Friday, 22 March 2019

Brexit and the "Wolfie Smith" of Politics


Today I have a compilation, as it's Saturday it has a lighter tone, forgive my attempt at humour the subjects are no less serious..

Confusion reigns supreme. I am pleased to have heard that the government are running a tv campaign to advise on leaving March the 29th, it would mean someone somewhere have taken initiative.  But, I'm confused and I don't know quite what I missed. I read today that Mrs May will pull next weeks vote if there is no support. Well, I am under the impression that Bercow scuppered the vote as there are no meaningful changes. The only way to bypass, is to change the deal remove the backstop or close this parliamentary session. Which our dear Queen would have to do, but I am sure Her Majesty is aware the last time a monarch took such an initiative was Charles the 1st, his head and body were buried separately! 

So in short what has changed?



I am also very confused by Corbyn.  We are in governmental crisis (although I sincerely believe, as the campaign shows that all will be ok) yet Corbyn calls for another referendum minutes after abstaining on a vote that would have paved a way to new vote.  I'm in awe (tongue in cheek) of this government and this parliament. At what seems parliaments the darkest moment when we the Great British plebiscites expect unity from our MPs. He, Corbyn attends a meeting only to then throw his toys around like a two-year old in the chocolate section of Sainsbury’s, why? Because Chuka Umuna attended!

You really could not make this up.  John Sullivan god rest his soul, could maybe have written a sit-com from this, one that rivalled “Only Fools and Horses”. Which brings me nicely to my next point or suggestion: Given the shenanigans of the last few years, the tantrums in parliament isles, the jeers from the benches, the misrepresentation’s of the manifesto, the obstinate way our MPs have cavalierly disregarded their employers wishes. Should we now consider parliament as a soap opera put it on ITV place adverts and remove 600 salaries from our taxes. I'm sure Robert Goodwill MP would agree there would be more opportunities to play with expenses without so much public scrutiny.

I jest, or do I. It's amazing despite our Parliaments the best efforts, Corporate UK continues and continues to out-perform. Record employment, less unemployment, record inward investment 2nd best in the world, 2nd only to China, here's the rub European Union corporations are investing in the UK at a faster rate than in previous years. All of this at a time when our Parliament behave like petulant children.

We have Monsieur Macron from the steps of Downing Street call for all British industry to relocate to France, calling for the city to consider Paris for their future global business, as if that would happen. What a rude dis-courteous man. I believe France for their own sake need to reform, but out of protest to this clown I will don a yellow vest, if only theoretically.  



To return to “Wolfie Smith” Corbyn, also written by John Sullivan, I'm only now beginning to realize how much we have lost due to John's untimely death. Corbyn just continues to muddle on, espousing tried and disastrous policies. Policies that ushered in 3 day weeks, power outages, only three days of TV per week.  Did we never have Maggie Thatcher who sorted out the last mess. Corbyn please go join your comrades on a beach in OZ. I realize “Red Robbo” is no longer with us but at least his last 30 years were spent in the sun. The man who orchestrated 523 strikes which eventually toppled British Leyland. For those who are not aware British Leyland represented 40% of the UK manufacturing output. They were unrivalled in their early years as the premier mass producer of family cars. It was a travesty that this man was able to organize so many strikes which ultimately destroyed Leyland, to the pleasure of his Russian paymasters I'm sure. Now there's a similarity!

The last two years have shown that the government are like traffic cops the roads flow better when they are not there.

Leave March 29th March 30th will look and feel the same except we'll be £39 billion better off.








Today I have a compilation, as it's Saturday it has a lighter tone, forgive my attempt at humour the subjects are no less serious..

Confusion reigns supreme. I am pleased to have heard that the government are running a tv campaign to advise on leaving March the 29th, it would mean someone somewhere have taken initiative.  But, I'm confused and I don't know quite what I missed. I read today that Mrs May will pull next weeks vote if there is no support. Well, I am under the impression that Bercow scuppered the vote as there are no meaningful changes. The only way to bypass, is to change the deal remove the backstop or close this parliamentary session. Which our dear Queen would have to do, but I am sure Her Majesty is aware the last time a monarch took such an initiative was Charles the 1st, his head and body were buried separately! 

So in short what has changed?



I am also very confused by Corbyn.  We are in governmental crisis (although I sincerely believe, as the campaign shows that all will be ok) yet Corbyn calls for another referendum minutes after abstaining on a vote that would have paved a way to new vote.  I'm in awe (tongue in cheek) of this government and this parliament. At what seems parliaments the darkest moment when we the Great British plebiscites expect unity from our MPs. He, Corbyn attends a meeting only to then throw his toys around like a two-year old in the chocolate section of Sainsbury’s, why? Because Chuka Umuna attended!

You really could not make this up.  John Sullivan god rest his soul, could maybe have written a sit-com from this, one that rivalled “Only Fools and Horses”. Which brings me nicely to my next point or suggestion: Given the shenanigans of the last few years, the tantrums in parliament isles, the jeers from the benches, the misrepresentation’s of the manifesto, the obstinate way our MPs have cavalierly disregarded their employers wishes. Should we now consider parliament as a soap opera put it on ITV place adverts and remove 600 salaries from our taxes. I'm sure Robert Goodwill MP would agree there would be more opportunities to play with expenses without so much public scrutiny.

I jest, or do I. It's amazing despite our Parliaments the best efforts, Corporate UK continues and continues to out-perform. Record employment, less unemployment, record inward investment 2nd best in the world, 2nd only to China, here's the rub European Union corporations are investing in the UK at a faster rate than in previous years. All of this at a time when our Parliament behave like petulant children.

We have Monsieur Macron from the steps of Downing Street call for all British industry to relocate to France, calling for the city to consider Paris for their future global business, as if that would happen. What a rude dis-courteous man. I believe France for their own sake need to reform, but out of protest to this clown I will don a yellow vest, if only theoretically.  



