Haiti and Its Cost of Freedom

The Haitian Revolution was one of the largest and most successful slave rebellions in history. Over 12 years of uprisings formerly enslaved Africans overcame colonial rule. This ended slavery in France’s most profitable colony and established the first independent black republic in the Americas.

In the 18th century, the white population made up 40,000 of Saint-Domingue’s residents. The slave population was close to half a million – outnumbering them 10 to one. The slave rebellion in 1804 gained Haitian independence from France. The French government however demanded compensation for the loss of their property and slaves. In fear of invasion, Haiti agreed to pay back a sum of 90 million gold francs over the following 122 years. Haiti, in effect, was forced to pay reparations for its freedom.

This history is not as distant as it may seem. It set the stage for many decades of Haitian economic misery and underdevelopment to come—the country, one of the poorest nations in the Western hemisphere, did not finish repaying its 19th century debts to France and the U.S. until the middle of the 20th century.

Source: UNICEF

In 2004, the President at the time Jean-Bertrand Aristide suggested that France should repay $21 billion in reparations for this money extorted after independence. Soon after making this suggestion, the democratically elected president Aristide was overthrown by a military coup supported by the USA.

While France belatedly offered a public apology for the history of slavery that shaped the Caribbean, and cancelled Haiti's $77 million debt following the cataclysmic 2010 earthquake, the country remains impoverished and vulnerable to disasters and climate change. Loans have continued to be given, and the IMF ranks Haiti as at high risk of another debt crisis. Activists say that the indemnities unjustly forced on Haiti more than a century ago must be reversed. Some calculate that returning all those 19th century gold francs would add up to about $17 billion.

The resulting racial wealth gap is no metaphor. In metropolitan France, 14.1% (2017) of the population live below the poverty line. In Martinique and Guadeloupe, in contrast, where more than 80% of the population is of African descent, the poverty rates are 38% and 46%, respectively. The poverty rate in Haiti is even more dire at 59% (2014). And whereas the median annual income of a French family is $31,112, it’s only $450 for a Haitian family (source: https://en.wikipedia.org/wiki/Median_income).

In May 2015, when French President François Hollande became only France’s second head of state to visit Haiti, he admitted that his country needed to “settle the debt.” He then clarified that it was a “moral” debt, not a financial one. "No negotiation, no compensation can repair the wounds of history that still mark us today," Haiti's President Michel Martelly told French President Francois Hollande. "Haiti has not forgotten, but Haiti is not stubborn."

Meanwhile, Haiti wallows in misery while France ignores its financial obligation. Why can’t people see the injustice especially the French who uphold their national motto of liberty, equality and fraternity?

 

Reference:

1.     Haiti: Free from slavery, not yet free from debt https://jubileedebt.org.uk/

2.     Ishaan Tharoor, Is it time for France to pay its real debt to Haiti? 13 May 2015, The Washington Post

3.     Marlene Daut, When France extorted Haiti – the greatest heist in history 30 June 2020, The Conversation

4.     Lucy Campbell, Ten black history events that should be taught to every pupil, 11 Oct 2020, The Guardian

 

What Ails Prasarana Malaysia Bhd (“Prasarana”)?

 

Prasarana is a wholly-owned unit of Ministry of Finance. As at end 2019, Prasarana had total assets of RM1.3 billion with total liabilities at RM35.38 billion.  (Possibly with impairments of RM30 billion the assets recorded is significantly lower (The Edge, Aug 5, 2019)). Accumulated losses stood at RM42.41 billion. For 2019, it suffered an after-tax loss of RM3.61 billion. Recently, its CEO was suspended for “insubordination”. He was appointed only in July 2020. The insubordination was in respect of not investigating MRCB-George Kent for the construction of LRT3. That was presumably a Board directive. Prasarana has a “colourful” Chairman – Datuk Seri Tajuddin Rahman, the MP from Pasir Salak.

