Malaysia Tax Budget 2014 Updates

Malaysia's government moved to allay concerns over its fast-rising debt on Friday, announcing a new consumption tax at a surprisingly high rate, abolishing subsidies on sugar and hiking property taxes to dampen a surge in home prices.

Prime Minister Najib Razak, in his annual budget speech to parliament, announced his government would bring in a goods and services tax (GST) in 2015 at a rate of 6 percent, above market expectations of 4 or 5 percent.

The ringgit currency gained against the dollar in late trade as investors welcomed the tax, which is aimed at broadening the revenue base in a country where only about 10 percent of citizens pay income tax and most of the government's money comes from oil and gas.

Otherwise, Najib announced few major steps to cut subsidies that take up about a fifth of government spending, or deeper reforms such as reducing a bloated, but politically influential, civil service.

Once a high-flying "tiger" economy, Malaysia has become heavily dependent on commodity exports and struggled with low private investment since the 1997-98 Asian financial crisis, despite a partial revival in recent years.

"The government has decided to implement a fair and comprehensive tax system that benefits all Malaysians," Najib said. "The government believes that this is the best time to implement GST as the inflation rate is low and contained."

Najib was under pressure to take bold steps after Fitch ratings agency in July cut its outlook on Malaysia's sovereign debt to negative, citing poor prospects for reform following a divisive May election.

Malaysian markets suffered a bout of turmoil over the summer as the country's shrinking current account surplus left it vulnerable to fund outflows driven by an expected tightening of U.S. monetary policy.

Most economists said Najib's budget had gone some way to restoring confidence in the government's political will to improve its finances, which has been shaken by a rapid rise in debt in recent years.

"The fact that they took the bold step to introduce 6 percent at the start shows a lot of commitment in reining in the fiscal deficit," said Irvin Seah, DBS economist in Singapore.

"You won't see the full benefit of the GST on the fiscal position at the outset... But in the longer term it will help bolster the fiscal position."

Najib announced a raft of steps to offset the impact of the GST, including exemptions on basic food items and transport and one-off payments to poorer families. He also announced a cut in corporate tax of 1 percent to take effect in 2016.

Ratings agency Standard & Poor's called the budget "a step in the right direction" though it added that the budget proposals did not fully address the weaknesses of high subsidies and poor revenue structure.

"We would have preferred more clarity on say fuel subsidies such as details and timelines," said Selena Ling, head of treasury research at Overseas-Chinese Banking Corp in Singapore.

After securing his power base last weekend in ruling party elections, Najib had appeared to have a freer hand to tackle a high fiscal deficit with unpopular steps.

But having trimmed fuel subsidies by 3.3 billion ringgit ($1 billion) per year shortly the Fitch announcement, Najib only pledged to gradually restructure the subsidy policy.

COOLING PROPERTY BOOM

The government's economic report, released just ahead of the budget speech, said that spending on subsidies, including fuel, would total 39.4 billion ringgit next year, down from 46.7 billion ringgit in 2013.

The abolition of the 0.34 ringgit per kg subsidy on sugar was justified as needed to combat rising rate of diabetes.

In the report, the government maintained its commitment to steadily cut the budget gap, from 4.5 percent in 2012 to 4.0 percent in 2013 and 3.5 percent in 2014.

"We believe that the government has paid heed to increasing criticism by markets and rating agencies, and has followed through after the aggressive fuel subsidy reduction in September," Barclays Capital economists wrote in a note.

The economic report forecast a slight pick-up in GDP growth to 5.0-5.5 percent in 2014 from 4.5-5.0 percent in 2013, underpinned by strong domestic demand. The government expects to narrowly stay within its self-imposed debt limit of 55 percent of GDP next year, forecasting a ratio of 54.7 percent.

To cool a surging property market, Najib announced that the country's property gains tax would be doubled to 30 percent for real estate sold within three years. The minimum value of a property for foreign buyers was doubled to 1 million ringgit.

Malaysian property prices have risen by about a third in the past three years, with even bigger rises in hot spots such as parts of southern Johor state.

The government forecast private investment would rise to 17.9 percent of GDP in 2014, with funds going into oil and gas, textiles, transport equipment and real estate development.

Private investment remains well below levels seen in the 1990s, when it averaged 22.9 percent of GDP annually, but it is recovering from an average of 11.8 percent between 2001-2011.

Following are highlights from Najib's ongoing speech to parliament:

CIVIL SERVICE

* Pensioners will receive a special financial assistance of 250 ringgit to assist them meet the rising cost of living. * Government to give a half-month bonus for 2013 with a minimum payment of RM500 to be paid in early January 2014.

CASH HANDOUTS
* Cash handouts to households with a monthly income of below 3,000 ringgit will be increased to 650 ringgit from 500 ringgit.
* For individuals aged 21 and above and with a monthly income not exceeding 2,000 ringgit, cash handouts will be increased to 300 ringgit from 250 ringgit.
* For the first time, cash assistance of 450 ringgit will be extended to households with a monthly income of between 3,000-4,000 ringgit. rising cost of living borne by the lower middle-income group.
* To implement all cash schemes, government will allocate 4.6 billion ringgit which is expected to benefit 7.9 million recipients.

REAL PROPERTY GAINS TAX
* For gains on properties disposed within the holding period of up to 3 years, RPGT rate is increased to 30 percent.
* For disposals within the holding period up to 4 and 5 years, the rates are increased to 20 percent and 15 percent, respectively. Malaysian property firms with exposure to this tax change include UEM Sunrise, Mah Sing Group and Tropicana Corp .
* Raise the minimum price of property that can be purchased by foreigners to 1 million ringgit from 500,000 ringgit.
* Prohibit developers from implementing projects that have features of Developer Interest Bearing Scheme (DIBS), to prevent developers from incorporating interest rates on loans in house prices during the construction period.
* Financial institutions are prohibited from providing final funding for projects involved in the DIBS scheme. Malaysia's top three banks are Maybank, CIMB and Public Bank.

AFFORDABLE HOMES
* To further increase access to home ownership at affordable prices, an estimated 223,000 units of new houses will be built by the government and the private sector in 2014.
* Companies that specialise in affordable housing development include Hua Yang Bhd.
* Government to allocate 578 million ringgit to the National Housing Department (JPN) for low cost flats consisting of 16,473 housing units.
* Malaysian's government to provide 80,000 housing units with an allocation of 1 billion ringgit under affordable housing scheme. The sales price of the houses will be 20 percent lower than market prices.
* Introduce the Private Affordable Ownership Housing Scheme (MyHome) to encourage the private sector to build more low and medium-cost houses. The scheme provides a subsidy of 30,000 ringgit to the private developers for each unit built.
* Preference will be given to developers who build low and medium-cost houses in areas with high demand and limited to 10,000 units in 2014.
* The scheme is for housing projects approved effective from 1 January 2014 with an allocation of 300 million ringgit.

TAX RELIEF
* Government proposes a special tax relief of 2,000 ringgit be given to tax payers with a monthly income up to 8,000 ringgit received in 2013.

GOODS AND SALES TAX
* To implement goods and services tax (GST) on April 1, 2015 - 17 months from now.
* GST rate fixed at six percent, the lowest among ASEAN countries.
* GST replaces current sales tax.
* Basic food items, transportation services, highway tolls, water and first 200 units of electricity for domestic users per month to be exempt from GST.
* Sale, purchase and rental of residential properties as well as selected financial services are exempted from GST.
* PM Najib: "The reality is that inflation now is low at around 2 percent. The government is confident this will be the best time to impose GST as inflation is minimal and under control."
* Training grant of 100 million ringgit will be provided to businesses that send their employees for GST training in 2013 and 2014.
* Financial assistance amounting to 150 million ringgit will be provided to small and medium enterprises for the purchase of accounting software in 2014 and 2015.

