Monday, June 30, 2008


June 30, 2008

When less is more
By Linda Lim & Geh Min

THE current bout of global inflation, mostly but not only in food and fuel prices, may be viewed, like global warming, as a wake-up call that the future of global and local economies cannot be like the past.

Fundamental lifestyle changes may be in store for all of us, particularly those in developed countries, including Singapore.

Today's inflation is symptomatic of substantial long-term world market forces at work, rather than a short-term business cycle or bad government policy. The coincidence of slowing growth with accelerating inflation - popularly known as 'stagflation' - indicates that excess demand resulting from economies operating beyond full-employment levels is not at work here.

Most governments today also understand that excessively 'easy' monetary policy, subsidies or price controls, and undervalued exchange rates all contribute to inflation.

The recent moves by many governments - including those of China, Indonesia and Malaysia - to reduce or remove fuel subsidies are a case in point. Subsidies and government price ceilings make inflation worse because they increase rather than reduce consumption of scarce commodities. Far better for prices to rise to market levels that equate supply and demand.

Consumption of another scarce resource - the natural environment - is also subject to market forces but with a twist: Environmental assets - clean air, water, undisturbed land - are under-priced by the market, regarded as free, and thus are over-consumed.

The market does not capture 'externalities' such as the costs and benefits to the health of human beings, future generations and the earth of exploiting or conserving natural resources.

If externalities were included in market pricing, overuse of scarce natural resources would be limited but they would also be more expensive. Unfortunately, we cannot increase the supply of natural resources. We can only reduce our demand for them.

Governments through regulation can raise the cost to consumers of previously 'free' and thus under-valued and over-exploited resources.

Herein lies the link between inflation and sustainability. The part of today's worldwide inflation which is here to stay is due to long-term changes in demand and supply. Rising incomes and wealth have created large new consuming populations in emerging markets such as China, India and Russia.

Their consumption adds to global demand, including for scarce resources like fuel. This will only intensify.

On the supply side, land and natural resources are fixed, and have already been fully utilised and exploited throughout most of the world. They are only going to become more scarce, though technological innovation can help us conserve the resources which remain by increasing the amount of output that can be generated with the given resources.

Global warming already signals that we may, according to scientists, be at or close to a 'tipping point' of no return to the balances of the past.

Both inflation and global warming signal a ratcheting upwards of the supply-demand equilibrium for scarce resources to a new and permanently higher level. Market forces will compel us all to consume less of scarce resources because they will become more expensive, properly reflecting their true scarcity value, inclusive of externalities.

In this context, both short- term 'inflation pay-outs' and aggressive long-term GDP growth targets are part of the problem rather than the solution to both inflation and environmental degradation.

'Inflation pay-outs' are simply another version of the 'cost-of-living indices' that perpetuated high inflation in Latin America for decades until the 1990s. By 'cushioning the impact' of inflation, they discourage adjustment to the higher cost of resources.

'Inflation pay-outs' by private companies also increase their costs, reduce their competitiveness, and in Singapore's already high-cost open economy, risk undermining investment and growth.

From a public policy perspective, it may be desirable to subsidise the consumption levels of the poor in a society. But this should be done by taxing those who are richer, who consume more than the poor, and thus contribute more to both inflation and environmental degradation.

Society as a whole needs to consume less. If we do not make that choice ourselves as individuals or governments, the market, nature and society (through political unrest) will do it for us - sooner and with greater force.

The imminent demise of the petrol-guzzling SUV in America, the financial woes of the energy-intensive global airline industry, food riots and protests over high fuel prices in many countries - these are only the first of many examples of lifestyle, business model and even socio-political changes that market prices will impose upon us if regulators will not.

Globally, aggressive GDP growth targets are justifiable for lower-income countries to lift them out of poverty. But they are less justifiable for higher-income countries like Singapore, whose citizens by and large already enjoy a comfortable standard of living.

We are also land- and labour-scarce, bereft of natural resources, already compelled to go further afield to source necessities such as foodstuffs, and vulnerable to supply disruptions.

With our per-capita energy consumption already among the world's highest, policies such as targeting a further 50 per cent increase in our population and resource-wasting practices like the high turnover of buildings - through collective sales, for example - need to be re-thought. We suggest a few simple initial principles.

First, the economic theory of comparative advantage tells us that no country can be internationally competitive in everything, because competition among different sectors for scarce resources will push up resource costs.

As a very small resource- poor country, Singapore cannot expect to be competitive in all of high-value manufacturing, finance, creative industries, life sciences, tourism, education and health services, and so on.

At a minimum, importing the labour and talent to fuel these industries will raise land costs and property prices to a point where the cost-competitiveness of these industries is eroded. Already, Singapore's housing-price inflation last year topped that in other countries by a wide margin.

Second, for both economic and environmental reasons, sustainability should be an important factor in choosing between sectors. This can be achieved by a clear regulatory framework which, for example, encourages energy efficiency in the production of output.

Social cost-benefit analysis techniques can be employed to include the imputed costs of 'externalities' such as pollution and congestion, in project evaluation. Excessively energy-intensive sectors could be penalised through taxes while energy conservation could be encouraged through tax breaks and other investment incentives.

Third, the criteria for measuring successful economic performance should be modified to include sustainability. Some years ago, China required that government agencies be evaluated for their performance on the basis of 'green GDP'. This requires the subtraction of environmental costs from the market value of goods and services produced (or standard GDP).

As a country with a per capita income 10 times China's and per capita carbon emissions about five times China's, Singapore should follow Beijing's lead in this.

It will help us moderate, even if we cannot eliminate, both inflation and environmental degradation as well as contribute to our own present well-being and future sustainability.


Linda Lim is professor of strategy at the Ross School of Business and director of the Centre for South-east Asian Studies, University of Michigan.

Geh Min, an ophthalmic surgeon, is a former president of the Nature Society of Singapore.

[Comment: Would Singapore accept a lower GDP growth for the sake of the Earth? This is a problem of the commons. ]

Green fuel of the future: Scientists look to algae

June 30, 2008

By Kwan Weng Kin

TOKYO - ONIGIRI is a ball of cooked rice wrapped in a sheet of dried seaweed, and to the Japanese, this is food for the soul.

Someday, seaweed may satisfy not only hunger pangs but also the nation's demand for energy.

Its potential as an alternative energy source has got scientists all fired up, not only in Japan but also in countries where seaweed is not uncommon, such as Ireland and Denmark.

Algae, of which seaweed is the most complex marine form, have long intrigued scientists.

During the process of photosynthesis, which produces chemical energy using light and carbon dioxide, algae are known to be capable of storing hydrocarbon compounds within their cells that have a composition similar to oil.

Because carbon dioxide is used to produce such oil, no extra carbon dioxide is discharged into the atmosphere when it is burnt.

The problem is finding the kind of algae that will produce high yields of such oil and also creating the right conditions to encourage these algae to reproduce as quickly as possible.

At Keio University's Institute for Advanced Biosciences, located in Tsuruoka City in northern Yamagata prefecture, a team has been quietly looking into such issues for about two years.

The green algae they are studying was first discovered in Japan's hot spring areas. It is said to be the highest-yielding and fastest-breeding algae currently known to scientists, therefore holding out the best promise for mass production.

Using technology that can give an instantaneous 'snapshot' of the physiology of a living organism, the university hopes to determine the most efficient way of cultivating the algae and extracting oil from it.

The biodiesel yielded can be used in cars and ships, as well as in power plants, and can reduce dependence on fossil fuels as a source of energy.

Said Keio researcher Takuro Ito: 'We hope to build an experimental plant by 2011 to demonstrate that the process works and to eventually get other universities and companies involved.'

At Tsukuba University, just over an hour north of Tokyo by car, Professor Makoto Watanabe is pondering similar questions in his laboratory, which is filled with flasks of pale green liquid.

He is studying a different variety of algae, which produces an oil heavier than diesel.

He has developed an extraction process in which the algae does not perish but can be returned to culture tanks to produce more oil.

The beauty of using algae to produce oil is that this does not eat into the world's food supply, unlike the use of food crops like corn or sugar cane to produce biofuels.

Besides, algae are notably more efficient as oil producers.

One report citing US government estimates said that while a 10,000 sq m site can only yield 0.2 tonnes of oil from corn, or 6 tonnes from oil palm, it can produce 47 tonnes to 100 tonnes of oil from algae.

Actually, the idea of extracting oil from algae goes back a long way, at least to the time of the first oil crisis in 1973.

The high cost of doing so dampened research efforts for a long time. Now the surge in global oil prices to record levels has put the spotlight back on the lowly algae.

Last December, Royal Dutch Shell said that it would build a biofuel production facility for algae in Hawaii.

In January this year, Japan's Fisheries Agency also announced a five-year plan to conduct research into producing biofuels from algae.

At the same time, the private-sector Mitsubishi Research Institute is reportedly working with universities and companies on various oil-from-algae projects, including the feasibility of building an enormous seaweed plantation in the ocean to produce biofuel.

The plan is to place 100 floating fishing nets in the ocean, each measuring 10km by 10km, and use them to grow seaweed.

There are many problems though, such as how to ensure that the nets will not be swept away by strong currents and whether they will obstruct the passage of ships.

At present, extracting oil from algae in commercial quantities is still very much in the realm of research. It will probably take many years before it can become a reality.

And should the price of oil drop sharply, or should there be breakthroughs in finding other cheaper alternative sources of energy, interest in extracting oil from seaweed could once again wane.

American biologist and entrepreneur Craig Venter, who led efforts to sequence and publish the human genome in 2001, is now studying the world's oceans in the hope of finding microbes that can suck up excess carbon dioxide from the air and turn it into fuel.

If he cannot find the right microbes, he hopes to be able to create synthetically-made ones that will do the job.

For Japan, rice - which the nation grows far too much of anyway - is increasingly being seen as a practical and immediate alternative source of energy.

A new hybrid variety, which does not require transplanting in order to save labour costs, is being used in a pilot project to produce bioethanol from next year.

