The Star Online: Business
The Star Online: Business |
- How the logic evolved
- Serious on Boomerang scheme
- SMEs want re-investment allowance period extended, among others
| Posted: 30 Sep 2011 06:08 PM PDT Title: Zero-Sum World Author: Gideon Rachman Publisher: Simon and Schuster We live in a zero-sum world ruled by zero-sum logic. This logic has prevented nations from reaching cooperative and meaningful measures to combat problems such as global warming and shortages of resources. It is due mainly to this logic that pressing issues such as nuclear proliferation are unresolved and financial shambles continue to emerge. Zero-sum logic yields no benefit and arises when nations think an action comes at the expense of crippling their own domestic economies, and so boosting the relative power and wealth of rivals. This logic explains the Chinese reluctance to agree on tougher sanctions against Iran, its major oil supplier. It also explicates America's silence on Chinese human rights in recent years China has the world's largest consumer market. This zero-sum predicament, emerges as a result of dwindling financial and natural resources, has ushered mankind into a new era the age of anxiety in which and at best, countries turn inward and the spirit of nationalism/protectionism revived. At worst, the future is as bleak as Gideon Rachman paints it in this wonderful eye-opening book: "Among the biggest risks is the danger of a major new war in the Middle East, provoked by a failure to rein in Iran's nuclear programme. The debt crisis in Europe or trade wars, triggered by American anger at Chinese mercantilism, could plunge the world economy into a severe new downturn. The inability to stabilise failing states could see countries such as Afghanistan and Pakistan slipping further into violent anarchy, with dangerous consequences for the rest of the world. Over the longer term, a failure to deal with climate change could provoke the most serious international crisis of all leading to flooding, famine, mass migration, and even war." Sounds worrying but this book must be read not for us to be tormented by gruesome facts of life, but for us to understand the workings of international systems such as EU and UN. It is for us to know the forces that have driven international economic and political change for the past half-century and for us to possibly envision a future spawned from the chaos we are experiencing. The world evolves not only China and the United States. Unlike many authors who tend to focus on these two super nations, Rachman includes in his analysis a host of other countries he thinks are equally important in the shaping of the world, whether it is past, present or future. Pakistan, though fractured, remains now the most dangerous international problem and this book explains why. The Soviet Union, seemingly defeated by the end of the Cold War, is silently charging and instigating, according to Rachman. The predecessor of Anxiety is the Age of Optimism (1991-2008) in which the ever more efficient global market enriched potentially every nation and everyone who embraced free trade. It was an age of personal freedom, technological advancement, financial empowerment and economic prosperity across the world. It belonged to the Internet (which has connected the world), Wall Street (which had spurred the world with easy money), Alan Greenspan (who had thought less stringent law equaled wealth creation), and Bill Clinton, (who had firmly believed that free trade, globalisation, capitalism and democracy are not only the source of global prosperity but also democracy enlargement). Clinton's ideology, adopted and adored by many, has not panned out as desired. In fact, free trade has renewed nation rivalries, globalisation has flooded the world with more goods, capitalism has created financial criminality, and full democracy has not been achieved in China. Yet, the world remained obstinately optimistic. Preceding Optimism is the Age of Transformation (1978-1991). Many political and economic epochs took place in this era when China/India transformed, Europe united, the United State deregulated, and Britain revolutionised. Rachman witnessed all these when he travelled around the world as a reporter following the spread of democracy. His own reflection on this age enriches his analysis; his anecdotes on the events he attended and places he was stationed in personalise the collapse of Communism and familiarise readers with Thatcher and Reagan. A book is good when the author is able to take you to places. Rachman does, vividly and engagingly. Well written, this book takes you not too far back in history but far enough to significant places to read for yourself about the world as it evolved and progresses. I have sat through this journey by reading the well-organised chapters in which the intricacies and complexity of international economics and geopolitics were bared and laid out. As Rachman concludes, the 2008 economic crash, the weakening of American power and the emergence of a set of intractable global political problems have changed the win-win world of the Age of Optimism to the present Zero-sum world. The most important question looming ahead is the future of China. After reading this book, I cannot agree more.
