Halim’s Suit and Political Business

June 14, 2013

MY COMMENT: An outstanding manager who built Renong into a darling of our stock exchange in 1990s became a victim of politics. NEP was supposed to help build a core of Malay-Bumiputra businessmen but in actuality it became a tool to cut down to size successful individuals like Halim Saad.

I have always thought that we should be proud of their success and serve them up as role models of business entrepreneurs and top executives for the young generation of Malays and other bumiputras. In stead, Mahathir did the opposite. He expected Halim and people like him to toe the line and do as they were told. When they did not, Mahathir would let loose the power of his government. Who would understand power better than our longest serving 4th Prime Minister!

Dewan Perniagaan Melayu used to complain that GLCs like Khazanah are being used to compete with genuine Malay business and thereby undermine the NEP objective  of creating a Bumiputra Industrial and Commercial Community. Halim’s fate is an example of what a pro-Malay business government can do to a successful but defiant Malay.

I talked to Halim years ago when I was in Sime Darby in 1980s and from my conversations with him I found him to be a very able, astute, and hardworking accountant turned businessman. When he was chosen to head Renong and spearhead the construction of the North-South Highway, I was not at all surprised at his elevation. He had built a strong management team and made the Renong Group into a flagship of Malay business.

Mahathir’s Hatchet Man

When Renong was brought down by the Asian Financial Crisis of 1997, Halim should have been given a chance to resuscitate it and allowed time to work out a General Offer scheme to save Renong. He did not have to be “bailed out”–and he was not as his suit reveals– because he had the capacity to raise funds from the banks. Here I disagree with Dr Terence Gomez. My view is that Khazanah was used to serve a political purpose. Mahathir tapped his Special Economic Advisor, Nor Mohamad Yakcop as the hatchet man to frustrate Halim’s ambition.

Nor Mohamad did so willingly. Why? Because with his track record in Bank Negara, Mun Loong, and Abrar Group, he needed political patronage to avoid the slammer. In fact, he survived all these years because he is protected by his political bosses from Mahathir, Badawi to Najib. Now he is Deputy Chairman, Khazanah Nasional as reward for past services. Amazing but for how long?

As blogger Rocky Bru said, he is a top cat with many lives.  But with this suit by Halim, Nor Mohamad as first defendant may finally have to defend himself and clear his name. For a different reason than Professor Gomez’s, I believe this former Minister deserves to bear the full brunt of the law. The suit must, therefore, be allowed to be heard in an open court.–Din Merican

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by Terence Edmund Gomez@http://www.econoclast.com

Halim Saad’s billion-ringgit suit against the government, a former minister and Khazanah Nasional puts the spotlight on political business — the ownership and operation of businesses by political parties. Our columnist looks at the suit in this context and opines that the suit should take its full course and that lessons must be learnt from it.

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Halim Saad’s billion-ringgit suit against the government, a former minister and Khazanah Nasional puts the spotlight on political business — the ownership and operation of businesses by political parties. Our columnist looks at the suit in this context and opines that the suit should take its full course and that lessons must be learnt from it.

When Halim Saad filed his massive RM1.3 billion suit against Khazanah Nasional, it returned to the fore a trend in Malaysia that defines its political system — the practice of political business.

The term “political business” was first employed to describe the practice of political parties owning corporate equity, a factor that led to the rise of large investment holding companies such as UMNO’s Fleet Holdings (which owned, among other leading firms, the New Straits Times Press and TV3), the MCA’s Multi-Purpose Holdings and the MIC’s Maika Holdings.

All these holding companies would come to be mired in controversy, a factor that led to UMNO transferring its assets to trusted nominees in the early 1990s.

Enter Halim Saad, who by his own admission, had long served as an UMNO trustee, though he answered primarily to his mentor, Daim Zainuddin, then the Finance Minister, and to then Prime Minister Mahathir Mohamad.

Halim had been fortunate to come to hold in his own name the vast corporate base that UMNO had built during the 1980s when Fleet Holdings was under Daim’s control. Halim was also in the right place and at the right time as Mahathir was then actively voicing his intent to produce an ensemble of entrepreneurial Bumiputera capitalists.

Mahathir justified the selective patronage system he would introduce by arguing that the best way to create Malay capitalists was to distribute government concessions to those most capable of generating wealth.

This marked the beginning of a different sort of political business nexus, one characterised by an intimate familiarity between UMNO and elite businesspeople. This form of political business would define Mahathir’s premiership and become a constituent feature of future UMNO-led governments.

Mahathir relied heavily on Daim to aid his vision of creating huge internationally-renowned Malay-led conglomerates. Both men were captivated with the workings of the stock market and saw Bursa Malaysia as a route to rapidly creating domestic capitalists.

Malaysia’s stock market capitalisation relative to GDP (gross domestic product – goods and services produced) would emerge as the highest in Southeast Asia.  Between 1989 and 1993, equity market capitalisation as a percentage of GDP increased from 105% to 342%.  By 1997, the Bursa Malaysia was listed as the 15th largest in the world in terms of market capitalisation.

A form of “casino capitalism” was the result of this deployment of the bourse to create conglomerates, which reflected Renong’s pattern of corporate development. This casino capitalism was welcomed, even celebrated — many got rich by it — until the 1997 Asian currency crisis.

Things fell apart quickly and this crisis disclosed not just the problems with this type of corporate growth but why political business ties, ostensibly for the purpose of redistributing wealth equitably and nurturing Bumiputera capitalists, was simply not a viable way to implement policy.

The history of Renong’s development and Halim’s suit suggests that, in spite of privatisation, Mahathir and Daim would use their now indirect control over this business group to show Bumiputeras how to nurture domestic firms.

The suit also suggests that UMNO leaders, having once granted corporate equity to private individuals, were not bound to honour the latter’s ownership rights. The nationalisation of Renong also reveals that UMNO leaders were capable of using government institutions to relinquish business people of their assets following disputes, a factor that would undermine public confidence and contribute to serious wastage of government resources.

In this context, what is interesting about the suit by Halim is that it does not mention Mahathir or Daim, only the public institution and person deployed by them to sort out the problem of the UEM-Renong share buyback controversy that had undermined investor confidence during a period when the economy was struggling to deal with the repercussions of the Asian crisis.

That Halim did not name Mahathir and Daim suggests that he is open to a compromise, one where he retrieves companies untimely ripped from him, as he would see it, or be privy to adequate compensation to enable him to re-emerge as a major corporate figure in his own right. It also suggests that, to Halim’s mind, Mahathir remains influential enough to determine how his legal suit with Khazanah should proceed.

It would be unfortunate if this suit is not taken through due process in a court of law as there are important lessons to be learnt here. One key lesson would be how not to develop an enterprise. The second lesson is the enormous public cost of selective patronage ostensibly to develop Bumiputera-led big business, a practice which can also contribute to business nominees holding corporate assets in trust for UMNO. The third lesson is the need to end political business ties that continue to define the Barisan Nasional government.

A select group of well-connected individuals is still privy to major privatised contracts while one businessman in particular, Syed Mokhtar Al Bukhary, has benefited from numerous government concessions allowing him to develop a conglomerate in a manner that appears strikingly similar to the pattern of growth of Renong under Halim.

The Najib Abdul Razak government has already been subjected to serious criticisms for privatising a range of public enterprises to Syed Mokhtar. Selective patronage by politicians in power continues to be exercised in a manner that is not transparent, in spite of persistent statements in government plans about the need to dispense with “rent seeking” and “patronage”.

While patronage continues to define UMNO politics, the nature of the quid-pro-quo has become more obscure with greater difficulty in tracing the flow of funds between businesspeople and politicians, an issue that raises concerns about covert concentration of power.

This multi-billion suit by Halim will draw attention to these facts as well as indicate how things can go very wrong if we do not learn the lessons of history. And, if a similar corporate crisis recurs, a GLC like Khazanah may not be in a position to bail out well-connected over-leveraged firms that can ruin Malaysia’s economy.

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Terence Gomez is professor of political economy at the University of Malaya and the author of Politics in Business: UMNO’s Corporate Investments (1990), Political Business: Corporate Involvement of Malaysian Political Parties (1994) and Malaysia’s Political Economy: Politics, Patronage and Profits (1997).

http://www.kinibiz.com/story/quotes/28194/halim%E2%80%99s-suit-and-political-business.html

 

Politics can’t handle the Truth about Austerity

June 12, 2013

MY COMMENT: How do we deal with our situation? Years of fiscal deficit spending have become a matter of concern. Our national debt including heavy household borrowing is at an all time high and how long do policymakers and their political masters think we can postpone the day of reckoning. The forthcoming budget 2014 will reveal how the Najib administration intends to cope with the after effects of politically motivated and debt financed public spending of the last few years.

Accommodative monetary policy (low interest rate policy) cannot be relied upon to do the magic of sustaining economic growth since inflationary pressures are already being felt in all sectors of our economy.

“Fiscal stimulus is essential when conventional monetary policy is powerless. But fiscal stimulus isn’t always an option. Governments can’t do it if investors are unwilling to buy their debt,” says Economist Crook. 

For Malaysia, it has become critical for our government to recognise that debt financing to sustain economic growth is not an option without attendant risks. The need for fiscal prudence, therefore, cannot be overstated. We need fiscal strength for a rainy day.–Din Merican

by Clive Crook(06-o5-13)@http://www.bloomberg.com

What we know, or think we know, about fiscal policy five years after the global recession started isn’t all that different from what we knew, or thought we knew, back in 2008. It boils down to two points. One, fiscal stimulus is essential when conventional monetary policy is powerless. Two, fiscal stimulus may be impossible even when it’s essential.

Most economists agree that changes in interest rates are usually a better way to regulate demand than discretionary changes in taxes and public spending. But interest rates can’t fall to less than zero. When that limit is reached — as it was in this recession — fiscal policy must carry a bigger load.

In economies with a lot of slack, fiscal multipliers (the change in output that follows from any change in the fiscal balance) are more powerful than usual. This recession, because of its unusual depth, has supplied new evidence to back up this rule, and the UK’s attempt to refute the logic with “expansionary austerity” is widely seen as a failure despite some recent tentative signs of recovery.

Moreover, unconventional monetary policy, the other alternative to changes in short-term interest rates, can’t yet be called a success. Only when the Federal Reserve and other central banks end their vast asset-purchase programs will it be possible to render a verdict on quantitative easing as a partial substitute for fiscal stimulus. So far, it looks as though it has helped. Let’s see how the exit goes before we declare it a triumph.

Essential options

To repeat, fiscal stimulus is essential when conventional monetary policy is powerless. But fiscal stimulus isn’t always an option. Governments can’t do it if investors are unwilling to buy their debt. Greece and other European Union economies discovered this in 2010. Theirs was hardly a new experience.

Europe as a whole had, and still has, unexploited fiscal capacity. It chose not to use it for both good and bad reasons. The good reasons included the desire to force governments to reform their economies in ways they wouldn’t consider unless under pressure. The bad reasons included the idea that the worst-hit countries had brought their troubles on themselves, and shouldn’t look to their EU partners for help.

The right answer is plain, and has been from the start: collective EU fiscal support with conditions. The union has made gestures in that direction, but the scale of the response so far has been pitiful.

