Reshuffle talk if PM keeps job

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Akanat is supported by UTN for supervisory positions.

Prime Minister Srettha Thavisin (photo: Government House)
Prime Minister Srettha Thavisin ( photo: Government House )

If Srettha Thavisin, the prime minister, survives a legitimate action pending a constitutional court ruling the following year, he will be prepared to take a cabinet reshuffle.

He made the remark after Pirapan Salirathavibhaga, the leader of the coalition United Thai Nation ( UTN) Party, proposed the shake-up to allow its secretary-general Akanat Promphan to fill a ministerial post which remains vacant under the party’s quota.

This month, there are a number of issues with the justice program… If a coalition party proposes]a cabinet reshuffle], I am ready to consider it, but I wo n’t do it any time soon because there is a case pending a Constitutional Court ruling. We have to honor the jury earliest”, Mr Srettha said.

In the most recent cabinet reshuffle, the Constitutional Court will decide whether Mr. Srettha will continue as prime minister in spite of his determination to assign ex-convict Pichit Chuenban as the PM’s Office Minister.

40 past senators, who had been found guilty of contempt of court for attempting to reward Supreme Court officers in 2008 while representing former prime minister Thaksin Shinawatra in a contentious area case, filed a complaint in May to ignore the prime minister.

According to a resource in the state, Mr. Pirapan, who likewise serves as the Deputy Prime Minister and Energy Minister, wrote to Mr. Srettha on Saturday to request that he think about reshuffling the case.

A government post under the group’s allotment remains vacant after Krisada Chinavicharana, a previous UTN part, resigned as deputy finance minister in May.

According to the cause, Mr. Pirapan stated in the letter that the group would select Mr. Akanat for any case position created as a result of the changes.

Mr. Pirapan claimed that because the location is still open and Mr. Akanat was well qualified to take over the position, Mr. Akanat, a UTN list MP, appeared to be extremely likely to be the party choice for it.

According to Mr. Pirapan, Mr. Akanat, a UTN record MP, performed well in the past election and has also fulfilled his role as an MP in parliament effectively.

A spokeswoman for UTN’s Ratchaburi, Akkaradet Wongpitakroj, claimed that Mr. Akanat is qualified to serve in the case and that a position under the party’s quota is still open.

” Mr. Akanat’s recognition has been recognized by party members and professionals. He made significant contributions to the preceding election campaign, and he excelled in congress.

After Mr. Pichai signed a document dividing up tasks within the department, Mr. Krisada resigned to Pichai Chunhavajira, the newly appointed finance minister and a deputy prime minister, according to another cause.

Because he has been given the authority to handle just one state agency, the Public Debt Management Office, was this perceived as reducing Mr. Krisada’s supervisory role.

Mr. Krisada stated in his resignation letter that his primary motivations for leaving as deputy finance minister were that he and Mr. Pichai had a unique labor theory and that Mr. Pichai had not treated him with admiration when they collaborated.

However, Wisut Chainarun, a Pheu Thai MP and general government whip, on Monday dismissed speculation that the criticism Democrat Party may be invited to join the coalition government.

There is no need to resign from the partnership because the state has more than enough support among its members.

” With another coalition party joining, issues regarding the limit of cabinet posts did arise”, he said.

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China needs to pick a side, and it just might pick the West – Asia Times

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For the Kremlin, its “partner of no parameters”, China, is n’t doing enough to support Russia’s war against Ukraine. But, Russia has signed a peace agreement with North Korea, hoping to force China into backing Moscow’s battle work more.

However, the West sees China as far to good to Russia. The West’s best observation of the mood came on a conference in Washington, DC on July 10, 2024.

China is a “decisive innovator” of Russia’s war against Ukraine, according to NATO leaders who even called on China to” stop all materials and social support of Russia’s war work.”

To the West, China’s help, though short of real weapons source, is more than enough to power Russia’s war device. This in turn threatens Europe’s stability.

But NATO’s communication and Russia’s inherent script to China seemed to indicate one thing: Beijing’s fence-sitting days are numbered, and it needs to choose a part. However for Russia, China may be forced to find the West.

China has begun to show evidence of its pivot toward the West. In late 2023, there was riddled rumors that China’s tiger diplomacy was about to break up due to the West’s deteriorating relationships.

But in mid-2024, Beijing sent more panda to Spain and Vienna, as well as the US software centre of California. In an effort to strengthen relationships with the West, President Xi Jinping even made position visits to the US, Europe, Australia, and New Zealand.

Beijing’s Russian headaches

Russia and Ukraine are aware of the disastrous effects the conflict has had. Estimates indicate that Putin’s fight in Ukraine may cost Russia US$ 1.3 trillion and at least 315, 000 in troop deaths. But, win or lose, the post-war harm to Russia may be tremendous.

This is terrible news for China. The West will have the freedom to use its tools to deal with the” Chinese risk” because it will have a diminished ally as well.

This issue is n’t false. After all, most Americans regard China as their greatest foe, and they occasionally refer to it as a part of an” axis of evil” along with Russia, Iran, and North Korea.

The Chinese government must therefore prevent Russia losing the conflict in Ukraine from becoming the “target of all arrows” ( ), as the famous Chinese saying goes. The revitalization of tiger politics and the organization’s state visits serve as tools for stabilizing relations with the west and as insurance.

However, NATO’s condemnation of China in July 2024, which echoes a statement made by US Secretary of State Anthony Blinken in late April 2024, suggests that these delicate power efforts are inadequate to satisfy the West.

China needs to hit Ukraine’s government to negotiate peace with Russia. With this, China can focused its efforts on becoming the world’s leader in AI and recovering its ailing economy, while Russia retains its regional strength.

Financial efficiency

For decades, China has been reeling from a real estate issue, a volatile stock market, a large 288 % debt-to-GDP percentage, as well as great youth unemployment.

And lately, as a result of rising demand, Chinese government bond prices recently soared, suggesting that investors are looking for safer investment options.

The Taiwanese government is also dealing with other issues, but they also have one. It has historically used financial performance to validate its rule. Beijing needs to revive its struggling business to keep its hold on power, given the current economic climate.

But, there is one major flaw with Beijing’s economic growth approach: it centers around exports, which rely heavily on American need. China exported more goods to various regions of the world, but nearly 30 % of those exported to the US and the EU in 2023.

As it stands, holes are surfacing in Beijing’s trade programs. In May 2024, the US raised tariffs on Chinese electric vehicles ( EV ) to 100 %. The European Union increased the tariff on all Chinese electric vehicles imported into Europe from 17.4 % to 37.6 %, topping the already 10 % duty.

However, depending on how it deals with Russia, stuff may get worse for the Chinese market. A moment after NATO’s statement, US President Joe Biden announced that China’s ongoing support of Russia will endure severe economic consequences for the Eastern power.

He made a reference to what China may face if its aid for Russia is continued, saying that” some of our German friends are going to be curtailing their investment in China.”

China hopes that a Russia-friendly peace arrangement will come after the war’s conclusion, for its own sake. Without this, China’s commitment to self-reliance will place its unmatched relationship with the Kremlin to the test.

