1. Indonesia unlikely to be affected by Greek crisis
Investors have factored in the Greek situation, say two experts
By Anggi M. Lubis and Grace D. Aminarti in Jakarta
The Jakarta Post/ANN
As in other emerging markets, share prices on the Indonesian Stock Exchange (IDX) mostly fell on Monday amid fears that contagion from the Greek financial crisis might spread to developing countries.
The Jakarta Composite Index (JCI), IDX’s main price indicator, slipped 0.8 percent to end the day at 4,882.58, after falling by 1.3 percent in afternoon trading.
The slump, however, was not as severe as other emerging markets, as analysts said investors had long factored in the Greek situation to their Indonesian investments.
Analysts said there were actually few worries about the impact of the Greek financial crisis on Indonesia. “But many investors sold their shares following the fall in share prices in other Asian markets,” an analyst said.
The MSCI Emerging Markets Index fell 1.8 percent to 962.8, the biggest slide since Dec. 1, 2014, Bloomberg reported.
Malaysia and Singapore led Southeast Asia’s tumbling indexes by diving more than 1 percent, while most Asia Pacific benchmarks — such as Japan, Hong Kong and China — registered more than 2 percent slumps on Greece updates.
“This [the slump] is purely psychological sentiment, driven by our only similarity with Greece, which is the fact that both Indonesia and Greece are emerging markets.
Our similarities with Greece are just the fact that both of us are emerging markets, falling under the same risk profile,” Universal Broker head of research Satrio Utomo said.
He said trading activities were still dominated by buy transactions despite the fall in the main price index. In fact, Satrio said that foreign investors booked Rp 80 billion (US$5.9 million) in net purchases in the regular market on Monday, higher than the approximately Rp 50 billion in the previous day’s trading.
Andreas Yasakasih, investment director of Valbury Asia Asset Management said there was nothing to worry about Greece, with no trade relations with Greece to directly impact Indonesia’s economy.
“If there is an impact from Greece’s possible default, it will be very indirect, such as from its creditors or with the euro if Greece proceeds to exit the eurozone. But even then the euro is still below the US dollar and Chinese yuan in terms of trading,” he explained.
Greece shut its banks and imposed capital controls in a dead-of-night announcement to avert the collapse of its financial system as the country edged closer to an exit from the euro. The move followed a weekend of turmoil that started with Prime Minister Alexis Tsipras’s shock announcement late on Friday of a July 5 referendum on austerity measures demanded by the country’s creditors, sending people rushing to line up at ATMs and gas stations. The risk of potential contagion if Greece leaves the euro spurred a 1.5 percent fall in the euro on Monday and sparked declines in Asian stocks.
Even ahead of the referendum, Satrio and Andreas said there would be no significant impact on the JCI, as investors might look forward to a potential hike in the US Federal Reserve’s fund rate and Indonesia’s economic growth.
The US dollar gained 0.24 percent on the rupiah on Monday to 13,339, still below its Malaysian ringgit gains of 0.43 percent.
Coordinating Economic Minister Sofyan Djalil said that Greece would only have a relatively small impact on the rupiah as compared to other currencies as Greece had been priced-in on currency-related policy. “What we consider will have an impact on the currency is when the Fed actually increases its interest rate by the end of the year [...] But there is still so much more to take into consideration other than that.”
“We can do only so much if the factors are from the outside. But we will certainly increase our foreign exchange reserves. Bank Indonesia has prepared everything necessary for this.”
2. Opposition in Hong Kong must stop sending out wrong signals
The opposition’s veto of the Hong Kong government’s historic electoral reform plans will change the face of Hong Kong society
By Ronald Ng in Hong Kong
It’s nihil est toto, quod perstet, in orbe, (there’s nothing in the whole world that remains unchanged), as ancient Roman poet Ovid once said.
Whatever one’s view of the blueprint before the legislators went to the vote, whether one supported or opposed it, it was already quite evident that the Hong Kong society had been split into two rival camps that are not just politically irreconcilable but, for some of the principal players, actually hostile and contemptuous of each other.
