Global News Journal

Perilous predictions for 2011

It’s the season to be merry – and to make forecasts about next year. Across the finance industry fine minds spend December crafting outlooks and extrapolations about how the world will fare, in the hope of a decent return over the next 12 months and avoiding the bear traps that will swallow an investment. The banks, strategic advisories and political risk consultants trumpet their analytical prowess, of course, but are also meeting a natural human need to peer into the future. We all want guidance to take the sting out of living in an uncertain world.

Nowhere is prediction more fraught with peril than in politics and world affairs. The success rate is in inverse proportion to the costs that unexpected acts in the real world can impose on the investor. So despite the difficulty of providing a reliable guide to the future there are huge incentives to try to chart the way ahead. Here’s  Control Risks, a risk consultancy firm, on its view of 2011, while competitor Eurasia reveals in early January, as does the World Economic Forum. Nomura has a list of 10 political challenges to prosperity that range from the prospect of gridlock in US domestic politics to brinksmanship on the Korean peninsula.

So which voices warning of political perils should one heed? There’s a crowded field of commentators, perhaps because political outcomes are not as reducible to numbers as economic indicators, where the industry of forecasting has statistical validity. If you work for a well-known investment bank or strategic studies institute your thoughts carry  institutional gravitas. However, and this is somewhat a statement of the obvious, only a track record of smart forecasting earns you an audience. That, and saying something worthwhile. Worse than getting a prediction wrong is being so blandly vacuous and broad in scope that your forecasts are both right and uninformative.

Respected voices suggest that beyond pointing to areas of dispute and potential tension, political forecasters are attempting the impossible. “The science of prediction is a contradiction in terms,” says Nigel Inkster, a former British intelligence officer who analyses international political risk at the International Institute for Strategic Studies in London. “There are so  many potential variables that could come together in so many potential configurations that it is really difficult to identify anything about which you can be really confident,” says Inkster.

“You can look at the line up of forces and make some broad predictions, for example on the likelihood of trouble around the referendum in Sudan. But so much there depends on decisions not yet taken,” he says, referring to January’s plebiscite where south Sudan may vote to secede. “And when you get into assigning probabilities (to outcomes), that’s not very helpful.”

Reuters tries to gauge political risks with appropriate cautions in mind. We reckon it is possible to use our expertise to diminish surprise and anticipate both dangers and opportunities. How well do we do? Our 2010 outlook focused on sovereign debt default, a hung parliament in Britain and tension between China and the United States. Those were borne out, unlike our prediction that Kevin Rudd would easily be re-elected in Australia. (He was ousted in a party coup in June and his successor Julia Gillard scraped into power). For comparison’s sake look at the 2010 predictions from Eurasia.

from Tales from the Trail:

McCain sees India, U.S. teaming up against “troubling” China

As President Barack Obama begins his visit to India, his erstwhile rival John McCain is voicing hope that Washington and New Delhi will tighten up their military cooperation in the face of China's "troubling" assertiveness.

McCain, the 2008 Republican presidential candidate and the ranking Republican on the Senate Armed Services Committee, told a think-tank audience in Washington on Friday that the two huge democracies were natural allies in the quest to temper China's ambitions.

"While India and the United States each continue to encourage a peaceful rise for China, we must recognize that one of the greatest factors for shaping this outcome and making it more likely is a robust U.S.-India strategic partnership," McCain said.

McCain suggested that India and the United States could increase the level of representation at each other's central military commands and work to make their armed forces more "interoperable" through joint military exercises and sharing of intelligence.

"There's no reason why we can't work to facilitate India's deployment of advanced defense capabilities such as nuclear submarines, aircraft carriers, missile defense architecture as well as India's inclusion in the development of the joint strike fighter," the next generation fighter aircraft being developed by the United States, the United Kingdom and others, McCain said.

The United States should also firmly back India's desire for a permanent seat on the U.N. Security Council, he said.

from Tales from the Trail:

State Dept seeks new ally vs. North Korea: PETA

North Korea -- you have been warned.

