Dani Rodrik: Has sustained growth decoupled from industrialization?


April 9, 2014

The George Washington University, Washington DC–Growth Dialogue

http://www.growthdialogue.org/shared-views/dani-rodrikhas-sustained-growth-decoupled-industrialization

Dani Rodrik: Has sustained growth decoupled from industrialization?

Watch Prof. Dani Rodrik’s full presentation at the Symposium on Frontier Issues in Economic Growth.

Attracting Malaysian Talent Home is tough for Johan Merican


April 9, 2014

Malaysia struggles to woo Malaysian experts home due to ‘better life’ abroad–A Tough Job for Johan Merican

 by MD Izwan (04-08-14) @www.themalaysianinsider.com

TalentCorp CEO Johan Mahmood Merican says the agency has several incentives to make it easier for overseas Malaysians to come home, including tax exemptions on their cars. – The Malaysian Insider pic by Najjua Zulkefli, April 8, 2014.

TalentCorp CEO Johan Mahmood Merican says the agency has several incentives to make it easier for overseas Malaysians to come home, including tax exemptions on their cars.–  pic by Najjua Zulkefli, April 8, 2014.

Higher salaries, better professional opportunities and a comfortable life – these are the main reasons Malaysian professionals living abroad are reluctant to return to Malaysia, TalentCorp said.

According to its statistics, TalentCorp managed to bring back 2,500 Malaysians working abroad, but the figure is small when compared with a 2011 World Bank estimate that almost a million Malaysians are working outside the country.

TalentCorp has received almost 4,000 applications in the three years since it was established in 2011 to address the brain drain in the country.

“It is a combination of several factors. First, the quality of life is related to salaries, second, professional opportunities and third, a comfortable life, ” TalentCorp Chief Executive Officer Johan Mahmood Merican told The Malaysian Insider recently. However, the gap in quality of life is not too big when Malaysia is compared with other countries, he said.

“For example, the salaries in London are definitely high but we must increase their awareness about the quality of life after living costs are taken into account. Sometimes, the gap is not that big,” he added.

In terms of professional opportunities, Johan said Malaysia was still capable of offering the best opportunities as the country’s economic position was still good.

“In many other developing countries in the world, their economies are relatively slow but Malaysia’s is steadily progressing,” he said.

“The third factor, there are a lot of reasons for that. It’s true that there are some Malaysians who are worried about education, crime and the political scenario in the country,” he added.

The country which has the highest number of Malaysians wanting to come home is Singapore, followed by the United Kingdom, China, Australia and the Middle East.

According to a World Bank report, Malaysia’s Gross Domestic Product (GDP) was US$303.53 billion (RM995.43 billion) in 2012. Malaysia’s GDP represents 0.49% of the world’s economy.

“When they have been out of the country for too long, it will be hard for them to come home. At least, we appreciate their efforts by giving them incentives.”

The administration of Prime Minister Datuk Seri Najib Razak has targetted Malaysia to become a high-income nation by 2020 through Vision 2020, which was introduced by former Prime Minister Tun Dr Mahathir Mohamad.

As part of efforts to achieve the goal, Najib also introduced fiscal steps to reduce the country’s deficit, but that have affected the inflation rate.

Up till 2013, TalentCorp was allocated RM65 million, but it has received criticism over the huge allocation as it did not reflect in the number of talents brought home.

“TalentCorp is not only about bringing workers from overseas, we also have other programmes such as graduate employability and helping foreign talents,” Johan said.

The area in which most talents have decided to come back to is the business service sector, followed by oil and gas, finance, electronics, information technology and health.

“We support the Economic Transformational Programme (ETP) and not just overseas programmes. We help drive the ETP,” he said, adding that TalentCorp was in line with the government’s goal of achieving a high-income nation by 2020.

Johan also said that TalentCorp does not take on the role of a “recruitment agency” for the talents brought home.

“We do not operate like a recruitment agency because we are a government agency. We do not look for jobs for them; it is up to them to find jobs.However, we realise that Malaysians who have worked overseas for too long will not necessarily be used to the local professional culture so we are prepared to help them to get in touch with recruitment agencies or executives,” he said.

Realising that the move to bring back talent is not easy, Johan said TalentCorp has prepared several incentives to make it easier for them to return to Malaysia.

“When they have been out of the country for too long, it will be hard for them to come home. At least, we appreciate their efforts by giving them incentives.”

Among the incentives are tax exemptions on cars the applicants would like to bring back to Malaysia under the Return Expertise Programme (REP).Johan said it was not fair for others to judge TalentCorp’s work just based on allocations to the agency, as there were other activities that they take on.

“You cannot take a whole amount of allocation and divide it by one activity… we have other different activities.Maybe our activities hardly get any coverage, but we are managing talents in a different aspect,” he said.

In 2011, a World Bank Report revealed that Malaysia was experiencing a huge brain drain to other countries, with almost a million of the country’s professional workforce reported to be working overseas.

According to the report, the migration is caused by the imbalances of the New Economic Policy (NEP), with Indians and Chinese making the highest numbers.

The World Bank warned that if the situation was not addressed as soon as possible, it would slow down the economy and halt the country’s development.

Following the report, Putrajaya set up TalentCorp and introduced programmes to lure Malaysian talents from overseas. – April 8, 2014.

Tengku Razaleigh’s Speech at the launching of “Rich Malaysia, Poor Malaysians”


April 4, 2014

Tengku Razaleigh’s Speech at Sultan Sulaiman Club, Kg Baru, Kuala Lumpur, 8 pm on April 3, 2014 on the occasion of the launching of “RICH MALAYSIA, POOR MALAYSIANS”, authored by Anas Alam Faizli

Ku LiYBM Tengku Razaleigh Hamzah

I am honoured at having been invited by Anas Alam Faizli to launch his book, “Rich Malaysia, Poor Malaysians”, a collection of essays reflecting his thoughts on energy, the economy and education of our beloved country. I applaud Anas for his intellectual discipline to pursue writing which demands mental toughness, quiet tenacity and absolute patience. Indeed, he deserves our admiration.

He deserves our respect given that Malaysians are notoriously apathetic to reading, let alone writing. I respectfully submit that we do not write enough, both fiction and otherwise in comparison to, say, our sprawling archipelagic neighbour to the south. It is in this context that our author deserves our commendation – my commendation in particular – for a task well done, even though the themes are serious and difficult. Well done, Anas.

Book Launch on April 3, 2014Having skimmed through the book, I must admit that I have more than just a passing interest in it; and at least for two reasons. I am always interested in writings on the subject of energy, be they articles for lay reading or academic treatises. I feel especially close when oil and petroleum are discussed. This is because of my task previously to see through the legislation of the Petroleum Development Act, 1974; the negotiation of the production sharing contracts with oil majors whose roles were redefined as contractors to the national oil company in the post-PDA era; and, establishing and developing PETRONAS into a professionally reputable and internationally respectable national oil company.

Secondly, having been schooled in economics, I follow its development keenly, both at the national and international levels. This is strengthened further by my having once been the Minister of Finance charged with the financial and economic management of the country. And of course, given the collective responsibility of the Cabinet, national policies on such subjects as education interest me greatly.

Let us reflect, for a moment, upon the situation regarding the supply and consumption of petroleum in the country and the downstream role of PETRONAS in the retailing of this essential and strategic product. Given our continuous inability to guide the country out of the middle income trap into the high income bracket, we have been using, for long spells, petroleum subsidisation to solve the problem of its affordability by ordinary people in the lower strata of the economic chain. While the subsidising of consumer goods is not the most efficient of ways in managing the high cost of living, it is fairly understandable if the government extends a helping hand to the small man in that manner.

What is sinful and cannot be forgiven is the ease with which the power that be had been dishing out subsidies to such entities as the national power supplier, the independent power producers and some other non-power outfits. As has been pointed out by Anas, since 1997 this subsidy has amounted to RM136.5 billion. The sad part is that while these power producers continue to enjoy subsidised fuel price, petroleum subsidy to the consumers – which purportedly cost the government RM14 billion in 2011 – was partly discontinued recently.

It is glaringly obvious that the government has been treating PETRONAS as a cash cow. Anas continues to point out that over 37 years from 1974 – 2011, the government had been paid some RM529 billion in dividends, taxes, petroleum proceeds and export duties from the national oil company. The reliance on PETRONAS to help outfits with strong linkages to the government out of financial trouble has been going on from as far back as 1985. In that year it rescued Bank Bumiputera with a RM2.5 billion bailout and again in 1991 when it coughed up another RM1 billion. In 1997, Petronas had to rescue the financially ailing Konsortium Perkapalan Berhad for RM2 billion.

The national oil company was also made to underwrite the construction of the Twin Towers in the heart of the KL golden triangle for RM6 billion and the building of the extravagant Putrajaya for RM22 billion. In all, more than a half trillion ringgit have been spent. This amount could have been used more productively to fund a national pension programme for Malaysians as has been done by a certain Scandinavian country.

This extravagance that had been forced on to PETRONAS has also deprived the company from the much needed cash build-up for reinvestment which would ensure its business sustainability. Given the finite nature of hydrocarbon as a resource, it is important for PETRONAS to look further afield at investments in businesses outside of oil and gas.

Looked at from this perspective, it is all the more critical for the corporation to have a strong cash reserve for reinvestment purposes. It was this need for prudence that had led Tun Razak, the Prime Minister of the day, to impress upon me the need to ensure that Petronas would enjoy parity with such multinational companies as the once much touted seven sisters, two of which ultimately became its contractors.

Today PETRONAS is at par with the oil majors and it is ranked as one of Fortune 500’s largest and most profitable oil and gas companies. But sadly, it is being abused and treated as the piggy bank whenever the government needs cash in a hurry.

Ladies and gentlemen, why is this so? Why is there a discrepancy between what was visualised by the founding fathers of PETRONAS and what it has turned out to be 40 years on; that is, as a banker of sorts to the government.

The truth is that there had been consistent political interference and this had affected PETRONAS, even though it is a professionally well run corporation. There is a blurring of lines demarcating the party in power and government, and by extension, the party supremo and the head of government. Cynics would contend that it was done on purpose to facilitate the development of politics of patronage. This, in turn, led to the growth of crony capitalism.

This inter-ethnic dichotomy is no more than a duplication of effort which result in the inefficient application of resources. It is worsened by the economic disparity that continues to be persistently reflected along racial line, notwithstanding the efforts made to blur and wipe it out. As explained by Anas, the bottom 40% of Malaysia in economic terms is still made up of Bumiputera households.

Transpose this against the notion that about 90% of their incomes are made up of wages and salaries which are hardly commensurate with the relatively more rapid increases in living costs, this problem takes on a much darker hue. As an illustration of how low Malaysian income generally is, it is worthwhile noting that the EPF had been known to report that about 79% of its contributors earn RM3,000 or less a month.

This reality becomes more significant when we realise that disposable income contributes much to purchasing power, especially among the relatively poor as opposed to the wealthy where purchasing power is additionally sourced from assets other than salaries and wages. A report on the national human development goes further to say that the “Chinese has a higher purchasing power compared to other ethnic groups…” More problematic and easily a potential source of politico-economic problem is the assertion by the report that there is “homogeneity in the purchasing power gap.” It asserts that the super-rich, regardless of ethnicity, has about 18 to 20 times more purchasing power.