After all, as the phrase commonly attributed to the 19th-century British prime minister Lord Palmerston goes,” There are no permanent foes, and no permanent companions, merely permanent interests”.

Chee Meng Tan is Assistant Professor of Business Economics, University of Nottingham

The Conversation has republished this post under a Creative Commons license. Read the original content.

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Kim Jong Un wants Trump back, elite defector tells BBC

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Donald Trump returning to the White House would be “a once-in-a-thousand year opportunity” for North Korea, according to a man in a unique position to know.

Ri Il Kyu is the highest-profile defector to escape North Korea since 2016, and has been face-to-face with Kim Jong Un on seven separate occasions.

The former diplomat, who was working in Cuba when he fled with his family to South Korea last November, admits to “shivering with nerves” the first time he met Kim Jong Un.

But during each meeting, he found the leader to be “smiling and in a good mood”.

“He praised people often and laughed. He seems like an ordinary person,” Mr Ri says. But he is in no doubt Mr Kim would do anything to guarantee his survival, including kill all 25 million of his people: “He could have been a wonderful person and father, but turning him into a god has made him a monstrous being.”

In an hours-long interview with the BBC, Mr Ri provides a rare understanding of what the world’s most secretive and repressive states is hoping to achieve.

He said that North Korea still views Mr Trump as someone it can negotiate with over its nuclear weapons programme, despite talks between him and Kim Jong Un breaking down in 2019.

Mr Trump has previously hailed the relationship with Kim as a key achievement of his presidency. He famously said the two “fell in love” exchanging letters. Just last month, he told a rally Mr Kim would like to see him back in office: “I think he misses me, if you want to know the truth.”

North Korea is hoping it can use this close personal relationship to its advantage, said Mr Ri, contradicting an official statement from Pyongyang last month that it “did not care” who became president.

The nuclear state will never get rid of its weapons, Mr Ri said, and would likely seek a deal to freeze its nuclear programme in return for the US lifting sanctions

But he said Pyongyang would not negotiate in good faith. Agreeing to freeze its nuclear programme “would be a ploy, 100% deception”, he said, adding that this was therefore a “dangerous approach” that would “only lead to the strengthening of North Korea”.

A ‘life or death gamble’

Eight months after his defection, Ri Il Kyu is now living with his family in the South Korean capital Seoul. Accompanied by a police bodyguard and two intelligence agents, he explains his decision to abandon his government.

After years of being ground down by the corruption, bribery, and lack of freedom he faced, Mr Ri says he was finally tipped over the edge when his request to travel to Mexico to get an operation on a slipped disc in his neck was denied. “I lived the life of the top 1% in North Korea, but that is still worse than a middle class family in the South.”

As a diplomat in Cuba, Mr Ri made just $500 (£294) a month, and so would sell Cuban cigars illegally in China to make enough to support his family.

When he first told his wife about his desire to defect she was so disturbed she ended up in hospital with heart problems. After that he kept his plans secret, only sharing them with her and his child six hours before their plane was due to depart.

He describes it as a “life or death gamble”. Regular North Koreans who are caught defecting would typically be tortured for a few months, then released, he says. “But for elites like us there are only two outcomes – life in a political prison camp, or being executed by a firing squad.”

“The fear and terror were overwhelming. I could accept my own death, but I could not bear the thought of my family being dragged to a gulag,” he says. Although Mr Ri had never believed in God, as he waited nervously at the airport gate in the middle of the night, he began to pray.

The last known high-profile defection to the South was that of Tae Yong-ho in 2016. A former deputy ambassador to the United Kingdom, he was recently named the new leader of South Korea’s presidential advisory council on unification.

Getty Images ussian President Vladimir Putin and North Korean leader Kim Jong Un toast during a reception at the Mongnangwan Reception House in Pyongyang on June 19, 2024.Getty Images

Turning to North Korea’s recent closening ties with Russia, Mr Ri says the Ukraine war had been a stroke of luck for Pyongyang. The US and South Korea estimate the North has sold Moscow millions of rounds of ammunition to support its invasion, in return for food, fuel and possibly even military technology.

Mr Ri says the main benefit of this deal for Pyongyang was the ability to continue developing its nuclear weapons.

With the deal, Russia had created a “loophole” in the stringent international sanctions on North Korea, he says, which had allowed it, “to freely develop its nuclear weapons and missiles and strengthen its defence, while bypassing the need to appeal to the US for sanctions relief”.

But Mr Ri says that Kim Jong Un understands that this relationship is temporary, and that after the war Russia is likely to sever relations. For this reason, Mr Kim has not given up on the US, Mr Ri says.

“North Korea understands that the only path to its survival, the only way to eliminate the threat of invasion and develop its economy, is to normalise relations with the United States.”

While Russia might have given North Korea a temporary respite from its economic pain, Mr Ri says the complete closure of North Korea’s borders during the pandemic had “severely devastated the country’s economy and people’s lives”.

When the borders reopened in 2023 and diplomats were preparing to return, Mr Ri says families back home had asked them to “bring anything and everything you have, even your used toothbrushes, because there is nothing left in North Korea”.

The North Korean leader demands total loyalty from his citizens and the mere whiff of dissent can result in imprisonment. But Mr Ri says years of hardship had eroded people’s loyalty, as no-one now expected to receive anything from their “Supreme Leader” Kim Jong Un.

“There is no genuine loyalty to the regime or to Kim Jong Un anymore, it is a forced loyalty, where one must be loyal or face death,” he says.

The “most evil act”

Recent change has largely been driven by an influx of South Korean films, dramas and music, which have been smuggled into the North, and are illegal to watch and listen to.

“People don’t watch South Korean content because they have capitalist beliefs, they are simply trying to pass the time in their monotonous and bleak lives,” Mr Ri says, but then they begin to ask, “why do those in the South live the life of a first-world country while we are impoverished”?

But Mr Ri says that although South Korean content was changing North Korea, it would not bring about its collapse, because of the systems of control in place. “Kim Jong Un is very aware that loyalty is waning, that people are evolving, and that’s why he is intensifying his reign of terror,” he says.

The government has introduced laws to harshly punish those who consume and distribute South Korean content. The BBC spoke to one defector last year who said he had witnessed someone be executed after sharing South Korean music and TV shows.

North Korea’s decision, at the end of last year, to abandon a decades-old policy of eventually reunifying with the South, was a further attempt to isolate people from the South, Mr Ri says.

This, he described as Kim Jong Un’s “most evil act”, because all North Koreans dream of reunification. He says that while North Korea’s past leaders had “stolen people’s freedom, money and human rights, Kim Jong Un has robbed what was left of them: hope”.

Outside North Korea, much attention is paid to Kim Jong Un’s health, with some believing that his premature death could trigger the collapse of the regime. Earlier this week, South Korea’s intelligence agency estimated that Mr Kim weighed 140kg, putting him at risk of cardiovascular disease.

But Mr Ri believes the system of surveillance and control is now too well established for Kim’s death to threaten the dictatorship. “Another evil leader will merely take his place,” he says.