The State Department on Monday held out the possibility that the isolated Stalinist state's belligerent rumblings could earn it a powerful new foe on the world stage:  animal rights activist group PETA.

Asked at a news briefing about North Korea's latest move, which saw it fire a barrage of artillery shells into the ocean near South Korea, State Department spokesman P.J. Crowley was blunt:

"Well, I'm sure it resulted in a lot of dead fish.  And we certainly hope that PETA will protest," he said.

PETA, or People for the Ethical Treatment of Animals, is no slouch when it comes to defending animal rights, having taken on everything from fur-wearing Hollywood celebrities and circus elephant acts to the meat and dairy industry.

It was unclear, however, if the group would rally behind Korean fish as the State Department suggested.

Crowley -- perhaps aware that he risked sounding flip with the PETA comment -- later reiterated longstanding U.S. concern over North Korea's actions, which included the March sinking of a South Korean warship that killed 46 South Korean sailors.

Defiant North Korea takes case to UN press corps

Officials working for the government of communist North Korea seldom appear in public — especially in front of reporters from countries they view as hostile. But Pyongyang’s ambassador to the United Nations, Sin Son-ho, turned to the U.N. press corps in New York on Tuesday to defend his nation against Seoul’s allegtions that the North Korean military torpedoed a South Korean naval ship on March 26, killing 46 sailors.

South Korea brought the dispute to the U.N. Security Council this month, asking the 15-nation body to take action to deter “further provocation” on the Korean peninsula, where the North and South have maintained an uneasy truce since the Korean War ended in 1953. On Monday members of a South Korean-led investigative panel presented the council with their evidence. Afterwards, Pyongyang had a chance to state its case in a separate closed-door briefing, though council diplomats said few if any envoys present were persuaded by the North Korean denials.

On Tuesday it was time to reach out to the press. The North Korean mission held a news conference at United Nations headquarters, a decision that several U.N. officials described as “unprecendented” for Pyongyang, which is under U.N. sanctions over its nuclear weapons program.

Large numbers of empty seats at U.N. briefings are commonplace, but Sin faced a full house. For most of his long rebuttal of Seoul’s allegations, Sin and two other North Korean diplomats on either side of him remained characteristically deadpan. Sin said his country was being framed by South Korea and the United States, both of which stood to politically benefit from unfairly heaping the blame on North Korea. He said the South Korean investigation was “a complete fabrication from A to Z” and compared its conclusions to Aesop’s fables.

“The U.S. most benefited from the sinking,” he said. “The U.S. wants to degrade our economy.”

Speaking in English, Sin showed a jovial side at least twice during his hour-long briefing, in which he fielded numerous questions from reporters, many of them Japanese and South Korean. He laughed heartily when asked how North Korea’s soccer team would perform in the World Cup in South Africa.

“This is not a place to be concerned about a soccer team,” Sin said with a big smile. “I am not in a position to give you any answer to your question, because your question is not directly related to the sinking of the South Korean warship.”

The incredible shrinking Kim Jong-il

North Korean leader Kim Jong-il emerged from his reclusive life last week for a rare visit to China looking every bit the part of a man nearing 70 recovering from serious illness. Kim, who was widely suspected of suffering a stroke about two years ago, walked with a slight limp, had a thinning head of hair and shed the trademark paunch that once pressed snugly against his jumpsuits. The most telling pictures of his change can be seen in the posed shots he took with Chinese President Hu Jintao, born just 10 months after Kim in 1942, and looking much younger  today.  Pictures taken in October 2005 when Hu visited Pyongyang and from earlier this month when Kim was in Beijing show how much the North Korean leader has changed.

