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Politics as Usual


Self-Confessed Killer Wins Guatamala's Presidential Election


Unfortunately, US presidential candidates don't admit their killings.

A SELF-CONFESSED killer associated with a brutal dictator has won Guatemala's
first peacetime presidential election in nearly 40 years, beating his rival
by more than two votes to one.

Alfonso Portillo, 48, of the Guatemalan Republican Front (FRG), polled 68 per
cent of Sunday's vote, while Guatemala City's mayor, Oscar Berger, 54, of the
ruling Party of National Advancement, managed 32 per cent.

Mr Portillo was running a lacklustre second to Mr Berger earlier in the year
before he admitted or, as some say, boasted that he killed two law professors
in a 1982 bar brawl while living in exile in Mexico. After that his campaign
took off and he never looked back.

The two victims were Mr Portillo's rivals for the deanship of the law school
where he was teaching. He says he killed them in self-defence; the victims'
families say they were unarmed. A warrant was issued for his arrest, but he
fled the country and was never brought to court. The statute of limitations
has long since expired in the case.

Rather than seeking to play down his double killing, Mr Portillo used the
incident as a centrepiece in his television campaign advertisements, showing
his image while a background voice said: "A man who can defend his life can
defend the life of citizens."

Mr Portillo was very low key in his victory speech. "This triumph is not of
Alfonso Portillo. It is not of the FRG. It is of the people of Guatemala," he
told supporters. "The vote had a very clear message: the need for change."

The founder of Mr Portillo's FRG and, some analysts say, the power behind the
throne is the former dictator Gen Efrain Rios Montt, who ruled Guatemala from
March 1982 to August 1983, one of the bloodiest periods of the country's
civil war which ended in 1996 after claiming more than 200,000 victims.

Gen Montt directed a scorched-earth campaign against Marxist guerrillas which
resulted in the execution of thousands of civilians. At the time, Mr Portillo
was a guerrilla sympathiser who was forced into exile. Mr Portillo has
confirmed that Gen Montt will serve as a presidential adviser.
The London Telegraph, December 28, 1999


Digital Society


Will Asia Catch the Next Wave?


Better chaos than dictatorship.

Asia enters the new millennium weakened by a financial crisis that will stand
out even in the broader sweep of history. Years of dynamic growth stopped
suddenly after 1997 when a wave of financial speculation brought
devaluations, disastrous losses to the region's banks and economic collapse.

Although the past year has brought improvement, recovery remains weak and
heavily dependent on the booming demand for personal computers and other
electronic goods in the US. The financial and corporate restructuring that
are widely seen as necessary to lay the foundations for sustained economic
growth are not complete. How Asia copes with this task will determine its
future, not only in 2000 but for many years beyond.

Currently, the region is being pulled in two opposing directions. The benign
one sees more restructuring and a period of strong economic growth based on
the new internet technology, which would in turn reinforce the trend towards
greater freedom and democracy. The negative one involves failure to complete
restructuring with disappointing growth leading to heightened social and
political tensions.

Tung Chee-hwa, Hong Kong's chief executive, is not alone among Asian leaders
in pushing the concept of an economy based on high-technology,
telecommunications and the internet as the source of future prosperity. If he
is right, the economic crisis could mark Asia's transition away from a growth
model based on manufactured exports and property speculation to a new
service-led economy.

The internet seems tailor-made for Chinese people with their nimble minds and
love of gadgetry, but signs of change are appearing in many places.

In what appears to be an important strategic shift, Hong Kong's property
tycoons are using their cashflows to develop internet businesses. The son of
Hutchison chief Li Ka-shing is building a cyberport in the territory, while
Sun Hung Kai Properties has formed alliances with both Microsoft and Sun
Microsystems.

China's mobile phone market has become one of the most dynamic in the world,
ready to embrace new products, such as wireless internet connections. Japan
has seen the rapid advance of technology-based companies such as Softbank and
NTT-DoCoMo, while day-trading of shares on the internet has suddenly become
all the rage in South Korea. Further afield, India's surging software
exports, officially expected to reach $50bn by 2008, have opened up prospects
for growth.

The new information age could not only underpin Asia's next phase of high
growth. It should also promote the trend towards democracy that has been a
feature of recent years. "As the market advances you see the devolution of
power away from the elites," says Andrew Sheng, Hong Kong's chief financial
market regulator.

The closing years of the millennium have seen important political shifts in
Asia with Taiwan and South Korea moving from military dictatorship to plural
democracy. Indonesia also seems to be heading in that direction. Even
Pakistan's new military dictatorship is defensive about its lack of
democratic credentials.

