Friday, February 27, 2009

Recession looms as Q4 growth stops at 0.1pc

KUALA LUMPUR, Feb 27 — Malaysia is heading towards recession this year after economic growth stopped at 0.1 per cent in the last quarter, the slowest annual pace since 2001, due to weakening external demand.
The slump also slashed the 2008 GDP growth to 4.6 per cent, falling from 6.3 per cent in 2007 despite optimistic projections of at least 6 per cent.
Government officials and economists had earlier forecast for 0.5 to 1 per cent growth for the 2008’s fourth quarter but Bank Negara figures today revealed that the economy slowed faster than expected.
Finance Minister Datuk Seri Najib Abdul Razak said today the bleak figures will prompt the government to revise downwards its forecast of 3.5 per cent GDP growth for 2009.
“I do not think that we can anticipate an improvement in the GDP figures for the next quarter, but of course, it all depends on the situation in the United States and Europe,” said the deputy prime minister who is set to table a new stimulus package on March 10.
Most of Malaysia’s main trading partners entered recession since last year but Putrajaya had been optimistic of staving off the downturn although recent export and jobless figures painted a pessimistic outlook.
The Statistics Department said the manufacturing sector contracted 8.8 per cent for the first time after 26 consecutive positive quarters while construction shrank by 1.6 per cent from a 1.2 per cent growth.
But the services sector continued to expand to 5.6 per cent from 7.1 per cent in the previous quarter while agriculture slowed to 0.5 per cent from 3 per cent in the same period.
Authorities said services continued to boost the supply side while private and government consumption expanded growth on the demand side.
Bank Negara disclosed that inflation fell to 5.9 per cent in the fourth quarter from 8.4 per cent in the previous quarter due to adjustments in fuel prices.
“The downward trend in inflation is expected to continue in 2009,” Bank Negara said.

Inflation lower but food prices remain high

Inflation may have dropped to 3.9 per cent in January 2009 in line with the fall in consumer demand and the end of the commodity price bubble. But even though the agriculture commodity bubble has burst, food prices remain high with the consumer price index showing a 9.8 per cent rise in January for food. (The food and non-alcoholic beverages component contributes over 80 per cent of the 3.9 per cent rise in the CPI index.) Imagine, the index for rice, bread and other cereals has shot up by 18 per cent.
According to the Statistics Department, the 9.8 per cent increase in the food index is the result of “increases for Food At Home (+ 11.0 per cent); Food Away From Home (+ 8.6 per cent) and Coffee, Tea, Cocoa & Non-Alcoholic Beverages (+ 4.2 per cent). Among the subgroups of Food At Home which showed significant increases during this period were Rice, Bread & Other Cereals (+ 18.0 per cent); Fish & Seafood (+ 11.8 per cent); Meat (+ 10.4 per cent); Vegetables (+ 9.0 per cent) and Milk, Cheese & Eggs (+ 8.0 per cent)”.

Isn’t it time we take another look at our agriculture and fisheries policies to ensure sufficiency, sustainability and food security while eliminating profiteering among middlemen and large corporate retailers? It is not the small-scale farmers and fisherfolk who are reaping huge profits.

Wednesday, February 25, 2009

A journey down the road to the Ivory Tower

Freshman to Faculty - A journey down the road to the Ivory Tower investigates the allure of academia
Published On Wednesday, February 25, 2009 1:48 AM
By CHELSEA L. SHOVER Crimson Staff Writer


