Eldon-Online

To Be - Or Not To Be; A Brexit Note

Okay, so I stole the line from Mr. Shakespeare, but doesn't it actually fit the mood over Brexit rather well? 

Last year the British public voted, albeit not overwhelmingly but at least by a majority, to leave the European Union. It was a democratic process, leaving aside whether a referendum was the right thing to do or not. I personally believe it was the wrong decision, but it is what it is and in a democracy you put your differences to one side and get on with it. It does seem, though, that from a legal point of view even if a majority of people agree to a course of action that doesn't mean you can just go ahead and implement the will of the people. I am not a lawyer so I am not about to opine on legal niceties, but if this is the way things are run in a democracy it seems to me that China is not too far out of line with the rest of the world in its own decision making processes.

And just to be sidetracked for a moment on democratic process and China take, for example, the recent US election where one candidate wins the popular vote but loses the Presidency because the US electoral college of something like 538 voters chooses the other candidate. Contrast that to the upcoming and widely believed to be undemocratic election process for Hong Kong's new Chief Executive. That will be decided by almost 1200 people - rather more it seems than are needed to elect an American President.  And no, before you jump up on the soap box, of course it's not a like for like comparison and yes it is flippant, but the point I am making is that even in the apparently most democratic societies there are indications that all is not what it seems.

Which brings me back to Brexit. I don't live in Britain so there is a chance I am missing something here. And I confess to having been reading news reports again - often a mistake - but the successful legal challenge saying that the triggering of Article 50, which is the mechanism by which the United Kingdom can apply to leave the European Union has to be discussed first by Parliament who then has to vote on it. This seems to have brought some interesting comments from more than a few Members of Parliament who are now saying at least we can debate the subject properly, forgetting apparently that the constituents they represent have already spoken on their behalf. In particular comments like they will only agree to the bill put before Parliament if "we get a good deal from the Europeans".

Wait a little minute here - getting a good deal from Europe? Why should they be interested in giving the United Kingdom an easy "out"? If Britain gets good terms, then that surely will encourage others to say "okay, we want out of the EU too, and if the "sweetheart" deal for Britain sets a precedent then we'll have the same". And so begins the slow, painful, inevitable unravelling of a union that actually started off with the right ideas. It was small in number but economically influential. It was manageable, and fell into the category of "good things come in small packages" - but then as my Mother used to say - "so does poison". And so the EU grew, and became unmanageable, and the previously economically strong countries began to have to bail out the smaller ones. Decisions made by the EU affected all members, on a "one size fits all" basis. Given those arguments, I am not altogether surprised at Britain's decision to leave the EU. I believe nevertheless that we should have stayed in for a variety of reasons - some of which I think will become clear as the negotiations to leave become more advanced. Maybe I'm wrong, I hope so, but I do not see the powers within the EU being keen to allow the UK too many concessions, despite the demands of the parliamentarians.

And just as an aside to that, I was at the Asian Finance Forum in Hong Kong two weeks ago and listening to one or two of the Europeans present who were consistent and adamant in their approach to an exit saying for example - and it has been in the media since - that they were determined that London would not be permitted to carry out Eurodollar clearing and that it would have to be done in Paris or Frankfurt. A loss of jobs and of prestige.

I am often asked what I think will happen with Brexit, and I usually answer that I have no idea - because I don't. Today it is only possible to surmise given the comments one hears, and until such time as the negotiations start we will not really know in which direction we are going. But I can guess this much, which is that if parliament in Britain goes against the wish of the people there will be trouble, and that if parliament says it demands certain conditions from Europe, they are unlikely to get them - and then what are they going to do?

I guess it's a case of que sera sera!

Mind The Gap

No, not the warning that accompanies the announcements at various stations on the London Underground about the gap between the train and the platform, but the rather more worrisome condition that is surely one part of the cause of our current ailments and which, if left unaddressed, like any ailment is likely to get worse.