BBC / Hosu Lee North Korean diplomat Ri Il Kyu BBC / Hosu Lee

It has been widely speculated that Mr Kim is grooming his young daughter, thought to be called Ju Ae, to be his successor, but Mr Ri dismisses the notion.

Ju Ae, he says, lacked the legitimacy and popularity to become the leader of North Korea, especially as the sacred Paektu bloodline, which the Kims use to justify their rule, is only believed to run through the men of the family.

At first people were fascinated by Ju Ae, Mr Ri says but not anymore. They questioned why she was attending missile tests rather than going to school, and wearing luxury, designer clothes instead of her school uniform, like other children.

Rather than waiting for Mr Kim to become ill or die, Mr Ri says the international community had to come together, including North Korea’s allies China and Russia, to “persistently persuade it to change”.

“This is the only thing that will bring about the end of the North Korean dictatorship,” he adds.

Mr Ri is hoping that his defection inspires his peers, not to defect themselves, but to push for small changes from the inside. He does not have lofty ambitions, that North Koreans will be able to vote or travel, merely that they can choose what jobs to work, have enough food to eat, and be able to share their opinions freely among friends.

Though for now, his priority is helping his family settle into their new life in South Korea, and for his child to assimilate into society.

At the end of our interview, he posed a scenario. “Imagine I offer you a venture, and tell you, if we succeed we win big, but if we fail it means death.

“You wouldn’t agree, would you? Well that is the choice I forced upon my family, and they silently agreed and followed me,” he says.

“This is now a debt I must repay for the rest of my life.”

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Chadchart weighs BTS debt fix

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PUBLISHED : 2 Aug 2024 at 04:00


Bangkok governor Chadchart Sittipunt said yesterday that City Hall will need more time to consider how to deal with the debts it owes to Bangkok Mass Transit System Plc (BTSC), the operator of the BTS Skytrain.

Billions of baht in debt have been incurred through hiring BTSC to operate the electric train service on two sets of extended sections of the BTS known as the Green Line.

The Supreme Administrative Court last week upheld a lower court ruling, ordering the Bangkok Metropolitan Administration (BMA) and its business arm, Krungthep Thanakom, to pay the overdue debts incurred from hiring BTSC to operate the electric train service on the two extended routes and provide electric rail system maintenance services.

Upon this ruling, BTSC hinted that it was open to negotiations if the BMA was interested in swapping the debts with an extension of the Green Line’s operation concession.

Mr Chadchart said the BMA owes BTSC around 40 billion baht in accumulated costs of BTS operation and maintenance services. Each year, he said, the BMA also has to pay BTSC around 6 billion baht, the difference between the cost of hiring BTSC and the ticketing revenue BTSC gains.

He said that the BMA receives 90 billion baht in its annual budget each year, and adding the 6-billion-baht expenses together with the 40-billion-baht accumulated debts is quite a burden on the BMA. “The BMA will have to find a way out of this long-term budgetary burden. And whether the proposed extension of the BTS’ concession, due to end in 2029, will be an ideal solution or not is something we still have to ponder,” he said.

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Forget the Fed and BOJ; PBOC holds the monetary cards – Asia Times

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TOKYO – With all the focus on the US Federal Reserve and Bank of Japan, it’s easy to forget where the most important monetary calls are being made this year: Beijing.

Sure, Fed Chairman Jerome Powell said Wednesday (July 31) that big actions are coming. A September interest rate cut is “on the table,” provided the inflation data supports one. That, and BOJ Governor Kazuo Ueda’s modest 0.15% rate hike hours earlier, is the talk on global markets.

But both narratives, though, are more of the signaling variety than anything that’s going to make or break the world’s No. 1 or No. 3 economy. How People’s Bank of China’s Governor Pan Gongsheng plays his monetary hand in Beijing will likely have far more impact given the intensifying headwinds bearing down on Asia’s biggest economy.

For all their challenges, neither the US nor Japan faces simultaneous mini-crises with property developers, weak household spending and deflationary pressures. Neither confronts youth unemployment at record highs. Neither faces domestic headwinds from municipalities grappling with US$10 trillion-plus of local government financing vehicle (LGFV) debt.

All this explains why the PBOC surprised global markets with an interest rate cut on July 25, when it cut the one-year policy loan rate by 20 basis points to 2.3%, the biggest move since April 2020. That came just days after the PBOC lowered a key short-term rate.

In July, mainland manufacturing activity unexpectedly fell for the first time in nine months. The Caixin manufacturing purchasing managers index slid to 49.8 last month from 51.8 in June. The dip suggests China’s export machine is losing momentum, dimming the economy’s prospects.

“The most prominent issues are still insufficient effective domestic demand and weak market optimism,” says Wang Zhe, economist at Caixin Insight Group.

Yet for all the turmoil in China’s economy, there are signs that the PBOC might be done lowering rates for a while.

The PBOC “moves reflect ongoing deflationary pressure and should modestly support growth,” says Duncan Innes-Ker, analyst at Fitch Ratings. “Nevertheless, we believe the prospects for further rate cuts are limited by the government’s wariness of adding to pressure on the renminbi exchange rate.”

Perhaps more important is that currency traders suddenly seem more interested in bracing for a rising yuan than a falling one.

Hedging trends show that the premium for put options used to bet on a weaker dollar-yuan relative to wagers on a stronger rate are at levels not seen in 13 years.

Nor do measures of expected volatility appear to be spiking as the Fed and BOJ finally make, or move toward, long-awaited rate moves.

Some of the yuan’s stability owes to a now-rallying yen. Its surge in the wake of the BOJ hiking rates the most since 2008 has the yuan trading at two-month highs. Chinese state banks are reinforcing the move and putting the dynamic to good use by selling dollars.

This dovetails with President Xi Jinping’s top-line priority for the yuan. In recent years, Xi’s inner circle worried that a weaker yuan might make it harder for giant property developers to make payments on offshore debt, heightening default risks.

More recently, Xi’s Communist Party has tried to avoid becoming a bigger election issue in the US, where Donald Trump is making another play for the presidency and looking to make trade wars great again.

Perhaps the biggest priority, though, is Xi’s yuan internationalization policy. Since 2016, Team Xi has made steady and significant progress toward supplanting the dollar as the linchpin of the global financial system.

That year, Beijing secured a spot in the International Monetary Fund’s “special drawing-rights” program. It put the yuan into the globe’s most exclusive currency club along with the dollar, euro, yen and the pound.

As Xi’s “yuanization” gambit gains traction, it stands out as one of his top reform successes. In March, the yuan hit a record high of 47% of global payments by value.

In 2023, the yuan topped the yen as the currency with the fourth-largest share in international payments, according to financial messaging service SWIFT. It overtook the dollar as China’s most used cross-border monetary unit, a first.

The strategy would get a major boost if the BOJ can continue hiking rates and the Fed ratchets rates lower.

Both of these dynamics are an open question. The BOJ, for example, confronts a sluggish economy, tepid wage growth and political paralysis in Tokyo.

