Deputy Assistant Secretary of Defense for Asian and Pacific Affairs. “China is going to be a major conventional threat in the coming years. So we need the capability of projecting naval power across the Pacific to maintain peace and stability in that region.”
According to Brookes, the Navy needs to focus on — among other things — regaining much of its anti-submarine warfare capability (undersea, surface, and airborne) that has been neglected since the end of the Cold War.
USS Kitty Hawk CV-63.jpg
USS Kitty Hawk.  This aircraft carrier calls Japan “homeport.”  She was ordered to the vicinity of Taiwan on or about 18 March 2008 to provide security for the Taiwanese elections.  Photo from the U.S. Navy.
Hoping to remedy its overall shortfall, the Navy has proposed a 313-ship fleet – an increase of 33 surface ships and submarines — able to be deployed according to Navy officials by 2019.
Among the Navy’s new additions would be the Littoral Combat Ship — a small, swift-moving surface vessel capable of operating in both blue water and the coastal shallows — a nuclear-powered guided-missile destroyer, a next-generation guided-missile cruiser, a new class of attack submarine, a new carrier with an electromagnetic aircraft launching system (replacing the steam-driven catapult system), and ultimately a new fleet of jets like the F-35 Lightning II (the carrier variant of the Joint Strike Fighter).
USS Zumwalt (DDG-1000).jpg
USS Zumwalt (DDG 1000)
All of the newly developed ships and airplanes would have multi-roles, and would be able to go head-to-head with a wide range of conventional and unconventional threats. Problem is, developing new ships and weapons systems take time, are often technically problematic in the developmental stages, and increasingly hyper-expensive. Additionally, new ships and systems are being designed, developed, and built at the same time the Navy is having to spend money on manpower and costly, aging ships, aircraft, and weapons systems just to stay afloat and fighting.

single modified tactical Standard Missile-3 (SM-3) launches from the U.S. Navy AEGIS cruiser USS Lake Erie
This photo provided by the U.S. Navy shows an SM-3 missile being launched from the USS Lake Erie warship on Wednesday, Feb. 21, 2008. The Pentagon says the missile successfully intercepted a wayward U.S. spy satellite orbiting the earth at 17,000 miles per hour, about 133 nautical miles over the Pacific ocean. (AP Photo/US Navy)
Of the proposed  $515 billion U.S. Defense budget for Fiscal Year 2009, the Navy is asking for $149.3 billion — 29 percent of the budget — which includes the Marine Corps’ piece of the pie (As its current recap/mod needs are similar to the Army’s, we will address Corps issues in our forthcoming piece on ground forces.), and that requested figure will almost certainly, and necessarily, increase over subsequent years.
Nevertheless, experts contend we are kidding ourselves if we believe the Navy will crack the 300 mark under the current plan.

This picture released by the US Navy shows Fire Controlman 2nd ...
Our sailors make our Navy the most capable in the world. This picture released by the US Navy shows Fire Controlman 2nd Class John Whitby operating the radar system control during a ballistic missile defense drill on February 16 aboard the USS Lake Erie. The US warship is moving into position to try to shoot down a defunct US spy satellite as early as Wednesday before it tumbles into the Earth’s atmosphere, Pentagon officials said.
(AFP/US Navy-HO/Michael Hight)
“This is the dirty secret inside the Beltway,” says Mackenzie Eaglen, a senior policy analyst with the Heritage Foundation. “If you crunch the actual shipbuilding numbers — year-to-year for the next 10 to 20 years — a 313-ship Navy is a pipe dream.”
According to Eaglen, the budget requests for shipbuilding submitted to Congress between FY 03 and FY 07, averaged just over $9.5 billion per year. “What’s needed is at least $15 billion per year,” she says. “What’s worse is that I see Defense spending dropping.”
Cynthia Brown, president of the American Shipbuilding Association, believes money slated for new ship construction needs to be at least $22 billion per year.
“Of the proposed $149.3 billion, only $12 billion is slated for new ship construction in FY 09,” says Brown. “Since 2001, the Defense Department has increased its spending by 80.8 percent, excluding war supplementals, but shipbuilding has only increased 12.2 percent.”
Costs of recapitalizing and modernizing our Navy will continue to rise, as will the conventional and unconventional threats our sailors must be trained and equipped to fight. And considering the make-up of Congress — and who may be moving into the White House in 2009 — the nation’s primary power-projection force may find it near impossible to avoid becoming, as Eaglen says, “a mere shadow of its former self.”

