In the Singapore press, there have been questions raised as to the role played by the aggressive sales culture in commercial banks that has led to the Lehman-linked investment products debacle.
The sales culture in banks started some time in the 90's and was imported from the US. Many local banks at that time engaged foreign consultants to jump-start their organizations because returns were not satisfactory and there was pressure to either upgrade or get merged.
Some of us will remember how the local banks used to operate and I am not sure if we want to go back to those days. The banking reforms have been good for the country. Although I can think of some controls to the sales culture, any changes will bring fresh issues so long as there is little attempt to educate the investors.
For example, there could be prohibition of the sale of investment-linked products at branches. The authorities could mandate that they be sold only via certain channels, like the internet (where the people are more likely to be educated) or on enquiry at the head office. Marketing activities can be controlled, much like the controls on advertisements on cigarettes. That will limit the exposure of small-time depositors to the availability of such products. However, this could be seen as effectively discriminating against the small-time deposit-holders, especially in a bullish market. Who knows, some of them may indeed want to earn higher returns on their deposits and do not mind taking on higher risks, but are unaware of the means to do so.
Another possibility is to eliminate the conflict of interest that resides in the job of the Relationship Manager as the salesperson as well as the financial risk advisor. This can be done through separation of duties. Have the RM work with a financial risk advisor. While the RM is compensated by a commission earned for bringing in a sale, the financial risk advisor is paid a fixed salary. The latter's role is to advise all customers of the potential risk before they sign on the dotted line. As the financial risk advisor does not benefit from the sale, there will be no conflict of interest. The onus is then on the RM to bring in the right customers, otherwise the RM's effort will be in vain. Obviously, there will be cost and efficiency implications if this is implemented, again new issues to be addressed.
Of course, the entire compensation structure of RMs can be changed. They can be salaried persons who just have a target to meet. Whether they meet the target or not, they will still earn their salary. It's just their advancement in their career that will be affected. This structure is reminiscent of yesteryears, this was how things were done before. Some pressure will be taken off the RMs but this may also blunt their motivation to sell and cross-sell. How this will affect the city-state as a financial centre will be another issue to address.
Liberalising the financial market is the direction that the city-state has chosen to take and any new regulation will need to be managed well as as not to be misconstrued. Some control is obviously good, but over-reacting due to the recent uproar over the sale or mis-sale of investment- or credit-linked products may not be to the benefit of all. Whatever it is, some form of investor education or investor awareness programme will not go amiss.
Monday, 20 October 2008
Sunday, 19 October 2008
Lehman-Linked Investments
In Singapore, many investors of Lehman-linked investment products are still upset about their loss. When Lehman collapsed, the value of their investments similarly collapsed to zero. Their main grouse is that they have been misled by the banks and relationship managers who sold them the products into believing that the notes were of low-risk.
The fixed deposit rates in Singapore are pittance, usually <1% while some of these investment products promised returns of up to 5% over a 5-year tenor. An investor with S$200,000 cash coolly collects $2,500 every quarter, versus the $500 per quarter he would otherwise have received under a fixed deposit. Isn't that an attractive proposition?
Now, even as the fixed deposit holders made the switch, surely they knew that there was no free lunch. Banks are not silly, not are they philanthropic. You can be sure that the risk of the product would be appropriately reflected in the differential in returns.
It may require a rocket scientist to understand the intricacies of these instruments, how it's priced and so on, so don't even try. [A certain bank I know did indeed employ several ex-nuclear scientists from the ex-Soviet bloc to do financial engineering.] But that's besides the point. To me, there is no need to sweat over the working of these products. Laymen like you and me can be guided by a simple rule: high risk = high returns. That's all. Investors who expect high returns should be aware that they need to take on higher risks. That's for sure. Don't fool yourself or let anyone fool you.
