Monetary Policy and Financial Stability by Fed Chair Janet Yellen


July 7, 2014

Chair Janet L. Yellen

At the 2014 Michel Camdessus Central Banking Lecture, International Monetary Fund, Washington, D.C.

July 2, 2014

Monetary Policy and Financial Stability

Janet_Yellen_FEDIt is an honor to deliver the inaugural Michel Camdessus Central Banking Lecture. Michel Camdessus served with distinction as governor of the Banque de France and was one of the longest-serving managing directors of the International Monetary Fund (IMF).

In these roles, he was well aware of the challenges central banks face in their pursuit of price stability and full employment, and of the interconnections between macroeconomic stability and financial stability. Those interconnections were apparent in the Latin American debt crisis, the Mexican peso crisis, and the East Asian financial crisis, to which the IMF responded under Camdessus’s leadership. These episodes took place in emerging market economies, but since then, the global financial crisis and, more recently, the euro crisis have reminded us that no economy is immune from financial instability and the adverse effects on employment, economic activity, and price stability that financial crises cause.

The recent crises have appropriately increased the focus on financial stability at central banks around the world. At the Federal Reserve, we have devoted substantially increased resources to monitoring financial stability and have refocused our regulatory and supervisory efforts to limit the buildup of systemic risk. There have also been calls, from some quarters, for a fundamental reconsideration of the goals and strategy of monetary policy. Today I will focus on a key question spurred by this debate: How should monetary and other policymakers balance macroprudential approaches and monetary policy in the pursuit of financial stability?

In my remarks, I will argue that monetary policy faces significant limitations as a tool to promote financial stability: Its effects on financial vulnerabilities, such as excessive leverage and maturity transformation, are not well understood and are less direct than a regulatory or supervisory approach; in addition, efforts to promote financial stability through adjustments in interest rates would increase the volatility of inflation and employment. As a result, I believe a macroprudential approach to supervision and regulation needs to play the primary role. Such an approach should focus on “through the cycle” standards that increase the resilience of the financial system to adverse shocks and on efforts to ensure that the regulatory umbrella will cover previously uncovered systemically important institutions and activities. These efforts should be complemented by the use of countercyclical macroprudential tools, a few of which I will describe. But experience with such tools remains limited, and we have much to learn to use these measures effectively.

I am also mindful of the potential for low interest rates to heighten the incentives of financial market participants to reach for yield and take on risk, and of the limits of macroprudential measures to address these and other financial stability concerns. Accordingly, there may be times when an adjustment in monetary policy may be appropriate to ameliorate emerging risks to financial stability. Because of this possibility, and because transparency enhances the effectiveness of monetary policy, it is crucial that policymakers communicate their views clearly on the risks to financial stability and how such risks influence the appropriate monetary policy stance. I will conclude by briefly laying out how financial stability concerns affect my current assessment of the appropriate stance of monetary policy.

Balancing Financial Stability with Price Stability: Lessons from the Recent Past

When considering the connections between financial stability, price stability, and full employment, the discussion often focuses on the potential for conflicts among these objectives. Such situations are important, since it is only when conflicts arise that policymakers need to weigh the tradeoffs among multiple objectives. But it is important to note that, in many ways, the pursuit of financial stability is complementary to the goals of price stability and full employment. A smoothly operating financial system promotes the efficient allocation of saving and investment, facilitating economic growth and employment. A strong labor market contributes to healthy household and business balance sheets, thereby contributing to financial stability. And price stability contributes not only to the efficient allocation of resources in the real economy, but also to reduced uncertainty and efficient pricing in financial markets, which in turn supports financial stability.

Despite these complementarities, monetary policy has powerful effects on risk taking. Indeed, the accommodative policy stance of recent years has supported the recovery, in part, by providing increased incentives for households and businesses to take on the risk of potentially productive investments. But such risk-taking can go too far, thereby contributing to fragility in the financial system.1 This possibility does not obviate the need for monetary policy to focus primarily on price stability and full employment–the costs to society in terms of deviations from price stability and full employment that would arise would likely be significant. I will highlight these potential costs and the clear need for a macroprudential policy approach by looking back at the vulnerabilities in the U.S. economy before the crisis. I will also discuss how these vulnerabilities might have been affected had the Federal Reserve tightened monetary policy in the mid-2000s to promote financial stability.

Looking Back at the Mid-2000s

Although it was not recognized at the time, risks to financial stability within the United States escalated to a dangerous level in the mid-2000s. During that period, policymakers–myself included–were aware that homes seemed overvalued by a number of sensible metrics and that home prices might decline, although there was disagreement about how likely such a decline was and how large it might be. What was not appreciated was how serious the fallout from such a decline would be for the financial sector and the macroeconomy. Policymakers failed to anticipate that the reversal of the house price bubble would trigger the most significant financial crisis in the United States since the Great Depression because that reversal interacted with critical vulnerabilities in the financial system and in government regulation.

In the private sector, key vulnerabilities included high levels of leverage, excessive dependence on unstable short-term funding, weak underwriting of loans, deficiencies in risk measurement and risk management, and the use of exotic financial instruments that redistributed risk in nontransparent ways.

In the public sector, vulnerabilities included gaps in the regulatory structure that allowed some systemically important financial institutions (SIFIs) and markets to escape comprehensive supervision, failures of supervisors to effectively use their existing powers, and insufficient attention to threats to the stability of the system as a whole.

It is not uncommon to hear it suggested that the crisis could have been prevented or significantly mitigated by substantially tighter monetary policy in the mid-2000s. At the very least, however, such an approach would have been insufficient to address the full range of critical vulnerabilities I have just described. A tighter monetary policy would not have closed the gaps in the regulatory structure that allowed some SIFIs and markets to escape comprehensive supervision; a tighter monetary policy would not have shifted supervisory attention to a macroprudential perspective; and a tighter monetary policy would not have increased the transparency of exotic financial instruments or ameliorated deficiencies in risk measurement and risk management within the private sector.

Some advocates of the view that a substantially tighter monetary policy may have helped prevent the crisis might acknowledge these points, but they might also argue that a tighter monetary policy could have limited the rise in house prices, the use of leverage within the private sector, and the excessive reliance on short-term funding, and that each of these channels would have contained–or perhaps even prevented–the worst effects of the crisis.

A review of the empirical evidence suggests that the level of interest rates does influence house prices, leverage, and maturity transformation, but it is also clear that a tighter monetary policy would have been a very blunt tool: Substantially mitigating the emerging financial vulnerabilities through higher interest rates would have had sizable adverse effects in terms of higher unemployment. In particular, a range of studies conclude that tighter monetary policy during the mid-2000s might have contributed to a slower rate of house price appreciation. But the magnitude of this effect would likely have been modest relative to the substantial momentum in these prices over the period; hence, a very significant tightening, with large increases in unemployment, would have been necessary to halt the housing bubble.2 Such a slowing in the housing market might have constrained the rise in household leverage, as mortgage debt growth would have been slower. But the job losses and higher interest payments associated with higher interest rates would have directly weakened households’ ability to repay previous debts, suggesting that a sizable tightening may have mitigated vulnerabilities in household balance sheets only modestly.3

Similar mixed results would have been likely with regard to the effects of tighter monetary policy on leverage and reliance on short-term financing within the financial sector. In particular, the evidence that low interest rates contribute to increased leverage and reliance on short-term funding points toward some ability of higher interest rates to lessen these vulnerabilities, but that evidence is typically consistent with a sizable range of quantitative effects or alternative views regarding the causal channels at work.4 Furthermore, vulnerabilities from excessive leverage and reliance on short-term funding in the financial sector grew rapidly through the middle of 2007, well after monetary policy had already tightened significantly relative to the accommodative policy stance of 2003 and early 2004. In my assessment, macroprudential policies, such as regulatory limits on leverage and short-term funding, as well as stronger underwriting standards, represent far more direct and likely more effective methods to address these vulnerabilities.5

Recent International Experience

Turning to recent experience outside the United States, a number of foreign economies have seen rapidly rising real estate prices, which has raised financial stability concerns despite, in some cases, high unemployment and shortfalls in inflation relative to the central bank’s inflation target.6 These developments have prompted debate on how to best balance the use of monetary policy and macroprudential tools in promoting financial stability.

For example, Canada, Switzerland, and the United Kingdom have expressed a willingness to use monetary policy to address financial stability concerns in unusual circumstances, but they have similarly concluded that macroprudential policies should serve as the primary tool to pursue financial stability. In Canada, with inflation below target and output growth quite subdued, the Bank of Canada has kept the policy rate at or below 1 percent, but limits on mortgage lending were tightened in each of the years from 2009 through 2012, including changes in loan-to-value and debt-to-income caps, among other measures.7 In contrast, in Norway and Sweden, monetary policy decisions have been influenced somewhat by financial stability concerns, but the steps taken have been limited. In Norway, policymakers increased the policy interest rate in mid-2010 when they were facing escalating household debt despite inflation below target and output below capacity, in part as a way of “guarding against the risk of future imbalances.”8 Similarly, Sweden’s Riksbank held its policy rate “slightly higher than we would have done otherwise” because of financial stability concerns.9 In both cases, macroprudential actions were also either taken or under consideration.

In reviewing these experiences, it seems clear that monetary policymakers have perceived significant hurdles to using sizable adjustments in monetary policy to contain financial stability risks. Some proponents of a larger monetary policy response to financial stability concerns might argue that these perceived hurdles have been overblown and that financial stability concerns should be elevated significantly in monetary policy discussions. A more balanced assessment, in my view, would be that increased focus on financial stability risks is appropriate in monetary policy discussions, but the potential cost, in terms of diminished macroeconomic performance, is likely to be too great to give financial stability risks a central role in monetary policy decisions, at least most of the time.

If monetary policy is not to play a central role in addressing financial stability issues, this task must rely on macroprudential policies. In this regard, I would note that here, too, policymakers abroad have made important strides, and not just those in the advanced economies. Emerging market economies have in many ways been leaders in applying macroprudential policy tools, employing in recent years a variety of restrictions on real estate lending or other activities that were perceived to create vulnerabilities.10 Although it is probably too soon to draw clear conclusions, these experiences will help inform our understanding of these policies and their efficacy.

Promoting Financial Stability through a Macroprudential Approach

If macroprudential tools are to play the primary role in the pursuit of financial stability, questions remain on which macroprudential tools are likely to be most effective, what the limits of such tools may be, and when, because of such limits, it may be appropriate to adjust monetary policy to “get in the cracks” that persist in the macroprudential framework.11

In weighing these questions, I find it helpful to distinguish between tools that primarily build through-the-cycle resilience against adverse financial developments and those primarily intended to lean against financial excesses.12

Building Resilience

Tools that build resilience aim to make the financial system better able to withstand unexpected adverse developments. For example, requirements to hold sufficient loss-absorbing capital make financial institutions more resilient in the face of unexpected losses. Such requirements take on a macroprudential dimension when they are most stringent for the largest, most systemically important firms, thereby minimizing the risk that losses at such firms will reverberate through the financial system. Resilience against runs can be enhanced both by stronger capital positions and requirements for sufficient liquidity buffers among the most interconnected firms. An effective resolution regime for SIFIs can also enhance resilience by better protecting the financial system from contagion in the event of a SIFI collapse. Further, the stability of the financial system can be enhanced through measures that address interconnectedness between financial firms, such as margin and central clearing requirements for derivatives transactions. Finally, a regulatory umbrella wide enough to cover previous gaps in the regulation and supervision of systemically important firms and markets can help prevent risks from migrating to areas where they are difficult to detect or address.