Purchasing power has a graver ramification from the standpoint of economic wellbeing. This has to do with the reality that a person who enjoys a high income is not necessarily guaranteed a better quality of life. Neither does the effort to improve the quality of life through high income mean much if the cost of living rises rampantly. Again, an observation by Anas is very illuminating here. He contends that a graduate who entered the job market for the first time, say, in 1978 on a monthly salary of RM1,000 could afford a lower-end car of RM12,400 or 12 months’ salary and take out a mortgage, perhaps, on a RM62,000 house in a fairly upscale Kuala Lumpur suburb.

Today, a fresh entrant into the labour market on a monthly salary of RM2,500, which is two and half times higher than his earlier counterpart, would find a roughly similar car costing him RM178,000, roughly 71 months of his salary. A house outside the Greater Kelang Valley area, in Nilai for example, would set him back by RM350,000. This situation could get worse in all probability.

Ladies and gentlemen, the challenge before us is to mitigate the socio-political issues and problems to a minimum. This will ensure that they do not become a part of our political culture and, by extension, our way of life. We must have the will to stop patronage and cronyism. In this way rent-seekers would be cut off. But herein lies the problem.

Political leaders are loath to upsetting the apple cart and disturb their cosy symbiosis with rent-seeking cronies. More often than not, these are the people whom they rely upon for political funds in their effort to continue to latch on to power.

What then could be done given this near-checkmate type of a situation? I say pressure must be brought to bear and it must be made known that we will not tolerate any more politics that is less than ethical. We must clearly and loudly make it known that politics must be practised with a high level of integrity. No, politics is not dirty but its practitioners, more often than not, are. In the longer run and in order to ensure that ethical politics of impeccable integrity is practised, we must overhaul our education system.

We need to shift our education paradigm from a system that emphasises regurgitating what is learnt by rote to amass distinctions to one that puts a premium on logical and critical thinking in which source as well as general reading is a major activity in providing the primary material. We must revisit our educational philosophy in order that we may give equal importance to classroom and off-classroom activities in educating the young Malaysian into a potential leader material for the public or private domains. Of course, this is a huge and important subject that needs proper addressing at, perhaps, another forum.

Ladies and gentlemen, in the last several minutes I have shared with you my thoughts on the subjects addressed by Anas in his book. I hope it has generated enough interest to trigger off your critical thoughts on the subjects or other related subjects. In the process it is hoped that some of you will go a step further to put pen to paper as Anas had done. On that note, I take this opportunity to congratulate the author for making the book available to the public which I have much pleasure in introducing. Thank you and I wish you a pleasant day ahead.

*This speech was delivered by former Finance Minister Tengku Razaleigh Hamzah at the launch of the book “Rich Malaysia, Poor Malaysians” by Anas Alam Faizli.

Anas Alam Faizli speaks in Bahasa Malaysia on his book, “Rich Malaysia, Poor Malaysians at Kelab Sultan Sulaiman, Kg. Baru. Kuala Lumpur, Malaysia on April 3, 2014 (below):

Book, Rich Malaysia, Poor Malaysians

Yang dihormati dif-dif jemputan yang terhormat,

YBM Tengku Razaleigh

Dr Syed Husin Ali, YB Saari Sungib, Tan Sri Kamal Salih, TokSu Norizam,

Pak Chong, Siraj, Azlan, Dato Din Merican, Sharaad,…

Para hadirin-hadirat yang dihormati sekalian,

Assalamualaikum warahmatullahi wabarakatuh dan salam sejahtera,

 Saya ingin merakamkan setinggi-tinggi penghargaan kepada YBM Tengku Razaleigh yang sudi merasmikan buku Rich Malaysia, Poor Malaysians dan Malaysia Kaya, Rakyat Miskin. Kredibiliti Tengku tidak dapat dipersoalkan – pengalaman Tengku sebagai Founding Chairman dan CEO Petronas yang juga pernah memegang tampuk kementerian kewangan dan perdagangan antarabangsa serta mantan pengerusi Bank Bumiputra.

Dalam pendidikan pula, Tengku pernah mengatakan pada bulan Julai yang lalu bahawa “Sistem pendidikan negara kita gagal dan kita tidak boleh mempertahankannya lagi. Tambah beliau, satu tindakan yang ikhlas, berani dan radikal diperlukan bagi mempercepatkan proses pembaharuan dalam pelajaran dan pembelajaran.”

Buku kerdil ini juga telah diangkat nilainya ke tahap yang lebih tinggi kerana sumbangan dua orang pemimpin yang saya sangat kagumi dan hormati- pemimpin yang mewakili gen-Y dan juga generasi veteran. Terima kasih yang tidak terhingga diucapkan kepada YB Nurul Izzah dan Senator Dr Syed Husin Ali yang telah mencurahkan pemikiran mereka seterusnya menyuntik kehebatan permulaan kepada buku kerdil ini. Terima kasih juga buat barisan panelis yang sangat tersohor, En Mohamed Siraj, En Azlan Awang, Dato’ Din Merican dan juga moderator Mr Sharaad Kuttan.

Anas Alam FaizliBuku ini merupakan himpunan esei yang telah ditulis dalam tempoh setahun. Manuskrip versi Inggeris dan Bahasa telah siap serentak tetapi versi Inggeris diterbitkan dahulu untuk menilai sambutannya. Walaupun ia merupakan himpunan esei tetapi Alhamdulillah berjaya disusun dalam satu bentuk kronologi yang mempunyai kekuataan tersendiri. Sebuah himpunan esei yang berbicara tentang isu-isu nasional dan global seperti isu tenaga, ekonomi, pendidikan dan kesukarelawan, yang saya harap mampu mencetuskan wadah bicara kritis dan berguna untuk semua.

 Penulisan dimulakan dengan berkongsi amanat almarhum Atok saya, Mohd Zain bin Abu dengan tiga prinsipnya iaitu:

1-  Pendidikan ialah perkara paling penting dan akan sentiasa menjadi keutamaan

2- Elakkanlah seberapa banyak permusuhan dengan orang lain

3-  Dan jadilah orang yang memberikan banyak manfaat kepada orang lain

Buku ini antara lainnya satu usaha untuk memenuhi wasiat Atok, dengan kerendahan diri, satu percubaan kecil untuk menjadi seorang yang bermanfaat.

Idea utama buku ini ialah satu penerimaan bahawa , Malaysia ialah sebuah negara kaya dengan hasil mahsul bumi.  Beratus tahun di jajah dan hasil kekayaan di larikan penjajah,  kita kembali memegang daulat sebuah tanah yang kaya dan mewah. Maka kerana itu,  sebaik sahaja merdeka, tanah ini tidak pernah  putus memberi sumbangannya baik daripada bijih timah, getah, kelapa sawit, bijih besi, bauksit, kayu balak dan terkini minyak dan gas yang menyumbang 40% hasil pendapatan negara.  Semua ini ialah sumber tidak ternilai yang perlu dihargai dan digunakan sebaik mungkin.  Oleh itu,  adalah sangat penting masyarakat umum memahami sebanyak mungkin mengenai industri yang menjadi “cash cow” negara ini.

Bahagian sumber petroleum Malaysia ini dimulakan dengan persoalan adakah kisah Petronas ialah kisah si tanggang? Beberapa soalan penting seperti – bilakah minyak akan habis? Dimanakah industri perkhidmatan tempatan dan isu-isu yang lain telah dikupas malah diakhirnya turut diberikan beberapa cadangan penyelesaian. Kemudiannya, satu penerangan mengenai sejarah Petronas, bagaimanakah ia beroperasi dan sistem fiskal Malaysia diperjelaskan. Konsesi vs PSC. Persengketaan Royalti Minyak juga telah disampaikan secara terperinci daripada perspektif semua negeri yang terlibat. Bahagian ini ditutup dengan cadangan pemberian ekuiti Petronas kepada negeri pengeluar minyak berbanding penambahan Royalti.

Bahagian Sosio-Ekonomi pula dimulakan dengan merungkai 8 realiti Malaysia dan mengapa pendidikan tinggi wajar dibiayai oleh kerajaan. Saya ambil jalan berbeza dan tidak membandingkan dengan negara lain tetapi melihat perspektif kaca mata Malaysia itu sendiri dan menyimpulkan mengapa kita perlukan pendidikan tinggi. Slogan saya dalam buku ini, 1 Keluarga 1 Graduan.

Esei berikutnya menghuraikan dengan panjang lebar apa yang dimaksudkan dengan Negara Berpendapatan Tinggi, Rakyat Berpendapatan Rendah. Malaysia Kaya, Rakyat Miskin.

Ilustrasi disampaikan dengan fakta dan diterangkan secara halus. Kemudiannya saya membuka kisah Mitos Si Kaya dan Si Miskin diikuti dengan penerangan bagaimana sebuah Negara Berkebajikan akan meluncurkan Malaysia kearah masa depan yang jauh lebih baik.

Menuju kearah demokrasi yang lebih kukuh dengan dua parti dominan negara, saya juga menulis bagaimana kaedahnya untuk memahami dan membuat analisis kritikal ke atas manifesto yang dijanjikan oleh parti-parti bertanding.

Bahagian ini ditutup dengan penjelasan panjang mengenai perjanjian TPPA yang sedang dirunding oleh Malaysia.

Seterusnya,  saya mengupas isu pendidikan dengan analisis pencapaian ranking antarabangsa Malaysia. Saya kemudiannya menyeru membina budaya membaca buat menuju mentaliti negara dunia pertama. 1996 – 2 muka surat, terkini 2 buku berbanding Jepun Perancis 10, AS dan Kanada 17 buku. Kemudiannya saya menyeru kepada penyemaian budaya berfikir dengan beberapa cadangan. Saya juga mempersoalkan jika sekolah moden itu satu pengkhianat kepada pendidikan. Bahagian ini ditutup dengan cadangan mendefinisikan semula falsafah pendidikan negara dengan cadangan Cinta sebagai Pedagogi dan FPN yang baru.

Saya percaya pendidikan boleh dijadikan penyelesaian kepada semua masalah yang dihadapi negara.

Bahagian terakhir menyentuh mengenai kesukarelawanan dan satu penulisan panjang yang menghuraikan mengenai bagaimana kesukarelawanan boleh berjaya dan menyumbang kearah pendidikan yang lebih baik. Saya juga nukilkan konsep kuasa ketiga dan bagaimana kesukarelawanan boleh menjadi agen menyubur demokrasi dengan memberi ruang suara kepada semua pihak.

 Buku ditutup dengan epilog bahawa gerakan massa Reformasi adalah milik semua  dan rakyat perlukan satu Rejuvenasi.  Seperti yang saya sering utarakan, penulisan ini adalah milik umum, dan saya seru warga umum untuk mengulas, mencabar dan memperkembangkan idea-idea di dalam buku ini. Usul-usul kritis yang padat di dalam buku ini saya mohon diperhaluskan dan semoga dapat dimanfaatkan oleh semua.

Akhir kata, Baca, Faham, Fikir dan Bertindak. Berjuanglah!

Terima Kasih.

 

Inside Singapore’s Socio-Economic Success


April 2, 2014

Singaporean Finance Minister Tharman Shanmugaratnam  on Singapore’s Socio-Economic Success

port-of-singaporePort of Singapore

MH370: Questions for the US and its Intelligence Services


March 30, 2014

Disappearance of Malaysian Airlines Flight MH 370: The Trillion Dollar Question to the U.S. and Its Intelligence Services

Malaysian media should pose critical questions to the US and its Intelligence Services and not to the Malaysian Government

Let me state from the outset that I totally agree with the press statements by Malaysia’s Defence Minister and Acting Transport Minister, Datuk Seri Hishammuddin Hussein that “we have conducted ourselves fairly, responsibly and history will judge us for that.”

