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EFN Asia CONFERENCE

SMELL OF ECONOMIC FREEDOM

LiNK e

TOP 5 THAT CHANGE THE WORLD

magazine of EFN Asia

FREEDOM BAROMETER ASIA

February 2010 ISSUE THREE


MEMBERS & PARTNERS

Message from

coordinator

WELCOME to the third issue of LINK, the members magazine of the Economic Freedom Network Asia. I hope that you had a wonderful holiday season and are now enjoying a great start to 2010. As I have already announced on the Network’s website, this year’s EFN Asia conference will be held on 7-8 October 2010 in Jakarta, Indonesia. I hope you have ‘saved the date’ for this important event.

Individual members

Member institutes

FENG Xingyuan

Indonesia Freedom Institute

YAO ZhongQiu Dr. Liu Junning Dr. Jianxun Wang

I very much hope you enjoy reading this edition of LINK and that you continue to provide us with valuable feedback. With best wishes, Gorawut NUMNAK

Centre for Free Enterprise

Dr. Jianxun Wang Dr. P.D. Kaushik

It is a fact of life that ‘nothing is constant, only change’. No one wants to change something that is already good. However, we might want to fix or adjust something slightly to give ourselves a better result or an improvement. No time is better suited for change than the New Year. We have worked 25 hours a day and 8 days a week to welcome 2010 with a new look LINK magazine. This is why this edition comes out a little late. We have shuffled, adjusted, rearranged and reduced some sections. It is hoped that the changes will give our magazine a wider scope of journalism and make it more interesting on the eye of our broader readers. Our previous two issues were also read by thousands of people from outside the Network.

Indonesian Institute

Dr. Muhammad Chatib Basri Dr. Arianto Patunru

Malaysian Institute of Economic Research Federation of Pakistan Chambers of Commerce & Industry

Farhan Bokhari Dr. Kriengsak Chareonwongsak Cong Minh Nguyen

Alternate Solutions Institute Foundation for Economic Freedom Foundation for Enhancement of Revenues

Partners

Center for Research and Communication Institute of Future Studies for Development


CONTENTS

LiNK 4

2009 EFN Asia Conference 7

8

QuoteJug

Smell of Economic Freedom 10 13

Top 5

Freedom Barometer Asia


4 2009

EFN Asia Conference

The International Conference of the Economic Freedom Network Asia series has progressed into a major event for economic libertarians in Asia and beyond. The tenth International Conference of EFN Asia was held at the Sofitel hotel, Siem Reap, Cambodia, on 9-10 October 2009.

With the current global economic crisis as backdrop, the main theme of this year's conference was 'Overcoming the Global Financial and Economic Crisis: The Rule of Law as the Key to Economic Crisis?' The conference was well attended by over 130 participants from 18 countries worldwide. Opening night at the Welcome Reception on 8 October 2009 provided the perfect opportunity for participants to renew old friendships and build on new ones in a relaxed atmosphere of the Citadel restaurant. After brief welcome remarks from the representatives of the hosts of this year's conference - Mr. Moritz Kleine-Brockhoff

of the Friedrich Naumann Foundation for Liberty (FNF) and Dr. Kang Chandararot of the Cambodia Institute of Development Study (CIDS) – the evening kicked off with a traditional Apsara dance. On 9 October 2009, the Conference was officially opened by H.E. Keat Chhon, Deputy Prime Minister and Minister of Economy and Finance. H.E. Chhon stated in his opening address that “In a broad and global term, the Rule of Law is threatened worldwide from four directions: (i) by the lumpen proletariat for their ignorance, despair and poverty, (ii) by the lumpen aristocracy for their arrogance and their insatiable greed as revealed by the cataclysmic crisis of international finance, (iii) by the deadly terrorism fuelled by ideological extremism and (iv) by the organised crimes… the Rule of Law relates to the economy through its power to protect property rights, enforce contracts, ensure fair competition, and mobilise and disburse financial capital.” The two-day conference featured keynote addresses from internationally renowned experts, as well as a series of themed panel streams, presentations and exhibitions. In the first session of the conference, Professor Lawrence H. White set the tone


of the conference with his keynote address, titled 'Avoiding and Resolving Financial Crisis: The Rule of Law or the Rule of Central Bankers?' He declaimed that “the approach of our fiscal and monetary authorities through this crisis has been to consider every possible remedy but applying the rule of law... The rule of law is vitally important because it allows a society to combine freedom, justice, and a thriving economic order.� In his stimulating address, he analysed the causes of the current crisis and attempted to answer the two challenging questions - Can applying the rule of law help us in resolving the extraordinary situation we have been in for the past two years or so? Can it help us to avoid future crises? Discussions about the relationship between the rule of law and the economic crisis were carried on in the ensuing panel discussion session. The first panel consisted of Dr. Parth J. Shah, Professor Kriengsak Chareonwongsak and Mr. Swaminathan S. Aiyar, discussing faulty views on/of the rule of law in the current situation. The second panel included Dr. Mark Mullins, H.E. Son Koun Thor and Mr. Ernest Leung, discussing market governance and solutions to the crisis. Both panels were moderated by Professor Winfred Villamil of Philippine Economic Society.