What about the view that governments don’t need to worry about fiscal capacity if they borrow in their own currency? A country like Greece can find itself literally unable to service its debts. The US or the UK, which borrow in their own currencies, could never be forced into that corner. They can simply print the money if need be. Or so it’s argued.

Countries that borrow in their own currency can, in fact, default. Put to one side the periodic threats from the US. Congress to repudiate debt as an act of policy. Beyond that, countries may resort to inflation as a way to lighten their debts, and investors are aware of the possibility. A surge in bond yields that would require sudden fiscal contraction is therefore possible even for a country like the US.

A country that borrows in foreign currency has to keep debt at levels that cause investors no concern; for the others, that’s merely very desirable. Even for the US, heading into the next bad recession with a ratio of debt to gross domestic product of 40% would be a lot better than doing so with a debt that is 80% of GDP. Fiscal consolidation when the economy is strong is as important as fiscal stimulus when it’s weak: Without the first, you can’t count on the second.

Impossible coalitions

Another finding from the past five years: Building political coalitions around that simple precept — stimulus when necessary, consolidation when possible — has proved surprisingly hard. The right has mostly argued for austerity regardless. The left has mostly played down the need for fiscal control later, arguing that as growth resumes the problem will take care of itself.

This is the context that made the findings of Carmen Reinhart and Kenneth Rogoff on debt and growth so controversial. Conservatives seized on their finding that high levels of debt are correlated with lower growth, calling it proof that austerity is needed now, which is a non sequitur. Keynesians seized on an error in one of the authors’ papers and on the fact that correlation isn’t causation to imply that austerity is always dumb, also a non sequitur.

A recent open letter by Reinhart and Rogoff says all that needs to be said on their position and that of their critics. The point I’d stress is that, confounding the positions of the two warring camps, the link between debt and growth almost certainly runs in both directions.

The link from low growth to a high debt-to-GDP ratio is clear and immediate: In a recession, dwindling tax revenue and higher automatic outlays increase debt, and slow growth holds back GDP. The link from high debt to low growth is a bit more complicated but still pretty obvious: Higher interest rates crowd out private investment while mounting payments for debt service squeeze public investment and push up tax rates.

It’s silly to ask whether high public debt causes lower growth or vice versa as though it must be one or the other. Almost certainly, both are true. This reinforces the case for fiscal consolidation as the recovery strengthens — not just to restore fiscal room for maneuver but also to support longer-term growth.

What’s needed is fiscal strength (as conservatives stress) and the willingness to use it boldly when necessary (as Keynesians stress). This simple proposition was true in 2008 and it’s still true. It should be uncontroversial, but it seems to be more than politics can handle.

Clive Crook is a Bloomberg View columnist. To contact the writer of this article: Clive Crook at clive.crook@gmail.com.

 http://www.kinibiz.com/story/quotes/25883/politics-can%E2%80%99t-handle-the-truth-about-austerity.html

Malaysia’s Sovereignty Sacrificed for Free Trade?

June 10, 2013

PRESS STATEMENT
6 June 2013
FOR IMMEDIATE RELEASE

The Trans Pacific Partnership Agreement (TPP) is a Free Trade Agreement (FTA) initiative involving 11 countries and is currently in its 17th round of closed-door negotiations. Malaysia joined the TPP discussions in October 2010. Unfortunately, in keeping with past traditions, Malaysians including their elected representatives have not been informed of the discussions pertaining to the TPP.

This unfortunate exclusion from discussions, debates or any other form of participation let alone the entire process of obtaining a Parliamentary ratification denies the public their right to oversight and scrutiny of international treaties and agreements – be they bilateral or multilateral – which could affect national interests and sovereignty.

Although the Government is allowed to enter into international agreements and treaties without having to obtain Parliamentary approval, the scale and size of the TPP supercedes any other treaties in the world. Consistent with President Barack Obama’s goal to make it the ‘trade treaty’ worthy of the 21st century, TPP far exceeds the authority and quality of the multilateral agreements already agreed at World Trade Organization (WTO). This in itself should have been a red flag for further caution.

Invariably, we are extremely worried that the Government will sign the TPP agreement without first seeking public opinion, or being attentive to the concerns and sentiments of the people of Malaysia.

While KEADILAN in principle supports FTAs if all stakeholders are involved in the process, alongside Parliamentary review and ratification, all FTAs nevertheless must be premised on “fair trade” principles without compromising the socio-economic sphere, environment, cultural domain, labour rights, public safety and national security. On that premise, we call for a parliamentary expert study group on TPP – formed of Malaysian experts and specialists drawn from around the world – to be immediately convened to look into the nuts and bolts of the FTA.

We have justifiable reasons to be concerned. This is because:-

- TPP confers greater legal rights on foreign businesses than those available to domestic businesses through a clause called the “investor-state” dispute settlement (ISDS) resolution. In lieu of this, we question the motives of the Government for entertaining the notion of joining an agreement that empowers foreign corporations to challenge domestic laws and regulations outside of domestic courts without first exhausting local legal measures. This is especially frightening as it allows foreign corporations to circumvent laws and regulations enacted by our Government in public interest such as those pertaining to natural resource, environmental protection, and health policies.

- TPP contains provisions concerning infringements of Trade Related Intellectual Property Rights (TRIPS) ranging from basic pharmaceuticals to digital information online. These provisions would result in the increased costs of medicines purchased by our Government, and for the private consumer of medicines. Further, some provisions would hinder privacy, expression and innovation on the Internet as Internet Service Providers (ISPs) would be required to monitor the everyday activity of internet users, and are given the authority to act upon them by means of disabling net access or throttling bandwidth, effectively hindering freedom of speech.

Accordingly, even if we accept TPP, we demand that the Malaysian Government ensure certain safeguards to be in place:-

1) Strengthen our environmental laws to that of international standards to prevent any abuse of our diverse ecosystem.
2) Emulate the international best practices to strongly oppose ISDS, and incorporate these best practices in the Trade Policy Statements.
3) Enact laws to protect the interest of domestic internet users and maintaining freedom of information as long as it does not breach existing security laws.

A study has been made by the Peterson Institute, stating that Malaysia stands to gain huge income gains through TPP. However, the projection has made no attempts to determine the impact of this trade deal on income inequality or environmental sustainability. Hence, we see TPP, and especially the processes leading to its ultimate acession, to be fraught with various social, political and economic risks, which could undermine the very integrity of the agreement eventually.

I will move a motion within Parliament strongly demanding a Parliamentary Expert Group on TPP be convened, with the added caveat that the legislature should be duly informed. This is to ensure the protection of the democratic rights of the Malaysian Parliament, especially in relation to the issue of review and ratification of all treaties.

Indeed, subsequent legislative amendments must be restored in light of this upcoming new treaty of TPP. Our concerns are not trivial. We will not accept the blind faith assurances that the Malaysian Government would perform its duties when they have failed miserably to protect our national interest and sovereignty in the past; including instances such as the territorial dispute cases of Pulau Batu Putih (with Singapore) and Block L and M (with Brunei), the Water Agreement (with Singapore) and the Singapore Tanjong Pagar KTM land deal (with Singapore).

I will further prioritise engagement with representatives from the Chinese, Malay, Indian and Chamber’s of Commerce regarding this matter. We take kindly to the invitation of the US Embassy which stated that they have offered give numerous groups from both business and civil society here in Malaysia the opportunity to be a stakeholder in the negotiations.

I fully intend to represent the interests of Malaysians during the upcoming round of negotiations that will be held in Malaysia and will be bringing with me representatives from the respective CCM’s to be stakeholders as well.

This TPP may have been in the spirit of ‘Free Trade’, but is it truly a ‘fair trade’ deal for the citizens of our country?

Nurul Izzah Anwar
Member of Parliament for Lembah Pantai
and Vice-President Parti KEADILAN Rakyat (People’s Justice Party)

‘BN Government is umbrella for all Malaysians’, says PM Najib

June 2, 2013

COMMENT:

It is tough  this time around for you, Mr. Prime Minister to regain our trust and confidence. You lost that glow. You showed us time and time again between April 2009–May, 2013 that you are too free with your words and sloganeering but have been very short on action.

To get re-elected in 2013 you resorted to playing up racial sentiments and pandering to conservative elements within your own party led by Dr. Mahathir. You even allowed PERKASA President and his No.2 to be Barisan Nasional candidates (one for Shah Alam and the other in Pasir Mas) for GE-13. Both these characters were resoundingly rejected by voters.

Own up to the fact that your flip flopping on vital issues in your Transformation agenda has caused your coalition to be rejected by 53% of Malaysian voters  on May 5, 2013. Today, we are more divided than ever as a result of your (and not national) “polemic based on beliefs, race, political ideologies, urban and rural demographic and class”(Bernama attributes this quote to you).

You have not been able to restrain the former Prime Minister Mahathir from playing up racial sentiments during the GE-13 campaign. In fact, you allowed him to play the race and Malay survival card. Now it is almost impossible to stand up against the octogenarian since you are going to depend on Mahathir’s good graces to stay in power. Only Mahathir can prevent a challenge against you for party leadership and hence the right to remain Prime Minister. His influence still looms large in UMNO.

I accept our King as Payung Negara because His Majesty takes his role seriously and does not play politics. I cannot see you commanding that special kind of respect and affection we Malaysians have for our King (and my revered Sultan of Kedah). You are a politician who is like a snake oil salesman who promises a lot and delivers little in terms of action/results. Frankly speaking, we Malaysians do not need a “leaking” payung that you and your colleagues in Barisan Nasional can provide.

Fight corruption in earnest especially against those in your party and Barisan Nasional, for example , Pehin Sri Taib Mahmud of Sarawak, and those UMNO leaders who were involved in Port Kelang Free Trade Zone scandal and the National Feedlot Corporation saga. Then and maybe, you will regain our confidence and trust in your leadership as Prime Minister.

It is time for us to see you as a Prime Minister who means business, who is decisive and tough, who is competent to lead our country, and who will not stand any nonsense from anyone. Release the newly honoured Tan Sri Abu Kassim of MACC and Senator-Minister Paul Low of your Office to do their work, and get rid of corruption. –Din Merican

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‘BN Government is umbrella for all Malaysians’

by Bernama, June 2, 2013

Prime Minister Najib Tun Razak said today the Barisan Nasional (BN) government is aware of cracks in national unity and that some people feel marginalised and is committed in addressing the challenges.

The Prime Minister said the situation occurred due to a national polemic based on beliefs, race, political ideologies, urban and rural demographic and class.

He and his colleagues in the government recognise they carry the trust and responsibility of all Malaysians whether they support BN or not in the 13th general election (GE13) which saw BN return to form the federal government.

“Your Majesty’s government is the umbrella for all Malaysians,” he said in his congratulatory speech before Yang di-Pertuan Agong, Tuanku Abdul Halim Mu’adzam Shah to mark his birthday and presentation of federal awards and medals at Istana Negara here.

The government, said the Prime Minister, will formulate a plan to strengthen national unity and repair national understanding and this requires the cooperation of all parties.

