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Income Statement – February 2018

Income Statement – February 2018

February 10, 2018 Board minutes

February 10, 2018 Board minutes

Modern slavery is bigger than ever – and here’s how we can eradicate it

By the time you finish reading this sentence, a fellow human being somewhere in the world would have been forced into modern slavery.

Matt Friedman, CEO of The Mekong Club, recounted shocking stories from the victims of modern slavery when he spoke at the FCC. Photo: Sarah Graham/FCC Matt Friedman, CEO of The Mekong Club, recounted shocking stories from the victims of modern slavery when he spoke at the FCC. Photo: Sarah Graham/FCC

One every four seconds, 9.2 million new slaves every year, 45.8 million in the world today. In fact, there are more slaves today than at any time in history, said Matt Friedman, CEO of The Mekong Club, an NGO working to alleviate the problem through education.

One minute it might be a 13-year old girl who is forced to provide sex to up to 10 men a day, seven days a week; or a teenage boy who is placed on a slave boat in Thailand – working 18 hours a day for four years without proper food or rest, and without any pay at all; or a child who is separated from her family and forced to work in a sweatshop to make the clothes we wear or the electronics we use. Modern slavery comes in many forms, Friedman said, and it is a US$150 billion industry.

The definition of modern slavery is withholding wages; debt and other forms of bondage; retention of identity documents; restricted movement; physical and sexual violence. It often begins with an offer that is too good to be true: sometimes a work offer, or a marriage proposal, Friedman said. In Nepal, teenage girls are sold into a marriage and the young bride then trafficked into prostitution.

Currently there are 29,000 slaves in Hong Kong – half of those are women forced into prostitution; the other half are domestic helpers, he said. In a timely move, the Hong Kong government, which has remained silent over the issue, announced on March 21 it would launch an action plan to stamp out slavery in the city.

But what is being done globally to eradicate the problem? While legislation is being put in place, such as the UK’s Modern Slavery Act, it didn’t go far enough. Friedman, who interviewed hundreds of freed slaves throughout Southeast Asia for his new book, Where Were You? A Profile of Modern Slavery, gave statistics showing that 66,000 of the more than 40 million currently in slavery had been been helped – a mere 0.2%. And of the half million criminals operating within slavery, 7,000 we jailed – 0.8%.

The Mekong Club was established to unite and mobilise the private sector – namely finance, apparel, hospitality and retail – with the purpose of disrupting and ending modern slavery. Friedman, an international trafficking expert, said 75% of the 45.8 million slaves were in forced labour, and 60% of them associated with manufacturing supply chains. This is why it is important to engage the private sector. “The private sector has extensive human and financial resources that could help eliminate modern slavery conditions,” he said.

“I personally believe the private sector has great potential to be the silver bullet to address these types of issues,” Friedman said.

And The Mekong Club offers some interesting tools to companies in the private sector, designed to help them work more efficiently in addressing modern slavery. A Risk Assessment Matrix (RAM) is an online dashboard that helps brands to assess the risk of forced labour associated with specific products, in a given country or province, in order to prioritise their audits and investigations where modern slavery is more likely to exist within their supply chains.

A Knowledge Hub offers a comprehensive online resource centre on modern slavery. It archives news articles, reports, website addresses, blogs and more, with a focus on modern slavery’s links to the private sector. An End Slavery smartphone app encourages the public to earn care points through learning about slavery, spreading the word, and volunteering.

Its impressive Victim Identity App allows police and NGO workers to approach those they suspect of being slaves and communicate with them using country flags to identify the language they speak, and voice recordings in hundreds of different languages that can ask the victim questions, such as ‘are you being held against your will?’.

Acting on the startling results of a survey The Mekong Club carried out in Bangladesh that found 40% of those helped out of trafficking got retrafficked, Friedman said the NGO was working on vocational training with a work placement element to help victims start a new life.

But on a more personal scale, Friedman encouraged anyone who was touched by the sickening stories of those forced into slavery to take action, whether it be attending lectures, bringing the topic to the attention of their employers, or simply talking about it with others.

Why GDP is misleading – and how we can make it matter to real people

The way in which we measure the health of our economies needs to change in order to maximise what actually matters: our welfare, according to a new book by a leading financial writer.

David Pilling, talked about his new book, The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations, at the FCC. Photo: Sarah Graham/FCC David Pilling, talked about his new book, The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations, at the FCC. Photo: Sarah Graham/FCC

David Pilling, associate editor and former Asia editor of the Financial Times, argues that current gross domestic product (GDP) – the statistic used globally to measure economies – is misleading because it fails to take into account distribution, sustainability or the nature of production.

GDP is the monetary value of a country’s goods and services within a given time period, and it is used as an indicator of national economic well-being. However, in his new book, The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations, Pilling says this economic measurement was created for and shaped around policy objectives.