And to a mischievous and presumptuous question from a correspondent of the Financial Times, Datuk Seri with confidence and integrity rightly said without any fear of contradiction that, “I don’t think we could have done anything different from what we have already done.”  Well done!

What technological innovation would prompt the Pentagon's military intelligence agencies to electronically interdict a civilian airliner in mid-flight, while disposing of the collateral passengers as shark bait?

What technological innovation would prompt the Pentagon’s military intelligence agencies to electronically interdict a civilian airliner in mid-flight, while disposing of the collateral passengers as shark bait?

The Financial Times, CNN and other foreign media ought to pose similar questions to the US and its intelligence services and stop insinuating that Malaysia has not been transparent and/or engaged in a cover-up. Foreign media should stop engaging in dirty politics!

 It is my hope that following the publication of this article, Malaysian mass media will focus on questioning the integrity of the US’s assistance to Malaysia in the first three weeks of the SAR mission, notwithstanding its recent offer of more assistance.

I take comfort that my reservations about the US and its intelligence services as well as other intelligence services closely linked to the US, especially British secret service, have been more than vindicated by Reuters in its news report on 28th March, 2014 entitled Geopolitical games handicap hunt for flight MH370

The search for flight MH370, the Malaysian Airlines jetliner that vanished over the South China Sea on March 8, has involved more than two dozen countries and 60 aircraft and ships but has been bedevilled by regional rivalries.

… With the United States playing a relatively muted role in the sort of exercise that until recently it would have dominated, experts and officials say there was no real central coordination until the search for the plane was confined to the southern Indian Ocean, when Australia largely took charge.

Part of the problem is that Asia has no NATO-style regional defence structure, though several countries have formal alliances with the United States. Commonwealth members Malaysia, Singapore, New Zealand and Australia also have an arrangement with Britain to discuss defence matters in times of crisis.

As mystery deepened over the fate of the Boeing 777 and its 239 passengers and crew, most of them Chinese, it became clear that highly classified military technology might hold the key.

But the investigation became deadlocked over the reluctance of others to share sensitive data, a reticence that appeared to harden as the search area widened.

“This is turning into a spy novel,” said an envoy from a Southeast Asian country, noting it was turning attention to areas and techniques few countries liked to publicly discuss.

Ultimately, the only country with the technical resources to recover the plane – or at least its black box recorder, which could lie in water several miles deep – may be the United States. Its deep-sea vehicles ultimately hauled up the wreckage of Air France 447 after its 2009 crash into a remote region of the South Atlantic.

While Putrajaya has been forced to reveal some of the limits and ranges of its air defences, the reluctance of Malaysia’s neighbours to release sensitive radar data may have obstructed the investigation for days.

At an ambassadorial meeting in the ad hoc crisis centre at an airport hotel on March 16, Malaysia formally appealed to countries on the jet’s possible path for help, but in part met with polite stonewalling, two people close to the talks said.

Some countries asked Malaysia to put its request in writing, triggering a flurry of diplomatic notes and high-level contacts.

‘It became a game of poker in which Malaysia handed out the cards at the table but couldn’t force others to show their hand, a person from another country involved in the talks said.

As in the northern Indian Ocean, where Chinese forces operate alongside other nations to combat Somali piracy, current and former officials say all sides are almost certainly quietly spying on and monitoring each other at the same time. (emphasis added)

WantChinaTimes, Taiwan reported,

The United States has taken advantage of the search for the missing Malaysia Airlines flight to test the capabilities of China’s satellites and judge the threat of Chinese missiles against its aircraft carriers, reports our sister paper Want Daily.

Erich Shih, chief reporter at Chinese-language military news monthly Defense International, said the US has more and better satellites but has not taken part in the search for flight MH370, which disappeared about an hour into its flight from Kuala Lumpur to Beijing in the early hours of March 8 with 239 people on board. Shih claimed that the US held back because it wanted to see what information China’s satellites would provide.

The above is the reality which we have to confront. Therefore, desist any attempt to label the above mainstream media articles as a “conspiracy theory”. Reuters has let the Genie out of the bottle!

Malaysia’s Minister of Transport Datuk Seri Hishammuddin gave hints of Malaysia’s difficulties (as his hands were tied by intelligence protocols and or refusal by the relevant foreign intelligence services and diplomatic reluctance) but our local media failed to appreciate the nuances of his statements by not directing their questions at those parties that have failed Malaysia as their neighbour and in their duties under various defence treaties and arrangements.

Malaysian media, please read at the minimum three times, the sentences in bold AND WAKE UP TO THE REALITY that our country has been badly treated even though our country put all its national security cards on the table so that countries whose nationals are passengers on flight MH 370 could come forward with sincerity to assist in resolving this unfortunate tragedy which is not Malaysia’s making.

Malaysia is but a victim of this tragedy whose plane, MH 370 was used for a hidden agenda for which only time will reveal. 

On the 27th March, 2014, I exposed how Israel is exploiting the tragedy to create public opinion for a war against Iran, a Muslim country that has close ties with Malaysia.

At the outset of the SAR Mission, all concerned stated categorically that every scenario, no matter how unlikely would be examined critically with no stones left unturned – terrorist hijacking, suicide mission, technical failures, inadequate security, criminal actions of the pilot and or co-pilot etc.

Given the above premise, families of the passengers and the crew of MH 370 have every right to ask the following questions of the US and other countries that have sophisticated technologies to track and monitor airplanes and ships in all circumstances.

Such questions should not be shot down by those who have a hidden agenda that such queries amount to “conspiracy theories”. Far from being conspiracy theories, we assert that the questions tabled below and the rationale for asking them are well founded and must be addressed by the relevant parties, failing which an inference ought to be drawn that they are complicit in the disappearance of MH 370.

Let’s us begin.

1)        Was the plane ordered to turn back, if so who gave the order?

2)        Was the plane turned back manually or by remote control?

3)        If the latter, which country or countries have the technologies to execute such an operation?

4)        Was MH 370 weaponised before its flight to Beijing?

5)        If so, what are the likely methods for such a mission – Biological weapons, dirty bombs?

6)        Was Beijing / China the target and if so why?

7)        Qui Bono?

8)        The time sequence of countries identifying the alleged MH 370 debris in the Indian ocean was first made by Australia followed by France, Thailand, Japan, and Britain via Immarsat. Why did US not offer any satellite intelligence till today?

9)        Prior to the switch of focus to the Indian ocean, was the SAR mission in the South China seas, used as a cover for the deployment of undersea equipment to track and monitor naval capabilities of all the nations’ navies competing for ownership of disputed territorial waters? Reuters as quoted above seems to have suggested such an outcome.

10)     Why was there been no focus, especially by foreign mass media, on the intelligence and surveillance capabilities of Diego Garcia, the strategic naval and air base of the US?

11)     Why no questions were asked whether the flight path of MH 370 (if as alleged it crashed in the Indian Ocean), was within the geographical parameters of the Intelligence capabilities of Diego Garcia? Why were no planes deployed from Diego Garcia to intercept the “Unidentified” plane which obviously would pose a threat to the Diego Gracia military base?

12)     The outdated capabilities of the Hexagon satellite system deployed by the US in the 1970s has a ground resolution of 0.6 meters;  what’s more, the present and latest technologies boast the ability to identify objects much smaller in size. Why have such satellites not provided any images of the alleged debris in the Indian Ocean? Were they deliberately withheld?

13)     On April 6th, 2012, the US launched a mission dubbed “NROL-25” (consisting of a spy satellite) from the Vandenberg Air Force Base in California. The NROL-25 satellite was likely rigged with “synthetic aperture radar” a system capable of observing targets around the globe in daylight and darkness, able to penetrate clouds and identify underground structures such as military bunkers.

Though the true capabilities of the satellites are not publicly known due to their top-secret classification, some analysts have claimed that the technology allows the authorities to zoom in on items as small as a human fist from hundreds of miles away. How is it that no imagery of MH370 debris was forwarded to Malaysia, as this capability is not classified though other technologies might well remain classified? (Source: Slate.com)

14)     Could it be that the above capabilities were not as touted?

15)     However, in December, 2013, the USAtlas V rocket was launched carrying the spy satellite NROL-39 for the National Reconnaissance Office, an intelligence agency which is often overshadowed by the notorious National Security Agency (NSA), only it scoops data via spy satellites in outer space. The “NROL-39 emblem” is represented by the Octopus a versatile, adaptive, and highly intelligent creature. Emblematically, enemies of the United States can be reached no matter where they choose to hide. The emblem boldly states “Nothing is beyond our reach”. This virtually means that the tentacles of America’s World Octopus are spreading across the globe to coil around everything within their grasp, which is, well, everything (Source: Voice of Moscow). Yet, the US with such capabilities remained silent. Why?

It cannot be said that it is not within the realm of probabilities that the US may not want the plane MH 370 to be recovered if rogue intelligence operators were responsible for the disappearance of MH 370.

If the above questions have been posed to the US and other intelligence agencies and answers are not forthcoming, I take the view that the Malaysian government ought to declare publicly that our national sovereignty and security have been jeopardized by the disappearance of MH 370 and that the relevant intelligence agencies have been tacitly complicit in the disappearance of MH370.

 By coming out openly to explain the predicament faced by our country, Malaysia may prevent a hostile act against a third country.

 I therefore call upon Malaysian mass media to be courageous and initiate such queries as only the US and other intelligence agencies can give definitive answers to the above 15 questions.

It is futile to demand answers from Malaysia as we are not in any position to supply the information as we do not have the capabilities of the global and regional military powers.

 Malaysians must unite behind the government so that our leaders need not feel that they are alone shouldering this enormous burden.      

Matthias Chang is a prominent Malaysian lawyer and author, who served as political secretary and adviser to former Prime Minister Dr. Mahathir Mohamad.

http://www.globalresearch.ca/disappearance-of-malaysian-airlines-flight-mh-370-the-trillion-question-to-the-u-s-and-its-intelligence-services/5375780

 

 

Dr. M’s unbearably convenient memory


March 30, 2014

Dr. M’s unbearably convenient memory

by Terence Netto@http://www.malaysiakini.com

Predictably,(Tun) Dr Mahathir Mohamed cannot quite remember whether he was in the country when the Memali incident occurred in November 1985, four years and four months into his 22-year premiership.

His Deputy then, Tun Musa Hitam, said in Kota Baru last Thursday that Mahathir was in the country, not just when the incident occurred on November 19, but also up to four days after the episode in which 14 police personnel and four villagers were killed in Mukim Siong, Baling. At that time, the Malaysian public was given to understand that their Prime Minister was abroad – in China, to be sure.

Mahathir held the customary press conference at the airport upon his return from abroad. He took questions on the Memali incident in which Police opened fire on a house where religious cult leader Ibrahim Libya was holed up with several villagers. The ensuing shootout became a cause celebre.

Pressed for a response to what Musa had said about him being in the country during that incident and then affecting to show he was not, Mahathir (right) parried his former Deputy’s implied attack on his probity with, “I can’t remember.” Mahathir pleaded his advanced years (he will be 89 in July): “Since this happened a long time ago, I need to check back to see what he [Musa] said is true.”  Mahathir has a convenient sense of recall: he remembers what it is expedient for him to remember and trots out pleas of amnesia when it suits his purpose.

At the Royal Commission of Inquiry into the Lingam videotape in January 2008, Mahathir not infrequently responded with “I don’t remember” to critical questions on his role in the matter in which a senior lawyer was captured on video attempting to fix the appointment of judges during the period of Mahathir’s tenure as Prime Minister (1981-2003).

