By Nassera H. Japanwalla
If we go by an Egyptian lore, then the gel from the leaves of aloe vera was the secret ingredient that Cleopatra used for her skin and not the much-touted milk. In fact, the Egyptians have used aloe vera for their embalming process since times immemorial.
It may look like a thorny cactus, but the aloe vera plant belongs to the onion/lily family.
Distinguished by its thick fleshy lance-shaped leaves, this green plant is suppose to have mystical properties, says an Indian legend, where is it known as Kumari.
The locals call it Ghekwar whereas its botanical name is Aloe barbadensis miller. People sometimes call it the fragrant desert lily.
If we go by an Egyptian lore, then the gel from the leaves of aloe vera was the secret ingredient that Cleopatra used for her skin and not the much-touted milk. In fact, the Egyptians have used aloe vera for their embalming process since times immemorial.
The clear juice of the plant is sold all over the world in health stores in the form of capsules and gels.
The gel has twenty amino acids which the body needs as supplement for its wear and tear and according to various sources, eight of these amino acids have to be ingested and are not produced by the body itself. The gel oozes from the leaf when it is cut and the mucilage rich cells emit the clear sap.
As a beauty aid, the gel has been incorporated in lotions and creams for its moisturising and soothing effect. When these aloe vera lotions are used on skin, the glowing freshness of the skin is a testimony of its beneficial value. As a topical treatment for burns and wounds, it is sold over-the-counter gel in most countries.
Another attribute to its healing properties is that it has effectively been used internationally for radiation burns.
But locally, the aloe vera industry is still in its infancy and not developed to the desired extent; it is mostly used in its raw form.
The natural state is, in fact, the most effective and provides faster relief since the polysaccarides are destroyed during processing when heat is applied and enzymes are added in order to stabilise it. In its natural form, a leaf of the plant is cut into palm size pieces and slit open ; the gel is then used to treat minor wounds, sunburns and fissures.
The gel also has amazing antibacterial, anti-fungal and anti-inflammatory properties. It is said to aid the immune system, cure constipation and also has its positive effect on the texture of the skin.
The sapomins have antimicrobial effect on bacteria, virus and fungus.
The local vaids or practioners of Ayurvedic medicine use the yellow sap of the aloe as a cure for constipation, but since it is a powerful and strong laxative and should therefore only be taken on the advice of a qualified practitioner.
Not only that, the aloe vera gel can be used to ward off mosquitoes/insect bites by applying it on the skin. Likewise, it relieves sunburns and minor kitchen burns.
Use of the gel on the skin restores its elasticity to a great extent by its immense moisturising effect and rejuvenates the skin. When the flesh of the aloe is applied to the scalp, it deters hair loss and decreases dandruff.
Saturday, February 7, 2009
MEDICAL NOTES: Magnesium is a must
By Dr Fatema Jawad
Magnesium is the fourth most important mineral in the body and essential for maintaining good health, states a recent issue of the Health Journal.
Half of the magnesium content of the body is in the bones, one per cent in blood and the remaining is distributed in other tissues and cells.
Magnesium is important to keep muscles and bones strong and to maintain nerve functions, whereas it helps the immune system to function normally. The mineral also plays an essential role in keeping blood sugar and blood pressure in the normal range. Magnesium is also required to maintain metabolism of calcium in bones and thus prevent osteoporosis.
A deficiency of magnesium in our bodies can affect heart muscle function while the coronary arteries can become spasmodic which eventually disturbs the blood flow and leads to a heart attack. It can also lead to the rhythm disturbances of the heart.
Magnesium has been linked with Type 2 diabetes as well and diabetics are often diagnosed with low magnesium levels. According to a study conducted at Karolinska Institute, Sweden, a 100mg increase in the intake of magnesium reduces the risk of diabetes by 15 per cent.
Magnesium increases insulin sensitivity and its deficiency impairs insulin action and promotes insulin resistance.
Low levels of magnesium in the body disturb the lipids which results in an increase in cholesterol and triglycerides in the blood. This promotes the risk for heart attacks and strokes.
There are many natural food sources for magnesium. These include wheat bran, wheat germ, almonds, cashews, peanuts, sesame seeds, millet, wheat, wild rice, tofu, beet greens, brown rice, dried figs and green leafy vegetables. The daily requirement of magnesium for males is 400mg and for women is 310mg.
Including magnesium-rich foods in the daily diet will not only prevent diabetes, high blood pressure, heart attacks and stroke, but will promote good health and an excellent quality of life.
Magnesium is the fourth most important mineral in the body and essential for maintaining good health, states a recent issue of the Health Journal.
Half of the magnesium content of the body is in the bones, one per cent in blood and the remaining is distributed in other tissues and cells.
Magnesium is important to keep muscles and bones strong and to maintain nerve functions, whereas it helps the immune system to function normally. The mineral also plays an essential role in keeping blood sugar and blood pressure in the normal range. Magnesium is also required to maintain metabolism of calcium in bones and thus prevent osteoporosis.
A deficiency of magnesium in our bodies can affect heart muscle function while the coronary arteries can become spasmodic which eventually disturbs the blood flow and leads to a heart attack. It can also lead to the rhythm disturbances of the heart.
Magnesium has been linked with Type 2 diabetes as well and diabetics are often diagnosed with low magnesium levels. According to a study conducted at Karolinska Institute, Sweden, a 100mg increase in the intake of magnesium reduces the risk of diabetes by 15 per cent.
Magnesium increases insulin sensitivity and its deficiency impairs insulin action and promotes insulin resistance.
Low levels of magnesium in the body disturb the lipids which results in an increase in cholesterol and triglycerides in the blood. This promotes the risk for heart attacks and strokes.
There are many natural food sources for magnesium. These include wheat bran, wheat germ, almonds, cashews, peanuts, sesame seeds, millet, wheat, wild rice, tofu, beet greens, brown rice, dried figs and green leafy vegetables. The daily requirement of magnesium for males is 400mg and for women is 310mg.
Including magnesium-rich foods in the daily diet will not only prevent diabetes, high blood pressure, heart attacks and stroke, but will promote good health and an excellent quality of life.
MARS V VENUS: Painful comparisons
By Lucy Atkins
A Finnish study has broken new ground that women experience more severe symptoms of rheumatoid arthritis than men. After studying 6,000 people, researchers found that when the chronic joint disease was at exactly the same stage, women suffered worse pain, swelling and exhaustion.
We often make glib assumptions about the differences between how men and women respond to health complaints.
Designed to endure the agony of childbirth, women are often thought to have higher pain thresholds, while men are frequently teased about coping poorly with colds.
But how much solid evidence is there of a disparity in how the genders are affected by illness?
It is well-known that women in many countries tend to live longer than men (current figures for the UK have it at four years). Women visit their doctors more and smoke and drink less than men, and their hormones help protect them from heart disease until menopause. We also know that some diseases affect men more than women, and vice versa.
Relatively little, however, is known about how differently men and women's bodies deal with the same illnesses, once they have them.
A Finnish study has broken new ground by showing that women experience more severe symptoms of rheumatoid arthritis — the chronic joint disease — than men. When researchers studied 6,000 people, they found that women had worse pain, swelling and exhaustion than men, when the disease was at exactly the same stage.
"Hormones probably play a big part in this," says Professor Alan Silman, clinical director of the Arthritis Research Campaign. The female hormone, oestrogen, increases inflammation, exacerbating the painful swelling of joints.
Differences between the male and female body build might also be to blame. "Men have a greater muscle mass than women and strong muscles allow the body to function more efficiently, thereby minimising the strain on joints," says Silman. And women's weight distribution is usually lower than men's, which puts more pressure on the hips and knees.
The tables are turned, somewhat, when it comes to chickenpox. Caught in adulthood, it can be dangerous, with around 25 to 30 people in the UK dying from it each year. Research published in the British Medical Journal in 2002 found that adult men are twice as likely to die from chickenpox as women.
