Eldon-Online

A Piece for Peace

With our daily diet of negative media I am not sure whether any of you have noticed that outside the global financial meltdown, (with associated recessions/depressions and unemployment), the distressing tales of infant deaths in the United Kingdom due it seems to appalling negligence by the Social Services and the continuing loss of life in war zones such as Iraq and Afghanistan, there is actually some potentially positive news out there.

The New York Times, for example, has been running a series of full page advertisements in the last week during the occasion of Saudi Arabian King Abdullah's visit to the United Nations General Assembly. The one I noticed was inserted by a group promoting an event known as a "Weekend of Twinning". Twinning by 50 Mosques and 50 Synagogues across the USA and Canada to be held later this month. The message being jointly presented by the "Weekend" is one of an effort to confront Islamophobia and anti-Semitism. 

It's a start but it needs to go much further, and I hope it will. The signs, at least to me, look positive.

It is a truism that both of the "conditions" or phobias, that is Islamophobia and anti-Semitism, exist in large measure in our world, the latter for many more years than the former. Thus a greater degree of understanding through education can surely only be good. But dealing with the phobias alone does not deal with the broader issues - and the next steps, which would lead to co-existence. A co-existence by mankind in general - where a Muslim arriving in any country is not immediately branded a potential terrorist, where a Jew is not seen as a member of a tightly knit almost secret society with excessive influence in the corridors of power, and an historical financier of wars for financial gain. 

That said let me be the first to acknowledge that I am venturing on to shaky ground here. I am an amateur observer of what are some deeply rooted issues. But I suspect even so, having lived a good number of years in the Middle East, and continuing as a regular visitor I have a better understanding of those issues than many who present their opinions as "experts". Nevertheless, I am receiving some clear pictures in my mind, and verbal messages in my ears that the senior leaders in the Middle East are beginning to stick their necks out and send ever clearer signals that the world must have peace in the region. Peace that must start first with an acknowledgement that terrorism, threats from nearby countries, and the general state of "alert" that prevents human beings from going about their daily lives without the threat of being blown up, is unacceptable. 

I am not so naive as to believe that this is easily achievable, although I do think that former President Clinton came close to reaching an agreement just before he stepped down from the Presidency. But any agreement is only possible if Middle Eastern leaders, from both sides, genuinely want there to be peace. Will an agreement stop the hostilities immediately? It is unlikely, but those same leaders can put pressure on the perpetrators if they have a will to do. And they are showing signs of doing so.

It may be somewhat ironic, but what sort of a positive message would it send around the world if we really achieve something positive around the same time as the Christian faith celebrates its religious holiday? And before the end of the Chinese New Year of the Rat - a year that the soothsayers predicted would be every bit as appalling as it has turned out to be - a peace that would have a very significant impact upon a world that is fearful, beaten and miserable.

It doesn't really matter what you believe in, does it? It would be seriously good news whenever it happens - and if the event in North America is a start, there could be a boost very soon. 

However we choose to place our wishes and thoughts, this the time we should all put our minds to doing our piece for peace.   

Vote for Hong Kong

It's election time in the USA. It is where I am right now and as I write it is still Tuesday so it ain't over. Personally I shall be pleased when it is. Not because the outcome is not important, it is, but because of the months and months it seems to have been assaulting our ears in Hong Kong and elsewhere - and the money the process costs in America. Frankly I prefer the British electoral system. Call an election, keep the period for electioneering short and restrict the amount of money it costs.  (Similar to the USA, though, it still doesn't guarantee we get the right person at the top!)

So with elections being topical I started to think, as I often do, about Hong Kong. Not from a political leadership perspective, but from the point of view of Hong Kong's position in the world, in Asia and in China - particularly in the post "American Crisis" era.

 Historically Hong Kong has thrived on crisis; political or economic. It was done by a mixture of entrepreneurial and practical business people with common sense, a facilitative civil service and a hard working labour force. 

 What's changed? 

 Well not a lot when you think about it. The entrepreneurs are still there, university-educated perhaps but with less of the raw gut instinct of their fathers. The civil service is still there and has the ability to perform as before, even if it does not always show the inclination to do so (due partly to the presence and pressure of a less business savvy and more banana-driven and hirsute legislature), and the workforce still seems to be largely willing to perform as hard as before. So although we, along with everyone else, who has been caught up in the "American Crisis”, have some issues, we've nothing to be concerned about long term, right?

Well, maybe we'll be lucky, but this is no time for complacency and it is pleasing to know that at least some in the business community are looking seriously at the subject. Mind you, looking, debating and agreeing are only a part of the sum; action is harder.

 I was delighted to be asked recently to give my views to a group of business people. Delighted because at this stage of career I am pleased to be asked my opinion about something - well just about anything actually.

 I used a couple of stories to illustrate the points I was making but my main thoughts from the first story, in brief, looked at:

 - the world over the next 30 years; a more interconnected, interdependent and international world. A world in which Hong Kong, despite the ties with China and the obvious synergies, must remain international in focus unless we want to become just another city in China - and a small one at that.