CORPORATE TAX
* corporate income tax rate be reduced by 1 percentage from 25 percent to 24 percent.
* income tax rate for small and medium companies will be reduced by 1 percentage point from 20 percent to 19 percent from the year of assessment 2016.

INCOME TAX
* government to give one-off cash assistance of 300 ringgit to low income households
* personal income tax rates be reduced by 1 to 3 percentage points for all tax payers.
* individual income tax structure will be reviewed
* chargeable income subject to the maximum rate will be increased from exceeding 100,000 ringgit to exceeding 400,000 ringgit.
* Current maximum tax rate at 26 percent to be reduced to 24 percent
* measures to be effective in 2015

SUBSIDIES
* Subsidy programme to be "gradually restructured"
* A portion of savings from restructuring to be distributed in the form of direct cash assistance with the other half to finance development projects.
* To abolish the sugar subsidy of 34 sen effective October 26 2013.

IMPROVING BUDGET MANAGEMENT
* committed to reducing the fiscal deficit gradually, with the aim of achieving a balanced budget by 2020.
* to ensure federal debt level will remain low and not exceed 55 percent of GDP.
* government to conduct audits on projects valued at more than 100 million ringgit during its implementation.

ISLAMIC FINANCE
- Securities Commission to introduce the a framework for Social Responsible Investment (SRI) Sukuk, or Islamic bonds, to finance "sustainable and responsible" investment initiatives.

AGRICULTURE
- Government to allocate six billion ringgit allocated for agriculture programmes.
* Says to 243 million ringgit allocated for rubber, palm oil and cocoa replanting as well as forest plantation programmes. Main plantation companies in Malaysia include Sime Darby , IOI Corp and KL Kepong.

LOGISTICS
- Government to allocate 3 billion ringgit in soft loans under the Maritime Development Fund through Bank Pembangunan Malaysia.
* The fund is to provide financing to encourage the development of the shipping industry, shipyard construction, oil and gas as well as maritime-related support activities.

AVIATION
- To replace existing air traffic control and management system in Subang, a new air traffic management centre costing 700 million ringgit will be built at Kuala Lumpur International Airport (KLIA).
* Kota Kinabalu, Sandakan, Miri, Sibu and Mukah airports in Sabah and Sarawak to be upgraded with 312 million ringgit allocation.
- Malaysia Airports manages and operates all airports across the country except for one in Johor.

PUBLIC INVESTMENTS
* Public investments to reach 106 billion ringgit. Projects to be implemented include:
- A 316-kilometre West Coast Expressway. Locally listed Kumpulan Europlus Bhd owns 80 percent of the project, while IJM Corp owns the balance 20 percent.
- Double-tracking rail project along west coast Malaysia. The project is carried out by as a joint venture between MMC Corp and Gamuda.
- Various projects from state oil firm Petronas under its 300 billion ringgit capex programme, including a petrochemicals plant in southern Johor state.

INTERNET ACCESS
- To carry out second phase of high-speed broadband project with the private sector involving 1.8 billion ringgit investment. State-linked telco Telekom Malaysia Bhd is involved in the project.
- To increase Internet coverage in rural areas, 1,000 telecommunication transmission towers will be built in the next three years, with an investment of 1.5 billion ringgit.
- To increase Internet access in Sabah and Sarawak, new underwater cables will be laid within three years at a cost of 850 million ringgit.



Related posts:
1. Malaysia's Budget to increase real property gains ..
2. No asset bubble, said Malaysian Central Bank governor 
3. Time for crucial fiscal reforms: Malaysia Budget 2014

How To Launch A Startup Without Writing Code

There is an unspoken rule: to launch a startup, you need to build a product, and to do that you need someone that can write code.

Whether that means chasing down a technical co-founder, learning to code, or even building that "Lean MVP" - the conventional wisdom is that without tech abilities you're nothing more than a dude (or dudette) with a Powerpoint.

A growing number of startups, however, are quietly disproving this assumption.

They're getting their first customers with minimal technology, and often no code at all. Instead of building fancy technology from the outset, they're hacking together inexpensive online tools such as online forms, drag-and-drop site builders, advanced Wordpress plugins, and eCommerce providers.

They're jumping right in to serve customers in any way possible - heading right for their first paying customers.

Most importantly, unlike the majority of their peers, by the time they start building a product, they already have a humming business.

How are they doing it?

Focus on Serving Customers Instead of Building a Product

Successful founders all know one thing: it's more important to serve a customer than it is to build a product.

This is the mindset you must get into when you start out. Most entrepreneurs are narrowly set on building a product that they lose sight of the real goal - to solve a problem for a customer.

Or, as Ben Yoskovitz eloquently put it,

"Customers don’t care how you get things done – just that you get it done and solve their pain."

Replace Technology with People

Think about the hardest part of the business you want to build. The part that would require the most complex development - the true innovation that no one else does.

Can a real person perform these tasks manually?

For many startups, this was the secret to massive success:

David Quail is a super talented software engineer, with one exit already under his belt. He wanted to solve his ultimate annoyance: scheduling meetings over email.

David's original idea was to build an artificial intelligence tool that could read an email chain and automatically schedule the event. But this would take months if not years.

His shortcut to launching a business ASAP? He simply set up an email address for his customers to "CC" that forwarded to him, and did the work manually at first to prove that customers were willing to pay.

Over time he automated more of the service - but not before he already knew there was clear demand and was making revenues.

Another example - a marketplace:

Tastemaker is a marketplace connecting interior designers with homeowners for small design gigs. They started by contacting interior designers and building a physical list of those interested in extra work.

They then asked their network who needed help with interior design - and made the connection, processing payment themselves.

The Tastemaker founders used pen and paper to solve their customer's needs and prove the market. They then built their online platform in parallel (which eventually became their core business).

You've probably heard many famous stories like ZenLike and Tastemaker. They range all the way from companies like Groupon or Yipit (raised $7.3M), to Aardvark (acquired by Google) and Diapers.com (acquired by Amazon).

What did they have in common starting out? At the core of many businesses, instead of fancy algorithms, you would have found the founders themselves, like the "man behind the curtain" in the Wizard of Oz, working hard, acting as the secret sauce.

Use These Off the Shelf Solutions

While your core tech might in fact be a service starting out, you can wrap it with an online presence, digital interactions, and the administration of a true technology business.

In short, you can act, look, and smell like a fully automated online company that employs a posse of software developers and an in-house graphic designer.

* Use e-commerce services to accept payments and even subscriptions using "hosted payment pages" - requiring zero code.

* Let your customers interact with you through sophisticated online forms you can publish (and brand) using drag-and-drop editors.

* Build a support knowledge base and community forum with Zendesk, Uservoice, or GetSatisfaction

* Use copy-paste widgets from around the web like contact forms, Skype buttons, live chat, etc.

* Use simple-yet-sophisticated website creators to publish your central website and glue together all the tools into one presence. Strikingly and Unbounce are great for beautifully designed landing pages.

I could go on listing these forever (well, I did here). As you can see, the web is full of tools that let you conjure entire features with the click of a mouse.

The key is to always search for what you want before reinventing the wheel. Chances are someone has already thought of how to make your life easier.

The Hidden Treasures of Wordpress

To most of us, the Wordpress brand connotes a free blog, or a simple way to create a content website for non-technical folks.

But the true magic of Wordpress is the ability to extend its functionality to create many kinds of web platforms - while keeping your hands (mostly) free of code.

Wordpress itself is free, and you can purchase inexpensive plugins that automatically transform your website into a membership site, ecommerce portal, social network, and even daily deals site.

Instead of spending thousands on a designer, you can buy a high-end theme for around $40 and customize it to your brand. If you have a bit more saved up, you can hire a local Wordpress expert for a few hours of their time for small custom tweaks and a personal tutorial. And, if you don't want hosting headaches, you can use WPEngine (hi, Jason!).

Wordpress is one of the most incredible tools on the web for non-technical entrepreneurs. There's a bit of a learning curve, depending on how you want to use it, but definitely a faster option than finding a developer or learning to code.