The world has few chances to see Kim free from the filter of his state’s official media and the trip to China reminded people just how frail the man known at home as the “Dear Leader” is.  He is a man of diminished physical stature whose policy blunders have caused the state’s economy to grow smaller since he took over in 1994 when his father died.  His pursuit of  nuclear arms and a missile arsenal have driven his state further into isolation. While Soviet satellites crashed down to earth with the end of the Cold War, Kim’s North Korea just plodded along as a historical anomaly, planting even more propaganda banners proclaiming the brilliance of its socialist system.

Kim’s trip raised the typical questions about his state’s dependency on China to supply the goods and aid he needs to keep the North’s economy alive. There was speculation over succession and whether Kim brought along his youngest son Jong-un to introduce to Beijing’s leaders as the heir to the throne his family has held for more than 60 years. Analysts wondered if economic pressures ratcheted up by U.N. sanctions imposed after the North’s nuclear test last year would cause Kim to return to international nuclear disarmament talks where he could win much-needed aid for reducing the security threat his state poses to the region.

But the trip also served as reminder that despite his physical problems, his economic woes and his ever increasing global isolation, Kim is still able to vex the world’s most powerful nations. His weakness can also be his strength.

China has been willing to bankroll its destitute neighbour in large part because it is deeply concerned by the instability a collapsed North Korea would cause. Kim can justify all economic hardship endured by his people as the price they have to pay to build a military strong enough to hold off an invasion by U.S. forces. And in the North, experts said Kim’s frumpy clothes and his infirmity are used in the state’s propaganda apparatus to build Kim’s cult of personality by showing as so busy and so tireless that he is willing to sacrifice his own well being for the betterment of his people.

North Korean leader Kim Jong-il says bye-bye bouffant. Hello China?

North Korean leader Kim Jong-il appears to have abandoned his trademark bouffant, relegating one of the world’s most noticeable hair styles to the scrap heap of history.

Reports have said that Kim may travel to China this month for a visit that would be the reclusive leader’s first trip abroad since apparently suffering a stroke in 2008. Kim’s trips to China, his destitute and isolated state’s biggest benefactor and the closest thing it can claim as a major ally, have often led to moves that decrease the security threat Pyongyang poses to the economically vibrant region. This would be Kim’s first trip abroad since falling seriously ill.

Kim changed noticeably in April 2009 when he made his first public appearance after the apparent stroke.

His pot belly pressed less firmly against his muddy shade of grey jumpsuit and his hair had thinned. In photos released by his state’s official KCNA news agency in the following months, Kim is seen putting on a little bit of weight and looking more spry, but his hair still remained thin.

Winter then set in and Kim was mostly only shown wearing hats in public until this month when KCNA released this photo, which appears to confirm that the bouffant is gone.

Kim now goes for a short on the sides look with the little bit of hair left on top brushed back.

South Korean intelligence officials have said the small-in-stature Kim wants to pile his hair as high as possible to make him look a little bit taller. He had to forgo his platform shoes after falling ill mostly because he had trouble with balance, they said.

Balancing powers in the Malacca Strait

  Singapore’s warning of a terrorist threat in the Malacca Straits has again highighted the issue of who is in charge of security in one of the world’s busiest shipping lanes.

 Singapore, Malaysia and Indonesia have stepped up sea patrols in the strait after Singapore’s navy said on Thursday it had received indications a terrorist group was planning attacks on oil tankers.

A Police Coast Guard vessel patrols shipping lanes near freight ships off the coast of Singapore March 4, 2010. ( REUTERS/Vivek Prakash)

 The 900-km long (550 miles) Malacca Strait, linking Europe and the Middle East with the Asia-Pacific, carries about 40 percent of the world’s trade. More than 50,000 merchant ships ply the waterway every year. 

About 3.3 million barrels per day (bpd) of Middle East crude passed through the strait and to Japan last year. Middle East crude accounts for 90 percent of Japan’s total imports. Up to 80 percent of China’s crude imports are delivered via the narrow and congested waterway.

 So China and Japan have a stake in keeping the Malacca Strait secure, as does India which has a blue water navy patrolling in the Andaman Sea at the western end of the strait.