- whether we need to ask ourselves some basic but sensitive questions. For example have we become all too comfortable in relying largely on China? Do we realise there are markets in directions other than north? 

- Simply put, Hong Kong is where it is today because of our international focus. Because this is a city where people from different places can do business together. If we want to remain relevant to China, and the world, our internationalism cannot be left behind - unless we want to be left behind.

 In terms of the second story, the salient point was that as Hong Kong moves forward we have to increase our appeal. In the comments above, I talked about our interconnected world. In such a scenario people we need in Hong Kong will only be attracted here if our city offers them and/or their families the best lifestyle. This means being honest with ourselves. Are we sometime soon going to go beyond paying lip service to cleaning up our environment or do we expect to be able to do as little in the next 30 years as the last 30 and still have a city worth living in? Simply put, if Hong Kong hopes to compete going forward, it must be a desirable destination for both business and leisure.

 Lastly I made a few points about aggression; being aggressive in defending our turf and our reputation. There is a re-balancing taking place in world economies. We are becoming increasingly volatile in the global economy - a volatility that is being partly driven by flows of information and misinformation. But in this environment we need to consider what we must do to stay ahead of the competition. 

Once again, these trends raise some sensitive but basic questions for Hong Kong. Questions about how to best fend off the competition, to make sure we stay ahead of ALL those cities in Asia that want what Hong Kong already has? But also questions about dealing with negative perceptions transparently and promptly and aggressively protect Hong Kong's regulatory reputation.

So, a few thoughts on this Election Day but for me - and I hope for those of you who have an interest in your future, when you have an opportunity - Vote for Hong Kong.

"We Will Survive"

With the above words Tony Tan, Deputy Chairman and Executive Director of Singapore's GIC, concluded his remarks at a session of the Institute of International Finance's Annual Membership meeting in Washington DC last month.

I agree.

The world has suffered many madnesses in its history, and if you have never lived through one previously you will always believe that yours is the most extreme, the worst ever, the absolute end of the world, and that we should never allow such a thing to happen again. But are the problems we face today truly worse than previous disasters? I missed the Second World War but my parents did not - so I can only imagine what they and millions of other people, ordinary people, went through. My parents missed the crash of 1929, or were too young to notice. History is littered with examples, experienced I am sure by our ancestors. Disasters of varying degrees of magnitude beset us on a regular basis, it seems, but we always seem to manage to get through it. 

Certainly in such times, and sadly, people who should not suffer - often do so. While others, already at a relative advantage perhaps, find ways to turn the crisis into an opportunity. (And do not be misled into thinking that the word for crisis in Chinese, weiji or 危机, actually means both danger and opportunity; lovely theory though it may be, it seems that whilst wei is indeed danger, ji means something like "incipient moment; crucial point, when something begins or changes. Which could, I suppose, give the idea of opportunity – or it could mean more trouble. But I digress).

In plotting the course of this particular crisis, it does seem that the severity of it has been underestimated all the way down the line, with the result that each Government or Economic Bloc's solution has proved to be nothing more than a band-aid, requiring more and stronger medicine on a regular basis. There are signs, however, that we are getting closer to some kind of stability, albeit still very fragile, and I have no doubt there is more to come.

There are questions that will be asked, once the dust has settled, and I am sure there will be additional regulations imposed as a direct consequence of some of the answers. There will be people considerably more erudite than I am who will provide all the economic arguments you want to read; so many arguments, in fact, you may also become as confused as everyone else. And they will tell you what, in their view, was the cause and the real effect and how it should have been spotted, (some will even tell you that they did spot it, but no-one listened) and stopped.

There will be comments from all quarters on the role of the investment bankers, the politicians (what elections??), and the people who decided they would no longer pay their mortgages for no better reason than there was no recourse to them as borrowers. There will be stories of the inappropriate selling of investment products to the wrong people, of rising inflation and how - in the end - the era of low interest rates that had created an overleveraged society brought about the "American Crisis". (Well, we like to call it that in Asia because we were pretty quickly dubbed as having the Asian Crisis a few years ago. A crisis that taught us many lessons, since heeded).

But, we will survive. We may take many years to return to the sort of free-wheeling lifestyles witnessed in various places, if that is really what we want to do, but I suspect we may be the better for it - until we forget all the lessons learnt and do it all over again.

Forget? Surely not! Perhaps the following few passages will give you a clue - 

"Bank failures we may have now and then, but not catastrophes like these. Our future failures, if any, will arise from imprudent banking, - from the locking up of deposits in unavailable forms of security..."

"The existence of Leeman's (sic) Act is another point in favour of our future outlook. Under that act, the broker who offers shares for sale must have the shares to sell. He cannot execute unlimited bear operations in the shares of any bank which he may select for attack and thus place its credit, and possibly its existence, at his mercy"

" The panics of the future will be influenced to some extent in their direction and force by the action of the public press. What any leading newspaper says today will be repeated throughout the land in a million or so news reports tomorrow"

Hmm; passages (a few of many) taken from "The Country Banker", a book by George Rae (a Scot, of course) first published in 1885! So - exactly what is it we have learnt in 123 years?