Has GDP outgrown its use?


July 7, 2014

Has GDP outgrown its use?

By David Pilling, July 4, 2014@ http://www.ft.com

Governments and the media obsess about it while statisticians endlessly fiddle – but what is the real point of GDP and can it ever be accurately measured?

GDPWhat do the price of hair-salon services in Beijing and sexual services in London have in common? The answer is that, depending on how you measure them – or indeed whether you measure them at all – the size of the Chinese and British economies will expand or contract like an accordion.

In April, statisticians working under the aegis of the World Bank determined that China’s gross domestic product was far bigger than they had previously realised. China was, in fact, just about to overtake the US as the world’s largest economy, many years earlier than expected. The reason? Statisticians had been overestimating the prices of everything from haircuts to noodles. As a result, they were underestimating the purchasing power of Chinese people and thus the size of the economy.

Last month, British statisticians worked some magic too. They declared that the UK economy – admittedly only a fraction of China’s size – was 5 per cent bigger than previously thought. It was as if they had suddenly discovered billions of pounds in annual revenue at the back of the nation’s couch. Here the explanation was simpler. Among other tweaks to their methodology, statisticians started counting the economic “contribution” of prostitution and illegal drugs.

Diane CoyleGross domestic product has become a ubiquitous term. It is how we measure economic success. Countries are judged by how much they have of it. Governments can rise and fall according to how effectively their economies create it. Everything from debt levels to the contribution of manufacturing is measured against it. GDP is what makes the world go round. Yet what exactly does it mean? Outside a few experts, most people have only a shaky understanding. In fact, the more you delve into the whole concept of GDP – one of the most centrally important ideas in modern life – the more slippery it becomes. In the words of Diane Coyle, an economist who recently wrote an entire book on the subject, “GDP is a made-up entity.”

Coyle is a defender of GDP as a tool for understanding the economy so long as we grasp its limitations. When I spoke to her by phone, she was nevertheless amused at what she called “the regular fandango” and “public ritual” that accompanies the quarterly release of GDP data. Even though those numbers are often within the margin of error and routinely revised, we invest them with as much meaning as a priest does his liturgies.

The title of Coyle’s book, GDP: A Brief But Affectionate History, makes clear her basic allegiance to the concept. Yet, she warns, “There is no such entity as GDP out there waiting to be measured by economists. It is an artificial construct … an abstraction that adds everything from nails to toothbrushes, tractors, shoes, haircuts, management consultancy, street cleaning, yoga teaching, plates, bandages, books and all the millions of other services and products.” The people who measure GDP, then, are not involved in a scientific enterprise, such as discovering the mass of a mountain or the longitude of the earth. Instead, they are engaged in what amounts to an act of imagination.

GDP is a surprisingly new idea. The first national accounts that resemble modern ones were produced in the US in 1942. It is not particularly odd that governments didn’t bother much about sizing up their economies before then. Until the industrial revolution, agricultural societies barely grew at all. The size of an economy was thus almost entirely a function of national population. In 1820, China and India made up roughly half of global economic activity by sheer virtue of the number of people who lived there.

Simon Kuznets (right), the Belarusian-American economist often credited with inventing GDP in the 1930s, had severekuznets reservations about the concept right from the start. Coyle told me, “He did a lot of the spade work. But conceptually he wanted something different.” Kuznets had been asked by US president Franklin Delano Roosevelt to come up with an accurate picture of a post-crash America that was trapped in seemingly interminable recession. Roosevelt wanted to boost the economy through spending on public works. To justify his actions, he needed more than just snippets of information: freight-car loadings or the length of soup-kitchen lines. Kuznets’ calculations indicated that the economy had halved in size from 1929 to 1932. It was a far more solid basis on which to act.

When it came to data, Kuznets was meticulous. But what, precisely, should be measured? He was inclined to include only activities he believed contributed to society’s wellbeing. Why count things like spending on armaments, he reasoned, when war clearly detracted from human welfare? He also wanted to subtract advertising (useless), financial and speculative activities (dangerous) and government spending (tautological, since it was just recycled taxes). Presumably he wouldn’t have been thrilled with the idea that the more heroin consumed and prostitutes visited, the healthier an economy.

Kuznets lost his battle. Modern national income accounts include both arms sales and investment banking services. They don’t distinguish between social “goods” – say, spending on education – and social “bads” (or necessities) – say, gambling, repairing the damage after hurricane Katrina or preventing crime. (Countries without much crime miss out on related economic activity such as security guards and repairing broken windows.) GDP is amoral. It is defined simply as the total monetary value of everything that has been produced in a given period.

The first thing to understand about GDP is that it is a measure of flow, not stock. A country with high GDP might have run down its infrastructure disastrously over years to maximise income. The US, with its ageing airports and less-than-pristine roads, is sometimes accused of precisely that.

…At the heart of the GDP debate is an anxiety that our societies have been somehow hijacked by pursuit of a single data point. No one seriously imagines that simply making an abstract number bigger and bigger can be a worthy goal in its own right. Yet GDP has become such a powerful proxy for what we do hold dear that we find it hard to see past it. Few economists are blind to its many limitations. Most, nevertheless, give the impression of wishing to maximise it at all costs.

Coyle argues that we should invent new ways to reflect economic reality. She advocates what she calls the “dashboard approach”. The Better Life Index, developed by the Organisation for Economic Co-operation and Development, for example, allows users to compare the performance of countries according to 11 criteria ranging from income and housing to health and work-life balance. By plugging in the criteria you value most you can see how a particular economy performs. If, say, employment is your priority, then Switzerland and Norway are best. If, on the other hand, you’re more interested in a combination of high income and education, then the US is the place to be.

In theory, this approach would allow voters to decide what is important and politicians to craft policies to achieve desired results. In practice, the combination of multiple criteria measured according to multiple yardsticks renders the exercise subjective and fuzzy. GDP may be anachronistic and misleading. It may fail entirely to capture the complex trade-offs between present and future, work and leisure, “good” growth and “bad” growth. Its great virtue, however, remains that it is a single, concrete number. For the time being, we may be stuck with it.

David Pilling is the FT’s Asia editor

 

The Myth of the Strong Leader by Archie Brown – Book Review


July 6, 2014

The Myth of the Strong Leader by Archie Brown – review

by Richard Reeves — The Guardian, Thursday 3 July 2014 10.00 BS

http://www.theguardian.com/books/2014/jul/03/myth-strong-leader-political-leadership-modern-age-archie-brown-review

 

Attlee and Truman get top marks, but not Thatcher or Blair: this is an excellent argument for the virtues of collegiate leaders

The Myth of the Strong LeaderAmericans love to honour their former presidents: paintings, statues, libraries. Even airports get relabelled. Since 1963, travellers to New York have been touching down at JFK; Washington DC is served by Reagan national airport. There is now a campaign, led by senator Claire McCaskill of Missouri, to give Harry Truman his due by renaming DC’s main train station Truman Union station. But the plan is facing an unexpected opponent, from beyond the grave: Truman himself. It turns out that Truman wanted a “living memorial”, rather than bricks and mortar. A scholarship programme in his name was established, helping students on their way to a career in public service. The legislation founding it, drafted in consultation with Truman’s friends and family, states: “The Harry S Truman scholarship program as authorised by this chapter shall be the sole federal memorial to President Harry S Truman.

This will please Archie Brown, for whom Truman is something of a hero. In contrast to self-styled “strong” leaders, seeking to achieve their aims through dominance and diktat, Truman was an instinctively collegiate president, delegating significant authority to his colleagues – especially his two secretaries of state, George Marshall and Dean Acheson. As Brown writes: “It was characteristic of Truman’s style that the most outstanding foreign policy achievement of his presidency is known as the Marshall Plan, not the Truman Plan.”

Brown points out that Truman was brought into the presidency as a result of the death of FDR. He was “a reluctant vice-president of the United States and subsequently a reluctant president”. This is, it seems, a good thing. In his sweeping history and analysis of political leadership, Brown comes close to endorsing Plato’s view that power should only be entrusted to those who do not seek it.

Truman QuoteTruman was modest not only about his own status, but about the powers of the presidency itself. While many US presidents – perhaps most – feel the need to exaggerate their powers, Truman said: “I sit here all day trying to persuade people to do the things they ought to do without my persuading them … That’s all the powers of the president amount to.”

Brown has provided in The Myth of the Strong Leader  two books in one. The first, as indicated by the title, is an opinionated treatise on the idea of political leadership. The second, which takes up the bulk of the book, is a rich description of different varieties of political leadership in diverse cultures. It is hard to imagine a better guide than Brown, who has lived and worked in the UK, US and Russia, and is both an outstanding political scholar and an elegant, witty writer.

First, the polemic. He is out to topple the idea of the “strong leader”, arguing that party leaders matter little to electoral outcomes, and wield limited individual power, except – and often fatally – in foreign policy. Clement Attlee, who became prime minister just three months after Truman became president, gets the nod of approval from Brown. Like Truman, he was a natural delegater, and content to have powerful ministers running their departments – Bevin, Bevan, Cripps, Gaitskell, Wilson. As Bevin’s biographer Alan Bullock (no Attlee acolyte) pointed out: “No politician ever made less effort to project his personality or court popularity.”

Thatcher and BlairNo prizes for guessing the prime ministers who earn lower marks for leadership style: Lloyd George, Neville Chamberlain, Margaret Thatcher and Tony Blair. All suffered, according to Brown, from a suboptimal conception of the role of the head of a government: “that of the leader as boss”. And all were ejected at the hand of their own colleagues, rather than the ballot box. But, with the exception of Chamberlain, all also make it into the top 10 of any poll ranking of great 20th-century prime ministers: the “best” leaders, in Brown’s sense, may not be the ones voters are typically electorally attracted to.

Political leaders err when they come to believe too strongly in their own powers and perception: a form of personal exceptionalism that disfigured the premierships of both Thatcher and Blair. Brown records Kenneth Clarke‘s recollection of Thatcher exclaiming: “Why do I have to do everything in this government?” He is particularly strong on identifying foreign policy as a dangerous area for overreaching political leaders. He brackets Blair/Iraq with Eden/Egypt, and painfully teases out, in Blair’s case, the path to war. There is a well-known tendency for prime ministers to tire of domestic politics, or what Max Weber described as the “slow, strong drilling through hard boards”, and turn to foreign adventures instead.

Towards the end of his time in office, Blair started to complain about the delay between “the flash and the bang” in relation to some policy reform. Ministers realised that Blair had picked up military terminology and was applying it to, say, the constitutional status of foundation hospitals. Compared with the complex, sluggish nature of public service reform, foreign policy, and especially military action, becomes seductive. You can bomb Baghdad tomorrow; improving the quality of early-years education will take longer.

Colleagues can seem an inconvenience, even if – perhaps especially if – they are foreign secretary. Contrast Robin Cook‘s treatment at Blair’s hands with Denis Healey’s response to Harold Wilson‘s desire to assist the Americans in Vietnam: “Absolutely not!” (Or at least, that’s how Healey records it.)