Sharply attired in a slim-fitting black suit and stylish thick-rimmed glasses, Matthew B. Kaiser folds his elbows neatly on his desk. For a professor who leads a class on crime and horror, his Barker Center office is strikingly cheery. The plush red rug matches the pillows arranged on the sumptuous couch and the lamp that sits atop one of the full bookshelves lining the walls.
But Kaiser’s deliberate enunciation, enthralling as it is haunting, is tinged with the darkness of his academic specialty—and his own past.
Kaiser did not think he would finish his last year of high school. At age 17 he left his home to live with three 22-year-old musicians in their attic. “I had a fairly chaotic and sometimes scary life,” he says. He did ultimately graduate and even ended up applying to the University of Oregon—in no small part because the application was only one side of a sheet of paper. For the next two years Kaiser says he drifted through college as an undeclared major, more interested in Oregon’s gay rights battles than in going to class.
Eventually, exhausted from the chaos of the political involvement and worn out from the ugly language hurled at him, he turned to Victorian literature. “I wanted to seek refuge in beautiful language,” Kaiser says. “There were so many shadowy silent spaces that needed to be filled with language.” Kaiser’s passion for Victorian literature turned him from a wandering, undeclared college student into an expert in the field and an assistant professor at Harvard. He now teaches the popular course, English 156: “Crime and Horror in Victorian Literature and Culture” to more than 450 students.
Kaiser says he attended graduate school and pursued a career in academia because it allowed him to dedicate his life to his intellectual passion. For students like Kaiser, this route often naturally leads to a career as a professor because along the way they discover a need to share their passion with the rest of the world. For others, becoming a professor has always been the ultimate goal. Whether it’s happenstance or raw ambition, the ivory tower holds some kind of allure for many who step inside its doors.
“If you really love a field, you see it everywhere,” Brian M. Weller ’09 explains. The bespectacled senior’s face lights up as he jokes about his obsession with economics. He constantly apologizes for what he sees as his overly “nerdy” interest in the subject.
As a freshman, he says he often annoyed his friends by taking an economic view of ordinary situations. “I’d have a marginal cost, marginal benefit type of analysis,” he says. But Weller was an economics whiz kid even before he was accepted by Harvard. When his high school Advanced Placement economics teacher was out much of the year due to illness, Weller sometimes taught the class in place of the substitute. His mother, Leslie A. Weller, recalls the nightly phone calls from other students asking her son for help. “Teachers would refer kids to Brian,” she says. “They said, ‘Call Brian, he’ll help you.’”
Weller finished his AP economics exams so early that he had enough time left over to pen some poetry. Along with responses about supply and demand and opportunity cost, his AP graders discovered a haiku and a sonnet in his response book. Weller recalled the experience fondly: “I think I wrote the longer one for macro because it was easier.”
Unlike Weller, Kaiser’s took a more windy road to discovering his hidden passion. Kaiser did not discover his true academic interest until he became an English major. After that, there was no turning back. “Once that love affair with Victorian literature began, my path into academia was pretty clear,” he said. When he entered his English Ph.D. program, his professorial pursuit was already in motion. “It doesn’t make a lot of sense, in literary studies at least, to work for a Ph.D. unless you are going to be a professor,” Kaiser said.
For Kaiser, it was authors like Walter Pater and Oscar Wilde, people who he says existed outside society’s power structure, who drew him to academia. For Maria Tatar, professor of TKTK, it was Kafka and Thomas Mann who initially drew her in. She chose graduate school because she viewed it as the next logical step to nurture her love of reading. Tatar began to investigate the Grimm Fairy Tales and stumbled upon a virtually unmined trove of literary wealth in these two volumes of tales told to generations of children the world over. “For me it was almost a way of knitting together my role as a parent and as a professor,” Tatar said.
By also looking at the effects of these violent stories on children, she helped lay the groundwork for the field that would become Childhood Studies, which examines literature written for children and how it affects them. She now leads the popular Lit and Arts A 17: Childhood: Its History, Philosophy, and Literature. “Teaching really is a way to give back,” she said, “you don’t have to be a lawyer or a doctor in order to do that.”
RESEARCH
For Professor Lisa Randall ’83, Harvard’s first female tenured theoretical physicist, an intense interest in research led her to enter academia. The author of Warped Passages: Unraveling the Mysteries of the Universe’s Hidden Dimensions was named one of Time Magazine’s 100 Most Influential People of 2007.
Although she is now a frontrunner in research on particle physics and cosmology, Randall initially viewed academia as only one potential career option. She realized it would probably be harder to return to research after an alternate career than to transition from a stint in research to another field. But when she was applying for professorial positions, she found she did actually want to teach along with conducting research. “I realized that I really did care,” she said.
Like Randall, a devotion to research pulls Harvard senior, Allen Cheng ’09 to academia. He currently works in a lab to screen for enzyme-inhibiting compounds. “You’re discovering something new,” Cheng said of his desire to contribute to the scientific body of knowledge, “You’re not simply living in the status quo.”
But Cheng’s interest in becoming a professor is not solely based on research. After working as an Organic Chemistry teaching fellow for the past two years, Cheng knows he would also enjoy instructing others. “It’s really a personal matter of finding something very interesting,” he said.
Lisa J. Miracchi ’09 also has dreams of becoming a professor. Like Cheng, this desire stems from a deep interest in her area of study—philosophy. She says she used to want to be an architect or perhaps a starving artist. However, in order to fulfill her goal of studying abroad in Italy, Miracchi first had to double up on her philosophy concentration requirements. It was this with this course load that she began to suspect she might want to be a philosophy professor. Even as she was studying gorgeous Florentine architecture, she found herself thinking about metaphysics and epistemology. It was then she knew she was ready to devote her life to the specialty Miracchi describes as “the study of what there is and how we know what there is.”
BREAK
Like Cheng and Miracchi, a specific passion for their area of expertise pushed Kaiser, Tatar, and Randall all into their professorial positions. However, some current students have much more direct visions of becoming professors. They have long dreamed of the days when they will prepare lectures rather than problem sets.