Corruption of Asian Economies Rated By Expats

March 12, 2008

From The Daily Tribune
March 12, 2008

It seems that no country in Asia can beat the Philippines under President Arroyo in the corruption game, with the country again seen by expatriates as tops in corruption.

The Philippines, Thailand, Indonesia and China are among the most corrupt Asian economies, according to results of a regional poll of expatriate businessmen released Monday, with the Philippines topping it, having obtained a 9.0 out of a possible 10 points under a grading system where 0 is the perfect score and 10 the worst.

While the Philippines retained its number one ranking in corruption, Singapore and Hong Kong retained their rankings as the cleanest economies, the Political and Economic Risk Consultancy (PERC) said in its report.

A man uses his mobile phone as he walks past a stock exchange ...
A man uses his mobile phone as he walks past a stock exchange board inside a bank in Taipei March 10, 2008. Asian stocks hit their lowest in nearly seven weeks on Monday, while the dollar was near a record low against the euro and an eight-year low against the yen after weak employment data fuelled U.S. recession fears. Shares in China, Taiwan and Singapore were down more than 2 percent.REUTERS/Nicky Loh (TAIWAN)

The annual survey covers only 13 economies in Asia and excludes other countries notorious for corruption, such as Myanmar and Bangladesh.

Some 1,400 expatriates were polled in January and February this year, PERC said.

Corruption remains a problem in the region despite huge economic progress made over the years, with governments generally lacking the political will to tackle the problem, the Hong Kong-based PERC said.

“The Philippines is a sad case when it comes to corruption,” the consultancy said in a summary report made available to Agence France Presse.

The Philippine situation is “probably no worse than in places like Indonesia and Thailand” but corruption has become politicized and is openly discussed in the media, unlike in authoritarian countries like China and Vietnam, it said.

The Philippines scored 9.0 out of a possible 10 points under a grading system used by PERC under which zero is the best score and 10 the worst.

Even in Philippine based surveys, the government of Mrs. Arroyo is seen to be very corrupt, with some seven out of 10 Filipinos distrusting Mrs. Arroyo as well as her spouse, who is perceived to be part of the conjugal partnership involved in alleged corrupt deals.

The Philippine Senate has an ongoing investigation on the alleged corrupt deals with China where huge kickbacks have reportedly been received by what has been termed “The Greedy Group” plus plus, where ZTE National Broadband Network witness Dante Madriaga, linked the presidential couple to the scam.

There are two other projects also in partnership with China, that are said to be corruption-filled, and where kickbacks have also been received by top Malacañang officials. These are the NorthRail and SouthRail projects, both of which are also scheduled for hearings at the Senate.

The latest fray on corruption, coupled with the sovereignty issue is the joint exploration agreement with China.

Expatriates who were surveyed by PERC also found China to be mired in corruption, coming in at number three.

China’s score worsened to 7.98 from 6.29 last year with corruption seen to be as widespread as ever despite Beijing’s efforts to clamp down on it.

“The economy is growing so rapidly that even low-level officials are able to amass illicit fortunes.

“The penalties for getting caught might be draconian, but graft is so widespread and the potential rewards so great that people seem to be more than willing to take the risks.”

As in the 2007 survey, Thailand remained the second most corrupt economy after the Philippines with a score of 8.0 after the military, which seized power in a coup in 2006, was seen to have failed to tackle the problem.

“The kingdom’s economy has been marking time for two years while it sorts out political problems in which allegations of corruption figure prominently,” said PERC.

Indonesia, which ranked behind Thailand with a score of 7.98, has made improvements under President Susilo Bambang Yudhoyono but the perception of the civil service as one prone to graft remains strong, said PERC.

“International ratings agencies might have improved Indonesia’s foreign and domestic currency debt ratings recently, citing the government’s efforts to tackle corruption… however, the problem is still very serious,” said PERC.

Corruption is also perceived to have worsened in Malaysia, which scored 6.37 in the survey, worse than last year’s grade of 6.25, but the country retained its number six ranking in the poll.

Malaysian Prime Minister Abdullah Ahmad Badawi’s failure to carry out his promise to fight graft was one of the key reasons his ruling coalition suffered its worst ever results during last Saturday’s elections, PERC said.

“A promise to fight corruption was the main campaign theme that won (Abdullah) a big increase in voter support in the last national elections (in 2004),” the consultancy said.