In the second half of the book, Brown provides a four-fold typology of political leadership styles: redefining, transformational, revolutionary and totalitarian. For each, a comprehensive global history is provided, complete with biographical sketches of every important political leader in the last century. On almost every page Brown offers us a historical tidbit or anecdote. (I did not know, for instance, that Goebbels presented Hitler with a German translation of Thomas Carlyle’s biography of Frederick the Great.)

What he calls “redefining” leaders are those who change politics, and in particular by changing “people’s thinking on what is feasible and desirable”, he writes. They “redefine what is the political centre, rather than simply … placing themselves squarely within it”. Attlee and Thatcher were redefining leaders, Macmillan and Blair were not: “Blair accepted the new centre-ground of British politics that Thatcher and like-minded colleagues had helped to create.”

Paris_Charles_de_GaulleStatue of De Gaulle in Paris

A “transformational’ leader is one who changes their nation in some systematic way: Mandela in South Africa; Abraham Lincoln in the US; Gorbachev in the USSR; De Gaulle, founder of the Fifth Republic, in France. These are leaders who leave the economic or political system of their country altered. By definition, they are rare, especially in settled polities. Brown may set the bar a bit too high here. Perhaps LBJ, who brought black Americans into the national fold and laid the foundations for US postwar welfare could be seen as having transformed his nation; ditto Attlee, for the creation of the NHS. Brown concedes that Blair may have a small claim to be transformational as a result of his semi-accidental constitutional reforms. But the only contemporary British politician with the potential to be transformational is Alex Salmond, should he succeed in breaking Scotland off from the UK.

In his desire for more humility in political leaders, Brown longs for a world in which political parties carry more weight, relative to their leaders. In his view, leaders have no role in setting the goals of the party, merely in implementing them. “If political parties become moribund,” he warns, “so will democracy.” This seems utopian and oddly shortsighted. Strictly defined, tightly whipped political parties have often acted against the democratic grain, rather than with it. It is not clear that democracy lives or dies with the party system.

At points, I wasn’t sure if Brown was describing the world as it is, or as he wished it could be. It is quite likely that the UK is headed for more coalition government in the future, which requires precisely the kind of collegiate leadership Brown admires. But for such leaders to succeed electorally will require a broad shift in political and popular culture. The “strong leader” may be a myth, but it is a politically powerful one.

Inequality Is Not Inevitable


July 2, 2014

J StiglitzAN insidious trend has developed over this past third of a century. A country that experienced shared growth after World War II began to tear apart, so much so that when the Great Recession hit in late 2007, one could no longer ignore the fissures that had come to define the American economic landscape. How did this “shining city on a hill” become the advanced country with the greatest level of inequality?

One stream of the extraordinary discussion set in motion by Thomas Piketty’s timely, important book, “Capital in the Twenty-First Century,” has settled on the idea that violent extremes of wealth and income are inherent to capitalism. In this scheme, we should view the decades after World War II — a period of rapidly falling inequality — as an aberration.

This is actually a superficial reading of Mr. Piketty’s work, which provides an institutional context for understanding the deepening of inequality over time. Unfortunately, that part of his analysis received somewhat less attention than the more fatalistic-seeming aspects.

Over the past year and a half, The Great Divide, a series in The New York Times for which I have served as moderator, has also presented a wide range of examples that undermine the notion that there are any truly fundamental laws of capitalism. The dynamics of the imperial capitalism of the 19th century needn’t apply in the democracies of the 21st. We don’t need to have this much inequality in America.

Our current brand of capitalism is an ersatz capitalism. For proof of this go back to our response to the Great Recession, where we socialized losses, even as we privatized gains. Perfect competition should drive profits to zero, at least theoretically, but we have monopolies and oligopolies making persistently high profits. C.E.O.s enjoy incomes that are on average 295 times that of the typical worker, a much higher ratio than in the past, without any evidence of a proportionate increase in productivity.

If it is not the inexorable laws of economics that have led to America’s great divide, what is it? The straightforwardDivide answer: our policies and our politics. People get tired of hearing about Scandinavian success stories, but the fact of the matter is that Sweden, Finland and Norway have all succeeded in having about as much or faster growth in per capita incomes than the United States and with far greater equality.

So why has America chosen these inequality-enhancing policies? Part of the answer is that as World War II faded into memory, so too did the solidarity it had engendered. As America triumphed in the Cold War, there didn’t seem to be a viable competitor to our economic model. Without this international competition, we no longer had to show that our system could deliver for most of our citizens.

Ideology and interests combined nefariously. Some drew the wrong lesson from the collapse of the Soviet system. The pendulum swung from much too much government there to much too little here. Corporate interests argued for getting rid of regulations, even when those regulations had done so much to protect and improve our environment, our safety, our health and the economy itself.

But this ideology was hypocritical. The bankers, among the strongest advocates of laissez-faire economics, were only too willing to accept hundreds of billions of dollars from the government in the bailouts that have been a recurring feature of the global economy since the beginning of the Thatcher-Reagan era of “free” markets and deregulation.

The American political system is overrun by money. Economic inequality translates into political inequality, and political inequality yields increasing economic inequality. In fact, as he recognizes, Mr. Piketty’s argument rests on the ability of wealth-holders to keep their after-tax rate of return high relative to economic growth. How do they do this? By designing the rules of the game to ensure this outcome; that is, through politics.

So corporate welfare increases as we curtail welfare for the poor. Congress maintains subsidies for rich farmers as we cut back on nutritional support for the needy. Drug companies have been given hundreds of billions of dollars as we limit Medicaid benefits. The banks that brought on the global financial crisis got billions while a pittance went to the homeowners and victims of the same banks’ predatory lending practices. This last decision was particularly foolish. There were alternatives to throwing money at the banks and hoping it would circulate through increased lending. We could have helped underwater homeowners and the victims of predatory behavior directly. This would not only have helped the economy, it would have put us on the path to robust recovery.

OUR divisions are deep. Economic and geographic segregation have immunized those at the top from the problems of those down below. Like the kings of yore, they have come to perceive their privileged positions essentially as a natural right. How else to explain the recent comments of the venture capitalist Tom Perkins, who suggested that criticism of the 1 percent was akin to Nazi fascism, or those coming from the private equity titan Stephen A. Schwarzman, who compared asking financiers to pay taxes at the same rate as those who work for a living to Hitler’s invasion of Poland.

Our economy, our democracy and our society have paid for these gross inequities. The true test of an economy is not how much wealth its princes can accumulate in tax havens, but how well off the typical citizen is — even more so in America where our self-image is rooted in our claim to be the great middle-class society. But median incomes are lower than they were a quarter-century ago. Growth has gone to the very, very top, whose share has almost quadrupled since 1980. Money that was meant to have trickled down has instead evaporated in the balmy climate of the Cayman Islands.

With almost a quarter of American children younger than 5 living in poverty, and with America doing so little for its poor, the deprivations of one generation are being visited upon the next. Of course, no country has ever come close to providing complete equality of opportunity. But why is America one of the advanced countries where the life prospects of the young are most sharply determined by the income and education of their parents?

Among the most poignant stories in The Great Divide were those that portrayed the frustrations of the young, who yearn to enter our shrinking middle class. Soaring tuitions and declining incomes have resulted in larger debt burdens. Those with only a high school diploma have seen their incomes decline by 13 percent over the past 35 years.

Where justice is concerned, there is also a yawning divide. In the eyes of the rest of the world and a significant part of its own population, mass incarceration has come to define America — a country, it bears repeating, with about 5 percent of the world’s population but around a fourth of the world’s prisoners.

Justice has become a commodity, affordable to only a few. While Wall Street executives used their high-retainer lawyers to ensure that their ranks were not held accountable for the misdeeds that the crisis in 2008 so graphically revealed, the banks abused our legal system to foreclose on mortgages and evict people, some of whom did not even owe money.

More than a half-century ago, America led the way in advocating for the Universal Declaration of Human Rights, adopted by the United Nations in 1948. Today, access to health care is among the most universally accepted rights, at least in the advanced countries. America, despite the implementation of the Affordable Care Act, is the exception. It has become a country with great divides in access to health care, life expectancy and health status.

In the relief that many felt when the Supreme Court did not overturn the Affordable Care Act, the implications of the decision for Medicaid were not fully appreciated. Obamacare’s objective — to ensure that all Americans have access to health care — has been stymied: 24 states have not implemented the expanded Medicaid program, which was the means by which Obamacare was supposed to deliver on its promise to some of the poorest.

We need not just a new war on poverty but a war to protect the middle class. Solutions to these problems do not have to be newfangled. Far from it. Making markets act like markets would be a good place to start. We must end the rent-seeking society we have gravitated toward, in which the wealthy obtain profits by manipulating the system.

The problem of inequality is not so much a matter of technical economics. It’s really a problem of practical politics. Ensuring that those at the top pay their fair share of taxes — ending the special privileges of speculators, corporations and the rich — is both pragmatic and fair. We are not embracing a politics of envy if we reverse a politics of greed. Inequality is not just about the top marginal tax rate but also about our children’s access to food and the right to justice for all. If we spent more on education, health and infrastructure, we would strengthen our economy, now and in the future. Just because you’ve heard it before doesn’t mean we shouldn’t try it again.

We have located the underlying source of the problem: political inequities and policies that have commodified and corrupted our democracy. It is only engaged citizens who can fight to restore a fairer America, and they can do so only if they understand the depths and dimensions of the challenge. It is not too late to restore our position in the world and recapture our sense of who we are as a nation. Widening and deepening inequality is not driven by immutable economic laws, but by laws we have written ourselves.

This is the last article in The Great Divide.

 

Mustapa Mohamed:Malaysia’s Productivity grew by 2.3% in 2013


June 26, 2014

Mustapa Mohamed: Malaysia’s Productivity  grew by 2.3% in 2013

Report by BERNAMA dated June 25, 2014

Malaysia Productivity Report 2013-2014Malaysia registered a productivity growth of 2.3% last year to a productivity level of RM60,437 from RM59,064 in 2012

Based on the Productivity Report 2013/2014 which was launched today by the Minister of International Trade and Industry (Miti), Mustapa Mohamed, the growth has helped Malaysia’s Gross Domestic Product (GDP) to expand 4.7% to RM786.69 billion in 2013, supported by a growth in employment of 2.3%.

MUSTAPA MOHAMAD 02In his speech at the launch, Mustapa (left) said the 2.3% growth in labour productivity compared to two per cent in 2012 could be attributed to the performance of key sectors of the economy, as well as technological progress, capital deepening and widening and the quality of labour.

“The launching of the Productivity Report for 2013/2014, in its 21 years running, strengthens the government’s agenda to enhancing the nation’s productivity. In this report, Malaysia Productivity Corporation (MPC) has emphasised the productivity framework which is based on shared Malaysian values of collaboration, coordination, communication and competency that drives national development agendas such as the Economic Transformation Programme, the Government Transformation Plan and the Malaysia Plans,” he said.