The high-yielding strain was originally created to make animal feed but is now being eyed as an energy source instead.

The Japanese could wake up one day to find seaweed and rice not only a staple on their menus but also the source of fuel for their cars.

And Japan might even find itself exporting oil as well.

Sunday, June 29, 2008

When your transport overshoots your destination

June 27, 2008
Plane misses destination as both pilots fall asleep

NEW DELHI - AN AIR India flight headed for Mumbai overshot its destination and was halfway to Goa before its dozing pilots were woken out of a deep slumber by air traffic control, a report said.

The high altitude nap took place about two weeks ago, the Times of India newspaper reported yesterday.

Some 100 passengers were on board the state-run flight that originated from Dubai and flew to the western Indian city of Jaipur before heading south to Mumbai when both pilots fell asleep, a source told the paper.

'After operating an overnight flight, fatigue levels peak - and so the pilots dozed off after taking off from Jaipur,' the source, who was not identified, said.

The plane flew to Mumbai on autopilot, but when air traffic there tried to help the aircraft land, the plane ignored their instructions and carried on at full speed towards Goa.

'It was only after the aircraft reached Mumbai airspace that air traffic control realised it was not responding to any instructions and was carrying on its own course,' the source said.

'The aircraft should have begun its descent about 100 miles (160km) from Mumbai, but here it was still at cruising altitude. We checked for hijack.'

Finally, air traffic control buzzed the cockpit and woke up the pilots, who turned the plane around, the report said.

When contacted by the newspaper, Air India said it was gathering information on the incident.

The manager of Mumbai's airport insisted the aircraft had suffered a 'communications failure' and that no napping had taken place.

But sources told the daily that the authorities were trying to hush up the matter.

Indian papers reported this week that a flight operated by private airline Jetlite to the central Indian city of Patna was grounded after the pilot was found to be drunk.


[Compare with this story below]
June 27, 2008
Cleaner missed stop, punched driver for refusing to turn back
By Khushwant Singh

A CLEANER, who fell asleep on a bus and missed his stop, demanded that the bus head back.

When bus captain Tommy Yong Kah Huat said he could not do this, Muhammad Ilias Syed Ibrahim, 23, punched him twice in the face.

In a district court on Friday, Muhammad Ilias pleaded guilty to fracturing Mr Yong's nose last December.

He was sentenced to nine months in jail and three strokes of the cane. The maximum punishment is seven years' jail and 24 strokes or a fine.

Looking sheepish, Muhammad Ilias admitted to boarding bus service No. 58 near the White Water condominium in Paris Ris at about 3.30pm to go to Kaki Bukit Road on Dec 29.

During the journey, he dozed off and woke up only as the bus was passing Upper Paya Lebar Road.

He started shouting vulgarities at Mr Yong because he was about 2km pass his destination and demanded to alight immediately.

Mr Yong pulled up at the next bus stop but by Muhammad Ilias kept insisting that the bus head back to Kaki Bukit Road.

When told that this was not possible, he attacked Mr Yong.

The bus captain, who was in contact with the SBS control room, was advised to let the other passengers alight.

Muhammad Ilias stayed on the bus and police officers found him 'reeking of alcohol' when he was arrested.

An ambulance took Mr Yong to Changi General Hospital, where he was given three days' medical leave.

Laying ground rules for SWFs easier said than done

June 28, 2008

Industry players hold differing views over what form such rules should take
By Grace Ng

WHILE controversy rages on about SWFs, the one thing that virtually everyone agrees on is the need to clarify the rules of the game.

But that is where the common ground ends.

One camp is clamouring for all funds to follow rules to be laid down by the ostensibly independent International Monetary Fund (IMF).

The other camp, largely the SWFs, wants to throw out the rulebook - especially if they do not get a say in crafting the rules on controversial issues such as transparency. They are gunning for a voluntary set of principles.

Most SWFs are quick to acknowledge that there are benefits to common standards that reassure the public of their investment behaviour - the way hedge funds and private equity players had done earlier.

This would be 'the smart move', noted Mr Peter Mandelson, the European Union's trade commissioner, in a recent commentary in The Wall Street Journal.

So, 'a voluntary and limited code of conduct would only formalise what (SWFs) already do...and confound any suspicions' that the funds have political motives.

'Any fund unwilling to sign up to a reasonable code would have trouble explaining why,' he reasoned.

However, SWFs maintain that any international financial guidelines must be formed with the participation of everyone, as Chinese Foreign Minister Yang Jiechi told the media on the sidelines of the annual full session of China's Parliament in March.

Two months later, the IMF set up an International Working Group with 23 member countries, to draft SWF principles. Participants include Norway, China, Russia, Kuwait, Timor-Leste and Singapore.

The group will be meeting on July 18 and 19 in Singapore to discuss the code, slated to be ready by October.

Nonetheless, 'work between the funds and the IMF on such a code has got off to a prickly start', as some funds are 'suspicious of the IMF's motives', admitted Mr Mandelson.

He was careful to stress that 'the IMF is not, and will never be allowed to become, some sort of second International Criminal Court'.

Path of limited disclosure

BUT proactively, some SWFs have already volunteered to follow some rules to avoid the risk of being shut out of markets.

The 'right thing to do is to move to a path of more disclosure', GIC deputy chairman Tony Tan told the media in Davos in January. If issues like disclosure are not addressed directly, the greatest danger is that recipients may raise barriers to hinder the flow of funds, he said.

Singapore's Temasek Holdings and Abu Dhabi have both signed an agreement acceding to some investment principles on March 20, after talks with the United States. These include greater disclosure and ensuring that investments are for economic, not political, purposes.

But GIC, unlike Temasek, is not likely to publish its returns annually and give details of its every move.

Minister Mentor Lee Kuan Yew, who is also GIC's chairman, outlined reasons why the fund should not be too transparent in a Bloomberg TV interview on April 29.

'If you make your moves very clear, people can predict what you will do next, and forestall you or pre-empt you,' he said.

Furthermore, being too transparent may raise people's expectations of the Government to spend GIC's returns. So GIC discloses its profits and losses only over a five-year or 10-year period, said Mr Lee.

Limited disclosure may well be the path the IMF will take in crafting governing principles for SWFs.

Mr Mohsin Khan, IMF regional director for the Middle East and Central Asia, thinks that the code will not go as far as to require that SWFs reveal their investment strategies.

'(That) doesn't seem to be a very sensible business decision...If they reveal their investment strategy, anything they want to buy will become more expensive and anything they want to sell will become cheaper,' he told Bloomberg in Dubai last month.

'To reveal what kinds of assets they're holding, fixed income versus equities versus real assets, that will probably be where we'll wind up.'

Other SWFs are not fully in favour of regulations but are willing to fall in with the rest.

Russia's Ministry of Finance, which manages the National Wealth Fund, is keen to demonstrate that it will march in step with other SWFs. It announced that it will publicly and regularly report on government investing and spending of the fund's capital.

As for the China Investment Corporation's (CIC) armoury, it has committed to no oil, no jets and no guns. CIC has pledged that it will not buy into overseas airlines, telecommunications, oil companies or military companies. Nor will it buy a controlling stake in any company or use its investments to exert influence or steal technology.

But that does not mean CIC will toe the IMF line on SWF legislation. CIC chairman Gao Xiqing has insisted that it should be unnecessary for the IMF to draft guidelines for SWFs.

'That law will only hurt feelings. It's not economic. It doesn't make sense. Politically, it's stupid,' he said in an e-mail quoted by the CBS television network's 60 Minutes. 'If you make... someone singled out as a bad boy, then that becomes a problem emotionally.'

Mr Angel Gurria, secretary-general of the Organisation for Economic Cooperation and Development, appears to agree with Mr Gao.

He told the media last month, after meeting senior Beijing officials: 'We believe that there should not be any legislation or any regulation or any code applied that unduly restricts the freedom of investment, because we would be doing ourselves a disservice.'

Professionalising SWFs

YET others feel that the way forward is not to regulate funds, but to improve the way they are run.

This is the view of Mr Knut Kjaer, former chief executive of Norges Bank Investment Management, Norway's SWF. He wants to shape the SWF debate around how to encourage SWFs to be professionally managed.

'Particular regulations for SWFs would be a step in the wrong direction...The end game is not a universal model,' he argued in a Financial Times column in April.

Given the 'huge variety in purpose' as well as cultural and political considerations for SWFs, there will be different ways to build successful funds, he pointed out.

So the discussion should centre on 'what conditions are needed for the professional management of publicly owned financial assets'.

As the debate about rules of engagement for SWFs rages on, it is easy to forget why SWFs even need to define these rules. The question to ask about SWFs really is: More rules and greater transparency to what end?

�NUS professor Ho Yew Kee argued that it should ultimately be about maintaining efficient markets.

'SWFs are massive funds which may have undue power and thus, there is a need to 'regulate' them to ensure that they do not disrupt any market activities.� Therefore if transparency is framed from that perspective, there is no problem whatsoever,' he said.

Indeed, some rules of engagement that maintain an open financial playing field for all SWFs are what they need to manage and grow their huge war chests for decades to come.

Debate on Sovereign Wealth Funds

June 28, 2008
A force for good?
They are 'not out to make a quick buck'
SWFs - 'Saviour wealth funds'?

This may be a better name for sovereign wealth funds (SWFs), argues the European Union's trade commissioner Peter Mandelson.

His comments were made this month during trips to Abu Dhabi and other Gulf countries for free- trade-agreement discussions.

The positive sentiment about SWFs marks the growing chorus of support for them as benign benefactors, who should be welcomed by governments rather than feared.

Indeed, even those who voiced suspicions against SWFs last year have largely changed their tune now.

The finance ministers from the Group of Eight (G-8) rich nations, who feared that SWFs' rise signalled the onset of 'investment protectionism' some 10 months ago, have acknowledged the positive side of SWFs.

Earlier this month, the G-8 conceded: 'We recognise the benefits of commercially driven investment from government-controlled investors such as SWFs.'