Little is known about why this is, but Nigel Higson, a GP who has a special interest in virology, says chickenpox, like the other childhood disease mumps, can certainly do things to men that it doesn't do to women.
"Chicken-pox and mumps can cause orchitis — a swelling of the testicles," he says. "This can lower sperm production and cause permanent scarring that will damage fertility for life."
Asthma, on the other hand, is more life-threatening to women than it is to men. In 2006, 850 women died from asthma in the UK, compared to 349 men. Women were also significantly more likely to be hospitalised because of the condition.
This could again relate to hormones. Until puberty, more boys than girls develop the condition, but once sex hormones kick in, girls take over.
“There is some evidence linking oestrogen and progesterone to sensitivity of the airways,” says Dr Elaine Vickers, research relations manager at Asthma UK, while testosterone seems to have the opposite effect. Other studies suggest that women on hormone-replacement therapy are 40 to 50 per cent more likely to become severe asthmatics.
When it comes to pain tolerance, perhaps surprisingly, “women seem to be more sensitive than men,” says Dr Jane Quinlan, consultant in anaesthesia and pain management at the John Radcliffe Hospital in Oxford. “In trials they respond more readily to pain stimuli and report more severe levels of pain than men.”
One explanation is that, when in pain, the body produces its own opioids (natural painkillers), endorphins and enkephalins, and oestrogen seems to lower the amount of them in the body.
However, pain perception is also bound up with our emotions, and it is possible that women simply interpret pain as more threatening or distressing than men.
How, then, do they cope with childbirth? “The magnitude of pain in labour is not in question," says Quinlan. "It's just that women cope better with this extraordinary pain because it is both expected, and finite.”
A Finnish study has broken new ground that women experience more severe symptoms of rheumatoid arthritis than men. After studying 6,000 people, researchers found that when the chronic joint disease was at exactly the same stage, women suffered worse pain, swelling and exhaustion.
We often make glib assumptions about the differences between how men and women respond to health complaints.
Designed to endure the agony of childbirth, women are often thought to have higher pain thresholds, while men are frequently teased about coping poorly with colds.
But how much solid evidence is there of a disparity in how the genders are affected by illness?
It is well-known that women in many countries tend to live longer than men (current figures for the UK have it at four years). Women visit their doctors more and smoke and drink less than men, and their hormones help protect them from heart disease until menopause. We also know that some diseases affect men more than women, and vice versa.
Relatively little, however, is known about how differently men and women's bodies deal with the same illnesses, once they have them.
A Finnish study has broken new ground by showing that women experience more severe symptoms of rheumatoid arthritis — the chronic joint disease — than men. When researchers studied 6,000 people, they found that women had worse pain, swelling and exhaustion than men, when the disease was at exactly the same stage.
"Hormones probably play a big part in this," says Professor Alan Silman, clinical director of the Arthritis Research Campaign. The female hormone, oestrogen, increases inflammation, exacerbating the painful swelling of joints.
Differences between the male and female body build might also be to blame. "Men have a greater muscle mass than women and strong muscles allow the body to function more efficiently, thereby minimising the strain on joints," says Silman. And women's weight distribution is usually lower than men's, which puts more pressure on the hips and knees.
The tables are turned, somewhat, when it comes to chickenpox. Caught in adulthood, it can be dangerous, with around 25 to 30 people in the UK dying from it each year. Research published in the British Medical Journal in 2002 found that adult men are twice as likely to die from chickenpox as women.
Little is known about why this is, but Nigel Higson, a GP who has a special interest in virology, says chickenpox, like the other childhood disease mumps, can certainly do things to men that it doesn't do to women.
"Chicken-pox and mumps can cause orchitis — a swelling of the testicles," he says. "This can lower sperm production and cause permanent scarring that will damage fertility for life."
Asthma, on the other hand, is more life-threatening to women than it is to men. In 2006, 850 women died from asthma in the UK, compared to 349 men. Women were also significantly more likely to be hospitalised because of the condition.
This could again relate to hormones. Until puberty, more boys than girls develop the condition, but once sex hormones kick in, girls take over.
“There is some evidence linking oestrogen and progesterone to sensitivity of the airways,” says Dr Elaine Vickers, research relations manager at Asthma UK, while testosterone seems to have the opposite effect. Other studies suggest that women on hormone-replacement therapy are 40 to 50 per cent more likely to become severe asthmatics.
When it comes to pain tolerance, perhaps surprisingly, “women seem to be more sensitive than men,” says Dr Jane Quinlan, consultant in anaesthesia and pain management at the John Radcliffe Hospital in Oxford. “In trials they respond more readily to pain stimuli and report more severe levels of pain than men.”
One explanation is that, when in pain, the body produces its own opioids (natural painkillers), endorphins and enkephalins, and oestrogen seems to lower the amount of them in the body.
However, pain perception is also bound up with our emotions, and it is possible that women simply interpret pain as more threatening or distressing than men.
How, then, do they cope with childbirth? “The magnitude of pain in labour is not in question," says Quinlan. "It's just that women cope better with this extraordinary pain because it is both expected, and finite.”
CHILD LABOUR: Perpetuating exploitation
Most children work. At the age of six or seven they start helping parents in the house by running errands and doing small chores.
In traditional societies involved in agriculture and handicraft production, they work under their parents’ supervision, learning family trade. In other developed societies, children work in their spare time to earn extra money, at the same time learning the value of work.
Child labour, however, implies something different as it entails children being exploited or overworked, or deprived of their right to health or education or just childhood. These children, apart from working at a very young age, work long hours, at little or no pay; and work in hazardous and slave-like conditions. These children are compelled to work on a regular basis to earn a living for themselves or for their families, and as a result are disadvantaged educationally and socially. Their places of work are exploitative and damaging to their health and to their physical and mental development. Separated from their families and often deprived of educational and training opportunities; these children are forced to lead prematurely adult lives, and condemned to a cruel present and a bleak future.
Many justify the existence of child labour on grounds of poverty, without realising that child labour itself may become a cause of poverty. A sizeable number of Pakistan’s population lives in abject poverty; and their children have to work for the survival of their families. This situation deprives them of choice and increases the employers’ hold over them; enabling the employer to pay meagre wages to these child workers.
The rise in employment of children at low wages creates a cycle in which already inadequate adult wages are further depressed to a point where a single adult salary is not sufficient to sustain a family. Hence child labour leads adult under-employment and unemployment.
As long as children are put to work, poverty will spread and living standards will continue to decline. It should, however, be appreciated that not all children work to support their families. Some enter the workforce due to lack of opportunities for free, quality and compulsory education.
The quality of available education remains irrelevant and unsuited to the needs of the child. Even if compulsory education were made available, it will not be considered by many parents as a worthwhile investment because the system does not impart relevant, marketable skills and knowledge. Competent, caring and qualified teachers are missing and the quality of curriculum is poor.
This, coupled with growing urbanisation, and its accompanying pattern of social transition, rapid population growth, resource constraints, commercialisation of agriculture and growth of landless peasantry, traditional hesitation in educating females, unemployment of adults and low income makes Pakistan one of the few countries in the world with child labour on the increase.
The magnitude of the problem is immense due to the numbers involved, although the government, regardless of who is in power, always denies the magnitude of the problem, insisting that it is blown out of proportion.
--------------------------------------------------------------------------------
Child labour in Pakistan cannot be abolished by projects that cover only a few hundred child workers at a time. Something more concrete has to be done.
--------------------------------------------------------------------------------
Millions of child workers continue to suffer, while society and bureaucracy dwells on a solution to the problem. Employers believe that they are doing a favour to poor families by employing their children, saving them from starvation and deprivation. The truth is that children provide cheap and easily controlled labour with other advantages like flexibility in situations of fluctuating or unstable market forces. They take less space, are obedient and easy to exploit through fear.
Widespread societal acceptance of child labour has obscured the fact that most of it is exploitative and that many of its forms place the child’s health and development in jeopardy.
