Dictatorship, Democracy, Dictocracy

While the Greek government faced intense pressures from Germany and some of the other European countries to accept more and more austerity that will clearly be rejected by most Greeks, the Greeks appeared to have come up with an interesting way to deal with it – To not have a government! Is that possible??!! Apparently, it is possible in a democratic nation. 

According to Floyd Norris, the Chief financial correspondent of the New York Times and The International Herald Tribune, the elections in Greece held on May 6^th, 2012 “seemed to draw an impasse over the formation of a government”. The two traditional parties got fewer than a third of the votes between them, which may be fitting considering that they were responsible for Greece’s current predicament. Nearly all the rest went to parties that opposed the austerity deal but also despise each other. 

So what happens if no winner is formed? Well, if no coalition government can be formed, a caretaker administration would be formed – with no mandate to do anything- and new elections called; with no assurance that a second or third election would settle anything. 

As I was flipping through the New Straits Times of the 27^th of May 2012, I came across an article that made me realize something. People are still oblivious towards race and religion and what’s more, they have a preconceived idea that a person who practices a certain religion would have a far superior knowledge on the religion than that of a person who doesn’t. Religion, as many think, can’t be immaculately conceived in one’s mind! 

When the oldest opposition party leader of Malaysia Datuk Nik Abdul Aziz Mat stated that only a Muslim can and should be the prime minister of Malaysia, I honestly felt perplexed by his ignorance. Granted that Islam is a predominant religion in Malaysia as it is practiced by many in Malaysia, it must not be used to determine the political scene of a nation. It somewhat spells out that non-muslims are insensitive towards the Muslim faith.

While I was in college I had the privilege of learning on world religions from the late Dr. Renuka, a born Hindu (Brahmin) who had an endless reservoir of knowledge when it came to any religion. As a matter of fact, she inspired me to learn up more on religions. And during my studies with her, she had made me understand that religion was something that drew a pattern of the rights and wrongs that helped guide people through life. When a person knows, without the need of reference, of the rights and wrongs of life, then he is beyond religion. 

Malaysia is still young in many ways. But that should not be reason for its ignorance. Tun Abdullah Ahmad Badawi was quoted saying “Malaysia has first world infrastructure but third world mentality”. The validity of that statement can be seen to resonate in the actions of the many that seem to be taking the front pages of our Malaysian newspapers. To change such mentality, one must find ways to look beyond religion and race and understand that human beings act the same way, it is only the cultures that make them vary. Religion is just an add-on to a person’s life. It should function as a point of reference and nothing more. When one lets religion dictate one’s life, he becomes a slave to the religion with God as nothing but a tyrant. Heaven is on earth. Not finding it now and hoping to find it after death is what I call PROCRASTINATING. So go find it, if not you, for GOD’s sake! 

Many, at this point, might look at this article as nothing but another petty rant of a youth. The generation that wants to be heard… Also many might be confused as to why there is not link between the ideas in the article. Well, is there a naturally existing order in the universe or is there order because we gave it? The Greek scenario can happen in Malaysia because of the politicians themselves – ruling and non-ruling party alike. 

If religion and race are going to be taking centre stage, Malaysia will soon face social problems caused by political parties, with the possibility of riots happening all over again (and please know the difference between a RIOT, PROTEST and RALLY). As a nation participating in the current global economic scene, we, as Malaysians, can’t afford for such mishaps. Malaysians are becoming aware that we can either vote for, vote against, or just not vote, whichever is the lesser of evils. Talking about religion and race which stirs up mud in the social pool would certainly not be welcomed by the general masses in the near future. So start working on ideas on uplifting the country and work towards common goals that would benefit MALAYSIANS (no matter what their ethnicity may be). Don’t know where to start? Well, get rid of the race and religion columns from official forms…

By,

Ashveen Chakravarthy Sekaran

2^nd June 2012

THE GREEK DRAMA

It starts with a note of melancholy, with the wailing and tears of the people over the fallen body of Greece. The pains and grievances of the society, making the air dense with the echoes of such hopelessness, that even the blunt mind of an ex-veteran military personnel who fancies doing butt exercises in front of other people’s houses, could cut through it… As the carcass of Greece decomposes, the putridity attracts vultures while driving away radiance and sunshine – leaving nothing but darkness. As the dark clouds gather to block the last bit of sunlight, the people raise their hands to the heavens praying for hope.

As the chorus sings of this tragedy something is heard from a distance. As the sound comes closer and closer, the wailing starts fading, allowing the people to identify the sound to be close to a purr of a strong engine. And then, right then, a strong burst of light rips through the dark clouds and in dives, from the heavens, a fleet of Mercedes S500, clad in metallic black armor that could only be owned by the war angels. The fleet then encircled Greece’s body and parked around it, with just enough space for one more of its kind. Then a ray of golden light poured from the heavens and brought in a white Mercedes S500 which could only be made by the god themselves!

