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Important News, Belangrijke nieuws, Nouvelles importantes, Wichtige News, Fontos hírek, Importanti novitŕ, Pomembne novice, Importante Notícias, Viktiga nyheter

Ing. Salih CAVKIC
orbus editor in chief
Belang van Limburg
De Morgen
De Standard
Het Laatste Nieuws
La Libre Belgique


Deutsche Welle
West-D. Zeitung

The man of the year

Guy Verhofstadt
Mr. Guy Verhofstadt

The man of the year
L'homme de l'an
De man van het jaar

A proven Democrat, protector and fighter for justice and human rights in the World.

Een bewezen Democraat, beschermer en strijder voor rechtvaardigheid en mensenrechten in de Wereld.

Un prouvé démocrate, protecteur et combattant pour la justice et des droits de l'homme dans le Mond.

Eine bewährte Demokrat, Beschützer und Kämpfer für Gerechtigkeit und Menschenrechte in der Welt.

Dokazani demokrat,
 zaštitnik i borac za pravdu i ljudska prava u Svijetu.

The man of the year

Peace in the World

Mr. Barak Hossein Obama

The man of the year
L'homme de l'an
De man van het jaar

peace in the world

vrede in de wereld

la paix dans le monde

Garantie des Friedens in der Welt

mieru vo svete

mira u svijetu

Murray Hunter
University Malaysia Perlis

Perpetual Self conflict: Self awareness as a key to our ethical drive, personal mastery, and perception of entrepreneurial opportunities.
Murray Hunter

The Continuum of Psychotic Organisational Typologies
Murray Hunter

There is no such person as an entrepreneur, just a person who acts entrepreneurially
Murray Hunter

Groupthink may still be a hazard to your organization - Murray Hunter

Generational Attitudes and Behaviour - Murray Hunter

The environment as a multi-dimensional system: Taking off your rose coloured glasses - Murray Hunter

Imagination may be more important than knowledge: The eight types of imagination we use - Murray Hunter

Do we have a creative intelligence? - Murray Hunter

Not all opportunities are the same: A look at the four types of entrepreneurial opportunity - Murray Hunter

   The Evolution of Business Strategy - Murray Hunter

How motivation really works - Murray Hunter

Evaluating Entrepreneurial Opportunities: What’s wrong with SWOT? - Murray Hunter

 The five types of thinking we use - Murray Hunter

Where do entrepreneurial opportunities come from? - Murray Hunter

  How we create new ideas - Murray Hunter

How emotions influence, how we see the world? - Murray Hunter

People tend to start businesses for the wrong reasons - Murray Hunter

One Man, Multiple Inventions: The lessons and legacies of Thomas Edison - Murray Hunte

Does Intrapreneurship exist in Asia? - Murray Hunter

 What’s with all the hype – a look at aspirational marketing - Murray Hunter

   Integrating the philosophy of Tawhid – an Islamic approach to organization - Murray Hunter

Samsara and the Organization - Murray Hunter

Do Confucian Principled Businesses Exist in Asia? - Murray Hunter

 Knowledge, Understanding and the God Paradigm - Murray Hunter

On Some of the Misconceptions about Entrepreneurship - Murray Hunter

How feudalism hinders community transformation and economic evolution: Isn’t equal opportunity a basic human right? - Murray Hunter

The Dominance of “Western” Management Theories in South-East Asian Business Schools: The occidental colonization of the mind. - Murray Hunter

Ethics, Sustainability and the New Realities - Murray Hunter

The Arrival of Petroleum, Rockefeller, and the Lessons He taught Us - Murray Hunter - University Malaysia Perlis

 Elite educators idolize the “ high flying entrepreneurs” while deluded about the realities of entrepreneurship for the masses: - Murray Hunter

Lessons from the Invention of the airplane and the Beginning of the Aviation Era - Murray Hunter

Missed Opportunities for ASEAN if the ASEAN Economic Community (AEC) fails to start up in 2015 - Murray Hunter

From Europe, to the US, Japan, and onto China: The evolution of the automobile - Murray Hunter

ASEAN Nations need indigenous innovation to transform their economies but are doing little about it. - Murray Hunter

Do Asian Management Paradigms Exist? A look at four theoretical frames - Murray Hunter

Surprise, surprise: An Islam economy can be innovative - Murray Hunter

Australia in the "Asian Century" or is it Lost in Asia? - Murray Hunter

Australia "Do as I say, not as I do" - The ongoing RBA bribery scandal - Murray Hunter

Entrepreneurship and economic growth? South-East Asian governments are developing policy on the misconception that entrepreneurship creates economic growth. - Murray Hunter

Hillary to Julia "You take India and I'll take Pakistan", while an ex-Aussie PM says "Enough is enough with the US" - Murray Hunter



Dr. Nguyen Anh Tuan, Assos. Prof.[1] Nguyen Linh[2]



The current public debt crisis in the (European Union) EU began in Greece in November 2009, quickly spreading to Ireland (September 2010), Portugal (January 2012), Spain (June 2012), Italy (November 2012) and most recently, Cyprus (March 2013). This crisis has not only impacted on the Europe but also on the entire global economy, including that of Vietnam. This article will analyze the causes of this crisis, its impacts on the economy of Vietnam and lessons for Vietnam to avoid a potential public debt crisis and guarantee sustainable development.

1. The Public debt crisis in the EU.

a. Public debt and public debt crisis

Public debt is a relatively complex concept that most current approaches agree to refer to the sum of debt whose obligation to repay falls on the government of a country[3]. According to the World Bank (WB)'s approach, public debt is understood as the liability of four main groups of institutions: (i) Central government liability, (ii) Local government liability, (iii) Central banking institution liability, and (iv) Liabilities of independent organizations, state-owned enterprises of whose capital the state owns more than 50%, or other organizations whose debt the government has the responsibility to settle should they fails to do this[4].

Owing to the widespread nature of public debt and the fact that countries can easily fall into public debt crisis – especially since the 80s of the 20
th century – the global community had created a number of criteria to supervise and warn countries about to, or in the middle of a public debt crisis[5]. However, the criteria most commonly used to estimate a country's public debt situation is public debt as a percentage of Gross Domestic Product (GDP). This figure reflects the size of a country's public debt as a fraction of the economy's income and is calculated as of the 31st December each year.

According to a 2010 research of the American National Bureau of Economic Research (NBER), a survey of more than 44 countries showed that when the public debt/GDP ration exceeds 90%, it will negatively impact on economic growth and reduce the economic growth rate of the country in question by around four percent on average. In particular, for newly emerging economies like that of Vietnam, the healthy public debt/GDP ratio threshold is 60%, and exceeding this threshold will stall annual economic growth by around 2%. However, the ratio between public debt and GDP alone is not a comprehensive estimate of the safety or riskiness of a country's public debt – we need to examine public debt in a more comprehensive manner, in its relation with the system of macroeconomic criteria of a national economy[6].

Public debt crisis refers to an escalated public debt situation – or worse, public insolvency – that damages the economy resulting from a imbalance between national budget revenue and expenditure. The typical scenario arises from an excess of governmental expenditure over revenue, forcing the state to borrow money in many ways such as government bonds, debentures or credit agreements. This results in the state's inability to repay its debt obligations. Persisting budget deficit will increase public debt. Should the state be unable to settle these debts in a timely manner will lead to an accumulation of interest, further exacerbating the problem.

Hyman Minsky (1986)[7] gave an explanation to what would cause the serious crisis starting in 2007, a flaw of the financial-credit system. According to him, the financial-credit system plays a key role in a financial crisis: It led to a large amount of risky and speculative borrowing by firms and the public alike (borrowing far more than their existing assets, for instance) to seek profit from appreciating assets. However, if and when assets depreciates instead (the credit bubble pops), these speculators will lose much - if not all – of their solvency, resulting in the insolvency of the entire financial and credit system, leading to a financial crisis[8]. This happened because there was not yet the necessary systems to control and reduce these speculative and highly risky activities..

b. Cause of the EU public debt crisis

The current public debt crisis in the EU began in Greece when the Greece Prime Minister announced in November 2009 that the country's budget deficit for the year would be 12.7% of GDP, twice as high as a previously announced figure (Lane, 2012), and that he would try to save Greece from insolvency. In reality, the country's public debt had peaked at €300 billion (around US$440 billion), equal to 124% of the country's GDP, twice as high as the level permitted by the Maastricht Treaty. Immediately, on December 22
nd 2009, Moody's Investors Service had reduced Greece's public debt credit ranking from A1 to A2 because of its rising budget deficit. Previously, Fitch Group an Standard & Poor had reduced Greece's credit rating below investment grade. In April 2010, Greece's budget deficit had risen to 13.6%, followed by a spike in government bond interest rate; Standard & Poor reduced Greece's credit rating to “junk status” - the lowest possible rank[9]. Ireland followed Greece with a budget deficit of 32% GDP (September 2010), Portugal (January 2012), Spain (June 2012), Italy (November 2012) and presently Cyprus (March 2013), all fell into debt crisis[10]. Why did this debt crisis happen? There were several causes as follows:

I. Root causes:

First, the problem arises from inefficiencies of an economic model based heavily on banking and financial services[11] as well as shortfalls in the EU and Eurozone's management system. Every time an economic recession occurs or an election takes place, public debt would spike as governments have not brought forward long-term solutions to the public debt problem and instead focusing on short-term solutions. The accumulation of this problematic management and failure to solve the problem at its root results in an eventual loss of control of the public debt burden.

Second, the problem also owes to the rapid development of the financial and banking services based on exploiting market inefficiencies and based heavily on speculation and speculative investment of the early 90s, leading to a “fake prosperity”. This caused many instabilities in the labor structure, big gap of wealth and increasing unemployment and welfare dependencies. This development of the financial system also, paradoxically, stabilized the supply of credit, making it easier and promoting borrowing and rapid growth of credit. These contributed greatly to increasing public debt.

Third, the global financial crisis in 2008 was greeted with old policies – borrowing to sponsor credit funds, firms and unemployment support, while government bonds had come to maturity. This caused an overload as several decades' worth of debt obligation fell on these governments at the worst possible timing. While governments have realized the unsustainability of an economy geavily stilted towards financial services, they have been unwilling to give up the old habit of a “false” economy, instead they were opting for a short-term solution of borrowing new funds to repay old debts and keep insolvent banks afloat.

Fourth, owing to structural problems, the European Union is heavily restricted in managing its economy as a whole, lacking mechanisms that would enable the governments of member countries to reduce budget deficit (Guillen, 2012). This leads to monetary policies not being consistent with fiscal policies, expecially tax reform and labor policies. While the EU has a limit on member countries' budget deficit and public debts, the managing and supervisory institutions remain lax, making it easier for countries to borrow and much harder for the group to control said borrowing. The EU and the European Central Bank had responded too slowly when the crisis struck. When the politics of opposing national interests is taken into the equation, the mechanism becomes even more complicated and self-defeating (Bastasin, 2012).

Fifth, this was the emergence of the Euro (€). This allowed smaller countries to attract a huge amount of foreign investment owing to the common currency[12]. However, this also caused a major challenge: When the capital flow exceeds the economy's capability to sustainably absorb it, the excess capital would easily be wasted on activities that do not efficiently benefit the economy, leading to an increase in bad debts among banks, causing an even faster outbreak of a debt crisis. This is one of the ways the sovereign debt crisis is linked to the banking crisis in Europe (Shambaugh, 2012)

Sixth, the monetary flows into smaller economies in the EU were too great, resulting in a huge monetary supply and an increase in price level, causing a far higher rate of inflation in smaller economies compared to larger ones, sometimes even greater than the rate of interest (causing, among others, the value of debts to decrease with time, causing borrowers to gain rather than lose). The consequence of taking advantage of external monetary flows was a long-term current account balance deficit, yet countries were unable to control this by their own monetary policies because of the common currency. Additionally, the use of an external monetary flows would further increase budget deficit (for want of stimulating domestic production), exceeding the 3% of GDP as allowed by the EU. This long-term budget deficit plays a contributing role to exacerbating public debt.