Child labour in Pakistan is found in innumerable occupations and patterns, classified into children working for wages and without any.
The latter involves children working for parents, mostly in rural as well as urban areas. The agricultural sector continues to be the biggest employer of children.
In feudal regions bonded labour is found in agriculture and brick kilns, despite the enactment of the Bonded Labour System (Abolition) Act in 1992. It is also known as pledging of children to landlords as workers for part repayment of loans taken by parents.
The other category is of children working for wages which may involve children working as a part of family labour group in agricultural fields, or brick kilns, or as individual wage earners generally found in small establishments not covered by laws protecting children. This sector is the largest employer of children in the urban and semi urban areas.
According to the ILO, it is the fastest growing area of child labour in developing countries, fed by rural to urban migration and the break down of production into decentralised units.
Domestic child workers are invisible and at high risk of exploitation and abuse. Being cheaper, they are more in demand and easier to control compared to adult servants.
The most visible ones are street workers who are usually self employed, while some work under adult supervision. Their activities involve shoe shining, selling miscellaneous articles like newspapers, sweets and flowers. Some of them are rag-pickers rummaging through garbage bins. Their working hours are long and tedious because the profit margin is low and work is poorly organised.
Since all these children are growing up without education, Pakistan will soon have an even larger adult illiterate population.
The government has plans and programmes for the prevention of polio, malnutrition and iodine deficiencies but the same approach must be applied to the problem of child labour.
Instead of regulation and rehabilitation, the emphasis should be on the abolition of child labour which is the cause of poverty as it perpetuates exploitation. Prevention is both cheaper and works better. Education should be made compulsory for all.
The problem is not of lack of resources but of poverty of will. All labour laws, and the Constitution, fixes the minimum age for admission to employment at 14 years, which conflicts with Convention on the Rights of the Child, with customary international law and other international instruments, and the age generally accepted internationally for permitting child labour.
Ideally, child labour should not be permitted below the age of 18. However, due to reasons beyond the control of the government, the age may be lowered. It should not be in any case less than 16 years by which age a child should at least have completed secondary education.
Child labour in Pakistan cannot be abolished by projects that cover only a few hundred child workers at a time. Something more concrete has to be done. Let us all remember that a child employed is a future destroyed.By Anees Jillani
In traditional societies involved in agriculture and handicraft production, they work under their parents’ supervision, learning family trade. In other developed societies, children work in their spare time to earn extra money, at the same time learning the value of work.
Child labour, however, implies something different as it entails children being exploited or overworked, or deprived of their right to health or education or just childhood. These children, apart from working at a very young age, work long hours, at little or no pay; and work in hazardous and slave-like conditions. These children are compelled to work on a regular basis to earn a living for themselves or for their families, and as a result are disadvantaged educationally and socially. Their places of work are exploitative and damaging to their health and to their physical and mental development. Separated from their families and often deprived of educational and training opportunities; these children are forced to lead prematurely adult lives, and condemned to a cruel present and a bleak future.
Many justify the existence of child labour on grounds of poverty, without realising that child labour itself may become a cause of poverty. A sizeable number of Pakistan’s population lives in abject poverty; and their children have to work for the survival of their families. This situation deprives them of choice and increases the employers’ hold over them; enabling the employer to pay meagre wages to these child workers.
The rise in employment of children at low wages creates a cycle in which already inadequate adult wages are further depressed to a point where a single adult salary is not sufficient to sustain a family. Hence child labour leads adult under-employment and unemployment.
As long as children are put to work, poverty will spread and living standards will continue to decline. It should, however, be appreciated that not all children work to support their families. Some enter the workforce due to lack of opportunities for free, quality and compulsory education.
The quality of available education remains irrelevant and unsuited to the needs of the child. Even if compulsory education were made available, it will not be considered by many parents as a worthwhile investment because the system does not impart relevant, marketable skills and knowledge. Competent, caring and qualified teachers are missing and the quality of curriculum is poor.
This, coupled with growing urbanisation, and its accompanying pattern of social transition, rapid population growth, resource constraints, commercialisation of agriculture and growth of landless peasantry, traditional hesitation in educating females, unemployment of adults and low income makes Pakistan one of the few countries in the world with child labour on the increase.
The magnitude of the problem is immense due to the numbers involved, although the government, regardless of who is in power, always denies the magnitude of the problem, insisting that it is blown out of proportion.
--------------------------------------------------------------------------------
Child labour in Pakistan cannot be abolished by projects that cover only a few hundred child workers at a time. Something more concrete has to be done.
--------------------------------------------------------------------------------
Millions of child workers continue to suffer, while society and bureaucracy dwells on a solution to the problem. Employers believe that they are doing a favour to poor families by employing their children, saving them from starvation and deprivation. The truth is that children provide cheap and easily controlled labour with other advantages like flexibility in situations of fluctuating or unstable market forces. They take less space, are obedient and easy to exploit through fear.
Widespread societal acceptance of child labour has obscured the fact that most of it is exploitative and that many of its forms place the child’s health and development in jeopardy.
Child labour in Pakistan is found in innumerable occupations and patterns, classified into children working for wages and without any.
The latter involves children working for parents, mostly in rural as well as urban areas. The agricultural sector continues to be the biggest employer of children.
In feudal regions bonded labour is found in agriculture and brick kilns, despite the enactment of the Bonded Labour System (Abolition) Act in 1992. It is also known as pledging of children to landlords as workers for part repayment of loans taken by parents.
The other category is of children working for wages which may involve children working as a part of family labour group in agricultural fields, or brick kilns, or as individual wage earners generally found in small establishments not covered by laws protecting children. This sector is the largest employer of children in the urban and semi urban areas.
According to the ILO, it is the fastest growing area of child labour in developing countries, fed by rural to urban migration and the break down of production into decentralised units.
Domestic child workers are invisible and at high risk of exploitation and abuse. Being cheaper, they are more in demand and easier to control compared to adult servants.
The most visible ones are street workers who are usually self employed, while some work under adult supervision. Their activities involve shoe shining, selling miscellaneous articles like newspapers, sweets and flowers. Some of them are rag-pickers rummaging through garbage bins. Their working hours are long and tedious because the profit margin is low and work is poorly organised.
Since all these children are growing up without education, Pakistan will soon have an even larger adult illiterate population.
The government has plans and programmes for the prevention of polio, malnutrition and iodine deficiencies but the same approach must be applied to the problem of child labour.
Instead of regulation and rehabilitation, the emphasis should be on the abolition of child labour which is the cause of poverty as it perpetuates exploitation. Prevention is both cheaper and works better. Education should be made compulsory for all.
The problem is not of lack of resources but of poverty of will. All labour laws, and the Constitution, fixes the minimum age for admission to employment at 14 years, which conflicts with Convention on the Rights of the Child, with customary international law and other international instruments, and the age generally accepted internationally for permitting child labour.
Ideally, child labour should not be permitted below the age of 18. However, due to reasons beyond the control of the government, the age may be lowered. It should not be in any case less than 16 years by which age a child should at least have completed secondary education.
Child labour in Pakistan cannot be abolished by projects that cover only a few hundred child workers at a time. Something more concrete has to be done. Let us all remember that a child employed is a future destroyed.By Anees Jillani
When impartiality becomes an excuse
The recent decision by BBC Television, followed by Sky News, to refuse to broadcast an appeal for help for the Palestinians sparked impassioned debate. The channels maintained that their action – or rather, the lack of it – was based upon concerns regarding the compromising of their objectivity, and many people agreed. But a great number of people around the world saw in this decision another example of what is commonly but rather simplistically understood as the ‘Western conspiracy’ against Palestinians.
In fact, both sides have a valid point but neither is fully correct in the manner in which they frame the issue. Neither side has extended itself towards understanding the problem properly in terms of its historical context and the resultant ideological frameworks.