The people I meet these days are increasingly bemoaning a world that seems to be fracturing. Lower morals, insensitivity, uncaring societies, social dysfunction as a result of over reliance on social media, populism, nationalism, unemployment, senses of entitlement, and unequal pay. And it is this latter issue that is creating a widening dissent. You see it in the industrial action, the media ... all around you.

I have been privileged to grow up in what has probably been the luckiest generation in modern history. I was born in a country that was emerging from a World War, which of course folk said must never ever happen again. (Now where I have heard that sentiment expressed since?). We were not at all well off, but there were jobs for both the skilled and the unskilled. You took life as it came and dealt with it. There were few distractions, a la social media, unless you created the entertainment yourself. People were paid wages rather than salaries, and when the latter happened the target was to earn GBP1,150 a year. That was in 1964, when I started in banking, although I was at the bottom of the ladder and getting much less than that of course; but equivalent today, so the brains tell me, to around GBP22,000. But that is not the problem. The problem is THE GAP.

To me it is quite a simple dilemma that should have quite a simple solution, but I fear it never will until the problem THE GAP creates becomes so big that we all fall into it.

Let's look at it simply. A dilemma I see in some of my roles today is one of remuneration where I note there are very hard-working staff at the bottom of an organisation, and some equally hard-working (in most cases) executives in senior positions. Happily most of the seniors are there on merit rather than the old method of promotion that was largely based on seniority instead of ability; ability acquired over years of hard work and learning.

But when it comes to bonus time I get told that the staff at the bottom of the ladder should, just for illustrative purposes get say 1 month pay extra and the people at the top must have 2 months extra pay, because that is the "market". This means of course that the incremental effect on the senior person's pay is significantly more than the more junior person, and the gap widens year by year. The same sort of "logic" also applies to increments.

Take it a step further down. One of Britain's most successful chef's (actually he's French but operates in Britain) has just been accused of paying his staff below the minimum wage. Of course he knew nothing about it – he says! I know of families in Hong Kong who take great delight in saying that they have found ways to pay their domestic helpers less than the "going rate".

Look, this isn’t a debate about whether or not the top 1% of incomes “earned” is more than 90% of the world put together, but it’s more a request for there to be some common sense in this whole issue. I have no concerns about bonuses for genuine achievement, not do I fret too much if there is recognition that the responsibilities of management are indeed somewhat onerous and require great minds, keeping it in perspective. But there are some in our communities today who still have the view that greed is good. That not paying your taxes is somehow clever. Pushing down on people because they need to take a job, any job at any pay, just to put some food in the mouths of their families.

The people who think this is not a problem are the ones who will point to the fact that many millions of people in the last 20 years have been brought out of absolute poverty. That is a truism. But it doesn’t stop the “haves” getting ever richer and the “have-nots” off the poverty line, but still only just able to feed themselves.

Should we therefore really be surprised at the growth in populism and nationalism? Like water shortages, that are going to create major global issues in the not too distant future, if we don’t address the matter of income disparity we are going to end up with a young, unemployed, poorer generation who feel they have been let down by their forebears and who will have little doubt they need to take matters into their own hands, with inevitable results.

When The Game Becomes Reality

There will be many sighs going around the world on Friday next week. Sighs signifying that, for some at last, the waiting is over and we can get on with life, and probably as many sighs signifying an "Oh despair!" attitude as Donald Trump takes the Oath of Office as he is Inaugurated to become the 45th President of the United States of America.

Now, before you go rushing for the delete key (sick bag?) I am not about to charge off with a piece to add to the millions that have been written already ... and myriad yet to come ...  of so-called informed opinion about the good, bad, ugly, truths, untruths and anything else the writers believe to be true on the subject of the next President. And they all think that their story is the only one to believe. I happily acknowledge that some have better insights than others but I am less sure about the rest and how do you choose?

No, I propose to be significantly more dull and actually just consider a few things that have crossed my mind recently, although partly as a result of what we might be seeing post the inauguration, in so far as matters are playing out in Asia. Before I do that, a little trip down memory lane. Mine!