From its first inception under U.S. President Franklin D. Roosevelt, who wanted a measurement in order to justify spending more to boost the flagging economy of the 1930s; to its interpretation by Britain in World War Two to increase spending on armaments; GDP has been manipulated over the years to fit fiscal policy, Pilling said.

Growth as measured by GDP is often a positive thing for developing countries like China and India where it can improve the lives and well-being of many, Pilling said. But once a country boasts prosperity, economic growth and personal well-being can often separate. It is here where the measure can fail as we see a disconnect between the numbers and how happy people are, he said.

During his March 21 club lunch appearance, Pilling used simplified – and often colourful – analogies to explain why the current formula to calculate GDP falls short of the real picture of an economy’s health. For example, America does not measure the cocaine economy in its GDP despite widespread use of the drug; but Colombia does, which of course, gives its economy a significant boost. Similarly, in the United Kingdom a person caring full time for a relative does not factor in the GDP, but putting that relative in a care home where someone else is paid to look after them is. A mother who breast feeds her baby does not contribute to GDP, yet the manufacture of infant formula does.

Pilling, now Africa editor for the FT, said: “GDP only measures things for which money changes hands. we shouldn’t worship it as a number, it doesn’t tell us everything we think it tells us. There should be some measure of wealth.”

He added that GDP needs to better measure the value of public services; it needs to improve median household income; and take into account an economy’s effect on carbon omissions.

Foreign press clubs call for immediate release of Reuters journalists in Myanmar

Three months ago, Myanmar police invited two Reuters reporters to a restaurant in northern Yangon. Wa Lone and Kyaw Soe Oo had been investigating the killing of 10 Rohingya Muslim men who were buried in a mass grave after being hacked to death or shot by ethnic Rakhine Buddhist villagers and soldiers.

Reuters journalists Wa Lone (L) and Kyaw Soe Oo, who are based in Myanmar, pose for a picture at the Reuters office in Yangon, Myanmar December 11, 2017. Picture taken December 11, 2017. REUTERS/Antoni Slodkowski Reuters journalists Wa Lone (L) and Kyaw Soe Oo, who are based in Myanmar, pose for a picture at the Reuters office in Yangon, Myanmar December 11, 2017. REUTERS/Antoni Slodkowski

At the dinner, police handed the pair some documents. They were arrested almost immediately afterward and later charged under the colonial-era Official Secrets Act, which carries a maximum penalty of 14 years in prison.

On the 100th day since the arrest of Wa Lone and Kyaw Soe Oo, 10 foreign correspondents’ clubs throughout Asia are again calling for their immediate release. The two journalists were engaged in normal reporting activities, and had not committed any wrongdoing. All charges against them should be dropped.

“We are not doing anything wrong,” Kyaw Soe Oo told reporters after the pair were formally charged. “Please help us by uncovering the truth.”

Their trial is now underway, with a verdict possible in the coming weeks. The outcome will have repercussions for Myanmar and the entire region, where press freedom is increasingly under attack.

We call on Aung San Suu Kyi and her civilian government to act to defend press freedom as the country undertakes its transition to democracy. It is vital that Myanmar respects the beneficial role of a free and independent media and ensures that journalists are able to work without threat of retaliation.

FCC Hong kong's president Florence de Changy (left) with Geoff Crothall from the Press Freedom Committee at the Myanmar consulate on March 21. The consulate had closed early but building management promised they would hand in the 3 volumes of signatures to the consulate when it opens again. FCC Hong Kong’s president Florence de Changy (left) with Geoff Crothall from the Press Freedom Committee at the Myanmar consulate on March 21. The consulate had closed early but building management promised they would hand in the 3 volumes of signatures to the consulate when it opens again.

We also call on all those who believe in press freedom to keep up the pressure on authorities who want to silence journalists, in Myanmar and elsewhere around the globe. One easy place to start is by signing a petition for their release: goo.gl/1kPTwX

A delegation of the Foreign Correspondents’ Club of Hong Kong walked to the Myanmar consulate on Wednesday, March 21 to hand over a petition with more than 42,000 signatures demanding the immediate release of Wa Lone and Kyaw Soe Oo.

“We are not doing anything wrong,” Kyaw Soe Oo told reporters after the pair were formally charged. “Please help us by uncovering the truth.”

#FreeWaLoneKyawSoeOo

Foreign Correspondents Association of Singapore
Foreign Correspondents’ Club of China
Foreign Correspondents Club of Malaysia
Foreign Correspondents’ Club of Thailand
Jakarta Foreign Correspondents Club
National Press Club of Australia
Editorial Committee, The Society of Publishers in Asia
The Foreign Correspondents’ Club, Hong Kong
The Foreign Correspondents’ Club of Japan
The Foreign Correspondents’ Club of South Asia, New Delhi
The Overseas Press Club of Cambodia

Democracy Now reports on the story – watch from 5 minutes 20 seconds.