To begin with, it is certainly true that principled journalism demands that impartiality be an over-arching priority of any news distributor. If any media organisation takes a side – or is tainted by even the impression that it has taken a side – it can never again be fully trusted as an accurate reporter of events. Reporters, be they individuals or organisations, have a duty to observe and report without bias, from all perspectives.
That said, however, it is also vital to understand and acknowledge that total objectivity is a mirage. It is an ideal that every newsperson or organisation must strive for, of course, but it can never be achieved in its true essence. This is so not only because of the complexity of the human mind and the various strands that inform it, but also because of the complexity of events that are of sufficient significance to be considered news. All news stories are based on facts that are usually undeniable. But those facts are themselves linked to other realities and sets of circumstances that a reporter can choose – or not – to highlight. In the simple act of picking up a story, and in deciding how to report it, one is making a judgment call based on a certain set of biases and assumptions.
Consider, for example, a story on a fire that could not be controlled in time to save a factory. These are the bare facts. But the reporters can choose to frame them in terms of incompetence on the part of the fire department, or the lack of resources available to it, or the factory owner’s insurance policy and financial situation, or the lack of building codes stipulating fire safety, or architectural malpractices – all of which are contextual facts.
So, when the BBC or Sky News say that they are concerned about losing their impartiality, they are right. But they must also not present themselves as totally objective otherwise, for this is not true. As a viewer, a cursory count of the airtime minutes devoted to stories on Israeli and Palestinian suffering leaves me with the certain knowledge that the slant is towards the former. (A similar scan of Al Jazeera, meanwhile, presents the opposite picture.)
At the same time, however, those amongst us who love to postulate the conspiracy theory are also delusional. The manner in which any credible media organisation works, and its ethic of objectivity, prevents it from taking this course. All the media organisations in the West do not get together and decide to cut the Palestinians, or the Muslims, or Africans, or women or what have you, out of their fair share of screen time. Even in a single organisation, all the employees don’t get together to come to a similar decision. There is never any single or all-important decision maker in a news organisation, the final content of which depends in equal measure on everybody involved in the production: reporters, copy, assignment and graphic editors, section heads, owners and even the marketing and circulation division. Any one attempting to set a conspiracy in motion hasn’t really a hope since he’d have to argue it out with dozens of his colleagues, most of whom are nitpicking debaters in the way that only journalists can be. And then he’d face the prospect of viewers or readers turning away from an organisation whose integrity has been compromised.
That said, though, there is a reason why news organisations sometimes display enough of a shared bias to make the suspicious sniff out conspiracy theories: historical context and bias. In terms of the Israel-Palestine issue, it is of vital significance that the United Kingdom has been involved in the matter right from the start. Regardless of various peace deals or ceasefires brokered, the country has historically remained sympathetic towards the settlers. It has sought to bring about a compromise between the parties, perhaps, but has never doubted the ethicality or legality of the initial Israeli takeover of Palestinian land. So, if this has been various governments’ stance, it is only to be expected that the citizenry would absorb the same bias. And who are the people working in news organisations but members of that self-same citizenry, most of whom will have grown up in educational, political and cultural environments that stealthily encouraged a leaning towards one view at the cost of another.
Before the conspiracy theorist goes “Aha!”, I must point out that this sort of ideological indoctrination is a reality of modern times that cannot be blamed on any one person, organisation or society. Here in Pakistan (or in India, for that matter), we have our own blind spots, for example. One of them is called Kashmir. No matter how much objectivity each one of us strives for, our views will always latently be informed by the stance our country’s successive governments have taken towards the issue. This is why, during any debate of Kashmir, no matter how liberal or left-leaning or supposedly impartial the commentator, one finds under the surface the lurking assumption that the land ‘belongs’ to Pakistan, and that even going as far as arguing for self-determination or self-rule is a bit of a noble sacrifice on part of Pakistan.
Just one more point remains to be made: there is journalistic responsibility, but there is also the ethical responsibility that each one of us, newsperson or not, owes as a human being. There are times grave enough for the latter to take precedence, such as what recently took place in the Gaza Strip and the very disturbing precedent it constitutes. It may be wrong for a news organisation to compromise its reputation by taking sides, but it is far, far worse to pretend that the Israelis are the primary victims of the situation as it now stands – that is very far from the truth. The ideal of objectivity must under no circumstances be used as an excuse to sit on the fence while atrocities are committed against the defenceless and the innocent.
As Frere wrote, “Washing one’s hands of the conflict between the powerful and the powerless means siding with the powerful, not to be neutral.”
By Hajrah Mumtaz
In fact, both sides have a valid point but neither is fully correct in the manner in which they frame the issue. Neither side has extended itself towards understanding the problem properly in terms of its historical context and the resultant ideological frameworks.
To begin with, it is certainly true that principled journalism demands that impartiality be an over-arching priority of any news distributor. If any media organisation takes a side – or is tainted by even the impression that it has taken a side – it can never again be fully trusted as an accurate reporter of events. Reporters, be they individuals or organisations, have a duty to observe and report without bias, from all perspectives.
That said, however, it is also vital to understand and acknowledge that total objectivity is a mirage. It is an ideal that every newsperson or organisation must strive for, of course, but it can never be achieved in its true essence. This is so not only because of the complexity of the human mind and the various strands that inform it, but also because of the complexity of events that are of sufficient significance to be considered news. All news stories are based on facts that are usually undeniable. But those facts are themselves linked to other realities and sets of circumstances that a reporter can choose – or not – to highlight. In the simple act of picking up a story, and in deciding how to report it, one is making a judgment call based on a certain set of biases and assumptions.
Consider, for example, a story on a fire that could not be controlled in time to save a factory. These are the bare facts. But the reporters can choose to frame them in terms of incompetence on the part of the fire department, or the lack of resources available to it, or the factory owner’s insurance policy and financial situation, or the lack of building codes stipulating fire safety, or architectural malpractices – all of which are contextual facts.
So, when the BBC or Sky News say that they are concerned about losing their impartiality, they are right. But they must also not present themselves as totally objective otherwise, for this is not true. As a viewer, a cursory count of the airtime minutes devoted to stories on Israeli and Palestinian suffering leaves me with the certain knowledge that the slant is towards the former. (A similar scan of Al Jazeera, meanwhile, presents the opposite picture.)
At the same time, however, those amongst us who love to postulate the conspiracy theory are also delusional. The manner in which any credible media organisation works, and its ethic of objectivity, prevents it from taking this course. All the media organisations in the West do not get together and decide to cut the Palestinians, or the Muslims, or Africans, or women or what have you, out of their fair share of screen time. Even in a single organisation, all the employees don’t get together to come to a similar decision. There is never any single or all-important decision maker in a news organisation, the final content of which depends in equal measure on everybody involved in the production: reporters, copy, assignment and graphic editors, section heads, owners and even the marketing and circulation division. Any one attempting to set a conspiracy in motion hasn’t really a hope since he’d have to argue it out with dozens of his colleagues, most of whom are nitpicking debaters in the way that only journalists can be. And then he’d face the prospect of viewers or readers turning away from an organisation whose integrity has been compromised.
That said, though, there is a reason why news organisations sometimes display enough of a shared bias to make the suspicious sniff out conspiracy theories: historical context and bias. In terms of the Israel-Palestine issue, it is of vital significance that the United Kingdom has been involved in the matter right from the start. Regardless of various peace deals or ceasefires brokered, the country has historically remained sympathetic towards the settlers. It has sought to bring about a compromise between the parties, perhaps, but has never doubted the ethicality or legality of the initial Israeli takeover of Palestinian land. So, if this has been various governments’ stance, it is only to be expected that the citizenry would absorb the same bias. And who are the people working in news organisations but members of that self-same citizenry, most of whom will have grown up in educational, political and cultural environments that stealthily encouraged a leaning towards one view at the cost of another.