“The rate hike sits uncomfortably with the poor run of economic data and lack of demand-driven inflation,” says Moody’s Analytics in a note.

Gross domestic product, Moody’s adds, “has been falling for the better part of a year. And consumer price inflation has slowed sooner than expected, despite jumpy headline and core CPI readings.”

What’s more, “the ‘shunto’ spring wage negotiations produced a three-decade record result, but actual pay gains recorded across the economy have been disappointing,” Moody’s notes. Also, “industrial production stalled in the second quarter and wage gains lack oomph, both of which move the recovery further into the distance.”

Moody’s concludes that the Ueda BOJ “is hiking into a weak economy. Indeed, there is a good chance that Wednesday’s decision will be remembered as one of the BOJ’s more controversial ones.”

The Fed faces myriad uncertainties of its own. Powell’s team confronts the specter of a Trump 2.0 White House, which seems primed for battle with the Fed over monetary independence.

During his first term from 2017 to 2021, Trump browbeat the Fed into cutting rates at a time when the US didn’t need fresh monetary stimulus. Trump even threatened to fire Powell.

If Trump wins another term on November 5, he might implement the “Project 2025” blueprint that includes eradicating the Fed system. Trump also is believed to favor devaluing the dollar.

Tokyo worries that weak Asian currencies – including the yen – might become a political talking point ahead of November. This fear is among the reasons Japan’s Ministry of Finance is working to prop up the yen. Tokyo spent more than $3 billion in the last month to put a floor under the yen.

The currency surged on Wednesday after Ueda’s minor rate hike, partly because he hinted at more tightening steps to come.

“Ueda’s hawkish comments and the content of the policy statement point to risk of the next hike to be brought forward earlier, depending on upcoming data. We see flattening of Japanese government bond curve as markets price in sharper rate hike cycle within short period,” says Takeshi Yamaguchi, economist at Morgan Stanley MUFG.

But it’s the PBOC’s Pan who faces the most challenging road to 2025. One reason is uncertainty about the timing of Xi’s plans to ramp up government stimulus.

“The Politburo is signaling a renewed emphasis on shoring up the domestic economy through consumer-focused policies, as China navigates economic headwinds,” says Carlos Casanova, economist at Union Bancaire Privée.

“However, investors were hoping to see actionable measures emerge from the July meeting. Instead, the announcements seemed to lack concrete details, leaving the impression of sizzle but no steak,” Casanova says.

Until there’s greater clarity, he says, “the 10-year government bond yield in China is likely to remain suppressed in the coming weeks, as the government rolls out additional policy support measures.”

All the global financial system can do is hope that Pan gets right the timing, magnitude and sequencing of rate cuts.

Nothing would cheer global investors more than the biggest trading nation beating this year’s 5% growth target in a big way and defeating deflationary pressures in short order.

That’s why this year’s most impactful monetary policy calls won’t be in Washington or Tokyo, but rather in Pan’s office.

Follow William Pesek on X at @WilliamPesek

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Sarawak and Malaysia’s national oil corporation Petronas square off, presenting PM Anwar with a conundrum

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Petronas is treading carefully. 

In its official responses to the media, including CNA, the national oil corporation said that it is in close talks with both the Sarawak government and Mr Anwar’s administration to achieve a “mutual resolution” to the state gas distribution situation.

It stressed that “all parties need to understand and acknowledge each other’s constraints”.

POLITICAL CHUTZPAH, BUT “BE CAREFUL NOT TO OVERREACH”

The political chutzpah displayed by Mr Abang Johari, Sarawak’s chief minister or premier as he is referred to in the state, spotlights how the balance of power in Malaysia has been upended following the May 2018 general election that has since led to four changes in government. 

The fractured political landscape in Peninsular Malaysia has turned Sarawak and neighbouring Sabah, which are collectively referred to as the Borneo bloc, into serious crutches for Mr Anwar’s unity government. 

That, in turn, has emboldened the ruling political entities in the two states to impose demands on Kuala Lumpur to meet provisions established in a charter when both states joined then-Malaya to create the Federation of Malaysia in 1963, which at the time included Singapore. The island state became independent in 1965.

Of the two Borneo bloc states, Sarawak has been more aggressive in its dealings with Kuala Lumpur because of the political cohesiveness of the state government led by Mr Abang Johari.

The demands by Petros join a list of other demands by Sarawak. 

Last month, Sarawak signed a memorandum of understanding with the Armed Forces Fund Board (LTAT), which manages the pension fund for certain members of the armed forces, to explore potential cooperation and sharing of information. Mr Abang Johari said it is securing necessary approvals to take a bigger stake in domestic financial institution Affin Bank, of which LTAT is the largest shareholder.

Two weeks ago, Sarawak also retook control of Bintulu Port, a previously federal government-controlled port in the state.

But it is the control over the oil and gas resources that is drawing close scrutiny.

According to the federal government, Sarawak’s probable and proven reserves of petroleum represent 60.87 per cent of Malaysia’s total, while Sabah’s make up around 18.8 per cent. 

Sarawak is insisting that oil and gas resources in its territory must be regulated under a colonial-era Oil Mining Ordinance 1958, which stipulates that oil and gas resources found within 200 nautical miles of its waters belong to the state. 

The state government wants the six new oil and gas fields discovered in the Balingian province of the continental shelf and the West Luconia area to be developed jointly with Petronas to ensure that the state receives more than the annual 5 per cent royalties that it currently enjoys.

Senior government officials and political operatives in Mr Anwar’s inner circle acknowledge that the demands by Sarawak and Petros could trigger a snowball effect and prompt other states to make greater demands on the federal government, which is already struggling with serious budgetary constraints because of a national debt burden of about RM1.22 trillion.

Several political and economic watchers in Malaysia say the stakes are also high for Mr Abang Johari, a seasoned politician who is regarded as a strong and able administrator.

“Abang Johari is in a strong position but he needs to be careful not to overreach (when dealing with the federal government),” said Mr Manu Bhaskaran, chief strategist at Centennial Asia Advisors. 

“The gas distribution issue needs to be settled where it is a win for both sides, and I hope that the demand for full control by Sarawak is just an opening gambit in the ongoing negotiation.”

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B10,000 handout registrations overload system

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More than 10 million attempt to sign up for digital wallet via government’s Thang Rath app

PUBLISHED : 1 Aug 2024 at 10:54

UPDATED : 1 Aug 2024 at 15:16

A gardener at Government House shows registration for the digital wallet handout scheme on his mobile phone on Thursday. (Photo: Chanat Katanyu)
A gardener at Government House shows registration for the digital wallet handout scheme on his mobile phone on Thursday. (Photo: Chanat Katanyu)

The Thai government’s flagship 10,000-baht handout stimulus suffered an early setback on Thursday when millions rushed to sign up on the opening day and overloaded the registration system.

By early afternoon, 10.5 million people had applied to join the scheme via Thang Rath app, which the government developed to help people access dozens of services.

However, millions more could not access the registration portal, with many complaining they did not receive text message passcodes to complete the process.