To return to “Wolfie Smith” Corbyn, also written by John Sullivan, I'm only now beginning to realize how much we have lost due to John's untimely death. Corbyn just continues to muddle on, espousing tried and disastrous policies. Policies that ushered in 3 day weeks, power outages, only three days of TV per week.  Did we never have Maggie Thatcher who sorted out the last mess. Corbyn please go join your comrades on a beach in OZ. I realize “Red Robbo” is no longer with us but at least his last 30 years were spent in the sun. The man who orchestrated 523 strikes which eventually toppled British Leyland. For those who are not aware British Leyland represented 40% of the UK manufacturing output. They were unrivalled in their early years as the premier mass producer of family cars. It was a travesty that this man was able to organize so many strikes which ultimately destroyed Leyland, to the pleasure of his Russian paymasters I'm sure. Now there's a similarity!

The last two years have shown that the government are like traffic cops the roads flow better when they are not there.

Leave March 29th March 30th will look and feel the same except we'll be £39 billion better off.







Thursday, 21 March 2019

Brexit passporting rights. Another myth.


The City of London or better the Financial centre have for a long period faced a pull on their business from the Eurozone to the Eurozone. The EU has always had a dislike of the UK financial power and have tried unsuccessfully to shift Euro clearing to Paris, Frankfurt or even Dublin.

Christian Noyer, the former Governor of the Banque de France, said: ‘No other sovereign or monetary zone would allow itself to rely on an offshore centre.’ 



Again, really, all I can say is he doesn't get out much. Throughout the world there are very few opportunities to clear ones currencies nearly all rely on another jurisdiction for their financial transactions. Even the US who have a Financial hub many of their transaction take place outside of New York, in London or Japan.

There is a vast amount of euro trade that takes place in London on a daily basis, that is correct, but, monetary policy is set in Frankfurt by the European Central Bank “ECB”. Therefore, the European banks, the Eurozone authorities have full control over policy, plus the activities of their banks. They can easily and unilaterally set their own capital requirements and regulate until their heart's content, or as a cynic would say until they've killed their markets.

There is a fundamental flaw in the authorities push to gain control in a Eurozone capital, it's quite simple the financial institutions do not want to move, not under any circumstances. Why? Because, they are deeply suspicious that the Eurozone will stifle their market by regulating them into the abyss. To use a Nigel Farage quote “Why would they be the turkey that voted for Christmas”.

Passporting rights


Here there is an issue which is potentially serious, which has surfaced due to Brexit the passporting rights. These allow institution to operate in each other's territory without an operation established in that country. London currently can operate throughout the EU where a Swiss financial institution can not, they have to set up a subsidiary in an EU member country. Currently America, Switzerland, indeed any bank outside of the EU have chosen to set up in London in order to access thes EU markets. This may change, I use the term may as we still hope common sense prevails. But, foresure with or without Brexit the Eurozone wanted to move their finances from London.

In order to establish a subsidiary, which incidentally would apply to British banks who will operate in the Eurozone. They need substantial dedicated capital which of course is dead money, an anathema to a Financial institution. It would also mean two financial centres so of course there is a concern as to why operate two centres just move to the Eurozone. However, consider my point above re; the abyss, analyse the percentage of Euro business together with all the city's business; A recent report by Oliver Wyman put the percentage of the City’s international and wholesale banking business that is EU-related at between 20% and 25% of the total. The full report can be read here oliverwyman.com.



In reality, if the financial institutions stood their ground. Primarily if you consider the loss of business to the city would be painful, perhaps not as painful as 20%. But, conversely the impact on the Eurozone would be hugely disruptive even chaotic. Of course, one considers one's options, assuming a continuum: stay entirely or relocate entirely, with many shades of grey along the way. Here one hopes for an adult discussion after which a logical win win would result, the operative word being adults in this situation, so far we've seen the reverse. One possible way round the passporting problem lies in the so-called ‘equivalence’ provisions for non-EU countries, which allow them to export financial services to the EU without passports. Under such arrangements, UK regulations would not need to be the same as the EU’s but rather they would need to be ‘equivalent’.

The future is not Europe, particularly under this EU authoritarian regime,. They have demonstrated how their single focus on ideology has destroyed the futures of many under 25s. Their growth since 2008 is pathetic; 15% that of the US and a quarter of the UK! They have not proved themselves of being worthy financial custodians. It's not only about them they have an impact globally.

Leave on the 29th





The City of London or better the Financial centre have for a long period faced a pull on their business from the Eurozone to the Eurozone. The EU has always had a dislike of the UK financial power and have tried unsuccessfully to shift Euro clearing to Paris, Frankfurt or even Dublin.

Christian Noyer, the former Governor of the Banque de France, said: ‘No other sovereign or monetary zone would allow itself to rely on an offshore centre.’ 



Again, really, all I can say is he doesn't get out much. Throughout the world there are very few opportunities to clear ones currencies nearly all rely on another jurisdiction for their financial transactions. Even the US who have a Financial hub many of their transaction take place outside of New York, in London or Japan.

There is a vast amount of euro trade that takes place in London on a daily basis, that is correct, but, monetary policy is set in Frankfurt by the European Central Bank “ECB”. Therefore, the European banks, the Eurozone authorities have full control over policy, plus the activities of their banks. They can easily and unilaterally set their own capital requirements and regulate until their heart's content, or as a cynic would say until they've killed their markets.

There is a fundamental flaw in the authorities push to gain control in a Eurozone capital, it's quite simple the financial institutions do not want to move, not under any circumstances. Why? Because, they are deeply suspicious that the Eurozone will stifle their market by regulating them into the abyss. To use a Nigel Farage quote “Why would they be the turkey that voted for Christmas”.

Passporting rights


Here there is an issue which is potentially serious, which has surfaced due to Brexit the passporting rights. These allow institution to operate in each other's territory without an operation established in that country. London currently can operate throughout the EU where a Swiss financial institution can not, they have to set up a subsidiary in an EU member country. Currently America, Switzerland, indeed any bank outside of the EU have chosen to set up in London in order to access thes EU markets. This may change, I use the term may as we still hope common sense prevails. But, foresure with or without Brexit the Eurozone wanted to move their finances from London.

