Getting the most out of foreign exchange reserves
Cao Huining and Liu Jin
Thursday, September 27, 2007
IT HAS been reported that China Investment Co, the long-awaited State forex investment company that is expected to make better use of the country's huge foreign exchange reserves, will be inaugurated tomorrow.
After three decades of robust and continuous economic growth, the country has accumulated US$1.3 trillion of foreign exchange reserves. This is about half of China's annual gross domestic product (GDP), which means every two percentage points of revenue from the foreign exchange reserves equals one percentage point of growth in GDP.
Information about the reserve's investment portfolio is not available to the public, though research indicates a big proportion of its funds are in the global bond market, especially in US bonds. Before 2004, the reserve's assets were primarily invested in US treasury and mortgage bonds. Corporate bonds gained more attention after 2004.
Compared with other financial assets, especially shares, bonds are less risky — and less rewarding. Putting the country's forex reserves into the bond market was fine when the reserves were small. The wisdom of this stance becomes questionable once the forex reserves exceed the amount needed for trade settlements.
Past experience proves that a stock-centred investment portfolio is much more rewarding than a bond-centred one. In the last century, the annual difference in returns between the two portfolios was between five and eight per cent in the US and around three per cent in Europe and Japan.
Given the gigantic size of China's forex reserves, the country could expect to see its returns increase by the equivalent of about 1.5 per cent of GDP if the investment portfolio became more stock-centred.
Switching the portfolio's focus would be worth a try despite the higher risks involved with stock investments. The newly established forex investment firm is obviously a pilot step in this direction.
During the transitional period, the key issue will be what kind of financial assets are worth investing in.
All non-bond financial assets fall into categories of shares of listed companies and equities of private firms. The stock of listed companies is more liquid and transparent, so it is relatively more expensive. The equities of private firms are less costly, less liquid and less transparent, but more rewarding in the long run.
An institutional investor will generally include both of them in its portfolio, with different proportions of each. So which one should the investors of China's forex funds favour — shares on the stock exchange or the equities of private firms? In other words, the investors will have to choose between acting like a mutual fund manager and a venture capital runner hunting for private equity.
Judging from several recent developments, the authorities seem to prefer private equities. This is understandable because China is a green hand when it comes to investing funds from the foreign exchange reserves. Moreover, there is a successful example to learn from: Temasek Holdings in Singapore.
Set up in 1974, Temasek Holdings oversees the investments of the Singapore government. Its average annual rate of return in the last three decades has been 18 per cent, much higher than the annual growth of the stock market. By the end of last year, the company was managing $100 billion worth of assets, about 83 per cent of Singapore's GDP for the year.
Temasek Holdings operates like a venture capital firm. It makes its investment decisions only after extensive research. As of last month, Temasek Holdings was the majority shareholder in more than 20 companies in the banking and telecommunications sectors, among others, in countries in East Asia and Southeast Asia.
However, while Temasek Holdings' successes are remarkable, its experiences are not suitable for China to copy at this moment.
As is typical for venture capitalists, Temasek Holdings' huge rewards came after facing big risks.
Temasek Holdings succeeded in most of its investment projects because of its unique access to information. About 40 per cent of its investments were made within Singapore, and the rest were mostly in neighbouring countries. It is not hard for Temasek Holdings to acquire the information it needs to make investment decisions.
Singapore's economy has been closely integrated into the global economy ever since the country was founded. The people at Temasek have been able to draw on their country's rich trade experiences.
When China uses funds from its forex reserves to invest, it will have to venture out into global financial markets. However, the Chinese are far from experienced in the global market.
It is important to maintain a certain level of liquidity in the forex reserves. If the funds are put into private firms, it will be hard to convert them back to cash when needed without suffering big losses. So it is improper for the forex investment body to copy Temasek Holdings.
Therefore, the stock of listed companies is a better choice for China as it goes in search of bigger rewards by investing funds from its foreign exchange reserves.
To manage the risks involved in trading on the stock market, the forex investment body could choose a global stock market index mutual fund as their primary investment target.
An index fund would be a good target for the forex investment body because investing in them does not require experience, talent or access to information to make an investment decision.
By tracking a package of shares, such funds dilute the risks as much as possible. And index funds are also the most liquid and least costly of all mutual funds, raising the long-term returns of the forex investment.