The pressure is now on Abdullah, who rejected pressure to step down despite the poll setback, to show he is serious about fighting corruption in his second term as prime minister, said PERC.

It is not only PERC that has come out with these findings of a corrupt Philippine economy.

Poor governance and corruption are two major complementing constraints on growth of the local economy, which has fallen behind its neighbors in East and Southeast Asia, the Asian Development Bank (ADB) said in its latest country report.

The ADB report also cited poor national revenues, lack of infrastructure and waning investor confidence as hurdles to growth.

In its report “Philippines: Critical Development Constraints,” the ADB said the country’s economy has fallen behind its neighbors in East and Southeast Asia over the past five decades.

It cited studies suggesting that the Philippines ‘ ranking in the control of corruption and maintaining political stability have worsened.

It also said that the pace of poverty reduction has been slow and income inequality remains stubbornly high.

The report added the Philippines has lost momentum in controlling corruption, and has allowed Vietnam and fairly soon, Indonesia, to pass it.

“In the case of political stability, the Philippines has slipped, particularly relative to the 1998 level,” the report added.

The ADB cited studies that show causal relationships between corruption, political instability and weak rule of law, on one hand, and investment, on the other hand, in the country.

“The perception of worsening corruption was found to partly explain the low investment rate in the Philippines. Poor governance was also found to translate into higher lending rates, reflective of premiums for worsening corruption, political instability, and internal conflict, acting as disincentives to private investment,” it said.

The study noted a key reason for weak revenue generation, which are leakages in revenue collection, was “rooted in persistent corruption and patronage problems.”

Governance concerns not only weaken investor confidence, they underlie most other critical constraints. For instance, corruption undermines tax collection; political instability hinders investment and growth and reduces the tax base; and both contribute to the tightness of the fiscal space.

Poor infrastructure is a result of insufficient development spending and of poor governance, the latter causing leakages and misappropriation of public funds, it added.

Similarly, poor governance hinders the pace of poverty reduction, as it reduces growth of incomes and productive employment opportunities. It is also a major factor contributing to inequalities in access to education, health, infrastructure, and other productive assets, as well as to weaknesses of many poverty reduction programs, it said.

“The Philippines must raise revenues, improve infrastructure, strengthen governance to build investor confidence, expand its industrial base and improve access to employment and development opportunities to increase growth and reduce poverty,” the ADB said.

It noted the data released by the government wherein 26.9 percent of families in 2006 were below the official poverty threshold, up from 24.4 percent in 2003.

“While growth has picked up in recent years, with the economy in 2007 posting its highest growth of 7.3 percent in the last three decades, both public and private investment remain sluggish and their share in gross domestic product has continued to decline, raising the question of whether the current economic momentum can be sustained,” the report said.

It also identified a number of critical constraints to economic growth and the fight against poverty in the next five to eight years for the Philippines .

“Targeting and removal of the most critical constraints will lead to the highest returns for the country. It will spur investment, which in turn will lead to sustained and high growth and create more productive employment opportunities,” said Ifzal Ali, Chief Economist of ADB.

“This would ensure that the fruits of development are shared by all,” he added. With Michaela P.del Callar and AFP

Year of the Rat also Year of the Stamps

January 8, 2008

In honor of the Chinese New Year, the U.S. Postal Service and the communist government of China will both unveil “Year of the Rat” stamps.


A worker makes a rat-shaped lantern at a workshop in Nanjing, ... 

A worker makes a rat-shaped lantern at a workshop in Nanjing, Jiangsu province January 6, 2008. China will usher in Chinese Lunar New Year, also known as “Year of the Rat “, on February 7, according to the lunar calendar.
The U.S. Postal Service (USPS) will eventually put into circulation stamps representing all 12 animals of the Chinese calendar. The series will continue through 2019. The first 41-cent stamp in the series is for the Year of the Rat, which begins Feb. 7, 2008 and ends Jan. 25, 2009 and will be dedicated tomorrow in an 11 a.m. ceremony at the Nob Hill Masonic Center, 1111 California St., in San Francisco, California.

The rat is the first of 12 animals associated with the Chinese calendar. According to legend, the animals raced across a river to determine their order in the cycle. The rat crossed by riding on the back of the ox, jumping ahead at the last minute to win the race.

“The start of the Lunar New Year is the biggest holiday of the year for more than 25 percent of the people in the world,” said Katherine C. Tobin, member of the U.S. Postal Service Board of Governors, who will dedicate the stamp.