In order to establish a subsidiary, which incidentally would apply to British banks who will operate in the Eurozone. They need substantial dedicated capital which of course is dead money, an anathema to a Financial institution. It would also mean two financial centres so of course there is a concern as to why operate two centres just move to the Eurozone. However, consider my point above re; the abyss, analyse the percentage of Euro business together with all the city's business; A recent report by Oliver Wyman put the percentage of the City’s international and wholesale banking business that is EU-related at between 20% and 25% of the total. The full report can be read here oliverwyman.com.



In reality, if the financial institutions stood their ground. Primarily if you consider the loss of business to the city would be painful, perhaps not as painful as 20%. But, conversely the impact on the Eurozone would be hugely disruptive even chaotic. Of course, one considers one's options, assuming a continuum: stay entirely or relocate entirely, with many shades of grey along the way. Here one hopes for an adult discussion after which a logical win win would result, the operative word being adults in this situation, so far we've seen the reverse. One possible way round the passporting problem lies in the so-called ‘equivalence’ provisions for non-EU countries, which allow them to export financial services to the EU without passports. Under such arrangements, UK regulations would not need to be the same as the EU’s but rather they would need to be ‘equivalent’.

The future is not Europe, particularly under this EU authoritarian regime,. They have demonstrated how their single focus on ideology has destroyed the futures of many under 25s. Their growth since 2008 is pathetic; 15% that of the US and a quarter of the UK! They have not proved themselves of being worthy financial custodians. It's not only about them they have an impact globally.

Leave on the 29th




Brexit - What Appalling Treatment Boycott French Wine and German Cars


Why doesn't Barnier come to the UK and put a gun to Mrs May's head.  We are a nuclear power, with a formidable army. We have the worlds financial capital within our borders. The UK imports €90 Billion more than we sell to the EU. Europe is in recession. The Med is in depression.

Is it right that such a power with such a trade imbalance should be held at gun point such that we are? What sovereign nation would agree to this withdrawal agreement giving up our rights, succumbing to an unelected foreign chamber of bureaucrats who would control our destiny with or without our agreement, this surrender would be high treason. Only a war time leader upon surrender would agree to such capitulation. Mrs May should be held to account for pushing this deal forward. 



The ramifications of this situation will haunt the UK for decades. Every French bottle of wine we have bought every German car that we have driven will be replaced with cars from Jaguar, Ford, Chevrolet, wine from Australia and the new world.  Macron for sure would be persona non grata on British soil.

The Blairites who have orchestrated this situation should be locked in the tower and die in the tower, their betrayal has been extreme, comparable to Blunt, Philby and Burgess. 

For god’s sake wake up we are a power in a world of minnows and sharks. We are surrounded by those that wish us harm.  We have to our South rhetoric coming out of Turkey exploiting the New Zealand atrocity as though it is a Caucasian conspiracy. I won't even dignify it with the religious connotations. Russia led by a despot intent on creating mayhem on whoever's streets he feels able.

The Euro is an ideology, Hitler was an ideology (barbaric to the extreme), we are treated to contempt by authoritarian ideologists. We didn't surrender in 1945 why is Mrs May surrendering now!

The EU is doomed, this negotiation has shown it for what it is incompetent, drunken, self-interested individuals who have no responsibility for the people they represent, if they did the Med under 25s would have more hope.

Let me ask, our situation Mr Macron "there for the grace of god go you" do you think we would have supported the EU in your humiliation such as you are with us? Mr Macron your speech on the steps of Downing Street were rude and offensive, your covert meetings with Blair to undermine our democracy equally so! Let me help you with the answer NO WE WOULD NOT! Sort your own mess out don't meddle in ours, try and behave like a grown up President!



Where are the €Billions missing in the accounts Mr Junker? Step aside put someone in who can treat us with dignity and respect, recognize that we will continue to be neighbours, the memory of this will blight our relationship for many years to come. 


Why doesn't Barnier come to the UK and put a gun to Mrs May's head.  We are a nuclear power, with a formidable army. We have the worlds financial capital within our borders. The UK imports €90 Billion more than we sell to the EU. Europe is in recession. The Med is in depression.

Is it right that such a power with such a trade imbalance should be held at gun point such that we are? What sovereign nation would agree to this withdrawal agreement giving up our rights, succumbing to an unelected foreign chamber of bureaucrats who would control our destiny with or without our agreement, this surrender would be high treason. Only a war time leader upon surrender would agree to such capitulation. Mrs May should be held to account for pushing this deal forward. 



The ramifications of this situation will haunt the UK for decades. Every French bottle of wine we have bought every German car that we have driven will be replaced with cars from Jaguar, Ford, Chevrolet, wine from Australia and the new world.  Macron for sure would be persona non grata on British soil.

The Blairites who have orchestrated this situation should be locked in the tower and die in the tower, their betrayal has been extreme, comparable to Blunt, Philby and Burgess. 

For god’s sake wake up we are a power in a world of minnows and sharks. We are surrounded by those that wish us harm.  We have to our South rhetoric coming out of Turkey exploiting the New Zealand atrocity as though it is a Caucasian conspiracy. I won't even dignify it with the religious connotations. Russia led by a despot intent on creating mayhem on whoever's streets he feels able.

The Euro is an ideology, Hitler was an ideology (barbaric to the extreme), we are treated to contempt by authoritarian ideologists. We didn't surrender in 1945 why is Mrs May surrendering now!

The EU is doomed, this negotiation has shown it for what it is incompetent, drunken, self-interested individuals who have no responsibility for the people they represent, if they did the Med under 25s would have more hope.

Let me ask, our situation Mr Macron "there for the grace of god go you" do you think we would have supported the EU in your humiliation such as you are with us? Mr Macron your speech on the steps of Downing Street were rude and offensive, your covert meetings with Blair to undermine our democracy equally so! Let me help you with the answer NO WE WOULD NOT! Sort your own mess out don't meddle in ours, try and behave like a grown up President!