For example, even before Weller was wowing his AP graders, he was already fascinated with economics. At age 17, he attended the Pennsylvania Governor’s School for International Studies, a summer program for high school students. Until that point he had primarily studied math and science. However, instead of spending his summer at the Pennsylvania Governor’s School for the Sciences, he decided to explore his burgeoning interest in economics. That summer’s survey course convinced him to continue exploring the field.
However, becoming a professor was not Weller’s only option for pursuing his interest in economics. He knew that there is often much more money to be made outside the hallowed halls of academia. But after a summer working in the private sector for Citadel Investment Group, Weller knew that inside those hallowed halls was exactly where he wanted to be.
Before working at this hedge fund, Weller had served as a research assistant to Aleh Tsyvinski, the now-co-director of Yale’s Macroeconomics Program. During his time at Citadel, Weller saw the difference between researching for industry and researching in a university setting.
“At the end of the day your knowledge and your efforts are restricted to making money,” he said about his summer experience. He resented being forced to limit himself to activities that were likely to produce profits.
Since confirming his original sense that he was bound for a career in academia, Weller has worked hard to structure his time in college to make his graduate school application as competitive as possible.
“My focus has been extremely tight,” he said. “It’s been, ‘I need to do this for grad school. I need to take these classes. I need to excel in one specific area of economics, write a great thesis, really drill down into something.’”
Years before Weller attended that fateful summer program, psychology professor Steven Pinker was trying to figure out where his interests would lead him.
As Pinker sat in his office, framed by large windows offering an expansive view of Boston, he recalled his path to William James Hall.
When he first discovered that think tanks are organizations that pay people for their ideas, Pinker was set on working for one. “I really want to think, and solve problems, and debate, and learn,” the college student told his mother.
She had a different idea in mind.
“You belong in a university,” she replied.
“At the time I wasn’t completely aware of the fact that university professors both taught and did research,” Pinker said.
Armed with this new information, Pinker knew his mother was right. “As soon as I realized that that’s what university professors did, I knew that was what I wanted to do, that you could actually be paid for thinking,” Pinker said.
He is now a highly respected professor who Time Magazine named one of the Most Influential People of 2004. He is also the author of best-selling popular psychology books including How the Mind Works and The Stuff of Thought.
THE FAMILY FACTOR
Family influence has also contributed to current Harvard students’ dreams of becoming professors. Daniel J. Thorn ’11 arrived on campus just over a year and a half ago, and he has every intention of sticking around. With several professors in his family, Thorn was exposed to academia from a young age. In speaking with members of the History of Science faculty, Thorn says he has found the life of inquiry he wants in a community of the intellectually engaged.
“You kind of get the impulse not to leave,” Thorn said, nodding to the economy that might dissuade his peers from entering the traditional job market in two years. Thorn says he has already been mistaken for a graduate student but “it’s more of a factor of looking old for my age rather than being innately professorial.” In fact, he said the biggest indicator of his scholarly goals is how he avoids studying: “When I procrastinate, I read the internet comic Ph.D. about doctoral candidates.”
A desire for intellectual freedom explains how economics professor N. Gregory Mankiw wound up in academia. He teaches Social Analysis 10: Principles of Economics, back in the classroom after chairing former-President Bush’s Council of Economic Advisors from 2003-2005. His Principles of Economics textbooks are used in high schools and colleges around the world. “They pay us to do what we want to do,” Mankiw said. “You can think about the problems that interest you. You have a tremendous amount of freedom to come and go as you please,” he added.
Of his own Princeton class of 1980, Mankiw said the beckon of the ivory tower reached a certain kind of student. “Those of us who became professors were slightly ‘nerdier’ on average than those who went for professional degrees.” Mankiw actually started out in the latter camp, initially attending law school while earning his economics PhD. But he dropped the J.D. half of his joint-degree program after a year and a half. “I eventually decided my comparative advantage lay in economics,” he says.
A DIFFERENT ROAD ALTOGETHER
And of course, in between the tenured professors at the end of the road and the undergraduates about to step off down the path their academic destination, there are those midway through the journey to academia.
When sociology graduate student Van C. Tran was deciding what he might like to do with his life, he looked around for a role model and a career goal. He found both in his thesis adviser, a sociology professor named Philip Kasinitz. “I thought [being a professor] was the best job in the world I could possibly have,” Tran said.
Tran has been at Harvard for several years, but ten years ago, when he arrived in the U.S. from Vietnam, earning a Ph.D. was nowhere on his radar. At the time, he spoke no English. He had lived seven of his 19 years in Thailand’s refugee camps. After his family landed in New York City, he found a job in a hardware store.
Tran says his life changed one fateful snowy day. Everyday he passed the local community college and on one afternoon he finally decided to check it out. He asked about his educational options and the receptionist handed him an application. After completing his Associate’s Degree, Tran went on to Hunter College to earn a Bachelor’s Degree in sociology. As he wrote his thesis on the experience of Tibetan refugees in New York, Tran worked one-on-one with Kasinitz.
Tran saw in his mentor’s lifestyle the only kind of life he wanted for himself. In the summer of his junior year, he brought up this goal in a weekly meeting with Kasinitz. He told his mentor that he wanted to apply to graduate schools–but only in New York so he could stay close to his family. “I said it very gingerly because I wasn’t sure how he would react,” he says.
However, his mentor responded encouragingly. “I was practically by the door, when he looked at me and said, ‘But you should also apply to Harvard and Princeton,’” Tran remembers. Thinking the professor was addressing someone else, Tran looked over his shoulder. “Are you talking to me?”
Kasinitz laughed.
Now, as a resident tutor in Lowell House, it is Tran’s turn to advise his own students on graduate school.
Whether life’s coincidences landed them in the lecturer’s seat, or that spot behind the podium was the goal all along, professors find different routes to the ivory tower. With his own wayward path to success as a frame of reference, Kaiser holds a respect for students at the center of his identity. “When I teach I address students as if they’re adults instead of my children,” he says. “I don’t look at students as lacking, in desperate need of being corrected, bundles of chaos that need to be brought into the light.”
While some students dream of getting to a tenured destination, others find immersion in academia is the only way to feed the fire of their intellectual passion. There are many roads to academic greatness. Who knows where the next Kaiser will come from? He may be living in an attic right now.