II. Direct causes

First and foremost, causes pertaining to interior characteristics of countries undergoing crisis:

First, all of the countries currently undergoing public debt crisis have lax fiscal discipline. End-of-year spending realization of budget would always exceed the expenditure decision of their respective Parliaments as announced at the beginning of the year. In addition, these countries had undergone a missed opportunity to tighten fiscal policies throughout the earlier part of the last decade, owing in no small part to their poor analytical framework (Lane, 2012).

Second, the distribution of capital, in many cases, is influenced more by political rather than economic goals. (for examples: defense and security expenditure, social welfare, retirement wages, interest subsidy of banks for social welfare projects, governmental protocols or celebrations and so on)

Third, state projects generally are not completed in a timely manner. This causes an increase in interest payable over the borrowed funds.

Fourth, low capital utilization efficiency (often lower than that of private projects with commercial loans), since the borrower in the state sector are not directly held responsible for its repayment. This is to say borrower responsibility is not high as those in charge of borrowing are not necessarily those who have to settle the debt, especially if they have a slim chance of being reelected into office.

Fifth, these governments have the capability to hide problematic issues of the country's public debt situation over an extended period (up to ten years), making it impossible to make readjustment in a timely manner. In fact, the severity of the crisis can be attributed to the governments' lack of initiative in the years leading up to, as well as during the 'lulls' in between the crises (Lane, 2012). Coupled with the complex and overlapping nature of this crisis (Shambaugh, 2012), this inactivity has proven to be extremely damaging.

Second, causes pertaining to external factors:

First, credit rating and risk analysis firms like Standard & Poor, Moody's and Filch Group is a contributing factor to the instability of the market and the crisis itself, owing to their announcement of lowering the credit rating of these government bonds, thereby decreasing investors' confidence in these markets[13].

Second, political pressure from speculators, major financial organizations and economic powerhouses managed to persuade governments to adjust rather than reform their financial institutions. Governments had to spend many billions of Euros to bail out banks and on stimulus packages to save banks and the economies from collapse. This would invariably lead to an increase in public debt. At the same time, private banks received funds from central banks at a low interest rate (around one percent) to finance enterprises for production, but instead, they used these funds to repurchase government debts and debentures at a higher interest rate (4 to 5 percent).

Third, arbitrage activities with an aim to raise government bond interest to the highest possible level for maximum arbitrage profit. In practice, public debt is usually negotiated through private banks and priced by these private institutions. Such financial institutions like Alpha Bank, Bank of America, Merrill Lynch, ING Group and so on have ample opportunities to artificially raise government bond interest[14].

The Vietnamese economy under the impact of the EU public debt crisis.

The public debt crisis in the EU in addition to the current problems of the Vietnamese economy may have a number of negative impacts on it:

First, an increased difficulty in exporting to the EU market. According to the General Office of Statistics of Vietnam, EU has been Vietnam's largest export market (the EU alone consumed around 17.5% of all products produced in Vietnam in 2012, worth US$20 billion)[15]. In 2012, difficulties in the Eurozone economies (high inflation, lowered income, increase in unemployment) resulted in a general tendency to reduce spending among EU consumers, giving rise to the demand of goods and services – including those from Vietnam – not rising. Additionally, EU countries have been increasing protectionistic measures to protect domestic industries, resulting in greater dificulties for Vietnamese exports, in addition to competition from other exporters. While the major relatively inexpensive export products such as agricultural and forestry products, seafood and foodstuff experienced a low drop in demand, the other products like furniture, handicraft, textile and footwear suffered a major demand hit.

Second, there was an increase in domestic market competition. In the backdrop of the ongoing public debt crisis and the difficulties challenging the entire global economy, Vietnamese firms are under pressure from foreign investors looking to diversify their market and hedge risks. These foreign firms are additionally granted advantageous borrowing rates (in many foreign countries, interest rates of commercial loans for their own firms are very low), and have greater competence and ber trademarks than Vietnamese products, making Vietnamese firms being severely disadvantaged all but inevitable.

Third, foreign investment and investors' confidence in Vietnam decreased. The crisis had forced European firms to constrict production and lay off employers owing to a decrease in consumption in both the EU and the world. The most obvious countermeasure is decreasing inefficient foreign investment. As a result, foreign direct investment flow from both Europe and the world into Vietnam has decreased. In 2009, Europe's FDI into Vietnam took up 18% of total FDI. This figure was reduced to 11% in 2011, continued to decrease in 2012 and seems to continue on this downward trend in 2013.[16]

Fourth, according to the evaluation of WB, Vietnam's business environment index is on the decrease (in 2011, Vietnam's business environment ranked 98th out of the 183 ranked economies, falling eight ranks compared to 2010), showing the faltering confidence of foreign investors on the Vietnamese business environment. The main reason behind this is that the public debt crisis in Europe had caused investors and credit ratings services firms pay greater attention to the public debt issue. The three groups of main criteria used as early warning are: (i) excessive debts, reflected in a high public debt over GDP ratio; (ii) excessive spending, reflected in a high budget deficit over GDP ratio; and (iii) a continually decreasing GDP growth rate. In 2011, Vietnam's public debt was 106% of GDP (see Table 1), state budget deficit was 4.9% of GDP (see Table 3), the GDP growth rates continually decreased[17] (see Table 2), making it the riskiest economy in the ASEAN region, with a S&P credit rating of BB- (a deterioration from the BB rating at the beginning of the year). This not only negatively impacted on the ability to attract foreign investment and borrowings, but also increased the cost of borrowing from international financial organizations owing to a higher interest.

Table 1: Vietnam's public debt, 2011
Figure Billion VND Billion USD Percentage of GDP
Public debt according to Vietnam's definition 1,391,478 66.8 55%
State debt 1,085,353 52.1 43%
State guaranteed debt 292,210 14 12%
Local government debt 13,915 0.7 1%

Public debt according to the international definition



Public debt according to the Vietnam definition 1,391,478 66.8 55%
State-owned enterprise debts 1,292,400 62.1 51%

Source: Vũ Quang Việt, “Public and banking debts of Vietnam at a glance”, Forum Magazine, Hanoi, 25/11/2011.

Fifth, there was an increase in exchange rate risk. In the short term, the appreciation of the US$ relative to the € will decrease Vietnam's export goods into the Eurozone owing to Vietnam's export goods being valued in USD. In addition, recently the USD are also appreciating relative to the VND (Vietnamese currency) owing to high inflation in Vietnam from 2008 to 2011 (see Table 3), creating a pressure to adjust exchange rate, yet Vietnam has maintained the same rate. This causes a risk of existing two interest rates and the potential risk of smuggled import owing to cheaper import. This will put a greater pressure on Vietnam's national foreign exchange reserve.

3. Lessons for Vietnam in public debt crisis prevention
a. Current difficulties of the Vietnamese economy.

The main reason causing Vietnam's current difficulties began to emerge in 2006 and was rooted before that. To promote high growth, Vietnam had promoted investment very bly and over an extended period had had an investment-to-GDP ratio, rating second only behind China (see Table 2). The rate of increase in money and credit supply was also among the world's highest and consequently the rate of inflation was record high in the world. This can be clearly seen when comparing Vietnam's exceedingly high investment-to-saving ratio from 2005 to 2011.

Table 2: GDP growth rate and the rate of investment and saving of Vietnam (2000-2011)










Investment/GDP (%)








Saving/GDP (%)   28 28 26 23 23 23 24
Difference between investment and saving (%)  







GDP growth rate (%)  7.1  8.4  8.2  8.5  6.3  5.5  6.8 5.9

Source: Vu Quang Viet, Crisis and the financial-credit system: Practical analysis in regard to the American and Vietnamese economy, Washington D.C., February 2013; Nguyen Anh Tuan; Vietnamese External Economic Syllabus, National Political Publisher, Hanoi 2005.

The rate of investment was much higher than saving, some years up to 16-17% of GDP (see Table 2). To achieve this there were only two ways: (i) borrowing from foreign sources, or (ii) extensive (excessive) issuing of credit lines, resulting in bad debts and very high inflation as of the last few years (see Table 3). As a result of high inflation while the government did not adjust the exchange rate between the VND and the USD, import was highly stimulated, resulting in an unprecedented trade balance deficit, some years as high as US$18 billion (See table 3). This excessive investment while efficiency was low resulted in an excessive public debt. As shown in Table 1, Vietnam's public debt could have reached US$129 billion, equal to 106% of GDP in 2011, in which state-owned enterprises' were US$62.1 billion (see Table 1).

Table 3: Increase in money supply, credit, CPI, trade balance deficit and state revenue-expenditure of budget in Vietnam (2006-2011)







Increase in money supply (%) 34.0 46.0 20.0 29.0 33.0 12.0
Increase in credit (%) 25.0 50.0 28.0 46.0 32.0 14.0
Inflation (CPI) (%) 7.1 8.3 23.1 5.9 10.0 18.6
Change in exchange rate (%) 0.9 0.7 1.2 4.7 9.1 10.1
Balance of trade (billion USD) -5,1 -14,2 -18,0 -12,9 -12,6 -9,8
State revenue (Trillion VND) na na 357.4 390.6 456.0 590.5
State expenditure (Trillion VND) na na 398.9 441.2 581.0 725.6

Source: ADB, Annual Report 2011, Manila 2012; General Office of Statistics of Vietnam, Annual Report 2012, Hanoi 2013.

b. Lessons and suggestions for public debt crisis prevention in Vietnam

I. Basic Guidelines

In order for the Vietnamese economy to avoid negative impacts from the public debt crisis, we need to examine intrinsic factors within the Vietnamese economy as well as the causes of the public debt crisis in the EU and its existing impact on Vietnam as previously analyzed. There are a number of suggestions:

First, in order to manage and prevent public debt crisis, the most pressing requirement is an effective governmental regulatory mechanism in order to control financial activities and the flows of financial sources. This includes transparency of information, the effective maintenance of macro-level supervisory mechanism, while guaranteeing the needs for social welfare and mobilizing and combining resources to develop the country in a sustainable manner.

Second, it is necessary to properly manage and improve efficiency of state investment. In the long term, state investment needs to be actively reduced while investment from non-budget sources needs to increase relative to total social investment; shift the focus of state investment outside of economic activities so as to concentrate on social and infrastructural investment. In the same time, there is also a need to reform and standardize the state investment process in an appropriate manner so as to serve as a selection and standardization criteria for public projects[18].

Third, state-owned corporations and enterprises diversifying investment outside of their main business and production must cease. State-owned enterprises should be concentrated on key industries of the national economy, mainly those related to and dealing with socio-economic infrastructure, public services and those pertaining to macroeconomic stability.

Fourth, systemic stability, prevention of side effects and debt “traps” and practical efficiency in both SOE and financial-banking sector restructuring should be ensured. At the same time, proper care should be taken to effectively handle such matters as firm acquisitions and mergers, unemployment insurance and social welfare.

II. In-depth suggestions and areas for attention

On the basis of the guidelines above, we can draw a number of in-depth lessons and suggestions for public debt crisis prevention in Vietnam.

First, there are a number of issues pertaining to state-owned enterprises (SOEs), as followed: (i) cease excessive investment into SOEs and only maintain a minimal, manageable number of SOEs (between one to two dozen)[19]; (ii) put an end to diversification outside of expertise (especially letting a SOE own a bank, or vice versa)[20]; (iii) every decision to found new SOEs must be carefully discussed and approved by the National Assembly. The government needs to stop spending more than the budget previously approved by the National Assembly (notably, in a number of countries this is considered illegal)[21].

Second, the government should not continue to have the State Bank issue money for spending and credit distribution, especially for SOEs as a spearhead for development owing to its lack of efficiency and also owing to the very large existing budget deficit (from 5% to 7% of GDP, while in these times a 3% of GDP deficit is already seen as a warning threshold in some countries). Stimulation of demand through budget deficit is only a temporary solution and should only be used when there are no other options when the economy – for any reason – falls into a crisis owing to plummeting demand. It should never be used as a method for stimulating economic growth because it will lead to high inflation and loss of stability, since budget deficit would invariably be remedied by printing money. The reason for Vietnam's current economic situation is the stimulation of demand via credit growth (which increased from 35% to 125% of GDP between 2007 and 2011), but without good control of the utilization of credit flow.