Simply put, targeting index funds is the best strategy for China at this moment, as it faces the many possible ways to construct its investment portfolio.
Cao Huining is a professor with the Cheung Kong Graduate School of Business, and Liu Jin is a professor with the University of California
China Daily/ANN
Thursday, September 27, 2007
Thursday, September 20, 2007
Economic Growth Not Fast Enough, Say VC
Economic Growth Not Fast Enough, Say VC
By Shareen Han
Bandar Seri Begawan - Brunei's economy is not expanding fast enough to provide sufficient jobs for university graduates, said Universiti Brunei Darussalam's vice-chancellor.
It is a demand and supply problem, and some graduates are not willing to work in the private sector because they know that there are more benefits in the public sector, Dato Paduka Dr Hj Ismail Hj Duraman told The Brunei Times in a telephone interview yesterday.
"In the minds of locals, the private sector cannot compete with the public sector because it has more benefits compared to other countries that have a tax system," he said.
He said most locals need to "tackle their attitude first", in order to make the implementation of national policies more effective in the long term.
"It is a paradox that locals are not taking up the jobs, but foreign workers are taking it instead," he said.
One of the reasons why employers hire foreign workers is because they are cheaper and locals are too selective in choosing jobs which are mostly filled up by foreign labour, he said.
Moreover, some of the unemployed locals may come from well-to-do families, so they would rather enjoy life with their families, he said.
"There is no simple solution, a concerted effort by everyone is needed," he said, adding that graduates should be more proactive and take up any available job opportunities, including apprenticeship programmes.
"The attitude will only change when a crisis arises, because there is no shocking factor at the moment that they need to make a drastic change as the oil and gas is still there," he added.
The vice-chancellor said that one of UBD's roles is to equip students with the knowledge and skills, but employers are always looking for "something extra" in workplaces.
"Thus, I made the speech (at the 19th convocation ceremony) to graduates that they need to bring added value to the organisation that they work for," he said.
Dato Ismail also noted that UBD is currently doing research on unemployment in Brunei because the statistics that are currently available may not be accurate and regularly updated. There are 313 local jobseekers that fall under the technical, vocational and university graduates category, based on figures from the Labour Department for the month of June.-- Courtesy of The Brunei Times
By Shareen Han
Bandar Seri Begawan - Brunei's economy is not expanding fast enough to provide sufficient jobs for university graduates, said Universiti Brunei Darussalam's vice-chancellor.
It is a demand and supply problem, and some graduates are not willing to work in the private sector because they know that there are more benefits in the public sector, Dato Paduka Dr Hj Ismail Hj Duraman told The Brunei Times in a telephone interview yesterday.
"In the minds of locals, the private sector cannot compete with the public sector because it has more benefits compared to other countries that have a tax system," he said.
He said most locals need to "tackle their attitude first", in order to make the implementation of national policies more effective in the long term.
"It is a paradox that locals are not taking up the jobs, but foreign workers are taking it instead," he said.
One of the reasons why employers hire foreign workers is because they are cheaper and locals are too selective in choosing jobs which are mostly filled up by foreign labour, he said.
Moreover, some of the unemployed locals may come from well-to-do families, so they would rather enjoy life with their families, he said.
"There is no simple solution, a concerted effort by everyone is needed," he said, adding that graduates should be more proactive and take up any available job opportunities, including apprenticeship programmes.
"The attitude will only change when a crisis arises, because there is no shocking factor at the moment that they need to make a drastic change as the oil and gas is still there," he added.
The vice-chancellor said that one of UBD's roles is to equip students with the knowledge and skills, but employers are always looking for "something extra" in workplaces.
"Thus, I made the speech (at the 19th convocation ceremony) to graduates that they need to bring added value to the organisation that they work for," he said.
Dato Ismail also noted that UBD is currently doing research on unemployment in Brunei because the statistics that are currently available may not be accurate and regularly updated. There are 313 local jobseekers that fall under the technical, vocational and university graduates category, based on figures from the Labour Department for the month of June.-- Courtesy of The Brunei Times
Tuesday, July 3, 2007
School wants agriculture students to be tech savvy
School wants agriculture students to be tech savvy
BRUNEI-MUARA
Tuesday, July 3, 2007
THE Wasan Vocational School received its second intake with a renewed pledge to churn out vocational graduates "capable of handling the latest technologies in agriculture", despite lacking qualified teachers.