“It should be based on constructive dialogue at all levels and it should be the agenda of all parties to ensure its success. Certain parties are trying to dispute the results of GE13 which favoured BN by raising issues such as popular vote, use of indelible ink, claims of the presence of ‘phantom voters’ and the so-called power blackout during vote counting.”

Najib said it was very easy to deny and blame others but it will not solve any problems or unravel all the challenges facing Malaysia.

“The government urge all Malaysians to consider the togetherness factors that can unify us rather than seeing points that will trap us in nostalgia and past reality.”

The Prime Minister said the government is committed to creating a better future for all Malaysians. “We dream of a Malaysia where people of all races and beliefs can live in peace and harmony without any suspicion, a progressive and prosperous Malaysia which has enough for all.”

Najib said he and his colleagues in the government will continue to defend, protect and preserve the constitutional principles, the rule of law, celebrate diversity, practice inclusiveness and put people first in its administration.

Bernama

Match Words with Action, Mr. Prime Minister

May 28, 2013

It’s Time to Walk the Talk, Mr. Prime Minister, or is it too late?

COMMENT: Our Prime Minister has established a reputation for himself as someone who does a lot of talking and sloganeering since he took over the premiership from Abdullah Ahmad Badawi in April, 2009. Plenty of talk but very short on action.

The last General Election is a referendum on him and some 53 per cent of the voters rejected his leadership. It is , therefore, going to be long uphill battle for Dato’ Seri Najib to regain his credibility.

His 1Malaysia is now in shambles thanks to the likes of Ibrahim Ali and Zul Nordin of PERKASA and other extreme elements within his own party. His economic transformation programme has proven to be choppy with our national debt is at all time high.

And now that he has failed to recapture Selangor and get 2/3rd majority in the 13th Parliament, he will face a serious challenge to his leadership. To survive, he must pander to the wishes of ultra-Malay nationalists in UMNO. UMNO will decide if he is to remain Prime Minister. This perhaps explains why he has chosen to be low key since May 5, 2013. He must blame himself, not the Chinese or anyone else, for the position he finds himself now.–Din Merican

Match Words with Action, Mr Prime Minister

by Terence Fernandez (05-23-13) @ http://www.mmail.com.my

“I BELIEVE we have learned our lesson because I keep telling that the political environment has changed. I see this as a structural change in society … people are becoming more aware and empowered. Values have changed and expectations have increased. As a government that wants to stay in power, you must realise that you have to respond to it. The era of government knows best is over.” — Datuk Seri Najib Razak, The Malay Mail December 7, 2012.

This excerpt from an interview we conducted with the Chief Executive last year resonated as I watched events unfold in Jinjang. The arrests of Batu MP Tian Chua, PAS member Tamrin Ghaffar (the son of the late Deputy Prime Minister Tun Ghafar Baba) and activist Haris Ibrahim have seen hundreds of people gather in front of the Jinjang lockup to protest a fresh spate of arrests in the wake of the general election.

They were detained for speaking at a forum on the May 13 riots. Days before the trio’s arrest, student Adam Adli was also detained for words he uttered at the same forum.

On Thursday, 1,000 copies of Suara Keadilan and Harakah were seized from various newsstands in the Klang Valley. Make no doubt about it but there may be a case for the prosecution in this “Ops Lalang” style crackdown. As the Home Ministry’s statement explains, these political gazettes were not licensed for mass sales, only “internal circulation”.

And calling people to take to the streets could be an offence under the vague provisions of the Sedition Act — another legislation that is prone to abuse. However, the trio was released, following a ballsy magistrate’s refusal to grant a remand order. Adam is on bail.

But if this may seem a victory of those calling for “change”, they still have their work cut out for them. Face it, one can shout in the streets till the cows come home but the ones who can make these changes are those in the corridors of power.

This means the Prime Minister who has received the mandate he requires to moot this change has to start keeping up with the demands of the rakyat. His words from the December 7 interview: “For me to complete my job I would require a strong mandate from the people. With a strong mandate from the people I can say: ‘Look, the people have spoken. They believe in the policies that I propounded’.” So okay, Najib did not really get the mandate he wanted.

The BN lost seven more parliamentary seats and 53 per cent of the population voted for the Opposition. But this is the hand both sides have been dealt with and the sore losers (and winners) must accept that if the Westminster system worked for them in gaining the seats they had won, this same system also dictates who will form the government of the day.

And this explanation of democracy 101 is how some of the winners of GE13 has been fending off the criticisms of their competitors — apart from telling more than half the population to migrate.

Truth be told, Najib may not have received the mandate he desired, but it is still an approval from the rakyat — a vote of confidence not so much for his party but for Najib to continue as premier. His position in UMNO, the party that decides the premiership, should be more than secure as the party did better attaining 88 seats in Parliament, as opposed to 79 in 2008.

So now is the time to put his words into motion and this means putting a leash on the likes of his former political secretary, Datuk Seri Zahid Hamidi (left) whose words and conduct since the later became Home Minister has been far from reconciliatory.

Here’s another excerpt from the Najib interview: “I’m talking about beyond the 13th general election. I’m talking about a new, better Malaysia.” Well, Sir, events post-GE13 so far makes it seem that a “better Malaysia” is still far off. The people are still clamouring for reforms louder than ever. And it looks like they will be heard.

The inclusion of people like Khairy Jamaluddin and Datuk Paul Low in the Cabinet is a step forward for change but these “agents of change” can only do so much if they have the backing of the Big Boss who hopefully now, can stop looking over his shoulder so he can carry out his responsibilities to close to 29 million Malaysians — not 2,000 party delegates.

First thing when parliament convenes is to re-look the Sedition Act and the joke that is the Peaceful Assembly Act that has only resulted in a flip-flopping Police force which should be utilised to make our streets safer.

This must be followed by efforts to address the allegations against the electoral process as well as the impartiality of the Election Commission. Forget the Opposition’s claims; voters must be confident that their votes must account for something. Right now, many of us are not.

In a way Najib had begun this process by supporting the “Project IC” inquiry in Sabah. By agreeing to a full-scale investigation, Najib may be able to end the daily rallies as well as calls for a BERSIH 4.0. He will be showing true leadership.

Yes, Rome was not built in a day and the reforms Najib has initiated over the last three years are welcomed. But Malaysians are all grown up now. And they are getting restless. Cosmetic changes have outlived their appeal. Najib spoke of national reconciliation. It is time to match words with action. National reconciliation starts with you, Mr Prime Minister.

Terence is managing editor.  Feedback: terence@mmail.com.my
He can be followed on Twitter @TerenceFnandez

http://www.mmail.com.my/story/mr-prime-minister-time-walk-talk-56958

There is no Alternative but Najib, says DR. Mahathir

May 26, 2013

COMMENT: Yes, we are not divided. We are united in our dislike of politicians who use racism for their own ends. In the last election, sensible Malaysians rejected  Malay-centric politicians like Ibrahim Ali and Zul Nordin who were supported by UMNO. Even the man who once led our country for 22 years and who talked about Bangsa Malaysia played the race card to rally the Malays to support UMNO.

How forgetful and he goes abroad, this time to Tokyo, to say that  it is an uphill battle to promote national unity. In fact, we have come a long way towards national unity, despite our race-based politics. Nearly 54% of Malaysian voters rejected UMNO-led Barisan Nasional, thereby saying NO to RACISM and discriminatory policies.–Din Merican

by Chisaki Watanabe@ Bloomberg,8:30AM May 26, 2013

BN has no choice but to continue supporting Prime Minister Najib Razak, even after losing a majority of the popular vote in May 5 elections, said Dr Mahathir Mohamad, the nation’s former leader.

“I think the party will support him because of a lack of an alternative,” Mahathir, 87, said in Tokyo yesterday, speaking at the Foreign Correspondents’ Club of Japan.

Najib’s governing coalition extended its 55-year rule, winning 133 seats in the 222-member parliament as support for ethnic Chinese component parties in the ruling alliance dwindled.

Ethnic Chinese parties in the government won nine seats compared with 23 in the 2008 election. Najib attributed his coalition’s loss in Selangor state assembly vote, where the opposition took 44 out of 56 seats, to a “Chinese tsunami” against the government.

Chinese make up about a quarter of Malaysia’s 29 million people, while about 60 percent are Malays and indigenous groups together known as bumiputera, or “sons of the soil,” who get preferential treatment in areas like business and education through affirmative action.

The Opposition rejected Najib’s analysis of the poll outcome in racial terms, a sensitive topic in a country where hundreds were killed in Sino-Malay riots in 1969 after an election.

The results of the election show Malaysia has become more divided than unified, Mahathir said. “We are still striving to bring the races together,” he said, calling unity an “uphill task.” “Because of this racial polarisation” Najib couldn’t get Chinese votes, he said.

Contesting results

Opposition Leader Anwar Ibrahim, a former finance minister under BN, has protested the result, holding a series of rallies around the country to allege electoral fraud. He has pledged to contest the results in as many as 30 seats, enough to swing the overall result.

The Institute for Democracy and Economic affairs, an official election observer, described the poll as “only partially free and not fair” in a May 8 report. Candidates have 21 days from May 23 to file protests. Election Commission chief Abdul Aziz Mohd Yusof said May 5 he was “satisfied” with the voting process.

The margin of victory was even narrower than the 2008 election, after which Abdullah Ahmad Badawi stood down as Prime Minister to take responsibility. Najib, who took over mid-term four years ago, could face a leadership challenge when his party, UMNO, holds its annual assembly later this year. Deputy Prime Minister Muhyiddin Yassin is potentially next in line.

 A Weakening Economy burdened by  National Debt

Besides an ethnic divide, Najib’s administration faces a weakening economy, burdened by a huge national debt, with growth slowing to less than 5 percent for the first time in seven quarters. Gross domestic product rose 4.1 percent in the three months through March from a year earlier, after a revised 6.5 percent gain in the previous quarter, the central bank said on May 15.

Mahathir was Malaysia’s longest-running Prime Minister, winning five straight election victories before retiring in 2003 after 22 years in power. The medical doctor sacked Anwar, his heir apparent, at the height of the Asian financial crisis in 1998 after clashing over economic policy.

- Bloomberg/www.malaysiakini.com

GE-13 is Neither Free nor Fair

May 17, 2013

Bishop Paul Tan and I agree: GE-13 is Neither Free nor Fair

Bishop Paul Tan and I  have no problem in agreeing that GE-13 is “anything but free and fair”. We are not in the business of political hedging, preferring to state our views as clearly we can. No mincing of words for fear of incurring the displeasure of the powers that be.In fact, we owe it to our government to tell them the truth, however unpleasant that maybe.

As Malaysians who are concerned about freedom, democracy, and justice, we support BERSIH. We are with Ambiga and her civil society friends and are very pro-electoral reform. BERSIH must continue its work.

Having stated my position on free and fair election, I accept the appointment of Prime Minister Najib and his Cabinet by our beloved King. His Majesty has acted in the best interest of our country by accepting the election results. Consequently, countries with whom we have diplomatic relations have accepted the new Government.

The Opposition, however, is free to contest the election results in our country’s courts. In the meantime, the business of government must begin in earnest since uncertainty is bad for our economy and our morale.