In the United States, considerable progress has been made on each of these fronts. Changes in bank capital regulations, which will include a surcharge for systemically important institutions, have significantly increased requirements for loss-absorbing capital at the largest banking firms. The Federal Reserve’s stress tests and Comprehensive Capital Analysis and Review process require that large financial institutions maintain sufficient capital to weather severe shocks, and that they demonstrate that their internal capital planning processes are effective, while providing perspective on the loss-absorbing capacity across a large swath of the financial system. The Basel III framework also includes liquidity requirements designed to mitigate excessive reliance by global banks on short-term wholesale funding.

Oversight of the U.S. shadow banking system also has been strengthened. The new Financial Stability Oversight Council has designated some nonbank financial firms as systemically important institutions that are subject to consolidated supervision by the Federal Reserve. In addition, measures are being undertaken to address some of the potential sources of instability in short-term wholesale funding markets, including reforms to the triparty repo market and money market mutual funds–although progress in these areas has, at times, been frustratingly slow.

Additional measures should be taken to address residual risks in the short-term wholesale funding markets. Some of these measures–such as requiring firms to hold larger amounts of capital, stable funding, or highly liquid assets based on use of short-term wholesale funding–would likely apply only to the largest, most complex organizations. Other measures–such as minimum margin requirements for repurchase agreements and other securities financing transactions–could, at least in principle, apply on a marketwide basis. To the extent that minimum margin requirements lead to more conservative margin levels during normal and exuberant times, they could help avoid potentially destabilizing procyclical margin increases in short-term wholesale funding markets during times of stress.

Leaning Against the Wind

At this point, it should be clear that I think efforts to build resilience in the financial system are critical to minimizing the chance of financial instability and the potential damage from it. This focus on resilience differs from much of the public discussion, which often concerns whether some particular asset class is experiencing a “bubble” and whether policymakers should attempt to pop the bubble. Because a resilient financial system can withstand unexpected developments, identification of bubbles is less critical.

Nonetheless, some macroprudential tools can be adjusted in a manner that may further enhance resilience as risks emerge. In addition, macroprudential tools can, in some cases, be targeted at areas of concern. For example, the new Basel III regulatory capital framework includes a countercyclical capital buffer, which may help build additional loss-absorbing capacity within the financial sector during periods of rapid credit creation while also leaning against emerging excesses. The stress tests include a scenario design process in which the macroeconomic stresses in the scenario become more severe during buoyant economic expansions and incorporate the possibility of highlighting salient risk scenarios, both of which may contribute to increasing resilience during periods in which risks are rising.13 Similarly, minimum margin requirements for securities financing transactions could potentially vary on a countercyclical basis so that they are higher in normal times than in times of stress.

Implications for Monetary Policy, Now and in the Future

In light of the considerable efforts under way to implement a macroprudential approach to enhance financial stability and the increased focus of policymakers on monitoring emerging financial stability risks, I see three key principles that should guide the interaction of monetary policy and macroprudential policy in the United States.

First, it is critical for regulators to complete their efforts at implementing a macroprudential approach to enhance resilience within the financial system, which will minimize the likelihood that monetary policy will need to focus on financial stability issues rather than on price stability and full employment. Key steps along this path include completion of the transition to full implementation of Basel III, including new liquidity requirements; enhanced prudential standards for systemically important firms, including risk-based capital requirements, a leverage ratio, and tighter prudential buffers for firms heavily reliant on short-term wholesale funding; expansion of the regulatory umbrella to incorporate all systemically important firms; the institution of an effective, cross-border resolution regime for systemically important financial institutions; and consideration of regulations, such as minimum margin requirements for securities financing transactions, to limit leverage in sectors beyond the banking sector and SIFIs.

Second, policymakers must carefully monitor evolving risks to the financial system and be realistic about the ability of macroprudential tools to influence these developments. The limitations of macroprudential policies reflect the potential for risks to emerge outside sectors subject to regulation, the potential for supervision and regulation to miss emerging risks, the uncertain efficacy of new macroprudential tools such as a countercyclical capital buffer, and the potential for such policy steps to be delayed or to lack public support.14 Given such limitations, adjustments in monetary policy may, at times, be needed to curb risks to financial stability.15

These first two principles will be more effective in helping to address financial stability risks when the public understands how monetary policymakers are weighing such risks in the setting of monetary policy. Because these issues are both new and complex, there is no simple rule that can prescribe, even in a general sense, how monetary policy should adjust in response to shifts in the outlook for financial stability. As a result, policymakers should clearly and consistently communicate their views on the stability of the financial system and how those views are influencing the stance of monetary policy.

To that end, I will briefly lay out my current assessment of financial stability risks and their relevance, at this time, to the stance of monetary policy in the United States. In recent years, accommodative monetary policy has contributed to low interest rates, a flat yield curve, improved financial conditions more broadly, and a stronger labor market. These effects have contributed to balance sheet repair among households, improved financial conditions among businesses, and hence a strengthening in the health of the financial sector. Moreover, the improvements in household and business balance sheets have been accompanied by the increased safety of the financial sector associated with the macroprudential efforts I have outlined. Overall, nonfinancial credit growth remains moderate, while leverage in the financial system, on balance, is much reduced. Reliance on short-term wholesale funding is also significantly lower than immediately before the crisis, although important structural vulnerabilities remain in short-term funding markets.

Taking all of these factors into consideration, I do not presently see a need for monetary policy to deviate from a primary focus on attaining price stability and maximum employment, in order to address financial stability concerns. That said, I do see pockets of increased risk-taking across the financial system, and an acceleration or broadening of these concerns could necessitate a more robust macroprudential approach. For example, corporate bond spreads, as well as indicators of expected volatility in some asset markets, have fallen to low levels, suggesting that some investors may underappreciate the potential for losses and volatility going forward. In addition, terms and conditions in the leveraged-loan market, which provides credit to lower-rated companies, have eased significantly, reportedly as a result of a “reach for yield” in the face of persistently low interest rates. The Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation issued guidance regarding leveraged lending practices in early 2013 and followed up on this guidance late last year. To date, we do not see a systemic threat from leveraged lending, since broad measures of credit outstanding do not suggest that nonfinancial borrowers, in the aggregate, are taking on excessive debt and the improved capital and liquidity positions at lending institutions should ensure resilience against potential losses due to their exposures. But we are mindful of the possibility that credit provision could accelerate, borrower losses could rise unexpectedly sharply, and that leverage and liquidity in the financial system could deteriorate. It is therefore important that we monitor the degree to which the macroprudential steps we have taken have built sufficient resilience, and that we consider the deployment of other tools, including adjustments to the stance of monetary policy, as conditions change in potentially unexpected ways.

Conclusion

In closing, the policy approach to promoting financial stability has changed dramatically in the wake of the global financial crisis. We have made considerable progress in implementing a macroprudential approach in the United States, and these changes have also had a significant effect on our monetary policy discussions. An important contributor to the progress made in the United States has been the lessons we learned from the experience gained by central banks and regulatory authorities all around the world. The IMF plays an important role in this evolving process as a forum for representatives from the world’s economies and as an institution charged with promoting financial and economic stability globally. I expect to both contribute to and learn from ongoing discussions on these issues.


1. The possibility that periods of relative economic stability may contribute to risk-taking and the buildup of imbalances that may unwind in a painful manner is often linked to the ideas of Hyman Minsky (see Hyman P. Minsky (1992), “The Financial Instability Hypothesis (PDF),” Leaving the Board Working Paper 74 (Annandale-on-Hudson, N.Y.: Jerome Levy Economics Institute of Bard College, May)). For a recent example of an economic model that tries to explore these ideas, see, for example, Markus K. Brunnermeier and Yuliy Sannikov (2014), “A Macroeconomic Model with a Financial Sector,” Leaving the Board American Economic Review, vol. 104 (February), pp. 379-421. Return to text

2. For a discussion of this issue encompassing experience across a broad range of advanced economies in the 2000s, including the United States, see Jane Dokko, Brian M. Doyle, Michael T. Kiley, Jinill Kim, Shane Sherlund, Jae Sim, and Skander Van Den Heuvel (2011), “Monetary Policy and the Global Housing Bubble,” Leaving the Board Economic Policy, vol. 26 (April), pp. 233-83. Igan and Loungani (2012) highlight how interest rates are an important, but far from the most important, determinant of housing cycles across countries (see Deniz Igan and Prakash Loungani (2012), “Global Housing Cycles,” Leaving the Board IMF Working Paper Series WP/12/217 (Washington: International Monetary Fund, August)). Bean and others (2010), examining the tradeoffs between unemployment, inflation, and stabilization of the housing market in the United Kingdom, imply that reliance on monetary policy to contain a housing boom may be too costly in terms of other monetary policy goals (see Charles Bean, Matthias Paustian, Adrian Penalver, and Tim Taylor (2010), “Monetary Policy after the Fall (PDF),” Leaving the Board paper presented at “Macroeconomic Challenges: The Decade Ahead,” a symposium sponsored by the Federal Reserve Bank of Kansas City, held in Jackson Hole, Wyo., August 26-28). Saiz (2014) suggests that about 50 percent of the variation in house prices during the 2000s boom can be explained by low interest rates, and finds that it was the remaining, “non-fundamental” component that subsequently collapsed–that is, the interest rate component was not a primary factor in what Saiz terms “the bust” (see Albert Saiz (2014), “Interest Rates and Fundamental Fluctuations in Home Values (PDF),” Leaving the Board paper presented at the Public Policy and Economics Spring 2014 Workshops, hosted by the Harris School of Public Policy, University of Chicago, April 8). Return to text

3. The notion that tighter monetary policy may have ambiguous effects on leverage or repayment capacity is illustrated in, for example, Anton Korinek and Alp Simsek (2014), “Liquidity Trap and Excessive Leverage (PDF),” Leaving the Board NBER Working Paper Series 19970 (Cambridge, Mass.: National Bureau of Economic Research, March). Return to text

4. See, for example, Tobias Adrian and Hyun Song Shin (2010), “Liquidity and Leverage,” Leaving the Board Journal of Financial Intermediation, vol. 19 (July), pp. 418-37; and Tobias Adrian and Hyun Song Shin (2011), “Financial Intermediaries and Monetary Economics,” in Benjamin Friedman and Michael Woodford, eds., Handbook of Monetary Economics, vol. 3A (San Diego, Ca.: Elsevier), pp. 601-50. For a study emphasizing how changes in the response of monetary policy to financial vulnerabilities would likely change the relationship between monetary policy and financial vulnerabilities, see Oliver de Groot (2014), “The Risk Channel of Monetary Policy (PDF),” Leaving the Board International Journal of Central Banking, vol. 10 (June), pp. 115-60. Return to text

5. This evidence and experience suggest that a reliance on monetary policy as a primary tool to address the broad range of vulnerabilities that emerged in the mid-2000s would have had uncertain and limited effects on risks to financial stability. Such uncertainty does not imply that a modestly tighter monetary policy may not have been marginally helpful. For example, some research suggests that financial imbalances that became apparent in the mid-2000s may have signaled a tighter labor market and more inflationary pressure than would have been perceived solely from labor market conditions and overall economic activity. Hence, such financial imbalances may have called for a modestly tighter monetary policy through the traditional policy lens focused on inflationary pressure and economic slack. See, for example, David M. Arseneau and Michael Kiley (2014), “The Role of Financial Imbalances in Assessing the State of the Economy,” FEDS Notes (Washington: Board of Governors of the Federal Reserve System, April 18). Return to text

6. For a summary of house price developments across a range of countries through 2013, see International Monetary Fund (2014), “Global Housing Watch.” Leaving the Board Return to text

7. For a discussion of macroprudential steps taken in Canada, see Ivo Krznar and James Morsink (2014), “With Great Power Comes Great Responsibility: Macroprudential Tools at Work in Canada,” Leaving the Board IMF Working Paper Series 14/83 (Washington: International Monetary Fund, May). Return to text

8. See Norges Bank (2010), “The Executive Board’s Monetary Policy Decision–Background and General Assessment,” Leaving the Board press release, May 5, paragraph 28. Return to text