It puts fate into your own hands.

Put It All Together

Go back to that core customer need, and think of how to satisfy it by any means. Now how can you make that solution accessible? What would the process be for finding you and reaching out? How can you charge and provide support?

Chances are good that you can pull it all off yourself. If not, consider starting a bit smaller than you originally imagined, if only to start generating revenues today and fund your development.

Once you have your first few customers, you'll have a very good picture of where your business is going, and what technology you absolutely need to build - and very clear motivation.

Does working this way pay off?

Tech companies started this way have sold for between $50-$540 million, or have gone public. They are growing at double digit rates. And they launched in a matter of weeks or months - not years.

If this approach makes you uncomfortable - that's great. It's a sign that you're learning to think differently. However, entrepreneurs presented with this approach often have similar gut feelings:

What Will Investors Think?

They will think you are clever, resourceful, flexible, persistent - and know how to focus on the right things.
To quote one of our investors, Len Brody, on his portfolio: "I call them the workaround culture... [they] just work around anything - and you have to."

If for any reason they are put off by your creativity and resourcefulness, then you're not talking to the right investors.

What About Scaling?

This is a very understandable fear. It's a scary situation to think, "Great, we got our customers, and now we're going to disappoint them."

Don't let that thought paralyze you. Growth is rarely if ever a black and white, rocket-ship-spike. It's a steady process that leaves you plenty of time to transition between solutions.

In other words, there's a spectrum between do-it-yourself and full-robot-revolution. You might hire a few people in the meantime (with the revenue that their hire would naturally generate) while also developing a scalable technology.

As most entrepreneurs will tell you the way you get your first 50 customers certainly won't be the way you get your first 5,000.

For those of you feeling held back by your lack of technical skills - or deep in development muck  - ask yourself, what can you do *today* to get your first customer.

Give it a shot. In contrast to paying a developer, you don't have a lot to lose. Do whatever you need to do to get your business going.

Remember: you're not here to build a product - you're here to solve a problem. And you certainly have the skills to do that.
***
Want more specifics, examples, and tools? Check out my newest Skillshare course, How to Launch Your Startup Without Any Code (use code ONSTRTPS for %15 off)

This is a guest post by Tal Raviv.  He is the co-founder of Ecquire.

Posted by Dharmesh Shah 

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2.Why Failure is so important to Success?

3.Money talks or advice?

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5.Tips on courting investors

No asset bubble, said Malaysian Central Bank governor

Malaysia has addressed many issues, risks 

Zeti:‘There is confidence in the financialsystem.’- EPA  

KUALA LUMPUR: There is no reason to believe that Malaysia has seen the formation of an asset bubble that is about to burst, as the country has addressed many of the issues and risks related to it, says Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz.

She said three series of macro prudential measures had been introduced this year to avoid the very risk of the formation of such a bubble asset.

She was responding to a question on whether Malaysia was experiencing an asset bubble that would burst if China’s economy tumbled and as global interest rates rose, as reported recently by the foreign media.

“Conditions between now and in 1997/1998 are different. We are now on a growth path,” she told a press conference in conjunction with the South East Asian Central Banks (Seacen) 30th Anniversary Conference on Greater Financial Integration and Financial Stability and launch of the Seacen Financial Stability Journal.

Zeti said domestic demand was driving Malaysia’s economic growth and the country was not at the epicentre of the recent global financial crisis.

“Our financial intermediaries remain resilient and the supply of credit was never disrupted,” she added.

She said financial intermediation was continuing and financial markets continued to function.

“There is confidence in the financial system. This is the result of the focus over the last decade on financial reforms that have strengthened the foundation of our financial system.

“We believe that credit growth has moderated to a sustainable pace that supports the growth of the economy. In this regard, we continue to monitor conditions,” Zeti added.

Meanwhile, in her opening address at the conference, Zeti said the modernisation of the Asian financial system had been accompanied by a significant strengthening of the regulatory and supervisory frameworks.

She said it had also been accompanied by improved financial safety nets, a more effective surveillance of financial stability risks and stronger legal underpinnings.

“These reforms supported the transition towards more market-oriented financial systems that are anchored in stronger institutions, risk management capacity and governance,” she added.

“Our financial institutions are supported by stronger financial buffers to withstand adverse developments and shocks.

“Significant strides also continue to be made in strengthening consumer protection frameworks, promoting financial inclusion, and enhancing market discipline,” she said.

She also said these developments continued to support the region through the recent episodes of turbulence in the global financial markets.

“The region has also made important strides in enhancing monetary and financial cooperation arrangements to address regional financial stability issues and global policy spillovers.

“Much has been accomplished in the areas of surveillance arrangements, financial safety nets and crisis prevention, management and resolution,” she added.

On the Asian financial integration model for the ten Asean economies, Zeti said it was focused on strengthening pre-conditions through collective capacity building to promote more open market access.

“It also focuses on progressively reducing barriers to facilitate cross-border trade, developing the market infrastructure and an enabling environment to promote the efficient and effective intermediation of cross-border financial flows.

“It also focuses on establishing appropriate safeguards for the stability of the financial system,” she added.

Meanwhile, Bank Negara and the Bank of Korea jointly announced the establishment of a bilateral local currency swap arrangement. It is designed to promote the use of local currencies for bilateral trade and strengthen financial cooperation between Malaysia and South Korea, Bank Negara said in a statement.

This arrangement allows for the exchange of local currencies between the two central banks of up to five trillion Korean won or RM15bil.

The effective period of the arrangement is three years, and could be extended by mutual agreement between the central banks. - Bernama

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Erosion of confidence: US avoided a debt default, debt ceiling shifted to next year

It happened again last week – at the last minute the United States avoided debt default. But the world is losing patience with this latest episode of dysfunctional leadership.

THE world waited with bated breath as the deadline neared. And breathed a sigh of relief when at the last minute, the United States avoided crossing its “debt ceiling” and a default on its debts.

The debt ceiling was raised, and the government shutdown also ended last Thursday after weeks of a high-profile standoff between US President Barrack Obama and the Republicans in Congress.

But this relief was mixed with incredulity and frustration.

First, the respite is only temporary; the can is just kicked down the road.

The deadlines for government shutdown and debt ceiling are shifted some weeks away to January and February next year.

Second, this fiasco has happened several times already.

Each time the Congress gave the President a reprieve of just a few more months, before the new deadline loomed again.

The Republicans are adamant to cut the government’s spending and its budget deficit and won’t allow the government to function unless they get what they want.

Previously, Obama compromised and gave in significantly.This time, he stood firm and refused to negotiate.

The Republicans went too far, choosing to defund and damage his landmark medical insurance reform as a condition for lifting the debt ceiling.

Obama decided “enough is enough” and relied on public opinion to win his gamble. The Republican Party blinked, as the public heaped the blame on them.

The party leaders in Congress had to eat humble pie and agree to stop the shutdown and lift the debt ceiling without defunding or changing the “Obamacare” health reform.

But thirdly, while the President finally showed the Republicans who was boss, the damage had already been done to the United States’ image as a superpower and the champion of American-style democracy.

The US system of governance has become dysfunctional, with one side of the political divide willing and able to paralyse the government functions led by the other side, using the weapon of withholding approval of the government’s budget and capacity to borrow.

Just days before the deadline, the world’s finance ministers meeting at the annual IMF-World Bank meeting in Washington highlighted the extreme dangers of a US debt default.

Around the world, leaders and analysts mourned the end of the past certainties surrounding the United States and its dollar as the world’s financial leader.

A widely-quoted article in China’s Xinhua news agency was titled: “Washington’s political chaos proves it’s time for a de-Americanised world.”

The commentator, Liu Chang, said the latest crisis reveals that the United States is unfit to govern itself, let alone lord it over the rest of us.

“It is perhaps a good time for the befuddled world to start considering building a de-Americanised world.”

