2014: year in review (by countries, part 3)

2014

 

This is the last article from the series reviewing events that have taken place across different countries this year. Now the last day in 2014, my only expectation towards 2015 is a better year ahead, albeit some difficulties, and some challenges, accumulated from past mistakes, will continue to befall us.

As I forgot to include Hong Kong and Mexico in the first two parts, I’ll just put them here.

 

Hong Kong – if this semi-autonomous region of 7.2 million people used to be known rather for dim sum, skyscrapers, action films, and Jackie Chan, now Hong Kong filled international headlines in 2014 with ‘protests’ being the most popular keyword. Triggered largely in part due to the latest decision by China’s National People’s Congress Standing Committee in having to screen out candidates in the upcoming 2017 Chief Executive election, which would be the first direct election in Hong Kong, this marked what had been more than two decades of impatience Hong Kong public has been faced in gaining universal suffrage. While the city has achieved monumental economic success since 1970s, the most crucial issues that have never been addressed are the worsening social inequality (Hong Kong is ranked the worst among developed regions’ Gini index, now reaching a staggering level of almost 0.56), astronomical home prices which most people can hardly afford, increasing living costs with low social safety nets, as well as erosion of freedom of expression, by which Hong Kong’s rank, according to Freedom House, has fallen drastically from among the top 15 in 2004 to now 61 a decade after.

But Hong Kong also inspired the world what ‘civil disobedience’ truly meant. Despite several scuffles (mostly infiltrated by certain elements), no buildings were damaged (except the Legislative Councils headquarters’ front window), no cars were burned, and life goes on fairly normal on most parts of the city. People helped each other, students continued to do their homework and studied at night, some set up medical clinics, and others even assisted in trash collection and recycling activities. There is hardly any place doing a civilized protest as Hong Kong has shown.

Mexico – this country of 115 million has long been faced with a massive drug war, having seen more than 100,000 people killed by both security forces and similarly heavily-armed drug cartels, but the forced disappearances of 43 university students, and their subsequent killings, marks the climax of this war, with millions of civilians coming out to the streets to protest both the government and drug lords, who have remained somewhat hypocritical and vicious in this matter. The murder started with student protests in Iguala, by which local police responded with mass suppression, and the subsequent kidnapping of 43 students. Nonetheless, having handed them down to drug lords instead to prosecutor’s office, and having these people brutally murdered, mutilated, and their body remains completely burned, this became what triggered the people to really show their anger. Such tragedy deals another further blow to the country’s current president, Enrique Pena Nieto, who has long been criticized for being hypocritical and not doing enough to solve many of Mexico’s crucial issues.

Pakistan – three gargantuan events have shaken this country throughout the year. Firstly, there’s this mass protest known as Azadi March, by which millions of people again went to the streets to demand an end to the country’s first democratically-elected government, led by Nawaz Sharif. Nonetheless, there remained suspicions that these protests were actually organized by certain elements with close ties to intelligence and military forces, notoriously known to have been partially infiltrated by several Taliban movements. The military itself had previously been in charge of the country’s leadership for decades, the climax of which was the ascendancy of Pervez Musharraf into the power, ending in 2008 after mass protests led by civilians. This march, for the first time, becomes a major test to Sharif’s government to which extent he could balance fragile relations between the authority, critically needing the support of security forces, and the military themselves.

Another one was Nobel Peace Prize jointly awarded to both Malala Yousafzai and Kailash Satyarthi, both hailing from cognate countries long involved in decades-old conflicts over numerous issues: Pakistan and India. Both of them were actively involved in advocacy towards children’s rights and education, and had faced formidable obstacles in their respective home countries. No matter how often the two nations clash, it was hoped the shared visions of Malala and Kailash could inspire both people to appreciate each other much better.

But the last one remains what becomes the most tragic closing event for the country’s 2014. Taliban, known for always targeting military forces and intelligence services, this time targeted a school attended by innocent kids. More than 150 people, mostly students, were brutally murdered by the ambush led by Taliban forces in Peshawar, leading to huge civilian protests, and a harsh crackdown by Pakistani government into the militants. While it is deplorable to see how US drones continuously invade civilian places – further encouraging Taliban to conduct more attacks, robbing the lives of innocent kids, dreaming hard of a better future, is another useless eye for an eye.