There has been a sea change in public attitudes. Asians have become less and
less willing to accept authoritarian rule, says Frans Seda, a former
Indonesian finance minister who was in government during the country's last
transition in the 1960s. "If there is a choice between chaos and
dictatorship, nowadays you choose chaos," he says.

The internet has not yet opened up the truly closed countries, such as North
Korea and Burma, but awareness of the need to latch on to the technology
revolution has already caused Singapore to lighten its heavy-handed approach
to censorship and regulation. Its planners realise they must allow creativity
to stay ahead in the knowledge-based business.

But doubts remain both about the durability of the region's recovery and
about the power of the internet to revolutionise economies. "The internet has
high potential but its benefits are narrow in terms of the multiplier effect
on the economy," says Hung Tran, the Vietnamese-born chief economist at
Rabobank International in London.

This year's recovery has depended on exports, weak currencies and low
interest rates. But Asia's long-term prospects are still vulnerable to the
rise in US interest rates and the lack of corporate restructuring at home. Mr
Tran says: "Without growth, social and political problems could come more to
the fore."

The devastation wrought by the economic crisis has also revealed more
sinister forces at work. There was a hint of religious extremism in the
recent Malaysian elections; it also underlies the separatist movement in the
Indonesian province of Aceh. The strain of the economic crisis has unleashed
a more strident nationalism in China, while Japanese voters have started to
question their country's traditional pacifist role.

One of the great challenges of the next century will be how to integrate
North Korea into the international community without the shock of a violent
internal collapse.

Above all, China has yet to face the challenge of allowing more economic
freedom without sparking political disruption. "At issue is the adaptability
of the Communist party. So far the signs are not as good as one would want,"
says Michael Yahuda of the London School of Economics. Membership of the
World Trade Organisation has been seen as a watershed in Chinese history
because it will oblige the country to deal with its faltering banks and
creaking state enterprises. But by creating new economic freedoms and
embracing the internet world, the government is also putting its own
authority at risk. Already it is cracking down on the Falun Gong, a sect that
attracts mainly older people but uses the internet to mobilise its
supporters. On the other hand, failure to reform and economic stagnation
would only increase the social tensions and mass unemployment.

The natural response could be a more deliberate retreat into nationalism in
an attempt to rally the people against a common, outside enemy.

One big fear is that failure by Japan to recover could lead to a separate
build-up of domestic tensions there as well. Although Japan has at last been
posting positive growth rates this year, its recovery remains heavily based
on fiscal stimulus. Japan is still not a final export market for Asian
companies in the way that Germany is for Europeans or the US is for Mexico.
It cannot thus play the role of locomotive for the region, says Jean-Pierre
Lehmann of the Swiss Asia Foundation in Lausanne. "Japan will be in no
position to pick up if the US falters."

That absence of real economic leadership means an element of stabilisation is
missing from the region, he adds. One of the big concerns for the future is
that the historic rivalry between Japan and China could resurface.

At present the balance is held by the US, whose military presence in the
region continues to play a stabilising role. But, says Mr Yahuda of the LSE,
one of the unresolved questions is that "neither China nor Japan have yet
found ways of dealing with common security issues in such a way that each one
can deal separately with Washington."

No one can be sure how Asia will respond to all these conflicting pressures
as the 21st century gets under way. Asia could choose the benign path,
capture the information revolution and use it to promote prosperity and
deeper political reform. Or it could duck the challenge with all the
attendant risks of social and political tensions.

The outcome is finely balanced, and as Mr Lehmann remarks: "There isn't any
room for complacency at all."
The Financial Times, Dec. 28, 1999


Progress of History


Top Stories of 1899 Like Those of 1999


But at least they didn't try to celebrate the millennium a year early.

It is the last month of the century. Directors' pay is under attack, interest
rates are too high for comfort and skilled staff are in short supply. A nasty
war rages in a faraway country and Britain is at odds with its European
neighbours.

On the positive side, money is pouring into new ventures. A modern generation
of trade union leaders has emerged and the number of strikes in Britain is at
its lowest level in years.

Such was the world in December 1899, as reported by the Financial Times, a
newspaper launched 12 years earlier with a promise to be "the friend of the
honest financier, the bona fide investor, the respectable broker, the genuine
director, the legitimate speculator".

The first half of 1899 had been an exciting time. American railway shares
enjoyed "a boom of unprecedented dimensions", the FT reported. Investors
flocked to South African and western Australian gold mining companies.

There were other enticing prospects. "When will the limit of music hall
enterprise be reached?" the FT asked, welcoming the addition of the Balham
Music Hall, "fitted throughout with electric light", to London's
entertainment scene.

