November 5th 2005

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Articles from this issue:

COVER STORY: CANBERRA OBSERVED: 'A dangerous moment for our democracy ...'

EDITORIAL: 'Simpler, fairer' labour laws? You've got to be kidding!

SCHOOLS: Mathematics at mercy of trendy educators

INTERNATIONAL AFFAIRS: Oil for food - or was it for a Mercedes?

INTERNATIONAL TRADE: WTO negotiations falter on trade liberalisation

VICTORIA: Water bill spells disaster for farmers

STRAWS IN THE WIND: Too many bulls in the China shop? / Anti-corruption conference / Logging onto other people's forests / Report from (another) conference / Little social protection

ABORTION: Cutting Australia's abortion rate

EMBRYO EXPERIMENTATION: Government push to use super funds for embryo research

WESTERN CIVILISATION: What conservatives should champion

CINEMA: In Her Shoes: Is Hollywood finally tiring of sleaze?

Maternity payment could make difference (letter)

How democracies perish (letter)

Justice for the worker (letter)

BOOKS: THE DEATH OF RIGHT AND WRONG: Exposing the Left's Assault on Our Culture and Values


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Too many bulls in the China shop? / Anti-corruption conference / Logging onto other people's forests / Report from (another) conference / Little social protection

by Max Teichmann

News Weekly, November 5, 2005
Too many bulls in the China shop?

Amidst all the adulatory talk of China as the coming giant with whom we can bond so as to make staggering profits (where have we heard all that before?), warning notes are being sounded as to the parlous condition of Chinese society and its political system as against its booming economic activity.

And as to the condition of human rights there? Forget it. Our Beautiful People have done so, along with our traders who never took any of this "sentimentality" seriously anyway.

The OECD produced its first comprehensive study of the Chinese economy in May, finding that corruption was both "severe and widespread", is "becoming a source of social discontent", and "poses a threat to the legitimacy of the country's leaders".

As the economy grows, so does corruption. Four thousand corrupt officials have fled the country, along with US$50 billion over the past decades, the Chinese Government has admitted.

Prosecutors and judges already have the powers to deal with these scandals, but there is a strange shortage of whistleblowers. The number of convictions is reportedly quite low, and very few senior or important people have been executed for what are capital offences.

Senior corrupt officials in China have as much chance of being properly dealt with as have our own corrupt corporate and legal malefactors - that is, almost no chance.

Critics are saying that tighter Internet controls and increasing suppression of free speech in the Chinese media are making it more difficult to control graft and injustice. (That might in fact be the reason for tightening censorship, rather than the fear of dangerous new political ideas).

Critics also raise the question of whether corruption can ever be properly tackled when there is a one-party state and limited formal accountability (like Victoria).

Anti-corruption conference

Then there was the regional anti-corruption conference held in Beijing in September, when the OECD rapporteur Janos Bertok spoke on the China report. He said that the economic losses were one thing, but the social and political fall-out in China was worse.

Rural unrest was growing right across China, partly triggered by official abuses of every kind.

The further away from Beijing, the more piratical the officials and the more brutal and arbitrary their reactions to peasants resisting exploitation or outright stealing by the Party.

And the overall situation is not helped by the standard of living of city-dwellers being four times that of the rural inhabitants who still comprise 60 to 70 per cent of the nation's population.

The figures concerning the levels of corruption, which were presented by the Chinese to the conference, were bad enough, saying as they did that corruption caused economic losses of more than 13 per cent of GNP in the late 1990s and that at least 32 government ministries were engaging in "budget mismanagement", including the finance ministry and the National Development and Reform Commission.

But the OECD figures were far, far worse. Instead of the state media story of 4,000 corrupt officials having fled abroad in recent years, along with 5 billion yuan, the OECD says US$24 billion is laundered every year and that, in the first half of 2003 alone, nearly 15,000 officials either fled abroad or disappeared within China to escape prosecution for embezzlement.

Clearly, the situation was getting so much out of hand, with lawlessness and criminality reaching up to the highest levels of the administration, that thousands of angry demonstrations have apparently been breaking out all over China.

