Positive incentives needed to pull North Korea back from the brink

With North Korea taking its game of nuclear brinkmanship to the next level over the last week, the security situation in Northeast Asia is looking increasingly bleak.

The only country with any real leverage over Kim Jong-il's hermit nation, China, is not eager to raise the pressure on its neighbour beyond verbal condemnations for fear of harming lucrative trade relations or precipitating a humanitarian crisis that could see millions of refugees streaming across the border.

So what is the international community (or more specifically the other five members of the stalled six-party talks) to do about North Korea's seemingly inexorable march toward nuclear armament other than climb into the nearest bomb shelter, strap on a tin hat and hope for the best?

Earlier today, at the appropriately timed launch of a new Asia Security Initiative, I met a man who had some good suggestions.

Kim Byung-Kook is professor of political science at Korea University and a former national security adviser to the South Korean government.

He argued that North Korea's escalation of the last week - testing a nuclear device, firing short-range missiles and tearing up the peace treaty with the South - did not represent the random posturing of a diseased and paranoid madman (as some think) but was part of a "set schedule" with specific goals.

"North Korea is trying to get its version of security guarantees accepted by the five parties," he explained. "They are: 1. Recognition of North Korea as a de facto nuclear state. 2. The withdrawal of US troops from South Korea. 3. An orderly leadership transition."
The problem is that the first two aims are completely unacceptable to the five parties and to the US and South Korea in particular.

The key to resolving the crisis, Kim said, was in working out how to assure the North that its security was guaranteed and that there would be no interference in the transition of power from the ageing Kim Jong-il while at the same time not acquiescing to the North's demands for nuclear status and the removal of American troops from the South.

With so little room for negotiation, this will be an extremely difficult task.

"We need unity, patience and for the five parties (especially the US, South Korea and China) to start thinking seriously about what kind of positive incentives we can offer the North when the window of opportunity for talks comes," Kim added. "We shouldn't panic but we need to take the situation very seriously."

What a price a job? £700 says MBA graduate

At the height of the economic crisis in Argentina, desperate contestants battled it out in a bleak reality show called "Human Resources" where the ultimate prize was nothing more glamorous than a job.

Things haven't got that bad in Britain yet but one young MBA graduate became so fed up with sifting through newspapers every day for the handful of relevant recruitment ads that he decided to take matters into his own hands.

So Daniel Tudor, an ambitious 26-year-old Oxford graduate, gathered together his last £700 and took out an advert in The Economist, offering his services to all and sundry.
"British man, 26, Oxford graduate, now with added MBA...looking for interesting work anywhere..," it read.

As Daniel had recently completed an internship at The Economist, the ad sales department kindly gave him a discount on the going rate but £700 was still a pretty expensive gamble for a man without a job.

"It was pretty much all I had in the world", he jokes down the line from his parents' house in Manchester, where is currently residing after completing his MBA at Manchester Business School.

Unfortunately for Daniel, he was looking for a job in two of the sectors hardest hit by the financial crisis, media and finance. While he had worked for a while as an equity sales trader in South Korea before starting his MBA, his experience almost counted against him, making him over-qualified for a graduate scheme but under-qualified for a senior role.

So, almost eight weeks later, has his audacious move paid off?

As well as some expressions of interest from a hedge fund, an African current affairs magazine and a biotech startup, he also received a few stranger responses including "one fine gentleman from India who assured me that we could start a business together and become tycoons like Donald Trump".

After following up some of the saner leads, Daniel has now landed a three-month internship at a socially-responsible investment fund in Zurich, which may lead to permanent, properly-paid work if things go well. So well done, that man.

However, Daniel says he probably wouldn't advise others to follow his lead. Advertising your services in a newspaper or magazine may be a bold move for the first movers but it is an economic action subject to the law of diminishing returns - the more people who do the same, the less impact it will have.

"Part of the reason people wrote to me was that they saw it as an imaginative move," he adds. "I wouldn't say it was so imaginative, but that's the way they saw it, at least. And that effect would be gone if a lot of people started doing it."

You can check out Daniel's blog here and watch him perform on Mastermind in July.
If you have a better job offer for Daniel, feel free to let him know via the comments.