January 20 is the designated day for every US Presidential inauguration, or at least has been since 1937, but it's an important date for me too because on that day in 1968, somewhere around 10 a.m, I stepped inside a BOAC (British Overseas Airways Corporation - forerunner to British Airways and sometimes unkindly referred to as Better On A Camel) VC10 flight from London to Dubai with a stopover in Beirut, arriving some time in the afternoon ready to start work the following morning. My first international "posting", never ever dreaming what I would do or where I would be 49 years later. Okay, that's enough nostalgia!

Have you been noticing what's been going on in Asia lately?

There has been much rhetoric coming from the USA over how they are going to rein in China and make life tough, and the USA has demonstrated that it wants a different relationship with Taiwan, and how it believes that the Philippines and Japan are going to need to be friendly towards them - although I am not sure what the US reaction will be if Japanese motor companies propose to build a car factory in Mexico. Lots of talk, but what is the reality?

Frankly I am not sure it is going to work out the way some might intend.

President Duterte, whose popularity in the region is quite amazing given his professed actions and methods in curbing the illegal drug trade - a curbing that in itself is laudable but perhaps not quite in the manner attributed to the President - has visited China. He suggested that despite his opposition to the creation of "islands" in the South China Sea, they and China should try to be friends. Smiles and handshakes all round followed by some substantial infrastructure investments in the Philippines by China, and an allowance by them so that Philippines fishermen could fish once again in disputed waters. Off goes President Duterte to Japan where he publicly states he wants the US forces out of the Philippines in the next two years. One has a sense that the Japanese would like a similar arrangement to get the US out of Okinawa, so this plays well with them. What has just happened? Japan has provided some finance for more infrastructure projects in the Philippines. Duterte is playing his international hand well.

Now here's a dilemma. We have to be honest and say that relations between China and Japan have never been that warm, and although Ms. Inada, the Japanese Minister of Defence has been successful in raising the amount of budget spend on the military they would still as a back-up probably prefer to keep the US fleet nearby as long as their personnel behave themselves. But wait a minute - didn't the President-elect say that if countries wanted US assistance they would have to pay for it? Where's that going to go for heavens sake?

And in the case of South East Asia I get the sense that there is still some comfort in having a US presence nearby - and if President Duterte is serious about ridding himself of US personnel from his country - especially if he has to pay for the "privilege", what next?

Add to that little melting pot the concerns being raised about North Korea's new-found nuclear missile launch capability, the difficulties being faced by Mrs Park in South Korea, the continuing woes of Prime Minister Najib in Malaysia, the "blasphemy" row in Indonesia - and we haven't even started on places like Vietnam, Laos, Cambodia and Myanmar - we have plenty in this region to think about already.

And while President-elect Trump faces a reality show of his own, starting out as something of an Apprentice, those of us with interests in Asia need to be very sure we keep ourselves up to speed with the local news. Maybe on twitter!!

A Choice of Topics

 Often any decision, even the wrong decision, is better than no decision.

                                                                                            Ben Horowitz

I started off by thinking I was going to comment on a report I read earlier this week on the subject of strikes in Britain and the demands being made by the unions for a fairer distribution of corporate profits.That would have led to a discussion on the wealth gap. Then I got sidetracked by a conversation I had on what has happened to women in the recent past. Not just the fact that we were anticipating a more prominent showing by Women Leaders - now Clinton has faded, while Merkel and May are both under pressure, but the issues go deeper than that. So, a possible opportunity for a rant there - or should I say a series of thoughts. But then I got sent an interesting YouTube clip which deals with a subject I am hugely interested in - millenials. And this one was a clip - 20 minutes of it - that touched on a variety of topics that made me feel unsettled, troubled, somehow having failed, and yet in agreement ... and wondering what it all means. Oh boy! Where was I to start?

Decision time! Women first!!

Surely, any right thinking person in the modern era has to understand the enormous benefits that women bring to our society. It doesn't matter whether it is social or business; technology, finance, design or shipbuilding.