Where are the €Billions missing in the accounts Mr Junker? Step aside put someone in who can treat us with dignity and respect, recognize that we will continue to be neighbours, the memory of this will blight our relationship for many years to come. 

Wednesday, 20 March 2019

Trump's Naughty List Drives Asia Growth


Trump's cross hairs, there's a pun but not intended. China, South Korea and India on Trump's naughty list it's not difficult to see who the beneficiaries are: For sure Indonesia but not just Indonesia, Vietnam has benefited. Asia have redoubled their efforts to increase trade and trade relationships, 28 from 44 FTAs “Free Trade Agreements” proposed are between Asian nation states. Cohesive active even pro-active dyads, trade relationships have grown significantly since the global crisis, weathered, even ignored the Trump doctrine, this is set to only improve further.

I bring you back to an earlier note of mine, one where I talk about Asia's third wave, it's worth a read, click here. The other where I cover PWC, their forecast for the World Economic growth, in a few short years PWC claim on a measure of GDP that 4 of the top 5 countries will be Asia. China, USA, Japan, India and Indonesia.

Two situations are emerging, in reality they are already upon us. One technology is no longer the domain of the USA, perhaps it's too early to write  the US off, for innovation or R&D. For several decades North Asia has maintained the industrial mantle for mass production with labour split between Japan, South Korea and China adding Taiwan and Hong Kong at a later stage.  From these five countries they account for $4.2 Trillion Asian exports, this is equivalent to North America, the European Union combined.



In the year 2000 China represented less than 10% of Asia's technology exports, today 44%. Huawei, Lenovo, Haier, and BYD Automobile Company all rank ahead of their Asian peers and Western rivals in categories such as telecom equipment, laptops, appliances, and electric cars. But of course their manufacturing links are all highly integrated as China relies on South Korea and Japan for their semi-conductors.

What Asia is aware of, their markets were once primarily the West this is no longer the case, their markets today are other Asian countries. Hence, the dawning of an age in shifting manufacturing to the south productivity grew, whilst opening new markets to export too. 

Cost of labour to the north has increased as has the cost of living. I've mention in an earlier document that average daily rate on the manufacturing shop floor is $30, Indonesia and Vietnam are still able to maintain $10 per day, with a substantial workforce, a median age below 30.

Indonesia has vast Industrial parks one of which can be seen in the image above. Companies from the west such as Siemens, ABB are already established, but, also from Asia Foxconn, JVC, Omron etc.  Pegatron will invest $300M opening a 2 hectare manufacturing plant in just one of Indonesia's industrial zones. Foxconn and Pegatron manufacture in excess of 80% of the world's iPhones. Hyundai announced in Dec 2018 plans to move electric car manufacturing to Indonesia with an investment of $800M. Hyundai anticipate 53% of their cars will head to Asia and Australia, the remainder serving the Indonesian domestic market. Not to be out done VW will build the Tiguan in Indonesia with a €50M investment.



Japan since the 1970s have invested in Southeast Asia but in recent years has increased its investment to $20billion, they are looking to manufacture Nissan electric and flexfuel (Ethanol and other biofuel) vehicles. 

I reaffirm the west should look to join their compatriots, explore the possibilities of cheaper markets for manufacture. Positioning for a burgeoning middle class able to consume at the rate that a westerner used to be able to. 
Since 2014, US, European, and even Chinese companies have outsourced to Asian nations, Japan and South Korea have led the way in moving manufacturing to this region. South East Asia has attracted more annual investment than China.  Asian’s total annual trade amounts to nearly $2.2 trillion, one-quarter of which is within Asian, 15 percent with China, and 10 percent with Japan.

Since the Asian-China Free Trade Area (ACFTA) established in 2000 this created by population (combined population of 2.5 billion people) the largest free-trade agreement in the world, South East and East Asia has become China’s third largest trading partner with $400 billion in annual trade. Don't be surprised if Asia displaces Europe and North America as the primary destination for Asia exports.

Whilst Europe squabbles over regulation and authoritarianism Asia is racing ahead. 

Can you afford to miss Indonesia in the 21C.












Trump's cross hairs, there's a pun but not intended. China, South Korea and India on Trump's naughty list it's not difficult to see who the beneficiaries are: For sure Indonesia but not just Indonesia, Vietnam has benefited. Asia have redoubled their efforts to increase trade and trade relationships, 28 from 44 FTAs “Free Trade Agreements” proposed are between Asian nation states. Cohesive active even pro-active dyads, trade relationships have grown significantly since the global crisis, weathered, even ignored the Trump doctrine, this is set to only improve further.

I bring you back to an earlier note of mine, one where I talk about Asia's third wave, it's worth a read, click here. The other where I cover PWC, their forecast for the World Economic growth, in a few short years PWC claim on a measure of GDP that 4 of the top 5 countries will be Asia. China, USA, Japan, India and Indonesia.

Two situations are emerging, in reality they are already upon us. One technology is no longer the domain of the USA, perhaps it's too early to write  the US off, for innovation or R&D. For several decades North Asia has maintained the industrial mantle for mass production with labour split between Japan, South Korea and China adding Taiwan and Hong Kong at a later stage.  From these five countries they account for $4.2 Trillion Asian exports, this is equivalent to North America, the European Union combined.



In the year 2000 China represented less than 10% of Asia's technology exports, today 44%. Huawei, Lenovo, Haier, and BYD Automobile Company all rank ahead of their Asian peers and Western rivals in categories such as telecom equipment, laptops, appliances, and electric cars. But of course their manufacturing links are all highly integrated as China relies on South Korea and Japan for their semi-conductors.

What Asia is aware of, their markets were once primarily the West this is no longer the case, their markets today are other Asian countries. Hence, the dawning of an age in shifting manufacturing to the south productivity grew, whilst opening new markets to export too. 