Asia has abdicated responsibility over Burma, says Anwar Ibrahim

Earlier today, I watched Anwar Ibrahim, the leader of the Malaysian opposition, give a very smooth and spirited performance at a lunch organised by Singapore's Foreign Correspondents Association.

While he answered a series of tough questions about Malaysian politics with wit and guile, he seemed particularly exorcised about Burma and the junta's treatment of Aung San Suu Kyi.

The normally supine Association of Southeast Asian Nations has spoken out for once against the latest sham trial of Burma's leading democracy campaigner. But Anwar was extremely critical about the failure of Asian nations to do more.

There has been an "utter abdication of responsibility in the region," he said, adding that the policy of constructive engagement in Asia (as compared to the sanctions imposed by the US, Europe and Australia) has "become a mockery".

"There's more construction than constructive engagement," he joked, referring to the eagerness with which Asian companies have rushed to help the Burmese generals build their new capital at Naypyidaw and other projects designed to cement their grip on power and augment their luxuriant lifestyles.

Anwar fits the classic mould of the economically liberal, pro-Western and media-friendly developing world opposition leader, which makes it very easy to get carried away by his rhetoric.

However, as Thailand's Abhisit Vejjajiva and Georgia's Mikheil Saakashvili have found, being embraced in the think-tanks and editorial columns of the West does not necessarily mean you have what it takes to resolve deep-seated domestic issues.

Let's just hope that the FT doesn't invite Anwar for lunch.

Even Malaysian politicians are laughing at our pilfering MPs

A few of the more establishment commentators have sought to defend our pilfering MPs by suggesting that the level of political corruption in Britain is nothing compared to Malaysia or Mexico.

That's a very complacent attitude, which ignores how much damage the ongoing expenses scandal is doing to the once-lofty reputation of Britain's parliamentarians abroad.

arlier this week, I went to a talk by Abdul Khalid Ibrahim, the chief minister of Selangor, one of Malaysia's most important states.

He is a senior member of Malaysia's main opposition alliance, which has won unprecedented public support by attacking the cronyism of the incumbent race-based government coalition.

But, whatever people think about corruption in Malaysia, he was in no doubt about how bad British politicians looked after so many had been caught with their fingers in the till.

"The quality of spending [in the Selangor state government] is much better than the parliamentarians in Great Britain," he said, to howls of derision among the usually quiescent academics in the seminar room at Singapore's Institute of Southeast Asian Studies.

The unacceptable cost of cheap labour

First thing in the morning and late at night, Singapore's tree-lined highways are full of lorries and trucks carrying a vital cargo: the migrant workers from Bangladesh and India who are the backbone of the Lion City's economic miracle.

Crammed into the rear deck, the only protection they have from the scorching sun and the perpetual downpours is a bit of plastic sheeting. But the weather is the least of their worries.

Before sunrise on Monday morning, four workers from India and Bangladesh set off from their humble quarters for the shipyard where they were employed. But none of them arrived at work after the lorry they were travelling in hit the back of a larger truck parked by the roadside and they were killed in the collision.

One of the victims had been travelling in the front passenger seat but the other three had been sitting in the back of their vehicle. Six others were injured but survived.

The fatal accident has once more brought the shoddy treatment of migrant workers in Singapore to public attention.

While cattle are transported in comfortable air-conditioned surroundings, Singapore's construction and shipping workers are afforded no such luxury.

The authorities only stipulate that each worker has at least 0.372 square metres of floor space and that lorries do not carry more people than they are licensed to.

210 people were injured while traveling in the back of lorries in Singapore last year and two killed. 186 were hurt in 2007 and two killed.

So long as unscrupulous companies are allowed to carry people in worse conditions than animals, the deaths and injuries will continue.

The Gulf state of Bahrain, which does not exactly have a reputation as a haven of workers' rights, has introduced a ban on using trucks to transport labourers.

But Singapore seems to have no intention of altering the status quo, largely because of the purported costs to business in a state that is dependent on external trade and investment. (It's obviously cheaper to pay the odd hospital bill and coffin shipping costs than it is to hire a mini-bus.)

It's a pretty despicable situation that reflects a xenophobic attitude to foreign labour. People are happy to milk the economic benefits of cheaply imported workers but are not so willing to accord them rights and respect.