At that time Mahathir’s infamous chiding of Malays – “Melayu mudah lupa” (The Malays easily forget) – for their supposed ingratitude came back to haunt him.

“Dr M mudah lupa,” (Dr M easily forgets) became his critics’ catch-phrase of raillery against him when it was seen that the former PM’s powers of recall were conveniently self-serving.

Musa’s motive

Musa HitamPolitical observers are wondering about the motive of Musa, a one-time ally-turned-opponent of Mahathir’s in raising a matter that took place almost 29 years ago. They ought to wonder no more.

Musa (left) is attempting a block. He knows Mahathir wants Prime Minister Najib Razak out as PM. The incumbent PM is beleaguered by the disappearance of flight MH370, now three weeks into the greatest mystery in civil aviation’s history.

The circumstances of the plane’s mysterious disappearance with 239 people on board places Najib, Home Minister Zahid Hamidi and Defense Minister Hishamuddin Hussein on notice of grave lack of fitness to hold office. Incidentally, all three of the abovementioned individuals are stalling points in the career path of Mukhriz, the Menteri Besar of Kedah, regarded as inheritor of the Mahathir mantle of national leadership.

In most countries in the world, North Korea excepting, an incident like MH370’s disappearance would have had the trio of Najib, Zahid and Hishamuddin with their necks on the chopping block. Not Malaysia where the 47 percent of the voters who endorsed the ruling BN coalition in the general election last May are embodiments of the validity of the philosopher George Santayana’s dictum: “Those who forget history are condemned to repeat.”

Command and control

Twice in the recent days Mahathir has talked about matters that bespeak a desire to return to a command and control role in Malaysian politics. First, he advised that the government should get ready to tackle a financial crisis and trotted out his expertise at prescribing for just such a malady.

Days after this advice, analysts toted up expected losses to the economy from the suspension of the Visit Malaysia Year 2014 because of flight MH370’s disappearance, and from the anticipated further bleeding of our already loss-hobbled national carrier, MAS. They said it would be RM4 billion at the very least.

The second alarm Mahathir sounded was even more unsettling. He said that if he were to return as PM, he would censor the internet which would be a clear violation of the bill of rights he vouchsafed cyber practitioners when inaugurating the Malaysian Multimedia Corridor in 1996.

Well, no prizes for guessing what the former PM would say if reminded of his promise of no restrictions on freedom to publish on the internet: “I can’t remember.”

It has become a mantra of the man who had ruled the country for 22 years (1981-2003) during which he built it up physically and emasculated it morally. The country’s problem is that it has enough masochists who may want more of the same. Not Musa Hitam, though.

 

Good Governance NOW


March 29, 2014

Good Governance NOW

COMMENT: I agree with Ms Tay. We have regressed as a nation due to Din MericanXweak and irresponsible leadership. Incompetence, inferiority complex from the top to bottom of our bureaucratic totem pole, and rampant corruption were  laid bare by MH370.

We should replace those who are not up to their tasks with with those who can get things done. We have competent people but they are have been ignored by their present bosses. Incompetence breeds incompetence.We have allowed kaki bodeks (yes-men) to rise to the top.The Peter Principle is at work in the Najib Administration. Unfortunately, our  Dear Leader is sleep walking.  –Din Merican

Speak up for good governance

by Salena Tay@http://www.freemalaysiatoday.com

Najib+Tun+Razak.snoozeHe is not Leading; he is being Led

Malaysia is now undergoing a tough time due to the MH370 tragedy.  It certainly did not help that two passengers managed to get on board with stolen passports.However, credit must be given to the Malaysian government for heading the largest ever Search And Rescue (SAR) operation in history.

Learning from this episode, our airport immigration and security procedures have to be improved. The government must acknowledge that there were weaknesses and these have to be acted upon and rectified.

The two major issues pertaining to the MH370 tragedy which posed questions are why was no action taken to check on the turn back done back by MH370, and also the issue of the contents of its cargo.People are demanding answers to these questions.

In addition to the above incident, on March 21 flight MH114 from Kuala Lumpur to Kathmandu was hit by ducks while approaching Tribhuvan International Airport in Nepal and MH066 from KL to Incheon in South Korea was directed to Hong Kong on March 24, 2014 due to a generator problem.

From here it shows that we are still far away from achieving Vision 2020 status, what with the recent news that the water ration will continue indefinitely.

The way things are going, we resemble a Third World nation. If we are on the road towards industrialisation and First World status, there should not be a water ration now as we are only six years away from year 2020, not sixteen years away.

No. We have not progressed but regressed. Our nation too has a big national debt (official figure of RM531 billion) and a big household debt (standing at 82%). This does not bode well for the nation despite economic growth of above 5%. The money is just not trickling down to the poor and the lowly.

Recently in Parliament, the government has also requested for more funding via the Supplementary Supply Bill. The additional funds requested amounted to RM2.39 billion. The breakdown is as follows:

1. Treasury allocation to the statutory funds – RM2 billion

2. Natural Resources and Environment Ministry – RM8.4 million (inclusive of panda project of RM5.6 million)

3. Public Service Department – RM55 million

4. Prime Minister’s Department – RM53 million

5. Works Ministry – RM50 million

6. Communication and Multimedia Ministry – RM46.9 million

7. Foreign Ministry – RM28 million

8. Agriculture and Agro-based Industry Ministry – RM20 million

9. Home Ministry – RM15.9 million

10.Energy, Green Technology and Water Ministry – RM13.8 million

Is the government spending wisely? What is happening? What can we as the small, powerless Joe Public say? We are voiceless.

Stop playing politics

We the citizens should speak up and tell the government where they are going wrong.

It is not enough to just rely on the opposition to speak up. We too have a job to do because it is our duty as a good and responsible citizen to see that Malaysia is well-governed. We owe it to our nation to see that things are run well.We must improve as our ASEAN neighbours are moving forward. Those who used to lag behind us in the not so distant past are now ahead of us.

The Federal Government must pull its socks up and start getting serious. There is no time to play politics. It must be noted that earlier this month (before the third week of March), the Transport Ministry had held a briefing for only the BN MPs regarding the MH370 issue. Why only for the BN MPs? Are the Opposition MPs not Malaysians too?

The Opposition MPs request to discuss this issue in Parliament was also rejected. Why so? Isn’t this amounting to politicking?Definitely the credibility of the nation will go down if we continue in this manner.

As mentioned many times earlier, the government must work together with the opposition for the good of the nation. And the people must keep both the government and the Opposition on their toes.

We must save our nation and save ourselves by abandoning all communal selfishness and siege-mentality.Let us speak up without fear or favour. We must sound out anyone in authority who does wrong.

We the rakyat of Malaysia must act now before it is too late. Time is running out. Citizens of Malaysia, let us work together for the common good and for the good of this nation.

Selena Tay is a FMT columnist.

Poor Quality in Malaysia is Worrying, says World Bank Economist


March 25, 2014

COMMENT: We do not need a World Bank Economist to tell us that imageour education system (and the standard of education) sucks. You and I have been commenting on this subject since I started this blog in 2007. It has since worsened. Today, we are lagging behind Vietnam, Taiwan, China and Singapore other countries in our region and around the world.

Nobody in government seems to be concerned about it or even dare to act to correct it except at the level of political discourse. Even parents who should be worried about their children’s future in a globalized world are not interested in pushing for a comprehensive educational reform. In stead, we have allowed politicians to play around withthe education of our young. As a result, our children are unable to speak proper English, and they lag behind children of other ASEAN children in Mathematics and Science.

The same can be said of our universities which are year in and year out churning out thousands of graduates who cannot be employed by industry except government. Just watch the press briefings by public officials in connection with MH370 over the last 17 days, and you can see how inept  our public officials are in handling the international media because of their inability to converse and communicate in English. It is time for Malaysia to act. Stop playing politics with the future of our generation of Malaysians.–Din Merican

Poor Quality in Malaysia is Worrying, says World Bank Economist

by Sheridan Mahavera, http://www.themalaysianinsider.com

education blueprintWhat Happened to Blueprint, Deputy Prime Minister?

The poor quality of Malaysia’s education system is more worrying than the level of debt in its households, said a World Bank Senior Economist in Kuala Lumpur today.

This is because the country’s substandard education system would affect the pool of skilled talent it needs to grow its economy to become a highincome nation, while high household debt is not necessarily a problem if the economy continues to grow and citizens are gainfully employed.

Dr Frederico Gil Sander, who is Senior Economist for Malaysia, said Malaysians should be “alarmed” that their children were doing worse in school than children in Vietnam, a country that is poorer than Malaysia.

“Rural Vietnamese students do better than Malaysian students,” said Sander, when met a forum that is part of the Global Malaysia series organised by the Economic Transformation Programme.

Sander was referring to a world student performance assessment test called PISA which had measured how students in 65 countries did in mathematics, science and reading. According to PISA’s 2012 results Malaysian students scored below average or ranked 52 out 65. In contrast, Vietnamese students ranked 17 out of 65.

Malaysia’s poor PISA results spotlighted the weakness of Malaysia’s school system, despite the fact that education gets the largest share of funds every year from the national budget.

Critics have pointed out that the PISA results contradicted the government’s insistence that Malaysia had a world class education system. Critics have also questioned the real worth of the Sijil Pelajaran Malaysia (SPM) which produces many students who scored As, but who can’t compete with their peers from Singapore, China and Taiwan.

Gil Sander said an efficient education system should be decentralised to give more power to schools to make their own decisions based on their local circumstances.

“At the same time, parents should be provided with information on the performance of each school in their area so that they can send their children to the best schools,” he said.

On the other hand, Gil Sander claimed that Malaysia’s rate of household debt is not necessarily bad, so long as the economy keeps growing and incomes keep rising.

“Low levels of debt could be an indicator of no access to finance, but if a person borrows money to buy a car to go to a good job, that is not a bad thing.The important thing is that salaries keep rising,” he said

Rich Guys Pay Taxes, says Tun Dr. Mahathir Mohamad. Do You Agree?


March 22, 2014

Rich Guys Pay Taxes, says Tun Dr. Mahathir Mohamad. Do You Agree?

by Lawrence Yong (March 20, 2014)

@http://www.malaysiakini.com

TDM--21 MarchFormer Prime Minister Mahathir Mohamad today said that Malaysia needs rich people who can pay taxes, and this is not cronyism even if some of them are now his friends.

Mahathir said that since the British left in 1957, Malaysia has mostly taken a ‘pragmatic’ approach to its economy – neither free-market capitalist nor socialist – and he therefore shot down critics who said he enriched only an elite class of people during his 22 years as prime minister.

He said that while government borrowed some socialist ideas – backing affirmative action for Malays, created state enterprises and gave land away, it also gave businesses a free hand to profit
handsomely.

He was giving the primary lecture for the Centre of Poverty and Development Studies at the Universiti Malaya campus in Kuala Lumpur.

After his talk which was titled ‘Poverty issues in Malaysia’s economic development’, human rights activist and lawyer Haris Ibrahim stood up to grill Mahathir for letting Malaysia’s inequality get out of hand.

Haris (left) pointed out that some households now live on RM29 a day amidst Kuala Lumpur’s famous Twin Towers, while just one percent of the richest Malaysians control over 10 percent of the country’s wealth. This is despite Malaysia’s oil wealth which has flowed since 1974.

Haris then asked Mahathir to explain “What went wrong?” and insisted that the elder statesman apologise for failing to eradicate poverty.