Cost of labour to the north has increased as has the cost of living. I've mention in an earlier document that average daily rate on the manufacturing shop floor is $30, Indonesia and Vietnam are still able to maintain $10 per day, with a substantial workforce, a median age below 30.

Indonesia has vast Industrial parks one of which can be seen in the image above. Companies from the west such as Siemens, ABB are already established, but, also from Asia Foxconn, JVC, Omron etc.  Pegatron will invest $300M opening a 2 hectare manufacturing plant in just one of Indonesia's industrial zones. Foxconn and Pegatron manufacture in excess of 80% of the world's iPhones. Hyundai announced in Dec 2018 plans to move electric car manufacturing to Indonesia with an investment of $800M. Hyundai anticipate 53% of their cars will head to Asia and Australia, the remainder serving the Indonesian domestic market. Not to be out done VW will build the Tiguan in Indonesia with a €50M investment.



Japan since the 1970s have invested in Southeast Asia but in recent years has increased its investment to $20billion, they are looking to manufacture Nissan electric and flexfuel (Ethanol and other biofuel) vehicles. 

I reaffirm the west should look to join their compatriots, explore the possibilities of cheaper markets for manufacture. Positioning for a burgeoning middle class able to consume at the rate that a westerner used to be able to. 
Since 2014, US, European, and even Chinese companies have outsourced to Asian nations, Japan and South Korea have led the way in moving manufacturing to this region. South East Asia has attracted more annual investment than China.  Asian’s total annual trade amounts to nearly $2.2 trillion, one-quarter of which is within Asian, 15 percent with China, and 10 percent with Japan.

Since the Asian-China Free Trade Area (ACFTA) established in 2000 this created by population (combined population of 2.5 billion people) the largest free-trade agreement in the world, South East and East Asia has become China’s third largest trading partner with $400 billion in annual trade. Don't be surprised if Asia displaces Europe and North America as the primary destination for Asia exports.

Whilst Europe squabbles over regulation and authoritarianism Asia is racing ahead. 

Can you afford to miss Indonesia in the 21C.











Tuesday, 19 March 2019

Brexit Dichotomy. Success of Asia Versus Self-harm of Europe

Join With These Names Make Indonesia Home.


A Simile comes to mind when you consider two systems or in this case a dichotomy. Two clear systems one based on economics the other based on ideology. One is prospering the other is self-harming.  Having grown up in the Soviet era and seen how terribly oppressive living behind the “iron curtain” was. How we fought to rid our own UK streets of the militancy driving us to communism, how could we turn around now by supporting the EU which has adopted the same persona of the old Soviet Union.

Two institutions:

One fully fledged, invasive, autocratic and stagnant, the other vibrant, dynamic devoid of invasive regulations and economically buoyant. 

One institution has achieved mediocre economic growth, in 10 years accumulative 2.2% (since 2008 through until 2018) the other would consider economic growth of 5% per year as a troubled year.



One institution is linked to the global economic crisis sweeping the west who  then reacted poorly even against its peers, the other has looked inward pulling together achieving phenomenal growth, prosperity throughout this period.

One institution demands globalization the other is thankful they’re not part of it.

One institution has plunged, in some areas 40% of their young into hopelessness devoid of any possible future, the other has lifted millions literally millions out of poverty.

One institution stifle business with regulation, eg. insisting that Salmon have a label to advise that it might contain fish, the other concentrates on the route to one's plate.

It's not rocket science to guess who I speak about. It is of course the antithesis of nirvana the European Union that bastion of authoritarianism, the Soviet Union in Western Clothes.  On the other side we have a cooperative, a collection of Asian countries working together to bring each other up the economic and social ladder. Sovereign parliaments that learn from each other, that invest in each other. They don't sit by and watch as rafts of young are left hopeless wallowing on their sun-drenched beaches off the Mediterranean, whilst their leaders stumble down stairs or slide under tables whilst indulging in opulent wines from the French vineyards.

What we have through a lack of interference or any egotistical need to become a United States to rival Trump's America, is an Asian mega-system consisting dozens of disparate economies coming together forming a whole greater than the sum of its parts.  To this region the notion of globalization was a harsh lesson that they learned in 1997/98. The currency crisis that swept Asia was anything but global. It was for this reason that individual Asian countries became a supportive companion to their neighbours. In short, Asia trade and growth became naturally interlinked, not through regulation, or through some ego driven ideology, but, through necessity growing organically through respect, identifying each others strengths and weaknesses. Richer communities invest in poorer regions. This I covered in my previous note.



In 2008, Asia inter-regional trade was of such strength that it offset the downturn in Europe and US. So robust that growth in the Asia region it accelerated, hence forth doubling between 2008 and 2016. Starting 2008 at 29% of their internal trade rising to 59% in 2016. A volume increase equivalent to Europe's internal market, not one “Common External Tariff” CET in sight.

To an Asian, Globalization is but a western pipe dream, one they want no part of. As 1998 proved, it did them no favours, may have even exasperated the issue.

Trade with Northern Asia, Southeast Asia, East Asia, South Asia and West Asia combined in two decades have gained a significant portion of global trade.

There has been much debate whether Asia can decouple from the west for investment the answer is a resounding yes. 

Consider this: Asia throughout the region is so diverse, it can sustain all their technology, agriculture alongside mass-produced production thus, satisfying all of their needs.

As the Brexit debate rages on consider the points that I have made, for sure the European Union is doing Europe no favours. I also suspect in 100years time, effigies of Tony Blair will be burnt on March the 29th commemorating yet another traitor of the British people. 



Join With These Names Make Indonesia Home.


A Simile comes to mind when you consider two systems or in this case a dichotomy. Two clear systems one based on economics the other based on ideology. One is prospering the other is self-harming.  Having grown up in the Soviet era and seen how terribly oppressive living behind the “iron curtain” was. How we fought to rid our own UK streets of the militancy driving us to communism, how could we turn around now by supporting the EU which has adopted the same persona of the old Soviet Union.