The Millennium Development Goals (MDGs)

At the Millennium Summit in September 2000 the largest gathering of world leaders in history adopted the UN Millennium Declaration, committing their nations to a new global partnership to reduce extreme poverty and setting out a series of time-bound targets, with a deadline of 2015, that have become known as the Millennium Development Goals.

The Millennium Development Goals (MDGs) are the world's time-bound and quantified targets for addressing extreme poverty in its many dimensions-income poverty, hunger, disease, lack of adequate shelter, and exclusion-while promoting gender equality, education, and environmental sustainability. They are also basic human rights-the rights of each person on the planet to health, education, shelter, and security.

The End of Poverty - J. Sachs

The End of Poverty: Economic Possibilities for Our Time

"Extreme poverty can be ended, not in the time of our grandchildren, but our time." Thus forecasts Jeffrey D. Sachs, whose twenty-five years of experience observing the world from many vantage points has helped him shed light on the most vital issues facing our planet: the causes of poverty, the role of rich-country policies, and the very real possibilities for a poverty-free future. Deemed "the most important economist in the world" by The New York Times Magazine and "the world's best-known economist" by Time magazine, Sachs brings his considerable expertise to bear in the landmark The End of Poverty: Economic Possibilities for Our Time, his highly anticipated blueprint for world-wide economic success — a goal, he argues, we can reach in a mere twenty years.


Marrying vivid eyewitness storytelling with concrete analysis, Sachs provides a conceptual map of the world economy and the different categories into which countries fall, explaining why wealth and poverty have diverged and evolved as they have and why the poorest nations have been so markedly unable to escape the cruel vortex of poverty. The End of Poverty does not deliver its worldviews from on high: Sachs plunges into the messy realities of economies, leading his readers through his work in Bolivia, Poland, Russia, India, China, and Africa, and concludes with an integrated set of solutions to the tangled economic, political, environmental, and social issues that most frequently hold societies back.

Tuesday, February 24, 2009

Nod for 45 new private hospitals

THE government has approved licences for a total of 45 new private hospitals and this will grow the number of beds at private hospitals by a third to 15,178.
As at end of 2008, Malaysia had a total of 209 registered hospitals with a total of 11,689 beds. "Since the implementation of the Private Healthcare Facilities and Services Act 1998 and its regulations in 2006, we have received 55 applications for the establishment of new private hospitals, of which 45 have been approved," the Minister of Health Datuk Seri Liow Tiong Lai said.
The 45 hospitals have a total of 3,489 beds."...the number of private hospitals operating in the country has increased almost two fold from 135 at the end of December 2001 to 209 by the end of December 2008," he added.Liow was speaking to reporters yesterday following the launch of "Rebirth of Pantai" for Pantai Holdings Bhd.
On whether the healthcare sector can expect anything from the second stimulus package, Liow said there will be some goodies in store to boost medical tourism and training for nurses. "We should prepare for medical tourism and take it to the next level ... we should promote this sector further," he said, adding that medical tourism has been identified as a key sector to generate economic growth.A second stimulus package to boost the economy will be announced on March 10 2009, adding to the RM7 billion stimulus package announced last November. - By Vasantha Ganesan.

Government considers increasing micro credit

KUALA LUMPUR, Feb 23 — The government will consider increasing the allocation for the micro credit scheme under its second economic stimulus package or mini-budget, Deputy Prime Minister Datuk Seri Najib Razak said.

It will be considered and most probably under the second stimulus package, he told reporters after chairing the Cabinet Committee on Indian Affairs at the Parliament building here today.
“We can consider extra allocation for the micro credit programmes which will provide benefit to all the races,” he said.
Asked on the total allocation for the mini-budet or second economic stimulus package, Najib said: “I cannot confirm anything. We will tell everything when the time comes.”

The deputy premier will present the mini budget in Parliament on March 10 where he will also announce the reviewed Gross Domestic Product (GDP) growth projection.

On November 4 last year, Najib, who is also Finance Minister, announced a RM7 billion economic stimulus package to mitigate the effects of the global economic slowdown.

On increasing the equity participation of Indians in the country’s economic pie, which now hovers around 1.2 per cent, Najib said it would need time to be studied. — Bernama

Malaysia to liberalise foreign investment

THE government is to announce soon, probably at the same time as it sets out its mini-budget on March 10, an easing of restrictions on foreign investment, International Trade and Industry Minister Tan Sri Muhyiddin Yassin said yesterday.
"There are some areas that we could liberalise, for example the FIC (Foreign Investment Committee); it has been agreed upon by the Cabinet and will be announced soon," he told foreign journalists in Kuala LumpurMuhyiddin did not specify which areas could be liberalised, but there has been pressure for the country to free up its services and government procurement."In the FIC one of the important components is the Bumiputera equity and that is also being looked at and there will be a slight change the Cabinet discussed this last week," he said.

Muhyiddin said, however, that the main policies would remain."It is one of the best policies ... It is a national programme; it is not a Malay agenda."
Muhyiddin said his ministry would push for cuts in corporate taxes in a new round of spending, due to be announced on March 10, and said that he had asked for RM5 billion to be allocated to his ministry.He declined to comment on the overall size of the spending package, aimed at helping the country avoid the global economic slowdown. - Reuters

Monday, February 23, 2009

From slums of Mumbai to the Academy Awards

LOS ANGELES, Feb 23 — The youngest stars of “Slumdog Millionaire” bubbled over with smiles and enthusiasm on the red carpet at the Oscars, and the crowd reflected it all back.

Two of the six actors completed their improbable journey from the slums of Mumbai, India, to the world’s most dazzling awards show. All of them looked as polished in front of the assembled throng of media as Angelina Jolie and Brad Pitt.

The two youngest were plucked from the slums by director Danny Boyle to star in the rags-to-riches tale of a slum kid who makes it big. The film was nominated for 10 Oscars, and was an early winner for adapted screenplay and cinematography.

“It’s fantastic. It’s beyond our dreams,” said Tanvi Ganesh Lonkar, who played the “middle” age protagonist Jamal, as he glanced around at the gaggle of famous faces jamming the long red carpet outside Hollywood’s Kodak Theatre.