The Edge (Dec 28, 2020) revealed that Tajuddin, who was appointed Chairman on May 11, had sought the termination of the contractors of the transport-oriented development at the Dang Wangi light rail transit (LRT) station. Prasarana may also move its office to this new development. The project going on at the LRT station is Latitud 8, a mixed-use commercial development with a gross development value (GDV) of RM1.2 billion. According to reported documents, Prasarana may have to fork out as much as RM80 million to terminate the joint land development agreement (JLDA).

The companies involved in the construction of Latitud 8 include public-listed Crest Builder Holdings Bhd and its 51%- unit Intan Sekitar Sdn Bhd. The remaining 49% of the company is held by Detik Utuh Sdn Bhd.

Detik Utuh’s shareholders are Tindakan Juara Sdn Bhd (40%), Obata-Ambak Holdings Sdn Bhd (35%) and Vignesh Naidu Kuppusamy Naidu (25%). Tindakan Juara is 35% owned by Sri Rahayu (Tajuddin’s daughter), 35% by Datin Seri Rohkiah Abd Samat and 30% by Firdaus Tajuddin. Rohkiah is Tajuddin’s wife while Firdaus is his son.

Rohkiah and Firdaus were appointed to the board of Tindakan Juara in early 2007, about four months after the company was registered. Sri Rahayu was appointed to the board in February 2010.

Crest Builder and Detik Utuh won the bid to develop the 2.72-acre or 1.09ha tract on the site of the Dang Wangi LRT station at end-March 2012. Prasarana, which owns the land on which the development was slated to take place, was to receive RM46.64 million or 21.2% of the project’s estimated GDV of RM220 million. Since Tajuddin, who is Member of Parliament for Pasir Salak, Perak, was appointed Chairman of Prasarana in May this year, it would indicate that he and his family were involved in the project even before he held the position.

According to Crest Builder’s annual report for FY2019, the Latitud 8 development has already commenced the main building works. The launch of the development was slated for end-2016, according to news reports, but it never happened. In 2019, there was talk of a change and a resubmission of plans to the local authorities. Earlier, the plan was for a single block of 43 storeys, with 17 storeys of office space and 418 SoHo units on top of the offices, as well as a retail podium, all located above the Dang Wangi LRT station. News reports published in 2019 say construction was halted, with the date of a relaunch of the project in 2020.

There are inconsistencies, conflicts of interest and huge liabilities/ accumulated losses that may never end for Prasarana. Shouldn’t there be a complete audit, overhaul, restructuring of this massive public sector entity? Prasarana needs professionals and transport experts to determine its future not politicians with vested interests!

 

Reference:

 

1.     Newsbreak: Prasarana chairman Tajuddin exerting his authority, 28 Dec 2020, The Edge

2.     Newsbreak: Impairments at Prasarana for FY2018 could exceed RM30 billion, 5 Aug 2019, The Edge

3.     Newsbreak: After Prasarana’s sound and fury, the chairman has to go, 5 Jan 2020, Free Malaysia Today

 

Our Top 5 Most Popular Blog Posts in 2020:

 

1. SMEs Shut Down – 30k or 100k?

2. “Why Nations Fail”

3. What Malaysian Leaders Earn Compared to Their Citizens

4. EPF’s Big Sell-Off!

5. “Dr. Doom” Predicts Greater Depression of the 2020s

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Fake Goods Are Putting Lives at Risk?

The filter material of a true three-ply mask is made from plastics, such as polythene and polypropylene. Hence when lit up, instead of producing sparks, they melt. But if it is made from paper or a mixture of plastic and paper, then there would be “some kind of fire”.

According to CNA, in March 2020, The International Criminal Police Organization (INTERPOL) led enforcement agencies from 90 countries to scour the Internet for fake medical items. In one week, they uncovered around 600 cases of counterfeit surgical masks sold online. It led to the seizure of 34,000 fake or sub-standard masks.

One of the countries that is engaged actively in this operation is Malaysia. The problem of counterfeit is now endemic. Fake masks are not only counterfeits in circulation but has a health impact on Malaysians. Today, counterfeiters are targeting a range of goods, from high-street beauty products — which can spark skin allergies — to car spare parts, with implications on road safety.

