In the decades following the end of the Cold War, civil and ethnic wars have become more prevalent than traditional inter-state war. The motivations for and the methods used to engage in civil conflict have altered.
BY CHAS MORRISON | MAY 2012
Scholars across different disciplines have not yet reached a comprehensive definition of civil war, nor come to a formal agreement on the total number of civil wars, due to lack of universally accepted characteristics. Civil warfare is generally funded through different mechanisms from inter-state war; unless there is third party interference or diaspora support, rebels must fund their own war efforts using methods such as capture of natural resource rents, support from local populations or extortion of businesses and other criminal activities.
A long-standing left wing extremist (LWE) insurgency across India has led to the deaths, injuries or displacement of thousands of people, whilst being mostly overlooked by Western theorists. Many academic analyses dealing with revolutions, insurgencies, and civil war do not mention the Naxalites whatsoever. The Naxalite conflict would likely be more well-known if global attention were less focused on events across the border in Pakistan and Afghanistan, or if a number of foreigners had been killed. The insurgency started in the town of Naxalbari in West Bengal state, and thus the rebels are often known as ‘Naxalites’ (interchangeably with ‘Maoists’, ‘extremists’, ‘rebels’, or ‘insurgents’). While all figures of the total number of combatants must be regarded as approximations, the BBC claims there are between 10,000 and 20,000 armed Naxalite cadres.
India has struggled with violent separatism in Kashmir and the North-East states, Islamic terrorist groups and communalist Hindu-Moslem conflicts, all of which have made the international headlines and received much more scholarly and media attention but the Maoist Naxalites have engaged in a civil conflict with severe impacts since 1967. What started as a localised uprising in a single town has now spread to influence or affect twenty states in India, covering two hundred and twenty-three districts. The exact number of affected areas is contentious, given that LWE-hit districts receive central funds for Security Related Expenditure. In 2011, the Government of India’s own figures were revised down to 83 affected districts from a high of 180 in 2009. Ajit Doval, the former director of the Intelligence Bureau, estimates Naxalite activity has affected 40 per cent of India’s territory and 35 per cent of its population (thus more than 420 million people). An insurgency on this huge scale deserves more rigorous analysis.
Economic costs are high; from 1980 to 2000, LWE-affected states lost an average of 12.48 per cent of per capita net state domestic product. There is a serious paucity of research and empirical data on specific elements of the Naxalite conflict. Research that focuses specifically on the Naxalite insurgency tends to be analytically restricted to issues of domestic politics and inequality, but a purely economic examination of conflict causation may be too narrow. Grievances, inequalities and drivers for conflict vary hugely over a country as big and heterogeneous as India. Successive Indian governments have resisted calling the Naxalite insurgency a ‘civil war’ and term it a law and order problem due to political and policy implications. All this takes place in a complex environment of multiple and conflicting stakeholders, reducing the validity of purely quantitative analyses of conflict causation.
In a startlingly frank admission from a head of state, the Indian Prime Minister stated in September 2009 that the country is losing the battle against the Naxalites. The Naxalite insurgency deserves wider international scholarly attention; India is the world’s largest democracy and its second most populous country. There has been a movement towards mergers and consolidation of various LWE groups under the Naxalite banner. The largest merger was in 2004 when the People’s War (PW) and Maoist Communist Centre of India (MCCI) merged to form the Communist Party of India (Maoist), also known as ‘CPI (M)’, but this pattern of mergers and splits has occurred numerous times since 1967. The Maoist insurgency is unusual for its long duration and the low intensity mortality rate. This however has reached cumulatively high numbers of deaths over the last decade, and become more indiscriminate.
*Published in Journal of Conflict Transformation & Security (JCTS) Vol. 2 | No. 1
© Copyright 2012 by CESRAN
In this article, I will point out and discuss the effect of the reform of exchange rate institution on the real estate market, and the discussion suggests that the appreciation of RMB leads to the rise of real estate price, but as well as the possible economic bubble in Hong Kong. The influx of capital flows and the real estate price volatility in Hong Kong real estate market shows that the expectation of the appreciation of RMB is one of the elements that inspires investment speculating in the real estate market causing the possible imbalance of demand and supply and various social problems.
BY SUNNY LAM | APRIL 16, 2012
- RMB appreciation stimulates mainland investors to enter the Hong Kong real estate market
An appreciating RMB will impact the Hong Kong economy and hence the real estate market in direct and indirect ways. Indirectly, it spurs capital inflows into Hong Kong in order to lower the local interest rates, creates an accommodative monetary environment and yields substantial wealth effects from a surging stock market. As a result, such wealth effects are expected to spill over into the property market. Lower interest rates will also provide incentives for increased borrowing and boost asset prices. Under the current currency system, an increase in liquidity would suppress Hong Kong-dollar interest rates. If money supply exceeds the desired money demand, inflationary pressure will rise. The positive outlook for asset prices and expectations of further appreciation of the RMB might attract substantial capital flows into Hong Kong.
- Hong Kong – an alternative exit for Chinese hot money
In the long run, it is believed that the reform of RMB exchange rate system and its revaluation will not have any significant adverse effects on China, but is rather one of the steps towards China’s strategic goal of gradual appreciation and loosening of capital control for RMB.
The domestic policy tightening in mainland China as well as the appreciation of the RMB causes the China investors to diversify their investment portfolio, Hong Kong is expected to be one of the first spots for it. Chinese investors in search of alternative real estate options, to reduce the overheating of domestic market risk exposures. China on the overseas property market influence eclipsed. China real estate investors are mostly limited to investment in the domestic market, forcing the Government to take vigorous measures to suppress excessive rise in prices of China's domestic policy tightening in real estate, and the appreciation of the RMB will, analysts expect more Chinese people to those high returns and low limit of the overseas market investments such as Hong Kong.
- Investment Strategy Consideration
The levels of total return due to the RMB appreciation offered by real estate markets in Hong Kong are likely to be attractive to many Chinese investors. In particular, in an environment when investment in low risk assets in Hong Kong offers very attractive returns, the income return from real estate is likely to be an appealing characteristic for many investors. The key to success is in the speed, scale and timing of the investment. In conclusion, the RMB appreciation presents a cross-border investor with a range of opportunities. It also offers scope for risk diversification within the real estate markets.
How might investors respond? Five trends may be significant:
- Increasing investment demands: Firstly increasing allocations to real estate both from traditional institutional investors (pension funds, insurance companies and endowments) but also from sovereign wealth funds and new institutional investors.
- Favorable risk adjusted return: Secondly many investors show an elevated degree of China heat effect. After all, if the outlook for returns is strong in Hong Kong many mainland investors still keen to find out the risk adjusted return for their investment?
- More value-added investment opportunities: Whilst many risk adverse investors may likely continue to focus purely on prime properties in Hong Kong; I suspect that increasingly some risk accepting investors may start to commit to investments in secondary properties with a value add strategy to reposition the property into a core property as markets continues to grow.
- Attractive capital flow environment: Listed real estate tends to anticipate the performance of direct or unlisted real estate. With healthy balance sheets, many listed companies have access to capital to redeploy into the wealthy real estate markets. Many investors might find this a more liquid way to participate in the boosting market environment.
- Focus on the core segment: Depending on the risk level the investor is willing to take, investors are suggested to invest in the core segment as part of the overseas portfolio. Hong Kong being a well developed city in the region, the core segment is relative stable in term of price growth and rental income.
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Published in Political Reflection Magazine (PR) Vol. 3 No. 1