The Kampung Wasan institution, which is in its second year of operation, is pushing onward with the introduction of a new course as it welcomed 60 new students into their post-secondary programmes.
Deputy Permanent Secretary (Corporate Services) of Education Hjh Norjum Hj Mohd Yusop told the students that they "should feel fortunate and proud to be chosen for the offered programmes", as many other students under the Secondary Vocational Programme (PMV) did not have the chance to further their education at technical and vocational institutions due to limited vacancies. PMV is offered as an alternative course to upper secondary education, for students who wish to enter the vocational and technical stream.
She went on to explain that the local agriculture industry held much potential for development, and thus expressed the Ministry of Education's hopes that the school concerned "would establish strategic partnerships to identify promising fields in agriculture to be integrated as quality programmes."
Wasan Vocational School's principal, Hj Mohd Zamri Hj Sabli, stated that his institution's main challenge was "a lack of qualified educators", but that the Ministry of Education was working to resolve the issue. He also said that there were plans to broaden the school's current levels to include National Diploma courses in "relevant and needed" fields.
The new students, who hail from all four districts, embarked on their first day of a five-day orientation week yesterday. They are enrolled in the school's National Trade Certificate Grade 3 (NTC3) Programmes, namely Crop Production, Fish Husbandry and the recently-added Basic Food Processing. The first intake totalled 40 students, who were evenly distributed between Crop Production and Fish Husbandry.
Each programme entails a year of study and three to six months in an industrial placement.
"I believe that the advancement of technology will force us to keep up to date with our knowledge, especially in the fields of high-tech agriculture, such as gene manipulation, genetic transfer and biotechnology," said Hj Mohd Zamri.
He also said that local perceptions of agriculture needed to change.
"If we still consider (agriculture) as just ploughing soil and working in scorching heat, then I believe we will not progress or achieve self-sustenance in agriculture," he added.
The principal concluded by articulating on his ambition of making the school a "focal point" for producing skilled graduates capable familiar with the latest technologies, towards the goal of raising local agricultural production.
For the rest of orientation week, the new intake will be participating in activities led by various government and private agencies such as the Counselling and Career Section from the Ministry of Education, the Da'wah Islamiah Centre, the Ministry of Religious Affairs, and local bank Taib.
First intake student Salfatinah bte Md Salleh, 18, who reads Fish Husbandry at the institution, expressed her support of the idea. "If given the opportunity from the school, I wish to continue and achieve a National Diploma," she added.
An administrator admitted that most of the students had trouble with staying outdoors and being under the sun for long periods of time but gradually they got used to it and became more and more interested in the courses that they were offered.
The Brunei Times
BRUNEI-MUARA
Tuesday, July 3, 2007
THE Wasan Vocational School received its second intake with a renewed pledge to churn out vocational graduates "capable of handling the latest technologies in agriculture", despite lacking qualified teachers.
The Kampung Wasan institution, which is in its second year of operation, is pushing onward with the introduction of a new course as it welcomed 60 new students into their post-secondary programmes.
Deputy Permanent Secretary (Corporate Services) of Education Hjh Norjum Hj Mohd Yusop told the students that they "should feel fortunate and proud to be chosen for the offered programmes", as many other students under the Secondary Vocational Programme (PMV) did not have the chance to further their education at technical and vocational institutions due to limited vacancies. PMV is offered as an alternative course to upper secondary education, for students who wish to enter the vocational and technical stream.
She went on to explain that the local agriculture industry held much potential for development, and thus expressed the Ministry of Education's hopes that the school concerned "would establish strategic partnerships to identify promising fields in agriculture to be integrated as quality programmes."
Wasan Vocational School's principal, Hj Mohd Zamri Hj Sabli, stated that his institution's main challenge was "a lack of qualified educators", but that the Ministry of Education was working to resolve the issue. He also said that there were plans to broaden the school's current levels to include National Diploma courses in "relevant and needed" fields.
The new students, who hail from all four districts, embarked on their first day of a five-day orientation week yesterday. They are enrolled in the school's National Trade Certificate Grade 3 (NTC3) Programmes, namely Crop Production, Fish Husbandry and the recently-added Basic Food Processing. The first intake totalled 40 students, who were evenly distributed between Crop Production and Fish Husbandry.
Each programme entails a year of study and three to six months in an industrial placement.