9. See Per Jansson (2013), “How Do We Stop the Trend in Household Debt? Work on Several Fronts,” Leaving the Board speech delivered at the SvD Bank Summit, Berns Salonger, Stockholm, December 3, p. 2. Return to text

10. For a discussion, see Min Zhu (2014), “Era of Benign Neglect of House Price Booms Is Over,” Leaving the Board IMF Direct (blog), June 11. Return to text

11. These questions have been explored in, for example, International Monetary Fund (2013), The Interaction of Monetary and Macroprudential Policies (PDF) Leaving the Board (Washington: IMF, January 29). Return to text

12. The IMF recently discussed tools to build resilience and lean against excesses (and provided a broad overview of macroprudential tools and their interaction with other policies, including monetary policy); see International Monetary Fund (2013), Key Aspects of Macroprudential Policy (PDF) Leaving the Board (Washington: IMF, June 10). Return to text

13. See the Policy Statement on the Scenario Design Framework for Stress Testing at Regulation YY–Enhanced Prudential Standards and Early Remediation Requirements for Covered Companies (PDF), 12 C.F.R. pt. 252 (2013), Policy Statement on the Scenario Design Framework for Stress Testing. Return to text

14. For a related discussion, see Elliott, Feldberg, and Lehnert, “The History of Cyclical Macroprudential Policy in the United States.” Return to text

15. Adam and Woodford (2013) present a model in which macroprudential policies are not present and housing prices experience swings for reasons not driven by “fundamentals.” In this context, adjustments in monetary policy in response to house price booms–even if such adjustments lead to undesirable inflation or employment outcomes–are a component of optimal monetary policy. See Klaus Adam and Michael Woodford (2013), “Housing Prices and Robustly Optimal Monetary Policy (PDF),” Leaving the Board working paper, June 29.

http://www.federalreserve.gov/newsevents/speech/yellen20140702a.htm

Thanks to Matthew Goldman. For reaction to Chair Janet’s Speech read this:

http://www.acting-man.com/?p=31577

The Muslim World’s Challenges–Part 1


May 28, 2014

The Muslim World’s Challenges

By Dr Farhan Ahmad Nizami

ISLAMIC PAST: Legacy was built on Muslims’ confidence in Islam, sustained by material prosperity, combined with political and legal stability

Dr Farhan Ahmad NizamiFOR about a thousand years, roughly from the 7th century onwards, the people under Islamic rule made striking advances in their material and intellectual culture.

The contribution of those advances to modern Western philosophy, sciences and technology has been extensively studied. But I want to speak about their distinctively Islamic qualities.

The area under Islamic influence stretched overland from the Atlantic in the west to the borders of China, and across the Indian Ocean to the islands of the Malay archipelago.

This vast area was commercially interconnected with much continuous and profitable exchange of goods. It was also culturally interconnected, with prodigious traffic in books and ideas, scholars and travellers.

Its people busied themselves in seeking knowledge and writing it down. So much so was this that, to this day, there remain huge quantities of manuscripts, from different ends of the Islamic world, yet to be catalogued and studied.

The regional diversity and assimilative embrace of Islam as a civilisation is manifest in the names by which great figures in Islamic scholarship are best known: al-Qurtubi, al-Fasi, al-Iskandari, al-Dimashaqi, al-Baghdadi, al-Isfahani, al-Bukhari, al-Dihlawi and al-Jawi.

The language of communication among scholars was mostly Arabic, with Persian and Turkish becoming important later in the east. This dominance of Arabic was not the result of any policy to diminish local languages. It was simply a gradual extension of the authority of the language of the Quran and its teachings.

Muslims believed that the way of life defined by the Quran summed up the best of the teachings of the past. They expected that non-Muslims, too, would have knowledge, skills and virtues. They expected to learn from them and to fit that learning with Islam.

Islamic civilisation thus self-consciously set out to co-exist with and absorb the cultures of others. It did so from a position of political strength.

The House of Wisdom (Bayt al-Hikma) in Baghdad, funded by the Caliph, is the best-known example of this attitude. Translations were commissioned of works in every branch of learning, from metaphysics to the science of making poisons. Once translated, these works were studied critically, then improved and extended.

The dominant streams in this flood of knowledge were Hellenic, Persian and Indian. The Chinese script proved too severe an obstacle to the absorption of Chinese philosophy and science. However, Chinese influences are found everywhere in the material culture of the Islamic world, in decorative motifs, and in the skills of making paper, ceramics, glass, metal-ware, textiles, dyes and drugs.

The Quran presented the teaching of all God’s messengers as a unified legacy. Muslims set out to harmonise older traditions of learning with that legacy. This effort was not universally admired.

In particular, the presentation of Islamic teachings in the style of Greek philosophy remained controversial for centuries. In the end, it had a more enduring influence on the medieval Christian world than on Islam.

Such controversies did not dampen Muslims’ self-confidence. In general, Islamic norms continued to encourage intellectual adventure and achievement. Muslims were aware of living in prosperous, stable societies, and comfortable with non-Muslim communities among them. They considered themselves forward-looking, inventive and multi-cultured.

Their best scholars made innovations of lasting importance in mathematics and experimental science, and applied them in technical instruments, manufacture, and engineering. And the wealthiest royal courts competed to own and display the results.

Al-Jazari’s famous water-clock illustrates this well. Its water-raising technology is Greek; the elephant, inside which the great vat of water is hidden, represents India, the rugs on its back are Persian; on top of the howdah sits an Egyptian phoenix; on its sides are conspicuously Chinese red dragons. This deliberately multicultural device was constructed shortly after the Crusades.

All that said, while Muslim societies were stable, their governments were often not: regime change was usually violent and disruptive. Politically, the Muslims became ever weaker and more divided.

Little now survives of their cultural self-confidence; even less remains of the personal and political skills they had developed to manage life alongside different communities and confessions.

Their ways of organising long-distance commerce and regulating free markets have vanished completely. The material remains of the rest — all the thinking in all the books, colleges, libraries and hospitals — interest only medievalists, museums, and tourists.

The past still has presence in the public spaces; you still hear the call to prayer, even in secularised city centres. There is still a feel of Islam in private homes and personal manners.

We can objectively map the movements of books, ideas and scholars from one end of the Islamic world to the other in every century until the modern period.

The recovery following the Crusades and Mongol conquests included the building of madrasa and colleges that taught a rich, varied curriculum.

There is little evidence of that during European colonial rule. The madrasa of that era were not well funded. They could afford to focus only on Islamic sciences narrowly defined.

For the rest of their education, Muslims had to leave the cultural space of Islam. A division became established between religious and secular education, between old and modern, with Islam on the side of the old. That division is at the heart of the present challenges facing Muslims in every part of the world.

When we memorialise the legacy of the Islamic past — when naming public institutions, or presenting past glories in books and museums — we should remember that this legacy was built on Muslims’ confidence in Islam.

This confidence was sustained by material prosperity, combined with a sufficient degree of political and legal stability. Without prosperity and stability, the constraints on political and economic decisions are too strong for people to make their own choices for their future.

We need only look at the difficulties in post-recession Europe to know that feeling powerless to shape the future is not special to Muslim societies. It is not related to their being Muslim but to the material conditions in which they are Muslim.

The end-goal is hardly a matter of dispute among the vast majority of Muslims. It is to re-establish connections between Islamic upbringing and education and modern secular, technical education.

The latter provides the means for individuals to make their way in the world, to have things to do in it and to enjoy doing them successfully. The former provides them with their religious orientation and identity.

Religious orientation is not itself the goal. The aim is not to have people identify as Muslims; the vast majority already do that. Rather, the aim is to enable them to prosper in the world in ways that express and test, inform and improve, their identity as Muslims.

As the Chinese saying puts it, the journey of a thousand miles begins from where your feet are. We in the Muslim world can only set out from where we stand in reality. That reality needs to be stated bluntly.

Today, Muslim identity is not sufficiently relevant to how things are done in the world, especially in the collective spheres of life.

Muslim identity is not the engine of prosperity, of either the production or the distribution of wealth. Muslim identity is not the engine of knowledge, of collecting it, or adding to it, or disseminating it. (This is true, rather unexpectedly, even of knowledge about the past legacy of Islam.)

Muslim identity is not the engine of political and legal order. Or rather, it is not so in a positive way. Instead, we see mainly negative expressions of it. We see it in a despairing withdrawal from the evils of power: in the attitude that the status quo, however bad, is still better than chaos.

We see it also in despairing violence intended to erase the status quo, without any labour of understanding and analysis about what will follow.

The end-goal is to make being Muslim relevant and effective in the quest for knowledge, in the quest for prosperity and in the quest for political order. Except in the sphere of personal courtesies and private concerns, being Muslim is no longer the currency of exchange neither among Muslims themselves, nor between them and non-Muslims.

To make it so again is a task of huge scale and complexity. Our first priority must be to establish institutions and forums so that the present challenges are properly identified, and then try to guide expectations towards realistic, achievable goals.

The hurdles in the way are real and substantial.First, there is the hurdle, as I said, of determining what is do-able and specifying it intelligently, in the light of local realities; in the way that sustains momentum towards the next objective; and without losing sight of the end-goal.

Second, there is the hurdle of co-ordinating effort with other societies and states. Priorities can vary sharply with local conditions. Therefore, there will be a need for trust among policymakers, with tolerance for variable levels of competence and energy.

Thirdly, there is the hurdle of rejection by those who oppose any attempt to bring religious concerns into the public sphere. The response will sometimes be concession, compromise and conciliation. At other times, it will take the form of steadfastly holding one’s ground. In either case, alert flexibility — the readiness to adjust to different circumstances — is essential.

Among general objectives, the most inclusive is to build up the commercial, financial, trade and cultural ties between Muslim societies.One measure of the need is the low values and volumes of bilateral trade between Muslim-majority countries, compared with their trade with non-Muslim countries.

Another measure is the low values and volumes of trade outside the dollar-dominated banking system.

Another is the low numbers of Muslims travelling for higher education from one Muslim country to another; the general preference, for those who can afford it, remains Europe or America.

Yet another measure is the massive inflow of cultural product from the non-Muslim into the Muslim world — the information and imagery people get from their televisions and computers; the advertising that influences the things they want to own; the time they give to sports and other entertainments.

All of this shapes people’s horizons, and their understanding of what is important and what is possible.

For the states that make up the Islamic world, the need to work together is clear. Modern technologies make it much easier to do that than it used to be. The sacrifices needed for cooperation to succeed are widely understood. But we should also highlight the benefits of a strengthened economic base in Muslim states, through increase in trade and long-term investments in human development.

The distribution of resources favours Muslim nations, but they lack the will and confidence to manage them to best advantage. If only because they are Muslim nations, their leaders have a special responsibility to nurture that will and confidence.

Their aspirations and policies should be consciously linked to the history, culture and faith that Muslims share. If enough far-sighted individuals have the courage of their Islamic convictions, what seems desirable but unrealistic can become a realistic and achievable goal.

Muslims are commanded to “bid to the good and forbid from the evil” (amr bi-l-ma`ruf wa-nahy `ani l-munkar). This entails commitment to the direction and quality of the whole social ethos. Not just traditional forms of family life and neighbourliness but also religiously valid ways of earning a living, co-operatively with others and with the natural environment.

As I mentioned, in the past, Muslims traded globally. The expansion of Islam’s influence followed the trade routes out of its Arabian heartland. For Muslims, economic effort is an integral part of responsible living.

We have a reliable record of how the Prophet and his companions went about discharging that responsibility. Muslims may not engage in practices that deliberately and systematically deprive others of their livelihood, and then, in response to a separate impulse, give charitably to relieve the distress their economic practice has generated.

Rather, the effort to do good works and the effort to create wealth must be sustained as a single endeavour. Both means and ends must be halal.

More Muslims need to join, with each other and with non-Muslims, in the urgent need to balance the creation and distribution of wealth so that a good life is available to all, including future generations.