"The resources of the London and County Banking Company Limited, Balham
branch, have been taxed to their utmost in a heart-straining endeavour to
cope with the dizzying flow of cheques from applicants all eager to be in the
swim for the �3,000 of capital, divided into 3,000 shares of �1 each . . .
Verily, there are moneyed men in Balham."

But by the end of the year a pall hung over the market. In October, Britain
had gone to war against the Boer republics of the Transvaal and the Orange
Free State. Along with many in Britain, the FT thought victory would come
within months, bringing South Africa's gold fields under Britain's control.

The Boers proved far tougher than expected. "We have now to face a state of
things under which the end of the war may be a remote event," the FT said.
"The wholly unlooked for situation . . . in South Africa has sadly
transformed the prospects of holders of mining shares."

The Bank of England raised interest rates to 6 per cent, the highest level
since the banking crisis at Baring Brothers in 1890. "While the Transvaal War
is in progress, and its probable duration is the matter of the wildest
guessing, tight money may last," the newspaper warned.

Much of French and German public opinion was pro-Boer. "We have by this time
become accustomed to the illogical and ignorant ravings of the Continental
Press in reference to the Transvaal question," the FT's editorial said on
December 2.

An appreciation of foreigners was generally absent, except insofar as they
provided an opportunity for business. "Now that the inhabitants of Crete are
no longer busy cutting one another's throats, there seems a fair possibility
of the island settling down to the more peaceful pursuits of trade and
agriculture," the FT reported.

Much of the newspaper was taken up with lengthy accounts of company general
meetings. Executive wit was as leaden then as it is today. "I am sorry this
is such a foggy day," C. Algernon Moreing, managing director of the London
and Western Australian Exploration Company, told shareholders gathered at
Winchester House, Old Broad Street. "I believe that this fog which is over
London pervades many places. I believe the stock exchange at the present momen
t is in a very foggy condition. (Laughter) ... Some people have said that our
balance sheet is rather a foggy document. (Laughter and hear, hear) Well, I
hope to try to lift any fogginess there may be about that document."

Complaints about directors' pay were frequent. When Niekirk, a South African
mining company, reported to an annual meeting at the London Tavern, Fenchurch
Street, that operations were at a standstill because of the war, a
shareholder called Mr Cooney called for a reduction in the number of
directors "because they were practically doing nothing except receiving
fees". Samuel Green, Niekirk's chairman, refused to discuss the matter.
"People before they became shareholders had an opportunity of looking at the
articles of association and seeing what remuneration was given to the
directors. That remuneration was specifically stated, and it was not the
right thing to come afterwards to those gentlemen who had accepted
responsible positions and tell them they must do their work for nothing."

In spite of the war, life was good for workers at home. "The industrial boom
has brought regular work and high wages to the workmen, and consequently
labour disputes have been fewer in number and less serious in their
consequences than for a decade past," the newspaper reported. The FT
applauded the formation of a new trade union federation and a move towards
conciliation rather than confrontation. The only problem was that labour was
in such short supply.

Companies worried about their staff abroad too, particularly if they were
white. Edward Byas, a director of Ashanti Goldfields, was applauded when he
told shareholders that, in spite of West Africa's inhospitable conditions,
"we have not had a single death from disease in the whole of our white staff".

Not all companies were concerned only with their white employees. Sir Charles
Tennant, chairman of the Champion Reef Gold Mining Company of India, was
worried about an outbreak of the plague on Indian mines. "The danger was not
so much the actual ravages of the plague, but the loss of a sufficiency of
labour, owing to a scare among our native employees, who have such a horror
of the disease that they resort to flight at the mere idea of its being in
their neighbourhood," Sir Charles said.

The newspaper reported a new idea from the US: banking for students. A
women's college in Baltimore had allowed its students to open accounts. "It
is represented in support of the novel institution that the student is not
only relieved of the responsibility of holding large sums of money, but at
the same time gains some practical knowledge of banking which is important to
her in life."

The FT did not believe young men would be able to handle such responsibility.
"If American boys are anything like English boys we are afraid it will be a
long time before the prospect of a successful future will warrant any attempt
on the part of the tutor to introduce the system."

The final edition of 1899 made no attempt to sum up the 19th century, because
the FT knew that it did not properly end until December 31 1900. Much about
life today would have puzzled our forebears, not least our insistence on
celebrating the end of the century, and the millennium, a year early.
The Financial Times, Dec. 28, 1999
-----
Aloha, He'Ping,
Om, Shalom, Salaam.
Em Hotep, Peace Be,
All My Relations.
Omnia Bona Bonis,
Adieu, Adios, Aloha.
Amen.
Roads End

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