"I believe that the advancement of technology will force us to keep up to date with our knowledge, especially in the fields of high-tech agriculture, such as gene manipulation, genetic transfer and biotechnology," said Hj Mohd Zamri.
He also said that local perceptions of agriculture needed to change.
"If we still consider (agriculture) as just ploughing soil and working in scorching heat, then I believe we will not progress or achieve self-sustenance in agriculture," he added.
The principal concluded by articulating on his ambition of making the school a "focal point" for producing skilled graduates capable familiar with the latest technologies, towards the goal of raising local agricultural production.
For the rest of orientation week, the new intake will be participating in activities led by various government and private agencies such as the Counselling and Career Section from the Ministry of Education, the Da'wah Islamiah Centre, the Ministry of Religious Affairs, and local bank Taib.
First intake student Salfatinah bte Md Salleh, 18, who reads Fish Husbandry at the institution, expressed her support of the idea. "If given the opportunity from the school, I wish to continue and achieve a National Diploma," she added.
An administrator admitted that most of the students had trouble with staying outdoors and being under the sun for long periods of time but gradually they got used to it and became more and more interested in the courses that they were offered.
The Brunei Times
Saturday, April 14, 2007
Before the oil, it was coal
Before the oil, it was coal
Rozan Yunos
BANDAR SERI BEGAWAN
Saturday, April 14, 2007
SINCE the discovery of oil in 1929, Brunei Darussalam had been known as an oil-exporting country to the point that it is almost impossible to remember a time when Brunei had to rely on other exports.
Believe it or not, there have been many exports in the past. Our famous camphor was one, others were timber, cutch, rubber and surprisingly, coal.
Coal was reportedly first found in the Kianggeh river as early as 1837, attracting the attention of Americans.
In 1841, the American ship "Constitution" arrived in Brunei Town to negotiate a treaty of commerce and friendship but the offer was refused.
The coal mine at Kianggeh was later operated by Pengiran Yusof and from 1846 to 1883, the Brunei coal deposits remained unexploited except for local consumption.
Coal played an important role in the world economy before oil. Steamships, trains and the engines for the industrial revolution in Europe relied on coal for their fuel.
In fact the discovery of coal in Labuan in 1844 led to the British decision to annex the island from Brunei with their gunboat diplomacy forcing the Sultan to sign the agreement.
However, it was in Serai Pimping, Muara that coal was mined extensively. The Muara coalmine was first mined commercially in 1883, when William Cowie was given the concession rights to mine the coal in exchange for $1,200 per year.
However, Cowie later sold his rights to Rajah Charles Brooke and the Rajah renamed the mine Brooketon (Brooke Town).
Between the years of 1889 and 1924, it was operated by the Sarawak government.
At first the mine was opencast the early miners used changkul (hoes), shovels and hammers the method is simple but very slow and unproductive. With increasing demand, the operation expanded underground.
Brooketon Colliery was strategic as it was very near to Muara where there is a safe deep-water anchorage to which the mine was connected via rail.
With the more sophisticated mining methods, railways, wharfs and other advanced equipment were needed.
A rail line that connected Brooketon in Serai Pimping was built. Muara itself also grew. Before the mine, Muara was a small hamlet occupied by fishermen but by 1911, more than 1,447 people lived in Muara and some 30 shops had opened.
Politically too, even though he only had economic rights, Brooke became the "ruler" of the area.
The mine employed hundreds of miners and that required him to introduce a police force, post office and roads transforming Muara into an "extraterritorial" settlement an extension of Sarawak. It was not until 1921 that Muara was "returned" to Brunei.
The Brooketon Colliery closed down in 1924 because of heavy financial losses caused by continuously decreasing coal prices in the world economic recession as well as the discovery and search for oil to replace coal.
The Muara coal mine opened for a short while during the Japanese occupation in the Second World War but production was limited for local consumption only.
Recently the Museums Department announced that it wanted to turn the historical 62-hectare coal mine as an open site museum to promote the country's eco-tourism.
The Brooketon coalmine is currently already a protected site under the Antiquities and Treasure Trove Act.
Maybe one day, Brunei can mine the coal again. In the meantime, it is being kept as one of Brunei's treasures and legacy for the future. After the discovery of oil, Bruneians seem to forget how lucky we are and how rich our country is.