“It’s normal to have problems on the first day, but we are doing our best,” said Prime Minister Srettha Thavisin, the programme’s biggest advocate.

Deputy Finance Minister Julapun Amornvivat predicted earlier that at least 5 million people would sign up on Thursday.

Some glitches were reported as soon as registration started at 8am, possibly because subscribers’ phones were old or their internet connection was weak, said Mr Julapun.

Each subscriber took from two to five minutes to finish the process, he said.

About 2.3 million people registered for the digital wallet via Thang Rath in the first hour.

Subscriptions for smartphone owners will be open until Sept 15. People who do not have smartphones can register using their ID cards starting on Sept 16.

The 450-billion-baht digital wallet is the flagship initiative of the coalition-core Pheu Thai Party, aimed at stimulating an economy struggling from high household debt and weak spending.

The distribution of the funds is scheduled to start in early October. It was originally expected to begin in February, and then was put back to May because of questions about how the handout would be funded.

Critics, including respected economists and some former central bank governors, have complained the scheme was short-sighted and fiscally risky, which the government rejects.

The House of Representatives late on Wednesday approved an additional 122 billion baht for the 2024 fiscal year to help fund the handout, but Senate and royal endorsement is still required.

Eligibility rules

As many as 50 million Thai nationals aged 16 and up are eligible for the programme, but officials expect that about 45 million will sign up. In order to be eligible, individuals must be Thai citizens with an income (based on personal income tax filings) not exceeding 70,000 baht per month or 840,000 baht per year.

Recipients can spend the money within the districts listed on their ID cards within six months. Eligible recipients will be allowed to move their house registration to the districts where their workplace is located before they register if they can spend the digital money without having to return to their home province.

Mr Julapun warned people not to make any exchange for cash with any party because that would be illegal.

The funds are meant to be spent at small businesses, including convenience stores. However, owners of shops that receive digital money can spend it outside their districts.

Millions of retailers are expected to apply and join the scheme, from major malls and supermarket chains to noodle vendors and family-run convenience stores.

Pheu Thai is counting on the multiplier effect of the handout to fire up consumption, revive manufacturing and spur more investments. Mr Srettha has predicted a “whirlwind” impact on the economy.

Authorities expect the stimulus to help lift Thailand’s growth rate by as much as 1.8 percentage points — a big jump for an economy that has expanded at a pace of less than 2% on average in the past decade.

The Bank of Thailand, however, sees a more modest contribution of 0.9 percentage points to gross domestic product for the whole programme.

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Less transparency, less faith in China stocks – Asia Times

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This week is offering quite the split screen to investors hoping China would step up efforts to raise its capital markets game.

On one screen, the China Securities Regulatory Commission (CSRC) pledged to improve market operations, strengthen comprehensive research capabilities, deepen response mechanisms to manage market risks and hone regulations for trading.

On the other, signals that Beijing is increasing opacity surrounding the flow of capital. Specifically, how much capital international funds deploy into and out of Asia’s most volatile major stock market.

After August 18, analysts won’t be able to track net capital movements at the end of a trading day. The fact this follows a move in May to end intraday data flows with Hong Kong markets suggests this is no aberration.

And it generates more questions than answers about the state of Xi Jinping’s vision for making China a more attractive investment destination for the biggest of the globe’s big money.

Of course, there’s a third screen on which investors are keeping an eye. This one features a fresh round of stimulus.

On Tuesday, the Politburo, a Communist Party’s top decision-making body, signaled renewed efforts to reach this year’s 5% growth target focused on consumers.

Chinese leaders said the priority is increasing household income “through multiple channels” and increasing the “ability and willingness” of low- and middle-income groups to spend.

Yet the Politburo had less to say about financial upgrades at a moment when regulators are obscuring basic intelligence on capital flows.

True, exchanges still plan to provide data on turnover and trading volume in equities and exchange-traded funds through links with markets in Hong Kong.

But as regulatory signals go, making it harder to discern top-line levels of enthusiasm and pessimism about mainland shares isn’t likely to bolster confidence in Asia’s biggest economy.

Restoring trust on the part of global investors was a major goal of this month’s Third Plenum extravaganza. Though normally a five-yearly event, President Xi didn’t convene one in 2018.

Since the recently concluded Third Plenum was the first since 2013, expectations for bold reforms were – and still are – sky-high. Xi’s Communist Party pledged to “unswervingly encourage” the private sector in a bid to accelerate “high-quality development,” “Chinese-style modernization” and “innovative vitality.”

There’s still scope for China’s 24-member Politburo to bolster investors’ trust by detailing plans to make bigger alterations to the nation’s export- and investment-led growth model.

Suffice to say, though, announcing plans for reduced transparency the same month overseas money managers sold at least US$4.1 billion of Chinese shares might not go down well. Chinese and Hong Kong stock markets lost an epic $6.3 trillion from their peak in 2021 to January this year.

Xi’s team also faces confidence deficits on the economic front. The nation’s 4.7% economic growth rate in the second quarter amid weak consumer demand and housing prices disappointed many.

As economist Louise Loo at Oxford Economics observes, “discretionary retail spending fell at the sharpest sequential pace since the April 2022 Shanghai lockdowns.”

Hence the Politburo’s renewed focus on demand-boosting stimulus. To economist Zhang Zhiwei at Pinpoint Asset Management, it’s a sign Xi’s inner circle “recognizes that domestic demand is weak and plans to prepare some policy measures in the pipeline to address the problem.”

This backdrop explains why the People’s Bank of China surprised global markets with an interest rate cut on July 25. It trimmed the one-year policy loan rate by 20 basis points to 2.3%, the biggest move since April 2020. That came just days after the PBOC lowered a key short-term rate.

Robin Xing, economist at Goldman Sachs, is struck by the “reactive nature of easing” by PBOC Governor Pan Gongsheng. Kathleen Brooks, research director at XTB, called it a “sign that the Chinese authorities are concerned about the state of the Chinese economy, which is more worrying for stock markets and for investors.”

All the more reason to use the recent Third Plenum as an opportunity to accelerate moves to increase the quality of growth, not just the quantity.

The weeks since the meeting have left unclear the status of Xi’s pledges to get bad assets off property developers’ balance sheets to avoid defaults. The same goes for creating social safety nets to prod households to save less and spend more, the fate of internet platforms uncertain about the regulatory outlook and moves to build more vibrant capital markets.

Though Xi has been promising to prioritize capital market development since 2013, the effort seemed to get a big lift last November. That was when Xi met with a who’s-who of top chieftains in San Francisco on the sidelines of the Asia-Pacific Economic Cooperation summit – including Apple CEO Tim Cook, Tesla chief Elon Musk and Blackstone’s Steve Schwarzman.

Other top executives on hand to rub elbows with the man leading an economy with which the US does roughly $600 billion of trade annually: Marc Benioff of Salesforce; Stan Deal of Boeing; Raj Subramaniam of FedEx; Ryan McInerney of Visa; Ray Dalio of Bridgewater Associates; Albert Bourla of Pfizer; Merit Janow of Mastercard; and Larry Fink of BlackRock.