Two institutions:

One fully fledged, invasive, autocratic and stagnant, the other vibrant, dynamic devoid of invasive regulations and economically buoyant. 

One institution has achieved mediocre economic growth, in 10 years accumulative 2.2% (since 2008 through until 2018) the other would consider economic growth of 5% per year as a troubled year.



One institution is linked to the global economic crisis sweeping the west who  then reacted poorly even against its peers, the other has looked inward pulling together achieving phenomenal growth, prosperity throughout this period.

One institution demands globalization the other is thankful they’re not part of it.

One institution has plunged, in some areas 40% of their young into hopelessness devoid of any possible future, the other has lifted millions literally millions out of poverty.

One institution stifle business with regulation, eg. insisting that Salmon have a label to advise that it might contain fish, the other concentrates on the route to one's plate.

It's not rocket science to guess who I speak about. It is of course the antithesis of nirvana the European Union that bastion of authoritarianism, the Soviet Union in Western Clothes.  On the other side we have a cooperative, a collection of Asian countries working together to bring each other up the economic and social ladder. Sovereign parliaments that learn from each other, that invest in each other. They don't sit by and watch as rafts of young are left hopeless wallowing on their sun-drenched beaches off the Mediterranean, whilst their leaders stumble down stairs or slide under tables whilst indulging in opulent wines from the French vineyards.

What we have through a lack of interference or any egotistical need to become a United States to rival Trump's America, is an Asian mega-system consisting dozens of disparate economies coming together forming a whole greater than the sum of its parts.  To this region the notion of globalization was a harsh lesson that they learned in 1997/98. The currency crisis that swept Asia was anything but global. It was for this reason that individual Asian countries became a supportive companion to their neighbours. In short, Asia trade and growth became naturally interlinked, not through regulation, or through some ego driven ideology, but, through necessity growing organically through respect, identifying each others strengths and weaknesses. Richer communities invest in poorer regions. This I covered in my previous note.



In 2008, Asia inter-regional trade was of such strength that it offset the downturn in Europe and US. So robust that growth in the Asia region it accelerated, hence forth doubling between 2008 and 2016. Starting 2008 at 29% of their internal trade rising to 59% in 2016. A volume increase equivalent to Europe's internal market, not one “Common External Tariff” CET in sight.

To an Asian, Globalization is but a western pipe dream, one they want no part of. As 1998 proved, it did them no favours, may have even exasperated the issue.

Trade with Northern Asia, Southeast Asia, East Asia, South Asia and West Asia combined in two decades have gained a significant portion of global trade.

There has been much debate whether Asia can decouple from the west for investment the answer is a resounding yes. 

Consider this: Asia throughout the region is so diverse, it can sustain all their technology, agriculture alongside mass-produced production thus, satisfying all of their needs.

As the Brexit debate rages on consider the points that I have made, for sure the European Union is doing Europe no favours. I also suspect in 100years time, effigies of Tony Blair will be burnt on March the 29th commemorating yet another traitor of the British people. 



Monday, 18 March 2019

Indonesia looks to well-being, health and balance for their growth


All around the world we see today a dichotomy between wealth and poverty.  Nowhere is that scarily abject than in the so called third world economies. Historically we have all followed an American devised system of statistical measure, “GDP” Gross Domestic Product. GDP is fine when you all share in the benefit, although arguably when you tour America you could say that GDP as a measure of wealth has failed even in the US, 1 in 8 live in poverty across this great nation.

Asia does however, have a handicap which Indonesia is not immune to. Much of the economy is controlled by family conglomerates, too few of these exist. Therefore, polarizing wealth into too few hands, which of course makes the government job to assist fledgling companies more difficult.



That aside Indonesia have opened the doors to eCommerce, the digital economy as a way to encourage a paradigm shift. To some extent this is wishful thinking but all credit to them they are at the beginning of a sincere initiative.

I have for a long period argued that you can not have a system that polarizes 80% of the world's wealth, and have that system determine well-being when the money is sitting with 20% of the population. The absurdity is more acute as you reach the top 2% or 3%. It is this dichotomy that will, over what is now a short period unwind society. My guess with Brexit, Italian elections, Jaunes Gilet (yellow vest), Trump's America this is all a polite wake up call to the elites in our political class that enough is enough. Whether they are yet listening that's not so obvious.

However, one area, for me a little surprising but most welcome nonetheless is the “World Economic Forum”. Here they have discussed, debated and formed the same conclusions, the system of GDP is archaic and replaced it with an Inclusive Development Index “IDI”. This index considers well-being, life expectancy, unemployment, median income, poverty, inequality, household savings, carbon emissions plus a myriad of other issues that encompasses us all. You could argue whilst our western politicians fiddle as Rome burns, line their pockets, protect their various expense scams other more dynamic areas have embraced this revolutionary index, Indonesia being one such area. 



In Asia, Australia and New Zealand rank highest, followed by South Korea and Israel, which rank in the top twenty. The next tier of emerging Asian countries is making substantial strides in most categories of inclusive development, including Azerbaijan, Malaysia, Kazakhstan, Turkey, Thailand, China, Iran, Vietnam, Indonesia, and the Philippines. We should be mindful that Asia is also home to countries in the bottom tier such as Afghanistan, Pakistan, India, Bangladesh, Cambodia, Laos, and Yemen. The Asia development bank have taken a step further and published their Social Protection Index. “SPI”. This index shows South Asia, Southeast and Central Asia are lacking their Eastern Asia neighbours with their subsistence programmes. But as with the economic wave example Asia will develop together through assisting each other, I have confidence the West could learn from the East when it comes to inclusive growth. Whether, the west is open to rocking the elites’ gravy train the jury is out.

If you look to the World Economic Forum website there is a PDF file which can be downloaded, this will give more depth to the points reference IDI that I have raised above:

“The Inclusive Development Index (IDI) is an annual assessment of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources.
The IDI is a project of the World Economic Forum’s System Initiative on the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation through thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.”