Then there are the complaints on how they are sold these products. I agree. Relationship managers can be very persuasive, or ruthless, however you look at it. Nevertheless, as adults living in an urban and competitive environment, potential investors must be responsible for their own decisions - they cannot plead naivete. Nobody held a gun to their heads to sign on the dotted line. Everyone knows the RMs earn a commission from the deals that they close. There would already be a conflict of interest right from the start. Push comes to shove, who will they take care of? The investor or their own pocket?
I may sound very unsympathetic but there are several lessons to be learnt, one of which is that one needs to take responsibility for one's action. Retirees or not, the same lesson needs to be learnt. Painful though it may be.
Other lessons: You win some, you lose some. Don't put all your eggs in one basket. There is no free lunch, caveat emptor. Finally, don't expect the government to bail you out.
If the banks choose to refund or compensate certain groups of investors (the retirees, for example, as suggested by the authorities), it should be clear that this is done out of goodwill. Investors have no right to demand or expect a full return of their capital. To think otherwise will have an impact on how the financial market operates and re-defines the notion of risk as it is understood today.
The fixed deposit rates in Singapore are pittance, usually <1% while some of these investment products promised returns of up to 5% over a 5-year tenor. An investor with S$200,000 cash coolly collects $2,500 every quarter, versus the $500 per quarter he would otherwise have received under a fixed deposit. Isn't that an attractive proposition?
Now, even as the fixed deposit holders made the switch, surely they knew that there was no free lunch. Banks are not silly, not are they philanthropic. You can be sure that the risk of the product would be appropriately reflected in the differential in returns.
It may require a rocket scientist to understand the intricacies of these instruments, how it's priced and so on, so don't even try. [A certain bank I know did indeed employ several ex-nuclear scientists from the ex-Soviet bloc to do financial engineering.] But that's besides the point. To me, there is no need to sweat over the working of these products. Laymen like you and me can be guided by a simple rule: high risk = high returns. That's all. Investors who expect high returns should be aware that they need to take on higher risks. That's for sure. Don't fool yourself or let anyone fool you.
Then there are the complaints on how they are sold these products. I agree. Relationship managers can be very persuasive, or ruthless, however you look at it. Nevertheless, as adults living in an urban and competitive environment, potential investors must be responsible for their own decisions - they cannot plead naivete. Nobody held a gun to their heads to sign on the dotted line. Everyone knows the RMs earn a commission from the deals that they close. There would already be a conflict of interest right from the start. Push comes to shove, who will they take care of? The investor or their own pocket?
I may sound very unsympathetic but there are several lessons to be learnt, one of which is that one needs to take responsibility for one's action. Retirees or not, the same lesson needs to be learnt. Painful though it may be.
Other lessons: You win some, you lose some. Don't put all your eggs in one basket. There is no free lunch, caveat emptor. Finally, don't expect the government to bail you out.
If the banks choose to refund or compensate certain groups of investors (the retirees, for example, as suggested by the authorities), it should be clear that this is done out of goodwill. Investors have no right to demand or expect a full return of their capital. To think otherwise will have an impact on how the financial market operates and re-defines the notion of risk as it is understood today.
Saturday, 18 October 2008
The Teaching of Math and Science in English
Much debate has been generated in Malaysia following the policy to switch the medium of instruction for Mathematics and Science from Malay to English six years ago. The intensity of the debate heated up recently as the Minister Of Education has promised a review of this policy before 2010.
The current debate largely centers on whether this policy will achieve its stated objective, that is, to enhance the competency in English among Malaysians. Various views have been put forth and it is fair to say that both the proponents and detractors have raised valid points.
In a nutshell, those who support the current policy are of the view that teaching the two subjects in English will increase the students' exposure to the language. Coupled with effective teaching of the language, this should strengthen the students' command of the language. Moreover, much reference materials are written in English and the dominant language on the internet and in commerce is English. Thus, it makes good sense to equip our young from the start.