Before the conspiracy theorist goes “Aha!”, I must point out that this sort of ideological indoctrination is a reality of modern times that cannot be blamed on any one person, organisation or society. Here in Pakistan (or in India, for that matter), we have our own blind spots, for example. One of them is called Kashmir. No matter how much objectivity each one of us strives for, our views will always latently be informed by the stance our country’s successive governments have taken towards the issue. This is why, during any debate of Kashmir, no matter how liberal or left-leaning or supposedly impartial the commentator, one finds under the surface the lurking assumption that the land ‘belongs’ to Pakistan, and that even going as far as arguing for self-determination or self-rule is a bit of a noble sacrifice on part of Pakistan.
Just one more point remains to be made: there is journalistic responsibility, but there is also the ethical responsibility that each one of us, newsperson or not, owes as a human being. There are times grave enough for the latter to take precedence, such as what recently took place in the Gaza Strip and the very disturbing precedent it constitutes. It may be wrong for a news organisation to compromise its reputation by taking sides, but it is far, far worse to pretend that the Israelis are the primary victims of the situation as it now stands – that is very far from the truth. The ideal of objectivity must under no circumstances be used as an excuse to sit on the fence while atrocities are committed against the defenceless and the innocent.
As Frere wrote, “Washing one’s hands of the conflict between the powerful and the powerless means siding with the powerful, not to be neutral.”
By Hajrah Mumtaz
Foreign policy and energy needs
IT is something of an understatement that the foreign policy of nations is heavily influenced by global energy needs. The geographical factor alone emphasises this. Petroleum reserves are extremely localised in their existence. Less than 10 countries hold over 85 per cent of the total global oil and gas reserves.
Securing the desired level of supplies from petroleum-rich countries is therefore at the heart of tough realpolitik, for a number of countries (particularly major global economic and military powers) with rare exceptions are energy deficient. Alliances are formed not with those that are liked, but with those that are needed to meet ever-growing energy requirements.
The pivotal role of energy in the architecture of foreign policy is a phenomenon that surfaced for the first time with the advent of the 20th century. By that time, there was broad realisation of the economic benefits of oil and a desire to control oil resources had begun to feature in western politics.
Just before the First World War, Britain’s decision in 1912 to convert its battleships to run on oil in order to maintain naval hegemony gave birth to a new geopolitical age. The switch-over from coal to oil, the latter a fuel that did not exist inside Britain unlike coal, was a strategic move that demanded a secure supply of oil. Winston Churchill substantiated this in the following terms: “We must become the owners, or at any rate the controllers at the source, of at least a proportion of the oil which we require.”
The vigorous pursuit of oil thus became an important feature of the British campaign in several parts of the world. The same year Britain bought the controlling rights of the Anglo-Persian Oil Company. Having discovered oil in Iran in 1908, the company was formed in 1909 as a subsidiary by another British company, namely Burmah Oil Company.
The powerful role of oil in the make-up of international relations became more evident after the First World War that significantly changed the geopolitical landscape. Apart from Britain and France, a number of other emerging powers including Russia, the US and Japan paid special attention to establishing ties with oil-rich countries. The conclusion of the Second World War presented the US, arguably the most powerful nation, a status that it has maintained thus far.
On the eve of the Second World War the US was self-sufficient in its energy requirements producing over 60 per cent of the world’s oil. With demand on the rise globally, US policymakers were aware of the intense competition for oil in the years ahead. Immediately after the war, the US started manoeuvring to replace the influence in the Middle East of Britain and France, both greatly weakened by the war, by its own. Washington’s motives in this regard not only aimed to contain Russia and become the predominant power but also to be the principal beneficiary of oil wealth. A top US State Department official in 1945 substantiated US policy in this regard: “A review of the diplomatic history of the past 35 years will show that petroleum has historically played a larger part in the external relations of the United States than any other commodity.”
The second half of the last century also witnessed a number of oil-driven geopolitical moves in the world. Although helping strengthen ties among nations, oil also contributed to triggering numerous frictions and conflicts. The use of oil as a weapon during the Arab oil embargo of 1973 — second in history after the US embargo on Japan in 1941 — and Iraq’s invasion of Iran (1980) and Kuwait (1990) are some of the leading paradigms.
The nominated trade secretary in the US president-elect Barack Obama’s cabinet, Bill Richardson, who also served as the secretary of energy with Bill Clinton, in 1999 reflected upon oil’s importance during the last century in the following terms: “Oil has literally made foreign and security policy for decades. Just since the turn of this century, it has provoked the division of the Middle East after World War I; aroused Germany and Japan to extend their tentacles beyond their borders; the Arab oil embargo; Iran versus Iraq; the Gulf War. This is all clear.”
The unfolding geopolitical landscape of the 21st century appears to have an even more prominent role in petroleum resources than that of the last century. Along with oil, gas is also set to become a coveted commodity. Sino-US ties are already under stress over the growing competition for petroleum reserves. For almost a decade now, in order to satisfy its rapidly growing energy requirements, China has been proactively pursuing the goal of increased shares in petroleum resources. In China’s foreign policy towards many parts of the world, particularly Africa, the Middle East and the Caspian Sea region, oil holds a critical status. China’s vibrant policies in these regions are being watchfully monitored in Washington.
Alongside the US and China, there are a few other proactive players on the chessboard of the future energy world. Russia, for instance, holding the largest gas reserves and seventh-largest oil reserves in the world, has emerged as an energy superpower. Particularly in Europe, that imports almost half of its natural gas and 30 per cent of its oil requirements from Russia, there is a growing degree of apprehension that the Kremlin may try to ride on its rich petroleum reserves to regain the powerful status it held during the time of the former USSR.
European countries were reminded of the strong Russian position during the recent Georgia-Russia conflict. Despite a strong push from various member states, the European Union could not impose sanctions on Russia, thanks to Germany that snubbed the proposal for sanctions warning against the dire energy crisis the move would have triggered.
By Dr M. Asif
The writer is a lecturer in renewable energy at the Glasgow Caledonian University, UK.
Securing the desired level of supplies from petroleum-rich countries is therefore at the heart of tough realpolitik, for a number of countries (particularly major global economic and military powers) with rare exceptions are energy deficient. Alliances are formed not with those that are liked, but with those that are needed to meet ever-growing energy requirements.
The pivotal role of energy in the architecture of foreign policy is a phenomenon that surfaced for the first time with the advent of the 20th century. By that time, there was broad realisation of the economic benefits of oil and a desire to control oil resources had begun to feature in western politics.
Just before the First World War, Britain’s decision in 1912 to convert its battleships to run on oil in order to maintain naval hegemony gave birth to a new geopolitical age. The switch-over from coal to oil, the latter a fuel that did not exist inside Britain unlike coal, was a strategic move that demanded a secure supply of oil. Winston Churchill substantiated this in the following terms: “We must become the owners, or at any rate the controllers at the source, of at least a proportion of the oil which we require.”
The vigorous pursuit of oil thus became an important feature of the British campaign in several parts of the world. The same year Britain bought the controlling rights of the Anglo-Persian Oil Company. Having discovered oil in Iran in 1908, the company was formed in 1909 as a subsidiary by another British company, namely Burmah Oil Company.
The powerful role of oil in the make-up of international relations became more evident after the First World War that significantly changed the geopolitical landscape. Apart from Britain and France, a number of other emerging powers including Russia, the US and Japan paid special attention to establishing ties with oil-rich countries. The conclusion of the Second World War presented the US, arguably the most powerful nation, a status that it has maintained thus far.
On the eve of the Second World War the US was self-sufficient in its energy requirements producing over 60 per cent of the world’s oil. With demand on the rise globally, US policymakers were aware of the intense competition for oil in the years ahead. Immediately after the war, the US started manoeuvring to replace the influence in the Middle East of Britain and France, both greatly weakened by the war, by its own. Washington’s motives in this regard not only aimed to contain Russia and become the predominant power but also to be the principal beneficiary of oil wealth. A top US State Department official in 1945 substantiated US policy in this regard: “A review of the diplomatic history of the past 35 years will show that petroleum has historically played a larger part in the external relations of the United States than any other commodity.”