Environmental campaigner calls on Chief Executive Carrie Lam to give green light to Central pedestrianisation plan

Des Voeux Road Central is so congested with traffic it’s often quicker to walk – so let’s pedestrianise it, says an environmental campaigner.

Markus Shaw, chairman of the Walk DVRC Initiative, put forward the case for pedestrianising part of Central's business district. Photo: Sarah Graham/FCC Markus Shaw, chairman of the Walk DVRC Initiative, put forward the case for pedestrianising part of Central’s business district. Photo: Sarah Graham/FCC

Markus Shaw, chairman of the Walk DVRC Initiative, called on Hong Kong Chief Executive Carrie Lam to honour her 2016 pledge to make the city more walker-friendly by implementing the plan that would reduce pollution; congestion; reduce obesity; improve mental health; and meet the aspirations of the young.

Currently, a staggering 77 bus routes make their way through DVRC in Hong Kong’s Central Business District (CBD), making it the most polluted stretch of road on the northern side of Hong Kong island. With insufficient space for both pedestrians and vehicles, travelling along DVRC makes for an unpleasant experience for all. The Walk DVRC Initiative wants to pedestrianise a 1.4km stretch – from Pedder Street to Western Market – into a dynamic public realm while at the same time reviving “a decaying, historic CBD”.

Shaw, a lifelong citizen of Hong Kong, said the city was on the back foot when it came to the environment and urged leaders to be more forward thinking in terms of planning. He cited other major world cities that have introduced pedestrianised zones including London’s Oxford Street and New York’s Broadway. Shaw said former NYC Mayor Michael Bloomberg had managed in only three years to trial a pedestrianised section of the famous street – which has now been permanently implemented – yet Hong Kong planners were slow to consider a similar scheme.

“Community planners should reflect the aspirations of the community,” Shaw said, adding that brand research showed millennials in particular wanted healthier lifestyles and walkable communities. “The government has to recognise these aspirations and build bridges to those who hold them.”

Hong Kong’s population is predicted to reach 8.2 million people by 2043 – and that’s without the predicted tourists. “Planning a city for tourists is putting the cart before the horse. Was Venice planned for tourists? A city should be planned for citizens,” he said.

While most agree that a greener CBD is the way forward, and many business and political leaders in the city had shown support for the plan, Shaw said that district councillors seemed intent on finding fault with the scheme by focusing on the potential public objections to the plan.

“Everybody thinks this is a great idea,” Shaw said. “Ultimately we have only one objective, and that is to get Carrie Lam to do it.”

History tells us that protectionists will not win, says Australia’s trade minister

The fight to save global free trade in the face of rising protectionism is in the hands of the young, who have known only globalisation, says Australia’s trade minister.

Steven Ciobo MP, Australian Minister for Trade, Tourism and Investment, spoke of the virtues of globalisation at the FCC. Photo: Sarah Graham/FCC Steven Ciobo MP, Australian Minister for Trade, Tourism and Investment, spoke of the virtues of globalisation at the FCC. Photo: Sarah Graham/FCC

The recent move away in some countries from the concept of globalisation is a result of governments mismanaging their economic destinies while failing to improve the lives of all. Australia should know, said Steven Ciobo, because it suffered the same fate until the 1980s.

What was needed now, he said, was global openness – and the people best placed to make the case for this were the young.

“They are instinctive globalists, and if armed with the facts of the economic and humanitarian case for free trade, will be our most powerful allies in the battle of ideas now playing out,” he said.

Ciobo, speaking at the March 19 club lunch, said the one thing governments should avoid when distributing gains among their populations is protectionism.

“Governments at large have a responsibility to do what they can to assist those negatively affected by reform to make transitions within an evolving economy – but protectionism is a fatal mistake to make,” he said.

Australia is currently the world’s 10th richest country in terms of GDP per capita and is in its 27th year of consecutive growth. But success wasn’t always the story for Australia.

Falling from one of the world’s strongest economies at the turn of the 20th Century, Ciobo explained, Australia hit a long period of slow decline – the roots of which lay in protectionism.

“Over the decades successive governments sought to shield big employment industries like manufacturing and textiles from overseas competition, to protect jobs and living standards,” he said. “That era of failed policy, though, led only to higher and higher social and economic costs, so by the late 1970s the evolution of a highly-protected economy was a major burden on the public purse.”

Additionally, a rigid economic system meant that the country was poorly placed to deal with unexpected shocks like the oil price hikes of the 1970s, Ciobo, whose official title is Minister for Trade, Tourism and Investment, added.

Change only began to take hold once the government opened the economy up to through major policy reform and exposed it to international competition. Since then, Australia has thrived: “Far from killing our national economy, the removal of protectionism made it stronger, changed its shape, and gave it new momentum,” he said.