Investment guru Warren Buffett weighed in even more strongly in favour of SWFs.

In his March annual letter to shareholders, he roundly trashed the conspiracy theories indicting SWFs' recent investments in big banks as part of 'some nefarious plot by foreign governments'.

If anyone were to blame, it would be the United States itself, he insisted.

'This is our doing. Our trade equation guarantees massive foreign investments in the US.

'When we force-feed US$2 billion (S$2.73 billion) daily to the rest of the world, they must invest in something here. Why should we complain when they choose stocks over bonds?' he argued.

Indeed, Mr Buffett pointed out that the key agenda of SWFs is more sensible than sinister - how to eke out satisfactory returns.

SWFs have no time to entertain pipe dreams of taking over the world - 'They already have their hands full trying to do a good job, to answer to their citizen shareholders at home,' an executive from an Asian SWF said, on condition of anonymity.

Hence, SWFs, including Singapore's funds, are diversifying outside their own home markets in search of a 'better risk-return benefit', explained Harvard Business School professor Robert Merton in an interview last year.

They need 'to preserve assets for future generations'.

Because SWFs are seeking long-term returns, another compelling argument is they are not out to make a quick buck like other investors.

China's Finance Minister Xie Xuren pointed out that SWFs can act as a balance to the short-term bets made by other investors.

'SWFs' investments are generally long-term, not speculative, so they are beneficial to the growth of investment and the economy,' Mr Xie said on June 17 on the sidelines of the US-China strategic economic dialogue talks.

Still, why go as far as to revere SWFs like China Investment Corporation (CIC) and Temasek Holdings as financial saviours?

Because they were willing to provide a lifeline at very short notice, by injecting much-needed capital into embattled banks, while other investors were fleeing in horror.

SWFs can afford to do so because they can wait for years until these companies recover. Government of Singapore Investment Corporation chairman Lee Kuan Yew declared in a Bloomberg TV interview on April 29 that the fund can hold some investments for two or three decades.

SWFs can 'stand the market volatility well into the long run', since their funds are stable and managed by investment professionals, noted Assistant Professor Yothin Jinjarak at Nanyang Technological University. This makes SWFs uniquely positioned to be stabilising forces amid the current financial turbulence, said the economics lecturer.

And now that SWFs have bought into Western assets, there is even less reason to fear them becoming renegades. After all, they have the same vested interests in ensuring that the global financial system remains stable.

Many SWFs hail from Asia and the Middle East, whose breakneck growth has been partly due to massive exports to the US and Europe.

Imagine a nightmare scenario where the SWFs did not inject capital into Wall Street.

Market confidence hits rock bottom. Liquidity in the financial system dries up. The US recession may well be worse than it is now.

'It is difficult to think of how much worse off we (the US) would be in the current financial crisis without SWFs,' wrote Mr Stephen Schwarzman, chairman of US private equity firm Blackstone, in a Financial Times commentary on June 19.

A recession in the US and Europe would hurt developing countries' growth, so SWFs from Asia and the Middle East have an added incentive to ensure the global economy remains stable - to protect their own economies.

SWF investments can also be good for the Western companies involved, said Shanghai-based economics analyst Jin Zhao.

Take Barclays, for example. Temasek Holdings and China Development Bank (CDB) - in which CIC holds a stake - helped to sweeten the British bank's bid for rival bank ABN Amro last year, by investing in Barclays.

Even after the bid fell through, Barclays was still the winner, having sealed a lucrative five-year deal to become the Chinese government's preferred provider of commodity-market risk hedging.

Indeed, companies looking for access to overseas markets like China may get a golden ticket from the SWFs which invest in them,' said Ms Jin.

While other companies, until recently, took the long road of forming joint ventures or buying stakes in Chinese companies, those with SWF investors may get a short cut.

Blackstone is enjoying access to plum investment advisory roles in China thanks to CIC, which bought a stake of just under 10 per cent in the US investment group.

It has been roped in to advise Chinalco on the latter's role in a merger between Rio Tinto and BHP Billiton to become the world's largest mining company. Chinalco bought a 9 per cent stake in Rio Tinto in January.

And it is not just financial players who sing praises of SWF involvement.

High-fashion US retailer Barneys New York is said to have become an even more premium brand after US$940 million of petrodollars sloshed through its portals from Istithmar, a Dubai SWF, a year ago.

SWFs have won over many critics, after bringing stability and liquidity to the global capital markets.

All these have prompted Mr William Miracky, a Monitor Group senior partner and former Federal Reserve economist, to declare: 'On balance, SWFs are good.' >

A force for evil?
SWFs 'can be a threat to national security'
By Grace Ng
SWFs - danger ahead?

Sovereign wealth funds may have been behaving themselves so far, but do not be fooled, warn political analysts like Mr Alan Tonelson.

'SWF enthusiasts, who eagerly note that the funds so far have provided no concrete cause for concern, are tantamount to teenagers who have begun to start driving under the influence (of alcohol), and brag that they're still alive,' he said.

He was red-flagging the rogue potential of SWFs at the United States-China Economic and Security Review Commission Hearing that discussed the implications of SWFs for national security in February.

'The government must provide the adult supervision,' he urged.

Mr Tonelson is not alone in his mistrust of SWFs and fear that they could 'threaten national security' through their investments in US assets.

In February, 55 per cent of Americans polled by Public Strategies, a US consulting firm, thought investments by foreign governments harmed US national security. Only 10 per cent disagreed.

The poll findings also showed that 'opposition was particularly pronounced to investments in high-tech or financial firms, and to investments by SWFs headquartered in the Middle East or East Asia', noted professor of international politics Daniel Drezner from the Fletcher School of Law and Diplomacy at Tufts University.

Common fears are that SWFs could seek to transfer know-how and technology in Western banks and high-technology companies to their home country, noted Morgan Stanley analyst Stephen Jen.

In other words, SWFs may practise 'state capitalism'.

Dr Gerard Lyons, Standard Chartered chief economist and group head of global research, coined this phrase to describe the 'use of government-controlled funds to acquire strategic stakes around the world'.

Mr Tonelson also speculated that SWFs' control over US assets may give them more diplomatic negotiating power over Washington.

He posed this question: If the financial turmoil persists, would Washington dare to stand up to Beijing if a cross-strait crisis erupted?

After all, the Chinese government holds big stakes in some big American financial institutions, he pointed out.

US Senator Barney Frank was more circumspect: it depends on which country the SWF comes from, he argued.

'I have been asked from time to time what I think about sovereign wealth funds. To some extent, that is like asking me what I think about countries,' he told a US hearing on foreign state investment in the US economy in March.

'Some I like a lot, some not so much. The fact is, sovereign wealth funds are reflections of their countries; some are fine and some make me nervous.'

While he did not name names, other politicians have been more explicit about which countries' SWFs they fear more than others.

Mr Charlie McCreevy, the European Commission single-market commissioner, for one, feels no love from Russia. Likening Russia's state-owned gas monopoly Gazprom to an SWF, he darkly speculated about a new age of industrial espionage, unless funds like those in Russia were handcuffed by rules.

But a more immediate concern is the impact of SWFs' massive financial firepower on the stability of the financial system.

Quintain chairman John Plender highlighted the 'threat these flows pose to high corporate governance standards in the developed world'. He wrote in the Financial Times in January that if SWFs move a lot more money into equities, this may artificially lower the cost of capital.

This may mean that companies that are more lax in their corporate governance standards may still be able to get funding from SWFs, instead of being punished by the market for their sloppiness.

SWFs also contribute to soaring prices of assets and commodities, others charge.

Institutional investors, including SWFs, have been pouring more money into oil and other commodities to hedge against inflation and secure supplies. This may have helped to drive up prices, said analysts like Mr Larry Goldstein, director of the Energy Policy Research Foundation.

On a broader scale, the concern about SWFs reflects a growing uneasiness in the West about the rising power of emerging economies such as China, Russia, India and the Middle East.

The richest SWFs come from developing countries that are fast replacing the rich nations as the powerhouses of the global economy, supplying them with everything from oil to commodities to cheap underwear.

As research consultant Monitor Group puts it: 'There is nervousness about the rise of nations outside the 'club' that has dominated international finance since World War II and the potential corresponding loss of power and influence.'

Indeed, the Group of Eight rich countries met in Germany last September and issued a strident call against 'investment protectionism'.

Others have railed against how prosperous Asian countries like China and Middle Eastern oil producers are using the West's money to take over the West's assets.

They point out that the West had outsourced a lot of production to the developing countries. The latter then sell the cheap goods back to the West and amass trillions of foreign currency reserves. Meanwhile, the oil producers are also getting jetloads of US dollars for barrels of black juice.

Even investment whiz Warren Buffett, an SWF supporter, has been losing sleep over this phenomenon since 2005. He painted the worst-case scenario: the US could end up with a 'sharecropper economy' where Americans largely slog for foreign-owned firms.

This is because the US has to 'give away a little part of the country' each year, as long as it is saddled with massive foreign trade deficits, he said in a letter to shareholders of Berkshire-Hathaway, which he heads.

Perhaps SWFs should resign themselves to the reality that mistrust about their motives will never go away.

This is because of the history of 'misunderstandings, complexity, and obscurity involved' with SWFs, said Mr Knut Kjaer, ex-CEO of Norges Bank Investment Management, Norway's SWF.

'What is true is that there is always a price to be paid for growth, and the fact is that the world relies on financial foundations different from the old model of unipolar American power,' he wrote in an article published in the Financial Times in April.

Still, the balance of power from the West to the Middle East and Asia may not shift drastically yet.

'These new forces of capitalism may finance the leaders of the next century, but they are unlikely to topple them,' said Mr Kjaer.

The Super Seven (SWF)

June 28, 2008

THERE are over 45 SWFs and counting, according to the SWF Institute, an independent US-based think-tank focused on SWF research.

The 'sheer diversity (of SWFs) confounds those...who try to generalise their activities', said Standard Chartered economist Gerard Lyons in his report on SWFs last September.