According to the Productivity Report, the services and construction sectors performed well in 2013, with labour productivity growing by 4.8% and 5.2% respectively. However, labour productivity in the agriculture sector declined by 3.5%.

The reported added that MPC made a few recommendations to address the issues facing Malaysia’s productivity goals such as how to nurture a competitive and productive mindset, promote incentives within targeted industries and strengthen regulatory review to boost national productivity.

Mustapa said Malaysia’s productivity growth surpassed that of many advanced economies, including Australia (1.4%), Japan (1.3%), Singapore (1.6%), South Korea (1.7%) and the United States (0.9%).

On another note, Mustapa said in the first three years of the Tenth Malaysia Plan (10MP) implementation, the average contribution of Total Factor Productivity (TFP) to the country’s GDP was 19.7%. He said in terms of labour’s contribution, the country needed to improve the quality of labour by strengthening policies and offer firms the right incentives to create modern jobs that will attract higher wages and increase productivity through the application of technology.

“Thus, all of us, including those in the government and representatives in trade unions and associations, must make a concerted effort to ensure higher growth with improvements in technology, research and development as well as investment in human capital,” he added.

Malaysia’s Top Economist and Mr.Transformer speaks


June 24, 2014

Malaysia’s Top Economist and Mr. Transformer speaks

I missed this one dated June 20, 2014, posted in Malaysiakini because Dr. Kamsiah and I were away in Taipei. Reading it, I thought the authorities in Taiwan should have appointed Dato Seri Idris Jala as their chief propagandist.  So here it is:

idris guitarSenator Dato’ Seri Idris Jala is a Minister in the Prime Minister’s Department and CEO of Malaysia’s Performance Management and Delivery Unit (PEMANDU), an organization tasked with ensuring Malaysia meets the goals set forth under the National Transformation Programme (NTP).

He spoke with The Prospect Group about the Economic Transformation Programme’s (ETP) goals for 2014, which includes Gross National Income (GNI), investment, and job creation, and ensuring Malaysia’s economy is resilient in the face of global uncertainty.

Q: What are the ETP’s main focal points for 2014?

JALA:

Our focal point for 2014 is to make sure we implement. We have to implement what we promised under the ETP as well as the GTP. The public wants results and the way in which we have to fulfill those results is to execute the initiatives within the 12 National Key Economic Areas (NKEAs) that will achieve big results fast.

Q: What are your 2020 GNI, investment, and job creation goals?

JALA:
By the year 2020, we would like to have become a high-income economy that fulfills the GNI targets of $15,000 per capita. That is our long-term goal. To do that will require a lot of investment; something like $444bn is needed to propel the Malaysian economy to grow. We also need to create 3.3m jobs; you have to create a lot more high-paying jobs so that the citizens can benefit. So those are the three true-North targets: gross national income per capita, private investments that will drive it, and jobs that are created. The good news today is that, from when we first began, in four years, we have been able to grow our total GNI per capita by 50%. We are at the halfway mark today. So we are very pleased with the progress made on the GNI target. With regard to job creation, we are supposed to create 3.3m jobs, and we have created 1.3m jobs in the four-year period. So that is really very good.

We have met more than 60% of the investment targets, signifying we are well on the way to achieving this as well. My view today is that we would like this coming year to continue in the same way as we have experienced over the last three years. That means that everything is on the right trajectory. If things continue the way that they are, we will fulfill our targets before 2020.

 

Q: In terms of time frame and the trajectory you are on today, when do you anticipate these goals will be achieved?

JALA:
I think we should reach our targets by the year 2018. But, as you know, the world is not linear. If you look back over the last four years, it has been a good run for us, but we are subject to what happens in the global economy. We have to build in a lot more resilience within the Malaysian economy to face any global crisis or any global slowdown to ensure we can weather storms that happen between now and the year 2020. It has been a very good run for the last four years.
Q: In a world of constantly changing economic realities, how can Malaysia’s Economic Transformation Programme (ETP) and National Key Economic Areas (NKEAs) adapt?
JALA:

Adaptation is a very important requirement moving forward for Malaysia. So what we want to do in Malaysia moving forward is to ensure we build enough resilience in our economy.Let me begin by saying we must implement proper fiscal reforms. Public debt in our case should not exceed 55% of our GDP. Now there are many countries that have gone to 80%, 90%, 100%, and even 190% public debt to GDP. So if you make sure that you grow the economy and make sure the government debt is below the 55% threshold, we believe that is the way to go. You cannot and should not over leverage, so we are really focusing on that.The second thing about being resilient as an economy and being able to face any un-foretold difficulties with the global economy is to make sure we do not have a fiscal deficit that exceeds 6%. We have been steadily reducing our fiscal deficit. When we first started, our fiscal deficit was 6.6%. We have since cut that down to 5.8%, and then to 4.8%, and last year we reached 3.9%.

The other aspect of making sure we can adapt is obviously to make sure we have the right competent talent. A competent talent pool means that whatever structural changes take place in the economy, people are able to be mobile and will do what is needed to produce products and services that can compete in the world outside.

The other is that we made changes in the way the civil service operates. We have become a lot more efficient and the good news today is that we have been able to improve the ease of doing business. It is very easy to do business in Malaysia. The World Bank assessed Malaysia in 2009 at number 23. We then moved to number 18, and then to 12, and last year, for the first time, we moved to number 6 overall in the world in terms of the ease of doing business. So if it is easy for investors to put money and investment in Malaysia, and at the same time the government is fiscally prudent and we bring in all the fiscal reforms, and we have a talent pool in the country, then we can adapt very quickly to changes that are happening.

Q: How does this philosophy play into the ideology that Malaysia should move away from being a primary resource based economy and into a higher value added service based economy?

JALA:
If you look at the history of Malaysia, we were an agrarian economy during independence in 1957 and then we moved into a more commodities play. So what we are now doing is making sure that our manufacturing arm grows a lot bigger and we have started doing that. In fact, when it gets down to palm oil, we are now telling the industry it is fine and good for us to do a lot more primary products and selling that as crude, but it is much more important for us to start producing downstream products such as oleo chemicals and we gave a lot of incentives to allow this to happen as evidenced by the establishment of more refineries. That is happening as we speak today, the downstream component has to come in. At the same time, between now and 2020, we wanted to see that we increase the services sector of the GDP to become more than 60% and we have been growing that rapidly. You can see today that tourism is big for us, financial services are big, the health sector as a part of the economy is also growing, and the education sector. So all of these all together, they will become, by the year 2020, at least 60% of our GDP. So I think for the first time doing this, we will have to diversify the economy so that we do not rely entirely on the commodities play, but we get into the downstream part of the same sectors and at the same time we grow the services sector. I think if you add the two together, the Malaysian economy becomes more resilient.

Wajarkah Tengku Adnan Rob Malay Businesses ?


June 22, 2012

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

dinmericanby Din Merican

On  June 6, 2014, Utusan Malaysia exploded a story about Sultan Johor’s interference in the Johor State Assembly (Dewan Undangan Negeri) by seeking to have executive control over the Johor Housing Board. The headline was a simple “WAJARKAH?”:

Utusan Malaysia then unfolded the real story. The real disaffection with Sultan Johor was that His Highness was seen as getting involved in businesses including selling large valuable parcels of lands in Johor to Singaporeans and lately to developers from China. This was further incensed by the fact that Malaysian billionaire tycoon Tan Sri Francis Yeoh of the YTL Group had made very damaging and insulting statements against the Malay leadership in the government accusing it of crony capitalism whereas it was a public secret that the YTL Group was the biggest beneficiary of Dr Mahathir’s privatisation policy. The TNB Employees Union then exposed that Sultan Johor’s power company SIPP was the JV partner of the YTL Group in the Pengerang IPP (independent power producer) project.

The Sultan of Johore's sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point. BN upset with royal housing bill too 01 The deal pocketed the Sultan RM4.5 billion.  The Sultan of Johore's sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point. BN upset with royal housing bill too 01 The deal pocketed the Sultan RM4.5 billion.

The Sultan of Johore’s sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point.
BN upset with royal housing bill too.
The deal pocketed the Sultan RM4.5 billion. 

So, the whole thing was really about UMNO’s anger towards Sultan Johor’s perceived betrayal by selling out on Malay rights. UMNO may be justified to come out strongly against Sultan Johor. UMNO is justified to chide any Malay Ruler and any GLC that disregards Malay rights. UMNO can do that because it perceives itself as the protector and guardian of Malay rights as guaranteed by the Federal Constitution. That’s what UMNO’s existence is for, and that is what most Malays expect of UMNO. But, is UMNO really the champion of Malays and Malay rights? Or, must the Malays also be protected from the rogues in UMNO?

Beside Johor Sultan, UMNO via Khazanah Nasional Berhad owns one of the largest development land in Johor. And UMNO is selling land at equally crasy rate to foreigners, disguised under the name of “joint development”.

Beside Johor Sultan, UMNO via Khazanah Nasional Berhad owns one of the largest development land in Johor. And UMNO is selling land at equally crasy rate to foreigners, disguised under the name of “joint development”.

For UMNO to regard itself as the Champion of Malay rights, UMNO must also not allow its politicians, its leaders especially the UMNO Ministers to betray and rob legitimate Malay businesses. UMNO must not allow Ministers like Tengku Adnan Mansor who is the Federal Territories Minister to do what is reported in MKini in the story below.

Damai Kiaramas was set up in early 2009 to provide a long-term solution for the former estate workers living on prime land of currently TTDI after their estate was closed down 32 years ago.

Damai Kiaramas was set up in early 2009 to provide a long-term solution for the former estate workers living on prime land of currently TTDI after their estate was closed down 32 years ago.

So, just as Utusan Malaysia had rebuked Sultan Johor by that simple phrase – “WAJARKAH?”, these Malay businessmen would equally be entitled to rebuke Tengku Adnan and ask him : “ WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?”

I think it is time that UMNO admonish Tengku Adnan before UMNO loses Malay support in GE14!Now read what Malaysia kini reported below:

UMNO men’s firm gets injunction against Ku Nan

By Hafiz Yatim@www.malaysiakini.com

 A group of bumiputera entrepreneurs today obtained an injunction against Federal Territories Minister and UMNO Secretary-General Tengku Adnan Tengku Mansor and two others from being involved in a joint venture project involving a five-hectare plot of land in Bukit Kiara.

Last week, Damai Kiaramas Sdn Bhd, owned by UMNO members, filed a suit in the High Court in Kuala

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

Lumpur against Tengku Adnan, also known as Ku Nan, for breach of contract. The company claimed it had fulfilled all the conditions set by the ministry to develop the land, including getting the agreement of those living in longhouses in the vicinity for 32 years, to be placed in a mixed development project on the land.

However, the company claimed, Tengku Adnan had favoured a company owned by the Pavilion group to be given the project. Today’s ex-parte injunction was granted by judicial commissioner Kamaluddin Md Said.