At lunch, the featuring keynote speaker was Dr. Martin Krause. He presented a new index, the Institutional Quality Index, as it is related to the overriding theme of the conference. Since 1998, it has become the EFN Asia conference's custom to utilise various forms of comprehensive and interactive programmes. In addition to keynote presentations and panel discussions, in the third session, the conference employed the Open Space Technology (OST), which was facilitated by Mr. Siegfried Herzog of FNF. The main theme for OST was 'Increasing the impact of our work in promoting the market economy in a hostile global environment'. OST is a facilitation method which allows participants to identify specific issues, self-select into discussion group and work on issues with individuals of similar interests. Altogether, there were 18 topics proposed (for instance, tools for spreading liberty in authoritarian societies, the causes of the economic crisis, the sequencing of economic and political reform, and the importance of business ethics), discussions from six of which were voted by participants to be fed into a synopsis presented before the large group on the next day.

A special feature of the second day of the conference was the launch of the Cambodia edition of the Economic Freedom of the World (EFW) report. After Mr. Moritz Kleine-Brockhoff presented the first copy of the report to Dr. Michael Walker (the representative of the Fraser Institute at the conference), Dr. Walker gave a presentation on the findings of this year's report. Following the launch and Dr. Walker's presentation, the conference organisers conducted a press conference with representatives of the local, national and international media to discuss the release of the first Cambodia edition of the EFW report and the index. In the last session of the conference, the socalled 'Thoughts and Ideas' session, various members of EFN Asia exhibited their works in forms of interactive poster presentations, videos, photo galleries and publications displays. This session severed as a marketplace for ideas, providing participants an opportunity to present their work and exchange experiences. The conference ended with a very enjoyable evening dinning and unwinding at the Foreign Correspondents' Club (FCC), where Dr. Rainer Adam (Regional Director of FNF Southeast and East Asia) delivered concluding remarks on behalf of the organising team, thanking speakers and participants.


7

QUOTEJUG

“Capitalism and communism stand at opposite poles. Their essential difference is this: The communist, seeing the rich man and his fine home, says: ‘No man should have so much.’ The capitalist, seeing the same thing, says: ‘All men should have so much’” Phelps Adams

“Freedom carries responsibility

with it” Anonymous

“Those immigrants didn’t come here in order to be lawbreakers; they broke a law in order to come here”

“Liberty is not the power of doing what we like, but the right of being able to do what we ought.” Lord Acton

Jeff Jacoby

“Everything that is really great and inspiring is created by the individual who can labor in freedom”

“As long as all men and women are truly equal before the law, and as long as the law is effectively administered and honestly adjudicated, then however much their fortunes differ they have no right to complain that they are ‘unjustly’ treated. It is up to them what they do with their lives and their property. They bear the ultimate responsibility for success or failure – and everyone’s life consists of a mixture of the two.”

“A successful person is one who can lay a firm foundation with the bricks that others throw at him or her”

“Inflation is taxation without

legislation” Milton Friedman

David Brinkley

Margaret Thatcher

Albert Einstein

“To many people, Asia may seem relatively free. Yet it would be mistaken in imagining that Asia has a permanent lease on freedom. With the long history of political conflicts, social unrests and divergent economic development, this region indeed has a high, disquieting potential of becoming unfree. The work of the Network is essential!”

Dr. Wolf-Dieter Zumpfort Vice President of Executive Board of FNF at the 10th Anniversary of EFN Asia


The Smell of Economic Freedom It is almost six o’clock in the evening and I just finish my work. It has been a long day at the office. When I look out the window, I see the sun slowly disappears behind the skyscrapers of Bangkok. The traffic on the streets, which increases each minute, reminds me in some way of a snake crawling through a jungle. But this is an urban jungle! I suppose, just like me, most of the people stuck in the traffic are on their way home from work. The difference is that I will be walking. While the roads are packed with cars, the sidewalks are crowded with people. Tuk-tuks and taxis, which are everywhere in Bangkok, wait for their customers. This is a usual scene of Bangkok in the evening. Meanwhile, the street vendors are setting up their “shops” to supply the masses of hungry people with all kind of foods. From soups to seafood and dried squid, from fried rice to roasted pork and fresh fruits, from vegetable s and noodles to drinks, they provide you with everything you’d ever ask for. You can see smoke rising up from a small street while the smell of cooked food fills up the air. People are standing around street vendors: some bargain, others just trade.