There, Xi raised expectations for his inner circle, led by Premier Li Qiang, to strengthen capital markets in foundational ways. Since then, though, progress on the ground in China hasn’t matched the lofty rhetoric.

The speed with which capital has continued to flee China suggests that Xi’s efforts to communicate that Beijing is at the top of its myriad challenges are not getting through to investors. That includes efforts to stabilize a cratering property market and overall weak demand.

There’s confusion in international circles, too, about Xi’s commitment to giving the private sector and market forces “decisive” roles in Beijing decision-making. That 2012-2013 pledge was first called into question in 2015 when Xi’s government intervened aggressively to stabilize Shanghai stocks.

Questions only increased after Xi began cracking down hard on mainland tech platforms in late 2020, starting with Jack Ma’s Alibaba Group. The inquisition rapidly widened to Baidu, Didi Global, JD.com, Tencent and other top internet companies. It even had Wall Street banks debating whether China might have become “uninvestable.”

Now seems the time to get under the economy’s hood as rarely before. One law of economic gravity that Xi’s team has tried to beat these last 10 years is the idea that a developing nation must build credible and trusted markets before trillions of dollars of outside capital arrive.

In China’s case, this means increasing transparency, making local government officials more accountable, prodding companies to raise their governance games, crafting reliable surveillance mechanisms like credit rating companies and strengthening the financial architecture before the world shows up.

Too often during Xi’s first two terms as leader, China has tried to flip the script, believing it can build a world-class financial system after waves of foreign capital arrive. Whether fair or not, the Xi era’s efforts to communicate that a financial Big Bang is afoot continue to get lost in translation in boardrooms from New York to London to Tokyo.

The sense that Xi’s China tends to over-promise and under-deliver financial upgrade-wise set in back in summer of 2015, back when Shanghai shares plunged by one-third in three weeks. Beijing’s response was to treat the symptoms of the market rout, not the underlying causes.

Since then, Xi stepped up the pace of winning Chinese stocks places in top global indices – from MSCI for stocks to FTSE-Russell for bonds. Yet increases in access to yuan-denominated assets often outpace reforms needed to prepare China Inc for the global prime time.

Whether China can win back investors’ trust is an open question. As Chinese stocks are reminding us – the Shanghai Shenzhen CSI 300 Index is down more than 13% this year – there are certain laws of gravity that still apply to economies transitioning from state-driven and export-led growth to services, innovation and domestic consumption.

Trouble is, China’s bond market – totaling more than $23 trillion overall – is underpinned by a developing economy with limited liquidity and hedging tools, a giant and opaque state sector, and a rudimentary credit-rating system that can obscure risk and misallocate capital.

For all China’s promises, this makes it more of a buyer-beware market than many investors expected.

This gets at other split screens. On one, China’s inclusion in major benchmarks is luring bond giants like BlackRock. On screen No. 2: the crisis of confidence surrounding developers like China Evergrande Group offer a stark reminder of the mainland’s opacity and excesses. 

The prevalence of local government financing vehicles – roughly $13 trillion of such off-balance sheet LGFVs – can be a major turnoff for foreign bond funds.

Not only are they difficult to analyze but their fingerprints also touch the operations of everything from commercial banks’ wealth management units to mutual funds to hedge funds to insurers to the gamut of securities companies.

Hence the need for deeper bond markets. And, of course, for regulators in Beijing to avoid steps that spook global markets anew. Among recent missteps by Xi’s party: last year’s crackdown on foreign consultancy firms on which global investors and multinational firms rely for information and analysis.

The move, supposedly part of a nationwide anti-espionage campaign, reduced the appetite for investment from some overseas firms. When US Treasury Secretary Janet Yellen’s team visits Beijing these days, the consultancy policy is among the examples of “non-market” practices and “coercive actions” against American firms that US officials highlight.

Deeper debt markets would help sort out the cart-before-the-horse problem that afflicts China’s economy. During the Xi era and before it, China too often believed that pulling in more foreign capital was a reform all its own. It’s been slower to strengthen China’s financial system ahead of those waves of overseas capital.

And pulling down new curtains of opacity won’t help to reverse recent capital outflows and flagging investor confidence.

Follow William Pesek on X at @WilliamPesek

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Xi stays the course amid rising calls for change – Asia Times

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Chinese President Xi Jinping has laid out his vision for China’s economic and social future – and it places Xi Jinping at the very center.

Having cemented his political legacy at the 20th Chinese Communist Party Congress in October 2022 by being confirmed leader until at least 2027, the “chairman of everything” has now set out how he sees the next few years going.

The road map was discussed at the important third plenum that took place July 15-18, 2024. To China watchers like myself, the plenum – which brings together party leaders to discuss great matters of state and economy – gives key insights on the current thinking in Beijing as to where the country sees itself now and where it wants to be.

The plenum is accompanied by an official communique and then a more detailed “decision” distributed days after the meeting.

Xi at the wheel

Often the plenums are decisive in setting out new directions – take, for example, the 1978 meeting that heralded the end of the disastrous Cultural Revolution and the beginning of Deng Xiaoping’s opening up of China.

This latest plenum was a far cry from such a pivotal moment. In fact, it offered little new in terms of the actual policy. But what it did do was confirm that Xi sees no need to deviate from the course he has set out, or to change the driver behind the wheel.

The decision document circulated on July 21 made clear Xi’s desire for authoritarian political control, albeit tempered with a populist approach to some of the issues facing China.

The plenum’s decision is primarily a political document aimed at rallying the party faithful behind Xi and his preference for a heavily centralized, state-run economy. There were no signs that Xi has any intention of significant reform in the face of a weakening economy.

Rather, what emerged was an indication that any questioning of Xi’s policies would not be tolerated – the communique calls for dealing effectively with “risks in the ideological domain,” while improving “public opinion guidance.” In other words, both the Communist Party and the people need to trust in Xi.

However, in a possible sign that unease persists, the decision stressed the need to establish Xi’s core position on the all-important Central Committee and the party as a whole. That position had, in theory, already been cemented, prompting the question: Why the need to emphasize again now?

Xi and his political thoughts pepper the decision, and it makes clear that both party – and his – control is crucial. This approach will maintain the ongoing tension between the need to innovate to address China’s economic needs and making sure that any changes to policy take place firmly within the framework laid down by party leadership.

At its core, the decision lays out how Xi intends to safeguard what he sees as his legacy.

As such, it touches on economic, social and security concerns that could threaten that legacy – be it faltering growth, tensions with regional rivals and the U.S, growing income inequality and a divide between urban and rural economies.

The decision is packed full of intentions but provides few concrete proposals. Even so, the broad strokes it provides give a glimpse into Xi’s thinking.

Conflicting messages

With respect to the economy, the decision confirms the shift from an obsession with growth at all costs to an emphasis on the quality of growth.

As such, it stresses “high-quality development” as the key component of Xi’s new philosophy. In real terms, this means a shift from the traditional drivers of the economy – labor, capital and the land – to new technologies and innovations, such as artificial intelligence and green energy.