Damai Kiaramas named its joint-venture partner Yayasan Wilayah Persekutuan, Tengku Adnan and the Pavilion group-owned Memang Perkasa Sdn Bhd as defendants in the suit. They had since 2008 proposed to redevelop the five-hectare land, which was then part of the Bukit Kiara estate, large portions of which have become the Kuala Lumpur Golf Club and Kelab Golf Perkhidmatan Awam.

The displaced estate workers are staying in dilapidated longhouses on the five-hectare plot and pay monthly rental to the Kuala Lumpur City Hall.Damai Kiaramas claimed it had obtained the backing of the then federal territories minister Raja Nong Chik Raja Zainal Abidin and got the cabinet’s support.

Yayasan Wilayah Persekutuan agreed to appoint Damai Kiaramas as a joint-venture partner on December 17, 2012, after it obtained signatures from all the longhouse residents to support the project, in which they would be placed in their new houses there.

A draft of the joint-venture company was produced several weeks later stating the terms that included the company having to pay RM60.702 million in land premium to Yayasan Wilayah Persekutuan.

A meeting was held between Raja Nong Chik, Yayasan Wilayah Persekutuan and Damai Kiaramas on Feb 22, 2013, at which they all agreed to the terms of the agreement and also agreed to the signing of the formal agreement only after the 13th general election.

Several declarations, general damages sought

However, with Raja Nong Chik having lost in the last general election, Damai Kiaramas had to deal with Tengku Adnan, the new minister in charge of the Federal Territories, and they held several meetings, last year and this year.

At subsequent meetings, the statement of claim from the firm states, Tengku Adnan requested that the land premium and return to be paid to Yayasan Wilayah Persekutuan, be increased from RM60.702 million to RM96 million. Tengku Adnan allegedly asked that the amount be increased further to RM140 million and then to RM160 million, to which Damai Kiaramas is said to have reluctantly agreed.

The joint-venture agreement between Damai Kiaramas and Yayasan Wilayah Persekutuan was formally signed and a copy was sent to the foundation on Sept 17 last year. However, on December 5 last year, Damai Kiaramas obtained a termination notice from Yayasan Wilayah Persekutuan, which stated that there was never an agreement between them, that Damai Kiaramas failed to comply with the foundation’s demand and had not presented a detailed development plan.

Damai Kiaramas maintained that it briefed Tengku Adnan and the foundation representative on this on Sept 25 last year. The company claimed the reasons for the termination of the joint-venture agreement came as an after thought, and that it tried to revive the project by agreeing to pay the RM160 million that Tengku Adnan sought for the foundation.

The company also demanded, in April this year, that Yayasan Wilayah Persekutuan reveals whether it had entered into an agreement with other companies to develop the project.Damai Kiaramas claimed that all the defendants had hidded from its knowledge that secret negotiations had been carried out with Memang Perkasa and further claimed that there was interference from the firm.

Damai Kiaramas further claimed that because it had agreed to pay the RM160 million as demanded, the joint-venture agreement stands and that the action of the other party amounted to breach of agreement.

Hence, the company is seeking a declaration that the joint-venture agreement dated September 17 last year is constituted and continues, and wants another declaration that the termination notice is set-aside.

Damai Kiaramas also wants Yayasan Wilayah Persekutuan to continue with the joint venture and an order that any agreement that the foundation has with Memang Perkasa should be declared null and void. It is also seeking general damages and any amount the court deems fit for loss of profit and exemplary damages.

READ HERE: by Ida Lim@www.themalaymailonline.com

June 21, 2014

http://www.themalaymailonline.com/malaysia/article/developer-insists-has-funds-for-ttdi-project-labels-ku-nans-claims-prematur

June 19, 2014

http://www.themalaymailonline.com/malaysia/article/ku-nan-shrugs-off-court-injunction-by-developer-says-firm-could-not-perform

On Taiwan


 

June 20, 2014

Taipei, Taiwan

On Taiwan

by Din Merican

image

My wife, Dr. Kamsiah, and I spent the last few days in Taipei and its surrounds and met a number  of her Taiwanese counterparts. We asked them a lot of questions about their history, culture, their economy and government. While my wife was occupied with her course, I was  able to interact with them. Although those  we met and talked to were hampered by their limited English vocabulary and  we have zero knowledge of their language (Mandarin), we are able to understand why they are very proud of their country and its economic success but they are critical of their government. Off the bat, we can say that their society is an open one founded on democracy. They are a very hardworking and disciplined people.

I searched google and found a report from the Heritage Foundation, which confirms our cursory impressions of the country.  See below:

image

 

 image

 

 

image

 

image

 

Get back on the right track,Mr. Jala


June 11, 2014

Published: Wednesday June 11, 2014 MYT 12:00:00 AM
Updated: Wednesday June 11, 2014 MYT 8:07:57 AM

http://www.thestar.com.my/Opinion/Letters/2014/06/11/Get-back-on-the-right-track/

Get back on the right track,Mr Jala

by Tan Sri (Dr) Ramon Navaratnam, Chairman,Asli Centre of Public Policy Studies

Ramon14I REFER to the article “Tackling income inequality” (The Star, June 9) by Minister in the Prime Minister’s Department and CEO of PEMANDU, Datuk Seri Idris Jala.

Jala shows compassion for the poor, having come up dramatically from a very poor village background himself.He explains the many achievements of the Government’s plans and programmes to fight poverty and states that Malaysia is on the right track to win the big war on poverty.

I would agree only generally with his assessment. It is true that we have come a long way to eradicating poverty. However, I would think that we are not necessarily on the “right track”. To put it aptly, we need to “get back on the right track!”

Why is this so? It is because we are still using the old strategies of fighting poverty through aiding small-time businesses and giving out grants to farmers, fishermen and giving out minor construction contracts to the poor.

All these uplift them in a very limited manner. That is why the Government often proclaims the individual aid given to Low-Income Households (LIH) and Amanah Ikhtiar Malaysia (AIM). But how effective are we in substantially solving the structural causes of poverty?

There are a limited number of poor individuals who gain from these small aid programmes in the short term. But what about the vast majority of the poor whose mean household income is only RM2,000 per month or lower for a family of four or about RM500 per person per month?

How do they survive and what are their prospects from getting out of poverty permanently?The public also needs to be told what proportion of the poor benefit from the schemes to uplift themselves permanently.

It is also good if Jala (pic-playing guitar) could provide the racial and geographical idris guitarbreakdown of these recipients.Unfortunately, there is this nagging perception that the very poor orang asli, the poor Sabahans and Sarawakians, and the very poor Chinese, Indians and others, are not given sufficient and equal attention by the Government.

If all the poor are treated fairly, then the Government should highlight it and be proud of this noble act. But is this being done? Although the Gini Coefficient that measures poverty is said to be improving, it’s a very slight improvement. Moreover, it is well-known that Malaysia’s Gini Coefficient is one of the worst in Asean, despite our considerable wealth in oil and gas and other natural resources and our relatively high income. They need to explain why this is happenning. Thus, in fighting poverty we need to review our old policies and “get back on track”.

While we need to carry on with short-term measures and perhaps the BR1M programmes for some time, we need to do much more to transform the structural causes of poverty.

Since Jala has rightly asked for “fair and reasonable comments”, I hope my recommendations will be considered, if not implemented.

First, increase the budget to fight poverty through long-term sustainable measures, like better infrastructure for the poor.Second, improve the quality of education. Our educational standards are rated poorly by international agencies.

Third, teach more and better English to help our dropouts, school leavers and even graduates to get higher income jobs to break out of the poverty cycle. Fourth, introduce more technical education so that the majority of our children who cannot benefit or are not interested in an academic education, can become independent and be gainfully employed as technicians. Then, they need not depend on government handouts or government jobs for the sake of employing them at taxpayers’ expense.

Lastly, instill the time-tested values of good conduct, strong discipline, racial and religious harmony and a sense of independence and competition. Tackling income inequality is a vital goal for social stability, progress and especially for national unity.

Therefore, we have to constantly review and revise our policies and practices to ensure we “keep on the right track” in fighting poverty, lest we lose our way in this tough struggle.

My message to Idris Jala, who may have forgotten his KPI on Corruption, comes from Ayn Rand, Author of Atlas Shrugged below. Minister Paul Low, what are doing in the Prime Minister’s Department, apart from earning a fat salary? –Din Merican

ayn-rand-“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”–Atlas Shrugged

 

The Muslim World’s Challenges (Part 2)


May 29, 2014

The Muslim World’s Challenges (Part 2) : Islam and Moderation

By Dr Farhan Ahmad Nizami@www.nst.com.my

Dr Farhan Ahmad NizamiTHE ideal of government as service cannot be realised without tackling corruption. Ultimately, this depends on personal integrity. However, much can be achieved by strict implementation of accountability procedures.

People’s everyday transactions — like getting a passport, a telephone connection, a licence to start a business or being free to travel — can be needlessly complicated by discriminatory application of regulations, or by having to pay bribes. As part of the commitment to justice and fairness, it is essential that Muslim identity is detached from crude forms of tribal and sectarian politics.

The Quran censures those among the Israelites who claimed salvation on the basis of tribal belonging. A central feature of Islamic civilisation was its understanding that values — like knowledge and skill and virtue — are by no means a monopoly of the Muslims.

Islam was a learning and teaching civilisation, and for that reason, a force for good. Between communities, there is need for both fences and bridges. Muslims must recover their talent for managing the shared and separate spaces.

If they do not, their sectarian and ethnic divisions will always be vulnerable to cynical exploitation.

The Quran describes the Muslim community as ummatan wasatan: the middle or moderate community, the anti-extreme or mainstream. The community of Muslims must not cut itself off; it must be inclusive and assimilative, go east and west, learning as well as teaching. That is an ideal worthy of presentation to all the peoples of the world.

In the end, people must have good reasons to prefer life in societies identified as Muslim, if they are to give their hearts to making those societies successful. Therefore, among the general objectives we pursue, some are bound to be specific to Muslims. Others may see the sense in them or they may not. But Muslims have a commitment to them from faith.

Human beings must expect to be questioned about the ends they pursue and the means they engage to realise them. For Muslims, there are issues of haram and halal in both means and ends.

With that in mind, Muslims should strive for a resetting of the international financial system and its regulation. They can draw upon their wealth of past and recent experience with Islamic financing.

A 100 per cent reserve ratio may be an impossible target, but significantly raising it is not impossible. Muslims can also demand much stricter regulation and more transparency in the relations between banks and regulators.

Islamic banking must practise what it preaches. To promote research and analysis in the general field of Islamic finance, a small positive step is the annual roundtable jointly organised by the Securities Commission of Malaysia and the Oxford Centre for Islamic Studies.

Muslims can and should intervene, more strongly than they do, to limit dependence on commercial and industrial processes that are life-threatening. Harm that happens far away is called an “external cost of business”. This is morally repugnant and, sooner or later, self-destructive.

Muslims can make common cause with non-Muslims to build the will to sacrifice present comfort for future wellbeing. Muslim states have contiguous borders, large populations and considerable financial weight. There is no reason why they cannot lead efforts to preserve natural resources and environments.