Muslims’ efforts to develop techniques of financing and investment that are free of usury and uncertainty (speculation) are pertinent to the wider concerns about ethical investment, fair and genuinely free trade, and abolishing the export, through debt-slavery, of poverty, instability and pollution to the poorest and weakest on this earth.

We have seen over the last forty years massive growth in the stocks of Islamic financial capital. But these stocks are not being deployed to develop the economic capacity of Muslim countries. It seems that the wealthiest Muslims, individually or as sovereign powers, prefer the safe, quick returns from investment in the non-Muslim world.

In many Muslim states, economic infrastructure and activity remain linked to servicing the economies of former colonial powers. Those linkages are not sustained only by fear, but by individual and institutional inertia — by lack of will and imagination on the part of officials to take the necessary steps to put in place the needed skills and systems.

One reason that Muslims do not invest their wealth and talents in Muslim countries is that those countries are unstable, unsafe and unproductive to work in.

This vicious circle is not a function of those countries being Muslim: similar socio-economic conditions elsewhere have similar effects — an exodus of energy, talent and money.

Many Muslim states inherited their political boundaries from the colonial era. Those boundaries increased dependence on the colonial power to keep order. The anti-colonial struggle provided a shared history for communities separated by ethnic and religious differences. In the post-colonial era they have not been able to find common ground. Solidarity is not a precondition, but an outcome, of the effort to identify common purposes. It is something that has to be, and can be, constructed.

To make Muslim identity effective in the world, a major policy commitment must be to make justice and fairness the decisive value for all modes and levels of governance.

This means allowing independent centres of authority to emerge and recognising their concerns and aspirations. It means a redistribution of opportunities to acquire wealth and influence, so that decision-making is not concentrated in the same few hands.

This must be a process, not a gesture. It must be given the time it needs, according to local conditions, to happen gradually.

In this way all parties learn to trust and work with each other to mutual benefit. If government is seen to be in the service of the people as a whole, its security is guaranteed by them.

Tomorrow: Part II

Dr Farhan Ahmad Nizami presenting the Perdana Putrajaya Lecture at the Putrajaya International Convention Centre yesterday. Bernama pic

Ah Jib Gor: You are just another Abdullah Badawi


December 3, 2013

Ah Jib Gor: Just Resign

Bakri Musaby Dr. M.Bakri Musa
Morgan-Hill, California

Habis lah ‘Jib! (You are finished, Najib!) You are just another Pak Lah! Malaysia cannot afford two consecutive incompetent leaders as it enters the 21st Century. The precious and critical first decade is already lost.

Najib’s latest “Pak Lah moment” came when his Police Chief, Khalid Abu Bakar, threatened to arrest Mariam Mokhtar for sedition over her article, “One Ideology, Two Reactions,” posted on Freemalaysiatoday.com on November 29, 2013. Mariam dared to highlight the highly favorable treatment Aishah Wahab, the woman allegedly held as a slave by her Marxist master in London, received from the Najib Administration versus the visceral contempt it heaped upon Chin Peng, leader of the defunct Malayan Communist Party.

Mariam (right) suggested that the Najib Administration’s generous gestureMariam Mokhtar to Aishah was more on exploiting the favorable publicity surrounding that London slavery case.

“She had better watch out,” the Police Chief warned, “or we will go after her!” The “her” is of course Mariam.  Jantan kampung betul! (a real village bull!), as we say in the village when referring to such petty bullies.

The  Police  Chief should display his manhood where it would really count, as with confronting the Singaporeans spying on Malaysia, those intruders at Lahad Datu, or the alleged treachery with the loss of Pulau Batu Puteh. Those are the real and menacing threats to the nation’s security and stability, not the eloquent writing of a young woman!

The Arrogant IGPIGP Khalid Ashburn

Clearly Najib and his officials are threatened by Mariam’s ideas. Najib is stuck in the time warp of the old feudal ways, unable to grasp the new reality of a porous digital age. He and Khalid should be complimenting Mariam for her ability to write well, and in English, as well as her courage to express her views.

If Najib and Khalid have a better grasp of English, they would have discovered that Mariam’s earlier essay in Malaysiakini.com, “Three Slaves and the Rakyat,” on the same case had more punch. In that piece she noted that while the three London women were imprisoned for three decades, Malaysians have been “metaphorically imprisoned for the most part of 56 years,” adding that the three women were shackled by “invisible handcuffs,” just like Malaysians.

“It is doubtful,” Mariam continues, “if many Malaysians realize the similarities between themselves and those three women.” Now that’s powerful stuff, but Najib and Khalid missed Mariam’s well-chosen metaphor and imagery!

Congratulations Mariam! Your voice is being heard at the highest level, and widely too as judged by the outpouring of comments both articles elicited. Keep writing! I hope the Police Chief and Najib’s other top officials would continue widening their reading repertoire beyond the UMNO newsletters, The New Straits Times and Utusan Melayu.

Mariam is not the first writer to be intimidated by the authorities. She does not need to be reminded of the horrible experiences of Kassim Ahmad, Syed Hussein, Haris Ibrahim, Hishamuddin Rais, and Raja Petra, among others.

I have nothing to offer Mariam except my best wishes, and I wish her that, and much more, as with her continued success in writing. I can, however, pass on the advice from that great Indonesian writer, the late Ananta Prameodya Toer, a man who had endured much from his government.

Orang boleh pandai setinggi langit,” Pramoedya wrote in Rumah Kaca (The Glasshouse), “tapi selama ia tidak menulis, ia akan hilang di dalam masyarakat dan dari sejarah.” (Your intellect may soar to the sky but if you do not write, you will be lost from society and history).”

Rest assured that when the collective “invisible handcuff” gets unshackled, as ultimately it will, Malaysians owe a huge debt of gratitude to brave individuals like Mariam Mokhtar.

As for that Police Chief, only his family would remember him, or if remembered by others, he would prefer not to be. Look at his many ‘illustrious’ predecessors; one jailed for punching Anwar Ibrahim, another a defendant in a multimillion-dollar lawsuit, and a third rewarded by being Chairman of a casino. That character apparently gambled right!

Najib’s Ultimate Pak Lah Moment

Najib1Najib warned the country is on the brink of bankruptcy!

Back to Najib’s other Pak Lah moments, the supposedly pious and humble Pak Lah squandered millions of taxpayers’ funds to renovate Sri Perdana before he deemed it livable. This from a man who only a decade earlier did not even own a house!

Najib however, bested Pak Lah on this front. Najib burned over two million ringgit a year just on electricity. When citizens complained, he haughtily defended his wasteful ways by suggesting that his official guests should not have to dine by candle light! He must have the whole United Nations delegates as his guests, and everyday too!

More likely Najib must have really turned down the thermostat and then had the fireplace roaring to simulate the English ambience of his student days so he could cuddle up to Rosmah.

Najib should remember the advice he received from his Prime Minister father, Tun Abdul Razak when he (Najib) and his brothers were clamoring for a swimming pool at the old Sri Perdana. “What will people say,” Najib quoted his old man as saying in turning down their request.

Malaysia's Executive JetMalaysia’s Executive Jet

Then there is the ultra-luxury, custom-fitted Airbus jet. Even Queen Elizabeth and Prime Minister Cameron do not have one. Pak Lah was severely criticized for his excessive use of that expensive toy. At least his wife (the first or second) did not get to use it in her personal capacity.

Today we have Mrs. Najib (the second)–Rosmah– jaunting off in it, oblivious of the cost to taxpayers. I do not know which is more reprehensible; Najib requesting the approval from his cabinet for his wife’s use of the jet or the cabinet approving it. This at a time when he warned the country is on the brink of bankruptcy!

najib-and-badawiAbdullah Badawi burdened Malaysia for over five years; the nation is still paying for his many follies and general incompetence. Many claim that Najib is worse than Pak Lah; that is being petty. When you score is already a miserable F, it does not really matter whether it is also F-minus.

Expect at this week’s UMNO General Assembly for Najib to execute yet another Pak Lah moment – reading his “own” pompous self-congratulatory pantun (poem). Do not expect however, for the delegates to even mention let alone review this critical issue of his glaring incompetence and profligate ways.

Thus it behooves Malaysians to ensure that this burden of Najib’s inept leadership comes to an end soon. Malaysians must force Najib to perform his ultimate Pak Lah moment – resign!

READ :

Three Slaves and the Rakyat by MM: http://www.malaysiakini.com/columns/247523

Prime Minister Najib Razak meets Christiane Amanpour


November 4, 2013

Prime Minister Najib Razak meets Christiane Amanpour

Watch this video and tell me what you think. I believe he did better than his predecessor, Tun Abdullah Ahmad Badawi. But  that does not say much, does it? –Din Merican

Tony Pua says to Najib stop embarrassing Malaysia

by Alyaa Azhar@http://www.freemalaysiatoday.com

Prime Minister Najib Tun Razak was hypocritical when answering questions during the CNN interview hosted by Christiane Amanpour, says DAP’s Tony Pua.

Prime Minister Najib Tun Razak has been urged to “stop embarrassingNajib Razak Malaysians” with the global moderate statesman facade as his actions are to the contrary.

Petaling Jaya Utara MP Tony Pua was commenting on Najib’s 12-minute interview with Christiane Amanpour on CNN last week.

“At the interview, the Prime Minister’s facial expression tells the world how uncomfortable he was in answering the questions thrown at him which exposes the facade of a global moderate statesman,” said Pua.

The DAP national publicity secretary also pointed out how the Prime Minister sang a different tune when Amanpour directed the spotlight to Malaysia’s increasing religious conservatism and extremism.

Najib had said that his priority was to ensure peace and harmony in Malaysia.

“What the Prime Minister is telling the world is that while it is hunky-dory to make the glamorous pitch for moderation at international platforms, moderation takes a back seat to peace and harmony domestically,” Pua said.

tony-pua2Pua elaborated that the peace and harmony mentioned by Najib was merely euphemism for pandering to the religious far-right and restricting the rights of the minority.

“As an example, the Prime Minister told Reuters that the curb against Catholic weekly, The Herald, from using the word Allah was necessary to protect public security and national harmony, going as far as to describe The Herald as a publication with wide circulation,” he said.

However, Pua stressed that the wide circulation was a distribution of only 14,000 issues in churches in a country of 30 million people.

“Instead of justifying his peace and harmony priority, his defense only proved the persecution of minorities in Malaysia,” added Pua.

He then opined that Najib does not have any right to be a statesman for moderation at international forums if he cannot practise what he preaches.

“His pretentious call for the Global Movement of Moderates only leads to being easily exposed as a hypocrite at the global arena and become an embarrassment to the country,” Pua stressed.

The Allah Issue will not just go away,so get real


October 15, 2013

The Allah Issue will not just go away,so get real

by Zaid Ibrahim

COMMENT: The Court of Appeal (CoA), as expected, has reversed thezaid Kuala Lumpur High Court decision on the use of ‘Allah’ by Catholic weekly The Herald.

The CoA, however, took a long time to hear and decide on the appeal, and this has enabled the general election to be safely tucked away without anyone having to worry about any adverse effect the decision might have had, had it been delivered earlier.

Before my fellow-Muslims think that the decision is a great victory for them, I must urge them to think properly. The decision may be a big victory for some Muslim NGOs or Nasharuddin Mat Isa, Ibrahim Ali  and Hassan Ali, but for the rest of the Ummah it will matter very little.

The decision binds only The Herald. How many Muslims read it? How many are threatened by anything besides their own insecurities? Besides, someone can always produce another publication with a new name and the controversy will start all over again.

Loud Mouth Zahid HamidiThe Home Minister will issue yet another directive that the new publication is ‘against public order’ and lawyers will be busy, as will Ibrahim Ali and his gang. Yet another public quarrel will ensue, and this will go on and on.