The second half of the last century also witnessed a number of oil-driven geopolitical moves in the world. Although helping strengthen ties among nations, oil also contributed to triggering numerous frictions and conflicts. The use of oil as a weapon during the Arab oil embargo of 1973 — second in history after the US embargo on Japan in 1941 — and Iraq’s invasion of Iran (1980) and Kuwait (1990) are some of the leading paradigms.
The nominated trade secretary in the US president-elect Barack Obama’s cabinet, Bill Richardson, who also served as the secretary of energy with Bill Clinton, in 1999 reflected upon oil’s importance during the last century in the following terms: “Oil has literally made foreign and security policy for decades. Just since the turn of this century, it has provoked the division of the Middle East after World War I; aroused Germany and Japan to extend their tentacles beyond their borders; the Arab oil embargo; Iran versus Iraq; the Gulf War. This is all clear.”
The unfolding geopolitical landscape of the 21st century appears to have an even more prominent role in petroleum resources than that of the last century. Along with oil, gas is also set to become a coveted commodity. Sino-US ties are already under stress over the growing competition for petroleum reserves. For almost a decade now, in order to satisfy its rapidly growing energy requirements, China has been proactively pursuing the goal of increased shares in petroleum resources. In China’s foreign policy towards many parts of the world, particularly Africa, the Middle East and the Caspian Sea region, oil holds a critical status. China’s vibrant policies in these regions are being watchfully monitored in Washington.
Alongside the US and China, there are a few other proactive players on the chessboard of the future energy world. Russia, for instance, holding the largest gas reserves and seventh-largest oil reserves in the world, has emerged as an energy superpower. Particularly in Europe, that imports almost half of its natural gas and 30 per cent of its oil requirements from Russia, there is a growing degree of apprehension that the Kremlin may try to ride on its rich petroleum reserves to regain the powerful status it held during the time of the former USSR.
European countries were reminded of the strong Russian position during the recent Georgia-Russia conflict. Despite a strong push from various member states, the European Union could not impose sanctions on Russia, thanks to Germany that snubbed the proposal for sanctions warning against the dire energy crisis the move would have triggered.
By Dr M. Asif
The writer is a lecturer in renewable energy at the Glasgow Caledonian University, UK.
Emerging World Economies
Singapore
The country’s economy may shrink in 2009 due to the international financial crisis. The country is affected by the crisis because it has an open economy and income from tourism and exports is falling. But the government is working to lessen the effects of the crisis, including giving credits to industries and helping them reduce costs. Asian policy makers and their counterparts around the world have lowered interest rates and announced stimulus plans to counter the impact of the global financial crisis. Singapore policy makers also need to implement measures to avoid a prolonged slowdown.
As the global economic slowdown continues, Singapore lowered it growth forecasts for the fourth time in a year, and warned of an impending contraction in 2009. The government of Singapore now forecasts an economic contraction of as much as one per cent through 2009, a sharp downward revision from its previous estimate of 4-6 per cent growth.
According to the Trade and Industry Ministry, Singapore’s economy is expected to face a broad-based slowdown in 2009. Singapore may be the first Asian country to enter in recession, after official figures showed that the island country’s economy shrank by a worse-than-expected 6.8 per cent in the three months to September.
The economy is now seen to grow at 2.5 per cent for 2008, down from the previous forecast of three per cent. The heavily export-dependent island economy has seen growth slide as demand from its key trade partners –US and Europe falls.
Shipments to other emerging markets have also dropped significantly. Overseas shipments are expected to fall by seven per cent this year, the Singapore government announced today. As demand for Singapore’s electronics and pharmaceutical products fall, exports could shrink by up to one per cent in 2009. The slowdown in international and regional trade will significantly impact wholesale trade and the transport and storage sectors.
The export-dependent economy has been battered by declining orders for electronic goods and pharmaceuticals from its biggest customers in the recession-hit markets of the US and Europe, as well as emerging nations. The government estimates that overseas shipments will fall as much as seven per cent this year.
The government plans to enhance measures to help local companies secure loans. The government won’t reduce spending even though the budget deficit this year may be three times its initial projection. As the global financial crisis chokes credit, the government has pledged 2.3 billion Singapore dollars ($1.5bn) to help cash-strapped small businesses. These measures seek to ensure that local enterprises have sufficient resources to continue to operate, invest trade and internationalize in an adverse economic climate.
The Singapore dollar is among Asia’s worst performing currencies this quarter after the Monetary Authority of Singapore shifted a ‘’zero-percent appreciation’’ stance last month. It has slid 6.2 per cent against the US currency since the beginning of October. The central bank, which sets monetary policy by managing the Singapore dollar against a secret basket of currencies, in October switched from allowing a gradual rise in the currency to a neutral stance of zero appreciation.
Some commentators expect the central bank to ease policy further by letting the currency weaken ahead of its next scheduled review in April. But the central bank said its policy stance remains appropriate and it has no plans to change it for now. It sees no reason for ‘’undue weakness’’ in the Singapore dollar and will act if necessary to limit excess volatility.
Singapore’s inflation hit a 26-year high of 7.5 per cent in April, May and June. It will continue to ease. However, it will continue to be sticky for the next few months as it will take time for the decline in prices to be reflected in the consumer price index.
The authorities are confident that annual inflation will revert back to 2-3 per cent next year. But Singapore’s central bank said it expects inflation to remain within the 6-7 percent target for 2008, and forecast inflation to ease to 2.5-3.5 per cent in 2009.
The policies to boost the economy would take effect immediately after being announced in an expansionary January budget. The government would partly rely on construction to help growth with project costs coming down.
The budget emphasis will be on jobs as the government expects unemployment to rise, particularly in manufacturing, which accounts for about a quarter of the economy. The government is also trying to diversify away from manufacturing into service industries such as tourism and finance. Moderation of employment growth is expected in the second half of 2008, and through to 2009.
Singapore’s banks have not suffered huge write downs on risky debts unlike peers in the United States and Europe, though top bank DBS Group said it would cut 900 jobs after suffering a 38 percent drop in quarterly profit.
Singapore may face political pressure from the European Union and the United States over its role as a financial centre for rich foreigners, following a landmark deal by offshore haven Liechtenstein with the United States to drop bank secrecy in cases of tax evasion. Singapore’s three local banks DBS, United Overseas Bank and Oversea-Chinese Banking Corp are well capitalised and their asset quality remains strong despite the problems in the United States.
Malaysia
The ongoing global turbulence roiling the financial markets will likely trigger a global recession in 2009 and accordingly forecasts Malaysia’s GDP growth for next year at 3.5%. The world’s largest economy and Malaysia’s single largest trading partner, the United States is likely to experience its first recession since 2001 as the financial crisis continues unabated with adverse impact on bank lending, investment and private consumption. As a result, the US economic performance will cast a long shadow on the rest of the world. Other major economies, namely the Euro and Japan, are also not being spared from the current financial and economic malaise.
Being an open economy, Malaysia and other regional countries are not immune from any crisis, especially one that is unprecedented as the current turmoil. These economies are now bracing for a decline in global trade volume due to an expected drop in external demand. In addition to external trade performance, Malaysian economic growth in 2009 will also be impacted by a slowdown in private investment as risk aversion heightens among investors. As a consequent, business expansion plans are likely to be scaled down while portfolio investors may continue to stay on the sideline as evident by substantial net outflows in 2008.
Although Malaysia has, over the years, diversified its trade pattern with intra-trade with ASEAN countries becoming a significant feature of its economy, the expected moderations in the economies of G3 (US, Euro and Japan) could have knock-on effects on ASEAN economies as well.