First up - there is the 'Super Seven', with over US$100 billion in assets each.

Next, mid-sized funds such as those run by Qatar, Brunei, Taiwan and Kuwait.

Bringing up the rear are new kids on the block ranging from Botswana to Japan to Saudi Arabia.

Their very apparent differences make it tough to define just what an SWF is. One can start with what SWFs are not: neither national pension funds, nor central banks, or regulators managing reserves.

So that excludes Saudi Arabia's Monetary Authority, with reserves of over US$250 billion, and which also acts as a conduit for US$116 billion of Saudi government funds.

But what about exotic creatures like Singapore's Temasek Holdings, which owns and manages its own assets but is solely owned by the Government?

It is an SWF, going by Mr Lyons' definition: ownership by a sovereign nation-state, rather than a regional or local state entity.

How about the US? It does not have SWFs, but state pension funds like the California State Teacher Retirement System manage over US$180 billion and are active investors.

Abu Dhabi Investment Authority

War chest: US$875 billion

Launch date: 1976

Commanders: Chairman Sheikh Khalifa bin Zayed Al Nahyan (12th son of Abu Dhabi's late patriarch Sheikh Zayed), CEO Hareb Al Darmaki

Recent trophies: Stakes in Citigroup (November 2007, US$7.5 billion) and PrimeWest Energy of Canada (September 2007, US$5 billion)

Strategy: About 70 to 80 per cent of its portfolio is managed by external fund managers. It generally tries to keep equity stakes below 4.5 per cent to avoid disclosure requirements.

Transparency index*: 3

'When people ask what keeps you awake at night, it is trying to avoid investing massively in another Japan in 1990. Are we at the beginning of something similar to what happened to Japanese equities in the 1990s? That is the way we look at the world.'

MR JEAN-PAUL VILLAIN, ADIA's head of strategy, quoted in BusinessWeek magazine this month. The Japanese stock market crashed in 1990 and the value of the Nikkei 225 more than halved over the next decade.

China Investment Corporation

War chest: US$200 billion

Launch date: 2007

Commanders: Chairman Lou Jiwei, president Gao Xiqing

Recent trophies: Stakes in Morgan Stanley (December 2007, US$5 billion), BG Group (September 2007, US$250 million) and Blackstone Group (May 2007, US$3 billion)

Strategy: Mr Li Yong, China's Vice-Minister of Finance, has said CIC plans to invest one-third of its capital to purchase Central Huijin Investment Co, which owns China's major state-owned commercial banks. Another one-third will be used to replenish the capital of the Agricultural Bank of China and China Development Bank. The remaining one-third is earmarked for investments in global markets.

Transparency index*: 2

'Our government has never been transparent for 5,000 years. Now we are told we need to be transparent and we are trying...We are regular people. We do not have horns growing out of our head.'

MR GAO XIQING, president of China Investment Corporation, at a conference this year held by the Organisation for Economic Cooperation and Development. He was addressing concerns in the US and Europe about the threat posed by SWFs.

Kuwait Investment Authority

War chest: 70.21 billion dinars (US$265 billion)

Launch date: Started in 1953 as the Kuwait Investment Board, and became the KIA in 1982

Commanders: Chairman: Mustafa Al Shemali; managing director: Bader al Saad

Recent trophies: Stakes in Halkbank (May 2007, US$209 million); Industrial Bank of China (April 2007, US$720 million); Cevahir Shopping Centre (November 2006, US$750 million); Merrill Lynch (June 2005, US$2 billion).

Transparency index*: 6

'Any fear of sovereign wealth funds is unfounded and unjustified...Recipient countries (of investments from SWFs) are placing handcuffs on SWFs in the form of regulations - termed in the best tradition of George Orwell's Newspeak - by calling them a code of conduct.'

SHEIKH BADER AL SAAD, Kuwait Investment Authority's managing director, at a conference in Luxembourg on April 9

Government of Singapore Investment Corporation

War chest: Well above US$100 billion (GIC's website). About US$330 billion (Monitor Group estimates)

Launch date: 1981


Chairman - Minister Mentor Lee Kuan Yew

Deputy chairman - Prime Minister Lee Hsien Loong

Deputy chairman and executive director - Dr Tony Tan

Recent trophies: Stakes in UBS (February 2008, US$10.8 billion), Citigroup (January 2008, US$6.88 billion), Merrill Lynch Financial Centre (June 2007, US$954 million)

Strategy: GIC aims to preserve and enhance the international purchasing power of Singapore's reserves.

Transparency index*: 6

'We regard our investments in UBS and Citicorp as long-term investments which will give us good returns when markets stabilise and economic conditions return to normal levels.'


Government Pension Fund - Global

War chest: US$396.5 billion

Launch date: 1990

Commanders: Norges Bank governor Svein Gjedrem; Norges Bank deputy governor Jan Qvigstad

Trophies: It typically holds small stakes in companies, many below 1 per cent. Stakes include Esprit and Kmart. Stakes in Singapore companies include United Overseas Bank, Banyan Tree Holdings, City Developments and Creative Technology.

Strategy: The fund is run by Norges Bank Investment Management, but makes extensive use of external fund managers.

The fund is shifting to a 60 per cent allocation in stocks from 40 per cent.

It has a panel of experts who evaluate the 7,000 or so companies it invests in to ensure they meet the highest ethical standards.

It has divested stakes in over 25 companies because of their 'unacceptable violations of fundamental ethical norms'. This includes Singapore Technologies Engineering because of its production of anti-personnel landmines.

Transparency index*: 10

'(I earn) less than $500,000. What's your salary?'

MR KNUT KJAER, ex-CEO of Norges Bank Investment Management, in response to a question from a Financial Times journalist about how much he earned in his former position in 2006, and if he personally felt underpaid. To the latter question, Mr Kjaer breezily responded: 'I don't and, you know, if you feel underpaid you should quit.'

Oil Stabilisation Fund and National Welfare Fund

War chest: US$129.8 billion in the Oil Stabilisation Fund (OSF) and US$32.7 billion in the National Wealth Fund (NWF)

Launch date: 2008

Commander: Finance Minister Alexei Kudrin

Strategy: The OSF is being invested in overseas government and government-backed agency bonds, while the NWF will undertake riskier overseas investments to generate higher returns.

Transparency index*: 5 (for OSF)

'The sovereign wealth funds of the Arab world and Singapore have been buying equities in Europe and America for decades and there was no discussion at all. I find it really strange that when Russia starts discussing such a possibility, we hear a lot of concerned speeches... I don't understand why we hear a lot of voices that demonise our activity.'

MR PYOTR KAZAKEVITCH, head of OSF, in an interview with the Financial Times, published on Sept 18 last year

Temasek Holdings

War chest: S$164 billion as of March 31, 2007

Launch date: 1974

Commanders: CEO Ho Ching, chairman S. Dhanabalan, executive director Simon Israel

Recent trophies: Merrill Lynch (December 2007 and February 2008, totalling about US$5 billion), Barclays (July 2007, &pound975 million), Bank of China (4.13 per cent stake as of November 2007), Standard Chartered (18.99 per cent stake as of May 2008)

Strategy: For the year ended March 2007, 61 per cent of Temasek's portfolio was in the financial services, telecoms and media sectors. It holds stakes in major listed Singapore companies, including DBS, Singapore Airlines, SingTel and Chartered Semiconductor.

Transparency index*: 7

'We are aware of the need to be far more sensitive in the current environment to investing in industries that may be iconic or have sensitivity from a national perspective.

'Please recognise that we at least believe we are differentiated...We are trying to help people debunk some of the myths around Temasek. There are factors that highly differentiate us from the others.'

MR SIMON ISRAEL, executive director of Temasek Holdings, in an interview with The Independent, a UK newspaper, in January 2008


* The Linaburg-Maduell Transparency Index was developed at the Sovereign Wealth Fund Institute by Carl Linaburg and Michael Maduell. Scores are based on 10 criteria, including whether the fund provides up-to-date independently audited annual reports, ownership percentage of company holdings and geographic locations of holdings, and whether it provides total portfolio market value, returns and management compensation.

SOURCES: Monitor Group's report 'Assessing the risks: the behaviours of SWFs in the global economy', (June 2008); annual reports of Temasek Holdings; Government Pension Fund - Norway; websites of Temasek, GIC, Abu Dhabi Investment Authority; Thomson Financial; Reuters data; Bloomberg data; Citigroup Global Banking: 'Sovereign Wealth Funds: A Growing Global Force,' (Oct 18, 2007); Goldman Sachs Economics Paper: 167 - 'In defence of Sovereign Wealth Funds' (May 21, 2008); Sovereign Wealth Funds Institute.

Monday, June 23, 2008

Rapist dad: I used condoms

By V. Anbalagan

2008/06/20 NSTonline

PUTRAJAYA: He used a condom every time he raped his daughter. For that precaution, the rapist said he should get a lighter sentence.

This mitigation riled Court of Appeal judges Tengku Baharudin Shah Tengku Mahmud, Datuk Sulong Matjeraie, Datuk Ahmad Maarop and those in the court gallery.

His counsel S.I. Rajah mitigated that the sentence imposed on the accused was excessive.

"Justice should be tempered with mercy.

"The accused used a condom every time he committed the offence," the lawyer said.

"You mean it is okay to rape using a condom?" asked Tengku Baharudin.

Rajah had no reply.

The roti canai seller, now 49, appealed against sentence because he was a first offender and was remorseful for his action.

Four years ago, the Sessions Court in Petaling Jaya sentenced the accused to a total of 36 years in jail and 20 strokes of the rotan on four counts of rape.

Sulong, who delivered the court ruling, said the appellate court found no reason to disturb the sentence of the Sessions Court.

He said the sentence was appropriate to send a strong message that such an act should not be condoned and to protect society.

According to the facts of the case, the roti canai seller raped the girl between May 2003 and August 2004.

The offences took place at their home at night when the mother had gone to work.

The victim was then between 11 and 12 years old.