The detractors raise the point that the inability of Math and Science teachers in schools to switch effectively to English is a stumbling block. There are also doubts whether the learning of technical subjects in English can actually raise the standard of the language. The main concern is that students who are weak in English may fail to understand complex Math and Science concepts when they are taught in a non-mother language tongue.
Needless to say, the ministry will have a tough time finding a suitable solution to the dilemma and convincing stake-holders that its eventual decision is for the best of the country. However, weighing the two arguments, I would say that things need not be so cut and dried.
It might make sense for the ministry to consider a third alternative and that is to introduce Science as a formal subject at a later stage in primary school. Build up a strong foundation in language skills first.
There is a school of thought that early primary education should focus on getting the three R's right first: Reading, wRiting and aRithmetic. I would suggest that our children focus on developing these literacy and numeracy skills before studying a subject like Science.
In our present school system, one of the criticisms is that the syllabus over-burdens the young child and robs the child of the joy of learning. All children in our schools learn at least two languages when they start formal education. This in itself is a challenge to many children. Although children tend to pick up languages easier at a young age, we need to be careful not to overwhelm young minds.
The many demands of the various subjects diffuse the key objectives of early primary school education, leaving the average child lost and stressed out. Policy-makers sometimes tend to forget that learning less may be more beneficial if the child learns well and develops a positive-learning attitude.
As a science educationist, I am qualified to say that Science is a subject that needs a considerable range of vocabulary for the concepts to be understood and appreciated. It is food for thought whether at lower primary school level, our students have that vocabulary range yet, in whichever language.
If one looks at the current lower primary school science syllabus, the focus is on fact-based learning, not inquiry-based. Lower primary school students learn the names of different flowers, animals, habitats, senses, materials, life cycles and the like. Most of it entails rote-learning - which is not serving the lofty aim of develop critical thinking skills. There is little room to discuss the whys and wherefores.
Thus, as we discussed the teaching of Math and Science, it is worthwhile to think about the value of learning Science the way it is taught in our lower primary schools now. The importance of science at this stage - the awareness of the environment and the natural world - can be brought into the classroom through language learning. When the children are older, say at Primary Three, it would then be more possible to explore scientific ideas and concepts with students.
Delaying the introduction of Science as a formal subject is not an avant garde idea. In fact, there are countries around the world which have postponed the teaching of Science until at least Primary Three. The students in these countries have not fared worse in Science than those countries which start teaching Science earlier. One of such country is Singapore. We know for a fact that their students are consistently ranked high in the achievement of Science in international competitions.
As for the learning of Mathematics, I would suggest that both Malay and English be used to teach the subject in national schools in the first two years. This is possible. We recall when the medium of instruction was switched from English to Malay some three decades ago, English-trained teachers all over Malaysia used this approach and succeeded within a short time frame. The teachers of today should be confident that they are of the same calibre. However, the message from the ministry must be clear that by the time the students reach Primary Three, Mathematics will be taught only in the English language.
There is generally no disagreement that a good command of the English language is key to employability in the private sector and career success in the globalised world. If the government is serious about upgrading the standard of English in the country, here is my call.
Let our students focus on getting the basics right in the English language during their first two years of primary education. Make sure they have access to the best teachers who have the right attitude and are trained in effective pedagogy. Nurture a conducive and supportive English learning environment created in the school, at home, in the media and the public.
We can succeed if the will is there.
The current debate largely centers on whether this policy will achieve its stated objective, that is, to enhance the competency in English among Malaysians. Various views have been put forth and it is fair to say that both the proponents and detractors have raised valid points.
In a nutshell, those who support the current policy are of the view that teaching the two subjects in English will increase the students' exposure to the language. Coupled with effective teaching of the language, this should strengthen the students' command of the language. Moreover, much reference materials are written in English and the dominant language on the internet and in commerce is English. Thus, it makes good sense to equip our young from the start.