Qatar – other than Al Jazeera as its global media outlet, the country has faced another international scrutiny in regard to alleged abuse of migrant workers in this oil-and-gas-rich tiny Gulf state. With population of migrant workers 1.7 million strong, or 75% of its whole population, how the country handles these people remains a question, especially as Qatar has been selected for 2022 World Cup, with a fantastically planned expenditure of 220 billion US$. It is estimated that among 1.7 million foreign workers residing in this country, majority of them do not have enough social protection from the respective government. What those people will experience in the years to come until 2022 remains a huge stake for Qatar’s credibility, nonetheless.

Russia – first, the world was surprised by how ‘unusual’ Winter Olympics had been, as shown by how the 50-billion-dollar project in Sochi turned into a completely gargantuan white elephant. Many stadiums ended up in decrepitude, hotels were largely unfurnished, and the city turned up pretty merely throughout the Olympics’ season, only to subsequently end up neglected much of the time afterwards.

After Sochi, Kremlin once again shook the world with its subsequent annexation of Crimea Peninsula in Ukraine, a Russian-dominant territory Soviet Union once awarded to the latter back in 1950s. As though not done with Crimea, Moscow continued to silently support pro-Russian separatists in East Ukraine, particularly in Donetsk, once one of the country’s most important industrial cities, now turning into a war zone. More than 4,000 people had been killed in the conflict lasting more than 9 months, and it is not expected the conflict will end anytime soon.

Sanctions and a drastic drop in oil prices themselves, again, give this country a hard slap. Ruble values have sharply declined by more than 70%, the worst performing this year, excluding the estimated capital flight at more than 130 billion US$ this year. Foreign exchange reserves, meanwhile, have evaporated almost 50%, leaving the country with less than 200 billion US$ to anticipate the crisis. Worst, Russia’s oil revenues will drop between 90 and 140 billion US$ this year, making 2014 the worst year for this country of 142 million after 1998.

Next year, former Soviet states like Estonia and Kazakhstan will have to be very careful of their giant neighbor.

South Korea – the sinking of MV Sewol became an international spotlight. Over 300 high school students out of 460 people on board a passenger ship heading to Jeju Island were killed as the ship perished at sea, and the reason was what gave the public enough outrage to be expressed at the national government, currently led by President Park Geun-hye: the ship itself has exceeded its sailing age, and there is certain extent of negligence by ship crew when the accident happened. This accident prompted a suicide case by the students’ vice principal, resignation by prime minister, and the subsequent disbandment of the country’s transport safety commission. Also, what was highlighted here is the continued issue of corruption, as well as collusion of power between government and major corporations controlling a large share of the country’s economy.

Another controversial issue is the widespread violence experienced by many servicemen during military service, as recently illustrated by the mass shooting in a military base by one of them.

Sudan / South Sudan – the world’s newest sovereign state faces a devastating civil conflict that had killed thousands of people since last year, driven largely in part by former vice president Riek Machar’s rebellion attempt against the government currently led by Salva Kiir. Millions of people were internally displaced, and governmental functions were mostly paralyzed. Nonetheless, despite infrequent coverage of these two countries, they remain widely discussed within international relations discourse given the influence of the soon-to-be superpower: China. Having staked out many oil and gas possessions in both countries, it is highly important for Beijing to create an uneasy counterpoise and political compromise between them, while also ensuring internal security in South Sudan to not interfere with their extraction activities. This country, in many geopolitical estimates, will become a ‘knot’ in determining of how Chinese foreign policy will transform in the years to come.

Syria – the country’s civil war, which has killed over 200,000 people within 3 years, doesn’t show any signs of abating. The nation remains largely divided, with Bashar al-Assad’s government still having a stronghold in the largely Southern part, while much of the North has fallen to both various rebel groups (often clashing against each other and against the government) and ISIS. Thousands of civilians, former government troops, and various tribal fighters have fallen victim to the savagery displayed by the Islamic State, and with the reluctance of both Assad’s government and rebelling coalitions to dialogue, despite an attempted peace talk brokered by Russia, it is expected that the country’s civil war will not subside anytime soon, even in two or three years to come.

Taiwan – 2014 was particularly not a really good year for this island country. In March, most of the central government was paralyzed by the largest mass protest ever organized since the 1990 democratization, with hundred thousands of students occupying Legislative Yuan’s headquarters in Taipei for nearly one month. This protest was largely triggered by China-Taiwan trade agreements, which many feared would give Beijing a stronger economic leverage towards the country’s survival. With bilateral trade between both countries surpassing 170 billion US$, or 30% of Taiwan’s overall annual volume, and Taiwan’s largest corporations benefiting the most, much of the public is concerned how this free trade policy will determine the country’s long-term existence.