Bedtime reading...





All around the world we see today a dichotomy between wealth and poverty.  Nowhere is that scarily abject than in the so called third world economies. Historically we have all followed an American devised system of statistical measure, “GDP” Gross Domestic Product. GDP is fine when you all share in the benefit, although arguably when you tour America you could say that GDP as a measure of wealth has failed even in the US, 1 in 8 live in poverty across this great nation.

Asia does however, have a handicap which Indonesia is not immune to. Much of the economy is controlled by family conglomerates, too few of these exist. Therefore, polarizing wealth into too few hands, which of course makes the government job to assist fledgling companies more difficult.



That aside Indonesia have opened the doors to eCommerce, the digital economy as a way to encourage a paradigm shift. To some extent this is wishful thinking but all credit to them they are at the beginning of a sincere initiative.

I have for a long period argued that you can not have a system that polarizes 80% of the world's wealth, and have that system determine well-being when the money is sitting with 20% of the population. The absurdity is more acute as you reach the top 2% or 3%. It is this dichotomy that will, over what is now a short period unwind society. My guess with Brexit, Italian elections, Jaunes Gilet (yellow vest), Trump's America this is all a polite wake up call to the elites in our political class that enough is enough. Whether they are yet listening that's not so obvious.

However, one area, for me a little surprising but most welcome nonetheless is the “World Economic Forum”. Here they have discussed, debated and formed the same conclusions, the system of GDP is archaic and replaced it with an Inclusive Development Index “IDI”. This index considers well-being, life expectancy, unemployment, median income, poverty, inequality, household savings, carbon emissions plus a myriad of other issues that encompasses us all. You could argue whilst our western politicians fiddle as Rome burns, line their pockets, protect their various expense scams other more dynamic areas have embraced this revolutionary index, Indonesia being one such area. 



In Asia, Australia and New Zealand rank highest, followed by South Korea and Israel, which rank in the top twenty. The next tier of emerging Asian countries is making substantial strides in most categories of inclusive development, including Azerbaijan, Malaysia, Kazakhstan, Turkey, Thailand, China, Iran, Vietnam, Indonesia, and the Philippines. We should be mindful that Asia is also home to countries in the bottom tier such as Afghanistan, Pakistan, India, Bangladesh, Cambodia, Laos, and Yemen. The Asia development bank have taken a step further and published their Social Protection Index. “SPI”. This index shows South Asia, Southeast and Central Asia are lacking their Eastern Asia neighbours with their subsistence programmes. But as with the economic wave example Asia will develop together through assisting each other, I have confidence the West could learn from the East when it comes to inclusive growth. Whether, the west is open to rocking the elites’ gravy train the jury is out.

If you look to the World Economic Forum website there is a PDF file which can be downloaded, this will give more depth to the points reference IDI that I have raised above:

“The Inclusive Development Index (IDI) is an annual assessment of 103 countries’ economic performance that measures how countries perform on eleven dimensions of economic progress in addition to GDP. It has 3 pillars; growth and development; inclusion and; intergenerational equity – sustainable stewardship of natural and financial resources.
The IDI is a project of the World Economic Forum’s System Initiative on the Future of Economic Progress, which aims to inform and enable sustained and inclusive economic progress through deepened public-private cooperation through thought leadership and analysis, strategic dialogue and concrete cooperation, including by accelerating social impact through corporate action.”

Bedtime reading...




Sunday, 17 March 2019

The 3rd Asian Economic Wave Is Upon Us.


The 3rd Asian wave is upon us. First came Japan, Korea, Taiwan, 2nd came Hong Kong, Singapore and China, 3rd is South East Asia. What makes the 3rd so special is it will run longer, as I explain below.  It is through the success of the first and the 2nd wave that the third will be more substantive.

1. The first and the second have, like the west an ageing population with the median age above 40. Conversely, the South East Asian countries the median age is below thirty. Therefore, India, Thailand, Vietnam and Indonesia have greater access to efficient cost effective labour.

2. Asia 1st and 2nd have not gone away nor have they declined quite the reverse, the older generation have shifted from being wealth generators to consumers. Therefore, need products and services but in a cost effective way.  It is due to this that these countries are investing in the South East Asian nations.  As I said in a previous note; the average China daily rate in manufacturing is $30 in Indonesia it is $10.

Whilst South East Asia will have a wave of its own it will be fuelled in addition by the newly formed demands driven by a wealthy Asian population to their North. Consider this during Japan and South Korea’s rise in the 1970s their combined population extended to 150M.  China during their years around 1Billion.  The 3rd wave has a combined population of 2.5Billion.



If you add the West Asia region Turkey, Saudi and Iran then you add another 300 Million.  Asia in total has some 5 Billion people. This wave will be longer, larger than any wave preceding.  More to the point since Japan and Korea kicked this off, for five decades they have invested throughout this region in total, they invested in China and the tiger economies. Indeed, as China and the tiger economies came on stream they too reciprocated, established networks, investment and diplomacy that will ensure the continuation of Asia's Factory for the world status, it will and is just shifting to the south.

Indonesia already have established economic zones, trading estates, science parks, free ports, Infrastructure, airports, ports, rail, roads and a thriving digital economy. Indonesia has been listed as one of the world’s top 10 manufacturers by the United Nations Industrial Development Organization (UNIDO).

According to UNIDO’s 2016 International Yearbook of Industrial Statistics, Indonesia’s manufacturing industry accounts for almost a quarter of the country’s GDP. The country has a solid footing with a stable government. We are in an election year and Jokowi has prioritised stabilty which, for this year he is right to do so.

  • "The UNIDO report shows that Indonesia has climbed into the top ten list," Shadia Hajarabi, UNIDO’s representative in Indonesia.
  • "Indonesia is at the bottom of the list, but it surpasses England and Canada," Shyam Upadhyaya, a statistician at UNIDO, said. He added that the list was based on total volume of production. China is at the top of the list, followed by the US, Germany, Korea and India. "Indonesia has become an important industrial country," he added.




