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Activism Economics Environment Society Sports

[885] Of Belum-Temengor: a possible alliance between the greens and the pharmaceutical industry

The Malaysian Nature Society (MNS) with cooperation of TVG at KLCC — a major local cinema — is screening “Temengor – Biodiversity In The Face of Danger” for free. The film is a documentary on Temengor, part of the Belum-Temengor forest complex up north in Perak. It’s the largest continuous forest in Peninsular Malaysia and is currently facing deforestation. The documentary itself was produced by Novista and is being screened in conjunction of the Belum-Temengor Campaign. The campaign itself was launched earlier this year and I’ve given it a passing mention back on Earth Day 2006. I won’t talk about the film per se but instead, I want to share my opinion on possible alliance the campaign organizers could forge to make their effort more successful .

The documentary mentioned several reasons why Temengor should be preserved. One of the reasons concerns the pharmaceutical industry. The narrator in the document said that deforestation there threatens the possible development of new drugs. She went on further that tropical flora species are major contributors to drugs development. Therefore, each day of deforestation reduces humankind’s chance to discover new medicines to fight diseases. One sentence struck me so deeply and it roughly goes something like this: “just as mankind starts to open up the treasure chest, the content begins to disappear.”

After the documentary ended, there was a Q&A session conducted by a representative from MNS. The audience — there were about 30 people in the hall — had a discussion and I shared my thought with everybody. I asked the society’s representative whether the organizers had come in touch with the pharmaceutical industry. My rationale for contact is simple: destruction of the forest reduces the chance the pharmaceutical industry to discover new drugs and essentially, chance to make more money through patents. In essence, the pharmaceutical industry has every incentive to stop deforestation and protect its potential goldmines.

Representative answered that while it’s a good strategy, Malaysia doesn’t have a strong patent law, especially when it comes to the protection of local interest. Somebody followed-up on it and asked whether the government plans to draft a relevant law on it. The representative said that there’s already a draft on it. Given how the current free trade agreement with the United States is heading which is giving lots of stress on intellectual property, I suspect that law would come sooner than later.

In The Carbon Wars by Jeremy Leggett, the author wrote that climate changes cause damages and adversely affect the insurance, or rather the reinsurance, industry. With every damage caused by climate change-related disasters, the cost of business for the industry goes up. Hence, the insurance industry has every reason to support action to slow down climate change. Right now, the reinsurance industry is one of the industries that are actually taking a proactive stance to combat human-induced climate change.

Similar alliance could be created between the greens and the pharmaceutical industry. It’s in the industry’s best interest to protect the its revenue source. Thus, this rationalizes an alliance between the greens and the pharmaceutical industry.

So far, the organizers have only contacted with the banking industry. While the banking industry’s involvement in the Belum-Temengor campaign is encouraging, I don’t believe the banking industry has a strong incentive to save the environment as the pharmaceutical industry does.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

p/s – when the Pope said something that isn’t too admirable, regardless his intention, for me it was like “here we go again”. I’m glad that the Pope later apologize and hence possibly closed the controversy down. But it seems the apology isn’t sincere:

VATICAN CITY – Pope Benedict XVI “sincerely regrets” offending Muslims with his reference to an obscure medieval text that characterizes some of the teachings of Islam’s founder as “evil and inhuman,” the Vatican said Saturday.

But the statement stopped short of the apology demanded by Islamic leaders around the globe, and anger among Muslims remained intense. Palestinians attacked five churches in the West Bank and Gaza over the pope’s remarks Tuesday in a speech to university professors in his native Germany.

Moreover, some Christians are disappointed with the Pope’s apology. They said the Pope shouldn’t have apologize. Sorry is the hardest word for them it seems.

Whatever it is, a Catholic school in South Bend isn’t happy regardless of what the Pope said. Reason is, the school — Notre Dame — just got kicked in the ass by a school called Michigan:

SOUTH BEND, Ind. (AP) — Take that, Notre Dame.

No. 11 Michigan finally put a Big Blue bruising on the second-ranked Fighting Irish in a 47-21 rout Saturday — the most points scored against Notre Dame at home in 46 years.

And Michigan won’t say sorry to Notre Dame. Nope. No way.

Categories
Economics

[882] Of controlling price to curb shortage

In economics, price ceiling introduces shortage given the right condition.

In Malaysia, price ceiling combats shortage in the same condition:

Controlling prices to ease sugar shortage
13 Sep 2006
Fay Angela D’cruz

KUALA LUMPUR: Fine sugar has been made a controlled item, with its price fixed at RM1.55 per kg in West Malaysia, and RM1.65 per kg in Sabah and Sarawak.

This move follows the tendency among refineries to produce more fine sugar as it was not a controlled item, resulting in the shortage of coarse sugar in the market.