After castigating the United States for meddling in the political affairs of countries in its efforts in building a world empire, the writer attacks a self-serving Washington for shifting financial risks overseas, while the debt ceiling crisis “has again left many nations’ tremendous dollar assets in jeopardy and the international community highly agonised”.

“Such alarming days when the destinies of others are in the hands of a hypocritical nation have to be terminated, and a new world order should be put in place, according to which all nations, big or small, poor or rich, can have their key interests respected and protected on an equal footing.

“Part of that reform is the introduction of a new international reserve currency that is to be created to replace the dominant US dollar, so that the international community could permanently stay away from the spillover of the intensifying domestic political turmoil in the United States.”

As the Xinhua opinion piece indicated, many countries are concerned about the US dollar being the world’s dominant currency. It is by far the most important reserve currency.

Countries holding US dollar treasury bills have been worried about the once unthinkable, that the US would be unable to honour its debt service obligations, thus putting their hard-earned assets in jeopardy.

On the other hand, countries that took loans denominated in US dollars could face punishing terms of repayment if the interest rate on the US dollar shoots up upon fears of a US debt default.

Companies, traders and governments that use the US dollar as the medium of exchange would also suffer from chaos in the markets for money, commodities and trade, if there is a massive loss of confidence in the US and its dollar.

Thus, continuing uncertainty arising from feuds in Washington will accelerate the erosion of confidence in the US as world economic leader.

The Financial Times columinist Martin Wolf commented that the US debt ceiling is the legislative equivalent of a nuclear bomb, and that the law needs to be repealed since there cannot be orderly government under so destructive a threat.

But another editorial comment in The Independent states that while there is a straightforward case to ditch the debt ceiling law, the same extremists who use it as a weapon of mass destruction will be loath to part with it.

In the past few days, some Democrat and Republican leaders in charge of budget policy in Congress have started meeting, giving hope they plan to avoid a repeat of the fiasco when the budget and debt ceiling deadlines re-appear in a few months.

But given the polarisation and ideological divides in Washington, chances are that the world will be treated to another round of the battle and the chaos. If that happens, there will be more calls for a new world order.

Contributed by Global Trends by Martin Khor
> The views expressed are entirely the writer’s own.

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Kinect Technologies for PCs, can track you through walls

Intel’s gesture control tech will be built into PCs from 2014

Ever since Microsoft’s Kinect came out, it has been wondering when the technology would get built into PCs. Yes, there is Kinect for Windows, but it’s a peripheral — about having advanced motion detection capabilities in the webcam, as a bridge to exciting future user interfaces.

Well, today, such technology is on its way, but not from Microsoft. No, it’s Intel that the PC manufacturers are talking to, and it’s not Kinect that’s the base: it’s Intel’s perceptual computing technology.

According to Paul Tapp, senior product manager in Intel’s perceptual computing division, manufacturers have “committed to doing it” in 2014 – “it” being the integration of an Intel-designed motion-detection system into their machines. And in the meanwhile, peripherals maker Creative put its $210 Senz3D, the first retail device to use the technology.

Creative’s Senz3D camera is up for pre-order. It’s the first peripheral to use Intel’s perceptual computing tech, which will be built into computers from next year. >>

Contributed by By David Meyer Gigaom.com

MIT’s ‘Kinect of the future’ can track you through walls

Researchers from MIT have unveiled a new form of motion tracking that uses a three-point system to follow a person’s position, even through a totally opaque wall. Though the word “Kinect” has been thrown around quite liberally for the sake of accessibility, this is strictly a positional tracker — that means that it won’t be interpreting sign language or reading lips any time soon. Rather than being a control mechanism, this device is purely for keeping tabs on users as they move both within and between rooms. At present the tracker is set up directionally, so it can only see through the single wall at which it is pointed, but the obvious end goal is an omnidirectional tracker that could follow a user through the whole house, upstairs and down.

The system works using three radio antennas spaced about a meter apart to bounce signals off a person’s body. Even through the researchers’ office wall, it can follow people with an accuracy of up to 10 centimeters (four inches), better than WiFi localization can currently provide. Though the device is exploded and sitting as component parts at present, one grad student working on the project said they expect to be able to condense it down to a final unit no larger than Microsoft’s Kinect sensor.

Beyond the loss of Kinect-like image and silhouette tracking, the MIT system can also only track a single person at a time. A second moving object within the system’s field of view will cause confusion and make the system useless — though that problem is, of course, to be addressed soon. It also has trouble with stationary objects, but they already have a first pass on an algorithm to get around this by recognizing the motion of a person breathing.

Applications for the technology, assuming its kinks and limitations are addressed, are numerous. There are the obvious gaming applications, perhaps blurring the line between real and virtual locations as players stalk through real hallways full of video-game enemies. All Oculus Rift fantasies aside though, there are plenty of more substantive reasons to be excited about the ability to keep track of people without their need to carry a transmitter. Rather than installing motion trackers in every corner of the home, a single tracker near the center might be able to intelligently turn the lights on and off as you move from room to room.

Architects and advertising researchers would love to know how people move through a particular space, where they spend their time, and what places they tend to avoid. The health care industry could keep better track of people in need of supervision, receiving an alert if, say, a person with dementia begins to wander away.

Though it’s a sprawling array today, the researchers say that the device could end up smaller than a Kinect.>>

Of course, there are also the more troubling possible uses. WiFi localization currently requires users to hold a tracking device, while more versatile options like holographic localization are slow and low fidelity. MIT is now bringing a high degree of accuracy and usability together with the versatility that comes with being able to track people who have never consented to be tracked. If the signal could be made strong enough, it could render prison break-outs virtually impossible, or let law enforcement quickly check the number and position of people in a hostage situation.

Human and civil rights activists might have something to say about such applications, however. That’s really the downfall of a catch-all people-tracker for use outside of private homes: I can’t imagine a world in which its use would remain legal for long. People are leery enough about ad agencies tracking their online activities — how might people react to the idea of a company monetizing their walking path through the local mall? The Kinect has already got certain people up in arms over just the possibility of always-on functionality, and that would only have mattered when the user was standing directly in front of their television.

The team has a patent pending for the technology, but the concept seems like it would be easy enough to adapt with slight changes. It’s still in its infancy, but finding a person through a wall by picking up on their breathing is about as strong a proof of concept as they could ever have hoped for.

Contributed by Graham Templeton Extremetech.com

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LiFi, instead of WiFi: Chinese scientists achieve Internet access through lightbulbs

Malaysia's Budget to increase real property gains tax (RPGT) will dampen market short term but rise up prices eventually

GEORGE TOWN: The Federal Government should leave real property gains tax (RPGT) alone in the 2014 Budget.

New Bob Group director Dr Lee Ville said that if the RPGT is increased, then it will dampen the property market, which has already started to cool.

Lee is also president of ERA Malaysia, which is the world’s leading real estate brand.

It is expected that the Federal Government will raise the RPGT rate to 30% from 15% for properties sold within two years, and 15% from 10% for properties sold within three to four years.

For properties sold in the fifth and sixth year, the RPGT is expected to remain unchanged at the current 10% and zero RPGT respectively.

“The anticipated RPGT will not deter foreigners from buying, as they are allowed to dispose their properties only after the third year,” he said.

Mont’Kiara and Sri Hartamas apartments Kuala Lumpur

Lee said the anticipated RPGT would work in the initial stages, curbing speculation in the short term.

“If implemented, developers will respond by reducing their delivery of residential housing projects.

“This will eventually lead to a shortage, triggering demand and causing property prices to rise up again in the long term,” he said.

Lee said the Federal Government should look into controlling price, other than cement, of essential building materials, as the rising price of raw materials was a reason for soaring property prices.

Meanwhile, Raine & Horne Malaysia director Michael Geh (pic) said the RPGT would hurt current speculators who had already bought properties, and not the future ones who had yet to buy properties.

“If the existing speculators are hurt, the banks will also be dragged down.