Among the most dangerous of these products are falsified medicines, of which an increasing amount is being produced and sold in Southeast Asia. This was reported by the United Nations Office on Drugs and Crime last year. Every year, consumers in the region spend an estimated US$520 million to US$2.6 billion on falsified medicines. And it ranges from anti-cancer treatments to drugs for infertility and weight loss.

According to Malaysian pharmacist Zeff Tan, there are two types of counterfeit medicines. The first type has no active pharmaceutical compound or contains the ingredients only partially. “If you're taking counterfeit blood pressure medicine, your blood pressure wouldn’t be well-regulated,” he said by way of example. “One tablet has the compound; another tablet is a placebo. So, on one day, your pressure is controlled; while on another day, it isn't controlled. You're risking your life.”

https://theshaderoom.com/

Alcohol without proper processing also has serious adverse effects on health. Properly produced and certified alcoholic drinks are made with ethanol. Drinkaware’s Chief Medical Advisor Professor Paul Wallace explains: “Commonly used substitutes for ethanol include chemicals used in cleaning fluids, nail polish removers and automobile screen wash, as well as methanol and isopropanol.” Drinking alcohol containing these chemicals can cause nausea and vomiting, abdominal pain, drowsiness and dizziness. Drinking it can also lead to kidney or liver problems and even induce a coma. Methanol, the substance which has been found in fake vodka, causes permanent blindness.

Many Malaysians are price oriented. Hence the market for fake products. We as consumers should be aware that fake products are dangerous to health. Buying cheap, especially a drug, is worrisome. And counterfeit alcohol with a discount of up to 80 per cent is not worth your life. But some people don’t really bother whether it is real or fake and end up dead. That’s not because we don’t have laws but just that enforcement is lax, or corruption is rife.

 

Reference:

1.     From face masks to alcohol, fake goods in Malaysia are putting lives in danger, 27 May 2020, CNA Insider

2.     The dangers of fake alcohol https://www.alcoholandyouni.com/

 

Bitcoin Gained More Than 300% in 2020

Bitcoin extended its recent run-away rally, breaching US$33,000 for the first time ever on 1^st January 2021. The digital currency advanced more than 300 percent in 2020. The latest leg has added more than 50 per cent since crossing US$20,000 just weeks ago.

Bitcoin is now being perceived as an inflation-hedge and an asset with a potential to give quick returns. Bitcoin has outperformed safe havens like gold and the SP500. 

"It's very likely that the Bitcoin will eventually pass US$100,000 per coin," Sergey Nazarov, cofounder of Chainlink, a global blockchain project. "People have been steadily losing faith in their currencies for years, and the monetary policies resulting from the economic impact of the coronavirus have only accelerated this decline."

Multiple competitor cryptocurrencies use similar blockchain, or electronic ledger, technology. Ethereum, the second biggest, gained 465 percent in 2020.

However, Hitesh Jain, vice president of Yes Securities Ltd.’s Research does not think so. “Ultra- cheap money pumped in by global central banks has found its way into many assets, including bitcoin. We are in a scenario where safe-havens and riskier assets are all rallying simultaneously, which is a theoretical contradiction. So much so that even negative-yield bonds are garnering inflows. It has become like hunting with the hounds and running with the hare."

Some analysts in the bearish camp also drew parallels between the current bitcoin rally with that of 2017. They said a crypto rally, which sees allocation shift from safer to riskier assets, is often followed by a deep correction. In 2017, bitcoin had rallied from the low of around $790 to a peak of $19,041 in December. Interestingly, in a December 2017 BofA survey, bitcoin topped the list of most crowded trades. In 2018, it crashed by 74%.