Deputy public prosecutor Aslina Joned told the court that the accused, a father of five, had betrayed the trust of his daughter.

Aslina said the father would give the victim RM5 as a reward every time he raped her.

A class teacher noticed her to be in a state of depression and the girl told her what had happened.

Police arrested the man on Aug 12, 2004, and he pleaded guilty to the charges in the Sessions Court a week later.

On the first three counts, the then Sessions Court judge Nurmala Salim sentenced him to 18 years' jail and five strokes of the rotan for each offence. The sentences to run concurrently.

He was sentenced to a further 18 years' jail and five strokes of the rotan for the fourth count.

Nurmala ordered this sentence to run consecutively.


Wednesday, June 18, 2008

Starving men on display at Mumbai's 'hunger cafes'

June 18, 2008

No meals for the needy unless some kind soul pays for their food

MUMBAI - THE golden Honda pulled over to the kerb alongside the restaurant. A window rolled down and a 100-rupee (S$3.20) note popped out, courtesy of a woman who would identify herself only as Mrs Abbas. Then, as quietly as it arrived, the car sped away.

Inside the Mahim Darbar restaurant, seven men sprang to their feet: gaunt, beleaguered men with pockmarked faces. This was the moment they had been waiting for. Mrs Abbas had bought them lunch.

Mahim Darbar is just one of Mumbai's 'hunger cafes' where donors can drive up to feed the hungry.

The cafes have stood for decades on a stretch of road in the Mahim neighbourhood.

Drifters squat in neat rows in front of each establishment, waiting patiently. Vats full of food simmer behind the doors. What separates the men from the food is the cost of 25 US cents (35 Singapore cents) per plate - a gulf harder to bridge than one might assume. But every so often, a car pulls up and makes a donation, and the men dine.

The restaurant owners describe their mission as charity, but their establishments are profit-making, if only meagrely so. Only in India, perhaps, where no business niche long goes unexploited, would a group of restaurateurs rely on the starving for their livelihoods.

Although parading the hungry can seem cruel, it may not be unwise.

To bring these men indoors with the notion of safeguarding their dignity would risk their starvation, according to the restaurateurs. They believe the men must be exhibited like this, sunken and sad-eyed. They must gaze at passers-by with that obedient, mournful, reverential stare that well-born Indians have learnt to expect. They must be advertisements for their own cause.

'If they sit inside, that would be a misconception for the people who are giving money - that those people are eating,' said Mr Shaib Ansari, the 23-year-old proprietor of the Mahim Darbar restaurant, which was opened by his uncle more than four decades ago.

'We don't let anyone sit inside until someone pays for them to eat.'

The restaurant sees some men (and it sees only men) once. These are the ones who fall on lean times but quickly get back on their feet.

Others come for a few months, men who have lost their jobs in the volatile labour market that is replacing the old job-for-life socialist ways.

Then there are the regulars. In this restaurant, it is no privilege being a regular. It is a category populated mainly by the sick and the unstable - or, as the owner puts it, the 'mentally retired'.

Mr Raju Subachan, 30, wearing a red rag around his head, belongs to the second category, the unemployed.

He came two months ago from Allahabad in the north, and found work as a waiter but then lost his job.

He made it clear, sitting in the doorway, that he was not a free-food junkie. During a month of joblessness, he had come only three or four times. On this day, he had already eaten once, at noon, and was waiting for a second meal, which he anticipated would keep his stomach from feeling empty until morning.

He sat alone, plunging his fingers into the yellow mush on his plate. He ate quietly and quickly.

When you eat like this, with your dependence exhibited to the world, a meal no longer feels like something to linger over.


Tuesday, June 17, 2008

Honouring the ultimate sacrifice

June 17, 2008

By Bernard Fook Weng Loo
WHAT should the military do when its personnel tragically lose their lives in the course of training?

This is a potentially loaded question, for how one answers it can lead to the person being labelled as either insensitive to human tragedy or irresponsible about the demands of national security.

The question becomes an even greater minefield when it is addressed to a military that has known no wars.

The Singapore Armed Forces (SAF) decided last week, in the aftermath of the deaths of two of its personnel in the course of training, to suspend training while it reviewed all its training safety regimes.

Given that the two deaths occurred on consecutive days, though in different locations, it would be tempting to think that their cause was lapses or gaps in the SAF's training safety regimes.

The review conducted by the SAF since has shown that this was not the case. In both instances, training safety regulations were followed. The SAF's safety regimes are indeed stringent.

The numbers bear out the SAF's claim. In the preceding nine years, there have been 19 training-related fatalities in the SAF. In comparison, a United States government agency puts the number of non-combat-related fatalities in the US military during the Clinton presidency at 3,953, although it does not indicate how many of these fatalities were the result of training activities.

Seen in this context, the number of training-related fatalities in the SAF has been remarkably low. It is possible to draw two conclusions from that fact.

One, the SAF's training systems have become lax, and this would account for the low number of training-related fatalities. Two, the SAF's training systems are tough, and its safety regimes have kept the numbers of training-related fatalities low.

The purpose of military training is to prepare soldiers for combat operations. That means training has to replicate as closely as possible the harshness and risks of the combat environment.

Before World War II, the German and Soviet armies had notoriously tough and realistic training. As a result, their training-related fatalities were extremely high.

One can clearly go overboard in trying to replicate a combat environment. But the point nevertheless remains: military training, even in peace-time, has to closely replicate combat conditions. To have it otherwise would be irresponsible.

This means that any citizen enlisting in the armed forces, whether voluntarily or through conscription, is entering an environment where the risks are inevitably higher than in virtually any area of civilian life.

If the main purpose of National Service is to ensure an SAF that can function effectively as a deterrent and a defender against armed aggression, military training has to be as realistic and tough as possible.

Granted, the point is not to die for one's country; it is to make the other fellow die for his country, as American general George Patton was alleged to have said.

Nevertheless, to slacken in training rigour would only result in a military organisation that is unable to meet the demands placed on it. Given this necessity, training-related deaths during National Service will almost certainly occur.

So is the SAF's training safety regime inadequate in any way? The numbers suggest that its safety record is actually rather good. And the fact that the SAF is often lauded by foreign military observers for its professionalism suggests that its training is tough, realistic and effective.

In other words, there may be nothing wrong with either the SAF's training systems or its training safety regimes.

Of course, National Service is not just about the creation of a credible and potent SAF. The institution of National Service serves a second, equally important, function: Namely, national identity formation.

Singapore may not have grand symbols of national identity like America's Statue of Liberty or France's Eiffel Tower or Japan's Mount Fuji. But there is one thing that unifies all Singaporean males above the age of 18 - and that is National Service.

Indeed, while National Service directly impacts only Singaporean males, it still has an effect on all Singaporean families, as people go through the experience of watching their sons, brothers and boyfriends go through this national institution.

In this regard too, training rigour is important. Most Singaporeans who have gone through National Service have heard of two names: 'Tiger' Hong and Encik Shamsuddin, who were legendary (perhaps infamous) for their toughness.

There is a mountain of anecdotal evidence of soldiers, who had been trained by them, speaking with pride of how they endured the privations and rigours of military training.

National Service creates a common pool of shared memories and experiences. These shared memories and experiences really need to be forged in fire. National Service - precisely because it is tough and on occasion life-threatening - makes it easier for those who undergo it to bond more effectively.

All of us who have been through National Service ask acquaintances where they served. We swop stories of how we endured National Service and how we sneaked in moments of enjoyment in the midst of deprivation and degradation.

There is no way to make this sound palatable to the families who have sons who lost their lives while in National Service, but military training has to be tough, but generally tolerable.

For military training to be effective, it has to replicate the extreme conditions of war as closely as possible. In the event of a war, it is such military training that will save lives - Singaporean lives.

There is one final issue. It is important to remember that these soldiers lost their lives in the defence of the country. The very claim that the SAF makes - that its deterrence posture ensures Singapore's continued stability and security - means that every soldier, past and present, was and is defending the country.

When a solder loses his life as a result of military training, the country has to demonstrate its genuine sorrow and gratitude to that soldier's family.

Both the soldier and his family made the ultimate sacrifice, and they deserve to be honoured and respected accordingly. Otherwise, the soldier would have died a meaningless death.

As a nation, we cannot allow that to happen.

[Comment: When NSmen die in training or in combat, they died in the service of the nation. They died defending our nation. There is purpose in their service, and there is sacrifice in their death, and there is honour and nobility in their service. Because National Service in Singapore is not just "play, play".

It is about serious defence and deterrence.

As an aside, National Service in Malaysia lacks this element of serious purpose. And until they realise this, copying Singapore's National Service to forge racial harmony is misapplying the programme.]

Monday, June 16, 2008


June 12, 2008
SAF suspends physical training after 2 trainees died

Regular serviceman, Officer Cadet (OCT) Clifton Lam Jia Hao collapsed at about 5.45 pm on Wednesday and was given immediate first aid treatment by a doctor and a senior medic. He was pronounced dead at 7.20pm in the hospital.

View more photos

THE Singapore Armed Forces (SAF) on Thursday ordered a halt to all physical and endurance training activities for three days following the deaths of two young servicemen in training.

Until Saturday, the entire force of 300,000 active personnel and National Servicemen will not be on obstacle courses, route marches or doing any fitness tests. Physically demanding field training is also out.


Weekend • Today June 14, 2008


THE chorus of concern over training safety swells like a familiar refrain each time there are deaths, especially within a short period, in the Singapore Armed Forces (SAF).

This time is no different and, even as the deaths of the two National Servicemen this week are being investigated, many have chipped in with suggestions to curb such unfortunate occurences.

For example, while the Ministry of Defence (Mindef) has portable life-saving equipment that can make a big difference, would setting up of a helicopter detachment at Pulau Tekong help speed up the evacuation of troops in emergencies?

After all, most Basic Military Training (BMT) is now carried out at Tekong. With every second a matter of life and death in a medical crisis, having to activate a helicopter based on the mainland could be costly.