Nimby-ist Singaporeans complain whenever a foreign workers' hostel is built in their vicinity and, according to one earnest writer in the Straits Times today, if migrant labourers were to be given public transport passes instead of being thrown onto the back of trucks, "some segments of the local population may complain about having to share standing space in trains and buses with foreign workers".

How I took on the Burmese junta and won

The repressive Burmese junta may have to put plans for an extensive new airport in their secretive capital Naypyidaw on hold after one of Australia's largest engineering companies pulled out of the project in rather hasty fashion because I exposed their involvement in the questionable development.

Rather bizarrely, the company in question, Downer EDI, claimed that it was unaware that its wholly-owned Singapore-based consultancy arm CPG had been contracted to design the airport until I informed them of the fact last week (see the full story here).

CPG was working alongside some pretty shady characters on this project and it really doesn't reflect well on a sizable publicly-listed company such as Downer, which is a constituent of Australia's benchmark ASX 200 share index.

Downer has also been a big donor to Australia's ruling Labor party, which has spoken out strongly against the Burmese junta and last year increased the scope of sanctions against the regime and its cronies.

But the company has moved to rectify the situation pretty quickly, saying it will pull out of the airport contract as soon as it can regardless of the possible financial penalties involved.

Most companies opt for damage limitation when caught out but not many executives would put their hands up so quickly and perform such a rapid U-turn. It's either a sign of how transparent and contrite they are or how seriously they believe they have erred.

I doubt the generals or their henchmen at Asia World, the Burmese conglomerate charged with building the airport, will be too pleased to have lost their major design partner. Particularly as they have worked with CPG, which used to be the Singapore public works department before it was privatised, in the past on other projects such as the redevelopment of Yangon (Rangoon) airport.

No international company with an ounce of decency should be involved in Burmese projects such as this that only benefit the generals at the expense of their people.

But I don't believe that extensive sanctions are the best way to curb the excesses of the vile military government in Burma and to promote democracy. The only hope for the country lies in greater engagement with the outside world, not more isolation.

Time to invest in Timor-Leste?

Finance ministers tend to be dour, uninspiring figures. Just look at the last two incumbents in Britain.



Emilia Pires, finance minister of Timor-Leste (East Timor), one of the world's newest and smallest countries, definitely does not conform to the stereotype.

With a Masters from the London School of Economics and experience at the UN and World Bank, she has all the necessary qualifications. But she's also an impassioned advocate for her nation as it strives to leave years of military occupation and social and political strife in the past.

I met the feisty minister at the ADB annual meeting in Bali last week, where she told me why it's time to start investing in Timor-Leste, with its abundant natural resources and stunning landscape, which she described as being like the Switzerland of Asia.

Nepal’s ambitious development plans under threat

Full marks to the chief economic adviser to the troubled Government of Nepal, Professor Sri Ram Poudyal, who was scheduled to make a presentation on the way forward for the Nepali economy at the ADB meeting today and went ahead with the seminar despite the rapidly-developing political crisis back at home.

I interviewed Professor Poudyal after his presentation and he admitted that the ongoing uncertainty would seriously impact the Nepali government’s ability to push ahead with its ambitious development plans.

As chief economic adviser to a government composed of Maoist former insurgents, he has the unenviable job of trying to marry double digit growth with a focus on promoting co-operatives and combating “feudalism”.

However, he stressed that the government was not taking a dogmatic approach to economic development and that its focus on distributive justice was not really a Maoist policy. “It’s what’s called equitable growth elsewhere,” he noted.

Nepal’s economy is seriously underdeveloped with, for example, the 70pc of the population that is employed in agriculture generating just 3pc of total GDP. Professor Poudyal wants to attract private sector and foreign investment as he strives to help the government transform the economy.

But this latest bout of political instability - described by some observers as the most serious crisis since the civil war between the army and the Maoists came to an end - will do nothing to convince investors that there money and faith is well place in Nepal.

After I had asked Professor Poudyal how he planned to generate rapid development while promoting communist policies, Xiaoyu Zhao, an ADB vice-president and former Chinese banker and finance official, jumped in briefly with a pertinent anecdote.

“In China we debated capitalism versus socialism for a long time but in the end we decided to go for economic development,” he said. “It doesn’t matter if it’s a black cat or a white cat so long as it catches the mouse.”