In many Muslim societies, the lives of women are diminished by ingrained social and economic injustices. Men and women have aspirations and duties for which they have equal capacity and equal need. Therefore, they have an equal right to be prepared for those duties. This means education and the freedom to test that education in appropriate occupations.

Any policy oriented to human values, if not expressed in local cultural idioms, will not have local buy-in. Granted that Muslims have much to learn from the West, their first and last responsibility as Muslims is to embody the teaching of God and His Messenger. It is not permissible for them, where they have a choice, not to discharge that responsibility.

Within the debate among Muslims about political and human rights, there is broad agreement on the need for reform of attitudes and institutions. But political models imposed from above will not lead to open, accountable government sensitive to human rights. Such models, in practice, exclude the society they are claiming to serve.

Effective, stable representative government can only evolve from the collective will of the whole society. It will realise broad and enduring legitimacy only when it adapts the full resources of the society’s history and culture.

That is a good reason for beginning with reflection on past achievements. We do that to identify the general objectives that are desirable now. But we also need to identify actual, present commitment to those objectives, and to recognise and celebrate the progress that has been made. In this respect, Malaysia is the right place to be doing that.

Malaysia is an example of the political wisdom of which Muslims in the modern world are capable. It has demonstrated that, where social and historical circumstances permit and outside influences do not prevent, Muslims can build a stable society alongside non-Muslims.

Malaysia is a thriving nation whose Muslims remain, through their embrace of modernity, true to what is universal in their cultural and religious values.

I know there are tensions. But ways have been learnt to contain the tensions, and they are ways of peace. Differences intelligently managed have been converted into the advantages of diversity and moderation.

It is appropriate that the call for a Global Movement of Moderates has come from Malaysia. Since it is active in various international forums, and is the next chair of  ASEAN, it can project that message to many others.

The message is listened to because it is supported by a lived, achieved example.Within the struggle for political independence, there had also been a struggle for Malay/Muslim rights and identity.But that struggle did not, despite imbalances in educational opportunity and economic leverage, decay into sustained ethnic conflict.

Such conflict was viewed as an aberration from the norm, and Malaysia’s different communities learnt to co-exist and cooperate for the benefit of all.

Some of the reasons for this success are local, peculiar to the situation in this country. But the deeper reasons have to do with an Islamic tradition of tolerance and neighbourliness with peoples of different religion and ethnicity.

I would argue that, even in circumstances that differ markedly from the situation in Malaysia, the most promising basis for initiating and sustaining such a political settlement is religious conviction. It is a responsibility of those who believe in and value their faith to engage religious conviction as a means of promoting tolerance and peace within and between nation-states.

Malaysia’s political stability has been accompanied by equally impressive economic development. Malaysia took the lead in setting up the World Islamic Economic Forum. This initiative carries forward years of effort to improve economic cooperation between Muslim countries.

I mentioned earlier the lack of cultural contact among Muslim countries. Again, Malaysia is at the forefront of putting this right. It attracted some 73,000 visitors last year from Saudi Arabia alone. Its universities offer high-quality advanced education and training to students from the developing world. Many Muslims are taking up the opportunity.

Malaysia’s policymakers have identified a long-term need and committed resources to scholarship programmes that will encourage students of all backgrounds to take part.

Perhaps consideration could be given to the establishment of a National Endowment for the Humanities in Malaysia. Aside from the enrichment in perspectives, this policy will also, over time, contribute to reducing the flow of cultural product from the West into the Islamic world.

Muslims in the past, when confident of their religion and of themselves, were not intimidated by the ancient prestige of the learned traditions of the Greeks, Persians and Indians.

They were sure that Islam could absorb them, since whatever is truly of value to human life is, ultimately, compatible with the compassion and beneficence embodied in the teachings of the Quran and God’s Messenger. Muslims have a responsibility to contribute to the mainstream of world civilisation. There are several areas in which Muslim history and experience have something to teach:

The Muslims’ experience of pluralist societies could enrich contemporary constitutional debates which express individual rights but have no language for community rights. Their experience of the tension between scientific and religious thinking could shape a philosophy of science to reconcile belief in a Creator with rigorous scientific study.

Their experience of economics is relevant to ethical business, the balance between market freedom and state intervention, between private profit and public welfare, the cost of money. All these topics require the commitment of resources for the long term.

That commitment must come alongside a confidence in the ability of Muslims to find answers to the concerns that preoccupy all of us: the fight against the expulsion of religious authority from the public domain, and its growing irrelevance in the domain of individual lifestyles; the fight against consumerism and the widening gulf between those who have and those who do not have buying power; the fight against scales and patterns of economic activity which are pitilessly indifferent to their consequences for human lives and the natural systems we depend on; the fight against a near-autonomous technology answerable only to the economic interests that finance it; the fight against injustices, some located in particular persons or regimes, others anonymous and inaccessible behind the visible structures of power.

Alongside this fight against, there is a fight for — for the recovery of habits of worship (ibadat) and religious reflection; for the self-discipline which enables disinterested service of others; for the alleviation of poverty through healthcare and education; for effective conservation and environmental protection; for the preservation of family life which, however imperfectly, is still the most tested way to raise adults capable of moral autonomy.

Ultimately, the quality of commitment to a goal is dependent upon the quality of human resources carrying it. It is in the domain of education which builds human resources that Muslims need to work the most.

They need to learn how to organise and manage effective faith-based schools (pondok). They need to relearn how to devise and balance curricula to equip students for an effective life as believers in the contemporary world.

They need to teach students not only the externals of their faith, but also how to understand and carry their faith within themselves and translate it into self-transcending service of others.

This Muslims cannot do until and unless they appreciate that other traditions of learning have also achieved worthwhile progress in advancing human knowledge and know-how, and challenged received wisdom with sound arguments from human reason, observation and experience.

Muslims need to inculcate that mental and moral discipline which stops believers from bringing into the zone of the sacrosanct narrow issues of custom and practice that pertain, not to belief as such, but to local identities and local manners.

It is not an easy discipline; if practised properly and sustained, its fruit is tolerance and peaceful co-existence with others of the same and other faiths.

All of that can be summed up as an effort to teach values that are authentically derived from religious commitment. I have explained that this effort needs to be, for Muslims, commensurate with the legacy of their past. It needs to be forward-looking and outward-looking. It needs to be comfortably multi-cultural, willing to learn, to go abroad. And it has to be confidently Islamic.

Asia’s tomorrow has come–PM Najib Tun Razak


May 24, 2014

Asia’s tomorrow has come

by Dato Seri Najib Tun Razak, Prime Minister of Malaysia

http://www.nst.com.my (05-23-14)

RISING ASIA’: This is the full text of Prime Minister Datuk Seri Najib Razak’s keynote address at the Nikkei’s 20th International Conference on The Future of Asia in Tokyo yesterday (May 22, 2014)

PM NajibPrime Minister Datuk Seri Najib Razak delivering a speech at the Nikkei’s 20th International Conference on the Future of Asia in Tokyo yesterday. Najib says theLook East policy will move into a second phase, focusing on high technology and highly skilled workers. AFP pic

I am honoured to join you today. This is the second time I have spoken at the Future of Asia conference, and it is wonderful to be back in Japan. Under Prime Minister Abe’s leadership, the Japanese economy has burst back into life, with strong early promise. Now, Japan looks set to usher in a new period of sustained growth,  and set a new standard for reform.

Abenomics–Resurgance of Japan

Japan’s reputation for economic leadership is well-known and well-deserved. In the early 1980s, under Prime Minister Mahathir’s leadership, Malaysia began a ‘Look East’ policy, turning to Japan and Korea for inspiration, helping to train the next generation of Malaysian students and businesses leaders in the East Asian way.

Not only has the Look East policy continued under my tenure, but in line with our transformation programme for Malaysia, it’s moved into a second phase, focusing on high technology and highly skilled workers — helping us move our economy up the value chain, and onto high-income status.

Back in the 1980s, things were different. Asia was rising, but the truly explosive growth was still to come. The emergence of the ‘Tiger’ economies, and the reforms in China, showed the world that something was stirring in Asia. It was the 1980s that the phrase ‘Asian Century’ was coined. But for many observers, Asia was still tomorrow’s story.

Tomorrow has come to Asia (and Malaysia)

Tomorrow has come. Economically and politically, Asia is now at the heart of world affairs. The most populous region on earth is also one of the most dynamic, and increasingly, one of the more contested.

Remarkable economic development has focused global attention on Asia’s prospects. When the recent financial crisis shook confidence in established markets, more companies, and countries, began to ‘look East’.This growing sense of economic momentum has also raised the geopolitical stakes, as emerging and established powers vie for influence in Asia.

This trend shows no sign of abating. Within 20 years, Asia is set to account for more than 40 per cent of global gross domestic product (GDP), and 60 per cent of the world’s middle class. This phase of growth will be accompanied by growing global stature, influence, and interest. We must come to terms with life in the spotlight.

Asia’s economy will remain in focus; our internal dynamics under the microscope. There will be, InsyaAllah, no return to Asia’s age of isolation. We are one of the new centres of gravity in a newly multipolar world.

For the Asians of tomorrow, what matters is how we respond to this scrutiny; whether we build strong and sustainable economies, or simply inflate more bubbles. Whether we show security leadership, or allow internal tensions to derail the peace upon which prosperity depends.

That is what I would like to talk about today — the challenges to Asia’s economy and security, and how we can respond. Let me start with the economy. There are a number of trends that will determine Asia’s continued success. The first is economic integration: the removal of trade barriers, and cooperation on monetary and fiscal policies.

According to McKinsey, in 2012, cross-border trade accounted for a third of global GDP. By 2025, that figure could reach half. In the past 20 years, emerging economies have more than doubled their share of cross-border goods, services and finance, but are still lagging far behind developed markets.

For Asian economies, integration offers significant benefits, including the ability to negotiate together. It can increase the power of middle nations, and raise living standards for all. It can help developing nations climb the ladder, and ensure fewer citizens are left behind, as common standards and entry requirements filter back into domestic policy.

I believe Asian states must look to build stronger, more lasting economic connections — both within our region, and with the outside world. That is why I strongly support the push to create a single market in Southeast Asia. The ASEAN Economic Community will support jobs and growth for more than half a billion people, and help ensure Southeast Asia’s growth spills across into all member states.

Trans-Pacific Partnership and Integration for Economic Growth

In an interdependent global economy, the benefits of greater cooperation extend far beyond Asia’s borders. Malaysia looks forward to the completion of the Trans-Pacific Partnership on terms acceptable to us. The TPP will strengthen our ties with the wider world; as will the Regional Comprehensive Economic Partnership, which will bring three of the largest economies into the world’s largest trading bloc.

For governments and businesses, trade agreements such as these often have a visible logic. We see the negotiations unfold, often over years. We see the compromises that are made, and the benefits that are secured.

The risk of public disaffection can grow. In an age of increasing integration, we must ensure we take people with us — explaining the process and describing the benefits more clearly. Education and engagement can help address public concerns, and win support for agreements that can unlock growth and create higher paying jobs.