The CoA decision is limited to The Herald alone. This does not, and should not, mean that Christians are prohibited from using ‘Allah’ in their prayers, or that they are prohibited at all in Sabah and Sarawak.

Christians beyond The Herald (and Catholics too), can still use that Name whenever they want to, and in any celebration they have. Of course, some Muslim NGOs will counter this new situation and go to court yet again to stop all Christians, regardless of denomination, from using ‘Allah’ on any occasion, religious or otherwise.

They will probably seek to widen the scope of the original government order to include prohibiting Christians and other non-Muslims from using ‘Allah’ at all under any circumstance. What about Sikhs? Sikhs can’t be bound by an order limited to a single Catholic newspaper.

The CoA has also ventured into new territory, although I shall let my colleagues who are more learned in this part of the law dissect the judgement.

All I can gather from the CoA decision is this: Islam has primacy over other faiths and, if Muslims are upset about some part of the practice of non-Muslims – and the Minister issues an order to stop non-Muslims from that practice – then the order is considered ‘valid’.  The CoA has also made it clear that it will never disagree with the Minister’s order.

How will this be enforced?

Religious people fear God more than the courts, whether they are Muslims or not. This judgment means nothing to the God-fearing Christians.

The court can declare whatever it wants and some Christians (and those of other faiths, and perhaps Muslims too) will do whatever religion requires of them, regardless of the cost to themselves or others.

Religion has that effect on some people. It can drive emotion beyond reason. But many regular Christians believe that ‘Allah’ is the right Name for God. They will continue to use that Name and the Courts will not be able to do anything about it. How can anyone initiate contempt proceedings against so many people?

The courts will then look stupid – how do will they enforce such orders? This is the scenario I foresee happening in the coming years of this so-called 1Malaysia. Silly things will continue.

Likewise, Muslims will fight this ‘battle’ for years to come, and they will be so preoccupied by this war over God’s Name against Christians and other infidels that no one will have little time left for education, their families and their  general economic improvement.

This is why I sometimes think that this is all part of the Jewish-Freemason-Communist-Illuminati-American-Martian (insert favourite bugbear here) conspiracy—to sidetrack the Muslims, Christians, and everyone else from focusing on what truly matters in life.

We are made to think that we need to continue to fight great battles and to seek great victories. Maybe we want to think it.

Get real.


ZAID IBRAHIM, a lawyer by training, was involved in politics for a time. This article is reproduced from his blog ‘The Zaidgeist’.

Mariam Mokhtar on the Imbecilic Home Affairs Minister


October 10, 2013

Mariam Mokhtar on the Imbecilic Home Affairs Minister

http://www.malaysiakini.com

ZHHome Minister Ahmad Zahid Hamidi uses aggression to try to intimidate reporters, but he was hiding something behind the bully-boy mask which he wore at the press conference on Oct 4.

If Zahid thinks he can use his altercation with Malaysiakini to pursue an agenda which will curb press freedom, then he is seriously misguided.

It is amazing how much Zahid has changed in 15 years. At the UMNO-Baru assembly in 1998, Zahid attacked former PM Mahathir Mohamad for corruption, cronyism and nepotism. By 1999, he was practically eating out of Mahathir’s hands and referred to the then-premier’s remarks as “advice from a father to his son”. Then, he vowed to back the party leadership, but today he shows little concern for the way in which our money is mis-spent.

No one could accuse this writer of spinning; not with video footage showing Zahid bringing rudeness and thuggish behaviour to an art form. This is not the first incident of unbecoming behaviour from UMNO-Baru politicians, or their supporters, against members of the media.

A few months ago, Zahid was embroiled in a court case in which he was alleged to have assaulted a businessman. Zahid is better known for his idiocy, not powers of reasoning. His preferred mode of problem-solving is to threaten people and order those who are dissatisfied with the state of the country, to emigrate.

Zahid should realise that attributing the loss of the Police weapons to human error, is too glib. In all probability, neither he nor the Inspector-General of Police (IGP) knows what became of the weapons. If they have the information, then why are they withholding it?

Zahid and ReporterZahid started a running dialogue with Malaysiakini, when he should have been fielding questions from reporters. This diversionary tactic was a ruse to waste time.Having berated Malaysiakini, he made a hasty retreat, just like a coward. Zahid’s body language showed that he was keen to avoid further questioning.

UMNO-Baru spends hundreds of millions of ringgit on its elections and on foreign consultants to spruce up its image. Why does it not spend money for its politicians to attend classes in ethics, civility and good manners? How about educating their politicians to answer reporters’ questions properly?

As taxpayers, we want to know the measures the Home Ministry or the Royal Malaysian Police (PDRM) will take to stem further wastage. What specific forms of human error does Zahid think could account for the loss of the weapons?

Zahid claimed that none of the losses were from “a breach of trust, deviant acts or elements of bribery”. How does he know? Did someone file a police report and were detailed investigations conducted?

Zahid denied that carelessness and mistakes made in the line of duty were to blame. What exactly does he mean? If the system is at fault, then he should say what remedial steps he or the IGP will take to rectify the mess.

Carelessness and error?

In August, it was reported in a daily newspaper that a Policeman’s pistol and ammunition had been stolen as he lay sleeping in his car, with his window wound down, in a lay-by in Shah Alam. It was odd that he had just returned from a funeral, carrying his gun, passport and lots of cash.

Is this the sort of carelessness and error Zahid referred to? Was this Policeman punished? Did he sell his gun to a syndicate? How do we know either man is telling the truth?

Zahid’s curriculum vitae states that before venturing into politics, he worked for two banks, OCBC and Bank Simpanan Nasional. Any bank staff member will confirm that at the end of the month, every sen has to be accounted for and no one is allowed to leave the bank and return home, until the books are balanced. Zahid may not have started his banking career as a teller, but this practice is drummed into every bank employee.

The video clip of Zahid’s infantile and childish behaviour at the October 4 press conference shows him acting like the school bully in a playground. He is verbally aggressive and he knows he can use his powers as home minister to make reporters compliant.

His angry outbursts are a means of showing off. He attempts to shame anyone whom he accuses of doing something wrong. He is fiercely argumentative when anyone tries to make a point. He threatens to punish and tries to humiliate in public anyone with whom he argues. This is not spin, but is accurate reporting. Zahid is damned by his own words and actions.

Zahid likes reporters who publish only what Umno-Baru want them to say. Incredibly, UMNO-Baru is the only political party which bans Malaysiakini from covering its functions, especially its supreme council meetings. This action compromises freedom of speech.

Many people will have noticed the steady build-up, since GE13, of harsher laws. Mahathir came out of the woodwork to support stricter laws, claiming that the streets were no longer safe; not that he would know or care.

Zahid claims that amendments to the Prevention of Crime Act (PCA) will be used to punish criminals, but cynics suspect that these draconian provisions will be used to gag opposition politicians, activists and reporters. We appear to be returning to the bad old days of restricted freedom.

The amendments were forced through Parliament and Zahid would be foolish to think he can broaden this latest attack on Malaysiakini into an attempt to gag the media, but the indications are that he is heading that way.

A day after the attack on Malaysiakini journalist Lawrence Yong, Zahid was at a security seminar for community leaders in Malacca, where it was alleged that he had made “sensitive remarks”.

Zahid Ham
Upon the discovery of the presence of journalists, Zahid banned them from publishing what was discussed and he followed this with a threat that he would have their newspapers shut down. The audience booed the media representatives, who were then forced to retreat.

Would Zahid have dared to humiliate, finger-wag and slap the shoulders of a foreign correspondent?Perhaps, his rude behaviour is reserved for Malaysian reporters because he can gag them and punish them, with the laws at his disposal. A bully boy attracts loyalty by fear. If Zahid harbours ambitions of becoming Prime Minister, he should tread warily.

Dato Dr Mahmood Merican: Be Kind to Your Fellowmen and Love our Nation


September 30, 2013

Dato Dr Mahmood Merican: Be Kind to our Fellowmen and Love our Nation

“Now at the end of my long lecture and near the end of my long career and my life the one worthwhile message I can leave you is “Be Kind”. It is easier than to be wise. We can be kind with our time, energy or money. Or we can be kind with just a smile, a word or a gesture. Kindness or charity is basic to the points I made in the talk: good and ethical medicine, cordial interracial relations, affirmative action, help for the disadvantaged, love for our fellowmen and for our nation.”–Mahmood Merican

Event Title: 12th Tunku Abdul Rahman Lecture
29-Sep-2013 to 29-Sep-2013 Past Event
Venue: Medical Academies of Malaysia,
210, Jalan Tun Razak, 50400 Kuala Lumpur
Secretariat: G-1 Medical Academies of Malaysia 210 Jalan Tun Razak 50400 Kuala Lumpur Tel: 603 40234700, 40254700, 40253700 Fax: 603 40238100
Organizer: Academy of Medicine of Malaysia & Ministry of Health Malaysia
Theme: delivered by Dato Dr Mahmood Merican
Master of the Academy of Medicine of Malaysia, Dr Chang Keng Wee,

Dr Mahmood Merican2I thank you for the honour you bestow on me by inviting me to deliver this, the 12th Tunku Abdul Rahman Putra  Lecture.

I accept the honour with trepidation in view of the greatness of Tunku, our First Prime Minister. The Tunku to whom we owe a tremendous debt of gratitude, in particular, for four major achievements:

  1. Winning Merdeka from the British and winning in a uniquely peaceful way in 1957.
  2. Steering the independent nation through 13 years till his retirement in 1970
  3. Successfully creating the enlarged nation, Malaysia, in 1963 and
  4. Leaving a legacy of charm, moderation and inclusiveness in our culture.

I believe Dr Chang chose me because I am old. Old enough to have known Tunku personally and to have lived through British colonial times, then the Japanese occupation, to have studied during the tumultuous years of our agitation for Independence and the Communist Emergency and to have worked as a doctor over a period concurrent with the Merdeka years. I graduated from University Malaya then in Singapore a year after Merdeka in 1958. That’s how old I am. Otherwise Dr Chang would not have chosen me.

I first met Tunku in December 1957. I was then a medical student in Singapore and President of the University of Malaya Students Union. It was soon after Merdeka and Tunku came to declare open the King Edward VII Hall of Residence in the grounds of the Singapore General Hospital.

Tunku was an aristocrat and a leader. He was also tall and big. Like every other student I held him in awe. But on that morning he spoke with such relaxed candour and humour that we were all put at ease. He said he hoped for two things:

  1. One was that “ from these portals will issue a steady stream of qualified doctors” to relieve the shortage in the government medical service and
  2. “My other hope is that when the students here leave this Hall to practise the art of healing, they will continue to practise the art of living with others in harmony and a gracious atmosphere”

Let me lead off first with Tunku’s first hope of “a steady stream of doctors” to see how we have done healthwise for our country. After that I will return to Tunku’s second hope for our practising “the art of living in harmony and a gracious atmosphere”.

On Tunku’s hope for good doctors and good health care for the country, we have done very well indeed though, of course, there are some concerns. Many present here in this hall deserve credit for how well Malaysia has implemented public health and preventive medicine and has kept up with the remarkable advances in clinical medicine. Our health indicators such as life expectancy, infant and maternal mortality show the overall health of the people to be comparable with advanced countries.

There are also undesirable changes including the rising cost of medical care, the commercialisation of healthcare, a lowering of ethical standards and a lowering of training standards – this last due to the recent meteoric rise in the number of medical schools and the annual number of new graduates for whom we simply do not have enough hospital facilities and specialists to adequately train during their housemanship and early years of practice.

These less desirable developments have contributed to  a waning of respect for doctors. Sadly, present doctors will not receive the high respect that old doctors like me enjoyed in days gone by. Commercialisation of healthcare and lowering of ethical standards are among the causes. It is appropriate that this Congress with the theme of  “Towards Excellence in Healthcare” incorporates the National Ethics Seminar.

