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Showing posts with label Insight. Show all posts
Showing posts with label Insight. Show all posts

Insight: Testing the limits of freedom in new Burma

Written By Guru Cool on Friday, December 2, 2011 | 10:55 AM

1 of 7. A family sits in the doorway of their thatched hut near rubber trees in Dawei in southern Myanmar, near the site of a planned special economic zone and deep sea port, November 19, 2011.
Credit: Reuters/Staff
By A Reuters Staff Reporter
MAYINGYI VILLAGE, Myanmar (Reuters) - Tun Aung knew there were plans for his village to be moved to make way for a multi-billion dollar industrial zone and deep-sea port, but the whole thing was hard to imagine.
Then one day last month he discovered a new road slicing through his family's cashew tree grove, part of a network that will link to a super-highway across southern Burma to Thailand.
"I am very angry about this," said the 56-year-old farmer, who said his village leader had agreed under pressure to have everybody relocate. "There was no compensation. This land wasn't bought (by me), it was handed down from my father."
The road is just one piece of a $50 billion deep water port and special economic zone that is meant to transform this wild landscape of beaches, small plantations and scrubland into Southeast Asia's largest industrial complex.
Au Bar Tha, a 57-year-old monk, is one of thousands in the area who face relocation because of the massive project. In the Myanmar ruled by generals, who never hesitated to use brutal force to achieve their ends, that would have been that.
But Myanmar under a new and nominally civilian government has shown itself to be more responsive to the will of people. It cancelled a $3.6 billion Chinese-led dam project in September following weeks of public outrage.
Inspired by that, a grassroots movement has emerged here to oppose the massive development. New legislation passed last month gives them the right to peacefully assemble. "I absolutely don't want to move," Au Bar Tha declares. "I will stand like a stone and if they want to move me they will have to lift me up."
Elsewhere in the country, former student activists who had eschewed politics since a 1988 democracy movement was brutally crushed, are testing the air again. Workers are beginning to organize. Exiles are being wooed to return.
As the former British colony embarks on its most dramatic changes since a 1962 military coup in what was then Burma, mega-projects like the 250 sq km (97 sq mi) Dawei Special Economic Zone hint at a rapid acceleration in both investment and development.
With a metal ruler, Au Bar Tha points at a spot on a photocopied map where a new $8 billion deep-sea port will be carved into the shore. He notes places where an oil refinery, a coal-fired power plant and a petrochemical factory will replace rice fields, cashew and rubber trees and jungle.
Then, he slides the ruler north to his village of Mayingyi and to the words adjacent to it. "What is a combined cycle power plant?" he asks earnestly, hoping rare visitors from outside the area might be able to enlighten him.
Dawei's position on the map highlights Myanmar's geostrategic importance as it emerges from its self-imposed isolation. Road and rail routes from the industrial zone, built by Thailand's biggest construction company, Italian-Thai Development Plc, will link Dawei's port to China, India and Southeast Asia.
In a country where a third of its 55 million people live on less than one U.S. dollar a day, Dawei is striking in its ambition. Super-highways, steel mills, power plants, shipyards, refineries, pulp and paper mills and a petrochemical complex are part of the plan, as are two golf courses and a holiday resort, according to Italian-Thai.
Up to 30,000 people, mostly impoverished rice, cashew and rubber farmers living in thatched-roof huts, must be moved during 10 years of construction, say local activists who are fighting for compensation for the displaced or to block construction of polluting projects.
"WE HAVE NO GRUDGE"
The new activists take their inspiration from Myanmar's democracy leader Aung San Suu Kyi, a proponent of non-violent resistance. Released from years of house arrest just over a year ago, she has rejoined the political process.
Suu Kyi had opposed the Myitsone dam and helped convince the government to suspend the project. That caught the eye of former activists such as Ba Htoo Maung.
Htoo Htoo, as he is known, was arrested on December 11, 1991, a day after Suu Kyi was awarded the Nobel Peace Prize. He was stabbed in the leg with a bayonet and beaten before spending the next 11 years behind bars for helping organize the 1988 protests.
After his release on March 9, 2003, Htoo Htoo gave politics a wide berth. He started a family and taught English and Burmese for a living. "Most people were afraid. I didn't even want to talk about politics."
When Buddhist monk-led protests erupted in 2007, Htoo Htoo stayed away. "Experience taught me a lot," he said in a quiet Yangon cafe. Those demonstrations, too, were soon crushed by the military.
This year, he noticed the tide turning.
Suu Kyi, once reviled by the military rulers and off-limits for the country's independent media, has been courted by the government after she was freed from years of house arrest last year. Her picture is everywhere -- on newspapers, posters, t-shirts and even key rings -- and she said she will run in a by-election for a seat in parliament.
Htoo Htoo is also inching back toward the political arena.
On August 8, friends who had also been active in the student movement invited him out to mark the 21st anniversary of a major student protest.
He decided to go "because the situation was starting to change". At the event, he met Suu Kyi and congratulated her on her meetings with government officials.