However, the silver lining in the Malaysian economy is the steady domestic demand, primarily supported by private consumption, which, while expected to moderate to 4.4% in 2009 from an estimated 6.3% this year following the impact of higher consumer prices and waning consumer sentiment, is anticipated to be a bulwark against a weakening global economy. Domestic demand in 2009 is expected to be underpinned by an accommodative monetary stance and a relatively stable labour market.
In addition, Malaysia is in a more resilient position to cope with present economic challenges as reflected by huge surplus in the current account of balance of payment, a high level of external reserves and sound banking system that will help weather current economic challenges.
As of September, the amount of external reserves stood at RM379.3 billion, sufficient to finance 9 months of retained imports and is 4.1 times the total short-term external debt. This is in stark contrast with the situation during the Asian Financial Crisis in 1997 when external reserves dropped to as low as 2.9 months of retained imports in October that year.
The country’s financial institutions’ ability to provide ample liquidity is also a critical factor to insulate the Malaysian economy from a credit crunch. A loan-deposit ratio in the banking system that continues to remain below 80 per cent in the last 4 years also augurs well for its role to support lending activities. Additionally, there is no visible strain in the domestic financial market as is evident by the benign spread between inter-bank and Treasury Bills.
Further underscoring the strength of the country’s financial institutions is the declining trend of net non-performing loans (NPL).
Meanwhile, Malaysia’s economy grew at a faster-than-expected rate of 4.7 per cent in the third quarter, driven by domestic demand. It was, however, its slowest pace of growth since mid-2005, as a sharply deteriorating global economy slowed down exports. Economic growth may slow to between 3.5 per cent and 4.5 per cent in the final quarter.
However, full-year growth to be within its forecast of between five and 5.5 per cent. It was a decent third quarter growth. The full effects of the global financial crisis will only be felt by Malaysia in 2009. Inflation, which peaked at 8.4 per cent in August, is falling and expected to come in at below three per cent in the second half of 2009.
South Korea
South Korea’s economic expansion is expected to slow significantly in 2009 as the global financial crisis drags down gross domestic product growth to its lowest level since the Asian financial crisis in the late 1990s.
The Bank of Korea projects Korea’s economy to grow two per cent in 2009 -- from a growth of 3.7 per cent in 2008 as the twin pillars of domestic consumption and exports weaken. That rate hasn’t been seen since the economy contracted by 6.9 per cent in 1998 at the height of the Asian financial turmoil. Private consumption is seen to increase 0.8 in 2009 after a 1.5 per cent expansion in 2008. In 2010; demand is expected to recover to 2.5 per cent.
Exports, a key engine of growth for the trade-driven economy, are forecast to rise more moderately at 1.3 in 2009, compared with a 3.6 per cent increase in 2008. In line with the weaker economic performance, inflation is expected to be more moderate at three in 2009 and 2.6 per cent in 2010 after accelerating 4.7% in 2008. South Korea’s current account balance, meanwhile, is likely to recover to a surplus of $22 billion next year from a deficit of $4.5 billion in 2008, aided by a drop in oil prices and lower imports on the back of tepid domestic demand.
The flow of the domestic economy will be affected by the global financial crisis, the depth of the global economic slowdown and the timing of its recovery.
In the absence of any strong indications that the global problems will recede soon, along with sluggish domestic consumption, it will be difficult for South Korea’s economy to regain its momentum, the central bank added.
The Bank of Korea’s outlook for the economy next year is in line with the International Monetary Fund’s 2% forecast and slightly more pessimistic than the Organization for Economic Cooperation and Development’s 2.7 per cent in 2009. Still, the revised estimate remains far more optimistic than what some private economists are predicting. Swiss bank UBS, for example, sees South Korea’s economy declining three per cent in 2009.
South Korea’s economy has not contracted on an annual basis since 1997, when it was hit by the Asian financial crisis that forced the government to seek a $58 billion bailout from the International Monetary Fund. The central bank estimated, however, that growth would recover in 2010 to four per cent. Deteriorating economic data have raised alarm bells that Asia’s fourth-largest economy could contract next year on an annual basis for the first time since 1997, when the country was in the throes of the Asian financial crisis. Exports fell 18.3 per cent in November from the same month last year.
South Korea’s central bank carried out its biggest ever interest rate cut, slashing borrowing costs by a full percentage point to a record low in a bid to stave off possible recession. The Bank of Korea lowered the benchmark seven-day repurchase rate to three per cent from four per cent at a regular policy meeting. There is now judged to be a strong likelihood that growth will fall sharply as a result of the worldwide economic slowdown along with the financial market unrest including the credit crunch. The rate cut marked the fourth time the central bank has lowered borrowing costs in the past two months and exceeded the 0.75 percentage point emergency cut on Oct. 27, previously the largest ever.
Most economists had expected further rate cuts after a quarter percentage point reduction in November, though not of such magnitude.
After the re-eruption of the US financial crisis in September, the South Korean administration promised to inject 133 trillion won (about $91 billion) into the financial system to ease liquidity. By the end of November, only 50 trillion won had been released. In October, 321 firms went bankrupt, up from 118 in September, as the lack of credit took effect. A $16 billion package to help small and medium exporters has failed to end the cash shortage, because banks are reluctant to apply for BOK funds out of fear that they will be seen as having a cash-flow problem.
The country’s economy may shrink in 2009 due to the international financial crisis. The country is affected by the crisis because it has an open economy and income from tourism and exports is falling. But the government is working to lessen the effects of the crisis, including giving credits to industries and helping them reduce costs. Asian policy makers and their counterparts around the world have lowered interest rates and announced stimulus plans to counter the impact of the global financial crisis. Singapore policy makers also need to implement measures to avoid a prolonged slowdown.
As the global economic slowdown continues, Singapore lowered it growth forecasts for the fourth time in a year, and warned of an impending contraction in 2009. The government of Singapore now forecasts an economic contraction of as much as one per cent through 2009, a sharp downward revision from its previous estimate of 4-6 per cent growth.
According to the Trade and Industry Ministry, Singapore’s economy is expected to face a broad-based slowdown in 2009. Singapore may be the first Asian country to enter in recession, after official figures showed that the island country’s economy shrank by a worse-than-expected 6.8 per cent in the three months to September.
The economy is now seen to grow at 2.5 per cent for 2008, down from the previous forecast of three per cent. The heavily export-dependent island economy has seen growth slide as demand from its key trade partners –US and Europe falls.
Shipments to other emerging markets have also dropped significantly. Overseas shipments are expected to fall by seven per cent this year, the Singapore government announced today. As demand for Singapore’s electronics and pharmaceutical products fall, exports could shrink by up to one per cent in 2009. The slowdown in international and regional trade will significantly impact wholesale trade and the transport and storage sectors.
The export-dependent economy has been battered by declining orders for electronic goods and pharmaceuticals from its biggest customers in the recession-hit markets of the US and Europe, as well as emerging nations. The government estimates that overseas shipments will fall as much as seven per cent this year.
The government plans to enhance measures to help local companies secure loans. The government won’t reduce spending even though the budget deficit this year may be three times its initial projection. As the global financial crisis chokes credit, the government has pledged 2.3 billion Singapore dollars ($1.5bn) to help cash-strapped small businesses. These measures seek to ensure that local enterprises have sufficient resources to continue to operate, invest trade and internationalize in an adverse economic climate.
The Singapore dollar is among Asia’s worst performing currencies this quarter after the Monetary Authority of Singapore shifted a ‘’zero-percent appreciation’’ stance last month. It has slid 6.2 per cent against the US currency since the beginning of October. The central bank, which sets monetary policy by managing the Singapore dollar against a secret basket of currencies, in October switched from allowing a gradual rise in the currency to a neutral stance of zero appreciation.
Some commentators expect the central bank to ease policy further by letting the currency weaken ahead of its next scheduled review in April. But the central bank said its policy stance remains appropriate and it has no plans to change it for now. It sees no reason for ‘’undue weakness’’ in the Singapore dollar and will act if necessary to limit excess volatility.