The detractors raise the point that the inability of Math and Science teachers in schools to switch effectively to English is a stumbling block. There are also doubts whether the learning of technical subjects in English can actually raise the standard of the language. The main concern is that students who are weak in English may fail to understand complex Math and Science concepts when they are taught in a non-mother language tongue.
Needless to say, the ministry will have a tough time finding a suitable solution to the dilemma and convincing stake-holders that its eventual decision is for the best of the country. However, weighing the two arguments, I would say that things need not be so cut and dried.
It might make sense for the ministry to consider a third alternative and that is to introduce Science as a formal subject at a later stage in primary school. Build up a strong foundation in language skills first.
There is a school of thought that early primary education should focus on getting the three R's right first: Reading, wRiting and aRithmetic. I would suggest that our children focus on developing these literacy and numeracy skills before studying a subject like Science.
In our present school system, one of the criticisms is that the syllabus over-burdens the young child and robs the child of the joy of learning. All children in our schools learn at least two languages when they start formal education. This in itself is a challenge to many children. Although children tend to pick up languages easier at a young age, we need to be careful not to overwhelm young minds.
The many demands of the various subjects diffuse the key objectives of early primary school education, leaving the average child lost and stressed out. Policy-makers sometimes tend to forget that learning less may be more beneficial if the child learns well and develops a positive-learning attitude.
As a science educationist, I am qualified to say that Science is a subject that needs a considerable range of vocabulary for the concepts to be understood and appreciated. It is food for thought whether at lower primary school level, our students have that vocabulary range yet, in whichever language.
If one looks at the current lower primary school science syllabus, the focus is on fact-based learning, not inquiry-based. Lower primary school students learn the names of different flowers, animals, habitats, senses, materials, life cycles and the like. Most of it entails rote-learning - which is not serving the lofty aim of develop critical thinking skills. There is little room to discuss the whys and wherefores.
Thus, as we discussed the teaching of Math and Science, it is worthwhile to think about the value of learning Science the way it is taught in our lower primary schools now. The importance of science at this stage - the awareness of the environment and the natural world - can be brought into the classroom through language learning. When the children are older, say at Primary Three, it would then be more possible to explore scientific ideas and concepts with students.
Delaying the introduction of Science as a formal subject is not an avant garde idea. In fact, there are countries around the world which have postponed the teaching of Science until at least Primary Three. The students in these countries have not fared worse in Science than those countries which start teaching Science earlier. One of such country is Singapore. We know for a fact that their students are consistently ranked high in the achievement of Science in international competitions.
As for the learning of Mathematics, I would suggest that both Malay and English be used to teach the subject in national schools in the first two years. This is possible. We recall when the medium of instruction was switched from English to Malay some three decades ago, English-trained teachers all over Malaysia used this approach and succeeded within a short time frame. The teachers of today should be confident that they are of the same calibre. However, the message from the ministry must be clear that by the time the students reach Primary Three, Mathematics will be taught only in the English language.
There is generally no disagreement that a good command of the English language is key to employability in the private sector and career success in the globalised world. If the government is serious about upgrading the standard of English in the country, here is my call.
Let our students focus on getting the basics right in the English language during their first two years of primary education. Make sure they have access to the best teachers who have the right attitude and are trained in effective pedagogy. Nurture a conducive and supportive English learning environment created in the school, at home, in the media and the public.
We can succeed if the will is there.
Friday, 17 October 2008
Playing Police And Thief
I haven't laughed out loud for a long time and I must thank Malaysian Home Minister, Syed Hamid, for providing yet another gem.
When asked in parliament why the police beat base in the notorious Chow Kit area was shut down, he said, in a written reply, that the “presence of criminals could make it unsafe” for police officers.
Laugh out loud, what are police officers for?
But it is more incredulous that the Home Minister can't see the irony of his answer. Is he just being blatantly honest or what?
The City Chief Police Officer immediately came to his rescue to say that the police beat base was not shut down but relocated to bigger premises so that the police can provide better services.