Another indicator that is flashing red is the bitcoin-gold ratio, which has risen from the levels of 1.1 to 15 in recent months. “Since both gold and bitcoin have finite supply, the bitcoin-gold ratio gives us a sense about which of the two is overvalued. Data shows that the former is poised for a correction," said Sugandha Sachdeva, vice-president, metals, energy and currency research, Religare Broking Ltd.

Foreign research house Jefferies has, for the first time, included bitcoins in its asset allocation for pension funds. It has cut allocation to gold by 5% in favour of bitcoin. Whether Bitcoin is worth to invest, it is up to your perception. Is Bitcoin undervalued or is it just a bubble? What we are sure is that both Bitcoin and gold are true havens from the ever-weakening fiat currency fiasco unfolding in the Covid and soon to be post-pandemic world. Gold fits the bill, but Bitcoin may fit the future better.

 

Reference:

1.     Bitcoin rallies above US$30,000 for first time, 2 Jan 2021, CNA

2.     Bitcoin could quadruple in 2021 as the digital currency sees a rally similar to 2017, Fundstrat's Tom Lee says, 3 Jan 2021, Business Insider

3.     Harsha Jethmalani, 2020 was great for bitcoin but experts are wary of a correction, https://www.livemint.com/

Drug prices: Profits before Patients?

Source: Corbis

The pharmaceutical industry has been responsible for a host of medical miracles over the past century, from disease-eradicating vaccines to revolutionary new treatments for a wide range of cancers and long-term chronic conditions like diabetes. Research undertaken by private pharmaceutical companies and bio-tech firms, alongside public research institutions, has improved the length and quality of millions of lives.

In the US, for example, annual cancer care costs are expected to rise from $104bn in 2006 to $173bn in 2020, according to the American Society of Clinical Oncology. A major component of that increase is the rising number of cancers along with other factors. Data from the Memorial Sloan Kettering Cancer Centre shows that 15 cancer treatments launched in the last five years cost more than $10,000 a month, and many existing drugs are getting pricier every year. The cost of innovative, patent-protected drugs is becoming increasingly difficult for patients and cash-strapped health systems to cover.

According to data from the IMS Institute for Healthcare Informatics, price rises on existing branded drugs accounted for $20bn in the industry's sales growth for 2013, just enough to cover the $19.3bn in lost revenues due to patent expiration.

The mounting cost of drugs has provoked a debate that penetrates to the heart of the pharma industry's business model, including the funding of innovative research.

Researchers writing in the Journal of the American Medical Association (JAMA) investigated the financial balances of pharma companies dealing in the business of developing, manufacturing, marketing and selling drugs. Their calculations found that in the years between 2000 and 2018, 35 big drug companies received a combined revenue of $11.5 trillion, with a gross profit of $8.6 trillion.

One of the key findings relates to the median net income margin—i.e. the percentage of revenue received after all expenses have been deducted from the total. The median net income margin reported by 35 pharma companies between 2000 and 2018 was almost twice as high as it was for the 357 non-pharma companies in the S&P 500 investigated—13.7 percent versus 7.7 percent.

According to Kaiser Health News, 4,311 prescription drugs saw price hikes in 2019, with average increases coming in at 21 percent. In contrast, 619 saw prices dip.

A fundamental issue with the public perception of drug pricing is the yawning gulf between the cost of production and the actual market price.

Campaigners for pharma industry reform want to see more public money spent on early-stage pharma R&D as a way of introducing high-quality but inexpensive and non-exclusive drugs to the market.

The other major disadvantage of the current R&D system is the risk-averse tendency that market forces instil in large pharma companies. Meanwhile, the industry has been increasing the pace of mergers and acquisitions, buying up small teams that have often been publicly funded, and then developing their products to sell at the same monopoly prices. What research money remains naturally flows to the most profitable therapeutic areas, leaving drug pipelines perilously underpopulated for certain conditions.

Clearly the R&D and research funding system is far from perfect, but what's the alternative?