Ethical practice is basically placing the interest of the patient as the paramount consideration.

Let us now turn to Tunku’s second hope – that we continue to “practise the art of living in harmony and a gracious atmosphere”.

It is a hope and a prayer.Racial harmony continues to be our greatest concern.

It was 1957 when Tunku expressed these hopes. If ever there was a time when we can say there was harmony it was then when we had just achieved Merdeka. At least among English educated students race was not a concern. We lived, played, studied and laughed together and even laughed at each other without risking offence. During my days in the university I always had a Chinese roommate.

Tunku then epitomised unity. To quote Tun Mohamed Suffian Hashim, the distinguished former Lord President (as the Chief Justice was then called), Tunku “won the confidence of the Sultans, united the leaders of the three main parties to form the Alliance, won the love of the Malays and the trust of the non-Malays.”

Under his leadership the country made great strides, overcame the Communist menace, developed rapidly and then grew larger with the creation of Malaysia in 1963, 50 years ago.

Yet in 1969, 12 years into his stewardship, racial riots erupted on May 13. About 200 people died. Many more were injured. Vehicles and buildings were burnt.

On that fateful day I was in charge of the Orthopaedic Department of the General Hospital Kuala Lumpur, my boss, the late Datuk (later Tan Sri ) Dr Abdul Majid Ismail, being overseas then. Normally already understaffed and overcrowded with patients the hospital, especially the Orthopaedic and Surgical Departments, had to deal with the casualties. I must pay tribute to all the staff and the volunteers who for several days never left the hospital.

Like others who lived through it I want to stress we must never forget the lesson of May13.

The riots exploded 12 years into the premiership of a kind, tolerant and generous leader, the Tunku.

Why May 13?

The basic essential cause was racial polarisation – the mutual resentment between Malays and Chinese – the Malays feeling themselves being dispossessed in their own country, the Chinese feeling themselves to be discriminated against. Malays were aggrieved not only with their poor economic status but also with the challenge to their political strength.

In the run up to the 1969 Elections communal appeals by politicians heightened racial grievances and resentment. The opposition parties made large gains. Their exultant victory parade ignited the riots.

The outlook for the country then was truly gloomy. It is to the credit of the administration and of leaders like Tun Abdul Razak, who succeeded the Tunku as Prime Minister, and his Deputy Tun Dr Ismail Abdul Rahman that order was quickly restored and measures taken to set the country back on the path of progress.

The New Economic Policy (NEP) was launched to attain national unity by a two-pronged strategy of eradicating poverty irrespective of race and restructuring society by eliminating the identification of race with economic function.

The Policy has succeeded remarkably well in reducing poverty. It has to some extent elevated the economic standing of the Malays and their participation in the professions. Malays, however, have not progressed as much as they should in commerce and industry. In these fields the Chinese have gone farther ahead. Certain Malay attributes such as their politeness, self effacement, their attitude to money and immersion in religion, while desirable in themselves, place them at a disadvantage in the competitive world.

Observing over the years, I have to say that racial polarisation is even worse now than at the time of the riots. The racial divide has been accentuated by differences in a whole range of things: divisions of vernacular schools, national and private schools, divisions between rural and urban living, job segregation, rich and poor and differences in culture, language and religion. Interracial ill feelings have been recklessly fanned by politicians seeking votes and lately by irresponsible users of the internet venting their prejudices.

Almost every day we get incidents or pronouncements that grate on one or other race. For example; when a good Chinese student fails to get his desired course or scholarship it is instantly loudly blamed on racial discrimination although it arose out of an administrative lapse- something that has happened to Malay candidates too. Candidates not offering alternative university options and lacking in extracurricular points, although excellent academically, can be denied by the computerised selection system. A problem that can be sorted out with the relevant admission bodies without blowing it up in the media.

Another example is the claim of Ketuanan Melayu. It inflames some of us. It dismays some others. Yet just a moment’s reflection shows how ridiculous is the claim. The Tuan or Master race is the poorer race, less educated, living mostly in the kampong and less robust and healthy having a shorter life expectancy, not to mention other health indicators. The supposedly Subject race, much richer, controls much of the economy and commerce and clearly has the means to better enjoy life.

Lee Kuan Yew too in his latest book talks about the “dominance of one race” in Malaysia. During the years Singapore was a part of Malaysia Kuan Yew questioned the special rights of the Malays and of the Malay Agong and Sultans. Much of what Kuan Yew demanded would have angered the Malays. Even Tunku Abdul Rahman, the epitome of magnanimity, tolerance and inclusiveness, could not accept it and asked Singapore to leave Malaysia in the interest of, in Tunku’s own words, “the security and peace of Malaysia as a whole”.

In a recent comment Dr Chandra Muzaffar lamented that Kuan Yew “chose to be an ethnic hero” instead of a bridge-builder helping to develop a cohesive nation. Dr Chandra noted that the special rights in the Constitution are a part of the social contract in which Malays at Independence conceded citizenship to millions of non-Malays, whereby Malays, who before were the definitive people of a country in large part comprising Malay Sultanates, became just a community in a multicommunal or multiracial nation.

Yes, Malays do have special rights. Former Deputy Prime Minister, Tun Dr Ismail Abdul Rahman, likened the special rights and affirmative action to the handicap in golf. It is “mainly intended to enable them- to borrow an expression in golf – to have a handicap, which would place them in a position for fair competition with better players.” That Malays need a handicap is a humiliation for them.

Like keen golfers Malays have to strive and be coached to improve their skill and competitiveness to then no longer need or want the handicap.

Tun Mahathir, doctor that he is, talked of crutches. In a recent discussion of affirmative action he said, “ We still need the crutches, but maybe not on both sides; we could discard one crutch and then we’ll exchange the crutch for a walking stick. Eventually, we will throw away the walking stick. I pray and hope that this will be soon..”  Some successful Malays, less realistic, wish to have the crutches discarded now, for we can’t walk tall with crutches.

I like to quote at some length another comment on affirmative action specifically the New Economic Policy (NEP):

“No medicine is without its adverse effects. Yet that does not stop us from taking medicines. Why? Because we reckon we will feel still worse without them. For all its shortcomings there is no question that we are still better off with the NEP than without. To realise the truth of this, you have only to ask yourself the question: “What if there was no NEP?” (I continue to quote)“To me the answer is obvious. There would have been a disaster scenario. There would have been an enormously widened gulf between Malays and non-Malays, and there would have been a dangerously lopsided economy, inviting Malay despair, disaffection, hatred and violence. All this weighing of who gains and who loses obscures a fundamental fact that if the Malays lose, then the Chinese lose too because if racial hatred tore the country apart, then everyone loses.”

You would think that passage is written by a Malay politician or civil servant defending NEP. Surprisingly, it is actually by a Chinese Malaysian businessman, Ye Lin-Sheng, in his book “The Chinese Dilemma”. This  book should be essential reading for all Malaysians along with Tun Mahathir’s “The Malay Dilemma”.

These two books would help Malaysians understand each other better. If the majority of Malaysians can have a rational and unbiased perspective, our interracial problems would sink into insignificance.

Ladies and Gentlemen

We are too fond of emulating the West without thinking for ourselves to see the difference between what the West proclaims and what it practises and the difference between what the Western media project and the reality. There is much in the West that we do well to reject. But one achievement of the West we should energetically emulate is their technology. Technology has enabled them to advance and to subjugate the world. Yet we choose to learn vernacular Science and Mathematics – a retrograde step, oddly enough, supported by the Opposition.

If Malays wish to survive and not be left further behind, they must embrace Science and English. But the signs are that Malays are turning more to religion. They are naturally spiritual and more concerned with the hereafter. Islam rightly understood and interpreted can be a force for progress. But Malays appear to be adopting a narrow restrictive trend, becoming preoccupied with details of dress, beauty contests, heterosexual handshakes and overly meticulous definitions of halal. The recent demolition of a mosque because some Buddhists meditated in it is symptomatic of this trend. Also, we appear to be adopting an unnecessarily hostile stance towards Shiah Muslims, thereby risking importing the murderous animosity between Sunni and Shiah, that bloodies so many Muslim countries. Are these the actions of the progressive moderate Muslim model we aspire to be? I believe Tunku would be as dismayed as I am.

We need to shift the emphasis to more fundamental values central among which is caring for and love for our fellowmen.

On 28 September 1978 exactly 35 years ago as Master of the Academy I was privileged to confer on Tunku the Honorary Membership of the Academy. I hope our remembrance of him today pleases his soul.

Although certain trends would upset him, much has been achieved of which we can be justly proud. It is sad that some Malaysians are so devoid of this pride or patriotism for their own country that they denigrate Malaysia not only here but also abroad.

In Vision 2020 Tun Dr Mahathir has set us a commendable target to become a developed nation not just economically but also morally and ethically. We must keep aspiring high and constantly examine our attitudes and actions to be consistent with our high aspirations.

I lived through May 13 and with others mended the injured. We must be thankful that we have since had peace in stark contrast to the racial, tribal and religious clashes that make daily headlines in the media- murderous clashes in so many countries all over the world. We know our complex situation makes a repeat of May 13 possible. Try to understand the interracial tension. When an action is contemplated consider the impact it can have on this tension. You can love your race – it is natural. But love your nation more. To do otherwise is to make the possible conflict inevitable.

I like to end on a personal note. Friends have asked me, now that I have worked 55 years, what do I do. I still work – work is a privilege – but I work only a few hours a week at the clinic I share with my very long time partner, Datuk Dr Yeoh Poh Hong. The rest of my time I enjoy reading, enjoy my family, golf and charity. Charity I like to think of as my second career. With doctors charity begins as soon as they start work. On retirement or semi-retirement they have more time for charity.

Now at the end of my long lecture and near the end of my long career and my life the one worthwhile message I can leave you is “Be Kind”. It is easier than to be wise. We can be kind with our time, energy or money. Or we can be kind with just a smile, a word or a gesture. Kindness or charity is basic to the points I made in the talk: good and ethical medicine, cordial interracial relations, affirmative action, help for the disadvantaged, love for our fellowmen and for our nation.

I end with a verse from a poem by Ella Wheeler Wilcox

So many gods, so many creeds,
So many paths that wind and wind,
While just the art of being kind
Is all the sad world needs.

Ella Wheeler Wilcox 1855-1919

BERSIH’s Ambiga at Oslo Freedom Forum 2013


June 6, 2013

BERSIH’s Ambiga at Oslo Freedom Forum 2013

ambigaListen to this brave and committed lady and lawyer on the need for free and fair elections in our country. GE-13 is neither free nor fair. The legitimacy of the present government is being questioned and there will be a major People’s Protest on June 15. I have been informed that this event is being organised not by BERSIH but by a young generation of Malaysian leaders and activists. –Din Merican

No Compassion, only Ambition in search of Power


May 24, 2013

No Compassion, only Ambition in search of Power

In browsing through my wife Dr.Kamsiah’s Facebook, I found this picture (below) by an Iraqi artist.

NO Compassion only ambition

It is painful to think what is life about without one’s mother. Her mother could have been killed leaving behind a little girl who has no one to turn to in her journey of life. Leaders like George W. Bush have no compassion; they are consummate egoists whose quest for power knows no bounds.–Din Merican

Empowering Women is the Route to Equality


January 9, 2013

http://www.nst.com.my

Empowering Women is the Route to Equality

by W Scott Thompson

AlexisI am rereading Alexis de Toqueville’s astonishing 1835 Democracy in America. Even then in his travels he appreciated that the southern slave-owning gentry were fully aware that the North would get richer compared with them precisely thanks to the increasing inequality in the South. But it couldn’t be discussed.

The slave owner was paying for the non-productive childhood and old age of his slaves. The workers had no incentive to produce more or innovate. In the North, almost everyone worked, and greater profit came from innovation and greater productivity. Formal equality made you richer and richer. Or as I saw as a boy in a border state, the local makers had only half a market, as the African Americans were held down — still — too much to add to the buying public.