“The Federal Government should look at curbing speculation through other means such as providing middle-income homes with an effective delivery mechanism that ensures only the eligible income category benefits,” Geh said.

Contributed by  BY DAVID TAN The Star/Asia News Network

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LiFi, instead of WiFi: Chinese scientists achieve Internet access through lightbulbs

Lightbulbs may one day be used for connecting to Internet

Successful experiments by Chinese scientists have indicated the possibility of the country's netizens getting online through signals sent by lightbulbs (LiFi), instead of WiFi.

Four computers under a one-watt LED lightbulb may connect to the Internet under the principle that light can be used as a carrier instead of traditional radio frequencies, as in WiFi, said Chi Nan, an information technology professor with Shanghai's Fudan University, on Thursday.

A lightbulb with embedded microchips can produce data rates as fast as 150 megabits per second, which is speedier than the average broadband connection in China, said Chi, who leads a LiFi research team including scientists from the Shanghai Institute of Technical Physics of the Chinese Academy of Sciences.

With LiFi cost-effective as well as efficient, netizens should be excited to view 10 sample LiFi kits that will be on display at the China International Industry Fair that will kick off on Nov. 5 in Shanghai.

The current wireless signal transmission equipment is expensive and low in efficiency, said Chi.

"As for cell phones, millions of base stations have been established around the world to strengthen the signal but most of the energy is consumed on their cooling systems," she explained. "The energy utilization rate is only 5 percent."

Compared with base stations, the number of lightbulbs that can be used is practically limitless. Meanwhile, Chinese people are replacing the old-fashioned incandescent bulbs with LED lightbulbs at a fast pace.

"Wherever there is an LED lightbulb, there is an Internet signal," said Chi. "Turn off the light and there is no signal."

However, there is still a long way to go to make LiFi a commercial success.

"If the light is blocked, then the signal will be cut off," said Chi.

More importantly, according to the scientist, the development of a series of key related pieces of technology, including light communication controls as well as microchip design and manufacturing, is still in an experimental period.

The term LiFi was coined by Harald Haas from the University of Edinburgh in the UK and refers to a type of visible light communication technology that delivers a networked, mobile, high-speed communication solution in a similar manner as WiFi.

Contributed by Shanghai Xinhua  Editor: Fu Peng

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South China Sea breakthrough helps China, Vietnam build trust, boost cooperation

Chinese Premier Li Keqiang (R, front) meets with representatives of youth from both China and Vietnam at Vietnam National University in Hanoi, Vietnam, Oct. 15, 2013. (Xinhua/Liu Jiansheng)

The establishment of a bilateral work group to discuss joint maritime development was a "breakthrough" for China and Vietnam on their way to peacefully handle maritime disputes, analysts say.

During the talks with his Vietnamese counterpart Nguyen Tan Dung, Chinese Premier Li Keqiang urged the two sides to pursue substantive progress in their joint development in waters out of the mouth of the Beibu Bay, a semi-enclosed sea whose delimitation remains under negotiation between China and Vietnam, and accumulate experience for broader maritime cooperation.

Analysts said the establishment of the group sends a positive signal of the bilateral readiness for solving difficult problems through cooperation, and the two countries are taking a step-by-step approach in solving the disputes.

"Joint development in waters out of the mouth of the Beibu Bay is acceptable to both sides. The approach that the two countries are taking is to start with the easiest and then to the difficult," said Zhang Yunling, a researcher with the Chinese Academy of Social Sciences.

The relationship between China and Vietnam has been overshadowed by maritime frictions in the South China Sea, but the two countries have made efforts to maintain frequent high-level exchanges this year. Li's visit followed trips of the Vietnamese president, prime minister and deputy prime minister to China earlier this year.

The South China Sea issue involves several parties and the disputes between China and Vietnam are, in deed, bigger and more complicated, said Wu Shicun, president of the National Institute for South China Sea Studies (NISCSS).

"The agreement reached by China and Vietnam, undoubtedly, send a clear message to other claimants that putting aside bickering on sovereignty and sitting at the table for joint development is a pragmatic choice. The attempts to internationalize the South China Sea issue will result in the deterioration of bilateral ties and worsen the situation," Wu said.

The decision to establish the group was announced just two days after China and Brunei vowed in a statement to encourage closer joint exploration and exploitation of maritime oil and gas resources in the South China Sea.

In a pioneering move, China National Offshore Oil Corporation and Brunei National Petroleum Company Sendirian Berhad have inked a deal on establishing a joint venture on oil field services.

Considering that disputes between Beijing and Hanoi over the South China Sea have, from time to time, upset bilateral ties in recent years, the multiple results Li's visit to Vietnam achieved are clear evidence that the two neighbors are showing a greater political will to rise above their disputes and forge a mutually acceptable path of cooperation, said Qu Xing, president of the China Institute of International Studies.

Li returned to Beijing on Tuesday after attending the East Asia leaders meetings and paying official visits to Brunei, Thailand and Vietnam.

-  HANOI, Xinhua

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South China Sea Conflict

Winds of change blowing in Asia

>
The APEC and TPPA summits in Bali recently showed the winds of change are blowing in the region, symbolised by the US President’s absence but also reflecting the aptness or otherwise of policies.

THE winds of change are blowing, bringing shifts in perceived wisdom and the old order, especially in the Asian region.

The recent APEC summit and associated meetings in Bali were marked not so much by results but by perceptions.

In fact, the lack of results, rather than results, was the main story. This lack was not so much in the APEC itself, but in the Trans Pacific Partnership Agreement (TPPA).

The leaders of TPPA countries met in a separate venue away from the APEC summit. The Indonesians were the host of APEC and not the TPPA, which they are not involved in, and were unhappy that the TPPA threatened to take away the limelight from the main event.

But that was the secondary story. The main news was that United States President Barrack Obama had to give a miss not only to his scheduled visits to Malaysia and Indonesia, but to the APEC summit itself.

This was damaging to the United States, symbolically and in practical terms. Obama could not be blamed personally, as everyone knows the problems he faces at home with the onset of the “government shutdown” and the looming debt-ceiling crisis.

The problem was deeper. Obama’s absence confirmed the already growing perception in the region and the world that there is a dysfunctional governance system in the United States, at least for the moment, and it is becoming a long moment.

Sympathy outside the United States lies with the President, a sympathy tinged with pity for a legitimate leader confronted with the fringe (but a powerful fringe) of the opposition party that refuses to accept his healthcare reform bill that has come into law, and which is willing to damage the operations of the administration and apparently even the country’s financial creditworthiness to achieve its ideological objective.

Every democratic country has its moments of clashes between governing and opposition parties, and sometimes it can paralyse the country until the crisis is resolved, one way or other.

But here we are talking about the United States, the world’s most powerful country, and the greatest advocate of democracy. What happens in the United States has ramifications for the rest of the world.

Suddenly the unthinkable becomes a reality – the partial government shutdown – and a possibility: a default on loans, with disastrous effects on the world economy.

The crisis emerging from the present configuration of the division of powers between executive and legislative wings of government – a major pillar of Western democracy – calls into question how stable that system really is and what can be done if the paralysis lasts more than just a passing moment.

The lack of clear results in the TPPA leaders’ meeting in Bali is partly attributed to the absence of Obama, since the President had been assigned the role of galvanising the other leaders to meet the aim of concluding the talks by year-end.

In the end the leaders’ statement merely said the negotiations are on track, but did not mention they would finish by December. The growing perceptions is that the TPPA talks are facing turbulence.

Obama’s absence cannot really be blamed for that. Instead, the TPPA meetings of ministers and then political leaders only confirmed what has been known in recent months, that the TPPA agenda has been overloaded with too many issues and by too many demands, especially by the United States, that are too extreme for other countries to simply accept.

According to reports, most of the TPPA countries cannot agree to the US demands on intellectual property that go far beyond the WTO rules.

Several countries have problems with various other issues, including environment, investment and competition.