The new Najib Government should deal the following issues with a great sense of urgency:

• Fight Corruption and racism.
• Free the media.
• Manage the economy and deal with the serious budget deficit and the mounting national debt.
• Promote a merit based system of government.
• Restore Judicial Independence.
• Revamp the Education System.

– Din Merican

Bishop: Polls anything but free and fair

RK Anand | http://www.freemalaysiatoday.com

Bishop Paul Tan explains that while he abstains from partisan politics, he supports electoral watchdog Bersih in its cause for free and fair polls.

INTERVIEW

PETALING JAYA: An outspoken Catholic cleric has cast aspersion on the 13th general election with regard to the battle for Putrajaya being clean and fair.

Bishop Paul Tan said this in reference to the report of the Institute of Democracy and Economic Affairs (IDEAS) and Centre for Public Policy Studies (CPPS).

“IDEAS and CPPS have done an interim report. In it, there is this conclusion: ‘GE13 was only partially free and not fair’. I find it difficult to believe that the report could conclude this…

“But when it concluded ‘only partially free’ for the three reasons given that

Malaysians want a competent and efficient institutions.

are fraught with irregularities as reported in the said report, the people involved are not objective,” he said.

“From the multiple examples of irregularities arrived in the report, permit me to use a stronger phrase than that of IDEAS and CPPS: GE13 is anything but transparently ‘free and fair’,” he added.

The Bishop, who heads the Malacca and Johor diocese, conceded that he could be wrong but stressed that he was morally obliged to speak out at this time because of the immorality practiced before and during GE13.

“If I didn’t speak up, I would have to answer to my God and my Church,” he said.

Tan said while he obeyed the Catholic Church’s teaching that clerics must not take sides in partisan politics, he noted that the church also taught that clerics must speak out against immoralities and against all that go against human rights.

“As a religious person in my role as bishop, I am in a dilemma vis-a-vis to what extent should I allow a certain degree of immorality or infringement against human rights to go on unpunished before denouncing them publicly,” he added.

For a long time, Tan said, there had not been sufficient action taken against immorality in its widest sense, especially corruption.

“Some attempts have been made by related government departments to deal with the matter. In ‘grosso modo’, it has not been effective. Only a few small fish have been caught, the big fish was left untouched.

“The consequence of this ‘laissez faire’ lifestyle is that it has produced massive corruption, cheating and immoral manipulation of the people to garner votes for one’s political party. Unfortunately, this cuts across the boundaries of all parties. The degree lies in the extent of corruption,” he added.

‘Are we not ashamed?’

The Bishop also noted that the most obvious example was the lavish manner in which the Najib administration threw cash to get votes.

“Where is our country going? Are cheating and corruption condoned as part of our Malaysian culture? Are we not ashamed of our country being an immoral society? We must all reflect and examine our consciences. What sort of nation do we want our country to be, moral or immoral? Undoubtedly, all will want a ‘moral country’.But what sort of morality do we want? It is here that the degree of permissiveness comes into play. To what extent can we tolerate it before stringent action is taken to punish the unscrupulous?” he said.

Condemning money politics, Tan said even if it was considered “legalised corruption”, it does not exonerate the guilt of the ones involved.

“Corruption is corruption, even if one was to dress it up like a queen. A toilet remains a toilet, even if one gives it the beautiful terms of ‘comfort room’ or ‘powder room’,” he added.

The Bishop explained that while he abstained from partisan politics, he supported electoral watchdog BERSIH in its cause for free and fair polls.“Any rational and moral person will support it,” he said.

Najib New Cabinet will be named on May 15

May 15, 2013

by Jahabar Sadiq (05-14-13)
Editor, The Malaysian Insider

The new Cabinet to be announced tomorrow (May 15) will have a familiar look and loaded with UMNO lawmakers, with Prime Minister Datuk Seri Najib Razak having one eye on this year’s party polls.

One likely to make a comeback is Datuk Seri Tengku Adnan Mansor, the Barisan Nasional (BN) and UMNO Secretary-General who gained notoriety several years ago for allegedly fixing judicial appointments during the Mahathir era.

Also on the shortlist is Datuk Seri Idris Jusoh (left), the former Terengganu Mentri Besar who together with Tengku Adnan is a member of the BN war room that planned the coalition’s Election 2013 campaign.

Another member of the war room, Rompin MP Datuk Seri Jamaluddin Jarjis, could also be rewarded with a Cabinet post, sources said today. But they said that no losers in the general election will be appointed to the Cabinet through appointments as a federal senator.

The Cabinet list is being scrutinised with interest on expectations that they have to be in line with Najib’s drive for reforms after getting his own mandate in the May 5 general elections.

There has been speculation that he would also opt for newer and younger faces to push his reform agenda outlined under the BN manifesto and various socio-economic initiatives since he took power in 2009.

The names of two state companies chiefs, Malayan Banking Bhd Chief Executive Officer Datuk Seri Abdul Wahid Omar and Khazanah Nasional Berhad’s Managing Director Tan Sri Azman Mokhtar (right) have also been bandied about but there is strong sentiment in Putrajaya that by virtue of winning 88 federal seats, UMNO must be rewarded.

One polarising figure in the discussion for a Cabinet position is UMNO Youth chief Khairy Jamaluddin with strong push back from the Mahathir camp, arguing that his baggage from the Abdullah years will be a liability.

In his corner is Najib who believes that Khairy, who tripled his majority from 5,746 votes in Election 2008 to 18,357 in this year’s polls, will be important in tackling social media and coming up with strategies to win the young.

One tricky move is whether to remove Datuk Seri Hishammuddin Hussein as the Home Minister or retain the UMNO Vice-President in that post. An online poll by The Malaysian Insider today showed that out of nearly 18,000 respondents, 97 per cent were against him to remain as Home Minister.

The other two UMNO Vice Presidents, Datuk Seri Ahmad Zahid Hamidi and Datu kSeri Shafie Apdal, are expected to keep their Cabinet posts as Defence and Rural Development ministers respectively.

It is also understood that Kelantan UMNO chief Datuk Seri Mustapa Mohamed is expected to keep his post as International Trade and Industry Minister.

State news agency Bernama reported today that Najib is scheduled to have an audience with the Yang di-Pertuan Agong Tuanku Abdul Halim Muadzam Shah at Istana Negara at noon tomorrow to get approval for his new Cabinet line-up.

According to the statement issued by the Prime Minister’s Department today, the King has agreed that ceremony to present letters of appointment, as well as for the appointed ministers and deputy ministers to take the oath of office, loyalty and secrecy be held at the palace at 9.30am on Thursday.

The Malaysian Insider also learnt that Sungai Besar MP Datuk Noriah Kasnon is expected to fill the post of women, family and community development minister after her stint there as the deputy minister since last year.

Bernama had earlier reported that several new faces from Sabah and Sarawak could fill vacancies caused by MCA and Gerakan’s decision not to accept any Cabinet posts following their drubbing in the May 5 general elections.

Among the names mentioned are Sarawak Progressive Democratic Party (SPDP) Deputy President Datuk Seri Tiong King Sing, 52, who is Bintulu MP and ex-chairman of the BN Backbenchers Club.

Other than Tiong, two MPs from Parti Bersatu Sabah (PBS), namely Datin Linda Tsen Thau Lin, 57, (Batu Sapi) and Datuk Mary Yap Kain Ching @ Mary Yap Ken Jin, 62, (Tawau), are also speculated will be new faces in the Cabinet.

Singapore and Malaysia- A Tale of Two Nations

May 13, 2013

by Mariam Mokhtar@http://www.malaysiakini.com

The greatest fear of the Singapore government is a Malaysia that is better governed and less corrupt. The extraordinary events in Malaysia over the past few years, plus the courageous stand of her citizens in the last few days, has been closely monitored from across the causeway.

If the infection spreads, the pent up feelings of Singaporeans may be unleashed. The two nations have a shared history.

Singapore may be a first world nation, but when it comes to an outpouring of feelings, the Singaporeans still look up to their cousins in Malaysia.

Dictatorship could be described as the new democracy in our neck of the woods; UMNO Baru’s Najib Abdul Razak together with his Singaporean counterpart, Lee Hsien Loong, have every reason to be rattled by the ‘Anwar Ibrahim phenomenon’.

Not since independence has Malaysia been rocked by a political force which has captured the rakyat’s sense of frustration at the nation’s existing archaic order.

The older generation are weary of the wanton waste of resources, the lack of discipline shown by its leaders and the disintegration of society. The young yearn for a new order where their contributions are acknowledged, where everyone is treated as equals and where they are rewarded for hard work, rather than their connections or lineage.

Anwar has articulated their needs and galvanised the rakyat into action. Two weeks ago, some Malaysians residing in Singapore were cautioned by the Singapore Police for reminding Malaysians to return home to vote. A few days ago, some were arrested in Merlion Park for protesting about the fraud perpetrated during GE13. The Singaporean government does not like its citizens to have a mind of their own.

Najib wants Malaysia to be “the best democracy in the world”, but the hallmarks of his version of democracy are cheating, intimidation and bribery. In Singapore, the authorities also intimidate and take legal action against anyone who dares besmirch the characters of its leaders.

In Malaysia, insecure Malays reject the DAP because of the implied threat that Malaysia will be swallowed up by Singapore. Their fears are enhanced by some Chinese Malaysians, who look up to an idealised version of Singapore. Singapore absorbed many of them into learning institutions, gave them scholarships and jobs. These Malaysians forget that the price paid for Singapore’s transformation into a first world nation has been high.

‘Soulless inhabitants’

What use are towers that reach up to the sky when deep down, its inhabitants lack a soul?  Children suffer from mental health issues because of academic pressures. Adults complain of a poor work-life balance. Many Singaporeans are unhappy and a number of them have migrated.

When Anwar held a talk at the London School of Economics a few years ago, the event was oversubscribed and several hundred participants were accommodated in an adjoining lecture theatre to listen to him via video link.

The audience were mainly young adults in their early twenties, but the most amazing thing, was that a sizeable proportion were Singaporeans.

Many people disagreed with me, when in an article, I mentioned the possibility that Singapore feared a strong, successful and less corrupt Malaysia, and that the People’s Action Party (PAP) would prefer UMNO Baru to govern Malaysia, rather than an Anwar-led administration.

Without a doubt, Singapore is clean, its public transport is efficient, the entertainment and the promotion of the arts is good, English is widely spoken, it is very safe, local and international cuisines are easily available, and the island state is an important international transport hub.

In many ways, Singapore is like Malaysia. Both have state-controlled media, its Armed forces are dominated by one race, and they are ruled by autocratic governments. The cost of living is high, housing and car ownership are expensive.

Both Malaysia’s UMNO Baru government and the Singapore PAP have alienated themselves from the population.

Although change is within the grasp of the ordinary Malaysian, change in the near future is only a dream for many Singaporeans. Wasn’t it Lee Kuan Yew (left) who once said, “…I spent a whole lifetime building this, and as long as I am in charge, nobody is going to knock it down.”

Like Dr Mahathir Mohamad, will Lee ever relinquish his hold on the island?

Last month’s Global Witness exposé highlighted the flip-side of the financial world of Singapore. It appears that dodgy South-East Asian governments and drug barons find Singapore a convenient place to launder money.