While we have the oil and the natural gas but, in terms of natural resources, we also have the silica sand, the peat which can be converted into energy, the coal, the methane gas and the trees. In the old days, these natural resources had made Bruneians great traders trading our goods far and wide.
Unfortunately we seemed to have lost that skill with most of us now preferring to be civil servants, sitting down in air-conditioned rooms and pushing papers.
The Brunei Times
Rozan Yunos
BANDAR SERI BEGAWAN
Saturday, April 14, 2007
SINCE the discovery of oil in 1929, Brunei Darussalam had been known as an oil-exporting country to the point that it is almost impossible to remember a time when Brunei had to rely on other exports.
Believe it or not, there have been many exports in the past. Our famous camphor was one, others were timber, cutch, rubber and surprisingly, coal.
Coal was reportedly first found in the Kianggeh river as early as 1837, attracting the attention of Americans.
In 1841, the American ship "Constitution" arrived in Brunei Town to negotiate a treaty of commerce and friendship but the offer was refused.
The coal mine at Kianggeh was later operated by Pengiran Yusof and from 1846 to 1883, the Brunei coal deposits remained unexploited except for local consumption.
Coal played an important role in the world economy before oil. Steamships, trains and the engines for the industrial revolution in Europe relied on coal for their fuel.
In fact the discovery of coal in Labuan in 1844 led to the British decision to annex the island from Brunei with their gunboat diplomacy forcing the Sultan to sign the agreement.
However, it was in Serai Pimping, Muara that coal was mined extensively. The Muara coalmine was first mined commercially in 1883, when William Cowie was given the concession rights to mine the coal in exchange for $1,200 per year.
However, Cowie later sold his rights to Rajah Charles Brooke and the Rajah renamed the mine Brooketon (Brooke Town).
Between the years of 1889 and 1924, it was operated by the Sarawak government.
At first the mine was opencast the early miners used changkul (hoes), shovels and hammers the method is simple but very slow and unproductive. With increasing demand, the operation expanded underground.
Brooketon Colliery was strategic as it was very near to Muara where there is a safe deep-water anchorage to which the mine was connected via rail.
With the more sophisticated mining methods, railways, wharfs and other advanced equipment were needed.
A rail line that connected Brooketon in Serai Pimping was built. Muara itself also grew. Before the mine, Muara was a small hamlet occupied by fishermen but by 1911, more than 1,447 people lived in Muara and some 30 shops had opened.
Politically too, even though he only had economic rights, Brooke became the "ruler" of the area.
The mine employed hundreds of miners and that required him to introduce a police force, post office and roads transforming Muara into an "extraterritorial" settlement an extension of Sarawak. It was not until 1921 that Muara was "returned" to Brunei.
The Brooketon Colliery closed down in 1924 because of heavy financial losses caused by continuously decreasing coal prices in the world economic recession as well as the discovery and search for oil to replace coal.
The Muara coal mine opened for a short while during the Japanese occupation in the Second World War but production was limited for local consumption only.
Recently the Museums Department announced that it wanted to turn the historical 62-hectare coal mine as an open site museum to promote the country's eco-tourism.
The Brooketon coalmine is currently already a protected site under the Antiquities and Treasure Trove Act.
Maybe one day, Brunei can mine the coal again. In the meantime, it is being kept as one of Brunei's treasures and legacy for the future. After the discovery of oil, Bruneians seem to forget how lucky we are and how rich our country is.
While we have the oil and the natural gas but, in terms of natural resources, we also have the silica sand, the peat which can be converted into energy, the coal, the methane gas and the trees. In the old days, these natural resources had made Bruneians great traders trading our goods far and wide.
Unfortunately we seemed to have lost that skill with most of us now preferring to be civil servants, sitting down in air-conditioned rooms and pushing papers.
The Brunei Times
Saturday, March 17, 2007
Human capital critical to growth
Human capital critical to growth
Ryokichi Hirono: Human capital is important. Picture: Husin Ismail
Saturday, March 17, 2007
BRUNEI must further invest in human capital and exploit ideas including those put forward by young people, an Economics professor from Japan said yesterday.
Speaking to The Brunei Times, Ryokichi Hirono, professor emeritus in Economics of Seikei University, said, "If young people have good ideas, this can be exploited. Government must take up the leadership, exploit these ideas."