Lonkar is one of the six actors who play the three lead characters in three stages of their lives. The group chattered happily away to reporters sticking microphones and cameras in their smiling faces.
Young stars of ‘Slumdog Millionaire,’(from left) Rubina Ali, Tanvi Ganesh Lokar, Tanay Hemant Chheda and Ashutosh Lobo Gajiwala, arrive for the 81st Academy Awards at Los Angeles today. — AP pic

Asked by one to show off their dance moves, they eagerly complied, with Tanay Hemant Chheda proclaiming, “All Indians can dance.”

Four of the six speak English, and they frequently talked over each other, but all agreed they want to be in more movies.

Lonkar admitted she hoped to meet Tom Cruise and tell him, “Hi, I’m you’re biggest fan.”

Rubina Ali, a 9-year-old who played the young Latika, lives in the slums, along with her 10-year-old neighbour and co-star Azharuddin Ismail. He’d never been on a plane or travelled outside India until his trip to Hollywood.

Ali wore a pale blue short dress and white ballet flats, with henna decorating her arms and staining her fingernails. The boys wore child-size tuxedos and Lonkar wore a pale mauve dress.
Young stars of ‘Slumdog Millionaire’ — Azharuddin Mohammed Ismail, Rubina Ali and Ayush Mahesh Khedekar (left, front) Ashutosh Lobo Gajiwala, Tanvi Ganesh Lonkar and Tanay Hemant Chheda (left, rear) — arrive for the 81st Academy Awards at Los Angeles today. — AP pic

For Rubina and Azhar, there was a frenzied scramble this week to get visas, passports and tickets after their parents decided at the last minute they wanted them to attend the ceremony. Everything came through on Thursday, and on Friday they were cruising Mumbai in an air-conditioned SUV, doing last-minute shopping and getting advice.

Bringing the youngsters to America was a concern of the film’s behind-the-scenes adults, including adapted screenplay winner Simon Beaufoy.

“We were so worried about bringing them over in case it seemed at all inappropriate because it’s the most lavish awards ceremony,” he said backstage. “They’re completely cool about it. We were worried and they’re all running around having a laugh about it. It was absolutely the right thing to do to bring them over.

The film’s adult co-stars, 18-year-old Dev Patel and 24-year-old Freida Pinto, got a kick out of seeing the kids receive the star treatment.

“While me and Freida have been hogging everything, these kids are big stars,” Patel said. “This is some of the appreciation they deserve.”

Director Boyle was grateful the youngsters were allowed to attend the show.

“It’s everything. It’s the real climax to it,” he said. “For us to see them here has just made it all worthwhile.”

Also part of the group was Ayush Mahesh Khedekar, who plays the youngest Jamal and lives in India, but did not grow up in the slums, and Ashutosh Lobo Gajiwala, who plays the middle Salim.

In the crowded lanes of the Mumbai slums, small crowds gathered around every television set and “Jai Ho,” one of the film’s popular songs, was heard ringing out.

In the tiny, bubble-gum pink shack that is Ali’s home, her mother Munni Qureshi watched the awards on TV as her three other children slept on the floor next to her. The single room, barely big enough to hold three adults, was crowded with dozens of television cameras and reporters.

Outside people bathed, women collected trash and stray dogs fought.

“I had never imagined that such a thing would happen. It’s a very proud moment for me. If she wins we hope some changes will come,” Qureshi said.

She said she had spoken to her daughter and she was very excited.

“We’re all very happy. It seems like happiness is falling from the sky,” said Sohail Qureshi, a neighbour who said he had seen Rubina grow up.

“She’s like a daughter to me.” — AP

Demographic Transition Model

The demographic transition model seeks to explain the transformation of countries from having high birth and death rates to low birth and death rates. In developed countries this transition began in the eighteenth century and continues today. Less developed countries began the transition later and are still in the midst of earlier stages of the model.

CBR & CDR

The model is based on the change in crude birth rate (CBR) and crude death rate (CDR) over time. Each is expressed per thousand population. The CBR is determined by taking the number of births in one year in a country, dividing it by the country's population, and multiplying the number by 1000. In 1998, the CBR in the United States is 14 per 1000 (14 births per 1000 people) while in Kenya it is 32 per 1000. The crude death rate is similarly determined. The number of deaths in one year are divided by the population and that figure is multiplied by 1000. This yields a CDR of 9 in the U.S. and 14 in Kenya.

Stage I

Prior to the Industrial Revolution, countries in Western Europe had a high CBR and CDR. Births were high because more children meant more workers on the farm and with the high death rate, families needed more children to ensure survival of the family. Death rates were high due to disease and a lack of hygiene. The high CBR and CDR were somewhat stable and meant slow growth of a population. Occasional epidemics would dramatically increase the CDR for a few years (represented by the "waves" in Stage I of the model.

Stage II

In the mid-18th century, the death rate in Western European countries dropped due to improvement in sanitation and medicine. Out of tradition and practice, the birth rate remained high. This dropping death rate but stable birth rate in the beginning of Stage II contributed to skyrocketing population growth rates. Over time, children became an added expense and were less able to contribute to the wealth of a family. For this reason, along with advances in birth control, the CBR was reduced through the 20th century in developed countries. Populations still grew rapidly but this growth began to slow down.

Many less developed countries are currently in Stage II of the model. For example, Kenya's high CBR of 32 per 1000 but low CDR of 14 per 1000 contribute to a high rate of growth (as in mid-Stage II).