To add to Singapore’s woes, there are the worldwide syndicated football rigging and sex scandals which have rocked the world.  Only the naive would think that corruption does not exist in Singapore – they are simply better at concealing their underhanded practices. An acquaintance who handled the Malaysian side of business for a Singapore firm, alleged that he was given a sizeable allocation to sweeten any business deals in Malaysia.

The Singaporeans like to project a clean image, but it is the Malaysians who gets the bad  reputation.

The government of Singapore is concerned by the moral awakening in their people, but they fear most the economic repercussions if UMNO Baru were to be replaced. If Anwar’s administration gave Malaysians meritocracy, and excellent learning institutions were open to all, the majority of Malaysians would not need to go to Singapore to study.

No more brain drain?

There are tales of children being woken up at 4am to travel to Singapore to go to school because their parents could not enrol them in a local Malaysian school. Bright children are deprived of scholarships because they belong to the wrong race or religion. Families are broken up when some family members moved to Singapore for employment.

Singapore has every right to be scared if UMNO Baru were ousted. The brain drain would stop. If working conditions in Malaysia were improved, the daily migration of workers to Singapore would be stemmed and Singapore might suffer a shortage of workers. If corruption was reduced, Malaysia would attract more foreign investment.

The feeling of xenophobia is high in Singapore, and is mostly directed at the Chinese from the People’s Republic of China (PRC). Singaporeans consider them to be loud, brash, arrogant and lacking in culture. They are wary of their government’s desire to attract more people from the PRC to increase the dwindling population, to take care of the elderly and to bolster the economy.

The recent wave of xenophobia in Malaysia was generated by UMNO Baru because it gave away identity cards (ICs) to foreigners – like the Filipinos and Indonesians – in exchange for votes to stay in power.

Leaders in UMNO Baru have lost valuable Malaysian land to the Singaporeans, such as the Pedra Banca island off Johor and the land swap deal involving Keretapi Tanah Melayu (KTM) land in Singapore.

To increase their land mass, Singaporeans have obtained sand from Malaysia, through legal and illegal means. The buying power of the Singapore currency means that they can buy property cheaply in Malaysia and in some places, have priced the locals out of the housing market.

In Ipoh, Singaporeans have built skyscrapers beside limestone hills and many locals fear that this has set a precedent and before long, the natural beauty of Ipoh will be marred forever. The Perak UMNO Baru seem oblivious to the concerns of the locals.

A clean and efficient government can improve our economy, but UMNO Baru will continue to hamper our progress. Without cronyism and corruption, Malaysia will emerge a stronger, richer nation, no longer the poor relation of Singapore.

Khairy Jamaluddin–The Government Spinner?

May 11, 2013

http://www.themalaysianinsider.com

UMNO Youth leader Khairy Jamaluddin has been given the task of improving the Barisan Nasional (BN) government’s image abroad and his first job was to soft pedal the angry reaction by UMNO politicians towards Malaysian Chinese in the aftermath of GE13.

The government spokesman to the international media also attempted to put some distance between Utusan Malaysia’s rabid anti-Chinese rhetoric and the ruling party, saying that Utusan’s editorial stance does not reflect the views of UMNO’s top leadership.

In an interview with the Singapore Straits Times, Khairy, Tun Abdullah Ahmad Badawi’s son-in-law, also said that Prime Minister Datuk Seri Najib Razak will roll out a 100-day programme to speed up existing programmes to reduce crime and corruption, and cap the cost of living.

“These are the top three issues that weighed heavily in the urban swing,” he said, adding that Najib will continue to improve the public sector and economy, and expand civil liberties.

Following BN’s poor performance in the polls, where it lost the popular vote for the first time and where it failed to regain the economic powerhouses of Selangor and Penang, many UMNO politicians lashed at the Chinese for voting in large numbers for the Opposition Pakatan Rakyat (PR).

The Chinese were called ungrateful and gullible while Najib and other BN politicians dismissed the idea of a rural-urban divide.

BN only won 133 of the 222 federal seats, down from 140 when Abdullah helmed the coalition in the 2008 elections. This time around, it also lost 31 more state seats across 12 states although the coalition got back Kedah.

Khairy said that Najib was not blaming the Chinese. “He was stating a fact that many Chinese voted against us but he did tell the BN MPs that we are not to blame any community,” he said.

In the longer term, Khairy said, the government will set up a National Unity Consultative Council to work on issues like education without affecting the status of vernacular schools.

Most analysts have come out to say the rural-urban divide was a major factor in the BN vote slide, with a major swing among the multiracial urban and middle-class electorate against the ruling coalition.

“There were differences between the low-income and the middle-income areas, as well as between the urban and rural areas,” pollster Merdeka Center’s chief Ibrahim Suffian said.Ibrahim also said that several constituencies had shown marginal BN victories that reflected a tight competition between BN and PR.

This is what the Chinese want

May 8, 2013

by Ong Hean Teik

The Utusan Malaysia headline of May 7 posed an interesting and pertinent question of what more do the Chinese in Malaysia want. It is a pity that Utusan is unable to see that what the Chinese want is, in fact, what the educated urban Malaysian voter wants, regardless of race or religion. There are three important characteristics lacking in the Barisan of today.

Any other mainstream media writing what has been written by Utusan Malaysia would have lost their licence to publish a long time ago.

Intelligent, courageous leadership

The Chinese comprise only 30 per cent of Malaysian voters, yet Pakatan Rakyat won 51 per cent of the total votes cast. By saying that the election result was because of the Chinese voters, the Barisan Nasional leadership demonstrates an inability to objectively face reality.

Barisan’s acceptance of Zulkifli Nordin as its direct Shah Alam candidate similarly shows a lack of intelligence and courage. Here is a lawyer who does not feel that dialogue and discussion can resolve matters, having forcefully disrupted a Law Society seminar a few years ago. He has vowed loyalty to, and then turned on, his previous political parties (PAS and PKR). He has publicly belittled an ancient religion with a million Malaysian followers.

UMNO making way for Ibrahim Ali to contest the Pasir Mas constituency is similarly bad judgement, showing its acceptance and approval of a crude man who prides himself with using vulgar words in public interviews.

Principled means acting in accordance with morality and showing recognition of right and wrong.

To give them such special honour and credit shows a lack of intelligent reasoning and an inability to stand up against the loud extremist faction of the party.

Attributing the election outcome to a “Chinese tsunami” is illogical in the face of concrete facts and data. PAS won an additional seven state seats in Selangor, all in Malay majority areas.

Lim Kit Siang could not have achieved a majority of over 14,000 votes in Gelang Patah without good support from Malays who form 35 per cent of the electorate there.

Similarly the UMNO-backed PERKASA extremists were conclusively rejected in Pasir Mas (96 per cent Malay) and in Shah Alam where Malays make up 70 per cent of the electorate.

To blindly spin the 2013 election outcome to suit its raced-based founding philosophy of 1947shows up a political party that wants to be stubbornly unwise. Unless UMNO’s leadership can find the courage to face facts, the party may become redundant and obsolete for the educated 21st century voter.

Respect for and recognition of rights

Academic studies have consistently shown that increased income brings more happiness and satisfaction only up to a certain point. When a society progresses out of poverty into middle class, increasing income does not increase satisfaction proportionately. It is the psychological aspects of living that produces a better quality of life.

Whatever the radiation scientists claim, the people of Bentong (45 per cent Malay, 44 per cent Chinese) will ask why a factory run by an Australian company is unsuitable for Australia or Damansara Heights but can be located in their backyard.

In 2008, Health Minister Liow won Bentong by over 12,000 votes. This year he retained Bentong with less than 400 votes against a political novice who is a green activist. The urban electorate, Chinese or Malay, seeks respect and recognition of their right to a safe living environment.

MCA contested in 37 parliamentary seats and managed to win seven in GE13.

In Penang, the 1 Malaysia Charity organisation hosted numerous concerts and dinners in support of Barisan candidates. At their functions, T-shirts, beer, hawker food and lucky draw gifts were given free.

Initially there was merriment and wonder at this new campaigning style; this then became anger and disgust when even cash incentives were handed out. The electorate felt they were treated with disrespect, as if their rights, dignity and vote were up for sale.

Numerous development issues had plagued the Penang DAP government in the months leading up to the election, and the increased majority they subsequently obtained can only be explained by the strong rejection what the other side represents. Money cannot buy happiness, and similarly, the urban electorate set out to show that money cannot buy their vote in Penang.

The urban electorate in Malaysia is obviously better off economically compared to the rural dwellers. They have reached a stage when extra economic incentives can no longer easily win their approval.

Instead they asked for respect, and an acknowledgement of their right to an inclusive, peaceful existence in the country. They seek recognition as a legitimate electorate with the right to choose the governing party. Blaming and insulting them for voting against the Barisan will only guarantee the DAP and Pakatan a brighter future.

Competent and efficient institutions

There is no doubt that relative to those who were once our equivalent, we Malaysians have fallen behind. The Singapore dollar which was equivalent to the ringgit in the 1970’s is today 2.5 times higher. Malaysia beat South Korea and Japan in the 1972 Olympic football qualifying rounds; today we are nowhere near these 2 World Cup Finals participating countries.

Malaysians have fallen behind in economy, education and sports.

Universiti Malaya had topped the list of universities passing the United States medical qualifying examination in 1969, ahead of Melbourne and Singapore University. In 2011, Universiti Malaya was ranked 401 out of the 500 universities in the Shanghai Jiao Tong University’s Academic Ranking of World Universities.

The educated, smart-phone holding, internet-surfing, urban voter is aware of world-wide trends and wants to experience the best that life can offer. When the governing party is unable to develop the country to its full potential, its popularity will drop.

As demonstrated by the Noble prize winning Dr Ivan Pavlov, animals respond to incentives, and man is no exception. A system that promotes those who agree with and pamper those in power while sidelining those working hard to pursue competency will breed inefficient malfunctioning institutions. Even those not under their direct employment will be affected by these incompetent institutions.

Malaysians want a competent and efficient institutions.

When the police force is politicised and crime rate increases, more money will have to be spent on personal and household security. Even Datuk Nazir Razak admitted that he had hesitated coming back to Malaysia because of concerns about his children’s education. When the middle class spends on private education or healthcare, votes for the governing party will drop.

Conclusion

The Chinese now make up only 25 per cent of Malaysia’s population and to be named as the cause of major developments in the country is to be hurtful to this minority and insulting to the majority. On the other hand, government statistics show that Malaysia’s urban population has increased from 62 per cent in 2000 to 71 per cent in 2010.

No amount of rhetorical whitewashing can hide the fact that the poor performance of Barisan in the 2013 election is due to its failure to win the heart and mind of the urban voter. The faster it faces reality and move away from its obsolete race-based mindset, the better its prospects for the next electoral battle.

* Dr Ong Hean Teik is a consultant cardiologist in Penang. He reads The Malaysian Insider.

* This is the personal opinion of the writer or publication and does not necessarily represent the views of The Malaysian Insider.

Newly elected Prime Minister Najib Razak urges Unity

May 8, 2013

Malaysian Election 2013: Newly elected Prime Minister Najib Razak urges Unity

by James Hookway@http://www.wsj.com

PUTRAJAYA, Malaysia—Newly elected Prime Minister Najib Razak said he would press ahead with a multibillion-dollar modernization program for Malaysia’s economy, adding that he hoped it would help reunite the Southeast Asian nation after the most fiercely contested election in its history.