There are negative issues surrounding the beliefs and practices in some cultures over the role of women but, and I accept this is a controversial statement, if those people want to practice such beliefs then they should find an environment in which they can do so and not try to impose their culture on others. That, by the way, works both ways and if you find yourself in a country where greater attention is paid to modesty then don't think as a westerner, for example, that because what you do in your own country is acceptable it should be okay anywhere else.

I am a great believer in diversity in general, and also in getting the right person for the job - irrespective of gender, ethnicity or other any persuasion. I am also not generally in favour of having quota systems. But I am not at all convinced that we provide the necessary training or create the right opportunities for women to prepare them for roles.

There are various initiatives in a number of countries whereby corporations are either encouraged or required to have a certain number of women on their Boards. This works to a degree, but too often the ratio of male:female workers in senior positions is heavily skewed in favour of the males. This means that the pool of available women becomes limited and surely we should not be focusing just on Board positions but asking companies why they don't have more senior women in their corporate structure?

I am due to moderate a panel at a conference in a week or so and I was looking at the list of speakers and panellists. Frankly, I was shocked at the lack of women speakers, less than 10%, and asked the organisers for a comment. The response was that they had asked a number of high profile women speakers but most had declined. I'm afraid this goes back to an earlier comment. There are so few women in senior positions that the pool is small and they are therefore much in demand. But do you always need to have the very top names - and nothing else will do? There are many highly articulate, talented women out there who just need some exposure, and in my view we are letting them down.

I said earlier on that I was against quotas, and I am. I came from an era where business was done based on principles of good behaviour and trust. This subsequently became eroded to the extent that rules and regulations had to be imposed. Perhaps we do need to something similar to make companies wake up to the value of women.

In one or two of the Middle Eastern countries with which I am involved, there are quotas for localisation. These are set not just on an overall basis but on a layered basis - level by level.

Maybe it's worth a thought.

 

Resolution Time ... Or Not!

I don't know about you but I gave up making New Year resolutions years ago on the basis that it was a waste of time. A lack of discipline, I know, but I would never keep them anyway and they were usually designed as a temporary measure. Losing weight, getting fitter, stopping drinking alcohol for a month - although most drinkers I know who follow that one usually choose February because it's only got 28 days in it. Really!

That said, let's be honest with ourselves. If something needs to be done you don't need to wait until the beginning of a New Year to do it. If you want to start thinking about losing weight in November what's the point of saying "Oh, let's wait until 1 January to start". Do it; start now - stop wittering and just get on wth it. And the same goes for all those other little 'resolutions" that you have tucked away to start on an apparently auspicious date. "I will start to exercise on 1 January" - what's so magical about starting on 1 January - especially as by the time you get to the 15th it is quite possible you are already making excuses to stop - you know, "pressure of work" and that sort of thing.

There is no time like the present, they say, which then leads me to wonder why it is we cannot find solutions more quickly to some of the issues we are facing today? 

The last year has been quite a year - and it doesn't matter whether it has been the Western calendar version of the New Year or any other - particularly the Chinese Year of the Monkey. What a lot of mischief that one caused! Too many deaths of people who are household names - but too many children who are never named. Children who have suffered because of bombs, targeted or otherwise by the cynical or by random acts. Drowned by trying to escape the ravages of war or famine in those countries either less fortunate than the developed world or ruled by despotic and corrupt leaders.

Why is it that our resolve rather than our resolutions - if we are going to make them - cannot somehow deal with important issues? Why is it that we have become insular, nationalistic in many countries and we cannot understand that we have but one planet and that we are expected to share it? Why is it that those who do have a vote are not using it to elect people who can lead the world to a better place? The slogans are clear "Let's Make (insert name of your country) Great Again". Why can't we strive to make the World great. To make it liveable where citizens do not have to flee their homeland for fear of persecution, be it religious or ethnic or in some cases economic.

If we do think that a resolution is worth making in 2017, and we want to start today and if you are strung up on making them on 1 January, now is your chance. But it must be a resolution of resolve and longevity. Let's look on the future of 2017 with hope and by the end of the year look back on it with satisfaction for a job well done.