Stage III

In the late 20th century, the CBR and CDR in developed countries both leveled off at a low rate. In some cases the CBR is slightly higher than the CDR (as in the U.S. 14 versus 9) while in other countries the CBR is less than the CDR (as in Germany, 9 versus 11). (You can obtain current CBR and CDR data for all countries through the Census Bureau's International Data Base). Immigration from less developed countries now accounts for much of the population growth in developed countries that are in Stage III of the transition. Countries like China, South Korea, Singapore, and Cuba are rapidly approaching Stage III.

The Model

As with all models, the demographic transition model has its problems. The model does not provide "guidelines" as to how long it takes a country to get from Stage I to III. Western European countries took centuries through some rapidly developing countries like the Economic Tigers are transforming in mere decades. The model also does not predict that all countries will reach Stage III and have stable low birth and death rates. There are factors such as religion that keep some countries' birth rate from dropping.

Though this version of the demographic transition is composed of three stages, you'll find similar models in texts as well as ones that include four or even five stages. The shape of the graph is consistent but the divisions in time are the only modification.

An understanding of this model, in any of its forms, will help you to better understand population policies and changes in developed and less developed countries around the world.


Friday, February 13, 2009

When the economy is bad, throw out the NEP... again

KUALA LUMPUR, Feb 12 — It happened during the gut-wrenching recession in 1986. It happened again during the Asian financial crisis in 1998. And now with the world in the throes of a severe economic crisis, the government is mulling the possibility of suspending aspects of the New Economic Policy.

Government officials told The Malaysian Insider that the affirmative action policy could be held in abeyance for one or two years depending on the severity of the impact of the crisis on the economy.

In 1986, the Mahathir administration surprised many when it suspended the implementation of the NEP, hoping the move would invite the flow of foreign investments needed to kick start an economy badly hit by the drop in commodity prices.

Tun Dr Mahathir Mohamad returned to the same playbook in 1998 when the currency crisis in the region sent the economy into a tailspin.

Government officials say that many elements of the original NEP — a policy set in place by Tun Abdul Razak and aimed at eradicating poverty and restructuring society — have been dismantled over the years.

But the view among foreign and domestic investors is that a cornerstone of the policy — which makes it necessary for Bumiputeras to own 30 per cent equity — makes Malaysia a less attractive place to do business than Vietnam, Indonesia, Singapore or Thailand.

The move to suspend the NEP is among a slew of measures — structural and fiscal — being considered by the government to breathe life into an economy which is slowing.

Export figures for December to be released today will show an economy grinding to a halt. The Malaysian Insider understands that fourth quarter growth is likely to be just over 1 per cent and economists believe that the government will have to cut its forecast of growth for 2009 from 3.5 per cent to 0.4 per cent.

The government is also re-examining the role of the Foreign Investment Committee, a committee which approves investments by foreigners in Malaysia. Top banker Datuk Nazir Razak recently said that Malaysia must review its race-based economic policies if it hopes to rein in political discontent and regain competitiveness.

He noted that the NEP had damaged national cohesion and hindered investment. “It is timely to examine the NEP, look at how the NEP retards national unity, investments and economic efficiency and develop a new, more relevant framework for economic policy-making,” said Nazir, who is chief executive officer of Malaysia's second largest bank CIMB.

The NEP was designed in 1971 after race riots to narrow the wealth gap between the majority Malays and the richer ethnic Chinese.

Critics say the NEP has enriched those businessmen who are politically connected and encouraged cronyism and corruption in the coalition that has ruled Malaysia for 51 years.

Political analysts have said that Nazir's comments would carry weight with his brother, Datuk Seri Najib Razak, the country's incoming prime minister.

Thursday, February 12, 2009

Dr M: Country needs to increase people’s income to boost the economy

KUALA LUMPUR, Feb 12 — Be like Singapore and find your niche.

That is what former Prime Minister Tun Dr Mahathir Mohamad wants Malaysia to do.

He cited Singapore as a country that not only found its niche in financial services, but had managed to increase both its gross domestic product and the income of its people to reach a developed nation status.

“Since their separation from Malaysia, every year they (Singaporeans) increased their wages but remained prosperous, although not so now,” he told Malaysia's Business Times in a recent interview.

He said that Malaysia too needs to increase income so that the economy will benefit.

“The main thing is to increase the income of our people so that the economy will rise through higher consumption of local products,” he said.

Dr Mahathir also said this cannot happen overnight.

He said Malaysia first needs to find out what kind of business or industry it can excel in and work on increasing efficiency through more automation and innovation, “so we can have less labour cost but higher wages”.

Dr Mahathir also gave his take on how the government should tackle the current economic crisis.

In response to people saying that the government was too slow to act, he said it needs to plan carefully before it can act.

He said that before dispensing money, the government has to carefully study the multiplier effect the money would bring to the economy.

“It is not just giving money here and there... giving it to this school or to this area, that area... that is not the way. We have to structure the whole economy and structure which part needs support.”

He said that during the 1997/98 Asian financial crisis, when he was the prime minister, daily meetings to discuss economic data from all sectors took place.

“Every day we would sit down, from morning to 1pm, to study the economy. We had all the data, all types of consumption data from electricity to restaurants... so that we know what the economy is like. We must have all the data regarding this crisis, the causes, then only can we plan on how to use the money.

“Just because it is called pump-priming, so we just give money?” he asked.