The politicians’ energy will likely continue to fritter away in arguing and fighting for whatever form of democracy each side deems to be appropriate, instead of being devoted to tackling more pressing social issues that have dogged Hong Kong for so many years — the sorry state of the housing problem, inequality in society, an aging population, how to maintain the city’s relevance in a changing world environment and in relation to the mainland in particular.
From the vantage point of an ethnic Chinese living overseas, and after observing how the central government has been dealing with Hong Kong since the handover, it’s obvious that Beijing doesn’t want Hong Kong to be a failed society. It wants Hong Kong to continue thriving to show Taiwan that it’s possible to have one country with two systems so that Taiwan would willingly rejoin the motherland. The fear that Beijing might somehow bring its system to Hong Kong did not materialise.
But, it’s also obvious that Beijing fears Hong Kong will be used as a base to subvert the mainland system. Hong Kong opposition politicians should take heart from the fact that the central government has no intention whatsoever to impose its own system on the SAR and, at the same time, should assiduously send signals to Beijing that they are not embarking on any move to subvert the mainland system so as to protect Hong Kong’s way of life and system.
But, some in the “pan-democratic” camp have failed to do that. There are still people toying with the idea, as though it’s their responsibility, of promoting “democratic advancement” on the mainland, and covertly seeking the help of some Western governments. They are sending out totally wrong signals.
With the reform proposals failing to get through the Legislative Council, coupled with the awkward way in which the pro-establishment lawmakers walked out of the LegCo chamber and brought the debate to an undignified close, what could be expected of Beijing’s reaction? Would Beijing soften up and open a dialogue with the “pan-democratic” camp? That’s perhaps just an optimistic way of looking at the picture.
As I had argued in a previous article, Hong Kong’s way of life is safeguarded by more than just a democratically elected leader. It is protected by the Common Law, separation of the three branches of government, trial by jury and the Independent Commission Against Corruption. These institutions of government are as important, if not even more so, in preserving Hong Kong’s cherished uniqueness.
It’s worth remembering that Hitler came to power by the ballot box, and universal suffrage is not an absolute guarantee of freedom and democratic rights. Under the British colonial government, Hong Kong had enjoyed peace, prosperity and plenty of freedom, including freedom to criticise the government.
What happened in LegCo has made everybody a loser. To make everybody a winner again, and to use that tired hackneyed phrase, to turn it into a “win-win” situation, there must be more trust all round. How about getting it started by sending a very clear signal to Beijing that Hong Kong is not going to be a base for subversion, and that Hong Kong politicians are only interested in bettering the lives of Hong Kong people, and not in mainland politics.
The author is a former Hong Kong resident and presently a naturalised Singaporean and practicing hematologist.
3. Quo vadis, Pakistan?
Pakistan can survive, but not without fundamental and sustained structural change
By Ashraf Jehangir Qazi in Islamabad
Pakistan's population is probably 200 million today. It will be 350-400 million by 2050. Given climate change and the trend lines of our vital national indices the country’s future is in serious question. Karachi’s wretched plight is engulfing the rest of Pakistan where low lives in high places callously contrive to win zero-sum games against their own people! The people suffer indescribably every single day because of them. Corruption, whether political, administrative or military, is institutionalised and systemic.
Political leaders alternately challenge and pander to the military as part of their degenerate strategies. They treat ordinary citizens as ‘cockroaches’. Those who can stop them, but do not, are complicit. The people desperately want to get rid of them. But they are constrained by political circuses, economic crumbs, intimidation and hopelessness. An informal economy, external inflows and private charity merely delay the day of reckoning.
Pakistan is still manageable. It can survive, even flourish. But not without fundamental and sustained structural change. Incremental approaches are covers for inaction. Specific transformation strategies can be evaluated.
But our parasitic elite will never consider good governance which requires them to see Pakistan as larger than themselves. Instead, they prefer being tax cheats, making false promises an art form, stowing away ‘untold billions’ in safe havens abroad, and updating their exit strategies.