Large-scale public-private research partnerships between the industry and the public sphere would have the benefit of giving governments and taxpayers a much greater say in the industry's drug development priorities. This may open the door to greater innovation in urgently required treatments like, say, new antibiotics to combat the threat of antibiotic-resistant superbugs .And the value of the public sector playing a larger funding role in early-stage R&D is for cheap distribution; otherwise taxpayers are getting the worst possible return on investment.

The debate on drug pricing is really a question of the value that the pharma industry offers to society.

 

Reference:

1.     Drug prices: profits before patients? https://www.pharmaceutical-technology.com/

2.     Rossie Mccall, Big Pharma Companies Earn More Profits Than Most Other Industries, Study Suggests https://www.newsweek.com/

The Century of Humiliation and the Chinese Mindset

Xi Jinping describes the century of humiliation from August 29^th ,1842 to the establishment of People’s Republic of China in 1949. The defeat of China to the British Empire, was the First Opium War. Hong Kong was ceded and five treaty ports opened to international key trade. Beyond that were the following events:

·       Defeat in the Second Opium War (1856-1860);

·       Defeat in the First Sino-Japanese War (1894-1895);

·       The Boxer uprising (1899-1909) and the subjugation by the 8-Nation Alliance;

·       Defeat in the Second Sino-Japanese War (1937-1948)

A troublesome egg to hatch / J.S. Pughe.

https://www.loc.gov/pictures/item/2010651397/

 

In almost all the wars China fought, it was forced to give concessions to the victors, including reparations, opening up ports for trade, lease or cede territories and make other concessions to foreign “spheres of influence”.

Jane E. Elliott criticized the allegation that China refused to modernize or was unable to defeat Western armies as simplistic. China embarked on a massive military modernization in the late 1800s. Buying weapons from Western countries and manufacturing their own arsenal. In addition, Elliott questioned the claim that while Chinese society was traumatized by the Western victories, many Chinese peasants (90% of the population at that time) living outside the concessions continued about their daily lives, uninterrupted and without any feeling of "humiliation".

Historians have judged the Qing dynasty's vulnerability and weakness to foreign imperialism in the 19th century to be based mainly on its maritime naval weakness. It achieved military success against Westerners on land as the historian Edward L. Dreyer said. "China's nineteenth-century humiliations were strongly related to her weakness and failure at sea. At the start of the First Opium War, China had no unified navy and not a sense of how vulnerable she was to attack from the sea. British navy forces sailed and steamed wherever they wanted to go. In the Arrow War (1856–60), the Chinese had no way to prevent the Anglo-French navy expedition of 1860 from sailing into the Gulf of Zhili and landing as near as possible to Beijing. Meanwhile, new but not exactly modern Chinese armies suppressed the mid-century rebellions, bluffed Russia into a peaceful settlement of disputed frontiers in Central Asia, and defeated the French forces on land in the Sino-French War (1884–85). But the defeat at sea, and the resulting threat to steamship traffic to Taiwan, forced China to conclude peace on unfavourable terms."

As China and its international presence grow, greater insight into how China views the world is needed. The West may have forgotten the Opium wars and the burning of the Summer Palace, but the CCP has not.

In recent years, the Century of Humiliation has also been invoked under the current Sino-American trade tensions. This has seen the comparison of the recent American demands to the unequal treaties previously imposed upon China to further nationalist sentiment and to unify China. Alongside the perception that the tensions are an American move to prevent China’s rise, this has been a tool to further China’s resolve, which has been underestimated by Washington.

The Century of Humiliation has been an important part of China’s international relations and has shaped China’s perception of its role. It has also been both the driving force in China’s push for greater status and a means to further Chinese foreign policy objectives. The results of which can be seen globally. China’s ascent demonstrates how the legacy of China’s humiliation continues to have wide-reaching consequences for everyone.

 

Reference:

1.     Century of Humiliation, Wikipedia

2.     Andy S. Lee, A Century of Humiliation: Understanding the Chinese Mindset www.mironline.ca

3.     CIGH Exeter, How the Century of Humiliation Influences China’s Ambitions Today www.imperialglobalexeter.com

 

Happy New Year!