Htoo Htoo was encouraged but also concerned. The changes were so quick. He wondered whether the two entrenched sides in Myanmar's long-running political battle could be so easily reconciled.
He launched a movement he calls "Metta", a Buddhist word that roughly means goodwill or peace.
"We have no grudge. We are not interested in revenge," he said. "What we want is the country to change."
After Suu Kyi met President Thein Sein, Htoo Htoo was excited. The long-suppressed student activist in him resurfaced. He wanted to put together a mass public rally in Yangon Square, near city hall in the centre of town, in support of the dialogue.
He met Suu Kyi and sought her opinion.
"'The Lady' he explained, referring to Su Kyi's epithet, "said Metta is good. As for the mass movement, it is too early, she said. We cannot know who will join this mass movement with what ideas and what ambitions."
RISE OF LABOR
To say mass movements have struggled in Myanmar is an understatement. While other Asian countries have had military rulers, none have been so entrenched in every sector of society as in Myanmar in a bid to stamp out every whisper of dissent.
After the generals killed or jailed thousands in the 1988 demonstrations, they stepped up attacks on ethnic minority groups that have fought for autonomy since independence from Britain in 1948. The junta simply ignored a landslide election win in 1990 by Suu Kyi's National League for Democracy.
Little wonder then that a labor movement never gained traction despite harsh working conditions for many in the country -- until October, when unions were legalized to the shocking surprise and relief of workers such as Ma Moe.
In July last year, she posted notices in the women's bathrooms of the garment factory where she worked on the outskirts of the former capital Yangon calling for a strike. Management responded with a small pay raise, and the strike was averted. But soon after, the harassment began.
The soft-spoken, 33-year-old was given more work than she could possibly complete, and hounded in other ways, she said. The trouble lasted more than a year before her boss gave her an ultimatum: quit or be fired.
She walked out.
"I cried," she said. "I was worried about the future because my family mainly depended on my salary." She said she earned between 80 cents and $1.50 a day, depending on overtime.
One of the first bills Thein Sein signed as the new president was a Labor Organization Law that legalized unions and, in theory, gave workers the right to strike.
As the economy advances, Myanmar may well emerge as a low-cost manufacturing hub alongside Vietnam and Bangladesh. Its once-flourishing garment industry was stifled by U.S. and European sanctions. Some expect it to rebound if sanctions are lifted, possibly next year or in 2013.
But the law fails in several crucial respects, said Phoe Phyu, a lawyer who represents disenfranchised workers and farmers. Workers can only strike with permission from authorities and grassroots unions are not allowed to have contact with international organizations, he said.
Conditions will change slowly as the country moves toward democracy, he said, but it is a long road ahead for workers such as Ma Moe. "The new law cannot change things for people like her," said the lawyer, who has been jailed twice for his work.
AN OLD POWER
Walking the rutted streets of Yangon with its dilapidated colonial-era buildings, Phoe Phyu's comment rings true in other ways: it is easy to see how Myanmar will change, but how progress could be excruciatingly slow.
The city seems ill-prepared for a wave of investment that could come if sanctions are lifted. It has no skyscrapers to house banks; no modern shopping malls for a new consumer generation. Wheezing Japanese cars from the 1970s and 1980s dominate the streets.
It's hard to believe today that Burma in the early 20th century was one of Asia's richest nations and a shining part of the British empire. After seizing Yangon in 1852 and anglicizing its name to Rangoon, Britain developed the area into its administration base, building law courts, parliament buildings, shady parks and botanical gardens. Rangoon University, founded in 1878, became one of Asia's premier universities. Its infrastructure rivaled London's.
Today, chronic power outages and deteriorating buildings are constant reminders of decades of mismanagement that began in 1962 with a disastrous "Burmese Way to Socialism" adopted by the then-leader, General Ne Win. It led to sweeping nationalization and global isolation for the resource-rich country.
In the centre of Yangon, at one of its hippest restaurants, however, Phyu Phyu Tin knows Myanmar's potential.
The 38-year-old managing partner of Monsoon Restaurant and Bar, with a menu that includes dishes from all the countries of Indochina, can trace her family's roots through the prosperous British colonial era.
Her great-grandfather owned enough property to give each of his children a house. Her grandfather worked for the British consulate and spoke better English than Burmese. Her father, Nyunt Tin, a fighter pilot-turned-diplomat, was posted to Hong Kong as Consul General and is now in parliament.
After years of living abroad, Phuy Phuy Tin felt the pull of her homeland in 2003 and opened the restaurant. Now that the country is poised for take off, she and her family are preparing to launch a construction company. Her little sister, Zar Chi Tin, who is living in London, plans to return and join in the business.
The Myanmar diaspora numbers in the millions, including refugees and exiles, and Thein Sein has invited them to return home to help develop the country.
"We are very happy, especially for the next generation," she said, reflecting the optimism that has washed over the country.
"Now we have reason for them to come back. And I think many in the younger generation will come back."
(Editing by Jason Szep and Bill Tarrant)
10:55 AM | 0 comments