Prime Minister Datuk Seri Najib Tun Razak was the most outspoken. At an APEC side event, he said the TPPA’s year-end timeline is not cast in stone and asked that more flexibilities be given to countries.

“We do have a few areas of great concern,” he said, adding: “As you go into areas of intellectual property , investor-state dispute settlement, government procurement, state-owned enterprises, environment and labour, you impinge on fundamentally the sovereign right of the country to make regulation and policy. That is a tricky part and that is why we ask for flexibility.”

These comments by the Prime Minister summarise succinctly the “agenda overload” problem in the TPPA negotiations.

The areas that are trumpeted by the United States as a set of 21st century issues that make the TPPA a trail-blazer may turn out not to be so first-class after all.

Instead, they make some politicians, officials and parliamentarians uncomfortable, and many public-interest NGOs and business representatives, very unhappy.

The APEC summit and the TPPA meetings in the sidelines gave the big perception that US leadership is in question if not in decline in the region and the big talk was the corresponding rise of China, whose President’s presence and performance was the reverse mirror image of Obama’s absence.

But it is not only the contrasts in relative presence and economic and political power that counts. In the end it is also the content of policies advocated and the willingness to be genuine partners, and not to make use of new pacts and treaties to benefit one’s own country or interests, at the expense of others.

Contributed by Global Trends Martin Khor
> The views expressed are entirely the writer’s own.

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China's assertiveness, confidence and trust, long history together with Asean

China and South-East Asia have had a long history together, but they still need to work hard to consolidate confidence and trust.

Highlights: President Xi's Southeast Asia tour

RECENTLY, the Chinese Ambassador to Malaysia, Chai Xi, remarked that the visit of Chinese President Xi Jinping will lift the bilateral ties of the two nations to a higher level.

Saying that the Sino-Malaysian relationship has taken the lead when compared to the other members of Asean, Chai pointed out that China has become Malaysia’s biggest trading partner in the world, with the first seven months of this year recording a 14.9% increase in bilateral trade to US$59.72bil (RM190.6bil).

Indeed, Xi’s visit to Malaysia was historic not only because it was his first state visit to the region since assuming office, but also in the sense that it marks another step in the continuation of the long history that Malaysia has shared with China.

It is a history that can be traced back to the 15th century, when the famous Chinese explorer Admiral Zeng He of the Ming Dynasty landed on the port city of Malacca only to find a thriving community of Chinese traders that had long established ties with the local population here.

Fast forward to the 20th century, into the height of the Cold War, and we have an international environment that is mired in suspicion and misperception, with loyalties mostly split along clear ideological lines. South-East Asia was a particular hotbed, and there was a great fear that China would turn its attention to the young and small nations of the region and begin forcibly exerting its influence to bring them under its sphere of control.

And yet, amid all the paranoia and balancing among all the nations in South-East Asia, Malaysia had the foresight of Prime Minister Tun Abdul Razak Hussein, who clearly understood the gravity and inevitability of China’s peaceful rise when he pushed for Kuala Lumpur to be the first in the region to establish diplomatic relations and normalise ties with Beijing in 1974.

Those who express opinions implying that it is possible to shape the direction of regional security and development without including China display a worrying lack of understanding and appreciation of the lessons of history, particularly that of the region.

That China will fulfil its cyclical destiny and rise to take centre stage in Asia and become a major player in world affairs is no longer a question, but the character and nature of the rise will ultimately depend on how others might want to meet this rise halfway.

Successive Chinese leaderships have assured the rest of the world that their rise is a peaceful one, which does not seek to create ripples and waves in the international world order, and there is plenty of evidence to support that assertion.

China is in pursuit of rapid economic growth and expansion to lift its 1.3 billion-strong population into the developed world. In order to do this, China needs wide-ranging support from the global community and a stable and peaceful international environment.

But China’s growing assertiveness, especially in the South China Sea, may unfortunately send the wrong signals to certain parties, and this is especially the case if there is very little understanding as to why China feels the need to proceed in such a manner.

The complexities and nuances that surround China’s actions are likely to be lost if the nervousness and concerns of its regional neighbours are not promptly and clearly addressed.

Asean countries have high hopes as to how far the Chinese dream can trailblaze the growth of the region and provide the developmental slipstream for them to follow suit.

However, the region is, understandably, still wary as it bears fresh scars of at least two other dreams before this: one that carried the salvation of “the white man’s burden” from the West, and another that sought to build a “Greater East Asia Co-Prosperity Sphere” from the East (Japanese occupation).

Granted, the Chinese dream is categorically different from these expressions of imperialism cloaked in ideology, but one needs to understand the reasons why sovereignty is an overriding concern in the region and some react strongly to the movements of greater powers.

It should not be such a stretch for China, which bears the memory of the century of humiliation dealt by former European powers through their unequal treaties, to see that the concerns of its smaller regional neighbours run along similar lines.

China and South-East Asia have had a long history together, but they must also work hard at understanding each other better so that the confidence and trust that has been built over time, albeit interrupted by occasional incidents, can be strengthened, consolidated, and built upon extensively. Trust and understanding are not built overnight, but we are not mistaken to think that the process has been going on for quite some time now.

Networks of relationships have been stitched across the region for centuries, from the trading routes and migration patterns of yesteryear to the regional production networks and the financial and business networks of contemporary times. Part of the reason why South-East Asia has been developing rapidly has been attributed to the “bamboo networks”, the ethnic-based business networks built upon the hubs and spokes of the Chinese diaspora that intersperse the region, with firm roots in the local communities but sturdily connected to the regional landscape.

But while the “infrastructure” of trust has already been firmly built between China and South-East Asia in the form of these networks of ties, which some scholars refer to as the “invisible linkages” that hold us together, there needs to be a more concerted effort to bring about more interaction and discourse, which are the lifeblood of trust, to engage the various communities at multiple levels.

These connections and dealings must not only dwell exclusively on economic and security issues; although important and, some may even argue, central, there should also be some effort invested into exploring how the cultural and normative aspects of these relations can be worked upon and perhaps improved, presenting opportunities to further strengthen the trust and deepen the understanding between China and its smaller neighbours.

In this respect, the idea of moderation as espoused by Malaysian Prime Minister Datuk Seri Najib Tun Razak and reiterated by him in his recent address to the United Nations General Assembly, may lend itself as a starting point in the search for mutualities of interest. This framework of moderation calls for the exercise of restraint and the creation of a discursive environment that allows for a multiplicity of voices to come together and collectively work towards solutions, defusing tensions and avoiding conflict.

This notion is perhaps compatible to the Chinese Dream; as China aspires for peaceful development with Chinese characteristics towards a moderately prosperous society, Malaysia and the rest of South-East Asia pursue their own goal of development that holds fast to moderate principles, so that their race towards becoming fully developed nations does not sacrifice their identities, traditions and culture, and sovereignty, the very things that make them what they are.

The idea of building a truly authentic East Asian community can begin with this very simple but powerful idea, and as Malaysia looks forward to assuming the chairmanship of Asean in 2015, it also looks to further strengthen ties between China, itself and the region through the values and principle of moderation.

Contributed by  Tan Sri Razali Ismail
> Tan Sri Razali Ismail is Chairman of Global Movement of Moderates Foundation (GMM). The GMM is an initiative of Prime Minister Datuk Seri Najib Tun Razak that calls for combating the scourge of extremism in five broad areas – peaceful co-existence, democracy and rule of law, finance, education and conflict resolution. The views expressed are entirely the writer’s own

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MaGIC, Malaysian Global Innovation and Creative Centre to spur entrepreneurship?

MORE COLLABORATION: Najib (right) answering questions during a session at the launching and gathering of 1Malaysia Entrepreneurship Programme (1MET) participants on the sidelines of 4th GES 2013 at Kuala Lumpur Convention Centre. Najib, together with United States Secretary of State John Kerry, spent about 20 minutes talking to about 5,000 1MET participants 



KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak has announced the establishment of the Malaysian Global Innovation and Creative Centre or MaGIC in Cyberjaya to encourage entrepreneurship among Malaysians.

