Glimmer of Hope

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If you’re reading this now than you’ve probably survived Year 2013 hopefully in one piece. Since December 2007 – as the story was just emerging on the Wolves of Wall Street in New York who were wrecking the global economy with their unchecked greed, ordinary people didn’t realise it yet but their lives would unexpectedly change dramatically for the worse. The spiral downward into a very nasty recession that ensued shortly was about to begin.


Global Recession 2009 opened with a salvo for global economic decline, this following a particularly sharp downward turn in September 2008. The initial phase of this new economic downturn started with a financial liquidity crisis (dated to have started on 9 August 2007) at the interbank lending market when central banks had to step in with liquidity lending to the banking market.


It started as a response to a situation where BNP Paribas – a French bank and financial services company, blocked money withdrawals from three hedge funds citing a complete evaporation of liquidity. The bursting of the U.S. housing bub ble which peaked in 2006 caused the values of securities tied to U.S. real estate pricing (in the form of ‘derivatives’ no one could really understand as risks were hard to assess) plummeted, damaging financial institutions who hoarded and traded these paper instruments globally thus creating an interbank credit crisis.




Not quite yet into the tail end of the first decade of the 21st Century, the re cession reared its ugly head first in the USA but it quickly infected everything else in the world like a virus with greater detriment to some countries more than others, but overall to a degree which we now realise as one of the worst global downturns since the First Great Depression in the 1930s.


The onslaught of century’s recession was a major disruptive event. It has been characterised by various systemic imbalances all sparked by the outbreak of the U.S. subprime mortgage bubble. That burst ushered in the financial crisis of 2007-08.


Just as dominos all lined up together fall in step rapidly when nudged, this re cession’s economic side effects such as the European sovereign debt crisis, drastic austerity measures, high levels of household debt, trade imbalances, high unemployment, and limited prospects for global growth still continue. These environments provide obstacles for many countries to achieve full reco very. The damage and pain is very deep. The wounds have yet to heal and if they don’t this could turn out to be the Second Great Recession.


Struggling To Make Ends Meet

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Economists and policy-makers overseas are particularly worried about how wages for many on lower to middle incomes have stagnated since the early 1990s, while the share of national income going to the owners of businesses in the form of profits has increased.


Will the fruits of economic recovery and what appears to have been an increase in productivity be passed on in the form of higher wages? Or will it be captured, as it has been in America, by an increase in profits?


The last six years have been a long, painful grind of job losses and small pay rises for many workers, and if 2014 should be the year when the economy starts to really rebound higher household incomes should follow suit now that labour is gradu ally becoming harder to find, suggesting that wage inflation will increase over the year ahead.


Many workers – particularly those in retailing, media and government, are likely to see only modest wage increases because their sectors are struggling with weak demand and plenty of supply, have been waiting a while now for the recovery to pump up their wallets, causing many to wonder if something structural has changed largely because any upward pressure on wages won’t be spread evenly. Areas such as construction, real estate, IT and dairy farming may see a surge of bonuses and employee poaching that fatten up pay packets.


Some wishful thinkers would say that the world economy had a good 2013. Well, yes. It was a bit better than the previous six years if you bother enough to compare it. But for the many it is still a struggle. While the US Congress still bickers and dawdles with its budget, the eurozone has continued to wallow in recession for much of the period to date. Living standards in most of the de veloped world are still below their 2007 peak. By the end of 2013, some laggards managed to catch up, and for them the long nightmare of recession and its aftermath is receding however precariously and bringing some psychological relief.


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The economic and financial miasma has spanned the length of the previous six years and it still lingers on even as global media have started this year to crank up news items that the world’s economy could be approaching a space where it might – just might, be able crawl out of this hole.


These signs of recovery are tempered with warnings that real growth pros pects “remain vulnerable” to the impact of the withdrawal of economic stimulus measures in the US and that crisis risks could pop up from nowhere and push up global interest rates, which could affect the flow of money in and out of devel oping countries and lead to more volatile international financial markets.


Even still, the World Bank forecasts that global GDP will grow by 3.2% this year, up from 2.4% in 2013, with much of the pick-up coming from developed eco nomies and that developing nations will grow by 5.3% this year, up from 4.8% in 2013. This news come amidst reports that countries in the developed world like Germany (the economic powerhouse of Europe) grew by a weaker-than-expec ted 0.4% in 2013 according to first official estimates and that its government is forecasting a still weak 1.7% growth rate this year if everything pans out right.


In the developing world, to accelerate poverty reduction, developing nations will need to adopt structural reforms that promote job creation, strengthen financial systems, and shore up social safety nets. All of that takes years of care ful planning, budget allocations, focused execution and the political where withal to accomplish the tasks so with that it may be apt to say that for now a swallow does not a summer make.