To prevent the build-up of risk, we must also ensure reforms to our financial and regulatory regimes keep pace with innovation in the financial sector. In the next decade, Asia’s financial sector is projected to grow by 50 per cent, accounting for almost a third of global banking sector assets. Yet, as the International Monetary Fund points out, Asia’s financial integration is not keeping pace.

As Asian firms ‘build out’ beyond their borders, and Asian investors seek new opportunities, they will be bound more closely into the global economy. There will be new regulatory challenges, such as the growth of shadow banking, and new problems of scale. As Asian capital stretches into other emerging markets, financial supervisors must be ready to address a much wider range of cross-border risks.

Focus on the reforms needed at home

We must also focus on the reforms needed at home. As the Hong Kong Monetary Authority has pointed out, despite a considerable pool of savings, and strong inflows of capital, some Asian infrastructure projects struggle to attract investment due to political, legal and governance risks. Stronger credit, risk management and corporate governance norms can make it easier to secure foreign capital. These must be complemented by a commitment to institutional reform to boost business and public confidence.

These reforms must be undertaken with an eye on the big picture: Asia’s changing role in the world economy. For many years, emerging Asia’s development model was based on a trade surplus with rich-world markets. But rebalancing is under way, as our nations grow richer and our labour costs rise. Some Asian economies are focused on building domestic demand — laying the foundations for more independently sustainable growth.

Alongside macroprudential policies, this approach will help cushion us from the near-term problems, such as the ongoing effects of sluggish growth in established markets, the withdrawal of United States stimulus, whilst also preparing our economies for the next phase of development. They will pave the way for Asia to play a greater role in shaping the global financial architecture, for the ultimate benefit of our citizens. Such structural changes take time and commitment. They can be socially disruptive. But the reward is a stronger and more secure economic future.

The Challenge of Inequality

The second trend we must come to terms with is inequality.Over the past few years, the growing gap between rich and poor in developed economies has become a pressing policy issue. This is not just the battle cry of the Occupy Wall Street protesters: many research institutions have pointed to the corrosive effect of structural inequality.

A little inequality encourages individuals to work hard and innovate; but an unequal system creates hollow economies, where wealth and opportunity are kept for the few, at the expense of the many. Excessive inequality has serious, and avoidable, effects on health, education and life outcomes. When soaring GDP outstrips living standards, people feel they do not have a stake in their nation’s economic success. That, in turn, undermines social progress and threatens stability.

With rapid growth at a time of globalisation and technological change, emerging Asia is particularly exposed to widening inequality. Over the past two decades, eight out of 10 Asians found themselves living in areas where income inequality is rising, not falling. Whilst inequality has narrowed in emerging regions such as Latin America, it has widened in Asia. As the Asian Development Bank has pointed out, had inequality stayed static, an extra 240 million people would have been lifted out of poverty.

Behind the headline growth figures, it is clear that Asia’s future success depends on broader and more diverse economic development. For Asia to truly prosper, we must give our citizens greater equity, as well as greater equality. Again, this will not be easy. Even the most successful economies have struggled to tackle inequality. There is no straightforward solution. But there are a number of things we can do.

We must invest more in public goods such as education and health: increasing access to quality education and narrowing the divide between urban and rural health outcomes. It means strengthening social safety nets and deploying targeted subsidies that support the poor at the point of need. It means encouraging the private sector to do its part, with corporations providing labour with flexibility, training and support. And, it means building more balanced economies, with higher quality jobs and more even growth spread across sectors.

Fight Against Corruption

It also requires a lasting commitment to the fight against corruption. Corruption suppresses meritocratic opportunity, undermines social cohesion and eats away at people’s confidence in the state. Tackling corruption is not the work of a year, or even a decade; but it can and must be done. Government procurement should be reformed to introduce open bidding, bringing transparency to a process often blighted by graft. Strengthening independent anti-corruption institutions, and increasing prosecutions for both bribe takers and bribe givers, can help change attitudes — even when corruption is deeply rooted.

Responding to these two trends — integration and inequality — will be critical. The changes I have spoken about will not always be easy; they require the investment not just of resources, but of political will. Difficult conversations will be had; in my country, for example, where income inequality remains a concern, we are working to find the right balance between affirmative action and individual opportunity.

With courage and foresight, however, we can deliver a stronger economic future for Asia. But, this future will not be assured unless we deliver the security and stability on which economic success depends.

To do so, we must manage our own rising influence, whilst responding to more intense outside interest in Asian security matters. We must make headway on non-state threats such as terrorism and piracy, and act on the ‘new security’ issues such as climate change. And, we must prepare to play a new leadership role in global security issues.

Rise in Asian military power must deliver peace

First and foremost, we must ensure the rise in Asian military power delivers peace, not instability.Over the past decades, Asia’s strong economic growth has obscured a military build-up that is almost as strong. In 1988, Asian defence spending constituted eight per cent of global military expenditure. By 2012, that figure had risen to 20 percent. In the last 25 years, overall military expenditure has grown by 187 per cent.

Countries have every right to defend themselves. But regular arms replacement programmes aside, this trend indicates deeper concerns about security and conflict — concerns that could swiftly become self-fulfilling. To address this risk, we should reject the siren song of competitive armament, and seek wherever possible to strengthen the multilateral and diplomatic ties that check instability.

We should also redouble our commitment to negotiation. Confronted with complex disagreements between states, Asia must place its trust in diplomatic solutions. We should heed the fundamental principles on which good diplomacy is conducted: sovereign equality, respect for territorial integrity, peaceful settlement of disputes and mutual benefit in relations.

And, we must affirm our commitment to rule-based solutions to competing claims. International law, and not economic or military coercion, should guide the resolution of disputes over resources. I also believe Asia can explore ways to make a bigger contribution to global security challenges.On non-proliferation, for example, the Association of Southeast Asian Nations has adopted a comprehensive treaty, the Southeast Asian Nuclear Weapon-Free Zone.

We should also make a concerted effort to implement and enforce strategic trade controls to cut the risk of dual-use goods.Our regional agreement on piracy is cited as a strong example of regional cooperation by the International Maritime Organisation, which seeks to replicate it elsewhere. The same principles — of sharing information and building capacity – could be applied to anti-terrorism initiatives, which, despite some successes, have sometimes lacked the coordination needed to be truly regional.

Peacekeeping and Conflict Resolution

On peacekeeping and conflict resolution, Asian nations are already ramping up their involvement in the promotion of global peace. Malaysia, which has already played an active role resolving regional conflicts, is bidding for a non-permanent seat on the United Nations Security Council for 2015-2016. Japan has made peace-building one of its main diplomatic priorities, South Korea has markedly increased its peacekeeping and post-conflict work, and many ASEAN nations, such as Vietnam, which will join UN operations next year, are looking to play a more active role.

This is driven partly by pragmatism: we have seen from the rise of nations that growth in influence and hunger for resources can bring new tensions, and exacerbate old ones. But it is also about acknowledging that with rising influence comes rising responsibility; that for Asia to continue to prosper in a stable global security environment, we must play our part not just in the enforcement of international norms, but in their creation, too.

By laying the foundations for greater Asian engagement in the international security agenda, and preparing our economies for more integrated and sustainable growth, we are recognising that our position in the world is changing.

As we leave behind the era of single hyperpower dominance, as the global economy becomes more connected and as nations converge around democratic market liberalism, a broader policy approach is needed. Today, more than ever, consensus, cooperation and constructive engagement are the basis for success.

Thirty years after it was proposed, the Asian century is upon us. By reforming at home, and assuming a greater international role, we can ensure it brings stability, prosperity and growth.

Defending our airspace is not a video game


By Mariam Mokhtar, FMT

May23, 2014

PlayStation-crazy Defence Minister Hishammuddin Hussein thinks that RMAF jets sent to investigate an unidentified aircraft must fire missiles and shoot it down. He must realise that the defence of Malaysian airspace is not like playing ‘Grand Theft Auto’.

It has been 10 weeks since MH370 disappeared without a trace en route to Beijing from Kuala Lumpur and in the absence of anything substantive, speculations and intrigue are taking hold in the public space.

It has been 10 weeks since MH370 disappeared without a trace en route to Beijing from Kuala Lumpur and in the absence of anything substantive, speculations and intrigue are taking hold in the public space.

It is bad enough having to suffer an inept Cabinet. We do not need trigger-happy ministers to start a war because of their stupidity.Hishammuddin’s performance, in the interview with ABC’s Four Corners programme, was embarrassing. He wasn’t just evasive, he was reckless and negligent.

He misunderstands his role as Defence Minister. On the night Malaysian Airlines Flight MH370 disappeared, he justified the failure of the RMAF to scramble a fighter jet to investigate because the blip on the radar was “…not deemed a hostile object.” He said, “If you’re not going to shoot it down, what’s the point of sending it (a fighter) up?” The Defence Minister does not need Opposition Leader Anwar Ibrahim or other people to tarnish the reputation of Malaysia. Hishammuddin is doing a splendid job by himself.

Malaysia's defence minister defended his military's failure to scramble a fighter jet to follow a Malaysian airliner when it veered off course and vanished two months ago, saying it wasn't seen as a hostile object.

Malaysia’s defence minister defended his military’s failure to scramble a fighter jet to follow a Malaysian airliner when it veered off course and vanished two months ago, saying it wasn’t seen as a hostile object.

As Defence Minister he should have known that to shoot a plane down, one does not need to send a fighter jet to apprehend it. One can target it with a surface-to-air missile. Hishammuddin’s justification for not sending fighter jets to investigate a possible incursion into Malaysian airspace is no different from his reaction to last year’s invasion of Sabah.

When Hishammuddin was told about the incursion of the Suluk militants in Lahad Datu in Sabah, he was very laid-back and told the public not to be alarmed because the Suluks were probably a bunch of old men enjoying a picnic. We subsequently found out that he was wrong!

Hishamuddin's reaction defies logic and common sense.

Hishamuddin’s reaction defies logic and common sense.

As Defence Minister, he has much to learn, and a schoolboy probably knows more than him. During peacetime a lot of the work of the military and armed forces is routine, like guarding key premises, weapons depots, telecommunications facilities or border posts.

Perhaps the most excitement the military gets is when they have to investigate reports of an incursion or to check-out sightings of people, straying close to important installations. Investigating any unknown activity does not necessarily mean the military has to engage in hostilities.

When a navy vessel encounters a boat full of asylum seekers they do not blow it out of the water.

The two aeroplanes which crashed into the twin towers on the Sept 11 terrorist attack were commercial aircraft and were not deemed hostile. What if MH370 had been commandeered by terrorists and turned into a missile?

A whole nation betrayed

After the Sept 11 attack on the twin towers, countries throughout the world put their air forces on red alert, ready to escort any plane which strayed from its flight path. They would only be shot if they were considered a threat.

Hishammuddin has often repeated that the RMAF knew the blip on the radar was not hostile. He has refused to explain how the RMAF knew this.