The Mercedes descended, and landed in the opening that was left. When the doors opened, the air was ridden of the stench and was replaced by the sweet, intoxicating scents of Hugo Boss and Chanel. Then, out stepped two angels, one dressed in what seemed to be Escada while the other, Louis Vuitton. The people gazed in awe as these angels approached Greece. Then, they knelt by the body of Greece, took out their cards and swiped it on Greece. Almost instantaneously Greece was awakened with all signs of decomposing vanished! And the people cheered the angels and merry were the streets!... Until one nut cracker decided to point to the angels and shout “DEMON”!

  Basically that is what happened and is happening in the Eurozone today. Although the Greeks were rejoicing when they received their “bailout”, they didn’t seem to understand that without proper planning things could go ugly. And the natural human reaction to that would be to blame, first Greece and then whoever who brought it back to life. And unable to take such pressure (which is great in many levels), Greece is deciding to leave the Eurozone. And if this happens, the rest of the Eurozone who helped Greece in the bailout, could kiss the thought of being paid back in full goodbye, a similar predicament that happened during the Greek restructuring that occurred in March. 

There is a lot of discomfort in the global economic scene at this moment, namely amidst the European tax payers and the commercial banks as the exit would generate a price tag of $625 billion. And with the failing and destabilizing that could take place in the already vulnerable European financial system, a domino effect would be imminent. With credit ratings that are already riding the slippery slope, investors are almost deeming the Eurozone unsafe for foreign investments. 

With the jobless rates hitting an 11% mark, social implications are becoming rather visible In Greece. The people have lost hope on the government on its mismanagement of the crisis. This same sentiment has been echoed by the whole of Europe on a geopolitical level. Even in Netherlands and France, the economic pain is nourishing the growth of parties on the far right and left as voters lose faith in main stream political leaders. To be honest, this ideology would intensify if Greece were to leave the eurozone. 

But the Greek dilemma has both sides. A Greek exit might also be good for the nation as it would allow for the creation of its own currency. It could devalue its money thus effectively bringing wages down to a level where the country can compete in the international export market especially since the efforts of the eurozone seem to be more like teaching a person who lives in the desert plains, to fish. 

But if the exit happens and currency is changes, there are VERY high possibilities that the courts around the world would be clogged with lawsuits as Greek companies and leaders fight about whether the contracts should be paid in Euros or the new currency. What’s more, courts might even seize Greek assets to enforce claims, paralyzing the Greek financial system.

Greece is not the only one that is expected to ride the greased slippery slope, no pun intended…( It was funny in my head though…)  The world is now worried if Spain is going to be following suit. With a population and economy 4 times greater than that of Greece, Spain’s fall might be far worse a hit to the global economy. But I don’t foresee that happening so soon (at least from my point of view). With the Spanish government debt at 69% of its Gross Domestic product (GDP) it is still relatively safe in comparison with Greece that has a debt ratio of 165% to its GDP. 

But there are some differences that might put Spain on a whole different playing field when it comes to determining on the time to blow the horn. While Greece holds mostly public debt, Spain hold private i.o.u’s. This became so, when the real estate boom occurred in Spain where Spain had given out loans summing to $663 billion. And since the burst of this bubble, there has been more unemployment in Spain compared to Greece and it would need $200 billion to assist in its restructuring, which the Spanish government can’t quite accomplish without European help. 

However, the similarity is that Greece and Spain both have an economy that is not competitive. And this, in turn, would retard growth. The two nations face a long restructuring process of its social services and its business markets that will test the fortitude of its people. 

So while the merriness has lifted from the streets and people looking more like an angry mob, the angels are in a dilemma. Just then, a thunderous roar sounded from the skies and bright flash of lightning split the heavens and came rushing down to earth. And just by a micro miscalculation, what was sent to stop the mob fried the Louis Vuitton clad angel instead. Realizing the error, the gods rectified this mistake and sent another angel, wearing Jean Paul Gaultier, to assist the Escada wearing angel. The spectacle had stopped the mob but had given birth to a new problem. The two angels could not get along….

The recent elections that changed the French government and with the German Chancellor and French President unable to come to an agreement on the austerity plan, Greece is growing weary (although they are not really in a position to do so), and is literally threatening to leave the Eurozone. It is this unsettled issue that has caused and is causing the current economic downturn.  

Until they come up with something decisive, even if it is to confirm the exit of Greece, the economy will continue to gallivant in the red-zone. With the Greek elections around the corner, decisions (temporary or permanent) better be made; at least consider taking the lesser of two evils, if such a case were to present itself! Or in any worse case scenario, those unemployed in Spain and Greece could come to Malaysia and set up lasagna and pizza stalls in front of our homes since the Malaysian authorities are very compliant with such things…

Scene ends with chorus wailing on a high note with the angels wielding their swords at each other!

FinTips - April 2012

Finally, Spain has sounded the horn! About time if you ask me. With the escalating pressures on its economy, it is interesting to know that it took the nation such a long time to seek the aid that they now seek. And trust me, things are not going to look “peachy” just yet. 

I do not want to be the bringer of bad news (as I have been perceived by quite a few since my article on the  impending doomsday), but NASA just sent out an alert that we might actually be facing a global catastrophe on the 21^st of Dec 2012 and governments have been urged to take needed precautions. With the increased frequency of solar storms and its dangerous magnitudes, there are going to be interesting “global climate related” events that are bound to take place. Well, if it ends, it ends… But, let’s make money until then shall we?