The Asian New Year “Is a time of great celebration and reflection for many millions of Americans, including our nation’s oldest Chinese-American community here in San Francisco,” said Ms. Tobin.

China is also unveiling a “Year of the Rat” Stamp.China’s official Xinhua news agency said Sunday the stamps were unveiled recently in Guizhou Province, the region with the only county in which the rat stamps can be officially postmarked.

Each stamp is worth about 16 cents and features a rat adorned with colorful clothing.

The rat stamp set represents the most recent addition to the country’s third collection of zodiac stamps, Xinhua reported.The stamps, which celebrate the new year, also represent the first new stamp released by the China postal system in 2008.

A worker makes rat-shaped lanterns at a workshop in Nanjing, ...

How Others See America: Interesting Times Part II

December 25, 2007

25-Dec-2007 Melbourne – By Les Lothringer 

The accusation of endemic, pervasive corruption that foreign critics of China, particularly Americans, level at it is now rendered passe, unfashionable in light of the systemic, widespread and criminal fraud that defines the American financial system and its manipulations of securitized mortgage debt.  Bonused senior banking executives, commissioned valuation officers and just about everybody in-between, including the rating agencies, have operated and co-operated to manipulate the mortgages system for their own financial gains.  And the evidence is in the documentation trails in every part of the American banking system.

The properties that ultimately back the value of those mortgage financial instruments are declining in value.  Goldman Sachs recently forecast a 40% decline in Californian house prices!  China and other Asian sovereign and bank investors have been very large buyers of these securitized debt instruments.  Yet they remain noticeably quiet about the extent of their doubtless considerable holdings, publicly that is.  It is probable that their investments have become, or will become, a fraction of the worth that they were rated at and so paid for.  What might they do about that?

The fundamental problem in the American mortgage market is not that mortgage rates will reset and so force even more defaults and distressed property sales – problems nonetheless and profit opportunities for finance market traders who saw the recent decline [AKA working both sides of the street].  The problem is something else and one well understood by finance industry insiders, as they scramble to extricate themselves from the real possibility of criminal charges and jail.

That problem is origination fraud and thus where fraudulent misrepresentation formed a part of securitized debt sales, mortgage debt investors could well force these banks to take back their bonds.  Naturally those banks do not want to do that.  Nor quite possibly the sovereign fund bond holders either.  These bonds may be now worth or will become a fraction of their “value” and as there is so much of this toxic debt, a mark to market valuation would render those banks insolvent with some bank executives looking at “Enron” like prosecutions.  Sarbanes-Oxley proved useless, but that should have been obvious to anyone who read it.

Obvious too is that integrity is no longer a part of a finance industry executive’s job specification and even the big external auditing firms have worked within their usual low standard of not being paid to detect material fraud, no matter how large or obvious.  Ditto the executive recruiters who are likewise pretty well useless at assessing integrity and honesty in job candidates and both these professional groups fail to approximate to the slightest degree their relentless self promotions of professional excellence.  This makes them natural partners to a delinquent American finance system.

Interest rate reductions by the US Federal Reserve can not fix this.  Interest rates will be heading up because the increase in the money supply is causing inflation.  The argument now is not about a US recession but whether it is to be a soft one or a hard one.  I would not be banking on a soft one.  This boom will come to an end soon enough now.

 Does China now hold an even stronger hand of cards? – a positive trade deficit and a trillion plus US dollars which it is keen to convert to US equity investments – and now a holder of fraudulently promoted and priced mortgage bond investments.  Just how do they deal with a US Treasury Secretary who was heading up a bank that was also involved in mortgage debt origination?  Or the major New York banks that are also being relied upon to solve the sub-prime problem, being the ones who both created it and profited immensely from it?  It is not all that difficult to work out.

Of course the banks that sold these faulty instruments should take them back and revalue them.  Bank bankruptcies and jail for their executives should result, so they will not do that.  Might Chinese bond holders litigate?  The possibility of successful legal action and staggeringly large liabilities, the drawn out and very public displays of how financial markets have corruptly operated and the debilitating impact on the banks is enough to make them very negotiable.

At the most basic level and with their usual regard for self-preservation, Main street bankers have started selling equity to foreign sovereign funds.  It cannot possibly stop here for the write-downs will continue through 2008.  Their stellar twenty year plus off-balance sheet manipulations have reached their zenith and, right now, banks just no longer trust each other to lend.  They ought to know.

Interesting times indeed.