He cited as an example Japan which has invested a lot of money in human capital, and this has led to its rise as one of the most advanced countries.
People in Japan have developed all kinds of industries said Hirono, who was one of the speakers at the recent forum on Perspectives on Implementation Strategies for National Development Policies organised by the Centre for Strategic and Policy Studies.
Investments in human capital is important, he said, noting that an educated workforce is critical to surviving the global competition.
At the moment, the country is rich with natural resources, and the country is "being run okay", but Bruneians must prepare themselves for sustained economic growth and this is achieved through effective policies.
In a government, there are many types of policies which can lead to development of sectors which range from tourism to agriculture.
However, in some cases "policies are made but not implemented. They are easy to make but harder to implement. Countries in Southeast Asia have beautiful policies but they are not implemented," said the Japanese professor.
The Brunei Times
Ryokichi Hirono: Human capital is important. Picture: Husin Ismail
Saturday, March 17, 2007
BRUNEI must further invest in human capital and exploit ideas including those put forward by young people, an Economics professor from Japan said yesterday.
Speaking to The Brunei Times, Ryokichi Hirono, professor emeritus in Economics of Seikei University, said, "If young people have good ideas, this can be exploited. Government must take up the leadership, exploit these ideas."
He cited as an example Japan which has invested a lot of money in human capital, and this has led to its rise as one of the most advanced countries.
People in Japan have developed all kinds of industries said Hirono, who was one of the speakers at the recent forum on Perspectives on Implementation Strategies for National Development Policies organised by the Centre for Strategic and Policy Studies.
Investments in human capital is important, he said, noting that an educated workforce is critical to surviving the global competition.
At the moment, the country is rich with natural resources, and the country is "being run okay", but Bruneians must prepare themselves for sustained economic growth and this is achieved through effective policies.
In a government, there are many types of policies which can lead to development of sectors which range from tourism to agriculture.
However, in some cases "policies are made but not implemented. They are easy to make but harder to implement. Countries in Southeast Asia have beautiful policies but they are not implemented," said the Japanese professor.
The Brunei Times
Monday, March 5, 2007
Thai town's trade dies as Malaysia tightens border
Thai town's trade dies as Malaysia tightens border
Border ties: A worker packages Thai-produced rice sold at a hut in the Thai border town of Pekan Mundok, March 1. Business in this dusty, once-bustling Thai village has gone quiet in recent days after Malaysia tightened its border. Picture: AFP
PEKAN MUNDOK, THAILAND
Monday, March 5, 2007
THE morning crowd from Malaysia usually consisted of housewives. They jumped onto rickety wooden boats from Bukit Lata, in northeastern Kelantan state, for a two-minute ride across the filthy Golok River to Pekan Mundok town in Thailand's insurgency-hit Narathiwat province.
But the housewives have stopped coming in recent days after Malaysia tightened its border, and business in this dusty, once-bustling Thai village has gone quiet.
The merchants who sell everything from rice to wild birds and fishing equipment from dilapidated zinc-covered shops worry Malaysia's crackdown on illegal border crossings will further undermine southern Thailand's impoverished economy. And they say Thailand's proposal to extend a wall along the frontier will only worsen their plight.
Tighter security at the border came after Thailand's army-installed Prime Minister Surayud Chulanont and his counterpart from Malaysia Abdullah Ahmad Badawi agreed last month to boost their cooperation in a bid to end three years of separatist unrest in the south of the majority Buddhist kingdom.
There is no official border post at this town, and until recently residents on both sides could cross at will, albeit illegally. That has changed.
"Look, the Malaysian police (are) over there," Bakri Che Mat, 42, a Muslim Thai, said as he pointed to two Malaysian security personnel armed with M-16 rifles on the other side of the river. "They have been there for a week now and Malaysians can no longer cross," he said. "I do not know why the police are preventing Malaysians from coming here. It is safe here. No bombs here," he said.
Residents on the Thai side depended on income from their southern neighbours "for our survival", he added.
At their recent meeting, the Thai and Malaysian leaders said they would continue efforts to end dual nationality for people on both sides of the frontier.
Many southern Thais also hold a Malaysian passport, which security forces say makes it easier for insurgents to slip back and forth across the border to escape arrest.
Militants responded to the leaders' cooperation by staging almost 50 Lunar New Year bombings, shootings and arson attacks that left nine dead in the south, where a majority are Muslims like their Malaysian neighbours.