Mr. Najib’s National Front coalition secured around 60% of the seats in Sunday’s ballot, but the vote was heavily split between Malaysia’s thriving cities, which largely voted for opposition parties, and rural, mostly ethnic-Malay areas that threw their support behind Mr. Najib, the 59-year-old son of Malaysia’s second prime minister.

Many of Malaysia’s ethnic-Chinese minority, which makes up about a quarter of the population, also switched to opposition leader Anwar Ibrahim’s People’s Alliance, leaving Mr. Najib’s coalition ruling the country with 47% of the popular vote, compared with 50% for its opposition rivals, who allege that electoral fraud swung the result against them. The remaining 3% represented votes for independent candidates or spoiled ballots.

In his first remarks to the international media following the election, Mr. Najib told The Wall Street Journal in an interview on Tuesday that expanding the size and scope of the country’s economy would help draw support back to the National Front, which has run the country uninterrupted since independence from Britain in 1957.

“My next task is to harmonize the racial makeup of Malaysia,” he said.Mr. Najib had launched a series of economic and social overhauls before the election, rolling back parts of a decades-old affirmative-action program designed to raise incomes among the generally poorer ethnic-Malay majority. Now, he says, he aims to accelerate a $444 billion plan in public and private outlays to help increase local consumer spending and make Malaysia more competitive against wealthier rivals such as South Korea and Singapore.

“There are those who will expect a bit more because they voted for you, but you still have to keep things in balance,” Mr. Najib said.

His spending program, known locally as the Economic Transformation Plan, is a bid to drag Malaysia out of the so-called middle-income trap, which forces many emerging economies to compete with each other in producing cheap exports instead of developing more-sophisticated, value-added products.

In previous interviews, Mr. Najib has talked widely on this theme, describing his goal to push Malaysia onto a higher-growth path as the main focus of his administration.

The plans include investing in new industries such as health care and strengthening its logistics and energy capabilities. Mr. Najib is also hoping for a further lift after earlier easing some race-based quotas and repealing a repressive colonial-era security law that allowed for detention without trial.

The British-educated aristocrat’s approach is a more modest version of overhauls than those pushed on the campaign trail by Mr. Anwar, who is 65 years old and contesting what he said would be his last election. The prime minister’s chief rival argued for a “big bang”-style transformation that would remove affirmative action and replace it with a more-inclusive welfare system, along with immediately freeing up the country’s heavily state-influenced media.

Mr. Najib’s election win buoyed financial markets, and the Prime Minister viewed their response as a stamp of approval for the direction he is trying to take the country. The benchmark stock index rose 1.4% to a record 1776.73 on Tuesday, after surging 3.4% on Monday, while Malaysia’s ringgit currency gained 1.9% against the dollar in the first two trading days of the week.

“I was happy to see the market strengthen so much. The word is out that Malaysia is now on the ‘buy’ list,” he said.

Still, many political analysts described Sunday’s vote as polarizing, deepening many of the divisions that run through Malaysia, as the well as the gulf between those who have benefited from years of rapid growth, and those who have been left behind.

Some government controlled-newspapers harped on these differences Tuesday, with the daily Utusan Malaysia blaming ethnic-Chinese voters for abandoning the National Front and reducing its number of seats in the 222-member parliament to 133 from 140.

Tensions were stoked further as Mr. Anwar, the Opposition leader, called for a mass rally at a sports stadium in the suburbs of Kuala Lumpur on Wednesday evening, where he says he will provide evidence of electoral violations he says cost his opposition alliance the election.

Among other things, Mr. Anwar complained in an interview earlier Tuesday about National Front operatives allegedly flying in foreigners from nearby countries to vote in closely contested districts and discrepancies in the electoral rolls.

“We can’t stand down. We must fight,” Mr. Anwar said, adding that aims to file court cases and press election regulators to hold new ballots in dozens of disputed constituencies—a process that could take months if the regulators and courts choose to act on the opposition’s complaints.

Mr. Najib dismissed Mr. Anwar’s allegations, questioning the opposition’s claims that 40,000 people with dubious voting credentials were moved by airplane into and around the country.

“That would take hundreds of planes. Where were they?” Mr. Najib asked. He, did, however, acknowledge the divisions in the country suggested by the results of Sunday’s election and emphasized the need to pursue polices that are fair and inclusive.

“We need to reach out to others,” Mr. Najib said. “That’s why I spoke about national reconciliation and moderation” after the election win, adding that once the drama of the elections and their aftermath have passed, the country would find a more even keel.

“We always do,” he said.

Write to James Hookway at james.hookway@wsj.comhttp://online.wsj.com

GE-13: Najib needs to confront the challenge of reform from within UMNO

May 6, 2013

by Peter Drysdale, Editor, East Asia Forum

Yesterday, after a hotly contested general election, a record electoral turnout and over half a century of essentially one-party rule, the Malaysian people edged towards change, but chose not to make the leap.

The campaign saw the ruling Barisan Nasional (BN or National Front) emphasise stability, continuity and economic growth, and the opposition Pakatan Rakyat (PR or People’s Alliance) urge the end of corruption, the institution of minority rights and dealing with issues over the cost of living. In a contest that always seemed too close to call, Prime Minister Najib Tun Razak has held on to power taking the prize from the indefatigable Anwar Ibrahim and his PR.

The election confronted Malaysia with big choices. While the Najib government led a tactical retreat on some elements of the old order, Anwar called for its sweeping rejection.

Malaysia struggles with breaking through the ‘middle-income trap’. Wages have climbed to the point where the country can no longer compete internationally in labour-intensive manufacturing. But skills and systems haven’t improved so that Malaysia can compete effectively in the same product lines as more advanced countries.

Without further reforms, it is difficult to see how Malaysia can escape from this middle-income trap. Much of the struggle to find a way through has to do with escaping the legacy from the old order: a ‘New Economic Policy’ framed over 40 years ago, that entrenched discrimination against minorities (including the significant entrepreneurial classes) and ‘affirmative action’ through government-linked corporations (and systemic entrenchment of political patronage and corruption).

The Najib administration did a creditable job (?) in implementing Malaysia’s so called ‘New Economic Model’ — a shift away from the old New Economic Policy — that aims to double the country’s per capita income by 2020 via a raft of reforms across key economic sectors and in government. While targets have been met or exceeded and economic growth has picked up despite the unfavourable international circumstances (the World Economic Forum now ranks Malaysia 21st out of 142 economies in its world competitiveness ranking, up from 26th in 2010), the implementation of these programs is still to address the core problem of the long-standing bumiputra (sons of the soil) affirmative action policy.

Najib, to give him his due, tried hard to reform bumiputra policy, but failed in the face of pressure from within his own party, as well as from powerful ethnic Malay interest groups. The Malay elite have reaped enormous benefits from the policy and were unlikely to surrender their privileges easily. Nonetheless, Najib entered the election with a standing that far exceeded that of his ruling coalition — commanding an enviable approval of 61 per cent — paradoxically because of the support of those Malay elites at the same time as his progressivist inclinations.

The election was clearly about alternative visions of Malaysian society and democracy. But it was also a deeply personal contest on epical scale between two charismatic political leaders.

As Meredith Weiss observed in the lead-up to Sunday’s vote, ‘this election is a two-party election (the BN is registered as a single party; the PR functions as one)… Both coalitions have been forced to articulate clear policy agendas, and even if the usual communal and monetary inducements still have a large bearing on results neither side (took) victory for granted’.

Najib sought a mandate for his leadership after being appointed to the prime ministership by the ruling coalition in 2009. Anwar had dealt an historic electoral blow to Najib’s predecessor, Tun Abdullah Ahmad Badawi, in the 2008 elections from outside Parliament, for the first time denting BN’s super two-thirds majority.

By one account, Najib played a sophisticated double game against his experienced and wily opponent. He tried to outflank the reformist opposition by repealing security laws and introducing his comprehensive economic transformation program that sought to catapult Malaysia into the ranks of the high-income countries. He appealed for a harmonious society through his ‘One Malaysia’ slogan at the same time as placating his party’s ethnic Malay base by protecting pro-Malay affirmative action in government, business and education.

Najib adopted the outward trappings of a dynamic, youth-courting reformer, a strategy that got him over the line. Malaysia’s economic performance, while solid, has yet to deliver the shine promised by ambitious but tailored reform. And the distaste for privilege, corruption and discrimination in the law attracted a wide if fractious coalition for reform and political change that presented the government with a real challenge.

In reality, Najib and Anwar have more perhaps in common than either might care to concede. Both cut their teeth in the cauldron of youth politics and graduated with distinction. Both are charismatic and commanding personalities. Both claim the mantle of reformer, one from within government and the other having been a former Deputy Prime Minister. Both are comfortable with the ambiguities of Malaysian politics. Both have been haunted by controversy: Anwar in the form of repeated allegations of sexual misconduct, and Najib by his aide’s conviction for murder in the case of Mongolian model Altantuya Shaariibuu. It is said that this is why their personal rivalry is so deep and so bitter.

With so many obstacles placed in his way to political comeback, an Anwar victory would have been a remarkable triumph. After rising to the deputy prime ministership, he was sacked by former prime minister, Mahathir bin Mohamad, during the Asian financial crisis, endured political persecution, imprisonment on charges of sodomy, release and political rehabilitation in 2008. His charisma, ambition, political skill and deep inside knowledge of the weaknesses in the ranks of the BN kept together the broad and unlikely coalition — Islamists, ethno-nationalists, non-Muslim ethnic minorities, socialist democrats and economic liberals — that delivered his parliamentary gains on Sunday.

But not enough, and Prime Minister Najib will now continue to confront the challenge of reform from within.

Peter Drysdale is Editor of the East Asia Forum.

http://www.eastasiaforum.org/2013/05/06/malaysia-edges-towards-change-but-not-yet/

Preserving Najib Razak’s Gains

May 4, 2013

An American Perspective on Malaysia’s Elections: Preserving Najib Razak’s Gains

By: Jeffrey A. Bader and Douglas H. Paal(05-01-13)

Malaysian Prime Minister Najib Razak has called national elections for May 5. This date is perilously close to the statutory deadline to hold the elections, suggesting he is concerned that the results may lead to his departure from office. Malaysia, the United States, and much of the world have a stake in the outcome.

The traditionally dominant party, the United Malays National Organization (UMNO), and its partners in the long-ruling Barisan Nasional coalition have experienced internal divisions. Ethnic preferences for Malays in government and the economy have alienated many Chinese, who are a minority (roughly 40 percent of Malaysia’s population) but economically dominant. Najib’s efforts at internal reform have threatened traditionalists associated with former prime minister Mahathir Mohamad. Younger, urban voters seem itching for change.

There is a strong challenge from an Opposition coalition headed by former Deputy Prime Minister Anwar Ibrahim. His Pakatan Rakyat coalition includes Chinese and Islamic parties and is close enough in some polls to win outright.