Americans Go to Vietnam to Adopt

December 22, 2007

By Venus Lee
Nguoi Viet
December 22, 2007

For years, China has been the Asian superpower when it comes to adoptions, but Vietnam is becoming a viable option for Americans seeking to adopt a child. Nguoi Viet 2 has a four-part series looking at the history of Vietnamese adoptions, at the cost and the waiting time of the process, the experience of traveling to Vietnam to pick up a child, and then how the youngsters assimilate into American culture.

Earlier this year, Angelina Jolie’s adoption of a 3-year-old Vietnamese boy attracted mega media attention. While she was the most famous American engaging in a Vietnamese adoption at the time, she was not the only one.

With adoption regulations tightening in other countries and relations improving with Vietnam, more Americans are turning to the third-world country to add to their families.

”Adoptions from Vietnam are gaining popularity again because they are faster and easier,” said Hedy Lee, a coordinator for Dillon International, an adoption agency. ”In comparison to China, which primarily offers girls and has a wait time of nearly two years, Vietnamese adoptions offer boys and girls in about half the time.”

Meet the families

The process for adopting children from Vietnam was so appealing that Tim and Theresa Hack of Nebraska adopted all three of their children from there. Josh is 13, Emily is 10 and Nathan is 7.

Bob and Karen Calvert of Massachusetts also chose Vietnam to grow their brood.
”There are so many children already in the world, we thought we might as well give them a home,” Karen Calvert said. The couple welcomed two girls. Madison is 9 and Ally is 7.

Ally’s adoption took a mere six months from start to finish.

Vietnam’s adoption policies were especially attractive to Catherine Nelson of Chicago because officials there accepted single parents. Her dreams of becoming a mother came true in September 2001, when she brought home 4-month-old Grace.

Robert and Dorothea Kalatschan of California also selected Vietnam to expand their household. However, their hearts specifically looked at the country because they were searching for a sibling for their Vietnamese American son, Thomas.

In the summer of 2001, their trip to pick up Kristina changed their lives forever. Their experiences there inspired them to start a nonprofit organization called Giving It Back To Kids, which strives to provide the basic essentials to Vietnamese orphans.

”There was such a backlog of babies that there were two to three babies per crib,” Robert Kalats-chan remembered. ”I looked into the face of my own daughter and realized how lucky she was that we were rescuing her from a life of poverty and enormous need, unlike most of her orphan mates who may never have their basic medical, nutritional, educational and individualized attention needs met.”

Although adoptions from Vietnam trickled off since 2001, a new generation of families is renewing the movement. In 2006, Pete and Sunnie Frank of Indiana traveled halfway across the world to bring home two girls, Mikenzie and Mikayla.

The couple already had four biological children of their own — three boys and one girl — but was looking to balance the gender distribution in the family. The fact that the Franks already have a quartet of kids and a limited income disqualified them from adopting from many countries besides Vietnam.

The Franks adoption inspired Pete Frank’s sister, Paula Davis, who also lives in Indiana, to also adopt from Vietnam. She and her husband, Mark, are currently waiting for a travel date to pick up their two girls, Reagan and Riley, who were born three days apart.

Vietnam was an attractive option for her because the country accepts older couples. At ages 50 and 53 (with 50 being the usual maximum), they will become parents to two toddlers who will turn 1 in January.

”It is a little frustrating that others will criticize our age, but our attitude is who cares?” said Paula Davis, who has three biological children ages 22, 24 and 26. ”We’re going to make a difference for eternity.”

One of the most recently completed adoptions from Vietnam involved a couple from Arizona. Rick and Jules Nolte already had a diverse family with a son from India, a son from California and a daughter from China. After battling some legal issues with the U.S. government in Vietnam for more than a month, the pair finally was allowed to bring Matthew home last month.

Tracking the history

Although a Vietnamese adoption seems like a great option, Americans were not always eager to open their homes to these foreigners.

The first influx of Vietnamese children in the United States occurred in 1975, when President Ford initiated Operation Babylift to rescue thousands of orphans created by the Vietnam War. Thirty official flights were scheduled, but many smaller flights on chartered or borrowed planes assisted the evacuation. After the dust had settled, more than 2,000 youngsters were flown out of South Vietnam and resettled all across the United States.

More Vietnamese children were adopted by Americans during this short, dramatic interval than in the next 25 years. During the 15 years following war’s end in 1975, only 44 Vietnamese children were adopted by Americans.

Prior to 1993, fewer than 100 immigrant visas were issued each year.