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| Posted: 30 Sep 2011 06:07 PM PDT THE Association of Accredited Advertising Agents Malaysia (4As) is getting tough on members that fail to achieve enough points under the Boomerang Membership Accreditation Programme (BMAP). The 4As introduced BMAP two years ago to uplift the professional standing of ad agencies in the country and their staff. Its members are required to participate in industry-relevant training programmes and other activities approved by the association in order to earn BMAP points. Last year it became a by-law that each agency, depending on its size, has to accumulate a certain amount of points within the 12-month period ending March in order to remain a 4As member. For example, an agency with less than 15 full-time staff has to garner 200 points, while those with more than 75 employees have to rack up 750 points. Karthi Palanisamy, convenor of the BMAP, says that the 4As, which has just over 100 members, is getting serious about BMAP. And it is doing its part to make it as easy as possible for members to gain the required points. The first year of BMAP was a trial period to see how agencies would accept this programme. "In the first year, there was a lukewarm response. But in the last one year, we have got a lot more traction as agencies realise the importance of it," Karthi tells StarBizWeek. However, they are still laggards. Hence the 4As last week sent letters of termination to 19 agencies because of non-fulfillment of Boomerang points. "They are given until the first week of October to appeal," he says. While Karthi does not name the under-achieving members, he notes that there are a few international agencies among them. He hopes all the agencies would appeal. "We are not doing this just to terminate members. We need to move away from agencies becoming 4As members for pitching purposes," he says. "At the end of the day, your agency would become equipped with well-trained people and it raises the standard of the industry. In time, we want to be seen like the legal profession where you have to achieve an X number of CPD (continuing professional development) points to renew your practising certificate," he says. The agencies were given ample time to comply. At the last 4As biennial general meeting (BGM) in March, the period of achieving the BMAP points was extended by three months. Karthi says that after the last BGM, the 4As sent letters to 39 agencies, of which 16 have started achieving their points and four have appealed. He says that the entire Boomerang programme is designed in such a way that it is easy for agencies to participate. Even non-advertising courses such as accounting or tax may be accorded BMAP points. An in-house workshop may also be given BMAP points. The 4As training credits committee evaluates training programmes, talks or seminars by private institutions and gives them between five and 100 points based on the speakers and the industry relevancy. However, only 60% of an agency's total BMAP points can be achieved via training. The rest must to be through service and participation, such as attending the 4As AGM/EGM/BGM, submitting entries to the Malaysia Effie Awards and the Kancil Awards, being on the jury for those awards, and being a guest lecturer at IACT College, which was founded by the 4As and the Malaysian Advertisers Association. "(4As president) Tony Savarimuthu has emphasised that we need to start engaging a lot more agencies to play a role in the 4As. Hence this service element is also something we want to push," says Karthi. Karthi, who manages a 14-person creative and PR agency called Crush Communications (M) Sdn Bhd, says that the 4As has made it very easy, especially for smaller agencies. "My agency needs only to achieve 200 points, with 120 points having to be for training. If I sent two of my staff for training over a one-year period, I would have achieved the points. And for service, if I attend the AGM, I would get 100 points," he says. Attending the 4As AGM, EGM or BGM earns the agency 100 points, according to the 4As BMAP handbook. Being co-opted for special projects gives 50 points. Attending a 4As training programme gets the agency 50 points, while programmes given by 4As' associates IACT and 95% The Advertising Academy are accorded 20 points each. Karthi says the association is also looking at more affordable programmes costing RM300 to RM400 to accommodate the smaller agencies. At present, only a tiny percentage (he estimates 10% to 15%) of the training programmes is within that price range. "When we sent out letters to agencies recently that they had only achieved certain BMAP points, we got complaints that courses were expensive. Every time an agency comes to us and tells us something is an issue, we'd do something about it. The Boomerang process needs to get a buy-in. We are listening to those whom we don't get a buy-in and are trying to meet their expectations." The 4As is awaiting a response from the Malaysian Institute of Management to inform it of MIM's programmes that could be accredited. "We want to do this with other professional organisations, too. This will give our members a wider choice of training programmes to get their BMAP points," he says, adding that the external programmes, however, have to be industry-relevant. The training credits committee will be looking at including graduate programmes in the next six months, Karthi says. The association is also looking at foreign training providers that can help it design specific programmes catering to the industry. "We want to evolve the Boomerang programme. Maybe in time, the Boomerang logo can go into name cards to show that the agencies are Boomerang-compliant," he says.