Although there was no radio contact with MH370, the RMAF fighter jets could have done a visual confirmation by the paintwork and the markings on the body of the plane. They could have trailed MH370 and known in which general direction it was heading.

The Search and Rescue (SAR) mission could have been better coordinated instead of sending search teams on a wild goose chase, wasting time and resources. The MH370 investigations highlighted a lack of communication between the Malaysian military aviation and the civil aviation authorities. How is Hishammuddin resolving this?

We spend hundreds of millions of ringgit on aeroplanes, submarines, patrol boats, defence equipment and radar but the leaders of the armed forces seem to be irresponsible or incompetent, or both. In most air forces, strategic airfields have two pilots ready to take-off at a moment’s notice and intercept unidentified aircraft.

The military did not intercept flight MH370 because Malaysia was not in war mode, says Acting Minister of Transport Hishammuddin Hussein.

The military did not intercept flight MH370 because Malaysia was not in war mode, says Acting Minister of Transport Hishammuddin Hussein.

Planes which have not filed a flight plan and which stray into prohibited airspace are intercepted and escorted out of the airspace. Sometimes rival countries may want to test the air defences of a country and check the capabilities of that country’s air force.

Hishammuddin has betrayed a whole nation. Perhaps, his most cruel act and his worst indiscretion was to insult the families of the passengers and crew of MH370. He has failed them. He gave conflicting and inconsistent reports on the military radar detection. There were allegations that the radio transcripts between the control tower and cockpit were doctored.

Why is there so much intrigue over the cargo manifest? Because of incompetence, he and Najib Tun Razak directed SAR to the wrong areas. Why are we at the mercy of ministers who are both reckless and dopey? Hishammuddin is not fit to be the Defence Minister, let alone a future PM. Trying to appease the rakyat by flying in economy will not do.

Hishammuddin defends the people who did not do their jobs. So, why is he rewarding failure? We owe it to the families of the passengers and crew of MH370 and that is why Hishammuddin must resign, along with the head of the RMAF and the chief of the armed forces.

They are only good at showing off their medals at the National Day parade. The rest of the time they act irresponsibly and treat the defense of the nation as a matter of inconsequence.

Mariam Mokhtar is an FMT columnist

Managing Federal-State Relations


May 22, 2014

Managing Federal-State Relations

by Dr. Sulaiman Mahbob (Tan Sri)@www.nst.com.my

sulaimanTHE nation, beginning with the formation of the Federation of Malaya in 1957 and later with the formation of Malaysia in 1963, was conceived with a strong sense of federalism.

As it is at the heart of our political economy, federal-state relations are an important ingredient for the nation’s success and survival. Federal-state relations, therefore, form an integral consideration in our policy making apparatus.

In other countries, we have seen how regions or provinces leave their union to form independent nations. These include Pakistan and, recently, Sudan. Interestingly, even in the developed West, there are component regions or states demanding independence or autonomy.

Close to us, Aceh in Indonesia had aimed for secession for some time. Scotland is a recent example of this trend as it tries to leave the United Kingdom.

In one of its activities, the Malaysian Technical Cooperation Programme (MTCP) recently brought senior officials from developing nations to Malaysia to attend courses on capacity-building at University of Malaya in its Institute of Public Policy and Management (INPUMA).

I had the privilege to be a speaker in the course. Many a time, the question of how Malaysia manages its issue of federalism, in addition to the many questions of how we planned our economy, arised from participants, especially those from the African continent. I used to reply that federalism is alive and kicking in Malaysia. There could be many explanations to the question. However, at that recently completed course, my answer was largely along these lines:

First, I said that our very Federal Constitution divides power between the central government and the state governments, with Sabah and Sarawak having additional powers, including on immigration.

Second, the same Constitution allocates capitation grants to the states based on population size and this grant constitutes a significant source of revenue to the state governments.

Third, our local governments, which are under the administration of the state governments, also obtain grants, through the state governments, from the Federal Government, thus complementing their revenue from assessment rates, fees and licences.

In terms of managing the relationship, the participants were also told that the nation had a few national councils, such as the National Land Council and the National Finance Council, which are attended by the prime minister or his deputy, and state chief ministers, where they deliberate on federal-state relations.

They often bargain for better financial terms for the states. The national councils provide a forum where state leaders see issues from the perspective of the nation as a whole rather than only from the state interests.

Invariably, revenue sharing between Federal Government and the states, beyond the constitutional grants, as well as better loan terms to states, are often discussed and agreed in view of the weaker tax revenue position of state governments.

These provisions allow avenues for deliberation and discussion on matters constituting the elements of federalism and how sensitive issues can be discussed behind closed doors, and yet, undertaken in a responsible manner.

In addition, the participants were also told that economic development policies of the country have been planned to reduce regional economic and social disparity, and to ensure that basic facilities are provided in all areas of the country, however remote they may be.

Public expenditures such as on basic health, education, water and power facilities and rural roads, and police services, are provided irrespective of the political party in power in the states.

There is no way national leaders can deprive states of basic developmental allocations because the civil servants who manage these matters daily are professional administrators, whose embedded culture is to serve and be loyal to the government of the day, both at central and state levels.

Our civil service officers are even seconded to various states even if the state governments are of different political parties.

These officials, such as state legal advisers, state police officers and state education and medical officers, and even state secretaries, will undertake activities in the various states without fear or favour.

The seconded state legal advisers will defend the states’ interests in the court of law if there is a legal case involving the need to pursue the central government.

These were the answers which I provided to the question on how Malaysia manages its federal-state relations. Occasionally, we do have irritations in the relations, but they were solved through discussion and engagement. Different countries may have different federal-state relations problems. One way is always to provide a healthy forum for engagement and consultation.

Malaysia may not have all the solutions. However, our federalism has remained intact since Independence. Let us strengthen it further so that it will remain robust and even stronger in the future.-May 20, 2014

Transformation report is favourable but insufficient


May 14, 2014

Transformation report is favourable but insufficient

Ramon14by Ramon Navaratnam@ http://www.malaysiakini.com

Prime Minister Najib Abdul Razak impressively presented the Report on the Malaysian Transformation Programme for 2013. It marked entering the mid-point of the Transformation Plan and was indeed welcome very informative but insufficient.

Impressive results

Many targets have been achieved despite the global slowdown and uncertainty, Malaysia has overcome global and domestic threats to our economy and society so far. Economic growth has been steady at about 5.1 percent per annum in the last three years, employment and incomes have risen and the budget deficit has been brought under control.  However, structural changes were inadequate. Inflation has been rising and the cost of living has been going up. Hence, the quality of life for the bottom 40 percent of the income groups has not improved but has most probably declined.

Inflation

Inflation is now the nagging problem due to persistent economic structural problems. How much of our economic success has benefited the poor and the underprivileged and the low income Malaysians? They still struggle to make ends meet.

The income of the bottom 40 percent of households is expected to reach an average of only RM2,007 per month. That income is for a household of about five persons per household. That works out to about RM401/- per person per month! How well can they survive on that low income?

Its interesting for the government to explain what proportion of the bottom 40 percent of our people earn RM2,007 per household per month and how many of them live in the urban areas. I wonder how the poor and lower income Malaysians, especially in urban areas can manage to live day to day, from hand to mouth?

That explains why household debt has been rising and loan sharks have been thriving. These are poor and the low income Malaysians who will be forced to cut down on their daily expenditure on food, medical care, shelter and transport if possible. And then private consumption which constitutes 52 percent of the Gross Domestic Product of the economic cake will slow down and reduce economic growth.

That is why the rakyat fear rising prices now and in the future, especially after the mid-point in the Transformation Plan, when the Goods and Service Tax (GST) will be introduced in 2015!

This is one major cause for the resistance generally shown against the GST. The najib-razak1prime minister is right in proposing that the government should come out soon with the full list of essential goods and services that will exempted from the GST for the poor and low income groups. Let them clearly see that it’s the wealthy who will be more affected by the GST.

Strictly, the GST should only apply to the wealthy and well-to-do who consume luxury goods and services that are non-essential. The wealthy have the choice to avoid purchases if they choose to. Unlike the poor who must have their essential goods and services, just to survive!

Protest against GST and insufficient structural transformation

In the spirit of the Economic Transformation Plan, we have to be more empathetic and ask why there is so much public protest against the GST? Taxes are necessary for development and good governance. But fair and reasonable taxation is welcome by most people on one condition. People will pay their taxes more willingly if they believe that these hard-earned taxes are being used responsibly by the authorities.

Thus the government has to come out more transparently and  speedily, on new tough structural transformation measures to  combat corruption, crime, cronyism, inadequate competition and of course wasteful spending, as highlighted in the Auditor-General’s Reports.

Then public confidence will rise and people will support new and fair  taxes which would benefit particularly the poor, if there is more of Good  Governance and fairness.

Instead the rakyat sense the creeping adverse effects of ‘state capture’ which can enable the rich and powerful to look after their own vested interests first and foremost. That is why we need to fully adopt the New Economic Model’s recommendations in the National Transformation Programme!

The government could win more public confidence, if it comes out openly, to fully accept and adopt the New Economic Model. It’s also vital to recognise that our Economic and Government Transformation Programme can only bear good fruit if the overall socio-economic and political environment improves at a faster pace.

The government has to come out more firmly and fairly to combat racism, religious bigotry and wild irresponsible and hurtful hate statements by extremists, who seem to be getting away scot free!

This could show weak governance which reflects our creeping elements of ‘state capture’, that can only poison our governance and society. The New Economic Model will achieve all our aspirations for a more equitable, peaceful United and progressive Malaysian society, and realise Vision 2020, on schedule – but our Report must show more Structural Transformation please.


Tan Sri (Dr.) RAMON NAVARATNAM is chairperson, Asli Centre for Public Policy Studies.

 

‘Stop the dangerous disease called ISMA’


May 9, 2014

To Prime Minister Najib:

‘Stop the dangerous disease called ISMA’

by R K Anand@http://www.malaysiakini.com

It appears that “another clown” has joined the circus but its antics are far from amusing, said a vexed MIC leader.According to S Vell Paari, when somebody first mentioned the term “Isma” to him, he thought it was a sexually transmitted disease (STD).

“I am not joking. That’s exactly what I thought,” Vell Paari told Malaysiakini. But now I know that ISMA is not a STD but something far worse. It is a more debilitating illness, which if left unchecked, could ruin all that we have achieved until now,” Vell Paari warned

The MIC director of strategy was commenting on the latest salvo from ISMA, the acronym for Ikatan Muslimin Malaysia.

Isma PresidentHe badly needs to see a Shrink: What’s his Hang Up?

ISMA President Abdullah Zaik Abdullah Rahman (above) yesterday described Chinese Malaysians as “intruders” in response to the community’s opposition to the implementation of hudud law. He said that the ancestors of Chinese Malaysians were “in cahoots with the British to oppress the Malays.”

“The Chinese came to this country with the British as intruders. Who gave them citizenship and wealth to the extent that the fruits of their intrusion is protected to this day?” he asked. Describing the statements as nothing short of “revolting”, Vell Paari said Abdullah “should be put in a time capsule and sent back to the Ice Age, where he belongs.”