In the biggest clash since those bombings, at least eight separatist militants were killed Friday in a gun battle with Thai troops who raided an insurgent training camp in Narathiwat near the border, security officials said.
Walking on the deserted red-stone track, which passes for a main road around Pekan Mundok, leaves a visitor with an eerie feeling, as if one is being watched.
The town has only about 500 residents but close to 50 merchants, a testament to the amount of business that used to come from Malaysia. Now they can only sit around, waiting for customers who no longer come.
Hamid Harun, 60, who sells birds and fishing gear, said life was "really difficult now". "I used to earn about 300 ringgit (US$86) daily, but now on some days, nothing at all," he said.
"Please don't let your Muslim brothers suffer," Hamid urged Malaysia, adding that trade links benefited people on both sides of the border.
Bakri, who sells rice on the Thai side, said his daily revenue of about 500 ringgit (US$143) dropped by at least 70 per cent in the past week. "Tourists from Bangkok are not coming here because of security fears in the south and now Malaysians are not crossing over. We are as good as dead now." AFP
Border ties: A worker packages Thai-produced rice sold at a hut in the Thai border town of Pekan Mundok, March 1. Business in this dusty, once-bustling Thai village has gone quiet in recent days after Malaysia tightened its border. Picture: AFP
PEKAN MUNDOK, THAILAND
Monday, March 5, 2007
THE morning crowd from Malaysia usually consisted of housewives. They jumped onto rickety wooden boats from Bukit Lata, in northeastern Kelantan state, for a two-minute ride across the filthy Golok River to Pekan Mundok town in Thailand's insurgency-hit Narathiwat province.
But the housewives have stopped coming in recent days after Malaysia tightened its border, and business in this dusty, once-bustling Thai village has gone quiet.
The merchants who sell everything from rice to wild birds and fishing equipment from dilapidated zinc-covered shops worry Malaysia's crackdown on illegal border crossings will further undermine southern Thailand's impoverished economy. And they say Thailand's proposal to extend a wall along the frontier will only worsen their plight.
Tighter security at the border came after Thailand's army-installed Prime Minister Surayud Chulanont and his counterpart from Malaysia Abdullah Ahmad Badawi agreed last month to boost their cooperation in a bid to end three years of separatist unrest in the south of the majority Buddhist kingdom.
There is no official border post at this town, and until recently residents on both sides could cross at will, albeit illegally. That has changed.
"Look, the Malaysian police (are) over there," Bakri Che Mat, 42, a Muslim Thai, said as he pointed to two Malaysian security personnel armed with M-16 rifles on the other side of the river. "They have been there for a week now and Malaysians can no longer cross," he said. "I do not know why the police are preventing Malaysians from coming here. It is safe here. No bombs here," he said.
Residents on the Thai side depended on income from their southern neighbours "for our survival", he added.
At their recent meeting, the Thai and Malaysian leaders said they would continue efforts to end dual nationality for people on both sides of the frontier.
Many southern Thais also hold a Malaysian passport, which security forces say makes it easier for insurgents to slip back and forth across the border to escape arrest.
Militants responded to the leaders' cooperation by staging almost 50 Lunar New Year bombings, shootings and arson attacks that left nine dead in the south, where a majority are Muslims like their Malaysian neighbours.
In the biggest clash since those bombings, at least eight separatist militants were killed Friday in a gun battle with Thai troops who raided an insurgent training camp in Narathiwat near the border, security officials said.
Walking on the deserted red-stone track, which passes for a main road around Pekan Mundok, leaves a visitor with an eerie feeling, as if one is being watched.
The town has only about 500 residents but close to 50 merchants, a testament to the amount of business that used to come from Malaysia. Now they can only sit around, waiting for customers who no longer come.
Hamid Harun, 60, who sells birds and fishing gear, said life was "really difficult now". "I used to earn about 300 ringgit (US$86) daily, but now on some days, nothing at all," he said.
"Please don't let your Muslim brothers suffer," Hamid urged Malaysia, adding that trade links benefited people on both sides of the border.
Bakri, who sells rice on the Thai side, said his daily revenue of about 500 ringgit (US$143) dropped by at least 70 per cent in the past week. "Tourists from Bangkok are not coming here because of security fears in the south and now Malaysians are not crossing over. We are as good as dead now." AFP
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