Third, it is necessary to raise the ratio of equity (paid-up or owner's capital) in both private firms and SOEs to ensure stable development. Currently, in Vietnam the debt-to-equity ratio is 1.77, much higher than in the United States or Europe (around 0.7). This high ratio of debt can very quickly lead to financial distress and insolvency should the interest rate rise.

Fourth, there is a need to focus the power for development investment into seven regions of Vietnam instead of on a provincial basis in order to avoid waste owing to overlapping construction investment, as well as to reduce the influence of the locality on the central organs located in provinces[22]. In addition, management of territory, forests, rivers and seas needs to be stratified between central, regional and local government so as to concentrate power for infrastructural development. Local governments should not be permitted to issue their own bonds to foreign markets. Furthermore, local government bonds should be tightly regulated so as to avoid uncontrollable layering of debts.

Fifth, it is worth noting that the excessive expansion of credit in Vietnam (See Table 3) is because the State Bank lacks the independence according to the standard of a market economy and of a central bank. Because of this, it had acted not on the ultimate goal of maintaining market price stability, but according to the government's directive to print money for SOEs to become as spearheads for the economy (that, in reality, was quite inefficient), but consequence of that was the detriment of the economy. The difficulties facing the Vietnamese economy occurred when the government began to execute stimulus packages but did not closely supervise them. Hence most of those funds were not invested on production but on stocks and real estate. When the bubble pops, this caused great difficulties for the financial-banking system with an increasing ratio of bad debts.[23]

Sixth, according to the Credit Organizations Law (2010), many banks that had been given permission for establishment but whose sole purpose was to help local governments and clienteles to carry out rent seeking activities because the Law does not distinguish between commercial and investment bank. According to the experience from the EU and the US, commercial banks use deposits from clients to lend, while investment banks mainly implement portfolio investment using their own money, or serve clients to invest in portfolio for the service fees. Hence, in order to avoid risks for the financial-banking system and crisis, there is an urgent need to amend this law to emphasize on the difference between the role and function of these two categories of banks, as well as stopping allowing a bank to own a non-financial enterprises, or conversely, a non-financial enterprises founding a bank to serve itself.

Seventh, the state bank should establish a standard for minimum capital for each category of banks, as well as set up and announce basic statistics of each bank in particular and the financial-monetary system in general to serve both policy-makers and users of financial services. The Vietnamese financial-banking system has (i) 101 banks and foreign bank branches including (a) 5 national commercial banks, each of which having more than US$1 billion in chartered capital and total assets of between US$15 to US$25 billion, (b) 39 private commercial banks, of which only a few banks are large like Eximbank with chatered capital of US$630 million, Sacombank - US$550 million, ACB - US$470 million[24]; (c) 53 foreign bank branches and banks with 100% foreign capital; (d) 5 foreign joint banks; (ii) 18 financial firms, 12 financial-lease firms and 1,202 public credit funds, (iii) 105 stock companies, 47 investment funds, 43 non-life insurance and 10 life insurance firms[25]. This financial system is a very complicated, overlapping that was not properly supervised and controlled [26].

4. Conclusion

As the public debt crisis in Europe continues, casting further doubt on the already tumultuous and shaky macroeconomic and financial system worldwide, two questions demand a satisfactory answer. The first, what should be done to save those economies already engulfed in it and bring them back to financial healthiness. The second, what should be done for economies not yet in the crisis to avoid its ripple effect, or worse, being involved in its own crisis. This paper seeks to find an appropriate answer for the second question in a manner that is relevant to the Vietnamese economy.

As has been discussed, the macro-economy of Vietnam is currently displaying a number of worrying issues and symptoms. The crisis has struck in the wake of Vietnam's rapidly changing economy and exposed a number of key weaknesses in the country's macro-economy such as inflation, state budget deficit and the inefficient use of SOEs as spearhead for the economy, to name a few. This article has named a number of suggestions to restructure the economy so as to alleviate these deficiencies at the root, while avoiding a potential public debt crisis.

While a number of issues underlying the European crisis – one may even say key issues – are inapplicable to Vietnam, namely the dependence on a shared currency and fiscal policies and the political costs thereof, the situation in Europe has proven that weaknesses in government budget, in the banking system and low growth are inseparable and one cannot be examined or solved without the other. Considering the present state of the Vietnamese banking and financial sector and its many issues, how these three problems interact and how to tackle them is an important area that policymakers and future researches should pay attention to.


[1] Editor-in-Chief, Journal of International Studies, Diplomatic Academy of Vietnam, Ministry of Foreign Affairs of Vietnam

[2] Master of Financial Management, Australian National University.

[3] The public sector as defined by the United Nations System of National Accounting (SNA) includes public service (government) and state-owned enterprises. Hence, the term “public debt” is also taken to mean the same as such terms as “governmental debt” (United Nations, System of National Accounts 2008, para. 22.15, “the public sector includes general government and public corporations”). However, public debt differs from national debts in that the latter refers to a country's debt obligation in its entirety, including both governmental debt and private debts. In other words, public debt is only a component of national debt.

[4] This definition is similar to that of the Debt Management and Financial Analysis System (DMFAS) of the United Nations Conference on Trade and Development (UNCTAD)

[5] Supervisory criteria for a country's public debt and foreign debt includes: (i) Public debt as a percentage of GDP, (ii) Foreign debt as a percentage of GDP, (iii) National debt as a percentage of GDP, (iv) Foreign debt as a percentage of gross export value, (v) Public debt as a percentage of state budget revenue and so on.

[6] These criteria are: (i) rate and quality of economic growth; (ii) total factor productivity; (iii) capital utilization efficiency (via the Incremental capital-output ratio – ICOR); (iv) budget deficit ratio; (v) domestic saving rate and gross domestic investment; and (vi) a number of other criteria. Additionally, such criteria as public debt structure, weight of different debt classes, interest structure and payment period also require in-depth analysis when addressing the sustainability of public debt. For instance, a public debt worth 100% of Greece's GDP caused its bankruptcy, while Japan's public debt is worth around 200% of its GDP and is still considered sustainable. Another example, Argentina, has a public debt ratio to GDP less than 60% yet is still undergoing public debt crisis. According to the Maastricht Treaty in 1992, the European Union countries are not allowed to have their public debt exceed 60% of their GDP.

[7] Hyman Minsky, 1986,
Stabilizing an Unstable Economy, Yale University Press, Yale.

[8] Minsky classified borrowers into three categories: (i) hedge borrowers, who can repay their both principal and interest from their investment flows; (ii) speculative borrowers, who can repay interest but has to regularly roll over principal to stay afloat; and (iii) Ponzi borrowers, who operates on the basis of borrowing money from one creditor to repay another. His view was that a crisis would happen if the last two categories outnumbers the first.

[9] On the 2
nd May 2010, the Prime Minister of Greece had accepted the aid package worth €110 billion (US$143 billion) from Eurozone and IMF, which would come into effect over the following three years.

[10] At the end of 2009, typical countries of the EU had the high public debt-GDP ratios such as Greece – 124%; Portugal – 84,6%; Italy – 120,1%; Germany - 84,5%; Ireland – 82,9%; France – 82,6%.

[11] Two energetical crises in 1973-1974 and in 1979-1980 pushed countries in Europe and America into recession. That was the time when Europe and America restructured and transformed their economies from industrial production into banking and financial services with the boom of portfolio investment.

[12] For instance, the small countries of EU like Greece, Ireland were allowed to borrow money with interest rates equal to that of Germany, France. In other words, the small countries took advantage of the whole EU for their benefit.

[13] At the beginning of 2009, the long-term interest of EU countries' government bonds reached an all-time low by the time the governments issued new bonds, but within a few weeks the bond market had undergone significant changes. As S&P’s Ratings Services and Fitch Group began to examine Greece's debt and ranked her bonds as junk, their bond interest statred to increase dramatically while the stock market index went down quite as dramatically.

[14] For example, IMF's report on the 22
nd of April 2010, stating that the economy of Portugal that was deteriorating, would grow less than forecasted and would not be able to reduce her deficit. This caused the interest on Portugal's 10-year bond to increase significantly, and as at present Portugal, Spain, Greece, Ireland and Italy are countries that are almost certain to meet with extreme difficulties reducing their public debt.

[15] Nguyễn Sinh Cúc, “An overview on the economy of Vietnam in 2012 and a forecast for 2013”,
Communist Magazine, Hanoi, Jan 2013, pp 69-73. The impact of the European public debt crisis on Vietnam's export goods are not very large owing to Vietnam's exports mainly being necessaries. In 2012, the amount of goods exported did not decrease, yet did not increase as much as expected.

[16] In addition, accoding to general analysis, global FDI in general and of the EU in particular into Vietnam, aside from the present crisis, are subject to a number of limiting factors: (i) low general effectiveness of FDI, still mainly being assembly and processing projects with little value added and low capability to participate in the global value chain; (ii) low ratio of disbursed to registered capital, small project scale, many projects slow on the execution; (iii) the majority of technologies attracted via FDI is not modern and is only average compared to the world, very few firms bringing high technology; (iv) the number of employment created by FDI is not high, as is the living quality of FDI firm employees, as well as an increasing number of labor disputes, (v) there appear many cases of price transfering and tax evading in FDI firms with an increasing level of sophistication (falsely raising the capital value, input costs, overheads, education and so on) to create “real profit, false losses”, (vi) low diffusion value to ofther economic sectors, and (vii) a number of projects cause environmental pollution and waste of resources.

[17] In 2012, GDP growth rate of Vietnam economy that was only 5.03% compared with that of 2011, was lowest growth rate since 2000 (Nguyễn Sinh Cúc, 2013, Ibid). In 2010, although GDP growth rate was 6.8%, but this rate attributed to estate bubble and consequence of economic stimulus packages of 2009 whose utilization was not stricly controlled and supervised , therefore was not used in proper manner.

[18] In particular, there is a need to distinguish between two classes of goals and criteria for assessing the efficiency of public investment (for- and non-profit investment), alleviate the confusion between tcapital for for profit and for non-profit activities as well as the social responsibility of state-owned enterprises.

[19] This can be achieved by promoting equitization of SOEs, reduce the weight and number of SOEs of which the state owns controlling shares, only maintaining SOEs with 100% state capital in industries and fields that the state needs to maintain a monopoly, or hold a key role in the economy, or that the private sector cannot or is unwilling to take part in. Additionally, this can also be done by promoting a multi-owner corportations where SOEs play a key role that can take on the role as the economy's lead, while operating according to economic laws, on the basis of voluntary agreement and cooperation between independent legal entities.

[20] At present, the Credit Law of Vietnam permits this.

[21] Since 2007 the government of Vietnam has been spending more than the amount approved by the National Assembly on a yearly basis: In 2007, exceeding 31%; 2008 - 29%; 2009 - 46% and 2010 - 11%. (calculation based on the statistics on budget estimates approved by the National Assembly and the budget liquidation at the end of each year).

[22] In other words, all branches of central organs like the State Bank, the Ministry of Finance, the Ministry of Planning and Investment, the General Office of Statistics and so on would be stationed on a region rather than provincial basis, as they are at the moment.

[23] Until the 31
st of May 2012, the total outstanding debts of the banking system of Vietnam are around VND2,500 trillion. If we assume 10% of this figure is bad debt, it would have an absolute value of 250 trillion. According to senior banking expert, Mr Nguyen Tri Hieu, bad debts in Vietnam are around 15% (VND370 trillion) of which 50% (VND190 trillion) is irretrievable (according to international precedences), which is very large compared to the banking system's provident fund (VND70 trillion). At the same time, State Bank Governor of Vietnam Nguyen Van Binh insinuated that the rate of bad debt is only 4.47% (around VND117 trillion) and 84% of all debts have collaterals worth 135% total outstanding debts. On the other hand, according to the banking inspectional body, the rate of bad debts is closer to 8.6% of outstanding debts (VND202 trillion).