Others have called for comprehensive cardiac screenings for all new recruits. But there is one aspect of a soldier that no medical specialist or equipment can get a handle on: His ego.

In an environment where awards are given out to the best trainee and best combat unit, “doing your best” becomes the overriding mantra. As a trainee — whether recruit or officer cadet — your psyche is different from that of a Reservist or National Serviceman.

You are driven to prove yourself — to others, your family — and you want to be the best. “Die, die must make it” was, and still is, a common refrain heard in the barracks corridors.

But not knowing when to quit can sometimes push people past their limits.

When I was a recruit undergoing BMT almost a decade ago, my right hand was infected and swelled to the size of a pig’s foot. I did not report sick for two days, even when I started running a fever.

In the end, I was hospitalised for two days. Discharged and given a Medical Certificate for a week, I was back at my company line two days later, much to the disbelief of my platoon commander. It could have been youthful pride, but I didn’t want to be called a “malingerer”. Also, I wanted to make the grade for OCS, or Officer Cadet School (for the record, I didn’t).

A friend who did get into OCS one night came down with a 40-degree high fever. He kept quiet about it, popped two Panadols and slept it off. I am sure we were not the last to tell ourselves to endure in silence.

Should the mantra of “doing your best” be adapted in the right circumstances to “doing your part”? If a serviceman pushes too hard, is there someone who could spot the signs? For many years now, the SAF has practiced a “Buddy System” where you look after your mate and vice versa. If your buddy fails you, there is still a instructor, or someone of a senior rank, on the look-out.

For many years, too, there has been only one section commander — usually holding the rank of third sergeant — attached to a section of about 10 recruits during BMT. :Could it be time to have more section commanders with a section?

After all, recruits are mostly conscripts pulled from a softer civilian life, and the first phase of NS is often the most demanding, physically and mentally. By necessity, training has to be realistic and gruelling. More guidance and attention could help.

Here is where instructors, whom trainees look up to as mentors, play a crucial role. But simply having more instructors is not enough, they need to know how to tread the line between motivating trainees without baiting them. Every generation of servicemen has its stories of nightmare instructors.

More could also be done, pre-enlistment, to prepare recruits. While Mindef sends out publicity material and recently launched a website for that purpose, not every recruit will read the material. More often than not, the young man’s perception of NS is gleaned from friends’ and relatives’ accounts.

Wouldn’t it be better if pre-enlistees were given talks in schools on what to expect? Other than the Army Open House, could there be more tours of training facilities for pre-enlistees?

Most importantly, even as the SAF reviews its procedures with a fine-tooth comb, personal responsibility needs to be at the forefront. Last year, Second Defence Minister Ng Eng Hen said as much when he pointed to “greater decision-making by individual soldiers”, and as a result, “every individual has to take personal responsibility”.

This extends not just to Full-time NSmen but also Reservists. Last month, my unit underwent our seventh in-camp training, which included a week-long exercise in Thailand. We were given safety briefings and reminders. Yet, a string of incidents occurred, unprecedented in our previous training sessions.

Two servicemen had to be flown back to Singapore with limb fractures. Other incidents included one man who injured his hand cutting tape, and one who injured his eye walking into a tree branch at night.

In short, training incidents affect even the most seasoned of servicemen — for any number of reasons, from complacency to poor judgment and bad luck.

I proclaim I have a vested interest in the safety of servicemen — I have three more years before my reservist unit stands down, and my younger brother is due to enlist in two years.

While the public will always ask if the SAF has the right procedures and processes in place, the best of these will not be enough if we don’t take on the onus of looking out for oneself and the man next to you.

Surely it is on the battlefield, and not the training ground, that one should lay down one’s life for loved ones and country.

[Comment: Any loss of life from war or training for war is sad. Safety precautions, and proper medical screening should be in place to detect and protect those for whom physical training could be fatal. And certainly gung-ho self-sacrifice in the face of clear medical incapacity is to be discouraged. And it is not just in the military. How many of us know colleagues who drag themselves to work even when they look like death warmed over?

But the spirit of "die, die must make it" is not wrong. In war, it is such spirit that ensures that the mission is accomplished. It is the responsibility of the trainers to inculcate in our citizen soldiers this spirit and value. It is the responsibility of the medical screening team to detect potentially fatal weaknesses. And it is the responsibility of the individual to be aware of his condition. Which is easier said than done.

However, that said, there are many other stories of inexplicable deaths. Young, relatively healthy individuals have died in their sleep. Or while exercising. Or while masturbating to internet porn while engaging in auto-asphyxiation while wearing his sister's undergarments.

These two deaths, while regrettable, were at least noble. Wasteful? Perhaps. Preventable? Hard to say.

In the list of possible causes of death in the military during peacetime, fatal or serious accidents due to poor maintenance, unsafe SOP, complacency, and carelessness rank as the worst because they should be preventable.

Deaths due to undetected, underlying medical conditions are unfortunate, but hard to prevent.]

Thursday, June 12, 2008

NZ drivers turn to blow-up dolls to beat traffic rules

June 12, 2008

WELLINGTON - DRIVERS in New Zealand's largest city of Auckland are turning to inflatable passengers to try and beat transit lane rules.

Blow-up dolls, shop mannequins and dogs dressed up as children have all been used to try and justify driving in lanes where vehicles are required to have at least three occupants.

'There were some odd people that tried these antics,' North Shore city council traffic safety manager Andre Dannhauser told Reuters.

Drivers caught trying to beat the system are fined NZ$150 (S$155).

Enforcement officers taking pictures of offending cars in transit lanes have been treated to a wide range of excuses from caught-out motorists, Mr Dannhauser said.

'The most common one is the imaginary passengers they claim we couldn't see because they were so small,' Mr Dannhauser said.

For a while some enterprising students charged a small fee to get driven past the enforcement officers, before running back up the road to repeat the trick.

'The money they generated from that was not enough to pay for the beer for the thirst they generated,' Mr Dannhauser said. -- REUTERS

[Those crazy new zealanders! :-)]

Tuesday, June 10, 2008

Shrinking airlines mean higher fares, fewer routes

June 10, 2008

NEW YORK - BY the time United States airlines are done cutting capacity and shrinking to survive record fuel costs, the US commercial airline network will look a lot leaner and, for some consumers, a lot meaner.

That is because fares, especially on less crowded routes, are rising fast, and some flights may just disappear.

Analysts say that for the airlines, the new pricing power is long overdue - and consumers will just have to accept that cheaper air fares have disappeared for now.

'The days of affordable flying are over for now, and leisure travel could become a luxury,' said Ms Vicki Bryan, a bond analyst at Gimme Credit.

In a note to clients, Ms Bryan said routes to as many as 30 cities across the country have been cut, citing statistics from the Bureau of Transportation.

United Airlines parent UAL said last week it will slash its work force and domestic fleet, following similar cuts by rivals as the industry grapples with a weakening economy and oil prices that have doubled in the past year.

Over this year and next, UAL will reduce its mainline domestic capacity at least 17 per cent.

UAL's downsizing is consistent with recent steps taken by rivals.

AMR's American Airlines has said it will cut domestic capacity 11 percent or 12 percent in the fourth quarter and eliminate more than 1,000 jobs.

Delta Air Lines, which plans to merge with Northwest Airlines, has said it will cut 2,000 jobs through voluntary retirement and reduce domestic capacity by 10 per cent this year.

'As the airlines cut capacity and drive fares up, some people will be priced right out of the market and the airlines will go more for the business travel than the leisure travel,' said Mr Patrick Murphy, principal of aviation consulting firm Gerchick Murphy Associates.

Travellers flying between two noncompetitive markets over 1,500 air miles now pay at least US$340 (S$464) round-trip more than they did last December, according to Mr Tom Parsons, chief executive of, an Internet travel website.

Another airline analyst, Mr Ray Neidl of Calyon Securities, said in an interview: 'There is the danger that some very small markets may lose their commercial airline service, and that's something the government has to address.'

Amid the unprecedented fuel costs, airline experts generally agree that US airlines must cut capacity 20 per cent and raise fares 20 per cent just to stabilise.

Lehman Brothers analyst Gary Chase said the US airline industry is undertaking a restructuring twice as large as it did in the years following the attacks of Sept 11, 2001.

In a recent note, Mr Chase wrote that he expects the airline industry will need to raise almost US$3 billion in new equity over the next 12 to 18 months to shore up liquidity.

Mr Murphy added that major carriers will now focus on their hubs, international routes and business travellers.

'For them, it's just hunker down and hold on and hope they can hold on to their cash longer than their competitors,' said Mr Murphy. 'Most of them feel they have enough cash to get through the year but if fuel continues to climb and doesn't let up, even the major carriers at some point could run out of cash.' -- REUTERS

[Airbus went with the Hub-to-Hub concept and created the super-Jumbo A380 to work the H2H strategy, whereas Boeing betted on the Point-to-Point strategy and so the Dreamliner was conceived and will be born soon. But with flights being cut, and smaller destinations looking to be cut out of air routes, the H2H seems to be winning out over the P2P. Then again, maybe people won't want to fly so far. The Boeing strategy seems to be Amerigo-centric. Most US residents won't fly beyond their part of the world.

Whichever strategy wins, both new airliners will be more fuel efficient and that's good.]

Malaysia not giving up hope on Pedra Branca yet

June 2, 2008

KL seeking letter by British governor to Johor sultan to back up claim to island
KUALA LUMPUR - MALAYSIA has renewed its search for evidence to stake its claim to Pedra Branca, just over a week after the International Court of Justice (ICJ) awarded the island to Singapore.

Foreign Minister Rais Yatim said he has directed his officials to try again to trace a letter written by British governor William Butterworth to the temenggong and sultan of Johor seeking permission to build Horsburgh Lighthouse on the island, The Star daily reported yesterday.

Dr Rais said in an interview with the paper that although the ICJ's ruling on May 23 was final and not subject to appeal, there was a specific provision in the court's rules that allowed for a judicial review of a case within 10 years if new evidence was found. He did not cite the exact provision.