Recessions contain psychological and confidence aspects so mostly one could say it’s all in the mind if behaviours are to change.


If an expectation develops that economic activity will slow down, firms decide to mow down employment levels and conserve their money rather than invest. Such expectations create a self-reinforcing downward cycle, bringing about (or even worsening) a recession when it does come around because of their actions. You see, in the pantheon of priorities man has fashioned to make the world go round where money is penultimately more important whilst people are expend able as are members of their families. Money has commoditized human beings in terms of their value and more so today under globalisation. It is a brutal reality of life on this Earth.


Only a few countries have managed to avoid the sharp claws of recession. For example, Poland in the Eurozone. In all this time, it has managed to avoid a decline in GDP. That is something that even emerging economic giants like India and China haven’t been able to achieve in the same period. They too have ex perienced a slowing of growth but at levels other countries grudgingly covet as it exposes the rot in their own economies.


As it were, these two countries in Asia have managed exceedingly well. They’ve achieved high single digit GDP levels of growth amidst the demands of  their humongous populations. That feat alone is quite both re markable and admirable but not isolated. More than half of the 10-member ASEAN countries situated in the region of Southeast Asia like the Philippines, Singapore, Indonesia, Laos, Cam bodia, Myanmar (Burma) and Vietnam have also managed to rack annual GDP growth rates over the last 3-4 years that are above 5-percent.


As for the rest of the world, global economic growth was estimated at 2.4-percent in 2013, but this consolidated statistic contains the numbers of the Asian countries just mentioned so if netted out of the equation the 2013 esti mate would be much lower. For example, the world’s largest economy (the US) grew 0nly 1.8% in 2013 while the 17-nation eurozone which is slogging its way out from two years of contraction hopes to achieve 1.1-percent growth pace in 2014.


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So what’s possibly in store for the balance of this new year. Are we really all out of the woods? Well, not fully as yet. But, there is a new story emerging about the world economy which is: the structural shift from the developed world more towards the emerging world and for good reason, some would say.


In years past before this recession you may have heard about the promise of the BRIC countries – Brazil, Russia, India and China, and how these four countries would eventually rise on their own accord as economic power houses, ones that could help rebalance a world economic order dictated mostly (but still domin ated largely) by the United States and the EU.


In 2010, the BRIC countries accounted for over a quarter of the world’s land area. Together, they house more than 40% of the world’s population and also account for one quarter of the world gross national income. That’s an impressive statistic considering there are over 190 countries to speak of. Although they are still developing rapidly, many economists say that is only by 2050 that their combined economies could eclipse the economies of the current richest countries of the world. But will the world wait that long just when an emerging übertrend is making its way across the globe?


Born out of anger, distrust and despair, it is a response to a very strong sense that the world is turning out to be dysfunctional and broken because even if we expect our leaders and businesses to be transparent their top-down solutions no longer seem to work. So, people are fashioning their own approaches from the ground up and the smart ones are tinkering quietly or boldly changing the status quo and it’s not only happening in the more developed countries, but rather also elsewhere.


What may bring about the critical mass required to reach the tipping point is when new players emerge with enough heft then the trend actually does become the norm.


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DISHARMONY: Since the abruption of the international financial crisis, it has been increasingly acknowledged that economic imbalance has become one of the severest problems impacting the normal development of the world economy. It is a struggle between the West and the emerging economies over a long period. It is marked by external imbalance between some countries in the areas of trade account, inter national investment and gaps between the rich and the poor, as well as internal imbalance in the aspects of debt, saving and consumption caused by macroeconomic policies in some countries but which appears mainly as the deficits of trade and balance of payment of the US. The cause of the deficits of the US is the huge surplus held by some other countries. It is believed in the emerging economies that the key reasons of imbalance are the international monetary system based on the US dollar and the current international labour division system. You will notice too that in this infographic image, the name of the Philippines has emerged from obscurity.




Now come the MINTs – Mexico, Indonesia, Nigeria and Turkey. For at least the next 20-years, these other four countries will enjoy really good “internal” demographics. They are all going to see a rise in the number of people eligible to work relative to those not working. If each of them does get their act together, they could just as easily match China’s double-digit growth rates experienced bet ween 2003 and 2008.


Economically three of them – Mexico, Indonesia and Nigeria are commodity pro ducers. Only Turkey isn’t. This compares with the BRIC countries where two – Brazil and Russia, are commodity producers and the other two – China and India aren’t.