Ah, that sounds more like typical politician-cum-civil-servant-speak. It's an art that Syed Hamid has yet to master.
But then again, wouldn't it be wonderful if all our ministers and civil servants start to talk honestly like our dear Syed Hamid?
When asked in parliament why the police beat base in the notorious Chow Kit area was shut down, he said, in a written reply, that the “presence of criminals could make it unsafe” for police officers.
Laugh out loud, what are police officers for?
But it is more incredulous that the Home Minister can't see the irony of his answer. Is he just being blatantly honest or what?
The City Chief Police Officer immediately came to his rescue to say that the police beat base was not shut down but relocated to bigger premises so that the police can provide better services.
Ah, that sounds more like typical politician-cum-civil-servant-speak. It's an art that Syed Hamid has yet to master.
But then again, wouldn't it be wonderful if all our ministers and civil servants start to talk honestly like our dear Syed Hamid?
Thursday, 16 October 2008
No To History In Primary Schools
I refer to a letter written to The Star today, applauding the Malaysian PM's call to teach History in Primary School.
I am dead-set against it. The fact that the letter is written by a self-professed educationist agitates me further. What type of educationists do we have here?
I am against this idea for three reasons:
1) The children at primary school are already over-burdened with school work. Learning more does not equate better learning. On the contrary, primary school children should focus on building literacy and numeracy skills at this stage, instead of studying more content-based subjects. Yes, things like cooperative learning and inquiry learning should be built into the system instead.
2) Children in primary schools do not appreciate history because their thinking is still very much at the concrete stage - they rely much on the touch and feel to learn. They have much problem handling the abstract. Teaching history to them is likely to end up being another rote-learning exercise.
3) The writer wants primary school children to have knowledge of history. Well and good, but knowledge-based learning is a thing of the past. Children do not need to "learn" knowledge, really. They need to learn process-based skills that will lead them to get whatever knowledge they require, given the easy access to information nowadays.
On the whole, I think there is a need for the public to be educated on what constitutes an education and what learning is all about. Suffice to say, learning is not about amassing knowledge. Our educators and educationists should update their ideas.
Wake up to the 21st century, please.
I am dead-set against it. The fact that the letter is written by a self-professed educationist agitates me further. What type of educationists do we have here?
I am against this idea for three reasons:
1) The children at primary school are already over-burdened with school work. Learning more does not equate better learning. On the contrary, primary school children should focus on building literacy and numeracy skills at this stage, instead of studying more content-based subjects. Yes, things like cooperative learning and inquiry learning should be built into the system instead.
2) Children in primary schools do not appreciate history because their thinking is still very much at the concrete stage - they rely much on the touch and feel to learn. They have much problem handling the abstract. Teaching history to them is likely to end up being another rote-learning exercise.
3) The writer wants primary school children to have knowledge of history. Well and good, but knowledge-based learning is a thing of the past. Children do not need to "learn" knowledge, really. They need to learn process-based skills that will lead them to get whatever knowledge they require, given the easy access to information nowadays.
On the whole, I think there is a need for the public to be educated on what constitutes an education and what learning is all about. Suffice to say, learning is not about amassing knowledge. Our educators and educationists should update their ideas.
Wake up to the 21st century, please.
Friday, 10 October 2008
Food Court Etiquette
The Straits Times in Singapore has taken upon itself to launch a campaign to exhort food court patrons to return their used trays and dishes to designated areas. It started with a letter written by a foreigner to the Forum pages which caught the attention of all, including the Prime Minister.
Sure, the aim is noble but the approach is not. I do not have any strong views about this. If it is convenient and the designated clearing areas are accessible, I would probably do it. If I have to tend to three children and carry loads of shopping, I would probably not do it. To me, it is not a big thing. I have made payment for the food and services.
What I strongly abhor are the character attacks on Singaporeans by foreigners and the establishment whenever they deem there is an area for improvement. We of course recall the strong, uncalled for remarks made by the journalists of the Straits Times against the residents of Serangoon Gardens during the foreign dormitory saga.