‘Probe the alarming call

Although the MIC leader said such characters were a “dime a dozen”, he, however, found Abdullah’s (above) call for the situation to be rectified rather alarming

“What does he mean in urging the Malays to ‘correct this historical mistake’? Is he asking for racial bloodletting? Is ISMA a terror group and are the Police going to ignore them?” he asked. He noted that it is disconcerting to see such elements threatening the harmony of this nation and called on the authorities to act against them.

“If the authorities feel that (DAP MP) Teresa Kok’s video was seditious in nature, then what about ISMA? This is sedition of the highest order. It is also a threat to national security. Failure to act against these dangerous elements will give the impression that outfits like ISMA have the tacit backing of those in power and are above the law,” he added.

Other races helped build Malaysia

As for Abdullah, Vell Paari said the ISMA President must not shoot his mouth off and realise how much the Chinese and Indians have contributed to nation-building.

“The Chinese are wealthy because they are hardworking and have an enviable sense of business acumen. Unlike what Isma believes, wealth was not given to them on a silver platter. The Chinese, Indians and other races have helped shape what Malaysia is at present be it in economic terms, infrastructure and even information technology. If not for them, ISMA and Abdullah would not even have Internet connection, let alone a website called ‘Ismaweb’ to spew their venomous views,” he added.

Calling on the government to put its foot down, Vell Paari said groups like ISMA threatened the 1Malaysia concept. Failure to act against them, he warned, would embolden others as well believing that when it comes to the Malay race or Islam, one has carte blanche and legal immunity.

Meanwhile, UMNO’s Saifuddin Abdullah (left) also saw red over Isma’s remarks and called for an investigation.

“Stop the anti-Chinese and anti-Christian sentiments before it turns to something worse. The authorities must investigate,” the former Higher Education Minister tweeted.

MCA and DAP have both stated they would be lodging separate Police reports against ISMA. Police later confirmed in a press statement that it has received several reports against ISMA. This will be investigated under Section 4(1) of the Sedition Act 1948, Deputy IGP Mohd Bakri Mohd Zinin disclosed.

“We will not hesitate to enforce the law, using Sedition Act in particular, against anybody who issues statements or acts in any form that is seen capable of breaking up racial ties in the country,” the statement said.

One missing jet, one sunken ferry, two responses


May 2-3, 2014

MY COMMENT: William Pesek is generous. I would give Malaysia  ‘F’ imagefor its handling of MH370 tragedy. Nothing illustrates this more than the release of the preliminary report which confirms what most of us in Malaysia knew about MH370 and that is our government has shown the world that it is incompetent, inept and poorly led. Our leaders lacked an appreciation of the severity of the tragedy in terms of national security. And that means we never learned the lessons of Lahad Datu. Arrogance will get us no where. Humility will since it is when the learning process begins. –Din Merican

Thanks, CLF…Be Yourself… this poem…it is still a beautiful world…we are children of the Universe–Din Merican

Crisis Management: Malaysia gets ‘D’ and South Korea earns ‘A-

Malaysia getsD ’, South Korea ‘A-’ in handling of tragedies, says Bloomberg columnist

www. themalaysianinsider.com

Putrajaya was once again slammed by a Bloomberg columnist who compared Malaysia’s handling of the MH370 saga with South Korea’s response to the recent Sewol ferry tragedy.

We accept God's will but at the same time, wants us human beings to be accountable for our actions, lest another tragedy such as this will strike again due to our ignorance.

We accept God’s will but at the same time,  we want as human beings to be accountable for our actions, lest another tragedy such as this will strike again due to our ignorance.

In a scathing attack, columnist William Pesek said he would give top marks to South Korea for their handling of the ferry tragedy but found Malaysia sorely lacking in handling the disappearance of Malaysia Airlines flight MH370.

He said the incidents could be described as tests for the two governments, if not of Malaysian and South Korean societies. “The grades so far? I’d give Korea an A-, Malaysia a D,” he said in his Bloomberg column titled “One missing jet, one sunken ferry, two responses”.

Pesek said in the two weeks since the ferry sank, killing about 300 people on board, the South Korean government had reacted with self-questioning, shame and official penitence.

President Park Geun-hye issued a dramatic and heartfelt apology. Her No. 2, Prime Minister Chung Hong Won, resigned outright. Prosecutors hauled in the ship’s entire crew and raided the offices of its owners and shipping regulators. Citizens and the media are demanding speedy convictions and long-term reforms,” he said.

Najib must emulate SKorea's accountibility. It's President apologizes, it's PM resigns over the ferry tragedy.

Najib must emulate S Korea’s accountability. Its President apologizes, its PM resigns over the ferry tragedy.

On the flip side, there was no such reaction on the part of Malaysian authorities 56 days after MH370 vanished, said Pesek. “No officials have quit. Prime Minister (Datuk Seri) Najib Razak seems more defiant than contrite. The docile local news media has focused more on international criticism of Malaysia’s leaders rather than on any missteps by those leaders themselves,” he said.

Pesek said although both countries are democracies, the key difference is the relative openness of their political systems.

“One party has dominated Malaysia since independence, while Korea, for all itsgrowing pains and occasional tumultuousness, has seen several peaceful transfers of power over the past quarter-century. Unused to having to answer critics, Malaysia’s government has responded defensively.

“Korean officials, on the other hand, are reflecting, addressing the anger of citizens, and delving into what went wrong with the shipping industry’s regulatory checks and balances,” he pointed out.

Pesek said South Korea was most likely to emerge from the crisis stronger than ever, unlike Malaysia. He said this could be seen from the way both countries handled the 1997 Asian financial crisis.

Pesek said Tun Dr Mahathir Mohamad, who was the Prime Minister then, had blamed the ringgit’s plunge on some shadowy Jewish cabal headed by George Soros instead of internalising what had gone wrong.

“It didn’t admit it had been using capital inflows unproductively and that coddling state champions – including Malaysia Airlines – was killing competitiveness. Never did the ruling United Malays National Organisation consider it might be part of the problem.”

Pesek said South Korea, on the other hand, forced weak companies and banks to fail, accepting tens of thousands of job losses. South Korean authorities, he said, clamped down on reckless investing and lending and addressed moral hazards head-on.

“Koreans felt such shame that millions lined up to donate gold, jewellery, art and other heirlooms to the national treasury.” Pesek said while South Korea’s response wasn’t perfect, the country’s economic performance since then speaks for itself.

“Now as then, Korea’s open and accountable system is forcing its leaders to look beyond an immediate crisis. Ordinary Koreans are calling for a national catharsis that will reshape their society and its attitude toward safety. Park’s government has no choice but to respond.

“Malaysia’s government, on the other hand, appears to be lost in its own propaganda.

Hishamuddin HusseinTo the outside world, acting Transport Minister (Datuk Seri) Hishammuddin Hussein performed dismally as a government spokesman: He was combative, defensive and so opaque that even China complained.

“Yet Hishammuddin is now seen as Prime Minister material for standing up to pesky foreign journalists and their rude questions. The government seems intent on ensuring that nothing changes as a result of this tragedy. As hard as it seems now, South Korea will move past this tragedy, rejuvenated. Malaysia? I’m not so sure.” .

May 3, 2014

To those who must take responsibility for mishandling MH370: Just RESIGN

By Robert Chaen@www.freemalaysiatoday.com

Hisham, Najib, and Muhiyuddin

Here are three good reasons why Malaysia Airlines CEO Ahmad Jauhari Yahya or Acting Transport Minister Hishammuddin Hussein –or, better still, both—must resign immediately: to save MAS, to save the tourism industry and, most importantly, to save the reputation of Malaysia and Malaysians.

Malaysians, Chinese and other nationals affected by the MH370 crisis want someone to be accountable—a real person.

They don’t want a thousand and one excuses or those public-relations statements coming from the Prime Minister, such as “this is an unprecedented disaster, 26 countries are involved in the search, we are doing our very best” and so on.

Malaysia Airlines is already losing badly. Bookings are significantly down, and it is likely that more celebrities, holiday makers and travel agents will boycott the airline. And there is now serious talk about the company being split up.

Malaysia’s tourism industry will lose billions of ringgit. Business will be down for hotels, taxis, shopping malls and even roadside stalls. Because neither Jauhari nor Hishammuddin is willing to resign, much less apologize, Malaysians everywhere—not just Malaysian singers in China—will lose respectability in the eyes of the world.

Selfish and arrogant

mh370-hishammuddinIt would seem that the only ones not losing are those clinging to their jobs and salaries despite their responsibility for Malaysia’s loss of face. How selfish and how arrogant of Jauhari and Hishammuddin?

Why can’t they follow the example of South Korean Prime Minister Chung Hong-won, who resigned over the recent ferry disaster in order to calm down his countrymen and let them have closure and move on?

Even if just one person had taken responsibility over the MH370 debacle, the tide of resentment against Malaysia might have turned to sympathy.Because the Malaysian government does not have the courage to admit that its agencies and officials have bungled and that it has botched its public relations, the world’s media have rightly lost trust in it.

It is obvious that the government is hoping the public and the media will start to dim their focus on MH370 after nearly two months and move on to other events such as the football World Cup.But one can be sure that the affected relatives will not let it all go away until they find closure. They will continue to hound Putrajaya.

TDM LatestMalaysia’s mainstream media may well play their usual role of spin masters in an attempt to cover up what is rotten in the system, but it will not work this time around because the world media now have the country on their radar. Even Dr Mahathir Mohamad’s attempt to shift the blame to Boeing will not work.

People are not stupid. And that’s the good news. Even readers of Malaysia’s mainstream newspapers are getting wiser and are no longer willing to swallow everything fed to them.

Jauhari or Hishammuddin—or both—please have the decency to resign before you plunge Malaysia into deeper loss. Don’t wait for us taxpayers to rise up and demand your unceremonious sacking. Do the right thing for once. It’s not too late.

Robert Chaen is an international change expert and online pollster.

A Debate on William Easterly’s New Book: The Tyranny of Experts


April 14, 2014

Public Event
Easterly

A Debate on William Easterly’s New Book: The Tyranny of Experts

Wednesday, April 9, 2014 – 10:00am to 11:30am

Featuring

William Easterly

Professor of Economics and Co-director, Development Research Institute, New York University

Vs.
Owen Barder
Senior Fellow and Director for Europe, Center for Global Development

Moderated by
Nancy Birdsall
President, Center for Global Development

Why does poverty persist across so much of the world, despite billions of dollars in international aid and the efforts of development professionals? William Easterly’s answer, as proposed in his new book, The Tyranny of Experts: Economists, Dictators, and the Forgotten Rights of the Poor, is a lack of respect for liberty—not just on the part of governments of impoverished countries but also, more provocatively, on the part of the development experts. Owen Barder, Director of CGD in Europe and a noted development expert himself, disagrees. A vote of the audience will determine who wins the debate, which will also be streamed live.

 

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.