He said in his speech at the Global Entrepreneurship Summit 2013 that the centre would be a “one-stop shop” for entrepreneurs in getting financing from banks or venture capitalists and also to serve as incubators for developing start-ups.

The centre would also help prospective entrepreneurs with intellectual property registration and facilities for training, coaching and mentoring, Najib added.

“Ideas and opportunities cannot travel through a vacuum - they must be born in an open, market-driven environment that welcomes them, nurtures them, (and) allows them to flourish and spread.

“Creating an eco-system in which ideas can be realised is one of the pre-conditions for success,” he said.

Najib also noted that Governments should play an active role in supporting research, irrespective of whether it had an immediate commercial application or not, and not hesitate to work closely with industry to promote innovation.

“Germany’s Fraunhofer Institute’s joint applied research ventures between business and the state provide one model for successful co-operation across the traditional sector divide,” he said.

In relation to this, he also suggested that higher learning institutions devote more time and funding to spin-offs, which can bridge the gap between research and commercialisation.

One-stop support centre for innovation in Cyberjaya

By Teh Eng Hock - The Star

KUALA LUMPUR: A one-stop centre to support companies involved in creative multimedia, research and development, outsourcing and data management will be set up in Cyberjaya.

Prime Minister Datuk Seri Najib Tun Razak said the Malaysian Global Innovation and Creative Centre (MaGIC) was part of the Govern-ment’s latest effort to enhance entrepreneurship.

“The centre will be a one-stop shop for entrepreneurs, with everything from getting financing from banks or venture capital to incubators for developing start-ups, from intellectual property registration to facilities for training, coaching and mentoring,” he said.

“Malaysia will also be hosting the 5th Global Social Business Summit next month,” he said at the launch of the Global Entrepreneurship Summit (GES) yesterday.

Najib said he was looking forward to receiving creative solutions from the Global Startup Youth programme, which is part of the GES.

The programme pairs some 500 young people with 100 mentors to look into some of the world’s most pressing problems, he said.

Later, Najib launched the 1Malaysia Entrepreneurship (1MET) programme, which will help to accelerate the growth of 5,000 young entrepreneurs annually.

“Please dream big. Be audacious. Dream of the improbable.

“The future is exciting. The future is today. The future is right now,” he told a cheering crowd.

During a question and answer session, Najib was asked if there would be a special allocation for the 1Met programme.

“Yes, the answer is yes. I will announce it in the coming Budget 2014. I can announce it today, but that will be letting the cat out of the bag,” he said.

Najib also said that entrepreneurs and businessmen should not be afraid or discouraged by failure, but instead use the experience to spur themselves to success.

“In a culture defined by a freewheeling and audacious capitalism, in a country like the United States, which draws on a history of both liberty and plenty, a failed business gambit is seen as useful experience. Failure is not a death sentence.

“Other countries have different traditions, but the principle of encouraging people to attempt the improbable, without the undue fear of failure, can be more widely adopted,” he said.

Kerry: US seeks to train 500,000 entrepreneurs globally

KUALA LUMPUR: The United States will enter into a partnership to train 500,000 entrepreneurs from Malaysia and around the world.

US Secretary of State John Kerry, who announced this, said the State Department would collaborate with Up Global over the next few years in 1,000 cities including Kuala Lumpur.

It will provide a full-spectrum support structure for entrepreneurs, focusing on every aspect of the entrepreneurial journey, from pre-idea through high growth stages.

Up Global is an organisation working with the US State Department with the aim of establishing entrepreneurship programmes around the world by 2016.

“The US will also take part in a mentor programme to facilitate entrepreneurship,” Kerry said at the 4th Global Entrepreneurship Summit (GES) here yesterday.

President Barack Obama had launched the GES in Washington DC in 2010 to connect entrepreneurs, banks, venture capitalists, investors and others to catalyse partnerships, encourage growth and strengthen ties.

Kerry was representing Obama who cancelled his visit to Malaysia citing the government shutdown in the United States.

Calling Malaysia a negara hebat (great nation), the chief US diplomat highlighted the country’s success in generating entrepreneurs in a multicultural setting, singling out Cyberjaya and prominent entrepreneurs Jimmy Choo and Tony Fernandes as among its success stories.

“This nation has given the world visionary business people like Jimmy Choo, who made his first pair of shoes at the age of 11.

“By the time he was in his 20s, his designs were being worn on sidewalks and catwalks from Los Angeles to London.

“And Tony Fernandes, long before he started hosting The Apprentice Asia, started the budget airline AirAsia,’’ Kerry said.

In a video address shown to the audience, Obama expressed his desire to make up for his absence and visit Malaysia soon.

“I had really hoped to be with you in person. Unfortunately, recent events in Washington made that impossible,” he said.

The president paid tribute to Malaysia, calling it “a dynamic economy, engine for regional prosperity and a country that’s increasingly connected to the global economy”.

“Likewise, Malaysia’s diversity, tolerance and progress can be a model to countries around the world,’’ he added.

Sources: The Star/Asia News Network

US mind-boggling politicians: stop rocking the boat, China Daily said

Furloughed federal employees, along with their family members, protest the government shutdown outside the US Capitol in Washington DC, USA, 08 October 2013. The federal shutdown in the US is in its second week - EPA Photo.

The prospect of dimmer global growth predicted by the International Monetary Fund should make it a matter of urgency for US politicians to stop manufacturing crises.

Five years after the start of the global financial meltdown triggered by the bankruptcy of Lehman Brothers, it is pitiful that the US is now putting the fragile global recovery under renewed threat with its mind-boggling political infighting.

The IMF on Tuesday cut its global growth forecast to 2.9 percent this year and 3.6 percent for next year. This year's growth forecast is 0.3 percentage points lower, and next year's 0.2 percentage points down, than the July projection.

Indeed, the growth slowdown in major emerging economies, as the Washington-based global lender identified, will contribute to a global growth fall in the coming years. Both cyclical and structural problems in these economies are demanding immediate and bold reforms to make growth more sustainable.

However, when financial ministers and central bankers gather in Washington later this week to discuss global growth issues, they will be lucky if their attention is not too distracted by the US government shutdown.

The inconvenience caused by the shutdown may be the least of their worries. The elephant in the room, the once inconceivable notion of the US defaulting on its debt and ensuing dollar upheavals will have to be acknowledged.

As the world's largest economy and the home of the global reserve currency, the US surely has the wherewithal to fund its government and avoid a catastrophic default by raising its self-imposed debt ceiling.

Yet the astonishing failure of the US Congress to put national needs before their partisan interests has sparked fears among investors and governments around the world that maybe it is time to think about the unthinkable.

That may explain why the biggest US creditors, China and Japan, have expressed concern over developments in Washington which could affect their several-trillion-dollar investments in US Treasury bonds.

US politicians can discuss, bicker and argue over government spending and economic growth. Kicking cans is one thing, but throwing caution to the wind is not a course of action worthy of the world's leading economy.

-  China Daily

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USA government shutdown !

IMF, China, Japan warn USA's debts on default! Demystifying the US debt ceiling

UNITED States (U.S.) President Barack Obama Tuesday declared that he was willing to negotiate with Republicans in passing at least a short-term budget that opens up the government at current funding levels.

But Obama, during a media briefing Tuesday, said his offer to negotiate with Republicans on the issues would “absolutely” stand if Congress passes even short-term clean spending and debt ceiling bills.

However, he declared that “the only thing that I will say is, we’re not going to pay ransom for” America paying its bills.

This came as it was revealed yesterday that there are no talks going on at any level to resolve differences over the government shutdown and the debt ceiling deadline.

But Washington’s march toward self-inflicted financial calamity is setting off alarm bells around the world as general bewilderment turns into genuine concern over a possible default by the world’s lone superpower.