But many longtime observers believe the real election is within UMNO, between old warhorses associated with Mahathir and the reformists surrounding Najib. The argument is that if Najib cannot bring in a result that preserves UMNO’s two-thirds majority and capacity to rewrite the constitution, old-line leaders, possibly current Deputy Prime Minister Muhyiddin Yassin, would displace Najib and stem reforms.

This is where the stakes need to be clearly stated. Under Mahathir, opposition to perceived residual Western colonialism was a rallying cry and a frequent and increasingly anachronistic theme. His successor, Abdullah Badawi, was less shrill but did not move significantly away from Mahathir’s policies. Najib has fundamentally repositioned Malaysia internationally. He has moved away from the old UMNO policy seeking to divide Asia from the United States and has seen the United States as an important partner for Malaysia and ASEAN.

Najib and his top officials have been forthright in speaking about democratic values in international forums such as the ASEAN Regional Forum. They have been critical of states such as North Korea and even Myanmar before reforms commenced there, something that would not have been countenanced in an earlier period when criticism was aimed solely at the West.

Najib has done all this as part of a strategy to retain domestic (Chinese) investment and attract foreign investment in order to accelerate Malaysia’s development. As a demonstration of his commitment to a more open Malaysian economy, he has joined the discussions on the Trans-Pacific Partnership trade agreement with ten other nations.

After economic contraction in 2009, Malaysia’s GDP growth has rebounded to a robust 5 percent, led by double-digit export growth in 2010 and large FDI inflows in 2010 and 2011. Gross investment for 2012 was up 9 percent over the last year, with the fastest growth in private and domestic investment (up 22 percent and 55 percent, respectively). The current account surplus is expected to narrow in the near term, and employment growth is expected mostly in domestic-oriented sectors such as services, in line with Najib’s New Economic Model that aims to create more sustainable, equitable, high-income growth. The Asian Development Bank forecasts that Malaysia’s GDP will grow by 5.3 percent in 2013, accelerating a little to 5.5 percent next year. Malaysia’s strong performance under Najib stands in marked contrast to the ethnic preferences and frequent allegations of corruption and cronyism under Mahathir.

Domestically, Malaysia remains an impressive Muslim-majority nation with a democratic system, pluralism, and generally good standards for human rights protection. Najib has given a number of speeches in international settings denouncing terrorism in the Islamic world and indeed has preached formation of a league of moderate nations to fight terrorism.

Under Najib, Malaysia also has moved to significantly tighten its previously porous export-control system, which had made the country a transit point for shipment and financing of dual-use products going to Iran. Defense cooperation with the United States and others has been normalized, and it has not remained a forum for grandstanding against the West.

Najib has moved to dismantle one of the instruments of repression, the Internal Security Act inherited from the British when Malaysia became independent. Under his guidance the legislature has replaced the law, which provided the basis for lengthy detention without trial.

These are not just achievements for Najib’s leadership, but they are gains for Malaysia, the region, and the world.

As the election campaign unfolds, it will be interesting to see what issues UMNO and its Barisan National coalition and Anwar with his Pakatan Rakyat coalition use against each other (see the table below).

Barisan National (ruling coalition) Coalition head: Najib Razak	Pakatan Rakyat (opposition) Coalition head: Anwar Ibrahim
The Economy
Gradually increase the government’s 1Malaysia People’s Aid (BR1M) handouts to RM1,200 for qualified households and RM600 for qualified singles Enact a more broad-based tax system and gradually reduce personal and corporate tax rates	Maintain BR1M cash assistance if elected Broaden income tax band, raise the income floor for the 26 percent tax rate to RM400,000 from RM250,000
Bumiputera (Ethnic Malays and Indigenous Groups)
Promote and improve Bumiputera policies that favor ethnic Malay businesses Provide RM500 million in seed funding to the Indian community	Equally distribute economic assistance regardless of race Undertake an inclusive development platform that includes all ethnic groups
Transparent Government
Establish additional corruption courts Elevate officers of Malaysian Anti-Corruption Commission to higher level	Introduce corruption elimination policy (DEBARAN) to free anticorruption institutions from political control and improve anticorruption prosecution Undertake electoral reform
Living Standards
Expand transport subsidies, education aid, food and housing assistance, public transportation, and rural infrastructure	Undertake similar populist policies, and raise minimum monthly income to RM4,000 by end of first term
Innovation
Enact the 2020 plan for high-income development based on innovation Attract RM1.3 trillion worth of investments and create 2 million new high-income jobs Channel investment to small and medium enterprises	Raise research and development expenditures to 5 percent of GDP Create a RM500 million national innovation fund Reshuffle tax incentives to give more assistance to small and medium industries
The Environment
Introduce financial incentives for renewable energy investment Voluntarily reduce emissions intensity of GDP by up to 40 percent by 2020 Pass stricter illegal logging laws	Halt work at the Lynas rare earth plant Review the implementation phases of the RAPID petrochemical project in Pengerang Reform logging regulation

Anwar has a mixed record. He earlier stood out as one of Malaysia’s leading progressive political figures and someone who creatively reconciled Islam and Western values. Since his imprisonment by Mahathir in 1998 on allegations of sodomy and a subsequent revival of similar charges in 2008 that was overturned in Malaysia’s courts, he has moved toward a closer alignment with Islamic politics. He has, for example, irritated women voters by suggesting that sharia law could be adopted by tradition-minded Malaysian states. Anwar nonetheless continues to be a strong public advocate of democracy and human rights and criticizes Najib as essentially continuing the more repressive policies of the Mahathir years.

Whether the winner is Najib or Anwar or the conservative forces within UMNO, Malaysians should consider seriously how to preserve the gains of the Najib era.

*Dr Jeffrey Bader is the John C. Whitehead Senior Fellow in International Diplomacy at the Brookings Institution. Dr. Bader returned to Brookings after serving in the Obama administration as senior director for East Asian affairs on the National Security Council from January 2009 to April 2011.

Prior to his appointment to the Obama administration, Dr. Bader was the first director of the John L. Thornton China Center and senior fellow of the Foreign Policy program at Brookings. He brings to Brookings profound expertise in U.S. foreign policy and Asian security after three decades of experience in the Department of State, National Security Council, and office of the United States Trade Representative. He is the author of Obama and China’s Rise: An Insider’s Account of America’s Asia Strategy (Brookings Press, 2012).

Dr. Bader was born in Brooklyn, New York in 1945. He graduated from Yale College in 1967 and earned his M.A. and PhD in European History from Columbia University in 1968 and 1975 respectively. He is married to Rohini Talalla. They live in Chevy Chase, Maryland.

http://www.brookings.edu/research/articles/2013/05/01-malaysia-elections-najib-razak-bader

Surely, there is a Future for Malaysia after Mahathir

May 1, 2013

by Political Studies for Change (KPRU) think tank.

http://www.freemalaysiatoday.com

It has been nine years since former Prime Minister Dr Mahathir Mohamad “retired” from the political arena. His “retirement” came after 22 years of steering the wheel as the prime minister of Malaysia, thus making him one of the longest world leaders holding the position as Prime Mminister.

As Prime Minister, he is responsible for introducing the F1 formula race to Malaysian shores, the construction of the Petronas Twin Towers, the construction of Putrajaya and Cyberjaya as well as a long list of other mega projects.

As a still influential and widely respected statesman, he had the opportunity to live this retirement in peace and is no longer involved in the world of dirty politics. Yet, in this run-up to the 13th general election (GE13), he chose otherwise.

At one end, we see Mahathir as a respected statesman, reminding the public on the importance of remembering Malaysian history, yet the readers of his blog as well as his media statements might think otherwise.

Remembering history is vital, but remembering history through one myopic scope and not a panoramic view is not an idea to be encouraged. Lately, Mahathir can be seen digging up the old ghosts of racial sentiments. He ominously warns the Malays that Lim Kit Siang’s win in Gelang Patah will bring bad news to Malays and at the same time, he is seen criticising and condemning the Malays as forgetful and lazy.

He endorses the screening of the controversial film “Tanda Putera” to Malaysians. According to him, “if a race controls certain interests and the other does not, it will spell out anger and this is not good for the country”.

Also not forgetting is his harsh criticism of the Opposition which, according to Mahathir, has the tendency to politicise racial-based and religious issues.

Yet, before he shoots the Opposition for raising racial sentiments and politicising religious issues, it was he himself who endorsed the call by Pertubuhan Pribumi Perkasa Malaysia (PERKASA) President, Ibrahim Ali, to burn Bibles containing the word “Allah” in those Bibles.

Adding insult to injury, Mahathir also noted that the burning of illegal books is a normal procedure. His indefatigable support of the controversial Ibrahim Ali does not end there. He is also seen supporting the PERKASA chief to contest a seat in this coming GE13.

According to Mahathir, the purpose of Ibrahim establishing PERKASA was not to promote himself, but to campaign on behalf of Barisan Nasional. Hence, Ibrahim is a man that deserved to be given a position.

The relationship between Mahathir and PERKASA is a symbiotic one. Mahathir gives his support to PERKASA and PERKASA gives Mahathir the opportunity to speak at its general meeting.

Mahathir reportedly warns of the possibility of the tragedy of May 13, 1969 recurring if it is forgotten by Malaysians. Yet it is he himself who is fanning the sparks of racism by stating that DAP’s Kit Siang is content if the Chinese hate the Malays.

In the same news report, Mahathir also noted that DAP is always undertaking measures to create a hostile environment between the Malays and the Chinese.

He asserts that peace and progressive development in Malaysia will never materialise if we were to squabble among ourselves. And yet, at the same time, it is he himself who encourages discrimination and prejudice between those two races.

What does he want?

This is the total opposite of what Mahathir said two years ago when he advised MCA to refrain itself from entertaining extremist groups if MCA wanted Umno to do the same with Perkasa, which was categorised as racist by MCA.

Yet Mahathir himself continues his support for extremist parties such as his backing for PERKASA.In his relentless efforts to fan racial sentiments, Mahathir asserts that since DAP is carrying on the Malaysian Malaysia agenda (based on Singapore’s People’s Action Party), DAP is also fighting for the same concept of meritocracy which decreases the opportunities for the Malays in the field of economy and education.

According to him, meritocracy is not about a partnership; it is instead all about the winner taking all.

Mahathir paints a picture of PKR and PAS as political parties that manipulate and use the Malays, while DAP is portrayed as a party that only wants to defeat the Malays as if the Malays are its enemy.

Yet, when one reads his blog writings as well as his media statements or opinions, he does not come across as a proponent of unity between races in Malaysia.The question is, what does Mahathir want to achieve?

He wants development for Malaysia. He wants Malaysia to be a developed nation and that is why he implemented mega projects such as the Petronas Twin Towers, Putrajaya and Cyberjaya.

He wants the Malaysia name to be recognised on the world stage. Yet at the same time, he fans the fire of racial sentiments, pitting the Chinese and Malays against each other.

He describes the Chinese as racially prejudiced against the Malays and asserts that the Malays need to protect themselves against the Chinese. And in his mind, this protection comes in the form of Malays supporting UMNO and PERKASA as only these two parties can protect the interests of the Malays.

Let’s not forget that he himself has described the Malays as an ungrateful and lazy bunch.This igniting of racial sentiments has placed Malaysia on the world stage along with Mahathir’s mega projects and other achievements. However, it does not paint a rosy picture of the country as intended by Mahathir.