Two more disasters befell Taiwan, with a plane crash in Penghu Islands, and a massive gas pipe explosion in Kaohsiung, devastating several parts and many buildings across the city. Ma Ying-jeou’s administration faced another major blow with the ruling party Kuomintang’s massive defeat in this year’s municipal elections, driven largely in part by public’s increasing dissatisfaction towards the government.

By 2016, with a presidential election already scheduled, this is going to determine the future direction Taiwan will go towards.

Thailand – for the umpteenth time (after nearly 20 times of coup d’etat since early 1930s), Thailand effectively becomes a military junta again, a consequence of lengthy political fights between kingdom-supported military, urban middle-class, and farmers plus rural villagers, who mostly support Thaksin Shinawatra and his associates. To make a long story short, the military junta will not end anytime soon, unless steps have been taken to reconcile both the royalists and the villagers (which so far hasn’t seen any concrete results).

Turkey – When Russia has Putin, Turkey has Erdogan. The mass protests originating from Istanbul’s Taksim Square, which later spread into the entire country last year, failed to overthrow Recep Tayyip Erdogan’s government; instead, it gave him further legitimacy to alter the current state of Turkey. Beforehand a three-term prime minister, previously hailed for his successful economic transformation of this country of 70 million, Erdogan has been increasingly faced with scandals involving his inner circles, and his increasingly conservative, and oftentimes iconoclastic, views about Islam and the world. This year, Erdogan is sworn in as the country’s president, eliminating the position of ‘prime minister’. Now being head of state and head of government, with numerous cash-draining, oftentimes ‘white elephant’ projects across the country (including a brand-new one-billion-dollar presidential palace in Ankara), the leader is getting more unpopular across much of the country’s youth.

Ukraine – situated in between European Union and Russia, Ukraine remains in difficult position. Much of the nation was fractured with mass protests taking place from November 2013, which ended with a street battle in February this year. While much of the country demand a complete integration with EU, many important elements within the country also want closer ties with Russia, enticed by Soviet-era stability. The protests, later known as Euromaidan, ended up with a bloodshed killing more than 100 people, and the subsequent escape of Viktor Yanukovich, the country’s deposed pro-Russia president.

Nonetheless, the protests ended up exacerbating the current situation in Ukraine, with many of the pro-Russian civilians taking up weapons and declaring their own republics across much of the Eastern part. The country itself was also faced with another threat on its Western part: Moldova, its neighboring state, served as a Moscow-supported bulwark against Kiev. Crimea and Donetsk has been taken, much of the country remains under war, and worse still, an airliner was bombed.

The current government led by Petro Poroshenko (known as the Ukraine’s Chocolate King) has also been faced with internal infighting within the parliament, giving this conflict an uncertainty when it will end.

United Kingdom –  It’s good that Scotland didn’t split up from the country; otherwise UK would have to rename itself, change its flag, and worse, other constituent countries like Wales and Northern Ireland will possibly follow the same way had Scotland chosen to declare independence.

United States – the world’s largest superpower faces its own largest racial tensions since 1960s, with the shooting of Michael Brown in Ferguson, Missouri, prompting large-scale protests nationwide, and subsequent acts of rioting and looting in several towns across the States. A few other African-Americans were also shot down by police, but this also fuels debates whether the police are getting increasingly militarized, or the Blacks are really trying to attack them.

The Republicans’ success in taking control of US Senate gives another blow for Obama’s administration, especially after the last year’s government shutdown in regard to endless debates about Obamacare and other proposed policies that didn’t get passed. With two years left for President Obama, there won’t be much left for him to accomplish given the latter’s strong control of the Senate.

Nonetheless, there’s good news aside: economic recovery has shown its outcome, now at a level of 4%, the highest since Clinton’s era. With Europe still at its teeters, China facing a gradual slowdown, and Japan entering recession, US is now driving the world’s economic growth again for the first time (albeit not so in long term, as long as economic reforms are not activated).

Venezuela – with Hugo Chavez passing away, people once put another populist hope on his former vice president, Nicolas Maduro. It turned out to be wrong: economy remains at a dismal level, and with oil prices further dropping, revenues are increasingly small. Despite Venezuela’s status as currently the world’s largest holder of oil reserves, much of the population remains chronically poor, crime rate remains among the world’s highest (nearly similar to that of war-ravaged nations), and state-organized violence remains dominant in suppressing freedom of expression. Worse, with Maduro’s limited capability in handling the country’s issues, all these invoked massive anger from much of the populace. The country experienced mass protests when hundred thousands of people went to the streets, demanding his resignation.