Now, if the BRICs and the MINTs are all put together with the better performing countries of the ASEAN, you’d have Brazil, Russia, Mexico, Indonesia and Nigeria all producing commodities and with the middle class growing in China, India, Turkey and the ASEAN countries in tow they could could walk in-step with the demands of their large consumer populations and spur on more inter national trade opportunities for the rest of the world.


What’s more promising too is that a few or more of the BRIC, MINT and other Southeast Asian countries could develop more of a sense of commercial purpose beyond commodities and consumerism. Likewise, if they continue to improve their infrastructure it would be a welcome new force for the stability of the world’s global economy and security going forward.

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EVERY WHICH WHERE: The Organisation for Economic Co-operation and Develop ment (OECD) places New Zealand at the middle to lower end of its middle rich countries – a classification that focuses on material output rather than standard of living. As in most rich OECD countries, New Zealand’s economy primarily uses the market, where private owners (of resources, factors of production, and goods and services) make economic choices voluntarily in an environment where its govern ment provides a context, including a framework of commercial law, in which these transactions can take place. Although the market mechanism has always been dominant since European settlement, the balance between government involvement and voluntary market transactions has varied depending on the policies and agendas of the political party winning elections. This significantly contributes to the ups and downs of the country’s annual GDP numbers as suggested in the graph above.




Now, what about New Zealand? Does it also have bright prospects stored in its deck of cards?


The past may be an indicator of the future. But that has much to do with the interplay of its internal politics, structure of governance and the general mindset of its population. Yes, it is a (social) democracy, but we also need to remember that the root of the word ‘democracy’ comes from the ancient Greek dêmos (meaning, people) and kratos (meaning, power). Together, these words mean ‘People Power’.


In countries run as democracies this would generally mean creation of laws that encompasses the fabric of social, economic and cultural conditions that enable the free and equal practice of political self-determination for the good of all of its entire people. These conditions invariably enable such countries to diversify and grow their economies, reduce incidence of poverty and thereby raise the standard of living for a greater majority of its population. So we ask this ques tion: Why isn’t New Zealand up there where it should be?


It turns out that across the globe where democracies exist (including New Zealand), the practice of “democracy” has in varying degrees turned out to really be an aristokratia or ‘rule of an elite’. So while the definition of the words dēmokratía and aristokratia (as political systems) are theoretically in oppo sition to each other, in real world situations the distinction has been blurred historically, or is ambi guous at best.


Where democracy contrasts with other forms of government that is – where power is either held by one person (e.g., absolute monarchies or single dic tatorships) or where power is held by a small clique of individuals or vested interests as in an oligarchies or collective dictatorships, the characteristic infusion of elitism is in any case all the same in this modern-day blurring. That has much to do with human nature and the innate lust for acquiring more power, more wealth, more privileges and bottling-up of other vital resources in the hands of a few. To keep up appearances, the face of the aristokratia has been cleverly glossed over with a veneer of dēmokratía to make it more palatable to those being ruled.

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CONSISTENT UNDER PERFORMANCE: The table above compares New Zealand’s Real GDP Per Capita Growth Rate performance with five other countries of similar popu lation sizes from 1961 to 2010. It is further broken down by successive 5-year periods. If you look very closely, you will notice that New Zealand has never in any instance punched above the 3% average growth rate line for any given 5-year period over the last 50-years as have all countries it is compared with on this table. Honestly. Doesn’t this outcome provide more questions than answers?    




So is New Zealand really a social democracy? Do the bureaucratic infrastruc tures of government, local councils and the business sector consistently exhibit a commitment to doing what is best for constituents at large and their fami lies. Have we consistently seen the creation of more opportunities that swell up and lift the well-being and quality of life for all?


And, when time comes to make tough funding allocation choices, do our elected officials and business leaders have a strong and credible record of supporting community-based initiatives, especially ventures with a potentially high social impact and return?


Is it impossible for anyone to adopt a mind-set where state directed economic activity and owned means of production are predominantly community-run and -owned? Is it unthinkable to combine private enterprise with regulations which encourage social entrepreneurship and fair competition? Is it unfeasible to maintain a good balance between a high rate of both national and local economic growth, low inflation, more employment, good and safe working con ditions and public services which together create more community liveli hood opportunities?


If that were so, then it might help explain why so many New Zealand families to this day still struggle to make ends meet in a supposedly advanced and pros perous country. It’s no hidden secret that our economy is owned by just 10% of the population who manage to avoid paying their share of the tax burden. The bottom 10% owns nothing at all and the remaining 80% – the struggling middle class, pay 70% of all taxes Is that fair? Obviously not, but that’s been the reality for decades.