Tocqueville goes on, wrongly as it happens, to foresee the hopelessness of the “negroes”. There could never be equality, so ingrained was the prejudice, and the blacks had nothing to do but accept their degradation and base status, uselessly aping the life of their master. He would not have believed a Barack Obama could be president in 10 centuries. But then he was right — it has taken almost two centuries to get past halfway towards real equality.

Today, the biggest problem in the march to equality (apart from the march away from it in the US and to a lesser extent in other rich countries) is in empowering women. True, perhaps the one good thing that came out of communism in Russia and China was the at least theoretical equality established between the genders. India’s rape last month has at last awakened the country to its daunting problem, and in a very big way. But in the two biggest countries, India and China, the problem in maintaining demographic ratios of equality is the preference still for male babies. There would be about 40 million more women in India today had no such steps — abortion of female foetuses or even death for female babies — been taken, according to demographic estimates.

Africa has few bright lights. A United Nations study found that women, measuring relative work contributions by caloric output, did over three-fourths of the work, not even including birthing. There are NGOs springing up all over opposing female circumcision — it’s quite a different thing for them than for men, and has no positive health benefits. It’s all to keep them in their place. It’s brutal.

Someone did a correlation between per capita income and the role of women. Guess what, the greater the equality the higher the PCI (Japan being a curious exception). And the glaring black area of the globe was the Middle East, and, to a much lesser extent, South Asia. Things are changing constructively in Southeast Asia. The Philippines has had two women presidents, but both “heirs”. And I note in my village that on weekends the men still sit outside gossiping and drinking rough — very rough — gin, while their asawa labour in the kitchen to bring them plates of food to nibble on. Little need be said of the macho culture of Latin America.

In the march towards industrialisation, it is natural for inequality to grow for a time, in a limited sense. The innovators who create the new wealth dole themselves a big chunk of the pie, until those on whom some of the riches trickle down rise up and demand a bigger share for themselves. From then on it’s a question of whether the state has sound policy for spreading the wealth — through fair elections, better schools, hospitals and infrastructure, minimum wage, and so forth.

The remarkable shift from autocracy to democracy during rapid wealth accumulation is nowhere more noteworthy than in Korea and Taiwan. The middle class grew right alongside the rapid rise of gross national product. Successfully industrialising states that have maintained democratic strides forward are always the result of sound policy.

America was for so long the measuring stick of democratic growth alongside wealth accumulation, that it has taken 40 years for people to realise that it’s been going the other way during this period.

Unenlightened leadership, blindness to the trend or blind determination to reinforce it, have contributed. It’s wearisome but necessary to note that Obama, as in so much, is the first president to try to do anything about it. Someone finally foresaw the dire straits such growing inequality was leading to — best illustrated by the Washington chaos caused by the excessively well-financed Tea Party obstructionists. You can’t have democracy without nourishing democracy.

*W Scott Thompson is emeritus professor at the Fletcher School of Law and Diplomacy, Tufts University, United States

Character and Leadership


December 29, 2012

Character and Leadership

by Dato’ Ariff Sabri@http://sakmongkol.blogspot.com

Samuel SmilesThe Government of a nation itself is usually found to be but the reflex of the individuals composing it. The Government that is ahead of the people will inevitably be dragged down to their level, as the Government that is behind them will in the long run be dragged up.

In the order of nature, the collective character of a nation will as surely find its befitting results in its law and government, as water finds its own level.

The noble people will be nobly ruled, and the ignorant and corrupt ignobly. Indeed all experience serves to prove that the worth and strength of a State depend far less upon the form of its institutions than upon the character of its men.

For the nation is only an aggregate of individual conditions, and civilization itself is but a question of the personal improvement of the men, women, and children of whom society is composed.

Samuel Smiles (a Scottish author and reformer pic above) wrote the above. Every leader of any nation has grappled with the issue. What is the secret ingredient of a good government? Smiles had the answer- the secret of good government is having good people heading it.
singapores-lee-kuan-yewLee Kuan Yew (left) tackled this issue a long time ago, and set out to cultivate good people to lead the Singapore government. He must have done something right, because Singapore is now the richest country in the world.
North of the causeway, the UMNO leader who ruled for 22 years as Prime Minister and many years as, Senator, Minister and Deputy Prime Minister, must have done something wrong. Our country is getting top placing for the wrong reasons.
Mahathir has admitted his failure to improve the Malays, yet the Malays still want to support him? Mahathir has admitted that after 55 years, Malays are still beggars in their own country; Malays are urged to continue supporting UMNO? Are Malays political masochists? You get high as you are abused more. You want people molded after Mahathir’s image to come back and lead us so that they can whip us further to get us high?
We are looking for people with commitment, deep-seated beliefs in democracy, resolute in putting the interests of others before self. These traits are not inherited. Otherwise we will not have Najib Razak and Hishammudin Hussein. They didn’t inherit the characteristics of the fathers.
Just look at the state by which we are governed, it is clear that indeed the worth andTun Dr. Ismail strength of a State depend far less upon the form of its institutions than upon the character of its men. We are like this because our leaders lack character and integrity. The man, who says he is Prime Minister to all, keeps quiet when citizens are set upon and harm inflicted upon them.
The Home Minister in charge of the Police is equally mute suggesting that he has no character and integrity to hold such office. The rakyat are being bullied and set upon, the characterless people leading the State, the Ministry, the institution keep quiet. Tun Razak, Tun Dr Ismail (right) and Tun Hussein will never countenance these things.
We look around us, we don’t see Malaysia being deficient in the number of institutions that we have. We have the judicial institutions, the law enforcement agencies, we have the state legislative councils, we have Parliament, and we have Kings. Indeed we have everything. What is missing is the character of the men heading those institutions.
Where is the democratic right to move freely across this country? Interests groups are stopped from going into FELDA schemes because some supporters of the government will not allow NGO’s opposed to FELDA to speak to settlers. What is there to hide? If the people doing the explaining break the law, charge them under that particular wrong. The FELDA settlers are people who can think for themselves.
When I wrote about the FGV listing a long time ago, I received many e-mails suggesting that I was envious of FELDA people getting money. Now, FELDA people are realizing that have been conned into transforming their tangible assets into paper assets tradeable in the stock exchange where control over the assets depends on the quality of people managing those assets. Well, you have people like Isa Samad and his sycophants watching over the FELDA assets, I am sure settlers can sleep peacefully at night.
Opposition parties hold ceramahs under the watchful eyes of the Police, and the Police did not stop other groups from causing disturbances and bodily harm. We know these trouble makers are UMNO people- yet the Prime Minister for all the people, maintains his silence on this infringement of democratic rights. Is UMNO, which is now led and headed by many people lacking in character and integrity, condoning violence and aggression on people?
Zam2I was listening to an old video clip showing Zainuddin Maidin’s response to questions posed to him by Al Jazeera. The TV station showed scenes of demonstrators being fired upon by water cannons and teargases. The response ex tempore, by Zainuddin as Minister of Information then would make any Malaysian citizen cringe in embarrassment.
An Information Minister was talking like a person with a passable lower certificate of education. Not only could he not answer the questions in a rational sounding manner, he went immediately into a tirade accusing the media of manipulating the news.
How could a person of this caliber represent Malaysia as an Information Minister- he was simply gibberish. Fast forward to now, we can get a clear picture as to why the same person, not a Minister any longer can give the answers he gave when asked to assess former Indonesian President’s visit to Malaysia recently. Only a person of this mental caliber can come up with similarly hostile and hopelessly incoherent statements about BJ Habibie’s recent private visit to Malaysia.
And the Prime Minister of Malaysia, equally vacuous and pathetic, rationalized the incident by saying that these deranged statements are to be expected during `erection’ year.

Interview with Tariq Ramadan


August 12, 2012

An Interview with Tariq Ramadan

by Ahmad Fuat Rahmat, Islamic Renaissance Front

From early to late July of this year, leading Muslim intellectual Tariq Ramadan travelled across the Peninsula to lecture in Kuala Lumpur, Singapore, Penang and Perlis. In this interview we gather his thoughts on the environment, economics, art, philosophy, the Hudud penal code as well the current state of Malaysian politics, among other things. –08-03-12

Q: The environment doesn’t feature much in current prevalent Muslim priorities. You argue that it should be. Why?

A: When I go back to the Quran I see that the context of Revelation is creation in its entirety. The universe is a Revelation and this of course includes nature, plants and animals. In other words, what is coming from the Quran as rules and objectives are set within the larger scheme of the universe and nature as part of Creation.

So if you look at how we are destroying and disrespecting Creation it is obvious that is something is not clear in our understanding. We overemphasize rules but we don’t understand the objective.

As Muslims the way we show respect to the creator is by respecting creation and this is why we have to reconcile ourselves with the objectives of the Revelation and the objective is really to honor nature as part of Creation.

We need to revisit how the Prophet dealt with water, animals, in how he talked about slaughtering, caring for plants and so forth. Respect towards nature is a part of Islam. This is essential but Muslims are not aware. The whole world is talking about global warming and respecting nature but Muslims are not doing enough of that.

Q: This, as you know, is tied to our economic system and habits of consumption. But even our reliance on basic everyday use of things depends on a certain exploration of, if not intervention in nature, from the furniture we use to the technology we depend on. Does this mean we have to rethink our notion of needs?

A: Yes, of course. In my book Radical Reform I made it clear that we cannot talk about the environment or ecology if we don’t also deal with the economy. There is a direct link between how we deal with the economy and how we deal with nature.

We cannot have a free market since it does not really set us free. It’s free for interest, speculation and consumerism to create false needs. But now nature is telling us that if you don’t respect the environment then you are living with artificial needs and a consumerism that is destroying the very conditions we need to survive.

This is where we need to deal with three things that are important: first, we need a very deep reconsideration of how we are dealing with the economy. Second, there must be a very deep reconsideration of our way of life. We cannot simply adopt American-style consumer culture. To Islamize that is to de-Islamize Islam.

Thirdly, it is important for us to understand the economy and the environment are common challenges for everyone. This is where the singularity of Islamic principles needs to join the universal values that we share with others.

But we are not doing this. We are not competing for the good when we only compete for numbers, being preoccupied with how many converts we are gaining. The true competition for good only happens when we are implementing our values of justice.

Q: How did the misdirection of values occur? The things you say about nature being a part of God’s creation, about how nature also enjoins in worship of Allah – all that is clear in the Qur’an. Why have Muslims overlooked that part of Islam’s message while being preoccupied with issues of moral policing and making hudud a priority?

A: Firstly, there is something we need to keep in mind. In Islam, rules are important, like the Prophet said innal halaala bayyinun, wa innal haraama bayyinun [“what is halal is clear, what is haram is clear”]. The goal is not to diminish the importance of rules, but to have the right priorities.

I’ve explained this in many of my books, whereby the Muslims began to be obsessed with rules when they lacked confidence with the vision and truth of the Message, and this began in the 13th and 14th centuries. There was a change in attitude towards not only rules, but also knowledge, when Muslims became scared of philosophy, the experimental sciences and the arts. These were signs that something was wrong with how Muslims perceived themselves and dealt with Revelation

This is not a particularly Muslim problem. You see this also in the West for instance, in how they deal with immigrants and Muslims. The first reaction is often to turn to the rules and call for more enforcement in a narrow minded way.

It’s okay to feel the need for protection if there is a real external threat. But to feel protective from the inside, it’s a kind of jail: you get so protective that you cannot get out of the box.

Q: A common concern that you have expressed as a Muslim intellectual is the lack of creativity among Muslims. Muslims tend to simply mimic whatever the West does or view any new changes in society through cautious legalistic perspectives. But creativity is not always compatible with rules. Creativity in many ways is contrary to rules, as it requires freedom as a condition. How ought Muslims balance the need and desire for creativity while maintaining a commitment to rules at the same time?