Ciobo cited Australia’s decision to pursue the TPP-11 after the withdrawal of the United States as an indication of how it was forging ahead with global free trade agreements.

He talked in depth about China’s rise from “an isolated, very inward-looking place” to a country that is “a great example of what happens when reform and trade liberalisation are allowed to take place”.

The China-Australia Free Trade Agreement – “the highest quality trade agreement China has ever concluded” – has given Australia better access and has further cemented the economic relationship between the two countries.

“The result is an all-time high of $175 billion in two-way trade in 2016-17,” Ciobo said.

And the relationship looks set to become closer, with Australia being the first country to be invited to China’s international Import Expo to be held in Shanghai in November this year.

“Australia is also working proactively with China to strengthen intellectual property rights for Australian businesses,” he said, adding that the government had appointed its first ever IP Counsellor at the Australian Embassy in Beijing “to enhance cooperation at a government-to-government level”.

Some foreign businesses complain that Chinese firms have stolen their ideas and software after forcing them to turn over intellectual property as part of the price of doing business in the country. For its part, China has in recent years taken steps to protect both local and foreign intellectual property. Ciobo said Australia enjoyed a very good working relationship with China when it came to IPR and added he firmly believed China would make more progress on the issue.

Trump’s tax law: new rules discriminate against expats, says expert

How will President Donald Trump’s new tax law affect Americans living overseas? It’s a question that remains a mystery, says tax expert Larry Lipsher, because the recently passed legislation is largely indecipherable.

Host Nan-Hie In (left) introduces Larry Lipsher ahead of his talk on Trump's tax reform at the FCC. Photo: Sarah Graham/FCC Host Nan-Hie In (left) introduces Larry Lipsher ahead of his talk on Trump’s tax reform at the FCC. Photo: Sarah Graham/FCC

The first act of its kind since 1986, the new Inland Revenue Service (IRS) act introduces “a whole array of new phrases you’ve never heard of before”, Lipsher said as he sought to focus on the law changes that apply to those living outside the United States. What was clear was that Americans filing tax as 10% or more owners of a foreign corporation would lose out under the new legislation, which introduces a quasi-territorial system that allows tax deductions only for domestic corporation owners of foreign corporations.

Confused? Lipsher said the legislation was so cloaked in complicated new terminology that “I defy you to look at it and tell me what the hell it means”.

Lipsher, an American and Hong Kong CPA, has been preparing U.S. tax returns since 1967, said that since its introduction in December 2017, U.S. banks in Hong Kong were reluctant to even open new accounts with customers because “in order to handle this the banks have to have people who understand the IRS terminology”.

“The system has broken down,” Lipsher said, adding: “You, as Americans living overseas, are discriminated against.”

When asked during the March 14 club lunch whether anyone in the senate was defending expats, Lipsher’s answer was simply “no”.

“The problem is democracy in America is under siege. I’m very pessimistic about the future of the taxation system,” he added.

What do you need to become a novelist? Tenacity, passion – and a lot of small notebooks

Award-winning Spanish writer and journalist Rosa Montero doesn’t go looking for ideas for novels – they find her and possess her until she reaches the end of the story.

Rosa Montero, award-winning author and journalist, explained her literary process at the FCC. Photo: Sarah Graham/FCC Rosa Montero, award-winning author and journalist, explained her literary process at the FCC. Photo: Sarah Graham/FCC

FCC members and guests got the chance to get inside a novelist’s head on March 12 for a glimpse of how Montero, who began her career as a journalist, develops her fictional characters and storylines before putting pen to paper – or keyboard to Word document – and producing an entire book.

Montero spoke of the difference between writing as a journalist and a novelist, describing the fictional side as “dreaming with your eyes open”.

“We have imaginations like children,” she said, speaking generally of novelists.

Last year, Montero won the “Premio Nacional de las Letras Españolas”, one of the top Spanish literature prizes. She published her first novel (La crónica del desamor) in 1979. Since then, she has published 15 novels, two biographies, three collections of interviews, a book of short stories and several children’s tales. Her books are translated into more than twenty languages. Her latest novel is La Carne (“Flesh”, 2016), already published in French as La Chair.

As a journalist she has worked since 1970 in TV, newspapers and magazines. Since 1977, she has worked exclusively for El País, one of the leading Spanish newspapers, and has worked as correspondent for the paper in India, Australia, the US and Latin America. She was also editor-in-chief of the Sunday magazine of El País from 1981-1982.

During the hour-long talk at the FCC, Montero explained how every idea begins with “what if..?” and that an idea for a plot usually grabs her to the point that she has an urge to share the story. She carries small notebooks everywhere to note down her ideas, she said.

“To be a novelist you need tenacity and passion,” she said.

Watch the video.

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