[24] According to the 141-ND-CP decree dated the 22
th November 2006, up to 31st December 2010, each private commercial bank has to have a minimum chartered capital of VND3 trillion (more than US$150 million). However, at that time there were 21 banks with a chatered capital less than VND2 trillion, 9 banks having a chartered capital between VND2 to VND3 trillion, and only 9 banks with a chartered capital of above VND3 trillion. At the meantime, the average global commercial bank has a typical chartered capital of US$1 to US$2 billion.

[25] Vũ Quang Việt,
Crisis and the financial-credit system: Practical analysis in regard to the American and Vietnamese economy, Washington D.C., February 2013 .

Labor (Người lao động), Market-dominating financial group, 23/1/2013, ( doan tai chinh lung doan thi truong.htm)


Bajrektarevic A., (2013), Future of Europe (Of Lisbon and Generational Interval), Crans Montana Forum, 2013, Geneva, Switzerland.

2. Bajrektarevic, A., (2004),
Europe beyond 2020: Three-dimensional Challenge, 13th OSCE Economic Forum, Trieste Italy, November 2004.

3. Bastasin, C (2012),
Saving Europe: How National Politics Nearly Destroyed the Euro, Brookings Institution Press.

4. Guillen, A (2012),
Europe: The Crisis Within a Crisis, International Journal of Political Economy, Vol. 41, No. 3 (Fall 2012), pp 41-68Jolly, D. (2011), European Agency Sells Billion in Bonds to Rescues Ireland, The New York Times, January 5, 2011 in

5. Lane, P. (2012),
The European Sovereign Debt Crisis, The Journal of Economic Perspectives, Vol. 26, No. 3 (Summer 2012), pp. 49-67

6. Minsky, H. (1986),
Stabilizing an Unstable Economy, Yale University Press, Yale.

7. Manasse, P. and Roubini, N (2009),
Rule of Thumb for Sovereign Debt Crises, IMF: Journal of International Economics.

8. Le, N. M., (2011),
Public Debt: Impacts on Economic Growth and Burden of Next Generation, Banking Academy of Vietnam, Hanoi 2011.

9. Reinhart, C.M. and Rogoff, K.S., (2010),
Growth in a Time of Debt, American Economic Review.

10. Shambaugh, J; Reis, R and Rey, H (2012),
The Euro's Three Crises, Brookings Papers on Economic Activity (SPRING 2012), pp. 157-231

11. Le, S. K (2013),
The World Economy After Crisis: Implications and Prospects, Publisher of Social Sciences, Ha Noi 2012.

12. Vu, V. Q., (2013),
Crisis and the financial-credit system: Practical Analysis in Regard to the American and Vietnamese Economy, Washington D.C., February 2013.

13. Vu, V. Q., (2011) “Public and banking debts of Vietnam at a glance”,
Forum Magazine, Hanoi, 25/11/2011.

14. Dinh, T. C., (2012),
EU in the First Two Decades of 21 Century, Publisher of Social Sciences, Ha Noi 2012.

15. Nguyen, T. A. , (1999),
Asian Monetary-Financial Crisis: Reasons and Impacts (ed.), National Political Publishing House, Hanoi 1999.

16. Nguyen, T. A, (2006), “East Asian Financial Cooperation After 1997-Crisis: Experience From EU”,
Seminar Proceedings in China, May 2006.

17. Nguyen, T. A., (2009), “Global Financial Crisis: Experiences of Australia and Lessons for Vietnam”,
Review of Communist, No 169, January 2009


The emergence of the Bhikkhuni Sangha (monkhood for women) in Thailand

Has its time come?

Murray Hunter


Murray HunterIf one takes a close look at Thai society today, it could be argued that it is primarily the women who run daily affairs. In a country where females outnumber males, the gender dynamics of the nation have dramatically shifted over the last few decades to where women fulfill many of the major roles in society. The majority of university enrollments are women, the breadwinners in many families are women, many corporate executives and civil servants are women, the majority of new entrepreneurial start-ups are undertaken by women, and even many farmers are women.

Dr. Siriwan Ratanakarn from Bangkok University in a paper on the women's role in Thai society discusses the important contributions made by such women as Nang Suang, Sikhara Maha-Devi, Nang Nopamas, Queen Suriyothai, Queen Saovabhaphongsri, and Queen Sirikit. She states that these women have helped to shape Thai culture, customs, and traditions either as regents themselves or as direct advisors to their kings. She also points out how, during the Sukhothai period, women were portrayed as equal partners to men. Through literature, we can note that women's status became much lower through the Ayutthaya period, where they were portrayed as obedient wives and daughters. Siriwan believes that women in Thailand have come a long way since then.

However, even with general acceptance about the emerging importance of the matriarchal role of women in society today, there is still one last bastion forbidden to women. This is the domain of the Buddhist monkhood, something that has been strictly taboo for women in Thailand for the last seven centuries. 

Although women were given the right to vote back in 1932, they were never given the right to be ordained as a monk. There is nothing in the Thai constitution forbidding women becoming monks. However the Sangha council which governs the monkhood continues to maintain that only men can enter the monkhood. This is based upon the Sangha Act 1928, which to all intents and purposes is still upheld as being valid.

The Theravada Bhikkhuni order was never "officially" established in Thailand, although it exists in both Myanmar and Sri Lanka. The absence of Bhikkhuni in Thailand over the last century has led to the perception among many Thais that women are not meant to play a monastic role in life other than being a lay follower, or becoming a Mae Ji, or nun. Although a Mae Ji is higher than a lay person, this place within the monastic hierarchy tends to be seen as subservient to monks. In addition, monks receive free public transport, reserved seats in public places, and government identity cards, which Mae Ji, just aren't entitled to.

This restricts women in the monastic hierarchy to only participating in activities of obtaining merit through collective rituals, and undertaking the housekeeping activities within a temple. Basically they are there to serve the monks.

A common perception by many within Thai society about nuns, is that while they are robed in white, they are most probably present in the temple because they have no other place to go, suffer from a broken relationship, have a psychotic disorder, or have very little education.

Consequently robed nuns tend to be looked down upon, with the general belief in some quarters that women are of less value than their male counterparts in monastic life. 

To some women, the role of Mae Ji or nun makes them feel very restricted, preventing them from doing more. This is according to Dhammakamala Bhikkhuni, the deputy abbess of the Thippayasathandhamma Bhikkhuni Arama Centre, in Kohyor, Songkhla.

To many women who became a Bhikkuni, the feeling of materialism, relationships, and career, began to lose the importance it once had for them. They develop a feeling of emptiness in life, which needs to be quenched through some form of change. However being only a Mae Ji or nun is not enough. They want to do more through the personal freedom a Bhikkhuni potentially has to contribute to the community and dhamma, in their own way, different from their male counterparts.

A small number of women who have become Mae ji, aspire for full ordination in Thailand, even though 'officially' they would become a social outcast, in risk of civil prosecution of impersonating a monk.


Prof. Murray Hunter,
He has been involved in Asia-Pacific business for the last 30 years as an entrepreneur, consultant, academic, and researcher. Murray is now an associate professor at the University Malaysia Perlis. He'd been also a visiting professor at a number of universities and regular speaker at conferences and workshops in the region. Murray is the author of a number of books, numerous research and conceptual papers in referred journals, and commentator on the issues of entrepreneurship and development in a number of magazines and online news sites around the world. Read other articles by Murray.

The pioneer who led the way for women to be ordained as monks was the professor, controversial author, and TV host Chatsumarn Kabilsingh, now known as Dhammananda Bhikkhuni. She is now the abbess of Wat Songhammakalyani in Nakkon Pathom, just North of Bangkok. Dhammananda Bhikkhuni slipped away to Sri Lanka back in 2001 to return an ordained monk, being a very controversial move at the time. Since her ordination, Dhammananda Bhikkhuni has built up the monastery,  established by her mother Voramai Kabilsingh who was ordained under the Mahayana tradition in Taiwan in 1971, where more than 100 Bhikkuni have passed through the gates and scattered around a number of provinces. There is also a substantial sramaneri or novice nuns who are training for public ordination at the monastery.

Wat Songhammakalyan has differentiated itself from male dominated monasteries in Thailand, in that the Bhikkuni have developed a strong rapport with the communities around them, and an exemplary empathy and ability to address the needs of the local residents. The bhikkuni directly engage the community, not just helping in their spiritual needs, but rendering assistance in many other ways, especially to the needy, sick, and infirmed. The Bhikkhuni were there giving assistance when floods hit their community a couple of years ago.

According to Dhammakamala Bhikkhuni, wherever and whenever people come into contact with the Bhikkuni, they very quickly become accepting and are generally happy to see them. Many of the male Sangha now also accept the Bhikkhuni and in some parts of Thailand it is now not unusual to see male and female monks jointly participating in prayers and other rituals.

Over a number of visits the author has made to Bhikkhuni temples, some stark differences can be seen in comparison to conventional temples. The Bhikkhuni seem to share a much stronger sense of community, than their more individualistic male counterparts. There also seems to be a strong sense of mission about what they are doing. Although the dhamma espoused is along the similar modernist themes as Sulak Sivaraksa, Thich Nhat Hahn, and Buddhadasa Bikkhu, the Bhikkhuni's method of practice and dissemination is very different. There is a warmth, empathy, and "a sense of personalization" in their approach to counseling and teaching of dhamma.

The Bhikkhuni have a nurturing approach based upon their various personal experiences before they were ordained, which has given many of them the ability to frame dhamma teachings in a practical way, which can be easily understood by people. The Bhikkhuni have managed to take scripture and turn it into something pragmatic that can be understood and used as "everyday dhamma", or socially engaged Buddhism.

According to Dhammakamala Bhikkhuni, the most important contribution the Bhikkhuni are making is their open approach to issues concerning women that are very difficult for males to discuss with females. This is very important as around 90% of people visiting temples for dhamma instruction are now females. The Bhikkhuni see gender as an essential bridge to women.

The Bhikkhuni are heavily involved in family counseling, assisting in solving everyday problems that are facing people in society today, particularly in regards to child and family issues. They are enabling dhamma to be used as a means to live by for the benefit of the individual, family, and community. Many supporting the case of the Bhikkhuni in Thailand believe that it is this group who are maintaining contemporary relevance of dhamma to everyday life. In this way the Bhikkhuni are performing a major role in maintaining Buddhism as a useable guide to everyday life.

With many of the Bhikkhuni coming from professional and higher education backgrounds, many modern pedagogy and teaching methods have been adopted to help disseminate dhamma teachings to the young within communities and schools around their temples.

The Bhikkhuni appear to be realists and have not relied upon donations to survive. They are not totally dependent on outside food donations and grow some of their own food. They even engage in enterprise and sell their surpluses. Practicality, self reliance, and a collective action orientation are signatures that the Bhikkhuni display to the rest of society in the manner of their dealings with outsiders. This manifests itself in an 'aura' of strong will and motivation, that is inspiring to many of those who come into contact with them.

There have been a number of scandals involving male monks of late, creating a small crisis in public trust. In addition, a large part of the Sangha is focused on doctrine and tradition, rather than the needs of their followers. Some would argue that if things don't change the Sangha may only be able to play a more limited role in society in the future, perhaps just restricted to performing the rites and rituals on formal occasions.

 The Bhikkhuni approach to dhamma, may be able to rebuild trust and maintain the relevance of Buddhism to society.

What appears to be one of the important aspirations for sramaneri women who want to be fully ordained as a monk, is to be ordained in Thailand in front of their peers, rather than run away to another country to be ordained, and then returning to proclaim themselves a Bhikkhuni. This is now possible where a member of the Sri Lanka Sangha travels to Thailand for the ordination and a number of Thai Bhikkhu or male monks are willing to make up the necessary quorum of five Bhikkhu being present at the ordination. They feel it is symbolically important that ordinations are carried out in Thailand.

The Bhikkhuni struggle highlights gender discrimination in Thailand. As a 'farang' or 'westerner', it would be too tempting to interpret what Dhammakamala Bhikkhuni told me during our interview as an expression of feminism. However, their aspirations probably more likely have something to do with their feeling of the need to serve society in the way they believe is the best. The author genuinely believes that the Bhikkhuni's commitment to the cause of developing a strong Bhikkhuni Sangha in Thailand has more to do with their personal commitment to love and compassion towards the community around them, their love of the dhamma, and humility, rather than the expression of any political or social statement.