Singapore’s inflation hit a 26-year high of 7.5 per cent in April, May and June. It will continue to ease. However, it will continue to be sticky for the next few months as it will take time for the decline in prices to be reflected in the consumer price index.
The authorities are confident that annual inflation will revert back to 2-3 per cent next year. But Singapore’s central bank said it expects inflation to remain within the 6-7 percent target for 2008, and forecast inflation to ease to 2.5-3.5 per cent in 2009.
The policies to boost the economy would take effect immediately after being announced in an expansionary January budget. The government would partly rely on construction to help growth with project costs coming down.
The budget emphasis will be on jobs as the government expects unemployment to rise, particularly in manufacturing, which accounts for about a quarter of the economy. The government is also trying to diversify away from manufacturing into service industries such as tourism and finance. Moderation of employment growth is expected in the second half of 2008, and through to 2009.
Singapore’s banks have not suffered huge write downs on risky debts unlike peers in the United States and Europe, though top bank DBS Group said it would cut 900 jobs after suffering a 38 percent drop in quarterly profit.
Singapore may face political pressure from the European Union and the United States over its role as a financial centre for rich foreigners, following a landmark deal by offshore haven Liechtenstein with the United States to drop bank secrecy in cases of tax evasion. Singapore’s three local banks DBS, United Overseas Bank and Oversea-Chinese Banking Corp are well capitalised and their asset quality remains strong despite the problems in the United States.
Malaysia
The ongoing global turbulence roiling the financial markets will likely trigger a global recession in 2009 and accordingly forecasts Malaysia’s GDP growth for next year at 3.5%. The world’s largest economy and Malaysia’s single largest trading partner, the United States is likely to experience its first recession since 2001 as the financial crisis continues unabated with adverse impact on bank lending, investment and private consumption. As a result, the US economic performance will cast a long shadow on the rest of the world. Other major economies, namely the Euro and Japan, are also not being spared from the current financial and economic malaise.
Being an open economy, Malaysia and other regional countries are not immune from any crisis, especially one that is unprecedented as the current turmoil. These economies are now bracing for a decline in global trade volume due to an expected drop in external demand. In addition to external trade performance, Malaysian economic growth in 2009 will also be impacted by a slowdown in private investment as risk aversion heightens among investors. As a consequent, business expansion plans are likely to be scaled down while portfolio investors may continue to stay on the sideline as evident by substantial net outflows in 2008.
Although Malaysia has, over the years, diversified its trade pattern with intra-trade with ASEAN countries becoming a significant feature of its economy, the expected moderations in the economies of G3 (US, Euro and Japan) could have knock-on effects on ASEAN economies as well.
However, the silver lining in the Malaysian economy is the steady domestic demand, primarily supported by private consumption, which, while expected to moderate to 4.4% in 2009 from an estimated 6.3% this year following the impact of higher consumer prices and waning consumer sentiment, is anticipated to be a bulwark against a weakening global economy. Domestic demand in 2009 is expected to be underpinned by an accommodative monetary stance and a relatively stable labour market.
In addition, Malaysia is in a more resilient position to cope with present economic challenges as reflected by huge surplus in the current account of balance of payment, a high level of external reserves and sound banking system that will help weather current economic challenges.
As of September, the amount of external reserves stood at RM379.3 billion, sufficient to finance 9 months of retained imports and is 4.1 times the total short-term external debt. This is in stark contrast with the situation during the Asian Financial Crisis in 1997 when external reserves dropped to as low as 2.9 months of retained imports in October that year.
The country’s financial institutions’ ability to provide ample liquidity is also a critical factor to insulate the Malaysian economy from a credit crunch. A loan-deposit ratio in the banking system that continues to remain below 80 per cent in the last 4 years also augurs well for its role to support lending activities. Additionally, there is no visible strain in the domestic financial market as is evident by the benign spread between inter-bank and Treasury Bills.
Further underscoring the strength of the country’s financial institutions is the declining trend of net non-performing loans (NPL).
Meanwhile, Malaysia’s economy grew at a faster-than-expected rate of 4.7 per cent in the third quarter, driven by domestic demand. It was, however, its slowest pace of growth since mid-2005, as a sharply deteriorating global economy slowed down exports. Economic growth may slow to between 3.5 per cent and 4.5 per cent in the final quarter.
However, full-year growth to be within its forecast of between five and 5.5 per cent. It was a decent third quarter growth. The full effects of the global financial crisis will only be felt by Malaysia in 2009. Inflation, which peaked at 8.4 per cent in August, is falling and expected to come in at below three per cent in the second half of 2009.
South Korea
South Korea’s economic expansion is expected to slow significantly in 2009 as the global financial crisis drags down gross domestic product growth to its lowest level since the Asian financial crisis in the late 1990s.
The Bank of Korea projects Korea’s economy to grow two per cent in 2009 -- from a growth of 3.7 per cent in 2008 as the twin pillars of domestic consumption and exports weaken. That rate hasn’t been seen since the economy contracted by 6.9 per cent in 1998 at the height of the Asian financial turmoil. Private consumption is seen to increase 0.8 in 2009 after a 1.5 per cent expansion in 2008. In 2010; demand is expected to recover to 2.5 per cent.
Exports, a key engine of growth for the trade-driven economy, are forecast to rise more moderately at 1.3 in 2009, compared with a 3.6 per cent increase in 2008. In line with the weaker economic performance, inflation is expected to be more moderate at three in 2009 and 2.6 per cent in 2010 after accelerating 4.7% in 2008. South Korea’s current account balance, meanwhile, is likely to recover to a surplus of $22 billion next year from a deficit of $4.5 billion in 2008, aided by a drop in oil prices and lower imports on the back of tepid domestic demand.
The flow of the domestic economy will be affected by the global financial crisis, the depth of the global economic slowdown and the timing of its recovery.
In the absence of any strong indications that the global problems will recede soon, along with sluggish domestic consumption, it will be difficult for South Korea’s economy to regain its momentum, the central bank added.
The Bank of Korea’s outlook for the economy next year is in line with the International Monetary Fund’s 2% forecast and slightly more pessimistic than the Organization for Economic Cooperation and Development’s 2.7 per cent in 2009. Still, the revised estimate remains far more optimistic than what some private economists are predicting. Swiss bank UBS, for example, sees South Korea’s economy declining three per cent in 2009.
South Korea’s economy has not contracted on an annual basis since 1997, when it was hit by the Asian financial crisis that forced the government to seek a $58 billion bailout from the International Monetary Fund. The central bank estimated, however, that growth would recover in 2010 to four per cent. Deteriorating economic data have raised alarm bells that Asia’s fourth-largest economy could contract next year on an annual basis for the first time since 1997, when the country was in the throes of the Asian financial crisis. Exports fell 18.3 per cent in November from the same month last year.
South Korea’s central bank carried out its biggest ever interest rate cut, slashing borrowing costs by a full percentage point to a record low in a bid to stave off possible recession. The Bank of Korea lowered the benchmark seven-day repurchase rate to three per cent from four per cent at a regular policy meeting. There is now judged to be a strong likelihood that growth will fall sharply as a result of the worldwide economic slowdown along with the financial market unrest including the credit crunch. The rate cut marked the fourth time the central bank has lowered borrowing costs in the past two months and exceeded the 0.75 percentage point emergency cut on Oct. 27, previously the largest ever.
Most economists had expected further rate cuts after a quarter percentage point reduction in November, though not of such magnitude.
After the re-eruption of the US financial crisis in September, the South Korean administration promised to inject 133 trillion won (about $91 billion) into the financial system to ease liquidity. By the end of November, only 50 trillion won had been released. In October, 321 firms went bankrupt, up from 118 in September, as the lack of credit took effect. A $16 billion package to help small and medium exporters has failed to end the cash shortage, because banks are reluctant to apply for BOK funds out of fear that they will be seen as having a cash-flow problem.
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