 The strait is a vital sea lane for the U.S. Navy, which sent warships to Taiwan via the Malacca Strait at a time of heightened tensions between China and Taiwan in 1996.

The comic books that brainwash North Koreans

By Geoffrey Cain

SEOUL, South Korea — Heinz Insu Fenkl, a literature professor at the State University of New York (SUNY) at New Paltz, has cracked one secret to understanding the bizarre regime of North Korea: by reading its comic books.

The academic, who refers to himself as an American-Korean, spends hours in his office tucked away in upstate New York, churning out English translations of the rare books (called “gruim-chaek” in North Korea) after he gathers them at shops in China and from colleagues who travel to Pyongyang.

The plots are often wacky, usually pinning blame on loud-mouthed Americans and opportunist Japanese for cursing their promised land with vice. Most books are leaked to China through the border town of Dandong — a hub of smuggling in North Korean goods. Others end up in a single shop in Tokyo that specializes in hermit-state memorabilia. Still, others mysteriously make their way to university libraries in the U.S.

Of the “gruim-chaek” I’ve located, those published this decade tend to be spy thrillers probably aimed at young boys and teenagers. The cartoonists establish the storylines strictly as moralistic good-versus-evil tales. And almost all the books are printed in black-and-white on poor quality paper.

“I’ve also seen some covers of more recent comics that seem to be re-establishing a mythic narrative by referring back to old folktales,” Fenkl said, adding that he’s planning a single massive web archive for all his North Korean comic books.

Interview with North Korea border crosser Robert Park

 (Photographs by Lee Jae-won)

North Korea said on Tuesday it had  detained a U.S. citizen who entered its territory, apparently confirming a report that an American activist crossed into the state to raise awareness about Pyongyang’s human rights abuses.   Robert Park, 28, walked over the frozen Tumen river from China and into the North last Friday, other activists said. The Korean-American told Reuters ahead of the crossing that it was his duty as a Christian to make the journey and that he was carrying a letter calling on North Korean leader Kim Jong-il to step down.

Park had an exclusive interview with Reuters last week before starting on his journey. The following are excerpts from the conversation. He requested that the comments be held until he was in North Korea.  

Reuters: Why are you planning to go into North Korea?

Robert Park: The North Korean human rights crisis by murder rate is the worst in the world. An estimated 1,000 people a day die by starvation and starvation is a murder case. North Korea has been sent more food aid than any nation in the world but the food has not gone to the people who need it. So this is murder.

But not only that, there are concentration camps in North Korea that are of the same brutality as in Nazi Germany.

North Korean leader Kim Jong-il likes to collect trains

While some people enjoy collecting model trains and building tiny stations along scaled down tracks, North Korean leader Kim Jong-il appears to have taken this passion to a new level. According to a report in South Korea’s largest daily newspaper, the Chosun Ilbo, Kim has six private trains and 20 stations around the country built just for him.

Kim’s train is armored and also contains conference rooms, an audience chamber and bedrooms. Satellite phone connections and flat screen TVs have been installed so that the North Korean leader can be briefed and issue orders, the paper said quoting intelligence sources.

Security obsessed Kim has 90 carriages in his collection and uses three trains when he travels, according to the paper. The advance train carries security personnel who check the tracks and look for bombs along the way. The train in the middle carries Kim and his entourage, while the trailing train is also for security.

Lee Yong-guk, who served in the closest circle of bodyguards for Kim in the 1980s before defecting to the South, told Reuters that North Korean security had mastered the art of camouflage to such a level that a train going north may in fact mean a ship carrying Kim is heading south.

Kim also travels the rails with a few young women who share food, drinks and perhaps a few other things with the man known at home as the “Dear Leader”, Lee said.

The reclusive Kim is thought to be afraid of flying and typically uses his private rail cars for his few trips abroad. He also likes to ride the rails for his internal inspection visits to military bases, factories and farms called “field guidance” by the North’s state media.