The audience cheered and applauded before waiting in anticipation for Mahathir’s expected comeback.

“You will find that the rich people are useful people. We were a business-friendly government and I told these people, when you make money, 28 percent belongs to us (through taxes)… that’s why we were helping them.

“Now suppose these people are absent… who are you going to tax? You can’t tax the poor. We need the rich!” Mahathir said, reading from his little notebook which he used to busily take notes when Haris spoke.

Mahathir also then quickly answered Haris’ three questions: “Do I ever drive in KL? I drive every weekend because I love driving. In the past, I used to drive around the check the construction sites.

“What went wrong? You don’t expect every prime minister to follow what the previous prime ministers have done… that you will have to ask them.”

And then he finished off with: “As for apologising… I should expect the questioner to apologise to me!” The audience erupted in applause. Mahathir’s solution was modernisation. In his speech earlier, Mahathir noted that when Malaysia gained independence, more than half were living in poverty.

He added that this disparity, which was marked along racial lines, was one of the reasons for the May 1969 racial riots.

Multiracial and multireligious Malaysia could not survive with such instability, said Mahathir, whose most famous economic writing was the formerly banned book ‘The Malay Dilemma’.

“How do we solve that problem? Dole out money like BR1M (Bantuan Rakyat 1Malaysia)? But we didn’t have money back then,” Mahathir said, adding that his own solution was modernisation to expand the economic pie.

“In fact, we grew the economic cake so large that people who were poor at one time are now rather rich.”

Looking around at international students and undergraduates who were among the attendees at the lecture, the octogenarian medical doctor who became a politician ended his speech with this advice for fighting poverty.

“Reject ideologies. We are pragmatic people – do what we think will give results,” he said.

Later, a law undergraduate also stood up to ask the doctor for his solutions to the perceived crony capitalism and the middle-income trap problems.

He cited the recent study from The Economist which put Malaysia as one of the top three countries in the world for rent-seeking behaviour which let the rich get richer.

Mahathir again defended his past economic policies, saying that students who wanted income equality had no idea what they were really asking for.

“Who are these cronies? They were unknown people… for example, I didn’t know these people until they were successful. Now supposing I have a million dollars to give as capital and I give it to a trishaw rider – what does he do with the money? He will spend the money.

“But if I give it to someone who understands business, he will succeed – the moment he succeeds… ahh, he is a crony! So in order to avoid this accusation that there is cronyism, you must ensure that everyone in this country fails.”

Pointing to Malay entrepreneur Syed Mokhtar Al-Bukhary (right), who is said to be the government’s most preferred business partner, Mahathir applauded the billionaire for giving jobs to over 120,000 people through his huge chain of enterprises which spans from carmakers to post offices and book shops.

“But he wasn’t always that. He started off selling cows and sugar and rice and now he’s a billionaire. What’s wrong with that?

“You want him to be a rickshaw puller? That’s easy… just take away all the opportunities from him and he will become a rickshaw puller but what good does that do? You can’t tax a rickshaw puller and you will have no money,” Mahathir said.

On the middle income trap, Mahathir said that it isn’t so bad as it could be worse. Malaysia could be stuck in a “poor income trap”, and the audience laughed politely.

Fund Scandal Looms in Malaysia


February 27, 2014

Fund Scandal Looms in Malaysia

Mysterious sovereign wealth fund may be billions in debt

NAJIB_RAZAK_091213_TMINAJJUA_05_540_360_100Political insiders in Malaysia say Prime Minister Najib Tun Razak could be facing a fresh political crisis due to the murky dealings of a sovereign fund established five years ago to drive investment in strategic domestic industries.

A widening circle of critics, fed in part by exhaustive reporting on independent news sites such as Malaysiakini, say the fund may have run up as much as RM40 billion (US$12.18 billion) in debt and has few assets to show for it beyond what are described as overpriced acquisitions of independent power producers in Malaysia.

On February 18, Opposition MP Tony Pua of the Democratic Action Party announced on the floor of Parliament that the fund, 1Malaysia Development Bhd, known as 1MDB, had yet to file accounts for the financial year ended March 2013 and that KPMG, the independent auditor, had suddenly resigned. Deloitte Malaysia has since taken over the accounts.

In 2012, 1MDB made a US$1.75 billion private bond placement, one of the biggest private US dollar bond placements on record from Asia, through Goldman Sachs, to acquire a portfolio of power assets. Other bond placements also have been made. According to US laws, failure to file financial accounts is a violation of the law, which should be raising concerns among the bondholders.

 ‘Bold and Daring’
A United Malays National Organization operative told Asia Sentinel a major scandal is lurking in the fund, which is wholly owned by the country’s Ministry of Finance, although no clear evidence has emerged of the exact nature of the scandal.  

Former Prime Minister Mahathir Mohamad and former Finance Minister Daim Zainuddin, both of whom have soured on Najib, are said to be questioning the operation of the fund. There has been a rising tide of gossip about the fund’s political connections, particularly to Najib’s wife, Rosmah Mansor, and a close friend, Low Taek Jho, who was active in founding the fund. 

Jho Low, as he is known, has become a New York social figure, seen out with Paris Hilton and pouring Cristal champagne for a succession of showgirls.  He and Rosmah’s son by her first marriage, Riza Aziz, produced The Wolf of Wall Street, a major box office success that has been nominated for a Best Picture Oscar. Ironically, the film can’t be shown in Malaysia because of its excess profanity.

Low reportedly was behind Wynton Group, which showed an interest in bidding for the famed Claridge’s, Berkeley and Connaught hotels in London. According to a Malaysian website, in a court document filed in Ireland, Low made the approach in 2010.  According to the court filing, Low was said to have had the backing of an unnamed Malaysian “sovereign wealth fund,” which was not named. Low has acknowledged having friends in Khazanah Nasional Bhd, another Malaysian sovereign wealth fund. The 1MDB fund wasn’t mentioned

Little is known of 1MDB’s operations. As Asia Sentinel reported at the time, it raised hackles when it started in April 2009 as a fund arranged by Jho Low and started by the Terengganu state government, which borrowed RM10 billion (US$2.87 billion at 2009 rates). Critics questioned why an oil-rich state with revenues of RM5-7 billion a year would have to borrow money to start a sovereign fund rather than using windfall revenues from oil and other commodity bonanzas.

The Terengganu fund morphed into 1MBD under the Ministry of Finance in September 2009 to “focus on strategic development projects in the areas of energy, real estate, tourism and agribusiness.” The fund’s website quotes Najib saying its mission is to “be bold and daring… to break new ground and do things differently.”

1MDB soon acquired a strategic partner in an obscure Saudi firm, PetroSaudi International, headed by Tarek Essam Ahmad Obaid, a member of the vast Saudi royal family. Reports indicated that PetroSaudi had signed a memorandum of understanding with Ghana National Petroleum Corp. although the MOU has apparently not resulted in a major project.  

According to a statement by Azmi Khalid, then chairman of the Parliament’s Public Accounts Committee, 1MDB loaned PetroSaudi about US$1billion, leading to additional questions over why a government fund set up to explore investment in Malaysia was loaning money to a joint venture in Africa. PetroSaudi, despite rumored ties to the Saudi royalty, was unable to come up with its own cash in the joint venture but got 1MDB to accept a potential oil site in Turkmenistan. Subsequently, the loans to PetroSaudi climbed to US$1.7 billion.

Debt and not much else
An exhaustive probe of the sovereign fund by writers Ho Kay Tat and Afiq Isa for the Malaysian publication The Edge, found that about all 1MDB has to show so far “is a multi-billion ringgit debt portfolio, the bulk of which was used to buy several independent power producers at hefty price tags.” 

Its main asset is a 48-hectare chunk of land passed to the fund by the government when the Malaysian Air Force closed its base at Sungai Besi, near downtown Kuala Lumpur’s Golden Triangle. It is a near-priceless plot that 1MBD is to develop as a financial center called the Tun Razak Exchange, named for Najib’s late father. That work hasn’t started yet.

Through a series of complicated financial engineering moves in 2012, the loan to PetroSaudi was prematurely terminated and redeemed, according to Tony Pua’s presentation on the floor of Parliament.

“However,” Pua said, “the repayment of US$2.32 billion (RM7.93b) was made in a perplexing manner in a “segregated investment portfolio” based in the Cayman Islands. To date no one has been able to verify with any certainty who the investment portfolio manager is, the fund’s performance or for that matter, if the money actually exists.”

The “investment” in the Cayman Islands, Pua said, “raises highly suspicious questions as 1MDB is desperately trying to raise funds through new bond issuance in Malaysia to fund its aggressive acquisitions of independent power producers as well as its mega-projects in Bandar Malaysia and Tun Razak Exchange. In fact, 1MDB is already laden with an estimated more than RM40 billion in debt, and hence such investments is a luxury that 1MDB does not have.”

KPMG, in 1MDB’s first financial statement in 2010, raised an “emphasis of matter” over a US$1 billion investment in the PetroSaudi joint venture, which was subsequently converted into a US$1.2 billion (RM3.95b) loan within a period of less than six months. The “emphasis of matter” was removed in subsequent financial accounts as the joint venture was servicing the loan with interest payments, it was also highlighted that 1MDB extended an additional US$700 million (RM2.3b) in loans to the JV, despite receiving less than US$200 million in interest between 2011 and 2012.

To date,  no one has been able to verify with any certainty who the investment portfolio manager is, the fund’s performance or for that matter, if the money actually exists, Pua said.

Controversial Muslim Thinker and Politics


February 23, 2014

Controversial Muslim Thinker sets the cat among the canaries, again

by Terence Netto@http://www.malaysiakini.com

COMMENT They say politics makes for strange bedfellows. It looks like religion also does the same. Consider thinker Kassim Ahmad’s ties to former Prime Minister Dr Mahathir Mohamad – on Islamic exegesis, the two are birds of a feather.

kassim thinkerThe Controversial Muslim Thinker

This is best understood in the context of Voltaire’s famous criticism of Christian belief and practice at the onset of the Enlightenment in the 18th century – that incantations can kill a flock of sheep if administered with a certain quantity of arsenic.

In other words, faith should not be blind and unexamined beliefs are for bovines, not homo-sapiens.

In 1986, Kassim published a book – ‘Hadis: Satu Penilaian Semula (Hadith: A Reappraisal)’ – that espoused a subversive idea.This was that certain bases of Islamic practice and belief cannot sustain critical scrutiny. The book proposed the Quran as sole basis for sound Muslim belief and best practices.

That view Kassim reiterated to a conference which reviewed his thought held last Sunday at the Perdana Leadership Foundation, a think-tank associated with Mahathir (right).

The former Premier officiated at the conference’s opening and days later, after controversy flared over what Kassim had said, allowed that Kassim was a thinker whose opinions are easily misunderstood.

Like the publication of his book 28 years ago, Kassim’s latest musings have caused a furore. Its magnitude can be gauged in the days to come as Islamic authorities mull action against him.

It’s a safe bet, though, that none of them will take him on in a debate because they know that Kassim is a formidable foe to joust with; he will not easily recant his views.

Kassim blames Anwar Ibrahim – the Education Minister in the mid-1980s – for squelching the debate that ‘Hadis’ was obviously intended to provoke.Till today, Kassim nurses an enduring antipathy towards Anwar for the turn of events following publication of Kassim’s book in early 1986.

The ironies in history

Although all this occurred 28 years ago, the passage of decades has not had a becalming effect on the visceral feelings the controversy evoked at that time.