Insight: The Wall Street disconnect

Written By Guru Cool on Friday, November 18, 2011 | 11:10 PM

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1 of 8. An Occupy Wall Street campaign demonstrator stands in Zuccotti Park, October 17, 2011.

Credit: Reuters/Shannon Stapleton

By Matthew Goldstein and Jennifer Ablan


NEW YORK | Fri Nov 18, 2011 11:00am EST


NEW YORK (Reuters) - It was a telling moment at the height of the Occupy Wall Street protests.


John Paulson, the hedge-fund trader who famously made billions betting on the collapse of the housing market, was threatened by the demonstrators with a march on his Upper East Side home in New York last month. Paulson responded by putting out a press release that described his $28 billion, 120-person fund as an exemplar of the American Dream: "Instead of vilifying our most successful businesses, we should be supporting them and encouraging them to remain in New York City."


Other captains of finance like to portray themselves as humble entrepreneurs. One owner of a multi-billion-dollar hedge fund grumbled in the midst of the financial crisis that he has to worry not only about making trading decisions but also about "all the hassles that come with running a small business."


With U.S. cities moving this week to crack down on Occupy Wall Street encampments - including the one in New York's Zuccotti Park - the staying power of the movement is in question. Whatever its future, it's clear that so far, the Occupiers haven't changed many minds on Wall Street over blame for the country's hard times. The cognitive disconnect between the protesters and the captains of finance is alive and well.


David Mooney, chief executive officer of Alliant Credit Union in Chicago, one of the nation's larger credit unions, used to work at one of Wall Street's top banks, JPMorgan Chase. There's a vast cultural gap between Wall Street and his new world, he says: Old friends from the Street, he says, now jokingly refer to him as a "socialist." A credit union is supposed to be run in the interests of all members, he says, while commercial bankers tend to see consumers as customers who can be "exploited" by layering on more fees.