Vietnamese adoptions picked up in the 1990s after President Clinton re-established relations between the two countries. Vietnam then emerged as one of the perennial powerhouses for international adoptions, and from 1994 to 2002, it was among the Top 10 countries sending children to the United States. Vietnamese adoptions peaked in 2002 with 766 immigrant visas issued that year, according to government statistics, right before the Vietnamese government suspended inter-country adoptions due to concerns of human trafficking and exploitation.

”Adoptions were held up because there were questions if the Vietnamese child was truly an orphan, or if the child had been taken from the birth parents’ home against their will to be sold on the black market,” said Lee, whose agency has a long history of working with Vietnam.

After 2003, pending adoptions were processed, but no new referrals were issued until the U.S. and Vietnamese government could reach an agreement on adoption policies.

In the summer of 2005, both governments signed the Memorandum of Understanding, which provided specific provisions safeguarding Vietnamese children: foreign adoption agencies must be licensed in the U.S. and Vietnam; adoption agencies must maintain offices in Vietnam supporting humanitarian projects; and a central authority, the Ministry of Justice, must process all international adoptions in Vietnam.

In the first half of 2007, Americans adopted more than 400 Vietnamese youngsters. Partial fiscal year statistics for this year indicate the number will at least double by the end of the year, with U.S. Embassy officials predicting as many as 1,000 American adoptions.

Making the choice

Deciding to adopt
-Balance the gender of children in the family
-Infertility-Love for children
-Love for humanitarian efforts

Deciding to adopt internationally
-Love for the country
-Humanitarian efforts
-Closed adoptions.

Deciding to adopt from Vietnam

Adoptions from Viet Nam offer the following advantages:
-The waiting time is significantly shorter than for other international adoption programs.
-Boys are available for adoption.
-Historically, children are usually in good health and medical records are available.
-Single mothers can adopt.
-Couples up to age 50 are eligible for adoption.

Estimated costs:

-$20,000 to $30,000 depending on the agency and number of people traveling to Viet Nam. Fees are staggered over the course of the adoption process and collected in increments, with the majority of the costs due at the time of child assignment. Many agencies accept credit-card payments and offer payment plans.


-Irregular; ranges on average from nine to 18 months.


-One trip lasting on average two to three weeks, depending on the agency and time of year.

Qualifying to adopt:

-A candidate can be a single person or a married couple (at least three years).
-Married couples must have both candidates meet all of the requirements.
-Candidates must be at least 20 years older than the child they wish to adopt.
-Candidates in their late 40s and 50s may apply.
-Candidates must not have had their parental rights restricted by authorities.
-Candidates must be able to care for, support and educate the child.
-Number of other children — no restriction.
-Number of other marriages — no restriction, but agencies might require couples in their second or third marriage to demonstrate commitment to a longer relationship.
-Education level no restriction.
-At least one parent is willing to travel to Vietnam.

Profile of Vietnamese Children:

Children are in the custody and care of Vietnamese government orphanages. Most are abandoned by either unwed mothers or large families.

-Age: generally several months old to 4 years. However, children up to and including age 15 are available, but children above age 9 must consent to adoption in writing.

-Gender: in theory both girls and boys are available, but girls are in higher demand so the wait time for a boy is often shorter. But there are more boys awaiting homes than girls.

-Health: Historically, children are in good health and medical information is available. However, limited or no information about family medical history is available. There is little evidence of pervasive Fetal Alcohol Syndrome or attachment/bonding issues. However, children can have ailments such as malnutrition, scabies, mites, lice, diarrhea, parasites, colds, coughs, skin conditions, eye and ear infections and dental problems.

-Ethnicity: Children are usually full Vietnamese, however, occasionally AmerAsian (children of Vietnamese women and American men) are available.

-Multiple children: Adopting multiple unrelated children simultaneously is allowed, however, it requires additional training and paperwork.

Selecting an agency:

Vietnam’s Department of International Adoptions (DIA) advises parents to only deal with agencies licensed in the desired province to avoid complications with the process. This listing includes all American adoption agencies currently licensed by Vietnam’s DIA. Prospective parents should make sure the agency chosen is licensed in the province from which they desire to adopt. Recently, adoptions from the Phu Thoi and Thai Nguyen provinces have been under government inspection due an increase in irregularities appearing in orphan petitions and visa applications.

Sources: The U.S. Government, Joint Council on International Children’s Services, Hawaii International Child adoption agency and Dillon International adoption agency.
Part 2: To be continued on Dec. 27