As recently as the middle of 2012, Kassim remained choleric at the mention of Anwar’s name, denouncing the Pakatan Rakyat leader with a vituperation that was ugly to behold.

It is not clear that Anwar had anything to do with the banning of Kassim’s book or with foreclosure of the debate.What’s less incontestable is that had the book not been banned, matters to do with Islamic thought and understanding in Malaysia would plausibly have transcended the present moment where some peninsula Muslim Malaysians insist that the term ‘Allah’ is exclusive to them.

In one of those ironies in which history abounds, in the debate over the ‘Allah’ issue, Anwar (left) is not opposed to non-Muslim use of the term – provided it is not abused – whereas Mahathir is for prohibition of the term to non-Muslims.

Kassim’s position on the issue is not known, but judging from what can be deduced of the man’s intellect, it would be a huge surprise if he agreed with Mahathir’s stance.

There is a strong strain of the iconoclast in Kassim, evident from half a century ago when he suggested that Malay folklore was wrong to view Hang Tuah as a hero because the real hero was Tuah’s friend, Hang Jebat, whom Tuah had killed.

Because of his tendency to examine the received wisdom on a subject, it wasn’t surprising that Kassim, who tuned 80 last September, gave vent at last Sunday’s conference to views that were even more controversial than the ones he aired in his 1986 work.

In what was purported to be his final testament – rendered at the conference themed ‘Thoughts of Kassim Ahmad: A Review’ – the man who started his intellectual journey as a cultural iconoclast and doctrinaire socialist, invited Muslims to return to the teachings of the Islamic faith as revealed in the Quran.

He said that believers would find Quranic teachings to be cognate with natural law (undang-undang alamiah).Kassim also espoused the view that Muslims do not need, like he claimed Christians did, a “priestly caste” to know what God commands of them and to perceive those commands’ consonance with what natural law tells them.

He argued that the female practice of wearing a headscarf (tudung) was a wrong interpretation of the Quranic stricture against bodily exposure, claiming that hair on a woman’s head is not included in the ‘aurat’ that is required by the Quran to be covered. He said that head hair must be aired for health (natural law) reasons.

An interesting tack to take

Thus, he took an example from nature to elucidate a Quranic teaching, demonstrating in the process the supposed truth of his argument that sound interpretation of Quranic revelation would necessarily be found to be compatible with what natural law teaches.

This is an interesting tack to take and is at variance to the asharite (God is power/God is will) school of Islamic thought. The asharite has been the dominant school since the 12th century when it gained the upper hand over the mutazilite (God is also reason) school of Islamic interpretation.

Since the victory of the asharite school, Islam’s answer to what is called “the Socratic puzzle” has been emphatic.But, pray, what is the Socratic puzzle?

It is a question that is so abstruse, it gives philosophy a bad name: Is a good action good because it is approved by God? Or is it approved by God because it is good?

In other words, do the categories of good and evil, right and wrong, have an existence independent of the divine will?

To this, the answer of the Asharite school is: An action is good because it is approved by Allah.

The asharites hold that there is no independent criterion of morality outside the will of Allah. And since the Quran is an absolutely literal and accurate account of that will – indeed in a deep sense, the Quran itself actually incarnates that will – there is no independent criterion of morality outside the text of the Quran.

In other words, if the Quran says something that seems morally offensive, it is morality that is mistaken, not the Quran.

The Mutazilites are inclined to find an interpretation of the Quran that accords with what natural law teaches. This is because they believe that there is an objective moral order to the universe and that this is discoverable through reason. That is why the Mutazilities are called rationalists.

Because these are febrile questions of religious interpretation and philosophy, and apt to foment divisive and emotional effects on believers – Voltaire advised that discussion of complex religious questions be held behind closed doors and out of the hearing of servants – Muslim thinkers approach them with circumspection.

Now and then, one or the other of them saunters on to the turf and inevitable detonations ensue.

Last Sunday, Kassim Ahmad walked into a blast-prone area and set off subversive ripples of resonance. He is likely to enjoy immunity because he did it at the Perdana Leadership Foundation

Last year about this time, Ibrahim Ali (right) escaped a sedition rap for threatening to burn bibles after Mahathir offered extenuations on the Perkasa chief’s behalf, following former attorney-general Abu Talib Othman’s admonishing incumbent AG Abdul Gani Patail against dilly-dallying on pressing charges.

This time round, Mahathir’s extenuations on behalf of Kassim are likely to have intellectually more beneficent uses.

The irony is that Kassim – like the man he detests, Anwar Ibrahim – is not likely to think much of the argument that the term ‘Allah’ ought to be the exclusive preserve of Peninsula Muslims; more certainly, he will laugh Mahathir’s reservation of the term for Peninsula Malays, to scorn.Not just politics, religion, too, makes for strange bedfellows.

The Malaysian Consumer and the Fight against Inflation


January 21, 2014

The Malaysian Consumer and the Fight against Inflation

by Tan Sri Dr. Mahboob Sulaiman@www.nst.com.my

As a society, we too have a role to play in ensuring that inflation is controlled. Let us exercise our power, as consumers, to control unreasonable price increases by judicious spending and economising on our energy use as well as changing our consumption spending pattern.–Dr. Mahboob Sulaiman

THE interest on inflation is reactivated now with the Consumer Price Index (CPI) approaching  three per cent.

Dr Mahboob SulaimanMalaysians are used to price stability for a long time, except for a few years, such as in 1973/1974, 1998, and in 2008. The inflation in 1973/74 and in 2008 was caused by an increase in oil and rice prices at the same time.

Some agitators recently conducted a demonstration on the eve of this new year, using the rising prices as an issue to air their grievances.I wonder what would they do if the country was experiencing an inflation rate of eight to 12 per cent annually as is being experienced for many years in China and India, given the countries’ rapid economic growth.

Blaming the authorities alone for the price pressure reflects a poor understanding of market forces. There is a market involving producers and consumers out there whose total effect determines the prices of products. This is the famous Adam Smith’s invisible hand or the market forces. The government’s policy to control prices only covers essential goods and services, enforced especially during festive seasons.

Inflation and high prices are two different things; inflation is a rate of change in general price level. One can have low inflation despite prevailing high prices of goods and services or high inflation at low price levels. It is the rate of annual price increase that is defined as inflation. Nevertheless, high price increases will invariably be translated into inflationary pressures.

High prices can be caused by high level of aggregate demand (demand-pull factor) when the economy grows beyond its sustainable levels. Our current rate of economic growth is still below our growth potential of about six to seven per cent per annum. Hence we cannot say that our current inflation is caused by excessive demand. There are also other contributing factors, such as rising cost of production including high wages, high cost of imports, and supply shortages as well as market imperfection.

One factor that may also cause increase in price level is declining rates of exchange which result in rising cost of imports. The Malaysian ringgit declined recently, with the rising value of the dollar under the impetus of the tapering policy of the Federal Reserve which led to outflows of fund from the region back to the United States, thus strengthening the US dollar vis-a-vis other currencies.

Hopefully, the decline in the ringgit will spur increases in exports thus helping our balance of payments position again. An improved external demand will help the nation to increase industrial production and a higher rate of economic growth.

The current increase in price level has not pressured our central bank to undertake monetary policy measures, such as raising interest rates and initiating open market operations. The bank is therefore still monitoring the price development.

Inflationary expectations by consumers and suppliers may result in price increases, too, as the nation is deliberating on toll increases, wage increases, increases in local government assessment rates and revision in electricity tariffs. Suppliers may have also increased the prices of certain goods now that the government has raised fuel price (RON95) and reduced sugar subsidy.

Powerful supply chain organisations can indeed raise prices much higher than the expected increase brought about by the 20 sen increase in RON95 fuel price and doing away with sugar subsidy. Analysing the supply chain using the input-output technique, tells us that supplies account for the bulk of costs of products and services. Thus, market intermediaries have a lot to explain the price increases if the resultant price adjustment after subsidy rationalisation appears unreasonable.

As usual, we as consumers are again at the disadvantage with price increases because of our weaker position as well as the lack of information on price conditions to enable us to exercise our purchasing power effectively and contribute to price stabilisation. However, this should not be the case. Consumers must exercise their power to ensure suppliers do not willy-nilly increase prices.

A detailed and comprehensive study of the causes of the current high prices needs to be donenajib-razak1 immediately so as to enable an accurate policy prescription to be implemented.

If supply is the cause of price increase then policy prescription may include import liberalisation and reducing domestic supply bottlenecks to increase domestic production and supply. In such a case, the policy response to increase KR1M (Kedai Rakyat Satu Malaysia) outlets therefore appears quite right.

Given the above explanation, one should not jump into conclusion that public policies have failed to arrest price increases. As a society, we too have a role to play in ensuring that inflation is controlled. Let us exercise our power, as consumers, to control unreasonable price increases by judicious spending and economising on our energy use as well as changing our consumption spending pattern.

Najib and his Big Spending Ministers lack EMPATHY


January 16, 2014

Najib and his Big Spending Ministers lack EMPATHY

by Jeswan Kaur@http://www.freemalaysiatoday.com

Puisi Kangkung

Pucuknya angkuh memanjat bukit,
tak sedar akar terendam air parit,
rakyat mengeluh lelah dan sakit,
sedikit diberi banyak diungkit..

wat is kangkung

Pucuknya angkuh memanjat bukit,
Tak sedar akar diair parit,
Bagaikan melepas anjing tersepit,
Dah jadi pemimpin , rakyat digigit.

-attributed to but denied by Ungku A. Aziz

 

Rosmah and NajibThe regular Malaysians are having it hard, having to deal with an expensive cost of living and at the same time being dictated to about their religion, that too by politicians who are hopelessly ignorant and insensitive in more ways than one.

That the start of 2014 has been turbulent for Malaysians in general and the non-Malays in particular is an understatement.

With the ruling Barisan Nasional government displaying zero empathy in relating to the hard-pressed rakyat’s plight in surviving the harrowing escalating cost of living, the people are left to their own devices to do what is best for them.

As such, Malaysians who are already bogged down with the challenge of coping with the onslaught of hardships can do without the sardonic remarks made particularly by the BN MPs.

Leading the way is the country’s Prime Minister Najib Tun Razak whose inability to feel for the rakyat has further worsened matters. While the rakyat back home suffers, Najib decided to enjoy himself abroad. It seems that both he and wife Rosmah Mansor were overseas during the Christmas and New Year period.

However, keeping in mind today’s harsh reality and the people’s struggle to come to grips with the rising cost of just about everything, from electricity tariffs to the proposed LRT ‘platform fees’, leaders like Najib should exercise wisdom each time he begins to open his mouth to address the rakyat, his intentions whatsoever.

Bad enough that the Najib-Rosmah indulgences come at the expense of the taxpayers’ welfare. It is unfortunate for the nation that Najib is one leader who fails to take cognisance from past mistakes.

Prodigal Najib

The Premier was recently lambasted by the very rakyat whose well-being he assured would be top priority. This time it was Najib’s callous statement that Malaysians are not thankful even though the price of kangkung (water spinach) has gone down.

In a video uploaded on YouTube on January 12, Najib who is also UMNO President, questioned why the government was always at the receiving end each time prices of goods increased but was never praised when prices came down.

“When prices of things go up, everything goes up, including sawi and kangkung. There are times when the prices of vegetables go up and down.Today I read in the newspaper that the prices of some things which have dropped. The price of kangkung increased before this and now it has gone down.When this happens, they don’t want to praise the government. But when it rises, they blame the government… This is not fair as it is due to weather conditions,” Najib was quoted as saying in the video.