This approach is aimed at moving China up the value-added chain and developing the cutting-edge technologies of the future.

Xi has touted the move to “high-quality development” as a way to create a more equitable society. But given that the vast majority of Chinese workers aren’t employed in these advanced sectors, it is difficult to see how Xi could pull this off.

Similarly, when it comes to remedying the slowdown in the Chinese economy, the decision’s policy priorities send conflicting messages.

It reaffirmed the need for China to continue global engagement and to place the private sector on an equal footing with its state-owned counterpart. However, it makes clear that it is the state sector and state financing that will play the major role in helping the party meet its goals, while the private sector will receive “guidance.”

And investors appear skeptical: The Chinese stock market saw its largest drop in six months when the decision was published.

And there is some doubt that China’s commitment to global engagement will be sufficient to calm the concerns of the international business community.

Addressing local concerns

The decision certainly identifies some of the key areas of domestic concern in China.

Take, for example, the thorny problem of local government debt. Local governments are burdened with mandates set by the central government to provide for a range of expensive social programs, including pensions and health care insurance – which are not funded adequately.

While local authorities in the past have looked to land sales to plug the budget gaps, a severe slump in property prices has left their finances looking increasingly shaky.

The decision calls for local governments to have more financial resources at their disposal, funded by a larger slice of tax revenue being distributed centrally.

Further, a “clear division” of powers and responsibilities between the central and local authorities is to be established – something the party previously promised would be implemented by 2020.

Concern from party leaders over wealth inequality is reflected in the decision, which calls for more inclusive public services to provide a cushion for those most in need.

But the most glaring inequality is driven by the differences between China’s rural and urban areas. Rural households in China suffer significantly lower income, and the gap has grown in recent years.

The decision sees greater and more effective urbanization as key to resolving inequality. A key part of the plan is to eliminate the system of household registration that ties individuals to their place of birth. As a result, many rural people who move to cities are denied access to better urban services, as they are still considered to be villagers.

The abolition of household registration has been promised for many years, but it is yet to be realized.

Blind faith not enough

Taking as a whole, the plenum’s decision reveals many intentions but offers little detail about how to achieve it all in the timeline set – just five years.

But in not offering anything new, the decision is making a point: Xi’s approach – long established – was, and is still, the best way to move China forward. Calls from within China and outside for fundamental changes are, it follows, to be ignored.

But there is a danger for China – and Xi’s legacy – in adopting such intransigence. Many of the problems plaguing China – in particular the gradual slowing of economic growth and creeping inequality – demand more than just good intentions and blind faith that the party knows best.

Anthony Saich is Professor of International Affairs, Harvard Kennedy School

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Yes, we still have to work – Asia Times

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“I may live badly, but at least I don’t have to work to do it!” — Slacker

In my roundup last week, I flagged some disappointing results for a basic income experiment. When people got US$1,000 a month, 2% of them stopped working. That’s a significant amount, considering that $1,000 a month is not enough to really support anyone by itself.

It suggests that a much larger universal basic income (UBI) would cause a much larger percentage of people to stop working. That would increase the costs of the program, and probably doom it politically — the idea of having the government pay a large portion of the citizenry not to work is likely to be very unpopular.

When I posted the result on Twitter X, however, I got some interesting reactions. A number of people told me — often in angry, indignant terms — that paying people to take leisure is the whole point of basic income, and is a good and desirable thing. Here are just a few examples:

From an economic standpoint, this argument is unpersuasive. Yes, taking more leisure time is valuable — even if you drop out of the labor force entirely, you’re still presumably doing something you like with all those spare hours.

But the benefit of that leisure has to be weighed against the cost of the lost production when the people stop working, plus the monetary cost of providing the UBI in the first place, and the deadweight loss of whatever taxes you had to use to transfer the money.

A welfare program that causes a significant number of people to stop working entirely is unlikely to pass any reasonable cost-benefit analysis. But what’s interesting here is the deep antipathy to the idea of work that seems to have taken root among some on the political left.

Not everyone on the left, of course — back in the late 2010s there were fierce battles between supporters of UBI and supporters of a federal job guarantee. But I notice a bunch of leftist types these days basically saying that work — or at least, most work — is useless and pointless and should be abolished.

A prime example was the late David Graeber, whose 2018 book “Bullshit Jobs” was something of a sensation. Although Graeber doesn’t support his argument very well — his list of “bullshit” jobs includes such obviously useful things as pizza delivery, dog washing, and corporate law1 — the notion that a large percentage of jobs could be eliminated without reducing real economic value appealed to a lot of people.

For less erudite and scholarly examples of leftist types who decry the idea of work, check out r/antiwork.

I admit that I’m not a scholar of the history of leftist thought, but this feels like a vibe shift compared to the socialists of a century ago. Obviously, socialists in the early 20th century wanted workers’ lives to be less back-breaking and toilsome, but “worker” was also an identity that socialists deeply valued and viewed as their core support group.

The Labor Theory of Value held that things were only valuable to the degree that it took work to create them (that theory is wrong, but it demonstrates what 20th century socialists cared about). Lenin vilified the bourgeoisie as being “those who shirk their work”, and the Soviet constitution declared that “He who does not work, neither shall he eat.”

For much of the 20th century, the great political struggle of the left was to reward workers more for their labor — to raise wages and benefits, to give workers more control over companies, and to raise the status and political power of workers as a group.

The people who designed the American welfare state took great pains to avoid the right’s accusation that they were paying people not to work; as a result, US government programs are full of work incentives.

What has changed? The standard answer to that question will be something along the lines of “kids these days are just lazy”, but that’s completely unsatisfying to me — even if it’s true, which I doubt, it doesn’t really answer the question. Laziness does not appear out of the void; there must be some cause.

In fact, the simplest answer is that nothing has really changed. The people who thump their copies of “Bullshit Jobs” and post on r/antiwork and troll anyone who questions UBI are probably a small minority of Americans (and many of them are not Americans at all).

After all, the share of Americans who say they’re satisfied with their jobs has been rising pretty steadily since 2010:

Source: Conference Board

The argument that Americans are trapped in jobs they hate and from which they need to be liberated by basic income is looking weaker by the year.

As for the fraction of Americans who do think work is bullshit, it’s probably not too hard to come up with plausible explanations for them either. Working-class people are undoubtedly annoyed by low wages, despite the fact that real wages have been rising at the bottom of the distribution for a decade now.

Working for $16 an hour is better than working for $12.502, but it’s still not amazing, and low-paid workers still tend to get treated poorly in many workplaces. I’m sure that fuels plenty of online complaints.

Most of those workers would probably rather just get paid more and get treated better, but I’m some would accept a UBI-supported life of leisure as an alternative.

Among educated Americans, however, I suspect there’s another factor at work: elite overproduction. In the 1990s and 2000s, smart young Americans were told that a college education was the ticket to a career that wasn’t just high-paying, but also deep, fulfilling and meaningful.

And even if that was true for the median college graduate, there were plenty for whom things didn’t turn out that way. The college wage premium has shrunk over time. Many humanities and social science majors turned out to be less useful for employment after the busts in the law and journalism professions. And academia is basically full.