“The leadership must be knowledgeable and understand what really needs to be done and can't simply expect civil servants to help overcome this problem. The leadership has to tell them and unless things change, you will lose the next election.”

Last week he told the Star newspaper that the government is capable of allocating RM35 billion for the second stimulus package if it wants to.

“(It) is 5 per cent of gross domestic product,” he said.

The Employees Provident Fund alone has funds worth some RM250 billion, he told reporters at a forum on the global financial crisis.

Corporate leaders from various industries had said that the first stimulus package worth RM7b was not big and effective enough.

Dr Mahathir also advised corporate leaders to be very careful in exercising cost-cutting measures, especially in cutting wages.

“When people have less purchasing power, people will buy less and this would have an effect on the economy on the macro scale,” he said. — The New Paper

Source: http://www.themalaysianinsider.com/index.php/malaysia/18174-dr-m-country-needs-to-increase-peoples-income-to-boost-economy

Saturday, February 7, 2009

Economic policy: Better late than never?

KUALA LUMPUR, Feb 7 — The government is belatedly stepping up efforts to limit the impact of the global downturn on the economy. The crisis has yet to hit Malaysia as hard as many other countries, and political jostling has hampered the policy response. But there is now a growing sense of urgency that robust measures are required.

That is certainly the view of the central bank, Bank Negara Malaysia, which cut its policy interest rate by 75 basis points on Jan 21. However, a successful response will require greater political unity and maturity, and even if this occurs, the economy’s heavy exposure to the external sector poses a significant risk.

The recent relatively healthy state of the Malaysian economy compared with its Asian neighbours may partly explain the slowness with which the authorities have responded to the downturn in the global economy that has occurred in recent months.

But politics may also have played a part in the recent shaping of policy. The opposition has accused Prime Minister Datuk Seri Abdullah Ahmad Badawi, and his deputy, Datuk Seri Najib Razak (who is also Finance Minister), of being too focused on party politics, and particularly on the preparations for the annual congress of Umno in March.

Umno, the dominant party in the ruling coalition, is due to hold elections for its top positions at the congress, and party officials have been observed to be jockeying for positions in recent months. The choice of party president has already been decided, owing to Abdullah’s decision not to stand for re-election and the fact that Najib is the only candidate to have received a sufficient number of nominations from within the party.

But plenty of other positions are up for grabs. This may encourage Umno members to put their own ambitions ahead of the common interest, despite the global crisis. And it will certainly distract attention from the bigger picture.

There is possibly a second political dimension to the situation. The government’s lethargy in formulating initiatives that will enable Malaysia to respond to the global economic slowdown may reflect the fact that most of the country’s export-oriented manufacturing facilities are located in states governed by the opposition Pakatan Rakyat coalition.

In early December the leaders of the five state assemblies then governed by the PR — Penang, Kedah, Perak, Selangor and Kelantan — announced that they would work together to mitigate the impact of the global downturn. Their first concern is to deal with the expected increase in unemployment. The five state leaders agreed to co-operate in the area of job creation and retraining programmes.

The menteri besar of Selangor, Tan Sri Khalid Ibrahim, criticised the federal government’s neglect of the states controlled by the PR. According to Khalid, the five states together account for nearly 60 per cent of Malaysian GDP — Selangor alone accounts for some 25 per cent — and over one-half of the country’s industrial workforce.

On Dec 10 the chief minister of Penang, Lim Guan Eng, outlined a blueprint to transform the state from a location for the low-value-added electronics industry to a capital- and technology-based centre. Penang is the country’s second-smallest state, with a population of only 1.4 million, but it accounts for 27 per cent of Malaysia’s exports.

Lim declared that the state government of Penang recognised the need to restructure and reinvent the local economy, in order to make use of its existing pool of knowledge-based workers and of their expertise, energy and entrepreneurial spirit. To promote restructuring, Penang has set up two advisory panels. One will deal with the services sector, which accounts for 57 per cent of Penang’s GDP, while the other will be concerned with industry, which generates 39 per cent. The two panels have been instructed to make recommendations on how best to support growth in the local economy.

Unemployment fears

At a national level, there is increasing concern about the social consequences of rising unemployment given numerous reports of job losses or impending retrenchment of workers. Alarmed by growing reports of lay-offs in the manufacturing sector, the Minister of Human Resources Datuk Dr S. Subramaniam told Parliament in October that his ministry was studying the possibility of creating a retrenchment fund, which could be launched early this year. Malaysia does not have an unemployment insurance scheme or unemployment assistance. Workers may be entitled to severance pay from employers on losing their jobs, but receiving it depends on their employers being able and willing to pay.

Past contributions to the Employees Provident Fund, a pooled pension fund covering both the private sector and the non-pensionable public sector, can be used to pay for medical treatment but not to provide income during periods of unemployment.

There is no social safety net for non-workers or those working in the informal economy. In the past, manufacturing associations have opposed the creation of a retrenchment fund, arguing that it would increase their business costs; the government has also been reluctant to implement such a measure. In 1999 the government rejected a proposal to set up a retrenchment fund when the economy began to recover following the 1997-98 Asian financial crisis.

One reason for the lack of progress on unemployment insurance is the presence of a huge number of foreign workers in the Malaysian labour market: there are some 2.2 million foreign workers, around 1 million of whom work illegally in the country. Malaysia’s workforce stood at 10.8 million in 2008, out of a total population of 27.7 million. The large relative size of the foreign workforce gives some idea of the concern that it raises with local populations and the government.