Says Mooney: "I don't say this lightly, but the consumer is simply an income stream and exploiting that is the purpose of the banking organization."


In conversations with nearly two dozen current and former bankers, finance professionals and money managers across the United States, the prevailing sentiment is that the anger at Wall Street's elite is misguided and misdirected. Blame the politicians and policymakers in Washington, many of them say, for encouraging people to buy homes they couldn't afford and doing nothing to stop or discourage U.S. consumers from piling on more than $10 trillion in household debt.


"I think everyone gets what the anger is about... But you just can't say, 'Well I want all debts forgiven.' That is not happening," says one West Coast trader, who like most still working in the financial services industry, declined to be identified by name in this article.


The disconnect, says Jason Ader, a former top Wall Street casino analyst turned hedge fund manager, is in part a simple product of Wall Street's isolation from the hardship out there. Ader says he spends a lot of his time in Las Vegas, one of America's hardest-hit housing markets, and thus wasn't too surprised by this fall's anti-Wall Street outburst.


"I see plenty of despair in places like Las Vegas, where in some neighborhoods every other house is vacant or foreclosed and lots are overgrown by weeds," says Ader, who sits on the boards of Las Vegas Sands Corp and a small Nevada community bank called Western Liberty Bancorp.


But the 43-year-old Ader, who manages $200 million in his hedge fund, says it's a different story for many of the wealthy who work in finance in New York City and don't spend a lot of time in states with high unemployment and high foreclosure rates. Living in Manhattan or the Hamptons or hedge fund havens like Greenwich, Connecticut, can lead to a bit of myopia, he says.


"At first I had friends who were scratching their heads at the protests," says Ader.


BLAME GAME


To put it bluntly, many on Wall Street still see the events leading up to the financial crisis as a case of banks having legitimately sold something - whether it be mortgages or securities backed by those loans - that someone wanted to buy.


Thomas Atteberry, a partner and portfolio manager with Los Angeles-based First Pacific Advisors, a $16 billion money management firm, says his success "wasn't a gift" and he had to work hard to get where he is. Atteberry says he understands the frustration many feel about income inequality. But he said the problem isn't with those who are successful, but rather our "tax codes and regulations."


While some members of the financial elite say they are willing to pay higher taxes, they note the picture for Wall Street firms is not as sunny as some on Main Street might paint it. Wall Street banks already are beginning to shed jobs, and consulting firm Johnson Associates Inc. is predicting bonuses for those who remain will shrink by 20 percent to 30 percent.


Complaints over new financial regulations burdening Wall Street firms are a major reason blamed for the layoffs. Sit down with a hedge fund manager or a top trader and it won't take long before he or she grabs some spreadsheet that shows all the new rules and regulations coming out of the Dodd-Frank financial reform bill.


Many of America's well-to-do, not just Wall Streeters, say they don't feel particularly advantaged. A recent survey by marketing firm HNW Inc. found that half of the nation's richest 1 percent "don't see themselves as being part of that elite group." Also, 44 percent of those surveyed told HNW's pollsters they already pay too much in taxes.


Maybe it is just the ethos of Wall Street, where success is defined solely by who makes the most money, that makes it hard for financiers to feel they've wronged anyone. But in a time of 9 percent unemployment and 15 percent of U.S. citizens receiving food stamps, some Wall Street alums say the financial elite are doing themselves no favors by giving the appearance of shrugging off the current mood.


"I think Wall Street hasn't taken in how much anger there is out there and they haven't taken partial responsibility for the financial crisis," says Brookings Institution fellow Douglas Elliott, who was an investment banker for two decades before joining the liberal-oriented public policy group. "I think both sides - Wall Street and Main Street - misunderstand each other."


Some who get paid to advise the rich on how to deal with the media and the public are telling clients to pay attention.


Robert Dilenschneider, founder and principal of The Dilenschneider Group corporate consulting group, recently sent a report to his clients telling them that many of the protesters taking part in the Occupy movement are not a bunch of unemployed crazies and hippies.