Since the early days of my time in Bangkok, I have been wondering why there are so many street vendors in this city. How this whole thing works. And how high their income could possibly be; on one street, there are hundreds of different shops. And the business seems good. After a while, I start to realise that this is really the market at work. Bangkok is the political, economic and cultural centre of Thailand. More than 10 million people live here. That means that there are millions of empty stomachs. More than in Europe, the people here love to eat together, to share their meals and finish the day enjoying time in good company. This guarantees a lot of opportunities to find work and the chance to start one’s own little business without many restrictions. Yet there seems to be some kind of rules, controlling the way the whole thing works. According to Gary Backer, “economy is the art of making the most of life.” These people definitely know how to live their lives. I am told that Thai means free, so the smell that is wrapping the streets of Bangkok may be the “smell of economic freedom.”

(Text and photos by

Claas Morgenstern)


w 10

TOP 5

That Change the World

The Fall of the Berlin Wall (9 November 1989) “Mr. Gorbachev, open this gate. Mr. Gorbachev, tear down this wall!”, said Ronald Reagan in front of the Brandenburg Gate in 1987. Two Years later the wall came down and his mission was accomplished. In 1961, communist East Germany erected the 155-km concrete wall – the “Berliner Mauer” – to encircle West Berlin and prevent citizens from fleeing into the capitalist enclave. For more than 28 years, the “Berliner Mauer” was the symbol of the divided World. The fall of the Wall 20 years ago led Germany to reunify, caused the collapse of the Soviet Union and ended the Cold War. “You tore down the wall and you changed the world”, declared British Prime Minister Gordon Brown on the 20th anniversary in 2009.

The World Wide Web (6 August 1991)

The Internet was first invented in 1969. It was originally used for military and civilian related issues. In 1989, Tim Berners-Lee designed the WWW at the CERN laboratory, ‘Organisation Européenne pour la Recherche Nucléaire’, in Bern. This new development made the Internet more accessible for non-professional users. And in 1991 the web was released to the public. The development of the web proved to be the key technology that popularised the Internet around the world and change the way we work and communicate.


The First Steps of Man on the Moon (21 July 1969) “That's one small step for a man, one giant leap for mankind.” Millions of people listened to those words live while sitting in front of their TV or radio. It was the world famous sentence Neil Armstrong said when he became the first human to step onto the moon on 21 July 1969. The Apollo 11 mission started from the Kennedy Space Center in Florida on 16 July and finally landed on the moon five days later. There were three more manned missions to the moon in the following three years. According to the NASA the next manned mission to the moon is planned for 2020.

The Discovery of DNA (deoxyribonucleic acid)

9/11 (9 September 2001) The 9/11 (often referred to as September 11 attacks) was a series of coordinated suicide attacks which targeted the United States on 11 September 2001. A group of Islamic terrorists, widely believed to be part of the al-Qaeda network led by Osama bin Laden, hijacked four commercial airliners. They took over the control of the respective airplanes and deliberately crashed with two planes in the twin towers of the World Trade Center and one into the Pentagon. The fourth plane crashed in Pennsylvania after the passengers mounted an assault on the hijackers and wrest control of the aircraft. After the terrorist attacks on 9/11 the NATO declared the ‘time of collective defence’. On 30 September 2001, US and British troops attacked the Taliban in Afghanistan. Today international troops from 42 different countries are based in Afghanistan. They are mandated to a NATO-led security and development mission (such as ISAF).

On 25 April 1953, in a short article published in the journal Nature, James D. Watson and James Wilson unravel the first double-helix model of DNA and with it, the secret of life itself. Today we know that DNA contains the genetic information that allows all modern living forms to function, grow and reproduce. It is the basis for many different technologies such as genetic engineering, forensic, bioinformatics and DNA nanotechnology. In forensic science for example the DNA can be used to identify an individual, such as a perpetrator. This process is called genetic fingerprinting. DNA can be found in blood, semen, skin, saliva or hair.