Instead, he paints Malaysia as a country centred on racism and race politics. The Malaysian identity as a moderate Islamic state is sullied by the messy relationship with racism.

Is this the legacy planned to be left behind by Mahathir? A broken and a disunited country? It appears so because that is where Malaysia is heading if race politics is repeatedly played by Mahathir.

His special right

Mahathir wants the Malays to be united and prosperous yet he himself has shown a tendency to belittle, criticise and humiliate the Malays. He wants unity but he continuously supports the efforts of a political party that is associated with racist acts.

In a nutshell, Mahathir’s real intention is to stay relevant in the eyes of Malaysians as well as his beloved political arena.

He does not want to be forgotten by Malaysians or his political colleagues. He has held the position of prime minister for 22 years. It could not have been an easy task for him to let go of power and influence to someone else.

Power and influence are both very addictive. Having the power to decide the direction of those who depend on you is an addictive drug. So is having the power to steer the direction of a nation and having the freedom to defend your own private political interest. Letting off something that you have held on for so long is never an easy thing to do.

Mahathir’s addiction to power and influence led him to this path. He reminisces his days in the office of the prime minister. He is not a senile old man. He is a statesman and former Prime Minister that still has influence particularly in UMNO and BN.

As George Orwell said: “All animals are equal, but some animals are more equal than others.” In Mahathir’s mind, that is what he thinks of himself. He believes that he deserves more than others for his “service” to this country.

He realised that the only way for him to attract attention from his political buddies is to play up racial politics while putting the blame on the opposition parties.

Since he is a political animal, it is not surprising for a seasoned politician who has spent his life in the political arena for so long to want to crawl back into the political world again after he has retired.

What else could be the reason for Mahathir to play up racial sentiments if it were not for his addiction to the political world? The race issue should not have been revived because Malaysians want a different political landscape that believes in transparency, honesty and meritocracy.

It is this focus on meritocracy that scares Mahathir because he believes the Malays do not have the drive or capabilities to improve themselves. He believes he is the only one qualified to decide the fate of the Malays.

But this is wrong. The Malays do have the drive to steer their own future. The Malays have the ability to rise up to the challenge without any political meddling. So is the Chinese. The Chinese do not hate the Malays and vice versa.

Mahathir may be a former Prime Minister, a politician and a statesman, but that does not give him special rights over others. He does not hold the key to Malaysia’s future.

It is the Malaysians themselves who hold the key to their own future. If he realises this, then he would not have taken the path that he is taking now. Because in the end, it is the collective opinions of Malaysians that matter and not the opinions of one politician.

The commentary piece is submitted by Political Studies for Change (KPRU) think tank.

Malaysian government-linked corporations crowd out private investment

May 1, 2013

April 25, 2013

by Jayant Menon, ADB and ANU, and Thiam Hee Ng, ADB

Private investment in Malaysia never fully recovered from the impact of the Asian financial crisis.

Foreigners have continued to shun Malaysia, but it now seems that even domestic investors are fleeing, with Malaysia becoming a net exporter of capital since 2005. One explanation for the sluggish performance of domestic private investment relates to the crowding-out effect of the growing dominance of government-linked corporations (GLCs) in many sectors. The influence of GLCs, however measured, is both widespread and pervasive.

The GLC share of operating revenue is approximately one-third in the aggregate, and they control more than half the industry share in utilities, transportation, warehousing, agriculture, banking, information communications and retail trade. GLCs employ around 5 per cent of the national workforce and account for approximately 36 per cent and 54 per cent, respectively, of the market capitalisation of Bursa Malaysia and the benchmark Kuala Lumpur Composite Index.

The pervasiveness of GLCs suggests they may present a formidable barrier to both competition and the entry of new private firms. This is also evident in their ability to exercise significant market power and use their special access to government and regulatory agencies to their advantage. Provisions in the government’s affirmative action program, the New Economic Policy (NEP) and its more recent incarnations also tend to favour GLCs, such as through government procurement restrictions.

Indeed, many GLCs were spawned as vehicles to achieve the redistributive objectives of the NEP. Since a key target was to increase the Bumiputera (Malay and indigenous peoples) share of wealth, rather than income, to 30 per cent, GLCs seemed the perfect instrument. While this target has yet to be met, the wealth share of Malays has increased at the same time that income inequality within the Malay community has worsened considerably. Many point to the rise of GLC-centred crony capitalism and a culture of corruption and patronage as contributing to this rise in inequality.

Recognising the problems with GLCs, and in a bid to improve the investment climate, the government launched its 10-year Transformation Programme in May 2004, with divestment of GLCs a key objective. With the deadline looming, progress has been lacklustre — of the 33 GLCs up for divestment, only 15 had been completed as of February 2013. Worse still, this limited divestment has been offset by new investments, with a spate of acquisitions by GLCs in private sector finance and property development for instance, making it more of a diversification than a divestment program.

So, are GLCs really crowding out private investment? For the first time, we provide empirical evidence on this relationship using a detailed dataset of 443 publicly listed firms covering the period 2007 to 2011 from Oriana. After accounting for the other determinants of investment, it is clear that a stronger GLC presence generally has a discernible negative impact on private investment. Also in question is whether there is a threshold effect when it comes to the share of GLC presence in an industry; that is, whether private firms tend to invest less to begin with if the share of GLC revenue in an industry is particularly large.

It would seem that when GLCs account for a dominant share of revenues in an industry, investment by private firms in that industry is significantly negatively impacted. Conversely, when GLCs do not dominate an industry, the impact on private investment is not significant. Even by varying the threshold by 10 percentage points in both directions, this change does not affect the original finding of a significant negative relationship between GLC share and private investment.

To revive private investment in Malaysia, the government must not only redress its growing fiscal deficit, but also expedite its program of divestment. While a growing fiscal deficit and the rising dominance of GLCs may both be crowding out private investment, a genuine privatisation program designed to reduce the role of GLCs would also address the fiscal constraint, providing a further boost to the investment climate. An improvement in overall governance and transparency would be an important, indirect, plus.

Jayant Menon is Lead Economist at the Office of Regional Economic Integration, Asian Development Bank, and Adjunct Fellow at the Arndt-Corden Department of Economics, the Australian National University.

Thiam Hee Ng is Senior Economist at the Office of Regional Economic Integration, Asian Development Bank.

The views expressed in this paper are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent.

http://www.eastasiaforum.org/2013/04/25/malaysian-government-linked-corporations-crowd-out-private-investment/

Malaysia’s fiscal future and the general election

April 28, 2013

Author: Liam Hanlon, Cascade Asia Advisors (04-23-13)

Malaysia’s 13th general election, scheduled for 5 May, is shaping up to be the tightest in the country’s near 60-year history.

The ruling coalition, Barisan Nasional (BN), should slightly edge out the opposition, Pakatan Rakyat (PR), but will probably fail to reclaim the coveted two-thirds majority necessary to amend the constitution. Behind the divisive rhetoric of this unofficial campaign season, however, neither camp has formulated a viable, long-term solution to one of Malaysia’s most insidious problems: fiscal imprudence.

Malaysia’s struggles with public finances are nothing new. With the exception of a brief period in the mid-1990s, Malaysia has long maintained a fiscal deficit, and in 2012 its budget deficit was one of the region’s largest, at 4.5 per cent. It has also done little to reign in public debt, which at 53.7 per cent of GDP in 2012 sits right under the debt-ceiling threshold of 55 per cent of GDP.

Although Malaysia’s deficits aren’t inherently irresponsible, they do reflect a concerning trend of ‘hidden’ public debt. This includes contingent liabilities, such as government guarantees on debt and ‘off balance sheet’ borrowings, which have more than doubled since Najib Razak took office in 2009. This debt surge comes from government entities that fund massive transportation and infrastructure projects.

It is not inconceivable that these liabilities may eventually find their way onto the federal balance sheet. Additionally, the government’s revenue stream, which has remained unimpressively low, is too heavily reliant on the state oil company PETRONAS, responsible for almost 35 per cent of federal revenues.

Underpinning many of these structural issues is a proclivity for subsidies and cash handouts, particularly when an election is on the line. As BN recovered from the political shock of the 2008 election that saw PR erase its parliamentary majority, Najib unleashed budgets saturated with voter-friendly measures.

The 2013 budget provided bonuses to over 1.3 million civil servants, cash for low-income families, smart phone rebates and a cut in the income tax rate. These additions reflect the political reality that prudent fiscal management does not carry votes in Malaysia. Malaysians frequently lament the rising cost of living, making subsidies politically expedient for anyone running for office.

Malaysia’s 13th general election is no different. PR’s leader, Anwar Ibrahim, and Najib are competing for the hearts and minds of Malaysia’s electorate, promising to deepen their pockets, shower them with gifts and reduce their taxes. Anwar unveiled his election manifesto 25 February, outlining an agenda replete with election sweeteners. He promised free secondary education, lower car prices, an increased minimum wage, and greater oil revenues for Sabah and Sarawak.

Najib revealed his electoral platform on 6 April, proffering his own brand of populist pledges. He promised to raise the annual cash handout for poor households from US$165 to almost US$400, build one million new affordable homes and similarly subsidise car prices. Najib also delayed the implementation of a goods and services tax (GST), which would expand the tax base and ease the government’s dependency on oil revenues. The electoral payoffs for these political ploys make it risky for any leader to advocate for long-term fiscal management.

However unpromising this election cycle has been, one policy prescription has emerged that could drastically alter Malaysia’s financial future. PR has advocated reforming the country’s longstanding quota system favouring Malays, opting instead for a system based on socioeconomic status. Eliminating racial preferences in public contracts could conceivably yield more efficient and useful government investments, and free up revenue for the high subsidies PR wants to dole out.

More importantly, this reform will reinvigorate Malaysia’s domestic competitiveness and empower truly disadvantaged segments of society. If implemented correctly, it would signal to the international investment community that business in Malaysia no longer runs on cronyism and race-based politics. Touting an improved investment environment could position Malaysia to better compete for much-needed foreign investment in the region, easing pressure on the government to drive investment.

To be fair, Najib has taken strides to roll back some of the archaic policies benefiting Malays. In 2009, he overturned a longstanding requirement for certain companies to sell at least 30 per cent of their shares to Malays. But the prime minister stopped short of addressing the bulk of preferential racial policies that infuriate ethnic Chinese and Indian Malaysians, particularly those in education and government contracts.

The United Malays National Organisation is still the most influential party component in BN, essentially guaranteeing that Malay interests will continue to guide the coalition’s policies. Regardless of Najib’s own ambitions, institutional impediments to achieving reform in this area may be too powerful to overcome.

Indeed, the policies of neither BN nor PR instil much confidence in the country’s medium-term fiscal future. Malaysia’s electoral politics fail to reward fiscal prudence and instead encourage shortsighted economic measures. But if the government cannot extract racial considerations from the economy, Malaysia risks falling deeper into financial mismanagement.

Liam Hanlon is a political analyst at Cascade Asia Advisors, a research and strategic advisory firm focused on Southeast Asia.

http://www.eastasiaforum.org/2013/04/22/malaysias-fiscal-future-and-the-general-election/