There is no anger present among the Bhikkhuni, as is in the 'western feminist stereotype'. Rather they seem to employ empathy and compassion as their driving energy. The Bhikkhuni seem to see their devotion to their cause as the important thing, and 'official recognition' is not their highest priority.  Dhammakamala Bhikkhuni probably best sums their feelings up when she said "we don't ask for what can't be done right now".

The ordination of Bhikkhuni has not been a major issue of discussion for over a decade. However with the regular ordination of women occurring in the near future, a planned ordination is scheduled for November 29th 2014, it is likely that the issue will be debated once again. The biggest barrier to the ordination of women may lie in that it is a total affront to 'what is', and consequently seen as a threat to the establishment, which has existed under the same structure for over a century. Consequently conservatism rules to maintain the status quo rather than consider 'what could be'.

Institutionally, the only consolidation is that the current small number of Bhikkhuni are generally left alone and have not been prosecuted.

However Buddhism in Thailand according to some, needs some revitalization and effort made to regain the confidence of the people after some of the scandals of late. The whole question of getting the dhamma across to a rapidly changing society needs a rethink. This requires some reconsideration about the entry of women to the Sangha or monkhood.

If Thailand is going to retain its leadership in the development and dissemination of dhamma, then it needs to appeal to all segments of the populace. These are challenges facing the Sangha Council which must address the institution of Bhikkhuni to maintain its relevance to society and prevent itself from becoming an institutional relic.

Unrecognized and unacknowledged women monks are at the forefront in dealing with Thailand's social problems, if even on the small scale, while many of their male counterparts have withdrawn themselves from society to stay within the temples of Thailand.

Ironically this issue appears to be as hard to solve as the ongoing political turmoil playing out on the streets in Bangkok. However the Bhikkhuni have a secret weapon with their charm and devotion that is winning the hearts and minds of many who come into contact with them.

The emergence of the Bhikkhuni phenomenon is a strong wind of change blowing across both the social and spiritual aspects of Thai society. Society may not be able to resist this idea, as its time may have come.   

Thailand is changing quicker than many would want to acknowledge.


World Security Network reporting from Seoul in South Korea, December 19, 2013
North Korean Leadership Upheaval: Voices from the South 

Dear Friends of the World Security Network,

North Korea is once again producing controversial headlines. After Kim Jong-un ascended to the position of supreme ruler of North Korea in 2011 as the third family member of the only remaining dynastic dictatorship in the world he launched the supposedly third nuclear test in February 2013. In what many argue to be an effort of power consolidation he ordered the execution of the second most powerful man in this bizarre and reclusive state, his uncle and mentor Jang Song Taek, for treason, corruption and womanizing.

In October 2013, members of the World Security Network Foundation travelled to South Korea and spoke to some of the countries leading experts about the difficult relation between the divided neighbors, the nuclear threat, and the implications for the otherwise highly dynamic North East Asian region. One of the key findings, as outlined by Dr.
Cheon Seong-Whun, President of the Korea Institute for National Unification (KINU)indicated that the leadership nature of North Korea is the most pressing obstacle to opening up North Korea and Korean unification.

See his opinions and others in the statements listed below. 

Hereditary Succession Key Obstacle to Reforms in North Korea

China and Russia Essential to Open Up North Korea

North Korean Nuclear Tests in 2006, 2009 and 2013

South Korean Unlimited Humanitarian Aid for North Korea despite Nuclear Threat

Nuclear Threat to South Korea

Dr Hahm Chaibong is the President of the independent, non-partisan Asan Institute for Policy Studies in Seoul, one of the leading political think tanks in Asia. The institute focusses on policy relevant aspects nationally as well as internationally and educates more than 60 young Korean scholars every year.  

Understanding North Korea

South Korea under the Gun: The Nuclear Shadow

North Korea, a Black Hole in the Most Dynamic Economic Region on the Globe

North East Asian Superstructure and the Six Party Talks

Dr Bernd Seliger, an expert on German reunification, is the representative of the German Hanns Seidel Foundation in Korea where he is helping to work towards Korean reunification. 

Comparing the Koreas with formerly divided Germany

Geopolitical Tragedy in North East Asia: Economic Cooperation - Yes - Political Understanding - No

Nuclear Capability - North Korea's lifeline?

South Korea: Role Model in North East Asia

World Security Network Foundation

December 19, 2013

20 Years to Trade Economic Independence for Political Sovereignty
Example of the former Soviet Union country Latvia

Vienna University of Economics and Business, Vienna


Following famous words of my professor Anis Bajrektarevic that: “the Atlantic Europe is a political power-house (with the two of three European nuclear powers and two of five permanent members of the UN Security Council, P-5), Central Europe is an economic power-house, Russophone Europe is an energy power-house, Scandinavian Europe is all of that a bit, and Eastern Europe is none of it.”, I wanted to examine the standing of my own place of origin in the ‘new European constellations’. What happens to a country which suddenly is free to govern its own territory and people? What is the biggest fear? Is it the inability to satisfy its population or a threat from the former conqueror? Should a country opt for the ‘shock therapy’ or experience gradual changes? How to deal with the privatization of state-owned institutions? The following lines objectively question how the well-being of the East-European nation has changed in 20 years since the collapse of the Soviet Union, and in the course of the country’s integration into the EU. The authoress also answers whether a small country like Latvia can actually preserve both its political and economic sovereignty. On a bigger scale, the findings suggest that the well-being in the Latvian SSR was better than it is today, while others strongly disagree. Furthermore, the authoress concludes that Latvia had to sacrifice its economical sovereignty in order to preserve its political independence. Is any other choice conceivable, now or in future?

* * * *
The Republic of Latvia is a small country situated on the Baltic coast, in Eastern Europe. The estimated population of 2012 slightly exceeds 2 million. 60% of the population is ethnic Latvians, while a significant part, i.e. 27.3%, is Russian, demonstrating the legacy of the past. (Eurostat, 2012)

Just slightly over 20 years ago Latvia was under the Soviet rule and Communists were the ones who had the power to make decisions. The government of Latvia was not recognized by the international community. The nation itself experienced the Soviet economic and political system. In other words, during the time of occupation, Soviet Union introduced the Russian language into all aspects of everyday life. The intelligence was deported and a 5-year economy plan led to empty store shelves and starving people. Even though the productivity of the agricultural sector was high, all harvest was transported to other Soviet territories. Nevertheless, industrial capacity was significantly improved, employment was high, education was for free, and most of the basic needs of the nation, such as housing, were satisfied.

Latvia’s de facto sovereignty was recognized in 1991, and the first years of independence were spent developing a functioning state. The most difficult tasks facing the government were the creation of administrative bodies, reforms in the health and education sector and also a much needed shift from a planned economy to a market economy. When a political stability was reached and reforms initiated, the nation became increasingly concerned about the preservation of its statehood, so in 1995 the Latvian authorities adopted a statement defining foreign policy goals. They argued that the sovereignty can be strengthened through early integration into the European and world-wide security and political and economic structures. Latvia became a member state of the UNO in 1991, and joined the EU and NATO in 2004. (Jundzis, 2010)

However, clear existence goals for the country were absent for the first decade of independence. While political sovereignty was at the top of the agenda, the majority of the society believed that the continuous increase of average human well-being and a long-term conservation of cultural heritage and Latvian language should be the goals. Even though the initiated reforms strived for improved living standards, similar to those of many Western countries, and increased individual freedom and protected rights, many question whether these reforms and integration into the EU have supported the achievement of one of the main goals – improved human well-being in Latvia. (Pabriks & Purs, 2001)

The Human Development Index, published by UNDP, assesses the long-term progress of human development regarding a long and healthy life, access to knowledge and a decent standard of living. The overall human development value in Latvia has been positive as the HDI value has risen from 0.693 (1990) to 0.805 (2011). Hence, the statistics rank Latvia among other high human development countries. (UNDP, 2011)

The majority of indicators, compared from 1990 to 2010, have followed a positive trend. Very often the development was slow during the first years of independence when the reforms were launched. Years later, in the 21st century, especially after Latvia’s accession to the EU, human well-being improved more rapidly until the crisis in 2008 which resulted in its decrease. Nevertheless, improved absolute numbers should not be overestimated.

The previously centralized health sector has experienced notable reforms in the last 20 years; thus, the health condition of the inhabitants of Latvia has improved. The system was decentralized; hence, it entitled the foundation of private health care institutions; thereby, the health care became more accessible and more qualitative, as displayed in Figure 1. Furthermore, as the health expenditure of the state’s budget has increased and the money from European funds can also be received, new technologies have been implemented. At the same time, more and more people are unable to afford the health care services due to the growing prices.

Figure 1 Satisfaction of surveyed population of health care system (quality, price, accessibility) in Latvia during three different time periods

One can say that in the Soviet Latvia general care was easily accessible, but, when it came to a very specific treatment, it was challenging to find a proper physician. On the plus side, nowadays there are various physicians specialized in their fields; however, sick people might have to pay for treatment out of their own pockets in order to receive help without waiting. Consequently, many people are unsatisfied with prices of medical care in Latvia. On the bright side, the quality of care provided has definitely improved over the past 20 years.

Despite advancements and reforms in the health care system, demographics are in recession, which is a serious threat to the country’s succession. A natural decrease of population due to lower fertility rates and a considerable migration outflow (especially within the first years of the collapse of USSR and after Latvia’s accession to the EU) has contributed to the fact that the population has decreased from 2.67 million in 1990 to 2.24 million in 2010. As a consequence of smaller number of new-borns and rising life expectancy, the population is aging, which imposes an increasing burden to the economically active part of the population to finance the retired people.

Unfortunately, not only is financing the retired people a serious issue, but also a complete burden to costs of primary goods which have increased. Thus, paying for one’s own needs is becoming harder. The results of surveying 130 people suggest that in the Latvian SSR more than 60 per cent of the representative sample had funds to pay for all basic needs, such as food, housing, health care, education. Currently, less than 40 per cent of respondents have means to pay for all these needs. The proportion of people who can finance their needs just partially has risen from 29 to 47 per cent.

Figure 2 Ability to finance the basic needs (food, education, health care, housing etc.)

Even though the absolute income has increased, the amount of people earning less than the subsistence minimum is rising, especially in the rural areas. It has to be mentioned that the content of Latvia’s subsistence basket has not been revised since the first year of renewed statehood; thus, in reality, it does not contain all goods and services required for living decently. Furthermore, since the accession to the EU, prices have risen rapidly. For instance, total housing costs have increased significantly - in the USSR the rent and public utilities were highly subsidized by the government, whereas in 2005 the average housing costs amounted to 80 US dollars and 170 dollars in 2009. (Central Statistical Bureau of Latvia, 2011) These costs are borne by the private sector and the burden is becoming heavier due to lower income compared to the costs themselves. The situation is even worse, considering the fact that the proportion of overcrowded households is one of the highest within the EU. If people lived in and paid for apartments so that they were not characterized as overcrowded, the housing costs would be even higher compared to their income. Many people agree that they enjoyed much better housing conditions when they were a part of the communism country.

Similarly, the respondents of the survey mentioned that the Soviet Times guaranteed a certain security regarding employment. The majority of the economically active population was employed in the Latvian SSR compared to the 16 per cent unemployment level in 2009. (Central Statistical Bureau of Latvia, 2011) Even though the absolute remuneration was considerably lower in the Soviet times, it had more purchasing power. On the other hand, the labor market is becoming more knowledge intensive, and the workers – more educated and better specialized in their professions. Working conditions have also improved significantly, partly because of the regulations of the ILO.

Transformation to knowledge-based economy has been supported by the development of the education system which is highly recognized by international surveys. High literacy and enrollment ratios are requirements for the nation to educate people who can efficiently participate in such natural resource-scarce economy. Smart people are one of Latvia’s major assets. Nevertheless, the state has to further advance its education system, as remarks from the Soviet system are still present (books, teaching concepts, teachers etc.). Furthermore, the government has to understand the role of education expenditure. Ongoing budget cuts on education sector deteriorates the quality, as teachers and professors lose their motivation and pupils and students become more motivated to enroll in universities abroad.