And now, Singaporeans are labelled "inconsiderate and ungracious" just because they did not clear their tables after patronizing the food courts. There are three reasons why this is not justifiable:
1) If there were large designated clearing areas in place (like in Tokyo Disneyland) and the people are not responding in a civic manner, then there might be some cause for chastisement. As it is, visit any food court in Singapore and all you see are cleaning trolleys manned by workers who clear the tables and clean them in a systematic manner. There are NO designated areas for patrons to leave their used cutlery. So, don’t turn around and blame it on the patrons
2) Hello??? Since the days of the taverns and road-side stalls (think medieval England, ancient China or the Western frontier, if you like), it is an acceptable practice for patrons to eat and go. It is the same whether the food establishment is a high class restaurant or a cheap food stall. It is a market practice, the exchange of money for goods and services. And in food establishments, the exchange of money is for the food and services rendered which include the establishment clearing the table for the next guest. Again, don’t suddenly become uppity and attack food court patrons. And, if clearing tables is indeed the way to go, what’s next? Why stop at clearing the tables? Why don’t patrons wash their dishes too after using them?
3) If patrons clear the trays willingly, it is because they have been persuaded to do so - witness the relative success of fast food restaurants in this aspect. It is not because patrons have been shamed to doing so or chastised for not doing so. A campaign must be done on a positive note.
I am not denying that there is merit in asking patrons to clear the tables but the appeal should be aimed at the practical judiciousness of such an action. Like, yes, the quicker turnaround would be appreciated by all patrons, especially during the lunch-time rush hour. No character attack, please.
There is so much heat generated on this topic because Singaporeans once again are being sieged on all fronts: the government, the establishment and not least, the foreigners who are leading the attack on Singaporeans. Suddenly, the Singaporean way of life, their HAPPY way of life, is changing. Why? They have been happily eating at hawker stalls and food courts all their lives and now this? No wonder there is resistance - why should they have to assimilate to some new way of life, purported by global citizens?
And to rub salt to the wound, they are now told they are "inconsiderate and ungracious" for doing something that is as common as eating noodles with chopsticks.
Give Singaporeans a break. There are bigger things to worry about or to support.
Sure, the aim is noble but the approach is not. I do not have any strong views about this. If it is convenient and the designated clearing areas are accessible, I would probably do it. If I have to tend to three children and carry loads of shopping, I would probably not do it. To me, it is not a big thing. I have made payment for the food and services.
What I strongly abhor are the character attacks on Singaporeans by foreigners and the establishment whenever they deem there is an area for improvement. We of course recall the strong, uncalled for remarks made by the journalists of the Straits Times against the residents of Serangoon Gardens during the foreign dormitory saga.
And now, Singaporeans are labelled "inconsiderate and ungracious" just because they did not clear their tables after patronizing the food courts. There are three reasons why this is not justifiable:
1) If there were large designated clearing areas in place (like in Tokyo Disneyland) and the people are not responding in a civic manner, then there might be some cause for chastisement. As it is, visit any food court in Singapore and all you see are cleaning trolleys manned by workers who clear the tables and clean them in a systematic manner. There are NO designated areas for patrons to leave their used cutlery. So, don’t turn around and blame it on the patrons
2) Hello??? Since the days of the taverns and road-side stalls (think medieval England, ancient China or the Western frontier, if you like), it is an acceptable practice for patrons to eat and go. It is the same whether the food establishment is a high class restaurant or a cheap food stall. It is a market practice, the exchange of money for goods and services. And in food establishments, the exchange of money is for the food and services rendered which include the establishment clearing the table for the next guest. Again, don’t suddenly become uppity and attack food court patrons. And, if clearing tables is indeed the way to go, what’s next? Why stop at clearing the tables? Why don’t patrons wash their dishes too after using them?