More than 40 people were shot to death, including former pageants (pageants are the most popular figures in Venezuela, sometimes comparable to government leaders), and Maduro remains in power.

 

 

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Starting from next year, 2015, I will not frequently update this blog anymore, given that there are several things I have had commitment to do so, but this doesn’t spell an end to it (even though there were quite some moments I was considering to simply terminate this blog). It’s just that there are some adjustments I have to do with my schedule, so I hope you, readers, can understand that. I wish you all the best luck ahead, and I’ll see you in 2015.

What Venezuela can learn from Norway

 

 

The passing-out of El Commandante, the all-beloved Hugo Chavez is surely a dolour unimaginable for most of the Venezuela’s population. A leader long rhapsodized by his populace, Chavez’s providential touch and fame has been elevated into something, something so well-revered and eulogized, as though he were a demigod assigned on Earth by the glorious Heaven.

But who could no more discern clearly at the country’s situation than the hangers-on themselves?

In reality, we have to be honest that even Venezuela itself has become, unofficially, ‘the Saudi Arabia of petroleum’. The answer lies on its extensively leviathan oil reserves – exactly the largest on the planet. Orinoco Belt may be the nation’s touch of Midas – it is estimated as many as 513 billion barrels of oil may be deposited throughout the territory. Enumerating that amount, it is almost twice as abundant as Saudi Arabia’s 265 billion barrels. Assume that oil production be maintained at similar output – approximately 2.45 million barrels a day, using 2011 standards – Venezuela should have held on as a prosperous country for 6 centuries.

 

 

With reserves estimated at 513 billion barrels of oil, Venezuela could possibly surpass Saudi Arabia – if the country were well-prepared to invest more in improving extracting technology currently existing in the industry.

 

Even under Chavez’s leadership and superintendence, Venezuela should have stricken the hot iron better than Middle East did.

Truth be told, as of today, nearly 30 percent of the country’s 30 million are critically poor. Crime rates in Caracas, the capital, are exceedingly high, that nearly 120,000 homicides were reported from 1999 to 2010. Transparency International, meanwhile, placed the country’s corruption perception index (CPI) on an average scale of 1.9 out of 10, and ranked the nation on number 164, in 2010 (compared to Indonesia’s 110th rank, our country is, slightly gratefully, better than the former).

Peter Maass, author of Crude World: The Violent Twilight of Oil, recounted his experience while covering the city for his book:

Caracas had a booming business in luxury cars and the highest rate of gun violence in the world for cities not at war. The capital’s infrastructure, ignored during decades of economic doldrums, continued to be ignored during the boom. A highway to the airport had to be rerouted for months due to a bridge that was in danger of collapsing; what had been an hour-long commute to the airport required three to four hours over a zigzag of back roads.

In addition, there was a mismanagement in managing the oil revenues. Not that the bulk went to tower cranes and more skyscrapers; human fallacies accounted for the occurrence. It was good that PDVSA, the country’s sole state oil authority, was obliged to provide much of the perquisite to social programs, ranging from building schools, providing cheap healthcare, subsidizing fuel prices and costs of basic items, and setting up cooperatives. Yet, Chavez made a great mistake: instead of placing such responsibility on the ministries involved, all these tasks were instead accomplished by PDVSA. Peter Maass noted as follows:

Chavez calculated that PDVSA’s revamped staff would be more loyal and more capable than the civil servants whose uninspired presence lent government ministries the aura of early retirement homes for bureaucrats.

 

 

One of the PDVSA’s oil refineries.

 

 

Worse, Chavez had fired nearly 18,000 managers and engineers working for PDVSA, human resources needed to operate and administer the company’s daily operation, due to 2002-2003 workers’ strike. In consequence, PDVSA encountered numerous difficulties in sustaining their business practices. The situation even festered when most of the social responsibilities were on PDVSA’s hand, not the ministries’. Peter Maass wrote:

Chavez did not just order PDVSA to boost its community spending by a few percentage points; he turned the firm into the engine of revolutionary change. PDVSA allotted more to its social projects in 2006 – nearly US$ 10 billion – than to its operations (US$ 5.9 billion). In a sense, it became a development agency with oil wells. No other oil company, whether publicly-traded or state-owned, spent nearly as much on non-core programs. In Saudi Arabia, Russia, and other oil countries, state-owned firms tend to have modest social programs. Their surpluses are transferred to the Treasury and distributed to ministries that chase the holy grail of sustainable development. Usually they fail. You can build colleges, as Saudi Arabia did, but that doesn’t mean the degrees will count for much or that jobs will await the graduates.