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| SMEs want re-investment allowance period extended, among others Posted: 30 Sep 2011 06:06 PM PDT EXTENDING the re-investment allowance period, setting up a special fund for automation, lowering corporate tax and reducing the retirement age are some of the pertinent proposals which industry observers feel should be incorporated into the upcoming budget for the small and medium enterprises (SME) sector to be one of the country's leading economic growth drivers. SMI (small and medium industry) Association of Malaysia national president Chua Tiam Wee says the reinvestment allowance period should be extended. He says many SME retailers who intend to renovate or refurbish their outlets have not been able to do so as they are not allowed to use the re-investment allowance. Hence, the association hopes the Government will be more flexible and allow the extension as it will further spur investments by SMEs. For those SMEs investing abroad, Chua adds that the Government should set up Malaysian SME Industrial parks overseas as successfully done by Singapore. One example is the Singapore Vietnam Industrial Park for the republic's investments in Vietnam. Associated Chinese Chambers of Commerce and Industry Malaysia SMEs deputy chairman Koong Lin Loong agrees. One of the main reasons for the lackluster investment activity on the local scene has been due to insufficient re-investment incentives, he says, adding that therefore there is a need to further enhance the attractiveness of the re-investment allowance currently offered to manufacturers. "For Budget 2012, the re-investment allowance should be extended to at least 30 years. Furthermore, the length of moratorium period before eligibility to re-investment allowance should also be shortened from 36 months to 12 months, as it has led to many manufacturers to defer their investment plans so as to enjoy the tax incentive,'' Koong tells StarBizWeek. Chua feels the current foreign workers levies that are paid by employers for their foreign workers should instead be placed in a fund and be allowed by the SMEs to use for automation of their plant or programmes to reduce unnecessary foreign workforce. On top of this, he says the compulsory annual audits which SMEs are required to submit should at the same time be exempted to make it "friendly" for SMEs to do business as the current penalty for non-submission is very high. Due to the lack of funding, the association proposes that more funding be allocated to SME-related agencies like SME Corp and Matrade to help more SMEs, especially in development programmes such as overseas market penetration via the Market Development Grant and other programmes, as many grants are still being frozen since December 2009 or are being cut. Chua says the popular Working Capital Guarantee Scheme should be further topped up as it has been quickly utilised even though the scheme was topped up by RM3bil to RM10bil at the beginning of this year. Koong says there is a need for the Government to lower the current rate of corporate tax from 25% currently to 24% in 2012, and 23% in 2013 to attract and retain private investment. Over a longer term, he urges the Government to reduce the rate of corporate tax in Malaysia to 17% so as to be on a par with Singapore. He says the threshold for taxable income at 20% for the first RM500,000 should be increased to RM1mil for companies with a paid-up capital of no more than RM2.5mil, which consists mostly of SMEs. Meanwhile, managing director of Innosol (M) Sdn Bhd Dr Umasuthan Kaloo, who is also the author of Managing Small Enterprises, says the retirement age of SME workers should be reduced as it will benefit the sector. "Prospective employees of all ages shun the SME sector which is widely perceived as "sweat shops" which pay minimal wages. "If the retirement age is kept low, combined with the longer working life expectancy from improved healthcare, the supply of experienced manpower in the labour market will improve significantly. "The increased supply combined with the reduced mobility of older workers to move or migrate, will contribute towards increasing the supply of manpower to SMEs in Malaysia,'' he notes.
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