"The CEOs in big board rooms in Paris, in Zurich and New York don't normally think about people who are demonstrating in parks," says Dilenschneider, whose firm advises some of the biggest companies in the world. "In the banking and financial area, we are telling our clients you have to explain more completely what makes up your business and why your profits are what they are."


MOM AND POP HEDGE FUNDS


Some of the disconnect is simply a matter of lifestyle and the fact that the super wealthy really do live differently from everyone else. Hedge fund managers and bankers fly around on private jets, live in palatial penthouse apartments overlooking Central Park and have second homes in the country.


In New York City, the average pay for those working in finance is $361,183, more than five times the average salary of $66,106 for all workers in the city, according to the New York State Department of Labor.


This disparity in income and attitudes was evident in the response of hedge fund managers like Paulson who portrayed themselves as humble businessmen. Says Wall Street historian Charles Geisst, "Hedge funds may be small businesses in terms of labor intensity, but in terms of capital intensity they are just the opposite."


A spokesman for Paulson said he had nothing more to add on the subject.


Former Wall Street practitioners say the Street does not lend itself to a lot of introspection. "The world of investment bankers and especially the trading floor region is notoriously hermetically sealed,'" says Kenneth Froewiss, a retired JPMorgan Chase investment banker and former finance professor at New York University's Stern School of Business. "The walls may be filled with screens beaming the latest news, but there is typically an obliviousness as to what is happening across the street."


LESSONS LEARNED


There are exceptions, of course. Some are saying it may be time for the government which has bailed out the banking system to help millions of struggling homeowners.


One of those is former top Pacific Investment Management Co executive Paul McCulley, best known for his analysis on central banks and monetary policy when he worked at the world's biggest bond fund. McCulley, who retired a year ago from Newport Beach, California-based PIMCO to become a consultant with a public policy firm, enjoys the wealth he accumulated in his old role. He lives in a house by the water where he docks his two boats. But he says Wall Street went too far.


"Our society was ripe for a convulsion about social justice, and Occupy Wall Street was the catalyst for that," says McCulley. "New York can be very insular. It is not the real world and neither is Newport Beach."


Now that he's no longer working for PIMCO, McCulley is a bit more free to speak his mind. And he says the only way to jumpstart the U.S. economy is for the federal government to get behind a serious program to encourage consumer debt forgiveness and principal reductions on mortgages by banks. (tinyurl.com/3cbdjpk)


McCulley noted that mortgage firms Fannie Mae and Freddie Mac have been propped up by about $169 billion in federal aid since they were rescued by the government in 2008, yet there's a "a moral overtone" to the argument against reducing mortgage debt burdens for individual borrowers.


"Wall Street capitalism has given us a foul stench in our society," says McCulley.


The disconnect continues.


Just this week, top executives at Fannie and Freddie found themselves drawing fire on Capitol Hill for trying to distribute nearly $13 million in bonuses to key employees.


And the October 31 collapse of MF Global Holdings is prompting some critics to say Wall Street hasn't learned any lessons from the financial crisis. The futures brokerage house filed for bankruptcy after investors and traders became fearful that MF Global had taken on too much exposure to European sovereign debt in a bid to juice revenues.


The risky trade was put on by former New Jersey Governor Jon Corzine, a former Goldman Sachs Group chief executive. Last year, Corzine was saying Wall Street investment banks had taken on too much risk in the months leading up to the financial crisis. On the lecture circuit Corzine was calling for tighter regulation of Wall Street, even while his firm was borrowing more and more money to bet on some of the riskiest European debt. A Corzine representative declined to comment. (link.reuters.com/xad25s).


William Cohan, the author of several Wall Street-related books and a former Lazard investment banker, said MF Global was acting as if the 2007-2008 crisis never happened: "You would have to be living under a rock if you didn't get the message of the financial crisis."


(Reported by Matthew Goldstein and Jennifer Ablan, with additional reporting by Sam Forgione; editing by Michael Williams and Claudia Parsons)

11:10 PM | 0 comments

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