It does tell just how much Premier Najib ‘understands’ the rakyat’s predicament. And that explains too why the people are fed up and decided to participate in the rally that took place at the iconic Dataran Merdeka on new year’s eve.

As for Najib, his very costly, the RM38 million worth ’1Malaysia’ programme has fallen flat on its face as far efficient governance goes, judging by the premier and fellow ministers’ addiction to profligacy.

Fooling the rakyat with ‘Putrajaya 11′

In the meantime, the 11 austerity measures outlined by Najib which Putrajaya would be implementing within the civil service to reduce expenditure and cut costs is meaningless if the leaders themselves are not prepared to control their disastrous spending habits.

Following in the footsteps of his ‘boss’ Najib, Agriculture and Agro-Based Industries Minister Ismail Sabri Yaakob thought he too could escape public scrutiny and flaying for the lavish wedding ceremony and dinner in big city Kuala Lumpur he held for his daughter.

Ismail’s daughter Nina Sabrina and celebrity Indonesian fashion designer Jovian Mandagie’s wedding included the akad nikah ceremony, the first to take place at the previous Istana Negara building before the palace was converted into a museum and renamed National Palace Royal Museum.

Then there was a two-day reception at a five-star hotel in Kuala Lumpur, attended by royalties, celebrities, politicians and socialites who were entertained by Indonesian diva Ruth Sahanaya and Malaysia’s Jamal Abdillah.

Just how much Ismail had frittered away on the Dec 14 and 15 reception is anyone’s guess as the minister is not telling.It is regrettable that Ismail got carried away with the glitz that comes with assuming power. The veteran minister could have done better than to find the RM25,000 paid to use the Istana Negara for eight hours a ‘value for money’ deal, simply because his son-in-law received a “good package” in return for the publicity.

Was that so? What about the six Balinese dancers in full regalia flown in to perform? Was there a ‘discount’ there too?To Ismail, the glamour and grandeur of a five-star hotel like the Shangri-La outweighed the humility of a community hall or balai rakyat.

Like Ismail, his colleague the Home Minister Ahmad Zahid Hamidi too is preoccupied withZahid HamidiX prestige. The latter hosted an extravagant birthday bash also at a five-star hotel in Kuala Lumpur which his guests claimed was a 2014 New Year’s party.

From Najib to his coterie of inept ministers, all share a common thread – their desperation to outdo one another not by way of serving the rakyat but by impressing friends by organising opulent dinners etc.

It is best that Najib’s economic adviser, Minister in the Prime Minister’s Department Abdul Wahid Omar knock some sense into premier Najib and the rest of the ‘spendthrift BN politicians’ to spend wisely.

It is these MPs who need an earful and not the rakyat when it comes to emptying the wallet without batting an eyelid.

Advising the already taxed Malaysians to look for alternatives and be thrifty is easy for the former banker- turned- politician.“I go to the market every week. I know that the prices of basic necessities are high, but consumers have a choice in what they spend their money on,” he was quoted as saying in a news report.

Dare Abdul Wahid tell the same to his ‘political masters’? Does he have the guts to tell boss Najib that it is all about ‘leadership by example’?

Jeswan Kaur is a freelance writer and a FMT columnist.

Remembering Tun Abdul Razak: “Putting People First”


January 14, 2014

Remembering Tun Abdul Razak: “Putting People First”

by Nazir Razak@http://www.themalaysianinsider.com

Nazir Razak2…there are signs that inter-ethnic and intra-ethnic tensions are once again approaching worrying levels. What can be done? There is a Malay proverb: “Sesat di Hujung Jalan, Balik ke-Pangkal Jalan.” Loosely translated, it means “When one has lost one’s way, one should return to the beginning.”… And “the beginning” here, in my view, is the values, commitment, vision and inclusiveness demonstrated and embodied by Tun Razak.–Nazir Razak

Thirty-eight years ago today, on January 14, 1976, Tun Abdul Razak Hussein passed away in London from complications wreaked by leukaemia.

Malaysia lost its Prime Minister. I lost my father. Malaysia (Malaya) was 19. I was nine. The days immediately after were shrouded in personal sorrow and national mourning.My four brothers and I sought to comfort our mother, while the public and heartfelt outpouring of grief throughout the country served as a resounding reminder that we were not alone in our time of tragedy.

I must confess that given my age and my father’s hectic schedule, I sometimes lament the factTunrazak14_300_575_100 that he gave so much to the country, leaving too little for his family. However, I have never wavered from being enormously proud of his selfless dedication to our young nation.

I did not get the time to know him. But imprinted in me are the values he imparted, the integrity that he insisted upon, above all. Yes, above all, including his family.

I recall the time when my brothers and I approached him one evening and asked that a swimming pool be built at Seri Taman, the Prime Minister’s residence where we lived.

The lawyer that he was, he insisted that we make our case with logical and rational arguments. We did so, and thought we had presented the argument pretty well, until we noticed his face had started to darken, and the eyes flashed with annoyance.

My father made it abundantly clear that while Seri Taman may be our home, the house belonged to the government and, hence, to the people. Anything spent on it would have to come from public funds, and there was no way he was going to allow the state coffers to be depleted on something as frivolous as a swimming pool.

“What will the people think?” he thundered. In my years of growing up, I actively sought to hear from people who knew my father well, including those who had worked with him in government, politics, the Merdeka movement and so on as well as his personal friends.

It was my only way of getting to know him. What stood out for me was that in almost every conversation I had about him, the qualities they always referenced were his values.

As the custodian of the nation’s coffers, his frugality was legendary.”You had to account for every cent, or he would be on your back,” one former Minister told me. Well, I knew that already. Not just from the swimming pool episode, but many anecdotes.

My elder brothers often talk about one of the rare opportunities they had to accompany him on an official trip to Switzerland.He made sure he paid their expenses himself, he was so careful with the cost of the trip to the government that he moved his whole entourage to a cheaper hotel than originally booked, and they dined over and over again at the cheapest restaurant in the vicinity of the hotel.

And then there was his final trip to Europe in October 1975 for medical treatment. He must have known that it could well be his last trip, yet he did not allow my mother to accompany him to save his own money; probably concerned about her financial situation after his passing.

She only managed to join him weeks later on the insistence of the cabinet and with a specially approved government budget for her travel.

His integrity was another trait that came up often in conversations. He was guided by what now seems a somewhat quaint and old-fashioned concept of public service; that a public servant is first and foremost a servant of the people whose trust must never be betrayed.

The other point that kept being repeated was his stamina. Many were later astonished to learn he had been suffering from leukaemia, given that when in office, he was constantly on the move, attending to official duties, immersing himself in the minutiae of policy and, of course, his famous surprise visits to constituencies around the country that allowed him to hear directly from the people about what was happening on the ground.

Of course, few people forget to recount Tun Razak’s dedication to rural development. He was “People First”, long before the sound bite.

But above all, what they unanimously emphasised was Tun Razak’s commitment to national unity – towards building a nation where every single one of its citizens could find a place under the Malaysian sun.

That vision was encapsulated in the two initiatives that my father spearheaded in the wake of the May 13, 1969 tragedy – the formulation of the Rukunegara in 1970 and the New Economic Policy in 1971.

The Rukunegara reconciled indigenous cultural traditions and heritage with the demands of a modern, secular state.

The NEP‘s goal, as outlined in the policy announcement, was the promotion of national unity to be undertaken via a massive experiment in socio-economic engineering through the twin thrusts of eradication of poverty irrespective of race and economic restructuring to eliminate identification of economic function with ethnicity.

The debate on the NEP rages on today. I myself have publicly remarked that something has gone awry in its implementation.The fixation on quotas and the seemingly easy route to unimaginable wealth for a select few have created an intra-ethnic divide in class and status, while fuelling inter-ethnic tensions. Both these developments serve to undermine, if not completely negate, the overarching goal of Tun Razak’s NEP, strengthening national unity.

What went wrong? Some have argued that the fault was affirmative action itself.  For me, it was because its implementation was skewed by the focus on the tactical approach rather than the commitment to the strategic goal.

The NEP has certainly helped eradicate poverty and reduced economic imbalances by spawning a Malay middle class. However, in terms of the larger vision, the best that can be said about the NEP is that it initially helped blunt the edges of racial conflict in the aftermath of May 13.

Thanks in part to the NEP, Malaysia did not follow Sri Lanka, which became embroiled in decades of strife between the immigrant Tamils and the indigenous Sinhalese.That is no small achievement. But the NEP promise of strengthening national unity has not been realised.

In fact, there are signs that inter-ethnic and intra-ethnic tensions are once again approaching worrying levels. What can be done? There is a Malay proverb: “Sesat di Hujung Jalan, Balik ke-Pangkal Jalan.” Loosely translated, it means “When one has lost one’s way, one should return to the beginning.”

And “the beginning” here, in my view, is the values, commitment, vision and inclusiveness demonstrated and embodied by Tun Razak.

I have mentioned earlier the remarks about his integrity, commitment to the concept of public service and his vision of a progressive, prosperous and united Malaysia. But let me close here by emphasising two other highlights of his legacy.

One, he was a true democrat. Two years after running the country as head of the National Operations Council, he disbanded the committee and restored democratic rule.

He held virtually dictatorial power as the NOC chief, but his worldview and values rested on a foundation of democratic rule, not dictatorship. His decision-making style exemplified this as well: he brought in all who needed to be involved and engaged in a consultative discussion before any major decision was adopted.

He never excluded those with contrarian views, he encouraged multiplicity of opinions in order to have the best chance of making a right final decision.

Two, while he was committed to helping improve the material quality of life for the majority Bumiputeras to avert another “May 13″, he viewed this as a national prerogative rather than a racial one. That, to me, explains his determination to involve Malaysia’s best and brightest in this quest, regardless of their racial or ethnic origin.

Just check out those who served him and his administration back then. They were and are, Malaysians all, united in their determination to rebuild this nation from the ashes of May 13.

That was Tun Razak’s legacy to Malaysia. We can best honour it by returning to “Pangkal Jalan”.

* Datuk Seri Mohd Nazir Razak is the son of the second Prime Minister, Tun Abdul Razak, and a brother of Prime Minister Datuk Seri Najib Razak. He is Managing Director and Chief Executive of the CIMB Group..Photograph courtesy Nazir Razak

Innovation, the “Third Arrow” and US-Japan Relations


January 11, 2014

east-west-center-asia-pacific-bulletinNumber 246 | January 10, 2014

ANALYSIS

Innovation, the “Third Arrow” and US-Japan Relations

By Sean Connell

Sean Connell, Japan Studies Visiting Fellow at the East-West Center in Washington, explains that “It is valuable to consider the potential impacts these strategies have not only for Japan, but also their interconnectivity with the US economy at a time when both countries face intensifying global competitive pressure.”

Japanese Prime Minister Shinzo Abe’s economic revitalization policies have energized Japan over the past year, boosting both corporate and public confidence and lifting the Nikkei stock index to heights unseen in recent years. The Abe government’s three-pronged strategy of aggressive monetary policy, fiscal policy, and structural reforms aims to eliminate deflationary mindsets after two “lost decades” of economic stagnation, stimulate consumption and investment, and spur new growth. As part of its growth strategy, the Abe government brought Japan into the Trans-Pacific Partnership (TPP) negotiations, presenting significant opportunities to strengthen Japan’s economic relationship with the United States.

