Friday, August 05, 2016

Decisions, Decisions

From the Bangkok Post, via @RichardBarrow

Thailand's Referendum Will Settle Nothing, says Tulsathit Taptim:
Let's face it: Irrespective of whether the draft constitution passes the referendum or not, what needs to be changed the most will not be. Years of divide have spawned hatred and prejudices to the point where Thais view deaths of fellow Thais differently, and the polarity is certainly not going away. The referendum on Sunday is meant to lend some democratic flavour to the controversial process of creating the highest law of the land, but democracy doesn't always mean harmony, especially in Thailand.

The draft constitution and the campaign against it are focused on the "big" players. They are the real stakeholders in Sunday's referendum but they have somehow managed to convince a lot of Thais, and probably the world, that it's all about grassroots people. What's panning out is a game in which real problems of the man on the street, like rampant narcotic abuse, poverty, injustice that favours the rich, etc, are overshadowed by the interests of a privileged few.

Make no mistake, the referendum is necessary at this point, where there is no other way to get a semblance of public participation in the process. A unilateral declaration of a new charter would create a whole new set of problems. Still, it's debatable what could make things worse - a summarily enacted charter or the referendum.

Whether it's a victory for "Yes" or for "No" this Sunday, a large number of Thais will not be happy, and the divided nation could be staring at fresh violence. We can blame the military government or Thaksin Shinawatra if it occurs, but the truth is that if bad things were to happen after the referendum, it would be because Thais allowed it. The people's distorted moral standards have tolerated things that should not have been tolerated, and found other things intolerable that should have been forgiven.

Wong Tek Chi looks at how government-controlled companies were instrumental in Malaysia's growing 1MDB scandal:
Underlying the 1MDB scandal is the problem of excessive state influence in business. It is estimated that GLCs account for approximately 36 percent of the market capitalisation of Bursa Malaysia and 54 per cent of the benchmark Kuala Lumpur Composite Index.

GLCs do not only participate in natural monopolies or strategic industries, but compete with the private sector in highly lucrative businesses such as retail, construction and property development.

In the case of 1MDB, the state-owned investment company also has a huge involvement in property development, through the projects of Tun Razak Exchange (TRX) and Bandar 1Malaysia.

These projects were particularly controversial because the land was sold to 1MDB at a very low price by the government. Critics argued that the land should instead have been auctioned publicly and that the projects could be handled more effectively and efficiently by private companies.

Satyanarayan Iyer on India's tax reform, why it's important, and the big thing which hasn't been sussed out yet:
The GST is hailed as the most important indirect tax reform in independent India and it is believed that the reform will drive up efficiencies by cutting out multiple taxes that are charged today. 
"The GST will support the entire ecosystem, including manufacturing. It will usher in transparency, efficiency, simplicity, ease of compliance and above all reduce the unethical practices of both businessman and those who regulate and govern tax. All this will encourage economic activities, thereby, generating new jobs in all sectors," said Pradeep Bhargava, director, Cummins India. 
Many analysts and economists have said once the GST is implemented, it will provide the much-needed boost to the GDP of the country, which might rise by about 1.5%.
"The growth in GDP will primarily be because of assumed efficiencies in the tax collection mechanism.That will happen only when the entire system settles down," said Anant Sardeshmukh, director general, Mahratta Chambers of Commerce, Industries and Agriculture.
However, much of the success of the GST for the end consumer will depend on the rate itself. If it is closer to the much talked about 18%, as mentioned by former finance minister P Chidambaram, it will be more "acceptable" to the general public.
"The rate itself is not decided and till it is decided, it is difficult to predict the impact on the consumer," Sardeshmukh added.

Finally, Nikkei looks at how Shinzo Abe's cabinet shift stays on course with Russia relations:
The decision to keep Foreign Minister Fumio Kishida in the post showed an emphasis on diplomatic continuity, as did the appointment of Hiroshige Seko as minister of economy, trade and industry. Seko helped build foundations for stronger economic ties with Russia as deputy chief cabinet secretary. Abe looks intent on bargaining with Russia by making multilayered overtures involving economic and energy cooperation... A Japanese foreign ministry official said Putin's visit would provide momentum on negotiations over the Northern Territories, which Russia calls the southern Kuril Islands. 
...When the two leaders met in May in the Russian city of Sochi, Abe tried to entice Putin with eight proposals mainly involving economic support, including industrial development in the Far East. As specifics of such cooperation become the centerpiece of the talks next month, observers will be looking for signs of just how far Russia is willing to bend. 
The outcome of the negotiations may shift politics within Japan. Progress in the talks may boost public support for Abe and give him greater leeway to manage internal politics, one of Abe's aides said. Some members of the ruling Liberal Democratic Party say Abe would go as far as dissolving the Diet's lower house for a snap election.

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