The EU has provided significant advantages to the Latvian population, especially the youth which now is eligible to study permanently or temporarily at foreign universities, enjoying the same terms and conditions. Also, to the people who are entrepreneurial, open-minded and have a certain understanding of how to take an advantage of new business opportunities. The EU has also contributed to the modernization of hospitals, schools and the infrastructure. Furthermore, the EU sets standards as well as observes the development of human well-being; therefore, Latvia is motivated and under a pressure to demonstrate continuous advancement. As a result, the nation believes that the health and education systems have been improved and provide higher quality and accessibility. Nevertheless, given their income level, they are discontent with the prices of the tertiary education and specialized health care services. On the other hand, the Soviet government paid for housing, education and health care thus more resources were available for food items, leisure time, clothing, and also the employment ratio in the Latvian SSR was close to 100 per cent. Therefore, there are people who believe that the communism times ensured better well-being. In addition, the equality within the population was much higher. However, as very often respondents mentioned, everybody was equally poor. Nowadays, the income polarization is a significant issue.

To complete the picture about human development trends in Latvia, which have followed different directions, it is worth referring to the final question of the conducted survey. It asked the respondents when, in their opinion, the well-being was the highest: in Soviet Latvia, in Latvia before joining the EU or in Latvia which is a member state of the EU. As the graph illustrates, the opinions vary – approximately every third of the respondent pool shares a different view, which simply further proves the finding that there are indicators which have improved along the movement towards Europe and there are aspects which so far the sovereign Latvia has not been able to offer its people as it was done by the USSR.

Figure 3 The period of the highest human well-being in the opinion of the respondents

In order to succeed and reach the well-being benchmark set by the Union, first of all, a sustainable economic growth is needed, resulting in means which could shift into a social system. Additionally, the political powers have to cooperate with the society ‒ finding a common ground, establishing goals that are seen as important and beneficial to the state itself and its population. It is of utmost importance to assure that the population lives decently, meaning, their basic needs, such as food, housing and health care, are satisfied. It should be the main goal of the government, thereby increasing the satisfaction and loyalty of the population to the state. Hence, the society would be willing to contribute to the development process, also by properly paying taxes.

Furthermore, lessons from the past should be learned. One of the main arguments for Latvia entering the EU was the economic advancement. As tariff and non-tariff barriers would be abolished, the trade between the EU and Latvia, especially the export originating from Latvia, would further increase. Productivity would be increased when people started working into more productive sectors. Furthermore, fixed and human capital investments were expected to be attracted via low labor costs, the adoption of EU legislations and additional privatizations. Investments would initiate an upward growth spiral. Nonetheless, skeptics argued that not every person residing in Latvia would benefit. Citizens who benefited the most would be young people, as they would enter better paid jobs, whereas the pensions of retired people would not increase as rapidly as the prices of goods and services. Latvian farms would face serious hardship due to a surplus in the market resulting from foreign competitors that are subsidized by their own governments. (Memo, 2000) They were right. The EU has suppressed the Latvian economy as a result of shutting down industrial plants, uncontrolled FDI inflows, enabling cheap credits, a significant inflation and price increase, and foreign companies creating a competition which small Latvian companies and farmers cannot defeat. The smaller economy led to an increasing budget deficit, external borrowing and, finally, budget cuts demanded by the IMF and the EU, which have harmed the population as their adjusted income is not as high as living costs. One can say that Latvia traded a part of its economic sovereignty in order to ensure its political independence and the population is paying the price.

However, the people living in Latvia have been willing to pay this price for the sake of Latvia’s sovereignty. In a survey, carried out by the national news portal TVNET, it was asked what the biggest threat to Latvia’s sovereignty is. 53 per cent of the 5311 respondents indicated Russia and unknown money influx as the biggest danger. Contrary, just seven per cent perceive integration into the EU and NATO as imminent danger to Latvia’s independence. (LETA, 2004) On one hand, if Latvia had not joined the EU, the threat imposed by a money influx would have been limited, but political independence would have been significantly less insured, suggesting that preservation of economic and political sovereignty is impossible for a small country like Latvia. In words of my former professor: ‘
difference between a dialectic and cyclical history is a distance between success and fall.’ (Bajrektarevic, 2012)

If Latvia had not joined the EU in 2004, it could have taken its time to develop the industries which correspond to the society’s interests, not to the EU regulations. In addition, the migration outflow would have been smaller; therefore, people who are desperately needed in Latvia to cultivate the economy would have been available. Hence, the money influx into an economically stronger country would not have resulted in such a crisis. In this case Latvia would have experienced a slow and stable economic and social welfare growth. However, at some point in time, say 10 years later than the original accession date, Latvia should have joined the EU, as it is too small to be acting alone on the global stage. Latvia does not have significant raw materials or highly developed industries; thus, it lacks international power. Its needs and ideas are heard and pushed forward only in cases when stronger partners share the same interests. The EU is a platform where Latvia can find like-minded countries; therefore, it can find “allies” and together strive for developments and economic and political stability.

As for the Latvia’s situation in the EU, in 2014, Latvia is expected to join the Eurozone if it fulfils the requirements. At the moment, it is believed that Latvia will succeed and be allowed to join, but opinions whether the country really needs to adapt the Euro vary. In September 2012, the public opinion on the Euro adaptation was record low, as only 13% of Latvians support the idea. Being a member of Eurozone would further disable Latvia to control its monetary policy and raise the prices which would not correspond to the income earned by a less productive workforce and industries compared to the ones in other EU states. Therefore, many experts believe that Latvia should postpone its adoption of the Euro until the future of the Eurozone is clearer and Latvia recovers from the economic recession and advances its production regarding productivity and value added.

Once Latvia substitutes its Latvian Lats for the Euro, it will be economically even more dependent from the EU and its regulations, but it would also present new trade opportunities for Latvian companies and therefore cultivate the economy and increase human well-being. The state would also become more credit-worthy to foreign investors. Nevertheless, one should not forget how the FDI affected the economy three years ago. Swedish banks, which acquired Latvian banks, issued loans excessively and irresponsibly during the pre-crisis period; thus, fuelling unsustainable and imaginary private consumption and property prices in the country. Sweden’s position, demanding severe budget cuts that affected education and the health sector, was indicative of their fear of losses in case the loans issued decrease in value due to devaluation. Latvia has to be well prepared before welcoming Euro as a replacement for its Lats, which was only reintroduced in1993.

Keywords: Latvia, European Union, Soviet Union, political sovereignty, economic sovereignty, independence, human well-being, human development, Human Development Index


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Of 9/11 and 11/9 – How did Europe become itself? Taylor & Francis, UK

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Future of Europe Europe’s World, Brussels

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Materiālā nenodrošinātība Latvijā. Riga: 2011.

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Nē Eiropai! Vai Latvijai ir nākotne ārpus Eiropas Savienības? Rīga: JPA.

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Social Policy in Latvia. Oslo: Fafo.

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Is Singapore Western Intelligence's 6th Eye in Asia?
What are the Regional Foreign Policy Consequences?

Murray Hunter

Murray HunterThe largely Anglophile Singapore is an anomaly in South-East Asia. It has staunch connections with the US and Israel, and a network of varied corporate interests all around the world. Singapore is a small primarily non-Muslim city-state surrounded predominantly by much larger Muslim countries. Sovereignty disputes upon the South China Sea are ongoing, and unpredictable events like Sulu militants invading Lahad Datu in Sabah continue to occur. Singapore's security is of prime importance to the nation.

The potency and effectiveness of Singapore's intelligence services was seen in the 1990s with the successful recruitment of Australian intelligence officers to pass on sensitive information to Singaporean intelligence at the DSD (now Australian Signals Directorate) listening station at Cabarlah, near Toowoomba, Queensland.

Even though Singapore has initiated a number of security programs like  the Eyes-in-the-Sky (EiS) program with Malaysia and Indonesia to protect the Melaka Straits, and undertakes joint surveillance of the South China Sea with Malaysia, using land, sea, and air based assets, Malaysia and Indonesia are still very suspicious of Singapore's intentions. In particular, Indonesia is very concerned that Singapore has been colluding with Australia and the United States with spying activities within Indonesia, recently calling the Singapore Ambassador to Jakarta for an explanation. The majority of Indonesia's international telephone and internet traffic is routed through Singapore, which leaves the country very vulnerable to Singapore's SIGINT programs.

Singapore has extensive military links with other nations of the "Western block" with  air force squadrons based in France, the United States, and Australia. These relationships are also firmly embedded in the intelligence arena.

The Singapore Special Branch, was the forerunner to the Security Intelligence Division under the Ministry of Defence (SID) and Internal Security Division (SID) under the Home Ministry. The Special Branch was set up by the British, and later Singaporean operatives were trained by Australians who operated the old Kranji SIGINT listening post, before its closure in 1974. Due to historical reasons, both the SID and ISD have a strong anti-communist culture.  

The role of the SID is to gather and analyze intelligence related to the national security of Singapore. The SID has an external focus and undertakes clandestine activities like it did in supplying weapons to anti-communist fighters in Cambodia during the 1980s. The internal component is the ISD which confronts and addresses threats to national security, international terrorism, border protection, racial tensions, fraud against the state, foreign subversion, and espionage. The ISD controls the internal Security Act which allows for detention without trial for up to two years. It is the ability to incarcerate suspect terrorists for long periods of time without legal redress, not allowed in most "Western" countries, that has allowed the ISD to develop an understanding of the reasons why people become terrorists, valuable knowledge for other Western intelligence agencies. Members of the both the SID and ISD work throughout all parts of the civil service and diplomatic missions around the world. It is believed that even Singapore Airlines and other regional airlines are infiltrated by agents of ISD/SID.

Prof. Murray Hunter,
He has been involved in Asia-Pacific business for the last 30 years as an entrepreneur, consultant, academic, and researcher. Murray is now an associate professor at the University Malaysia Perlis. He'd been also a visiting professor at a number of universities and regular speaker at conferences and workshops in the region. Murray is the author of a number of books, numerous research and conceptual papers in referred journals, and commentator on the issues of entrepreneurship and development in a number of magazines and online news sites around the world. Read other articles by Murray.

The prime SIGINT function in relation to the "five eyes" collaboration according to Philip Dorling of the Sydney Morning Herald is in partnership with Britain, The United States, and Australia in intercepting data and telecommunications by tapping undersea cables that links  Asia, the Middle East, and Europe, under a program called TEMPORA. The two major fibre optic cables are the SEA-ME-WE-3 running from Japan, via Singapore through Djibouti, the Suez, the Straits of Gibraltar, to Northern Germany, and the SEA-ME-WE-4, from Singapore to Southern France. Both these cables come to land on the Western side of Singapore at Naval base in Tuas. Cable interceptions are very important because they carry around 95% of the world's internet traffic. They also carry telephone and SMS data. Singapore intelligence Division plays a major role in intercepting around 30% of the world's data traffic for the "five eyes" network.

One of Singapore's most strategic corporate intelligence assets is SingTel. SingTel owns equity in a number of Asian Mobile networks including AIS Thailand, Telkomsel Indonesia, Airtel Africa and South Asia, Globe Telecom in the Philippines, and Citycell in Bangladesh. One reason why the then Howard Government did not oppose the SingTel takeover of Optus in 2001, which included the Aussat Satellite which carried Australian military communications was because of the close intelligence cooperation Australia had with Singapore, although this was not disclosed to the public at the time. Countries like Indonesia rely very heavily on Singapore owned telecommunications infrastructure. This is worrying to the Indonesian leadership to the point where it is beginning to become an issue within the relationship.

However the role SingTel has played in intelligence has been vitally important to the ability of the US and Australia to expand eavesdropping capabilities in the region. The relationship of SingTel to the intelligence community can be seen by Peter Ong's position on the board of directors as the government representative. Ong who is head of Singapore's public service was before that appointment responsible for national security and intelligence coordination in the Singapore Prime Minister's office.   