A growing, prosperous Japan benefits the United States. Japan is the fourth-largest US export market, and US subsidiaries of Japanese companies employed more than 680,000 US workers in 2011. The two economies are increasingly integrated through trade, investment, and global supply chains. A TPP agreement will accelerate and further deepen integration by removing significant market access, regulatory, and other barriers in Japan to US exports. Moreover, the recent approval of US shale gas exports to Japan will make energy an increasing area of the bilateral economic partnership. The Abe government’s growth agenda shares with US domestic economic strategies the goal of spurring innovation to generate new productivity and growth engines. It is valuable to consider the potential impacts these strategies have not only for Japan, but also their interconnectivity with the US economy at a time when both countries face intensifying global competitive pressure. One consideration for policymakers is the matter of where engagement supports Japan’s growth strategies, and presents opportunities for bilateral cooperation in creating new industries and advancing related goals globally.

First, governments play key roles in facilitating conducive environments and policy frameworks for innovation, and in coordinating among various actors–including businesses, universities, non-governmental organizations, and entrepreneurs–from whose interactions innovations emerge. The Japan Revitalization Strategy announced in June 2013 indicates an active role for the Japanese government in advancing these proposals. This is important for enhancing basic research for which government support is vital, such as the proposed establishment of a Japanese version of the National Institutes of Health, along with university reforms. It will be essential to implement deep structural reforms, such as those required for TPP, electricity deregulation, and in labor and agriculture policy in order to overcome long-recognized constraints to productivity and Japan’s innovation ecosystem. The Abe government should, however, be careful to avoid actions that could inadvertently distort markets, including picking industry and standards champions, and consider appropriate exit strategies for government stimulus in order to allow competitive businesses and entrepreneurs to fully unleash innovative capabilities. These are issues with which the US also grapples, and that present useful opportunities for continued engagement and dialogue around best practices and policy solutions.

Second, coordination around innovation policy is increasingly important within the US-Japan relationship. Center stage for this is TPP, given the role trade and investment play in fostering innovation by encouraging competition and bringing new products, technologies, and ideas across borders. TPP presents opportunities to enhance key elements of innovation frameworks, including stronger intellectual property protections, greater alignment of standards-setting processes, opening market sectors closed to investment, removing localization barriers, improving transparency and eliminating regulatory impediments. Some of these issues remain challenges to foreign businesses in Japan, but on others Japan has strong rules and shared goals with the United States. This makes TPP an important venue for cooperation to ensure a high-standard agreement that encourages innovation in Japan, and fosters a more competitive environment across the Asia-Pacific region for Japanese and US innovations. The two governments are additionally exploring common issues in clean energy, the Internet economy, and other innovation-driven industries. These dialogues have increasingly incorporated both small and large businesses from both countries, positive for pragmatic discussions on policy, commercial developments, and areas of potential collaboration. Expanding this inclusive approach, and exploring untapped synergies across existing initiatives and institutional lines on cross-cutting innovation topics, could present beneficial opportunities. This includes in new growth areas, such as smart grid systems, health care technologies including regenerative medicine, and services for aging societies.

Third, innovation is borderless and requires a global orientation. Japan is world-leading in its innovation capabilities, but Japanese companies have stumbled in recent years in bringing these assets to global markets. Contributing factors have included business and organizational models, and an inward, domestic focus. The Abe administration’s growth strategy includes a comprehensive set of actions to address these and related challenges in Japan’s innovation ecosystem. These range from incentives for corporate governance reform and business organization, and encouraging more women and high-skilled foreign professionals in the workforce, to attracting foreign direct investment through special economic zones featuring bold regulatory reforms. Increased engagement with US partners, at multiple levels of government, the private sector, and civil society can support Japan as it moves forward with this agenda. For example, the two governments are discussing opportunities to facilitate more mergers and acquisitions into Japan, which could help introduce more global perspectives and get innovative Japanese goods, services, and ideas out to global markets. Leveraging the diverse networks of people and institutions across both countries already collaborating bilaterally and active in these areas could also contribute positively. Examples include entrepreneurial business competitions and women’s leadership programs such as those under the TOMODACHI initiative.

Building on this, stakeholder-driven initiatives could be valuable as models for collaboration in achieving these goals. For example, the International Institute for Carbon-Neutral Energy Research (I2CNER), a joint Kyushu University/University of Illinois institute funded by Japan’s Ministry of Education, Science and Technology, is emerging as a unique venue for US-Japan basic research collaboration. Initiated by researchers from both universities, I2CNER is not only developing innovative technologies, but also emerging as a laboratory for new practices in a Japanese university environment, including through introducing a US-style tenure system for researchers. A joint US-Japan smart grid demonstration project in Maui, which came on line in December 2013, is intended to develop a functioning smart grid system and business model that could be exported to other island or isolated communities. Additionally, Okinawa Prefecture and the State of Hawai’i have each taken the lead in opening ocean thermal energy conversion demonstration facilities and exchanging information to study the potential of this energy resource. These represent just a few examples of evolving opportunities for US-Japan cooperation at multiple levels in both countries, and which can serve as laboratories to explore in practical ways the two countries can pursue mutually beneficial innovation and growth objectives.

About the Author

Sean Connell is a Japan Studies Visiting Fellow at the East-West Center in Washington. He can be contacted via email at spconnell@gmail.com.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Damien Tomkins, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

For comments/responses on APB issues or article submissions, please contact washington@eastwestcenter.org.Honolulu, HI

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A Vortex of UMNO’s own making threatens Malaysia


January 14, 2014

A vortex of UMNO’s own making threatens Malaysia

by Dr.Ooi Kee Beng

The C-3To every major flow of events, there is always a backflow, and the stronger that major flow, the greater the backflow.But unlike with water, social flows are not so easily read and one can easily mistake major flows for backflows, and vice versa.

In the case of Malaysia, the last 15 years have seen such profound changes that not only are a lot of scholarly books published before that now seem outdated and irrelevant, the same can be said of a lot of the politicking.

And in a last-ditch attempt by conservatives to preserve inter-ethnic divisions, religious controversies have suddenly exploded, poisoning public debate. This has shocked some and confused many others at a time when economic and social problems are looming larger.

So why is Islam being used so vigorously by certain factions to distress non-Muslims and divide Muslims? And why has the government been allowing it? To be sure, that is probably due to indecision on the part of the country’s top leadership, but this in itself is symptomatic of deeper ills that the government is conscious of.

After all, reforms have stubbornly been on the agenda of the ruling coalition since former Prime Minister Mahathir Mohamad retired in 2003. Now, the best way to distinguish the main flow from the backflow is to focus on the sociological transformations in Malaysia today.

These include urbanisation of the youthful Malay community; new media undermining old media control of public discourse; the widening of the income gap at a time when living costs are rising; the regionalisation of the labour market; the revival of civil society; and the rise of neighbouring countries as competitors for foreign direct investments. These factors boil down to a polarising battle between the two coalitions: Barisan Nasional (BN) and Pakatan Rakyat (PR).

Acceptance required

Breaking out of this stalemate will need some enlightened and innovative leadership. It requires acceptance by the ruling coalition, on the one hand, that it will never again wield as much power as it had enjoyed for 50 years; and acceptance by the Opposition that UMNO will remain a major party for a long time to come even if it loses power. Each has to realise that the other is here to stay.

Where the popular vote is concerned, the two are more or less equally strong at the moment. But one has been falling while the other has been rising — meaning that their respective view of what is happening is quite different from each other’s.

The BN is still suffering from a phantom sense of self-importance following curtailment of its power — the same way someone who has recently lost an arm will experience itching where his arm used to be.

The opposition fears that the strong support it presently enjoys may not continue growing; and that from now on, every new vote gets harder and harder to win. That is why Pakatan parties are trying to remain as proactive as possible and are planning to penetrate the semi-rural areas in states such as Johor, Sarawak and Sabah, where their best chances of gaining new votes lie.

Playing safe now could see them losing momentum. In contra-distinction to the racial and religious issues still favoured by UMNO, opposition parties will have to concern themselves with people empowerment, good governance and cost of living. After all, over the last 15 years, these have been the issues capturing the public imagination.

UMNO must manage backflow

As for the ruling coalition, its promises of reforms over the last 10 years have not appeared sincere enough to win it votes. Its meek attempts at transformation have instead worried internal peripheral factions enough for them to use provocation to change the game.

This treacherous backflow — which has gone from provoking the non-Malay community, to targeting non-Muslims Christians as religious enemies — is not something that UMNO or the country can afford to lose control over.

In this dangerous situation, the government needs more than ever to practise some backflow prevention. A backflow that muddies the waters too much will not necessarily reverse the flow — it will more likely generate a whirlpool that brings chaos instead.

That is not something anyone really wishes for.–www.themalaysianinsider.com

* Ooi Kee Beng is Deputy Director of the Institute of Southeast Asian Studies. His latest book is Done Making Do: 1Party Rule Ends in Malaysia (2013).

Pak Kadiaq: Talking Tough on Najib


January 8, 2014

Pak Kadiaq: Talking Tough on Najib

by V. Anbalagan, Assistant News Editor@www. themalaysianinsider.com

kadir_jasin_350_238_100Pak Kadiaq

Pro-government supporters should realise that Prime Minister Datuk Seri Najib Razak is not above criticism for Putrajaya’s cost-cutting measures which had resulted in price hikes, says a former editor of an UMNO-linked newspaper.

Veteran journalist Datuk A. Kadir Jasin  wrote that Najib and his advisers were not above criticism when the public reacted to Putrajaya’s way of managing the national economy.

“It was Najib and his advisers during the general election who promised the people that prices will not be raised. So, who is going back on their word?” he asked in a posting in his The Scribe blog yesterday.

He also questioned whether the Prime Minister was an absolute monarch who could not be criticised or questioned. Or is he a living saint who is free from any kind of slip-ups?” asked Kadir, who was the Group Editor-in-Chief of the New Straits Times when Tun Dr Mahathir Mohamad was the Prime Minister.

Since September, Putrajaya has introduced a series of cost-cutting measures to rein in a chronic budget deficit which includes a reduction of fuel subsidies, removal of subsidy for sugar, allowed an increase in power tariffs and confirmed the introduction of the goods and services tax (GST). Putrajaya is also mulling a revision of toll rates while the 20% rebate offered to frequent users of tolled roads in the Klang Valley is being scrapped.

The increasing cost of goods and services had also triggered a protest on New Year’s Eve by an undergraduate non-governmental organisation, Turun, which attracted more than 10,000 people.

In defending his strident criticism of Najib, the veteran journalist also rebuked his critics who had claimed that he only lambasted the Prime Minister on “economic management but did not offer advice and pointers”.

Kadir felt his critics did not read his long “advice” to Najib and his government through his blog and also through his writings elsewhere.Abdullah Ahmad Badawi was the Prime Minister following drastic hike in the price of fuel and cooking gas which resulted in the price increase of essential items and services.

“I had written several articles then to remind the government on the implication and ways to reduce the burden of consumers,” said Kadir, who owns Berita Publishing which produces the Malaysian Business magazine. He added it was not his responsibility to teach Putrajaya economic management for that was the responsibility of ministries, government agencies and the advisers of the Prime Minister who were learned.

“My job is to offer feedback. However, there are those who equate that to going against the establishment. This is the result of a society who are not critical and extremely partisan,” he said.

Kadir also said that he had repeatedly stated that subsidy was unsustainable, distorted the market and led to the people to rely heavily on the government. “But I only questioned the way the government, especially under Abdullah dan Najib, managed the subsidy, price control, distribution of savings from the subsidy and ways to reduce financial wastage,” he added