These have been virtually ignored by our media, one section of which is willing to excuse anything that a communist state does so long as it is anti-American - and the other section being virtually a China lobby for our giant mining exporters.

But at least Beijing read the signs, so it has just announced a new five-year plan in which economic growth will be slowed with more attention being paid to the lower classes and a greater share of the social product devoted to improving the lot of the poor of China.

This announcement looks to be like a tactical move, recalling the periodic "one step back" technique of Eastern European communist states when public discontent began to look dangerous.

After an interregnum, the screws would be put on again. When they were, critics who had been allowed to come in out of the cold and perform were hustled away for psychiatric care.

We'll just have to see whether, in China, communist history repeats itself.

Logging onto other people's forests

While still reflecting on the bright and golden future which lies before us with the rise of China, a report from Greenpeace, drawn from the International Tropical Timber Organization, is certainly relevant.

Rowan Callick, Asia-Pacific editor of the Australian Financial Review, sets it down in a piece on Chinese economic activities in the global market (AFR, October 21, 2005); and he writes so succinctly that it is tempting not to just quote him verbatim.

China is buying half the logs being shipped from the world's tropical forests, to turn them into plywood. Thus, in 2004, the port of Zhan-jiagang, not far from Shanghai, "imported about $1 billion worth of tropical logs".

Greenpeace gave an account of illegal logging in Papua New Guinea, the movement of the logs to Chinese processing mills and their conversion to plywood. PNG could be "logged out" within 15 years.

China, as it grows, has developed an enormous appetite for timber - other people's - and exporting other people's, after turning it into plywood.

Between 1998 and 2004, China's plywood exports went from one billion cubic metres to 11 billion, according to The International Forestry Review.

Callick quotes from a joint article in The International Forestry Review by Xu Jintao and Andy White saying that "China has suddenly become the wood workshop of the world, capturing almost one-third of the global trade in furniture".

Then the authors add: "In many cases, increasing trade flows are associated with unsustainable harvesting, corruption, illegal logging and the abuse of indigenous and other forest community rights."

The reason China prefers other people's timber is that, from 1998, the Government banned logging in China's national forests. This ban followed upon China's devastating floods, considered to be in part the result of the widespread destruction of her forests.

Another communist country, the Soviet Union, had done all this earlier. So there was no mystery as to what would happen.

So China is now doing to others what she was earlier doing to herself.

But China is not the only state taking advantage of corrupt local regimes - for that, really, is the nub of the whole issue of neo-colonial, as against colonial, exploitation.

Thus, Malaysia's logging titan, Rimbunan Hijau ("forever green"), apparently exports nearly half the timber leaving PNG and "it appears to be protected by political patronage", wrote Greenpeace.

In fact, the World Bank terminated a $47 million forestry conservation project in PNG in May because of the PNG Government's failure to meet conditions.

PNG is a failed state, doused in corruption, and this is why all Australian attempts to restore the fortunes of such countries to our north predictably fail (although we help them to cover up the failures, so as to save our face).

Then, when they descend into violence, we are supposed to send in troops or peacekeepers.

In a way, one can see the full economic cycle operating in contemporary capitalism.

They take our timber to their country, turn it into plywood or low-priced furniture. So, over time, we are deforested, so our timber "exports" dry up.

Meanwhile, their plywood and cheap furniture wipe out our local plywood and furniture industry, so we'll have to import these items in perpetuity.

It's called the law of the market ... Or is it the jungle?

As Fagin sang in Oliver!, "I think I'd better think it out again!"

Report from (another) conference

The International Federation of Social Workers is holding its 50th anniversary conference in Munich in 2006; but meantime the 18th Asia-Pacific Social Work Conference was conducted this year in Seoul.

It signalled a kind of changing of the guard. The Seoul Government and the local Korean social workers' chapter pulled out all stops. (The previous Asia-Pacific conference had been held in Adelaide).

But, at this Seoul Conference, the Asian members signalled that the previous Euro-American model for social work, practised very widely, should be diluted, to say the least.