Singapore is almost unique where no court warrants are required to make phone taps and data interception. All phone, SMS, and internet activities are closely watched by the ISD. In addition the ISD can access any CCTV around the island state and has the latest facial recognition capabilities, utilize mobile phones and car toll units as tracking devices, as well as tap into credit card data through the local banking system.

The Snowden document releases allege that Singapore diplomatic missions are assisting Australian and US diplomatic missions eavesdrop on telephony, SMS, and other data traffic from their own diplomatic missions within the region. The island state has a number of air assets including C-130 WSO, Fokker 50MP, and Israeli supplied Gulfstream G550 business jets with AEW, SIGINT, and ELINT capabilities. This is now supplemented with E-2C Hawkeyes, and the latest Global-Hawk RQ-4 early warning and SIGINT capability equipped UAVs. These assets undertake maritime surveillance, and signals interception within the South China Sea area. A reliable source also has indicated that there is a signals interception station within the Ministry of Defence Headquarters at Bukit Gombak in Singapore, operating in a similar manner to the ASD facility at Shoal Bay, near Darwin. In addition to being linked with "five eyes" intelligence services, Singapore's Joint Counter Terrorism Centre is also linked with the United States Pacific Command (PACOM) joint intelligence centre.   

Singapore's HUMINT operations were stepped up dramatically after 911 where it was believed the country would be in danger due to its physical location and pro-Western attitudes. Islamist groups like Jemaah Islamiyah (JI), Abu Sayyaf, and Kumpulan Mujahidin Malaysia (KMM) started developing a strong foothold in the region, especially with a number of terrorist attacks in Indonesia. A number of successful arrests were made of terrorists, however the ISD became embarrassed with the escape of Jemaah Islamiyah leader Mas Selamat Kastari from one of its facilities in 2008.

Singapore provides many benefits to the Western intelligence community in terms of special expertise in language, strategic position, and being a member of ASEAN. At the top level Singapore has fostered the development of a number of new think tanks and institutes such as S. Rajaratnam School of International Studies (RSIS) established in 2007, and the Institute for Defence and Strategic Studies (IDSS)within RSIS, where many foreign academic and security experts have been employed to undertake "top-end" security analysis of the region. Some of these institutions are also partly funded by security agencies to undertake specific studies and analysis of interest.

One concern is that this growth in intelligence collection really has very little to do with terrorism and crime, but rather commercial interests. The death of Shane Todd in Singapore sheds a light on the relationship between industry and espionage, where there were concerns that the Chinese phone company Huawei is involved in espionage. Taxpayer money is being used to protect the intellectual property of private corporations.

Even though Singapore has been able to develop some cooperation with regional "allies" through programs like Eye-in-the-Sky (EiS), it is of a very limited nature as each countries forces are not allowed encroach upon  another's territorial waters. ASEAN security summits have really got nowhere. Singapore's enthusiastic participation in "five eyes" surveillance programs has created a foreign policy dilemma as it appears contrary to its own regional interests, and therefore national interests, if the integration of Singapore with the rest of the region through bodies like ASEAN is a priority.  

Singapore has failed to be a major shaper of the ASEAN agenda. Singapore's ethnic make-up has not assisted it in developing any special relationship with China. Singapore is fast becoming an Asian anomaly, a stranger in its own home, out of synch with the rest of the region. It's a situation not unlike Israel, or Cuba in the extreme. This in the medium to long term will be counterproductive to its own National Security Strategy of prevention, protection, and response, and consequently national security.

This Singapore's ruling elite have trouble seeing this, and as a consequence the very "events" they may be trying to prevent occurring on Singapore shores, may become more highly probable. This may be so because of the "sphere orientation" Singapore's cooperation with "five eyes" countries is creating, in relation to the rest of the region. Consequently Singapore must expect many more "please explain" requests from its near neighbors if it continues to carry on with the occidental "five eyes" countries without developing some form of "local intelligence" arrangement within ASEAN itself. However, the lack of cooperation within ASEAN over AEC project doesn't generate much optimism in this respect.

Island Singapore may thus just remain Island Singapore in an estranged relationship with the region it cannot geographically escape from.


In Defense of Cross-Fertilization: Europe and Its Identity Contradictions

Aleš Debeljak

Where does Europe end? The question of boundary has been discussed for quite some time. It is an old one indeed, going back to the destruction of the Jewish temple, the disintegration of the Greek city-states, and the collapse of the Roman Empire. This is what provides historical material for the narrative of what it means to be a European today. The idea of uniting various European lands is also an old one and has seen many different incarnations. One of them was captured well by Charlemagne's motto: Renovatio Imperii Romani or Reconstruction of the Roman Empire. After his kingdom disintegrated, numerous fiefdoms sprung up in its wake. Then, Napoleon conquered large parts of the European continent and made some serious overtures toward what the European Union of today is: the common European Arts and Sciences Academy, the common measures, the common currency, the common Court of Appeals, etc.

Nevertheless, all attempts to build a United Europe were predicated on a perceived difference: us versus them. "Us" stood for the civilized conqueror, whereas "them" referred to the conquered barbarians. It is not just the Roman limes that can be used as a symbolic demarcation between civilization and barbarianism. The European Union continues to emphasize the difference between "us" and "them". It would be nice to be able to talk about a tower of Babel in which everybody is freely mixing with people from different lands, speaking different languages, and practicing different cultures. As we know, that is not the case. However, in a particular sense we are all in the same boat. We are members of the same community if not the same polity. We are all human. Alas, this claim that has often been repeated but very seldom heeded we tend to either dismiss as banal, or attribute it an absolute mandate to change our perspective so as to line it up with the philosophy of German critical theologian Hans Jonas who said: "Live your life so that it will be compatible with sustained human life on Earth".

It is the Earth that represents the ultimate border, the final limes. There is no "them" from this particular perspective, except for the extraterrestrials, of course. This is the entity that falls outside of the terms of contemporary monotheistic pseudo-religion that have been imposed on the globe since the 16th century. I am talking about the capitalist system and its terms under which everything is for sale. We are all buyers and sellers, and we subscribe to the philosophy "I shop, therefore I am". The Earth, though, is emphatically not for sale.

This insight is part and parcel of advanced Western mind. But what exactly is Western mind or, more precisely, Western civilization? Haven't we heard enough of the "West" and the “rest"? Shouldn't we reach for our anti-colonial guns when we hear that? Allow me a quick explanation: I distinguish between the modern Western civilization on the one hand and the Westernistic civilization on the other. I do so by drawing a parallel between the ancient Greek civilization and the Hellenistic civilization. The latter came to the fore after the 4th century BC when the ancient Greek city states collapsed. This led to the emergence of an empire that covered a territory on three continents and spread over the whole known world. Hellenistic civilization was spread over this vast territory by the soldiers of Alexander the Great and was the first example of a global civilization.

In what sense did Hellenistic civilization differ from its original source? The ancient Greek civilization was ultimately territorial. It was anchored in the system of city states in southeastern Europe and the Mediterranean islands and stayed within the limits of this narrowly defined realm. It was the Hellenistic civilization, which emerged after its collapse, that took the ancient Greek legacy and heritage, or, better: its package of ideas and technologies, and turned them into the backbone of its external expansion.

To put it in a simpler way, Hellenistic civilization is a continuation of Greek civilization but is not synonymous with it.  It absorbed new ideas and technologies from various localities that had become parts of the Hellenistic empire.  Alexander the Great actively encouraged mixed marriages between Greek colonists and the local populace. But he also encouraged laboratory experiments in which ancient Greek ideas and technologies entered into a fruitful collaboration with local ideas and technologies, innovatively producing something new. These new products were neither local nor ancient Greek. Instead, they were amalgamations.

I am now going to continue with an analysis of the current conditions. It is very tempting to fall for the siren song of the frequently repeated statement that the contemporary world is divided into two opposed entities: the “West” and the “rest”. This Manichean black and white division of the world appeals to radical left-wingers because it gives ample opportunity for moralizing and wagging a pedagogical finger at the despicable appetites of the West. On the other hand, it turns everybody else into an amorphous and powerless mess.

But the West-versus-the-rest dichotomy also appeals to radical conservatives, like the late professor Samuel Huntington, who saw an impending clash of civilizations. These people pose as defenders of the West as a region with special values that needs to be protected from those who are on the wrong side of Hadrian's Wall - the barbarians, the Third World people or whatever you prefer to call the “Other”.

It would be better to consider an alternative interpretation of the current human condition. We could use the analogy between the Hellenistic and the Westernistic civilization. The latter must not be mistaken for modern Western civilization. Western civilization was decoupled from its base after Columbus's voyage in 1492 and spread after the collapse of the Aztec empire. That was the beginning of globalization. There was a new impetus in the 19th century - a period of colonialism - after which globalization was reshaped into a corporate phenomenon in the 20th and 21st centuries.

The ideas of the ancient Greeks migrated to other places and provided fertile soil for the cross-pollination that produced many new inventions. Likewise, contemporary Westernistic civilization rests on the accomplishments of the modern West but incorporates many elements from various other places that enhance power, prestige, and wealth. But what exactly defines today's global civilization as Westernistic? For a start, the understanding of time and space. Today, an international transaction is inconceivable without it as it rests on mechanical division of time into discrete units (a clock) and larger historical periods (antiquity, Middle Ages, modernity) as well as the arbitrary, yet mandatory, division of time continuum with a zero point that separated the flow of time into “common era” and “before common era”. Despite the fact that the Anno Domini was as a designation recently replaced by a more secular and neutral-sounding “Common Era”, the Latin Christian division of time is unerringly present in the modern Western chronology. Regardless of the specific collective ways of counting time (the Muslims start in early 7
th century, the Jews locate the zero point at the time of creation, etc.), everybody today has to accept and apply this chronology. 

Further: think of Gerhard Mercator who produced the modern geographic map of the world. It is biased in favor of the region his creator was from; nevertheless it is today universally adopted. Even the Ottoman Empire, the greatest Muslim rival of the West, ultimately accepted its world maps even though it meant to overrun ther specific Islamic counting of time. Likewise, the delineation of territories into states with clearly marked borders was a European invention. One must of course not forget the ideologies and collective narratives that were invented by the modern West yet are today globally spread such as the rule of law and parliamentary democracy, communism and nationalism, Nazism and fascism, liberalism and human rights, etc. We are talking about modern Western ideologies or narratives that various peoples in various corners of the planet are using to advance their particular interests.

Japan is a very good example of what it means to live under the aegis of Westernistic civilization yet not be Western. Back in the 19th century, Japan’s elites decided to accept the main elements of the modern Western paradigm, particularly in the area of governance, science, and military matters. It successfully avoided the role of a colony and even became a regional colonial power itself. Although Japan's elites and the population at large have accepted some aspects of Western aspects of economic and business management, they have not given up their local culture. Consider karaoke and sushi, anima and manga. Not only are they still popular in Japan, but they have also been packaged and sold around the globe. 

What we see is a cross-fertilization between modern Western ideas and technologies on the one hand and local cultural artifacts on the other. As you see, I keep emphasizing the role of ideas and technologies. This I do the better to emphasize the tunnel-vision of clash of civilizations that has been given much public currency. The underlying theme in Huntington's notorious thesis is that civilizations act as singular actors and that they are very much akin to states. But that is not the case. Civilizations are not bound by a common territory. It is a mistake to see a civilization as something that is territorially bound. The best way to conceive of civilizations, instead, is to see them as a package of ideas and technologies. These packages or elements thereof do travel and spread as they have the capacity to appeal to peoples across various time and across the globe.

Suffice is to stress that, for example, the Byzantine civilization did not collapse entirely after the fall of the Byzantine Empire in 1453 when its seat at the Bosporus was occupied by the Muslim army. Its modes of thinking and doing things lived on in an altered form in the emerging structure of Ottoman public governance. The institutions that had been devised by the Byzantine Empire survived even though the polity that had given birth to them had ceased to exist. The ideas and the technologies of the Byzantines were given a second life under the banner of the Ottoman Empire.