3) If patrons clear the trays willingly, it is because they have been persuaded to do so - witness the relative success of fast food restaurants in this aspect. It is not because patrons have been shamed to doing so or chastised for not doing so. A campaign must be done on a positive note.
I am not denying that there is merit in asking patrons to clear the tables but the appeal should be aimed at the practical judiciousness of such an action. Like, yes, the quicker turnaround would be appreciated by all patrons, especially during the lunch-time rush hour. No character attack, please.
There is so much heat generated on this topic because Singaporeans once again are being sieged on all fronts: the government, the establishment and not least, the foreigners who are leading the attack on Singaporeans. Suddenly, the Singaporean way of life, their HAPPY way of life, is changing. Why? They have been happily eating at hawker stalls and food courts all their lives and now this? No wonder there is resistance - why should they have to assimilate to some new way of life, purported by global citizens?
And to rub salt to the wound, they are now told they are "inconsiderate and ungracious" for doing something that is as common as eating noodles with chopsticks.
Give Singaporeans a break. There are bigger things to worry about or to support.
Wednesday, 1 October 2008
What Do Milk Scandal and Financial Meltdown Have In Common?
The melamine-tainted milk scandal in China.
The financial meltdown in the US.
What do these two events have in common?
To me, they confirm two trends that deserve attention:
1 Declining ethical standards in the world
Greed has reared its ugly head again - this time higher than ever before. The scale is unprecedented, mind-boggling. Coupled with a callous disregard to the value of life and well-being to fellow citizens of the world, it has yielded wide repercussions, as we have seen in the last few weeks.
In China, milk farmers and traders disguised milk protein content with harmful melamine, hardly caring about the impact this might have on infants and other consumers of milk products. Milk manufacturers kept quiet for months after the dalliances were discovered.
In the US, Wall Street traders, promised millions for turning in good financial numbers, recklessly took on unimaginable risks. They took short-term views and escaped when the going became tough.
The lives of millions are now in jeopardy because of the selfish actions of a few.
2 Lack of effective regulation
Centralised regulation is a denounced practice in capitalistic economies and those economies which are heading that direction. Nevetheless, it is now clear that laissez-faire practices must be coupled with authoritarian regulation to protect the common people. The State must assume the responsibility of governing seriously and effectively.
If rules are already in place, like in the case of China, make sure that they are enforced, with severe penalty for encroachment or outright defiance. If rules are not in place, like in the US, it is time to set those rules.
Will this be the last time we see such turmoil? I won't bet my last penny on it. But let's hope at least this generation has learnt its lesson.
The financial meltdown in the US.
What do these two events have in common?
To me, they confirm two trends that deserve attention:
1 Declining ethical standards in the world
Greed has reared its ugly head again - this time higher than ever before. The scale is unprecedented, mind-boggling. Coupled with a callous disregard to the value of life and well-being to fellow citizens of the world, it has yielded wide repercussions, as we have seen in the last few weeks.
In China, milk farmers and traders disguised milk protein content with harmful melamine, hardly caring about the impact this might have on infants and other consumers of milk products. Milk manufacturers kept quiet for months after the dalliances were discovered.
In the US, Wall Street traders, promised millions for turning in good financial numbers, recklessly took on unimaginable risks. They took short-term views and escaped when the going became tough.
The lives of millions are now in jeopardy because of the selfish actions of a few.
2 Lack of effective regulation
Centralised regulation is a denounced practice in capitalistic economies and those economies which are heading that direction. Nevetheless, it is now clear that laissez-faire practices must be coupled with authoritarian regulation to protect the common people. The State must assume the responsibility of governing seriously and effectively.
If rules are already in place, like in the case of China, make sure that they are enforced, with severe penalty for encroachment or outright defiance. If rules are not in place, like in the US, it is time to set those rules.
Will this be the last time we see such turmoil? I won't bet my last penny on it. But let's hope at least this generation has learnt its lesson.
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