A point well noted.

Much of the oil revenues also went up into subsidies of basic items’ prices; Chavez’s administration had even set up Mercal, a chain of supermarkets ‘extraordinarily’ dedicated to selling all basic items at a cost 50% lower to all Venezuelans. But even the mushrooming number of such stores – numbered at thousands throughout the country – could not help solving the country’s long-term problems.

Peter Maass summed up as follows:

In Venezuela, it was as though a well-meaning doctor [referring to Chavez] was using the wrong instruments and wrong procedures to operate on a sick patient. Even during the boom years, signs of failure were ample – price controls on foodstuffs were leading to shortages [due to excess in demand], and the government was spending so much on subsidies that it was running into deficit problems, which is a striking achievement when large amounts of revenues are being received from oil sales. Chavez’s policies, intended to break the resource curse, seemed likely to prolong it………They did an awful job, but giving away money is not going to solve people’s problems. We have a saying here: ‘Bread for today and hunger for tomorrow’.

And what can Norway offer to teach Venezuelan government? Allocate more of the oil money, instead of petty subsidies which only offer short-term solution, to sovereign wealth fund.

 

 

One of Statoil’s main refineries. Through The Government Pension Fund of Norway (GPF), the sovereign wealth fund is committed to maintain the integrity of being a pro-sustainability advocate; one of their regulations includes blacklisting companies which they deem ‘having pursued ecologically disadvantageous business practices’ for investment.

 

 

What is a sovereign wealth fund (SWF)? To make it easier to comprehend, just consider this analogy: every household, even a big nation, needs savings. When money is earned, it is important that some bits of the coming-ins are saved to appropriate adequate funds for future generations. Imagine that your dad toils in the office, earns a typical salary, say, 500 dollars a month, and makes use of one-fifth of the income for family savings. But what if your dad, rather than save 100 dollars to anticipate possible events in the future, instead spoil you and your siblings (exclude your mom) with ‘subsidies’ worth 490 dollars, where you can shop and buy whatever you need? That is the case Venezuela is being faced. Chavez is generous, but he’s been way too free-handed that he now spoils the citizens’ needs.

Norwegian government, in this context, is far much wiser. They realize that ‘oil boom’ is no more than a temporary, fast-come-fast-go phenomenon, that they need to save up such golden opportunity to entirely improve their nation’s living standards. But that does not mean they are overlooking the people’s education and healthcare needs. They do still fully pay the citizens’ education and healthcare fees, but unlike Venezuelan government, they are not subsidizing prices of consumer goods. They realize such policy only yields more kief among the citizens.

Here is their scheme: portions of Statoil’s – Norwegian state-owned oil and gas corporation – revenues will go to the The Government Pension Fund of Norway (GPF), the state’s sole SWF. When money is collected, the government hires individuals to manage those funds. But that also does not imply that the managers may run the money at their own will. The government sets up a conservative regulation – most of the funds shall not be invested into stocks, but obligation, as stocks tend to be more volatile and riskier than the latter.

As of 2013, the total funds managed by GPF, mostly from oil revenues, have surpassed nearly 716 billion US$. If it were divided equally among its 5 million Toms, Dicks, and Harries, every individual could attain an additional of nearly equivalent to 143,200 dollars. Even though Norway still primarily depends on oil production to account for its GDP (oil exports contribute to 45% of the GDP), Norway, also itself a socialist economy, shows virtually no signs of contracting a possible recession. While most of its counterparts in European Union are struggling against double-digits unemployment and possibly double-dip recession, most Norwegians remain calm, stable, and unaffected (except for the 2011 massacre, an ‘unlikely’ event).

 

 

In fact, the government of Norway does not only compensate its citizens for education and healthcare; they also provide all-expenses-paid tour overseas packages for the country’s elders.

 

 

Substantively, it is not that the Venezuelan government has no comprehension of what SWF is; they even have one, namely Fondo para la Estabilizacion Macroeconomica (FEM – Macroeconomic Stability Fund). Nevertheless, the funds accumulated reach no fewer than 800 million US$. If spread across its 30 million inhabitants, every person would procure only 26 dollars and 70 cents, an amount adequate enough to rear food supplies a full week. Even to reach a minimum level, the amount saved should be 100 billion US$ for an energy superpower wannabe like Venezuela.

With Hugo Chavez passing away and Nicolas Maduro, his vice, being sworn in as ‘temporary President’, such tasks prevail the government’s challenges to manage such abundance – whether it will be a mirage for its people, or worse, nothing more than a deadly, contaminating black liquid.