Survey: UK’s Radio Times Contents: Class Morgenstern


CALL FOR WORKSHOP PROPOSAL Be part of the solution: Join leading experts from civil society, the public, and the private sectors at the 14th International Anti-Corruption Conference (IACC), "Restoring trust: Global action for transparency", between 10 and 13 November 2010 in Bangkok, Thailand. At the 14th IACC, participants from the global community will produce strategies and recommendations to reset the global governance agenda for a sustainable future. The IACC is the world premier forum that brings together heads of state, civil society and the private sector to tackle the increasingly sophisticated challenges posed by corruption. The IACC takes place every two years in a different region of the world, and attracts up to 1500 participants from over 135 countries. The conference serves as the global forum for the networking and cross-fertilisation that are indispensable for effective advocacy and action, on a global and national level. The 14th IACC is jointly hosted by the IACC Council, the National Anti-Corruption Commission of Thailand, Transparency International and its local chapter Transparency Thailand. Ideas, Inspiration, Innovation

A fundamental feature of each IACC is the eclectic mix of up to 50 workshops and special sessions that take place during the four days of the conference. IACC workshops aim to stimulate debate, forge solutions and identify tangible, effective and innovative strategies to combat corruption and boost transparency and accountability standards. The 14th IACC workshops will tackle the following global challenges: • • • •

Restoring trust for peace and security Fuelling transparency and accountability in the natural resources and energy markets Ensuring collective climate governance Strengthening global action for an accountable corporate world

The call for workshop proposals opens from 15 February to 31 March 2010. The organisers welcome workshop proposals from practitioners sharing the common goal to dramatically strengthen global efforts against corruption. For more details, please visit http://14iacc.org


13

Freedom Barometer Asia

Measuring Freedom in Asia Freedom is a fundamental element for achieving substantive goals such as a satisfactory quality of life or a higher income. In order to understand the implication of freedom in social and economic development, this should be conceptualised and quantified. As the conceptualisation is associated to the quantification and vice versa, many attempts have already been made to measure the nuances of freedom in a simple numerical figure. However, according to Dr. Adam, Regional Director at the Friedrich Naumann Foundation for Liberty in Bangkok, "the major weakness of [most existing indices] is that the only selected areas are covered. They only focus either on political freedom...or economic freedom." A team of the Friedrich Naumann Foundation for Liberty, led by Dr. Rainer Adam and Dr. Sebastian Braun, devised a new index to measure freedom in Asia, called the "Freedom Barometer Asia". Recently this new tool was unofficially launched on YouTube. The Freedom Barometer Asia presents a fresh attempt to develop an index of "freedom as a whole".


“We do not want to reinvent the wheel", said Dr. Adam. The aim of the Freedom Barometer Asia is to rely on reliable data sources. This leads to the inclusion of some indicators, including Economic Freedom of the World of the Canadian Fraser Institute, World Survey of Economic Freedom of the American Freedom House, Worldwide Press Freedom Index of the French Reporters Without Borders and Corruption Perceptions Index of the German Transparency International. There are, of course, some limitations of each of the indicators employed. However, the authors believe that the new index provides a faithful picture of the relative freedom existing in countries examined. Three main components are considered: political freedom, the rule of law and economic freedom. In his presentation, Dr. Adam elaborates that "in order to keep our barometer short and simple, we selected ten areas for analysis only." Political freedom includes three areas: 1) free and fair elections, 2) the absence of undemocratic veto players (for instance, military) and 3) press freedom. The rule of law includes 1) the independence of the courts and checks and balances, 2) corruption and 3) human rights protection. Economic freedom includes 1) security of property rights, 2) size of government expenditures, taxes and enterprises, 3) regulation of credit, labour and business, and 4) freedom to trade internationally. In order to measure freedom, score of 0 to 10, where 10 freedom. The ten component overall freedom score for each points is 100 (completely free) unfree).

each of the ten indictors is given a represents the highest level of scores are then added to give an country. The maximum number of and the minimum 0 (completely

The preliminary result indicates that, for the ten countries that the research team has a completed dataset, Japan tops the list with a score of about 83 out of 100 possible points; Taiwan and South Korea score 77. Next come Singapore with 65. The three Southeast Asian countries - Thailand, Malaysia, and the Philippine - are closed together with score of 58, 57, and 56 respectively. On the low end of the scale we find Vietnam with a 43 point in ninth, followed closely by China with 42 points in tenth position. It is interesting to note that the two socialist countries get only half the level of the full democracy such as Japan. The result also reveals that countries are not homogenous within their own borders with respect to freedom. Singapore, for instance, ranks first in the areas of economic freedom, but quite low in the areas of political freedom and the rule of law (especially, the protection of human rights). Japan gets full scores of 10 in all areas of political freedom but it does relatively poorly in the economic realm. The details on the new index are being worked out further. There is no doubt that a great deal can be done to improve the quality of the data and to refine the index. The authors would welcome any comments and suggestions. It is hoped that this preliminary attempt will be a further incentive to promote freedom in the region and the world as a whole.


Asia

LiNK e

magazine of EFN Asia


LINK 2010 Issue Three