The International Monetary Fund (IMF) as well as China and Japan – which hold a combined $2.4 trillion in U.S. debt – have called for a quick resolution to the crisis and expressed worries over the economic consequences of a default.

Meanwhile, Obama said U.S. credit-worthiness will be affected if markets see that “we’re not paying all our bills on time.”

Noting that he missed a major conference in Asia this week because of the government shutdown issues, said the president said: “whenever we do these things, it hurts our credibility around the world. Makes it look like we don’t have our act together.”

He warned that if Congress doesn’t raise the debt ceiling, “every American could see their 401Ks and home values fall,” and the country would see a “very significant risk” of a deep recession.

Obama said that Congress has to vote to raise the debt ceiling as soon as it votes to reopen the government. Failing to raise the debt ceiling “would be dramatically worse” than a government shutdown, he said.

He criticised House Republican tactics in dealing with the government shutdown and a debt ceiling increase. “Let’s lift these threats from our families and our businesses and let’s get down to work,” he told reporters yesterday.

Obama spoke after Republicans reportedly offered a new approach yesterday to resolve the U.S. fiscal standoff, proposing creation of a bipartisan panel to work on deficit reduction and find ways to end the government shutdown and make recommendations on a debt-limit increase.

The proposal, which was quickly dismissed by Democrats, came as House of Representatives Speaker John Boehner and President Barack Obama spoke by telephone shortly after Boehner adopted a slightly more conciliatory tone in comments to reporters.

“There are no boundaries here. There’s nothing on the table, there’s nothing off the table,” Boehner said after a meeting with House Republicans, making no mention of his recent demands to delay parts of Obama’s healthcare law in return for approving funds to end the government shutdown.

In the first official response by China, Vice Finance Minister Zhu Guangyao said that a solution must be found quickly in order to “ensure the safety of Chinese investments” and provide stability for economies around the globe.

“We ask that the United States earnestly take steps to resolve in a timely way the political issues around the debt ceiling and prevent a debt default,” he said. “This is the United States’ responsibility.”

The International Monetary Fund (IMF) has trimmed its forecast for global economic growth at the same time as lifting its UK growth projection.

It now expects global growth of 2.9% this year, a cut of 0.3% from July’s estimate. In 2014 it expects global growth of 3.6%, down 0.2%.

It cited weakness in emerging economies for the cut.

But it warns that the political standoff over raising the US government’s borrowing limit, if it results in the US defaulting on its debt payments, “could seriously damage the global economy”.

It expects growth of 1.6% in the US this year and 2.6% next year, down 0.1% and 0.2% from its July forecast.

Economists have predicted that a default would do great harm to economies around the world.
Obama recounted to reporters his telephone discussion yesterday morning with House Speaker John Boehner:

He was happy to eventually talk with Republicans about issues they care about, but that “shouldn’t require threats of a government shutdown” or economic chaos over the heads of the American people.

Yesterday, there were news conferences and a high-level phone call between Obama and the House Speaker, but no immediate sign of progress on reopening the government a week into a partial shutdown or reaching a deal to avoid the first-ever U.S. default next week.

Obama called Boehner yesterday morning, and the White House then announced the president would make a statement and take some questions from reporters at 2 p.m. ET.

Earlier, Boehner demanded that Obama and Democrats negotiate with Republicans on steps needed to end the shutdown that began on October 1 and raise the nation’s debt ceiling before the deadline for default on October 17.

“Americans expect us to work out our differences, but refusing to negotiate is an untenable position,” Boehner said, adding that Obama and Senate Majority Leader Harry Reid are “putting our country on a pretty dangerous path” by rejecting GOP calls for talks

- The Guardian

Demystifying the US debt ceiling: 5 things you should know

As the US government is about to hit its so-called debt ceiling of $16.7 trillion on Oct. 17, the frightening prospect of the world’s biggest economy running out of cash is dominating headlines around the globe.

So, in an effort to shine some light on what exactly the debt ceiling means to all of us, Business RT spoke to leading Moscow financial expert Chris Weafer, a senior partner at Macro-Advisory.com.

1  What exactly is the “debt ceiling?”
 
The US debt ceiling has existed for almost a century, and describes the maximum amount of money the US can legally borrow. The country introduced the legislative limit on its debt back in 1917, and since then it has stipulated the affordable amount of national debt that can be issued by the US Treasury. As of September 25, the US Treasury reported federal government debt at just shy of $16.7 trillion
($16,699,396,000,000.00, to be exact) in its daily statement, a figure which has been reported for 130 days straight. This is about $25 billion shy of the precise legal limit – $16,699,421,095,673.60. When the US approaches this debt limit, it can take some “extraordinary measures” to buy some time before Congress agrees to raise the ceiling. In its entire history, the US has so far never reached the point of default, where Treasury can’t pay its debt obligations.

2  Who holds the US debt?
 

The US owes about two-thirds of its debt to US-based creditors, with almost 66 percent of the country’s debt held domestically. US individuals and financial institutions hold around 31.7 percent of US Treasuries, with the US central bank, the Federal Reserve, which holds some 12 percent of the debt. Foreign creditors, including China and Japan, own an estimated 34 percent of total US government debt. These two 'big lender' countries have recently urged the US to take decisive steps to avoid a default.

3 What does the US borrow the money for?
 
In the US, often referred to as a 'big-spending' country, both individuals and the government have habitually spent more than they earn, pushing the economy deeper into debt.

“Just like any ordinary individual, the choice is either to cut back on spending or to borrow money to bridge the gap,” Weafer says.

In 2012, 22 percent of total government expenditures went to social security (means-tested payments to the poor and unemployed), while 21 percent was spent on healthcare, again mostly for poor Americans who cannot afford private health insurance. The third largest expenditure item is defense at 19 percent. In recent decades, the US defense bill has ballooned, mainly due to costly wars in Iraq, Afghanistan and elsewhere. The so-called War on Terror has also added greatly to the debt burden, while the Department of Homeland Security, created after the September 11, 2001, attacks on the US, has cost taxpayers more than a cumulative $800 billion.

The biggest contributory factor to the fast-growing debt mountain in recent years, however, has been the economic crisis that began in 2008. Apart from hundreds of billions of dollars paid out to rescue failing Wall Street banks that had made too many toxic loans, the US government has also paid out large amounts on vital social programs to aid the growing 'army of the unemployed'. Coupled with the Bush-era tax cuts to the rich and big business, lower average incomes and greater unemployment have hit government tax revenues hard, sending federal government debt sky-high.

4  Why can’t they simply print more dollars and pay their debt?
 

No economy in the world can simply turn on its printing presses and create as much cash as it wishes, as this would make its currency worthless.

“If the amount of currency in issue is not sensibly related to the strength of the economy, then foreign trade partners will … devalue the currency quickly,” Weafer explains. “If you have one asset and income source which allows you to issue one dollar, and then you print one more dollar, everybody else will see what you have done and will value your one dollar at only 50 cents. Some countries have done that in the past, but in those cases people soon had to use suitcases just to carry enough currency to buy a loaf of bread.”
 
Under the Bretton Woods financial system, established in 1944, the amount of currency in circulation was linked to gold reserves. But in 1971, the US abandoned this system and started to include a number of other economic factors, based on a recognized ability to service debt and prevent inflation, and maintain orderly trade with the rest of the world.

5 How would a US default affect people around the world, on a macro and personal level?
 
If the US defaulted, then the world’s financial system “would start to freeze up,” Weafer says. “Banks would pull back from risk and lending. The US economy would slide towards recession and the global economy would quickly be affected.” A prolonged US default would lead to job losses everywhere and much tougher borrowing conditions for companies and individuals, he adds.

“A short period of default would also have a bad effect in that it would hurt confidence in the world’s financial system,” he says. “Bankers and investors would assume that a short-term fix in the US would mean it would only be a matter of time before the same issue arises again in 2014. The resulting caution would make life that much tougher for all of us.”
 
- RT news

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