At some point in time, the reason why a population band together to change their country is because it is failing miserably in that its political and economic institutions over time fail to transition towards an inclusive environment wherein extractive growth is sustained for all its citizens and residents. Just to be clear in use of terms, extractive growth pertains to power and opportunity being held only by a few – namely, a very rich elite. Inclusiveness means decen tralising it so that the whole nation prospers and not a few. Since 1961, it seems nothing has really changed.


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The irony here is that the very people who are governed under a system of “plurality” have lost their own sense of priorities and have been lulled to sleep as a result of enjoying just a minimum of guaranteed freedoms. This has translated to apathy towards the status quo and in the way things have changed in their static lives. This lack of interest and enthusiasm is reflected in low voter turn-outs during general and local elections particularly for the generation (or Gen-X) following the baby boom in the 1960s and 70s baby boom.


It is a behaviour of silence (rather than engagement and vigilance) probably having to do with Gen’xers preferring to pin their hopes on opportunities to control their leaders and to oust them through the ballot without the need for a violent revolution. But what is really needed is evolution and people are not getting it from their political masters. Silence does not always mark wisdom.


The trouble is, when new personalities come into power after each election they tend to form governments focused on agendas that drive policy rather than institute an on-going process that manages change for the better and for the whole of us.


With every passing year, it becomes harder to be proud of a country that was once a world-leading social democracy. The small Scandinavian countries New Zealand found itself included at the top of the league tables have maintained their positions whilst we have plummeted.


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A GAME OF THRONES: New Zealand national politics feature a pervasive party system. Usually, all members of Parliament’s unicameral House of Representatives belong to a political party. In dependent MPs occur relatively rarely. While two primary parties do indeed domi nate the political landscape, the country now more closely resembles a multi-party state, where smaller groups can reasonably expect to play a role in gov ernment. As of August 2011, eight parties are represented in Parliament.But Mixed Member Proportional (MMP) politics is a numbers game in which small shifts can have big implications. It’s a chess game with multiple players. The two main players (National and Labour) have to woo other parties at the same time they are wooing us and the outcome of the 2014 election may rest on a handful of votes and may even be decided by a single MP from a minor party but the bigger political party always gets to drive its political agenda, so nothing really changes.




The arrogance, hypocrisy and poverty of the political elites we have had and continue to have has been obvious for all too long.


The left-right political spectrum lacks depth and relevance needed to offer real options for much better outcomes. The consequences of this set-up may be debatable but are clearly significant and what has happened over the recent decades is that there are really only two real parties left to speak of – the Haves and the Have Nots.


Well-known political commentators voicing opinions bellyache that successive government which electorates have voted for did so with a count representing less than half of the voting population. That’s a strong signal that tells politicians that the majority who didn’t vote really don’t care about the poor and working classes which ironically, by the way, constitutes 95% percent of the population. That’s apathy for you.


Also, the unsavoury secret of New Zealand politics today is that these successive governments initiate programmes that are somehow engineered to embed and eternalise, but not evolve or adjust. It’s akin to having an edifice complex or tendency of politicians to initiate or enact laws and policies attributed to them as a concrete reminder to the rest of the world (meaning the voters) of the importance of their “Legacy”.


How Things Work Here

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Under our Mixed Member Proportional (MMP) system of government, we preserve some fictional semblance of individual liberty and the collective good by electing leaders and then regularly dump them. Like all other ‘democratic’ countries it is also an adversarial electoral system.


For anyone aspiring to the post of MP someone else is stripped of a job and for any MP aspiring for promotion, someone else has to stand down and give way. All MPs must constantly waste energy watching their backs to keep their jobs or side rail someone on track to acquire their next promotion. Otherwise, they lose their power, perks and pay check. It’s a powerful incentive for the few which is bad for the many since nothing good comes of it.


Some argue that this system is ideal (for lack of a better one) because power never accumulates permanently into the hands of a few for too long. So, when the electorate decides they’ve had enough of their current crop of leaders there’s always some alternative government (the Opposition) ready to start work imme diately which invariably results in a reversal of most things the previous crop put in place during their term in office.


It is a ‘process’ of creation and destruction that repeats itself endlessly inside a revolving door. It doesn’t get anyone anywhere other than back to square one. There is no inertia, no momentum. Nothing moves beyond to accelerate toward the challenges or opportunities of change. Things remain the same and even deterio rate which is where the electorate always find themselves.


This is how our political system has worked since the founding of this nation. Worse still, it has never really produced leaders of substance who are larger than life, fearless or controversial enough to lunge ahead with vitality, turn the game on its head and force others in positions of power to think of the essentials that reach, educate and inspire our people (and themselves) to rise above out pathetic circum stances and prosper.