If you went into $30,000 of debt for a state university, and now you’re facing the prospect of living out your life as an insurance assessor or a human resources compliance officer, perhaps you think a shabby life of leisure — paid for by all your classmates who struck it rich — doesn’t sound too bad.

Social media might be bad for work ethic

But on top of all that, it’s also possible that Americans have gotten lazier — or in less condescending econ terminology, there may have been a shift in the preference for leisure.

One of the most interesting economic facts of the last few decades is that Americans have gotten steadily richer since the 1980s, but haven’t really reduced the amount they work since then:

Many people — including John Maynard Keynes — think that as people get richer, they should work less. But in fact, as real wages go up, the incentive to work more hours actually increases, because each additional hour of work lets you buy more stuff. So it’s not clear whether people should work less or work more as they get richer.

Until the 1980s, Americans chose to work less as they got richer. But since then, increased income has had basically no effect on how much Americans work. There are several possible reasons for this. 

One possibility is that work itself has become more meaningful, fulfilling, and fun. Another is that the invention of new stuff to consume – better TVs, cars, video games, vacations, elective health procedures, etc. – has kept people working hard in order to afford it all.

But if it’s the latter, then the invention of new free forms of consumption — Instagram, TikTok, Twitter, and so on — could reduce the incentive to work.

If the way I have fun is by buying a boat and sailing it up and down the coast while drinking Clase Azul and watching TV on a big screen, then sure, I might work 50-hour weeks in order to afford all that.

But if the way I have fun is by going on X and arguing with Elon Musk, and watching TikToks of college kids complaining about cultural appropriation, then why am I busting my butt at work?

Of course, that’s theoretical. The cold, hard data says that Americans are working just as much as ever before…or does it?

Data on labor hours comes from two places: A) asking businesses how long their employees worked, and B) asking people how many hours they worked.

But neither of those is likely to capture actual time-on-task very well. If people browse social media on their smartphone in their cubicle, that’s going to be counted as “work” in the government numbers, even though in reality that’s leisure.3 

Before the internet, smartphones, and social media, goofing off at work was probably both more boring and harder to get away with; now, people bring their whole social lives to the office in their pockets.

All day long, whenever I check Twitter, there are a ton of people talking who list high-paying jobs in their bio. And yet there they are, gabbing away on the internet instead of doing those jobs!

If lots of people are taking stealth leisure via social media use during “work” hours, then this might be satisfying the increased demand for leisure time due to a shift in consumption preferences toward social media.

This might increase job satisfaction — because work now involves a lot more goofing off — while also making many jobs feel like “bullshit.” Because if you’re actually getting paid to do a couple hours of work and six hours of arguing on the internet every day, why are you even clocking in to the office or logging onto the company Slack?

The robot fantasy

I did notice one other very common argument among the people who had no problem with UBI discouraging work. A whole bunch of people said that since jobs are going to be automated away anyway, people are going to have more leisure time whether they want it or not. And so, they argue, at least UBI will regular folks well-fed during their new leisurely obsolescence:

Screenshot

I can’t tell you with certainty that this won’t happen, but I can tell you with certainty that it hasn’t happened. Among those who are too young to retire and mostly too old to still be in school, the percentage of people with jobs is as high as it has ever been:

There’s just no sign of mass technological unemployment, either in the US or anywhere else.

Now it could be that this is about to change. Sometimes the economy really does encounter a sudden break point where all the old certainties get tossed out and a new reality takes hold.

The Industrial Revolution is a good example of this. Maybe the invention of “Artificial General Intelligence” is right around the corner, and will replace the bulk of the work that normal humans can possibly do, leaving a world in which only the most brilliant AI engineers, savviest and boldest entrepreneurs, and most well-heeled financiers can make a living.

I encounter a surprisingly large number of people in the San Francisco tech industry who believe that this is going to happen. They might be right — Daron Acemoglu agrees with them — but I suspect they’re overgeneralizing from their own experience.

Everyone likes to marvel at how billion-dollar software companies have been created with just a handful of employees. If you see that kind of thing all day, you very well might start to think that labor is obsolete!

But if you look at the overall economy, you’ll see that the fraction of output that gets paid to labor has fallen by only a couple of percentage points since the dawn of the information age:

(And part of this fall is just the increase in land rents from our national failure to build housing.)

Science fiction futures are fun to imagine, but as things stand right now, pretty much every American company still needs lots of labor from lots of human workers.

If all the janitors, food service workers, farmers, construction workers, checkout clerks, receptionists, security guards, cooks, warehouse workers, food delivery people and other working-class people in the economy vanished tomorrow, advanced technological society would simply collapse, and those software engineers and entrepreneurs and venture capitalists who didn’t starve to death would find themselves scratching out a meager living from unforgiving soil in short order. Economics bloggers would not be spared.4

A less colorful way of saying this is that labor and capital might have become a tiny bit more substitutable over the last few decades, but they’re still mostly complements.

Personally, I like the idea of unconditional cash benefits. They have much to recommend them over other forms of welfare — they’re easy to administer, simple to navigate, relatively free of perverse incentives, and have the potential to be broadly popular. I supported the expanded Child Tax Credit, which is the closest thing we’ll get to a federal basic income in the near future.

But at the same time, I think the intellectual culture around UBI has become a bit weird and dysfunctional. It seems like a strange alliance between rich nerds who think that anyone with an IQ of less than 130 is either economically useless or soon will be, and downwardly-mobile overeducated elites who feel like normie middle-class jobs are beneath them.

Neither of those attitudes makes much sense to me; neither the dream of a world free of workers nor the dream of a world free of work is particularly useful right now. Human labor is still incredibly valuable, and figuring out how to make human workers more capable is still how most value is created.

And for that reason, we should focus policy on rewarding human labor more, and be wary of economic philosophies that claim that most human beings would be better off as glorified pets.

Update: I should have mentioned this in the post, but unpaid work like child care and housework is no less valuable than the paid kind — and society seriously undervalues it.

But in the recent big UBI experiment, detailed surveys of the cash recipients found that they didn’t spend more time on these unpaid tasks — or on things like community engagement, caring for others, or self-improvement — after getting UBI. I should have been more explicit about that!

Notes:

1. But what about “econ blogger”, you ask? Surely that is a bullshit, useless job? Ahh, but if not for us econ bloggers, someone somewhere might make actual policy based on something David Graeber wrote. And just think how much economic value that would destroy!

2. Assuming both numbers are adjusted for inflation, which in this case they are.

3. Note that this might help explain the productivity slowdown! If people today spend an hour more out of every workday goofing off on social media rather than doing work, compared to 2005, this increased “stealth leisure” could mask increasing productivity from new information technologies. So far I haven’t seen anyone investigate this possibility.

4. In fact, this is a joke from the “Hitchhiker’s Guide to the Galaxy” series.

This article was first published on Noah Smith’s Noahpinion Substack and is republished with kind permission. Read the original here and become a Noahopinion subscriber here.

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