'If we can gain sight of that letter, the gate can be opened again. There is a maximum 10-year period but preferably it should be done within six years,' he said.

During the hearing, Malaysia had contended that Britain had built and operated the lighthouse after getting consent from the Johor rulers.

In its argument before the ICJ, Malaysia had cited governor Butterworth's letters as one of the grounds for its claim to Pedra Branca.

The Star reported that a search for the 19th-century letter had covered 40 institutions in 11 countries, including Britain, India, Australia, New Zealand, the United States, the Netherlands, Portugal, Hong Kong and Malaysia.

'The letter could be in London...We have searched with them but it has not been conclusively proven that they don't have it,' said Dr Rais.

'Probably it is in Singapore. That would be a double jeopardy,' he added.

During the hearing, Malaysia had insinuated that Singapore might have hidden two 1844 letters from governor Butterworth to the rulers of Johor seeking permission to build a lighthouse near Point Romania on the Johor coast.

But Singapore Deputy Prime Minister S. Jayakumar countered that Singapore did not have copies of the letters, and had also searched in vain for them in various archives. He also pointed out that since the letters were sent to Johor's rulers, they were more likely to be in Johor than in Singapore.

Both countries also disputed the area referred to in the letters for which permission was sought. Malaysia said it included Pedra Branca, while Singapore maintained it referred to another group of islands.

Dr Rais said Malaysia could introduce a separate motion to the ICJ if the letter was found.

The ICJ ruling has raised much unhappiness among Malaysian MPs.

Earlier last week, an Umno MP lambasted the government for not archiving its historical documents properly, and thus failing to locate the Butterworth letter.

Following the ICJ's ruling - which awarded Pedra Branca to Singapore and Middle Rocks to Malaysia - the two countries now have to work out how to delimit the territorial waters in the area.

The court did not make a definitive ruling on an outcrop, South Ledge, which is visible only at low tide, saying it belonged to whoever owns the territorial waters it sits in.

Dr Rais said he would propose to Singapore that the waters be opened to fishermen from both countries and also Indonesia.

[Comment: When I first read about the ICJ decision, I was thinking, "shit! what a dumb decision. Probably political decision. Do a Solomon "split the baby" decision. And pass the buck on South Ledge some more."

But now, on reflection and with the above story, I think it was the best possible decision for Singapore. Since the ICJ explained that as far as they were concerned, Pedra Branca originally belonged to the Johore Sultanate. However, after the lighthouse was built, and after Singapore started to exercise sovereignty over the island, Malaysia's silence was implied consent that Singapore was the legal owner of the island.

Thus, even if Malaysia do succeed in finding that letter, it would not have any relevance it changing the decision. It would have confirmed that the ICJ was right in deciding that the island did originally belong to Johore, but that subsequently, Singapore and Malaysia behaved as if the island belonged to Singapore until Malaysia published the maps in 1979.

On hindsight, it was a good decision for Singapore.]

Saturday, June 7, 2008

For the love of God, stop grandstanding

June 7, 2008

By John Bradley
A RECENT effort in Malaysia to ban non-Muslims from using 'Allah' as a synonym for 'God', on the pretext that it could 'confuse' the country's Muslim majority, has dealt another blow to the country's reputation for pluralism.

The Herald, a Roman Catholic newspaper, last month cleared the first hurdle in its legal bid to contest the government's decision not to renew its licence unless its Malaysian-language edition ceased to use the word 'Allah'.

In the midst of the controversy, a senior official from Malaysia's Internal Security Ministry said: 'Christians cannot use the word Allah. It is only applicable to Muslims. Allah is only for the Muslim God.'

The statement is contentious on a number of levels. For a start, 'Allah' is an Arabic word used for centuries by Arab Christians as a synonym for 'God', even before Arabic-speaking Muslims existed.

The Malay translation of the bible, in which the word Allah appears, has been used by Christians since the church's earliest days.

More worrying is that the statement paradoxically echoes those of numerous anti-Muslim bigots in the West which portray Muslims as worshipping a God 'different' from that worshipped by Christians and Jews, reinforcing fears that Islam poses a threat to Judeo-Christian values and civilisation.

Remember Lieutenant-General William 'Jerry' Boykin? He was named US deputy undersecretary of defence for intelligence in 2003.

In 2005, while recounting a military battle he had fought against Muslims in Somalia, he declared: 'I knew my God was bigger than his. I knew that my God was a real God and his was an idol.'

When politics, culture and religion are entwined, ignorance usually triumphs. The political motivation for Lt-Gen Boykin's outburst was the US-led 'war on terror', especially as he was addressing a key Bush administration power base: evangelical Christians.

Similarly, Father Andrew Lawrence, editor of The Herald, told the BBC that 'politics and a general election' were the main reasons why the Malaysian authorities decided to raise the issue last year.

But there's also a cultural reason why a Malaysian official could so casually refer to a 'Muslim God': the emergence into the mainstream in Malaysia of Wahhabism, the extremist interpretation of Islam sponsored by the Saudi royal family.

Wahhabism was founded two centuries ago on a belief in the superiority of (Sunni) Muslims and the damning of Jews and Christians as 'infidels'. Historically alien to the diverse Muslim cultures of South- east Asia, Wahhabism spread like wildfire throughout the region in the wake of the 1970s oil boom.

The Saudi religious establishment spent tens of millions of dollars to fund mosques and universities, and offered lucrative scholarships for foreign Muslims willing to complete their religious education at Wahhabi-controlled institutions in Riyadh. It's no coincidence that the ban on Malaysian Christians using the world 'Allah' was first introduced in the early 1980s.

That politics and culture, rather than sound religious understanding, are really at the heart of the debate over the use of the word 'Allah' becomes obvious when Malaysia is compared with Egypt. It, too, has a sizeable Christian minority and a long tradition of Islamic pluralism.

Christians and Muslims in Egypt have lived peacefully together for centuries. But in the 1970s, millions of Egyptians began working in Saudi Arabia, and in many instances, when they returned, they propagated their newly learnt Wahhabi doctrine. At the same time, the Muslim Brotherhood was invited back from exile in the Saudi kingdom, and given a greater role in politics.

The result: Egypt's Christians suddenly found themselves under violent attack. Last week, three Christian workers were shot dead in a Cairo jewellery shop by assailants who stole nothing, while in Upper Egypt, three monks were kidnapped by Muslim extremists protesting against the renovation of a church. Egypt's Christian minority is voluntarily shunning Islamic-inspired terms and expressions.

Instead of greeting one another with asalam alaikum (peace be upon you), many now say ahlan (hi). Before starting a meal, instead of saying bismillah (in the name of Allah), they say bismasalib (in the name of the cross).

Where once they said without thought alhamdullillah (praise be to Allah), they now utter nushkrailrub (we thank our Lord).

In a recent Los Angeles Times article on God vs Allah, which was critical of the Malaysian government's stance, the Lebanese-American novelist Rabih Alameddine wrote: 'We never say the French pray to Dieu, or Dios. Having Allah be different from God implies that Muslims pray to a special deity.

' It classifies Muslims as the Other. Separating Allah from God, we only see a vengeful, alarming deity, one responsible for those frightful fatwas and ghastly jihads - rarely the compassionate God.'

Creating more differences 'is troubling, even dangerous', he concluded. 'I suggest we either not use the word Allah or, better yet, use it in a non-Muslim context. Otherwise, the terrorists win.'

It's advice that the Malaysian authorities might benefit from.

KL makes right fuel move

June 7, 2008

THREE days ago petrol in Malaysia cost RM1.92 a litre, a false rate kept low by subsidies. The price is now RM2.70, up 41 per cent, but still cheaper by half than in full-price Singapore. Malaysians have been put on notice they could be paying RM4 by August, when most price supports will have been removed. Diesel is up by 63 per cent and electricity charges will be raised next month. These adjustments dictated by the oil price hovering around US$130 a barrel are easy for the Malaysian government to justify: The savings of RM14 billion will lighten the impossible burden of a RM50 billion fuel subsidy taxpayers will have to bear by the end of the year if prices were unchanged. The country has been running Budget deficits, with the fuel subsidy at 7 per cent of GDP being one of the highest ratios in the world. The comparative ratio in Indonesia, a notorious case of price coddling demanded by street agitation, was to be 3 per cent, considered worrying, until prices were raised by 30 per cent last month. India and Taiwan have also raised regulated prices.

Malaysians accustomed to cheap car travel and marginal businesses sustained by cheap fuel are bound to punish the government of Prime Minister Abdullah Badawi for what to them would seem a badly timed move. For comparison, a simple matter of road toll charges being increased has frequently caused public commotions. What now, when the fuel spike, on top of food price movements, could double the inflation rate to 6 per cent, say economists. And the national oil company Petronas is rolling in riches, with each US dollar increase in price bringing the nation RM250 million more a year. The people have some vengeful nervous energy left over, even after having taught the neglectful Barisan Nasional government a lesson in the recent elections.

But they would be wrong and unjustified to take it out on PM Abdullah or his government. They should, as the Prime Minister has advised, change their habits, like driving less. He has been brave and decisive in cutting the subsidies. These are not only unsustainable to the Treasury but are also wrongly targeted in their aim of helping the poor. A study of fuel subsidies by the International Monetary Fund found that the richest households, not the poorest, gained the most (by 42 per cent against 10 per cent) from their use of big cars and air-conditioning. The comparable gap in Malaysia would be smaller as car ownership is fully democratised in a country with patchy public transport, but it makes sense for the saved ringgit to go into social programmes like health care and education. The government should be supported in its effort of putting public funds to more productive use to help the poor, not for discretionary consumption.

[Comment:The fuel subsidy wrongly benefits the Thais - I hear they drive big tankers over the border to get the cheap fuel - and Singaporeans - who have been enjoying relatively cheap food from M'sia due to the low fuel and transport costs.

It is a courageous and unpopular move by Abdullah Badawi. I wonder if he is choosing to make all the unpopular moves now, take all the blame, and then hand over to Najib so Najib can begin with a clean slate?]