Mindful of the fact that employment conditions are likely to deteriorate in the months ahead, in December the government stated that it intended to reserve jobs for local workers and step up the deportation of unemployed and illegal immigrants. The Ministry of Human Resources is also considering making the registration of job vacancies compulsory for employers — currently vacancies are filed on a voluntary basis — and reserving certain employment categories for locals with the right skills.

“Buy Malaysian” campaign

In early January the Minister of Domestic Trade and Consumer Affairs Datuk Shahrir Abdul Samad launched a campaign to encourage Malaysians to buy locally produced goods. The campaign will run for a year, and is intended to increase awareness of locally produced items and thereby indirectly boost domestic demand.

Shahrir hopes that local producers will be encouraged by the campaign to introduce new value-for-money products to compete in the local market. However, the campaign raises concerns that other countries in the region could follow suit and attempt to increase demand for home-produced goods as global trade growth slows.

The prospect of “beggar they neighbour” economic policies is a particular worry given the already rapidly deteriorating conditions in Malaysia’s export markets. For much of 2008 Malaysia escaped the worst of the accelerating global downturn, protected by strong overseas demand for oil and non-oil commodities, which helped to offset a weakening appetite for electronic and electrical goods, the country’s largest export category.

Data releases in Malaysia have not been as gloomy as those in its major export markets, but the sharp deterioration in macroeconomic conditions experienced in those markets in recent months will have a pronounced impact on economic activity in Malaysia.

Singapore, Malaysia’s neighbour and largest Asian trading partner, recorded a sharp contraction in real GDP in the fourth quarter of 2008. Macroeconomic conditions in other markets that supported Malaysian export growth in the first nine months of last year, such as India, the Middle East and Russia, have also deteriorated sharply. —Economist

Tuesday, February 3, 2009

Bailouts for Bunglers

By PAUL KRUGMAN
Published: February 1, 2009
Source: http://www.nytimes.com/2009/02/02/opinion/02krugman.html

Question: what happens if you lose vast amounts of other people’s money? Answer: you get a big gift from the federal government — but the president says some very harsh things about you before forking over the cash.

Am I being unfair? I hope so. But right now that’s what seems to be happening.

Just to be clear, I’m not talking about the Obama administration’s plan to support jobs and output with a large, temporary rise in federal spending, which is very much the right thing to do. I’m talking, instead, about the administration’s plans for a banking system rescue — plans that are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.

When I read recent remarks on financial policy by top Obama administration officials, I feel as if I’ve entered a time warp — as if it’s still 2005, Alan Greenspan is still the Maestro, and bankers are still heroes of capitalism.
“We have a financial system that is run by private shareholders, managed by private institutions, and we’d like to do our best to preserve that system,” says Timothy Geithner, the Treasury secretary — as he prepares to put taxpayers on the hook for that system’s immense losses.

Meanwhile, a Washington Post report based on administration sources says that Mr. Geithner and Lawrence Summers, President Obama’s top economic adviser, “think governments make poor bank managers” — as opposed, presumably, to the private-sector geniuses who managed to lose more than a trillion dollars in the space of a few years.

And this prejudice in favor of private control, even when the government is putting up all the money, seems to be warping the administration’s response to the financial crisis.

Now, something must be done to shore up the financial system. The chaos after Lehman Brothers failed showed that letting major financial institutions collapse can be very bad for the economy’s health. And a number of major institutions are dangerously close to the edge.

So banks need more capital. In normal times, banks raise capital by selling stock to private investors, who receive a share in the bank’s ownership in return. You might think, then, that if banks currently can’t or won’t raise enough capital from private investors, the government should do what a private investor would: provide capital in return for partial ownership.

But bank stocks are worth so little these days — Citigroup and Bank of America have a combined market value of only $52 billion — that the ownership wouldn’t be partial: pumping in enough taxpayer money to make the banks sound would, in effect, turn them into publicly owned enterprises.

My response to this prospect is: so? If taxpayers are footing the bill for rescuing the banks, why shouldn’t they get ownership, at least until private buyers can be found? But the Obama administration appears to be tying itself in knots to avoid this outcome.

If news reports are right, the bank rescue plan will contain two main elements: government purchases of some troubled bank assets and guarantees against losses on other assets. The guarantees would represent a big gift to bank stockholders; the purchases might not, if the price was fair — but prices would, The Financial Times reports, probably be based on “valuation models” rather than market prices, suggesting that the government would be making a big gift here, too.

And in return for what is likely to be a huge subsidy to stockholders, taxpayers will get, well, nothing.

Will there at least be limits on executive compensation, to prevent more of the rip-offs that have enraged the public? President Obama denounced Wall Street bonuses in his latest weekly address — but according to The Washington Post, “the administration is likely to refrain from imposing tougher restrictions on executive compensation at most firms receiving government aid” because “harsh limits could discourage some firms from asking for aid.” This suggests that Mr. Obama’s tough talk is just for show.

Meanwhile, Wall Street’s culture of excess seems to have been barely dented by the crisis. “Say I’m a banker and I created $30 million. I should get a part of that,” one banker told The New York Times. And if you’re a banker and you destroyed $30 billion? Uncle Sam to the rescue!

There’s more at stake here than fairness, although that matters too. Saving the economy is going to be very expensive: that $800 billion stimulus plan is probably just a down payment, and rescuing the financial system, even if it’s done right, is going to cost hundreds of billions more. We can’t afford to squander money giving huge windfalls to banks and their executives, merely to preserve the illusion of private ownership.