Military rule — overt or covert— has no answer to the nation’s challenges. Criminal civilian rule leads to military takeovers, as is happening once again. The concept of civil-military relations is meaningless without civilian supremacy and good governance. In Pakistan CMR is based on the military’s political supremacy which is unconstitutional. Fake “democracy” does not evolve into genuine democracy. It perpetuates the rule of deceit and plunder.
The military, moreover, cannot become a national institution if it remains a political institution. Pakistan’s interests and Punjab’s interests remain out of joint. That is why the original Pakistan died an early death. If this situation continues, either Punjab will conquer the rest of the country, or the country will break up because of domestic resistance and external intervention. A soft and failing state can never become a democracy. The situation is indeed dire.
During the Long March Mao Zedong wrote “So little time; So much to do!” In 1949 he proclaimed “China has stood up!” Look at China today! Deng Xiaoping believed democracy is what it does, not what it claims. Lee Kuan Yew observed “Democracy is the Rolls Royce of politics provided you can keep it. If you cannot it is the worst investment you can make.” He also noted: “If you give a man a vote without providing him a stake in the nation he will ask for the moon.”
Professor Ernest Gellner observed that Islam is more compatible with modernism and democracy than any of the other great faiths. But unfortunately our faith has been hijacked by wily professionals and extremists who mislead and terrorise honest believers. They have friends in high places.
It has been said ‘one step in the right direction and a journey of a thousand miles is a thousand miles no longer’. We have yet to take that first step although we have travelled far in the wrong direction. The journey today is longer than ever.
We must plan specifically and implement rapidly and resolutely. This requires constant public communication and inclusive feedback to maximise ownership of policies. No one person, party or institution should presume to impose a particular view of the national interest. That has ensured national disunity. Discussions and recommendations are, however, essential.
The national interest: To transform Pakistan from a dysfunctional and failing state into an effective, inclusive and participatory state and society. This is the Transformation Imperative. It requires national priority for human resource and institutional capacity development. It entails the maximisation of the quantity and quality of economic growth based on equitable distribution, the maximum mobilisation of indigenous resources and the full range of rights protections. The security and defence of the country should be optimised within this transformation paradigm. Economic policies must be pro-poor while encouraging responsible and profitable private enterprise.
Democracy: The Constitution does not mandate democracy’s systemic mockery based on the exclusion of the people through irresponsible parliamentary government.
Terrorism: This is a product of a lack of good governance, justice and opportunity. Counterterrorism, without addressing this situation, increases terrorism instead of checking it. Short-term operations outside the context of longer-term nation-building strategies add up to nothing.
Balochistan: The Baloch people have been denied their rights and entitlements. The government — civil and military — remains in denial. A Baloch-Pakhtun divide is being created to facilitate exploitation and dominance. Indian interference is a consequence of this pathological situation. The Baloch narrative is one of alienation and exploitation, not external interference. The murder of non-local residents and workers is a crime facilitated by political exclusion and repression. A truth and reconciliation commission is indispensable to facilitate solutions to the tragedy of all ‘missing and murdered people’ and the creation of social and economic conditions for political stability.
Foreign policy: This largely consists of policies towards India, Afghanistan, China and the US. Rational and coherent policies on these fronts will create conditions for foreign investment and an improved international image. It will maximise Pakistan’s options.
A peaceful neighbourhood and conflict-free relations, even with countries with which unresolved issues inhibit full normalisation, are essential. An improvement of ties with India can significantly facilitate Pakistan’s transformation.
This does not mean unprincipled compromise on Kashmir or any other issue. However, policies towards India and a Kashmir settlement must not obstruct Pakistan’s domestic transformation. Otherwise, it will only disguise class conflict, betrayal of the people, and continuing failure to meaningfully support the political and human rights struggle in Kashmir.
Our Afghan brethren must begin to experience the credibility of our highest level undertakings to them. Otherwise, we will once again outsmart ourselves. Rhetorical assurances and statements may satisfy for a while. They cannot substitute for consistent policy.
Pakistan cannot strategically partner a globally emerging China without transforming itself.
The writer is a former ambassador to the US, India and China and head of UN missions in Iraq and Sudan.