So it’s politics, not economics, which creates massive hurdles that both the poor and the middle class must struggle with to keep their heads just above the water line. It’s getting harder to stay afloat because of new obstacles an ossified system has layered up in place. So, why bother to vote, it won’t make a difference since the players who win elections will still play the same game. They’re probably correct.


Let’s take one example – the issue of child poverty and a long-standing policy whose treatment has ignored it in this country. The current Government has been avoiding taking constructive steps to measure it because that would mean having to also acknowledge the deleterious impact of their overall policies on the most vulnerable. That shames the rest of us in the eyes of the world because it inarguably implies that we prefer to treat our cows and sheep better than our children. Then, there’s under- and unemployment, poor housing standards and supply, rising crime and a host of other ills that have yet to be tackled just as squarely using a process that works.


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As said, what New Zealand needs going forward are successive governments each with a political will not focused on policies driven by narrow-minded political agendas, but ones that are process-driven with a strong ethos for pro gress on all fronts for all its people.


In a country such as ours, it is the responsibility of the dêmos (the people) to point out what doesn’t work by voicing out and encouraging change more vigourously. But, they also need to specify very clearly what they want to hap pen by way of processes that deliver clear measurable outcomes. Until then, we won’t be seeing much of a good future for this country for the many if the previous 50-years is any indication of where we are going these days. The country needs antidotes, not political propaganda.


But what’s even more important is to have a selection of qualified individuals to choose from to run our government and ones who have the right attributes the most important one being that such persons truly care about the country and all who dwell in it.


Neither will they behave like they are better than everybody else and arro gate unto themselves rights to entitlements once a position of political power is handed to them but rather, act prudently because they wholeheartedly believe they actually are like everybody else.


We realise that you may think it’s too early to think about politics, particularly as we are still all in ‘stand-by’ mode (after the Christmas and New Year period) but there is no denying that election year 2014 should be one in which a sense of perspective should seep into the stream of consciousness and where the political landscape needs to be shifted towards something that’s much better than what we’ve had for a very long time. Likewise, the Opposition – whose official job really is to defeat the incumbent parties, can’t possibly be much better or worse than the incumbents if they fail to adopt a process of change that New Zealand needs to move us out of the merry-go-round grounds.


Trust Has Been Lost

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There is a growing consensus among more voters across all parties that there is a vacuum of vision evident from the current batch of denizens sitting inside the Beehive and that what New Zealand sorely needs (but isn’t getting from them) is a public debate on who really should earn the right to run this country. It is a debate that will require politicians address pressing issues and elaborate clearly their vision for a breakthrough process that delivers vital long-term benefits and outcomes for the 90% of the population who actually shoulder the tax burden on their backs.


The political landscape is shifting much quicker than one thinks. What has crystallised in the minds of voters today is that the direction this country is taking is one that’s descending – one which sees Government spying on its people; taking them down without due process; ignoring a public referendum process in the face of an obvious mandate and perpetrating a host of other abuses of government over-reach as their organisational departments assert so-called ‘rights’ over persons that trump normal procedures which ruin individual reputations and in cases lead to bankruptcy. Is this the way the State should operate?


It is time that the entire electorate move boldly ahead into the next 25-years if we all desire to protect and maintain our freedom of voice, human rights and indi vidual economic prosperity. We don’t need people to lead the rest of us who swag ger around arrogantly while doing practically nothing but employ their energies to keep their jobs and oversized perks and get themselves better prospects after 2014. We need to send them a clear message that that’s not going to happen any more.


We need leaders who inspire. We need those who are forward thinkers with vision; more responsive, useful and relevant to the times who are absent of arrogance, more humble and deal civilly and legally with citizens who put them into seats of power. We need leaders with courage to do and say things differently and achieve meaningful goals for the country and its people that are bigger than their terms.


It is not about allocation of resources anymore. It’s about a renewed political will expressed by real people power both in- and outside of the voting booth during election years. It’s something that politicians and voters should both devote deep thought to as another year dawns and that thought is: that the kind of governments that have been voted for in previous elections have really been indifferent to the needs of ordinary New Zealanders.


What the rest of us need to keep front of mind is the plight of those who cannot even aspire to enjoy the dignity of being a human being and get most of us back on the road to equal opportunity and widely-shared prosperity for this and all future generations of New Zealanders. There is where the glimmer of hope lies.


There is enough land, food, money and wealth to go around. Tackling issues like poverty and other ills that plague this resplendently beautiful country is about priorities and process. Otherwise folks, she’ll not be right.


Filipinos in Auckland | Glimmer of Hope






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