S'pore rig builders win $1b of deals to build four rigs

June 7, 2008

SembMarine unit and Keppel Fels secure contracts from Norway-listed Seadrill
By Michelle Tay
ROCKETING oil prices are causing plenty of pain worldwide, but they have ignited a gusher of gold for Singapore's blue-chip rig builders.

Firms are winning huge orders - seemingly by the day - from oil companies that see deep-water exploration as a way to find new fields and reduce their dependence on the Middle East.

Orders were pumping at full volume this week. PPL Shipyard, a unit of Sembcorp Marine (SembMarine), and Keppel Fels, a subsidiary of Keppel Offshore & Marine (Keppel O&M), yesterday secured contracts totalling $1 billion to build four rigs.

PPL Shipyard will build two deep-drilling offshore rigs worth a total of US$430 million (S$588 million). Keppel Fels has been contracted to build two similar rigs worth US$420 million.

The four rigs - all for Norway-listed Seadrill - will be able to drill down to 9,100m. They will be delivered in 2010.

These deals came after Keppel Fels secured a US$537 million contract on Monday to build an ultra-deepwater semi-submersible rig for Texan oil firm Ensco. That would be delivered in 2012.

Two days later, it announced that Brazilian oil and gas giant Petrobras had contracted the firm to build a rig worth US$385 million.

The shares of both firms have recovered well from their year lows. SembMarine is up more than 50 per cent from February, while Keppel Fels' parent, Keppel Corp, has advanced almost 30 per cent since its March slump.

But their bulging order books tell a more dramatic story of the sector's remarkable boom over the past three years.

SembMarine's total order book for jack-up and semi-submersible rigs was $4.4 billion in 2006 and $5.4 billion last year. Total orders this year are even better, standing so far at $6.7 billion, of which $1.86 billion comprise new deals.

Keppel Fels' orders at the end of 2005 were $7.2 billion, $10.5 billion a year later and $12.2 billion at the end of last year. It is now approximately $13.5 billion - with new orders, including yesterday's Seadrill deals, totalling $3.5 billion so far this year.

Keppel O&M chairman and chief executive Choo Chiau Beng said: 'In recent years, we have witnessed an unprecedented surge in demand for oil rigs. Ten years ago, we had about five newbuild rigs in our yard. Today, we have 43 in various stages of construction across our yards worldwide.'

He added that last year, half of the world's new jack-up rigs were delivered by Keppel O&M, which employs more than 27,000 worldwide.

Singapore now accounts for 70 per cent of the world's jack-up rig-building market with more work to come.

SembMarine said demand continues to be strong, with orders trending towards deepwater rigs as high energy prices make such costly ocean exploration and drilling much more viable.

Mr Alf Thorkildsen, chief executive of Seadrill Management, said: 'Our focus will continue to be on the deepwater segment.'

Financial services group Nomura reported last week: 'With high oil prices seemingly here to stay, oil companies should step up offshore prospecting, and we believe the boom in drilling activity will continue well into 2009 and 2010.'

It added that total exploration and production spending will rise by more than 11 per cent this year, marking the sixth consecutive year of double-digit growth. That means the flow of orders to Keppel Corp and SembMarine is likely to stay robust, with both firms developing sound track records with the big guns in the industry.

Mr Choo added: 'The level of inquiries and customer interest remains positive. This indicates that the rig market, in the next few years, will remain healthy.'

[Comment: The last time there was such good news for our rig builders, there was bad news down the road when the US$ dropped and their profits evaporated. I hope this time they have better sense and signed the contract in a more stable currency.]

Friday, June 6, 2008

A tale of two cities

June 6, 2008
Singapore's poor turn to temples to fill bellies
SINGAPORE - WEARING a pair of worn grey slippers and dirty Bermuda shorts, Mr Quek hungrily chews mouthfuls of free vegetarian noodles on the second-level canteen of a Singapore temple.

The unemployed 31-year-old is one of many Singaporeans increasingly turning to free meals at temples to fill their stomachs, as surging global commodity prices hurt, even in a country that is one of the richest in Asia.

The Singapore Buddhist Lodge, where Mr Quek eats every day, is now serving up to 5,000 people on weekends. It has seen a 30 per cent rise this year in the number of people coming for meals, as well as a rise in donations.

'We saw the increase happen when the markets started to go bad and inflation started rising,' said Mr Lee Bock Guan, the temple's president. The Buddhist Lodge cooks about 400 kg of rice every day and up to 10 vegetarian dishes to serve to the masses.

Long lines of strained faces wait inside to scoop up ladles of rice, noodles and stir-fried dishes. They then stand next to walls to shovel in the food if they can't find a spot at packed tables.

Most are elderly or labourers, in a country that has the second highest GDP per capita in Asia after Japan but ranks alongside the Philippines and Guatemala for income disparity.

Singapore says combating inflation, at a 26-year high, is a priority and the government is worried about a widening income gap. A dozen opposition party members were arrested earlier this year for protesting about rising prices.

The government says welfare should not be a crutch and there are no food subsidies, unemployment benefit or minimum wage.

Buddhist, Christian, Taoist and Sikh organisations in Singapore give out free food to help the poor. The country is 54 per cent Buddhist, 13 per cent Christian and 15 per cent Muslim.

Kong Meng San Phor Kark See Monastery, which gives free meals to about 200 people daily, has also seen a rise in numbers.

'We don't count how much it has gone up, we just keep cooking. Once one batch is finished, we keep refilling,' said Mr Sheng Hua, spokesman for the monastery.

Food prices have been a key driver of Singapore's annual inflation hitting 7.5 per cent, the highest since 1982. Global rice, corn and wheat prices have all hit records this year.

'I have no choice. You go outside and eat, food now is very expensive. Here it's free so I can save a bit of money,' Mr Quek told reporters.

At the Central Sikh Temple, which serves free vegetarian Indian meals to 600 daily, the rising cost of food is affecting handouts.

'Our costs have doubled since last year. We are already curtailing the number of hours we give away food. We will have to be more prudent - if it really gets out of hand, we may have to reduce further,' said Mr Dilbagh Singh, vice president of Central Sikh Gurdwara Board. -- REUTERS

June 6, 2008
Downturn forces more in US to rely on free food
MONROE (Georgia)/DOUGLAS (Arizona) - IN the richest nation on earth, a rising number of people line up for free food because they are struggling to put meals on the table at home.

Demand at food banks in the United States is up 15 per cent to 20 per cent over last year and many food banks are having difficulty coping, according to America's Second Harvest, the largest United States food bank provider with 200 in its network.

Food bank networks procure nonperishable and fresh produce from suppliers, then stock it in warehouses before distributing it via a chain of community food banks across the country.

The total number of people who use them is not known but the upward trend is one sign of a US economic downturn in which soaring fuel costs and the rising price of other basic goods have pushed many people on low incomes or without jobs into hardship.

The banks say more people with steady jobs are turning up at their centers to wait in line, fill out forms and collect rations of free or reduced-price food. In a parallel development demand for government food stamps is also rising.

'Having a (low wage) job isn't enough anymore. Having two or three jobs isn't enough anymore,' said Ms Marcia Paulson, spokesman for Great Plains Food Bank in North Dakota, where nearly half the households receiving food stamp benefits have one or more working adults.

Ms Olga Medina's story illustrates the dilemma for many on low wages who said they considered their need to resort to free food a humiliation in a country that prides itself on independence and stresses work as a sure route to success.

Ms Medina works full time providing homecare for old people in Douglas, on Arizona's border with Mexico. She said she earns US$1,100 (S$1,500) a month with which she also supports her parents and a sick son, but is unable to make ends meet due to rising food and fuel costs.

Most weeks she forages for milk, fruit and vegetables in dumpsters outside the Safeway supermarket. One day last month she waited in line with 147 others outside the Douglas Area Food Bank for a grocery handout because she had no bread.

'We have to put up with a lot of humiliation just to survive,' she said, putting on a pair of sunglasses to hide tears. 'It's not dignified but we are hungry and hunger is ugly.'

Providing food
At a giant warehouse in Monroe, Georgia, scores of volunteers and paid workers using fork lifts or pallet jacks load food onto big trucks - everything from carrots to frozen spare ribs to canned goods.

The warehouse is part of Angel Food Ministries, a national organisation headquartered in Monroe that offers food at half price to people who need it. A typical food pack contains US$60 of family groceries and is sold for US$30.

The organisation, which is linked to a church, purchases food in bulk at a discount and passes the savings on to 500,000 families a month who use its service in 35 states, distributing through a network of churches.

Its founder, Mr Joseph Wingo, argued that perceptions that the US economy was doing better than is reported failed to take into account a different reality for millions of Americans, not least senior citizens.

'Go into any community that has been devastated by job losses and you will find there's more people (struggling to provide food) than you think,' said Mr Wingo, who set up the organisation in response to demand in Monroe.

Broken dreams
For Ms Selena Lewis, 28, who owns a boutique in Alpharetta, Georgia, going to the North Atlanta Community Food Bank brings an added irony - just last year she donated some of her money to the bank as an act of charity.

But the downturn has stifled demand at her boutique and some days she makes just a single sale, not enough to pay off debts and feed herself and her son and leading to a dilemma about whether to close the boutique and seek other work.

'I don't want to give up on my dream because the hardest thing to do is to start,' said Ms Lewis who said she gave up a high-paying corporate marketing job to start the boutique.

Her story illustrates how small business owners are caught up in the downturn, but problems exist at the other end of the spectrum of age and opportunity.

Standing in line at the Douglas food bank was Ms Brenda Salazar, a neatly dressed woman of retirement age, who worked for 25 years as a nursing assistant in the city.

Now disabled, she receives US$944 a month in benefits and food stamps, but after paying rent, utilities and gassing up her car, she had just US$16 for food to tide her over.

'I bought a gallon of milk, I bought a bag of green onions and a bag of grapes. It was US$17. It was three items .... Now I have to pray that God will put gas in my car.' -- REUTERS