As most of you already know, I have been introducing many different kinds of investment mechanisms and portfolios since 2010. Starting off with just mutual funds, the search for more investment avenues continued and brought forth new and unique investments like gold, silver bars & coins, land, local and foreign property market investments and the occasional fixed deposits. And now, I’m glad to say that I have been granted the license from the Colombo Stock Exchange in Sri Lanka and am able to trade for the National Development Bank of Sri Lanka in Malaysia! This means, I can now offer opportunities for individuals from Malaysia to partake in the growth of the Sri Lankan capital market, financial sector and the various other industries. This would also include fixed deposits, IPOs (of which I get first dips to!), stock market and mutual funds.

I know that quite a number of the readers would be saying (in a relatively calm fashion) the following with due concern:

“SRI LANKA?!  IS HE NUTS?! WHY ON EARTH SRI LANKA?! ISN’T THAT A WAR PRONE ZONE?!”

Well, for those who have been following my articles for the past year and a half would know by now that I have the habit of backing my statements with a fair amount of research. And what research has shown is that with an expected GDP growth rate of over 7% in 2012 in comparison to a rate of over 8% in 2010 and 2011, the macroeconomic environment in Sri Lanka looks encouraging.

Construction sector development, healthy growth levels in both agriculture and tourism industries are expected to maintain credit growth in the banking industry. However the recent measures introduced by the Central Bank to avoid the economy from overheating would bring down the credit growth to around 20% in 2012 compared to over 30% in 2011.

 To understand the growth of the Sri Lankan economy with respect to other countries, I have created a table to compare the real GDP growth of Sri Lanka with that of some others. For those who are wondering, the Real GDP (Gross Domestic Product) is the GDP minus Inflation. To put it into perspective, if a country had recorded a GDP growth of 5% and an inflation of 6%, this would mean that the Real GDP grew by  -1%.

·         GDP – Inflation = Real GDP

·         5%    -    6%       = -1%

Real GDP Growth Table

COUNTRY	YEARS (Real GDP Growth Rate %)
	1999	2000	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010
SRI LANKA	3.7	5.6	-1	3.2	5.5	5.2	6	7.5	6.8	6	3.5	9.1
HONG KONG	1.8	10	0	-3	3.3	7.9	7.3	6.8	6.4	2.4	-2.8	6.8
MALAYSIA	5	8.6	0.3	4.2	5.2	7.1	5.2	5.9	6.3	4.6	-1.7	7.2
CHINA	7	8	8	8	8	9.1	9.1	10.2	11.9	9	9.1	10.3
NEW ZEALAND	3.1	3.6	3.1	4.4	3.5	4.8	2.3	1.5	3.1	0.2	-1.7	1.5
AUSTRALIA	4.3	4.7	4	3.6	3	3.5	2.7	2.7	4.3	2.3	1.2	2.7
INDONESIA	0	4.8	3.3	3.5	4.1	4.9	5.6	5.5	6.3	6.1	4.5	6.1
U.A.E	2.5	4	5.6	2.4	5.2	5.7	8.8	8.9	7.5	7.4	-2.7	3.2
U.S.A	4.1	5	0.3	2.45	3.1	4.4	3.2	3.2	2	1.1	-2.6	2.8
JAPAN	0.3	1.3	0.3	-0.3	2.7	2.9	2.6	2.2	2	-0.7	-5.2	3.9
U.K	1.9	3	1.7	1.6	2.2	3.2	1.9	2.8	3.1	0.7	-5	1.3

With the availability of natural resources and workforce, it is pretty obvious that Sri Lanka has huge potential of becoming a proliferating economy in the world. Just as how many were skeptical on countries such as Indonesia and India, it was the splendor performance of those countries’ economy that had shown the skeptics of how powerful these countries truly are. Logically speaking, with the ready availability of natural resources and workforce, combined with the low cost of production, it would be sufficient to say that global investments would gravitate towards them as time goes by. 

“But what about the movement that is gaining momentum to impeach the President of Sri Lanka on his ‘war crimes’?” 

Well, that is a logical concern. Over the years, the Sri Lankan economy has been relatively resilient toward the civil war. But over the last 3 years, more growth had been recorded as there is more room for development that has come to be realized by global investors. And that is exactly what is going to happen in the coming months. With the global economic turmoil that Is occurring, and with investors seeking new venues to realize gains, this political and civil movement to impeach the President, has made most countries turn their view towards Sri Lanka. Whether or not the President would be impeached is not the point that I am driving at; But rather the action that has forced everyone’s attention towards the country. Many (even from Malaysia) have started venturing into the business sector of Sri Lanka and have started realizing gains, while the rest hold onto their money with raging skepticism and unwavering emotional conflict. The choice of being the sheep or the shepherd truly lies with the individual.  As I believe and have always believed, perspectives need to change with time, otherwise, we shall never see the opportunities that come by.  

Prepared By,

Ashveen Chakravarthy Sekaran

14 April 2012