To sum it up: it seems impossible to think outside the binary dichotomy of "us" against "them" as we perceive ourselves as members of a particular community. Only if we see the planet as the ultimate border will we be capable (though not necessarily willing to do so) of seeing ourselves as members of the very abstract concept, the community of human beings. I understand very well that collective identities in the past 200 years have been based on nations. This is what grabbed the attention and commanded the total loyalty of their citizens. The idea of the European Union is to transcend this parochialism. It is nice but does not go far enough. If the European Union is defined on a cultural basis, we will have the problem of boundaries and will ask questions such as where the European Union ends. Do the countries that carry the legacy of Eastern Orthodox Christianity fit within the framework of secular Europe? Do Islamic civilizations belong in Europe? If we conceive of Europe as of a cultural union, questions of this kind become vexing and divisive. But if we perceive the European Union as a political union, there should be no borders except those that have a political and economic foundation, such as the Maastricht criteria.

This should lead to a disregard for cultural parochialism and an attempt to integrate the entire world in the European Union. That would enable us to keep monotheistic capitalism at bay. I call it monotheistic because it behaves very much like Christianity and Islam and Judaism. It recognizes only one God - Mammon. It is a proselytizing philosophy in the sense that it seeks to convert everybody. It also engages in existential cleansing. Whatever cannot be transferred onto a datasheet and cannot be calculated in terms of the bottom line must perish. But if we treat the planet as something that is not for sale, we might stand some hope of learning from the historical divisions that have wrecked communities, split them and kept them asunder and subjugated them to the global order of modern corporate capitalism. On the other hand, sustainable development should take into consideration the ultimate limits of the planet where nobody is a barbarian and everybody is a member of one, all-encompassing civilization that is striving to achieve a common goal. This is a utopian pursuit that is however worth pursuing. It is, after all, a longing for the unattainable that, regardless of place of residence, animates the human soul.



The emergence of the Bhikkhuni Sangha (monkhood for women) in Thailand -
Murray Hunter

North Korean Leadership Upheaval: Voices from the South

      20 Years to Trade Economic Independence for Political Sovereignty - Eva MAURINA

Is Singapore Western Intelligence's 6th Eye in Asia?- Murray Hunter

     In Defense of Cross-Fertilization: Europe and Its Identity Contradictions - Aleš Debeljak

     Malaysia: Why the Pakatan Rakyat does not deserve to be the Federal Government - Murray Hunter

The Germans to the Front? - Dr. Hubertus Hoffmann

The Australian security state is collecting intelligence on an Orwellian scale never seen before
- Murray Hunter

Has an 'out of control' intelligence community compromised 'Australia in the Asian Century'?-Murray Hunter

The European Court of Justice of Human Rights and Bosnia

The Australian Government's new stance on human rights?
- Murray Hunter

      NATO rejects Bosnia and Herzegovina due to Russia's influence - Bakhtyar Aljaf

      The immorality of Australia's prostitution laws
- Murray Hunter

Australian Election: Abbott as PM may surprise everyone
- Murray Hunter

      Malaysia: Desperately needing a new national narrative - Murray Hunter

      One Man's view of the world and a thousand faceless men: Singapore's cadre system - Murray Hunter

      How important is the Australian Election? - Murray Hunter

      El Indio: Seeking Symmetry - By Jamil Maidan Flores

Australian Immigration - the Snowden link? - Murray Hunter

      Sarawak Reenacts Independence from Britain 50 years Ago -Murray Hunter

      The return of Kevin Rudd as Australian PM: For how long? - Murray Hunter

      Reinvigorating Rural Malaysia - New Paradigms Needed - Murray Hunter

      Can there be a National Unity Government in Malaysia? - Murray Hunter

      Will Australian Labor Remain Principled and fall on its own Sword? - Murray Hunter

      Finding a long term solution in the 'Deep South' of Thailand - Murray Hunter

      Islamic Freedom in ASEAN - Murray Hunter
      Multiculturalism is dead in Europe – MENA oil and the (hidden) political price Europe pays for it - Author: Anis Bajrektarevic

      Malaysia: It was Never About the Election It was always about what would happen afterwards - Murray Hunter

      Enriching the Sustainability Paradigm - Murray Hunter
      Does Australia's 2013 Defence White Paper Signal a Strategic Withdraw? - Murray Hunter

      Where is Saudi Arabian Society Heading? - Abdullah Abdul Elah Ali Sallam & Murray Hunter University Malaysia Perlis

      Critical Similarities and Differences in SS of Asia and Europe - Prof. Anis H. Bajrektarevic

      Searching for an end game in the Korean Crisis - Murray Hunter

      Turks suspicious towards German Government - Dr. Hubertus Hoffmann

      The high Australian Dollar: Whose interests is the Reserve Bank of Australia looking after? - Murray Hunter

      Is Secretary Kerry's trip to China a "face saving" measure? - Murray Hunter

      Asia-Pacific at the Crossroads - The Implications for Australian Strategic Defense Policy - Murray Hunter

      Obama's Korean Peninsula "Game" Strategy seeks to achieve a wide range of objectives in his "Asian Pivot" - Murray Hunter

      Institute for the research of genocide - IGC Letter Regarding Vuk Jeremic Agenda in UN

      Who rules Singapore? - The only true mercantile state in the world - Murray Hunter

      The Thai Deep South: Both Malaysia and Thailand Desperately Seeking Success - Murray Hunter

      The desperate plight of Islamic education in Southern Thailand - Murray Hunte

      Who makes public policy in Malaysia? - Murray Hunter

      MENA Saga and Lady Gaga - (Same dilemma from the MENA) - Anis H. Bajrektarevic

      Australia's National Security Paper: Did it amount to lost opportunities? The policy you have when you don't have a policy - Murray Hunter

      Are "B" Schools in Developing Countries infatuated with 'Western' Management ideas? - Murray Hunter

      The Stages of Economic Development from an Opportunity Perspective: Rostow Extended - Murray Hunter

Who Really Rules Australia?: A tragic tale of the Australian People - Murray Hunter

      Europe: Something Old, Something New, Something Borrowed, and Something Blue - Murray Hunter

      Back to the future: Australia's "Pacific Solution" reprise - Murray Hunter

      Hillary to Julia "You take India and I'll take Pakistan", while an ex-Aussie PM says "Enough is enough with the US" - Murray Hunter

Entrepreneurship and economic growth? South-East Asian governments are developing policy on the misconception that entrepreneurship creates economic growth. - Murray Hunter


Australia "Do as I say, not as I do" - The ongoing RBA bribery scandal - Murray Hunter

      Australia in the "Asian Century" or is it Lost in Asia? - Murray Hunter

      Surprise, surprise: An Islam economy can be innovative - Murray Hunter

      Do Asian Management Paradigms Exist? A look at four theoretical frames - Murray Hunter

      What China wants in Asia: 1975 or 1908 ? – addendum - prof. dr. Anis Bajraktarević

ASEAN Nations need indigenous innovation to transform their economies but are doing little about it. - Murray Hunter

      From Europe, to the US, Japan, and onto China: The evolution of the automobile - Murray Hunter

      Missed Opportunities for ASEAN if the ASEAN Economic Community (AEC) fails to start up in 2015 - Murray Hunter

      Lessons from the Invention of the airplane and the Beginning of the Aviation Era - Murray Hunter

      Elite educators idolize the “ high flying entrepreneurs” while deluded about the realities of entrepreneurship for the masses: - Murray Hunter

      The Arrival of Petroleum, Rockefeller, and the Lessons He taught Us - Murray Hunter - University Malaysia Perlis

      Ethics, Sustainability and the New Realities - Murray Hunter

      The Dominance of “Western” Management Theories in South-East Asian Business Schools: The occidental colonization of the mind. - Murray Hunter

      How feudalism hinders community transformation and economic evolution: Isn’t equal opportunity a basic human right? - Murray Hunter

      On Some of the Misconceptions about Entrepreneurship - Murray Hunter

      Knowledge, Understanding and the God Paradigm - Murray Hunter

      Do Confucian Principled Businesses Exist in Asia? - Murray Hunter

      Samsara and the Organization - Murray Hunter

Integrating the philosophy of Tawhid – an Islamic approach to organization. - Murray Hunter

      What’s with all the hype – a look at aspirational marketing - Murray Hunter

      Does Intrapreneurship exist in Asia? - Murray Hunter

      One Man, Multiple Inventions: The lessons and legacies of Thomas Edison - Murray Hunter

     People tend to start businesses for the wrong reasons - Murray Hunter

     How emotions influence, how we see the world? - Murray Hunter

     How we create new ideas - Murray Hunter

     Where do entrepreneurial opportunities come from? - Murray Hunter

     The five types of thinking we use - Murray Hunter

     Evaluating Entrepreneurial Opportunities: What’s wrong with SWOT? - Murray Hunter

     How motivation really works - Murray Hunter

     The Evolution of Business Strategy - Murray Hunter

     Not all opportunities are the same: A look at the four types of entrepreneurial opportunity - Murray Hunter

     Do we have a creative intelligence? - Murray Hunter

     Imagination may be more important than knowledge: The eight types of imagination we use - Murray Hunter

The environment as a multi-dimensional system: Taking off your rose coloured glasses - Murray Hunter

     Generational Attitudes and Behaviour - Murray Hunter

     Groupthink may still be a hazard to your organization - Murray Hunter

  Perpetual Self conflict: Self awareness as a key to our ethical drive, personal mastery, and perception of entrepreneurial opportunities - Murray Hunter

     The Continuum of Psychotic Organisational Typologies - Murray Hunter

There is no such person as an entrepreneur, just a person who acts entrepreneurially - Murray Hunter

     Go Home, Occupy Movement!!-(The McFB– Was Ist Das?) - prof. dr. Anis Bajrektarevic

     Diplomatie préventive - Aucun siècle Asiatique sans l’institution pan-Asiatique - prof. dr. Anis Bajrektarevic

Democide Mass-Murder and the New World Order - Paul Adams


Koninkrijk Belgie - Monarchie Belgique

Maasmechelen Village

Maasmechelen Village


Važne vijesti

Важни новини

Notícies importants

Důležité zprávy

Vigtige nyheder

Belangrijke nieuws

Important News

Tähtis Uudised

Nouvelles importantes

Wichtige News

Σημαντικές ειδήσεις

Fontos hírek

Fógra tábhachtach Nuacht

Importanti novitŕ

Svarīga Jaunumi

Svarbu Naujienos

Importante Notícias

Pomembne novice

Noticias importantes

Viktiga nyheter


prof. dr. Anis Bajrektarevic
prof. dr. Anis Bajrektarevic

MENA Saga and Lady Gaga - (Same dilemma from the MENA) - Anis H. Bajrektarevic

Go Home, Occupy Movement!! - (The McFB – Was Ist Das?) -
prof. dr. Anis Bajrektarevic

Diplomatie préventive - Aucun sičcle Asiatique sans l’institution pan-Asiatique - prof. dr. Anis Bajrektarevic\/span|

prof. dr. Anis Bajrektarevic

Gunboat Diplomacy in the South China Sea – Chinese strategic mistake -
Anis H. Bajrektarevic

Geopolitics of Quantum Buddhism: Our Pre-Hydrocarbon Tao Future
prof. dr. Anis Bajrektarevic

The Mexico-held G–20 voices its concerns over the situation in the EURO zone - Anis H. Bajrektarevic

What China wants in Asia: 1975 or 1908 ? – addendum - prof. dr. Anis Bajraktarević

‘The exhaustion of Greek political system and a society in flames’ - by Dimitra Karantzen

Maasmechelen Village

Maasmechelen Village


Institute for the research of genocide - IGC Letter Regarding Vuk Jeremic Agenda in UN

Critical Similarities and Differences in SS of Asia and Europe - Prof. Anis H. Bajrektarevic

MENA Saga and Lady Gaga - (Same dilemma from the MENA) - Anis H. Bajrektarevic

Le MENA Saga et Lady Gaga - (Même dilemme de la région MOAN) - Anis Bajrektarevic

20 Years to Trade Economic Independence for Political Sovereignty - Eva MAURINA

Aleš Debeljak
In Defense of Cross-Fertilization: Europe and Its Identity Contradictions - Aleš Debeljak