Before the decision, fine sugar was sold between RM1.90 and RM2.50 per kg. Coarse sugar is controlled at RM1.40 per kg.

Domestic Trade and Consumer Affairs Minister Datuk Shafie Apdal announced the decision, which is effective from today.

He said the government hoped the move would help solve the coarse sugar shortage in the retail market.

May a higher being saves us all.

For previous entries on sugar shortage, see post [824] Of sugar: price ceiling and oligopoly, [810] Of doctor says sugar is unhealthy and [763] Of honey, ah sugar sugar.

Categories
Economics

[876] Of the independence of Bank Negara

After running through the 2007 Malaysian budget earlier, I’d like to touch on an issue and it concerns Bank Negara. Bank Negara is of course the Malaysian central bank. In the budget tabled last Friday, the Prime Minister announced that Bank Negara will establish a fund worth MYR 200 million to invest in “integrated agriculture and livestock projects”. I’m shocked to find out that Bank Negara is getting itself involved in agriculture!

Before I go on, I want to clarify that I’m neutral on the current administration’s stress on agriculture. Despite all the political gimmicks, I do see the rationale behind the stress on agriculture. Malaysian economy after all is undergoing structural shift and there’s a need to reassess its bases. Malaysia at the very least need to find the sectors that it has comparative advantage in as our regional competititors are outdoing us. I myself — perhaps due to the limits of my knowledge — am not confident enough to say which sectors Malaysia look into.

Nevertheless, having Bank Negara involved in agriculture is another story altogether. I’m not sure if this is the first time ever the central bank has seriously ventured outside the area of central banking but in my short term memory, this is certainly the first.

Bank Negara is first and foremost a central bank. Therefore, it should act as a central bank. Its business is central banking. It should only focus on monetary policies.

I don’t know if this is an outside-the-box thinking by the government but why couldn’t the existing Bank Pertanian — the main function of Bank Pertanian after all is promoting development of the agriculture in the country — take the job instead?

It does seem to me that Bank Negara is being used by the Prime Minister to advance his political agenda, for better or for worse. Even if that isn’t true, this venture into agriculture is not part of monetary policies and thus, not the responsibility of the central bank. This agricultural venture could distract the central bank from its real responsibilities.

More importantly, through my eyes, Bank Negara doesn’t have the independence that it needs to operate as a central bank. With the lack of independence, imagine if the executive branch of the government suddenly found out that it ran out of cash and decided to resort to seignorage?

Categories
Economics Politics & government

[872] Of bye bye Chad, hello Venezuela

It’s likely that many Malaysians and others have already read that Petronas – the giant Malaysian state-owned oil and gas company – has been kicked out of Chad. In a rather suspicious way too. The Chadian president alleges that Petronas fails to pay taxes to the Chadian government. After doing some reading, I feel the expulsion of Petronas is an exercise by Chad to forcefully nationalize part of Chadian oil and gas industry. That taxes stuff is simply a red-herring:

The surprise move followed Chad’s decision to create a new national oil company, which it said should become a partner in the country’s existing oil-producing consortium, led by U.S. major Exxon Mobil and including Chevron and Petronas.

If you’re a Malaysian and you haven’t heard of the expulsion, then you’re probably too busy talking about a wedding between a Malaysian pop star and er, somebody.

Interestingly, the People’s Republic of China seems to have a hand on the Malaysian explusion given that the PRC stands to directly benefit from Malaysian loss. So, it’s kind of hard to shrug off the idea that the PRC might have a hand on this.

Whatever PRC role in this expulsion is, if Petronas is kicked out, Chad is stealing from Malaysian citizens. But then, given the fact that Chad was the world’s most corrupt nation according to Transparency International last year, we should have seen this coming.

While that happens, here comes Hugo Chavez to the rescue:

KUALA LUMPUR: Venezuelan President Hugo Chavez received a red-carpet welcome in Malaysia on Monday ahead of talks expected to focus on politics in the Middle East and cooperation in the oil and gas sector.

Socialist or not, black gold is still black gold. I’m sure even commies understand what that means.

Who needs Chad, eh?

Welcome Hugo Chavez.

Categories
Economics Environment

[864] Of Coase theorem and global warming

Global warming deniers have lost the debate. However, recognizing the problem and arresting it are two different things . An article by Sunstein at WaPo talks on one of the obstacles of combating global warming:

The obstacle stems from the unusual incentives of the United States and China. As the world’s leading contributors to climate change, these are the two countries that would have to bear the lion’s share of the cost of greenhouse gas reductions. At the same time, they are both expected to suffer less than many other nations from climate change — and thus are less motivated to do something about it. And while the international spotlight has rightly been on the behavior of the United States, China will soon present the more serious problem.

This is of course, like what Prof. Mankiw said, is relevant to the Coase Theorem. Coase Theorem is also related to the transboundary haze in Southeast Asia.