Asian societies are different and should devise their own caring and social work philosophy. In fact, each Asian (and, for that matter, African) country should work within its own cultural system, and political and religious systems.

Where all that pluralism is going to lead in the end is interesting, to say the least.

But, as the Koreans said, the Asian tigers are now walking with pride. And so are the great new powers, China and India.

First, the impressive news. Asia has been growing economically, industrially and, until recently, demographically in ways that Britain, Europe and America never achieved.

It took Britain 60 years from 1780 to double its per capita income; the US 50 years from 1840; whereas Japan doubled in 17 years after 1965; and China took only 10 years from 1978.

The second-string tigers, Korea, Hong Kong, Taiwan and Singapore - and, close on their heels, Thailand and Malaysia - have also been doing very well.

Although Asia will have more than half of the perhaps nine billion people living in the world in another few decades, two superpowers, India and China, are likely to dominate the rest. (So it is believed in Korea).

Second, the not-so-good news. Asia has the highest number of poor children in the world. Almost half of Asia's 1.27 billion children live in poverty, without proper food, water or shelter, according to a new report by Plan (a large international aid and development organisation).

India, with 80 per cent of its 400 million young people severely deprived, leads the field. Sixty per cent of Indian children can be classed as absolutely poor, with almost half of Indian children under five malnourished.

India also has the greatest number of working children in the world.

Not surprisingly, Plan says, what is happening here is catastrophic. Not only have the children been left behind in this great saga of Asian economic growth, but so have half of Asia's families missed out.

In his keynote address to the Asia-Pacific Social Work Conference, Korean Professor Jong-sam Park said many things and included in the documents a paper by Jim Rohwer (a Hong Kong-based senior contributing editor at Fortune magazine) on "understanding the reasons for the Asian economic success".

The crux of the Asian idea of public policy is that governments should not do much to temper the hazards of life, particularly the often harsh consequences of fast technological and economic change.

Little social protection

So, as a rule, Asian governments have tended to offer little social protection, such as pay-as-you-go pensions, unemployment insurance or state-funded health care.

In Asia, government spending accounts for an unusually small part of economic activity by comparison with that of the West. And very little of that government spending goes to transfer payments from the pockets of one class of taxpayers into those of another class.

Where Asia has been directing this quite modest spending is into investment, especially education. And the Asian saving rate has been far higher than that of most Western countries.

Author Jim Rohwer says that the markets have been telling states like Sweden, and even the US, that they can't keep running up debt in perpetuity without paying higher interest rates.

The failure of Western public finances has centred around the issue of social protection. In Western Europe, there was the welfare state. In the US, it took the form of immense intergenerational transfers within the middle class under social security and Medicare programs.

As Rohwer continues, all this came about with the understandable aim of creating a compassionate society, one in which the government would prevent life hazards from wantonly striking people down.

But the result, which became clear as early as the 1960s and, even without the benefit of Asia's alternative example, has been not only the deterioration of public finances and the paralysis of Western democracy by interest groups, but the practical breakdown of the family, of civil society and law and order.

Interesting thoughts these, from an Asia-Pacific Social Work Conference? Somehow, you wouldn't get that from an Australian conference ...

Another message from this Seoul conference was that, for many poor areas, indigenous mutual help efforts at the bottom and involving everyone could do far more to tackle local problems - poverty, illiteracy, disease and homelessness - than waiting for big schemes from the top, deploying massive sums of money.

Each local community, each locality should devise its own strategy, and social philosophy.

Western models - where they did penetrate - were often useless or destabilising. They enabled graft and the misappropriation of resources - and encouraged the growth of a new subculture of politicised health-care parasites, such as has taken over in the West.

We might start to see the magnitude of trying to compete with Asia.

Not only do we have to face products, goods and services, produced by firms with wage bills only a fraction of those in the West, but with a very small social security component, and far lower taxes than is normal and necessary in the West because, in those countries, there is so little investment in social services.

Who's still for more free-trade agreements?

  • Max Teichmann

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