To compare; China and India have had higher economic growth compared to Indonesia. But, in recent years, economic conditions in those countries have fluctuated, resulting in economic slowdowns. Indonesia's economy has been relatively stable compared to other countries in the region.

The Indonesian government had succeeded in maintaining the inflation rate at 4.5 percent and had lifted 25 million people out of poverty. In 2010, there were 50 million people living in poverty, now almost half.  Not only does Indonesia benefit from other Asian countries, from their greater spending power, they can rely on the domestic market to boost economic growth, which means exports are not so critical.

If they can maintain these indicators, it could produce even higher growth.

What you are now seeing is that each generation becomes wealthier than the last just as we saw in the west.

According to the HSBC’s former chairman Stuart Gulliver, “The American dream of the 20th century is becoming the Asian dream of the 21st: A house, a car, a smartphone, travel, banking services, health care the prospect of unfettered upward social mobility for many more families.”

With greater domestic production of goods and services, weaker currencies, low commodity prices, controlled inflation, and rising intraregional trade, Asians increasingly buy things in their own currencies at much lower prices than Westerners pay in US dollars or euros. Asians can have a good life without being rich in American terms. Indeed, most Asians are not going to catch up to Western per capita incomes. China’s per capita income is comparable to that of Russia or Brazil, not the United States or Britain. But that’s not the point. Asian societies are focused on maintaining high employment, keeping the cost of living manageable, and promoting access to basic services.



Western critics convinced themselves that slower growth would bring down the Chinese regime, but Xi has rightly pivoted the national narrative toward quality growth.

Indonesia through its vast archipelago, substantial resources and sizeable population is poised for even greater economic fortunes.


The 3rd Asian wave is upon us. First came Japan, Korea, Taiwan, 2nd came Hong Kong, Singapore and China, 3rd is South East Asia. What makes the 3rd so special is it will run longer, as I explain below.  It is through the success of the first and the 2nd wave that the third will be more substantive.

1. The first and the second have, like the west an ageing population with the median age above 40. Conversely, the South East Asian countries the median age is below thirty. Therefore, India, Thailand, Vietnam and Indonesia have greater access to efficient cost effective labour.

2. Asia 1st and 2nd have not gone away nor have they declined quite the reverse, the older generation have shifted from being wealth generators to consumers. Therefore, need products and services but in a cost effective way.  It is due to this that these countries are investing in the South East Asian nations.  As I said in a previous note; the average China daily rate in manufacturing is $30 in Indonesia it is $10.

Whilst South East Asia will have a wave of its own it will be fuelled in addition by the newly formed demands driven by a wealthy Asian population to their North. Consider this during Japan and South Korea’s rise in the 1970s their combined population extended to 150M.  China during their years around 1Billion.  The 3rd wave has a combined population of 2.5Billion.



If you add the West Asia region Turkey, Saudi and Iran then you add another 300 Million.  Asia in total has some 5 Billion people. This wave will be longer, larger than any wave preceding.  More to the point since Japan and Korea kicked this off, for five decades they have invested throughout this region in total, they invested in China and the tiger economies. Indeed, as China and the tiger economies came on stream they too reciprocated, established networks, investment and diplomacy that will ensure the continuation of Asia's Factory for the world status, it will and is just shifting to the south.

Indonesia already have established economic zones, trading estates, science parks, free ports, Infrastructure, airports, ports, rail, roads and a thriving digital economy. Indonesia has been listed as one of the world’s top 10 manufacturers by the United Nations Industrial Development Organization (UNIDO).

According to UNIDO’s 2016 International Yearbook of Industrial Statistics, Indonesia’s manufacturing industry accounts for almost a quarter of the country’s GDP. The country has a solid footing with a stable government. We are in an election year and Jokowi has prioritised stabilty which, for this year he is right to do so.

  • "The UNIDO report shows that Indonesia has climbed into the top ten list," Shadia Hajarabi, UNIDO’s representative in Indonesia.
  • "Indonesia is at the bottom of the list, but it surpasses England and Canada," Shyam Upadhyaya, a statistician at UNIDO, said. He added that the list was based on total volume of production. China is at the top of the list, followed by the US, Germany, Korea and India. "Indonesia has become an important industrial country," he added.




To compare; China and India have had higher economic growth compared to Indonesia. But, in recent years, economic conditions in those countries have fluctuated, resulting in economic slowdowns. Indonesia's economy has been relatively stable compared to other countries in the region.

The Indonesian government had succeeded in maintaining the inflation rate at 4.5 percent and had lifted 25 million people out of poverty. In 2010, there were 50 million people living in poverty, now almost half.  Not only does Indonesia benefit from other Asian countries, from their greater spending power, they can rely on the domestic market to boost economic growth, which means exports are not so critical.

If they can maintain these indicators, it could produce even higher growth.

What you are now seeing is that each generation becomes wealthier than the last just as we saw in the west.

According to the HSBC’s former chairman Stuart Gulliver, “The American dream of the 20th century is becoming the Asian dream of the 21st: A house, a car, a smartphone, travel, banking services, health care the prospect of unfettered upward social mobility for many more families.”

With greater domestic production of goods and services, weaker currencies, low commodity prices, controlled inflation, and rising intraregional trade, Asians increasingly buy things in their own currencies at much lower prices than Westerners pay in US dollars or euros. Asians can have a good life without being rich in American terms. Indeed, most Asians are not going to catch up to Western per capita incomes. China’s per capita income is comparable to that of Russia or Brazil, not the United States or Britain. But that’s not the point. Asian societies are focused on maintaining high employment, keeping the cost of living manageable, and promoting access to basic services.



Western critics convinced themselves that slower growth would bring down the Chinese regime, but Xi has rightly pivoted the national narrative toward quality growth.

Indonesia through its vast archipelago, substantial resources and sizeable population is poised for even greater economic fortunes.

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