A: This is an important question. You know, since the uprisings in the Middle East many scholars have come out saying that freedom comes first before the Shariah. There is also something important that we must keep in mind in our understanding the Shariah, and that is the room for what is permissible should be as wide as possible. So we should leave it open to let people be creative.

Of course, there should be ethics in all creative pursuits but we cannot force or impose ethics on creativity, for this would be contrary to creativity. So pushing the limits, to be thought provoking, pushing people to think and question the limits, it’s not always bad for the rules if you’re confident because it can even strengthen your understanding of religion in the process.

What we also need to have a discussion on the philosophy of art: so we must ask what is it that we want in the first place? Is it just about saying and doing whatever you want, or is it about something more? We should let the artist be free, but we must also question how exactly he deals with freedom. Is it arts for elevation or arts for destruction? Is there dignity in the process?

There is a claim coming from the West that says that all art must be outside any moral consideration. I can understand this as a provocation, but I also believe that we can still have very profound creativity with a moral sense. To have a moral sense is not to be dogmatic in dealing with rules. It can be an open way with dealing with questions of objectives and purpose, which is completely different.

Q: So the freedom to make mistakes should be there, but it should nonetheless be oriented towards an ethical worldview.

A: Yes. We should not fool ourselves. When the Quran says wa la qad karamna Bani Adam [“we have honored the Children of Adam”] so yes we should all be free but this should not mean that we must act against the dignity of human beings.

If you look at how great artists of the past, like Beethoven, for example dealt with art and morality, you see that there was torture and pain in their work, but there was also dignity in the way that was dealt with. So I don’t buy this contemporary notion that the only way to be artistic is to be arrogant, offensive or immoral.

Q: In your book Radical Reform you speak of the need for an ethics of liberation. What is an ethics of liberation?

A: To be more precise, it’s ethics and liberation, and as a consequence there is an ethics of liberation. We have to free the Muslim mind from the obsession with limits and rules and forgetting the path and objective. This is truly a liberating process, and for me this is Islam: liberation from the ego, and in this case liberating ourselves from the wrong understanding of the religion.

Because ethics is fundamentally about questioning the ends, the goals and aims of our actions, we must come back to the rules and ask why. So we must return to the philosophy of law, the raison d’etre and the point of what we’re asked to do. It’s not easy, it’s very demanding and it needs intellectual courage.

You know when we speak about Muslihun or Mujaddidun [reformists] the main point is to respect the text and take it seriously, and to be courageous with the world. But very often now when I see people who are perceived to be, or who call themselves progressives, sometimes I see an imbalance. Yes I understand the courage in their mind but I don’t see the spirituality in their heart, good you are questioning the limits, but what about yourself, are you also liberating yourself?

So I am dealing with people with both sides. I see people who are liberating themselves but they want to forget the world. And I see people who want to liberate the world but they forget themselves. Neither is the way I want to go.

Q: Speaking of intellectual courage, you have called for scholars of the text to be in dialogue with scholars of the context whereby findings in the modern natural and social sciences are to be taken seriously by Muslims.

What happens in the event that conclusions from studies of the context contradict what is said in the text? For example in the case of hudud: empirical studies in the social sciences can argue that there are more effective and sensible ways to counter crime than what can be found in the Quran. How would you respond?

A: I wouldn’t say that it’s more sensible. I’d say that the modern social sciences are just showing us why the conditions for implementing Hudud are so demanding, and thus Hudud should only be for the absolutely last resort.

The findings in contemporary social sciences are helping us understand that we can find other ways to educate people and act against injustice and corruption in our society. So it can deepen our understanding of what Hudud is about, but not contradict it.

Now, they can contradict the literalist dogmatic minds who understand Hudud literally but these minds are problematic because they don’t understand the in depth event of the rules in light of the objectives.

I have never, so far, in all the studies I have done, met a contradiction between what the human, experimental and natural sciences are telling us and the Islamic rules. In fact, the opposite is true: anything that is coming from the modern sciences is helping me better understand the text. It’s not a contradiction. It’s a relation.

Q: At least in conventional Sunni history, philosophy was eventually eclipsed by Sufism on one hand and legalism on the other. Do you see a role for philosophy for Muslims today?

A: Yes, in many ways. In fact there is, as As-Shatibi says, a philosophy of law. We are scared of the word, but questioning why is fundamental. Now, there are certain things that we cannot understand, like why we pray five times a day, for example. But the fact that we choose to pray is understandable.

As Al-Afghani said, when we read the fundamental texts, the scriptural sources of the Quran and Sunnah, we can find that there is a philosophy that is coming from the texts.

And then there is the philosophy embedded in the culture we are living. It is quite clear for example that Arabs have a different culture than Malaysians. Unfortunately there are some trends that are changing this but you don’t have for example as strict and narrow understanding of the relationship between men and women. And then there is the philosophy we have to extract in the relationship between text and culture.

We have to reconcile ourselves with philosophical questions in every field. Every field should be open to inquiry and knowledge. The problem, once again, as in all sciences is the attitude of the mind that is dealing with whatever field. The problem is not philosophy but the lack of intellectual humility. It is when reason becomes arrogant that we lose track. But intellectual humility with science: this is spirituality – this is the way we are with God. So we should not be scared and we must reconcile ourselves.

Q: The Muslim philosophers of Islam’s Golden Age are often accused of pursuing philosophy at the expense of the Qur’an’s message. They felt that Greek philosophy – the major philosophy of their time – was as, if not more, compelling than the Qur’an itself. Muslims today live in an age whereby Western philosophy is the dominant strand of philosophy. What attitude should Muslims have in engaging with that discourse?

A: Exactly the same attitude we should have had with Greek philosophy. Greek philosophy departs from the assumption that we can understand the world autonomously using our rational faculties. Islam is not saying this. There is a commitment to a Tawhidic paradigm. There is One God. We have an epistemic center. There is meaning.

But this is not to say that we should deny rationality either, like current strands of postmodernism. It also does not mean that we cannot engage with Western philosophy, as if we cannot read Heidegger or analytic philosophy. We can and should so long as we know our center.

Like for example in Hegel, when he understands the verb “being” as both an affirmation and negation,  as something and something else, the problem is that in Arabic you do not have the verb to be. So his German construction is problematic in other languages. This is why having a center in engaging with other discourses is important, to see the commonalities and differences. So we must re-center philosophy within our frame our reference.

This was why Al-Ghazali was concerned with the Muslim philosophers and how they tried to disconnect with the text in the name of autonomous philosophy. We don’t need this. We can deal with philosophy without being obliged to say that is connected from Revelation or our belief in God.

So we must re-center philosophy within our frame of reference which I think is the way to deal with it.

Q: This is a different approach than the Islamization of Knowledge. You accept the validity of knowledge from other cultures so long as it remains within a widely acceptable Islamic framework. You don’t see Hegel or Heidegger for example as un-Islamic or corrupting.

A: I don’t buy anything which is Islamization of knowledge. I don’t understand what it means in fact. The point for me is people who are atheists or are coming from different religious traditions; they are coming from their own sources and specific roots. We should analyze these.

We always think from where we come from. We always think from the sources that shape our understanding.  I think about the world through the lens of my Islamic tradition. I accept this but I must also have intellectual humility.

In the Quest for Meaning I gave the analogy of looking at the sea through windows, and the need to look at the sea for what it is, rather than to only see the window.

There is this Bergsonian intuition that there are many ways of knowing something. One is through the object itself and the other is through the different viewpoints around it. So we have to combine the intellectual and intuitive understanding of things.

So to Islamize doesn’t make sense to me. But to center, but to have intellectual empathy and modesty – all these dimensions are important on how we look at truth.

Q: You mention the Quest for Meaning. One thing I find interesting about it is that you mention the word “Islam” less than a dozen times in total. It’s definitely a different style than the common Muslim legalistic method of writing. What informed that style? Why did you suspend the typical Muslim academic style of writing to write philosophical prose?

A: It’s a reconciliation with philosophy and poetry at the same time. It really is who I am. It’s one of my best books in fact. It’s not really well understood by both Muslims and non-Muslims. Even the publisher was not really happy with it.

But it’s an important book for me because it’s translating my own journey and my own understanding. It’s my philosophy of pluralism, how I think about the Other.

I’m working on different fields. One of my next books Insha’Allah will be a novel because it’s important to explore the heart and imagination, the spiritual side. I’ve been working for twenty five years in the legal field and now I’m reaching what I want, which is an Islamic applied ethics and I’m also dealing with Muslims in the West.

But there are other dimensions that are also important. And then having traveled a lot and met people from different horizons it makes you more humble and ready to listen.

Q: As a European Muslim the question of pluralism is one that is deeply relevant for you. For this I must ask a question that I think gets to the heart of the matter: should Muslims rethink the nation state? Isn’t that the fundamental problem? Ultimately regardless of how egalitarian we claim to be, having a nation state means that we must eventually exclude others for very shallow reasons.

A: In my last book, the Arab Awakening, I talk about the fact that we have to move from this. All the contemporary ideologies of political Islam have been based on the nation state. The nation state is very problematic but I’m not sure if we have an alternative political model.

Destroying the nation state are mainly three things: the global economy, global communication technology and global culture. And this is where we are lost in the process. What could be something that can provide us a transversal political sense of belonging? At the end of the day, without an alternative we end up with populism in the name of very narrow identities.

We can think of solutions in various theoretical ways, but it’s not so on the ground. If they don’t have a reference that helps them to belong, then they will end up excluding, and through that they get to feel that they belong on the basis of some narrow identity, language or color.

Q: It seems that Islam can be a resource to think through this. As you said so yourself in Radical Reform, diversity is an integral part of Creation.

A: Yes, it is in fact a condition of humanity. There can be no humanity if there is no diversity because the absolute power of human being is destruction.

Wa lau la daf’ullahi’l nasa ba’dahum bi ba’din la fasadat al ard. “If we had not created a set of people against another the world would have been corrupt”, and “against” here means two things: Against in the fact that they are challenging you with their diversity, challenging your intelligence and to challenge is not negative, it can be very positive depending on how you are challenged.

When I came here [to Malaysia] I heard that there is a problem with the concept of pluralism whereby pluralism is understood in a very narrow way, which I think is wrong. This is not to diminish your sense of truth in what you believe but to acknowledge the fact that we live in a world where we need to deal with pluralism. It’s a fact.

It’s not so much about the right to tolerate but the duty to respect, to go beyond toleration where there is no power relationship with the Other. This is where a deep understanding of Islamic principles would help us.

Q: You’ve traveled up and down the Peninsula over the past three weeks. You’ve spoken to figures in the opposition in the government. Plus, given that you’ve been here several times before you’ve gathered an accurate sense of this country over time. What do you make of Malaysia’s potential as a Muslim country?

A: Very often we talk about India and China, but not really Malaysia and Indonesia. The potential in the shift to the East is going to be great and very important for this country.

One of my next books is going to be called Our West: Towards a New Narrative. I challenge the norm there [with regards to the dominant attitude towards immigrants] and saying that you are playing with us. You tell us to respect the state but you have a problem with your nation. But the problem is that we can respect your state but we are not within your understanding of nation.

It’s exactly the same for the non-Malays and non-Muslims in this country. The common narrative is not there so they are excluded by the way “us” is defined by the majority.

So there is great potential and deep fragility [in Malaysia] that can be used by any group that stresses on religion, pushing towards Islam, rejecting people and alienating migrants – anything can be used to win the next elections. So these are the signs of fragility that is very much there.

Now no one can deny the fact that whatever is the state of the affairs in the country, you did not have the army controlling the country and you have a pluralistic society anyway. So the people who are going to be important in this country are people who are going to question sectarianism through emphasizing common values and understanding.

For me I made it clear that I wanted to meet with both sides of the political spectrum.  I wanted to understand. I’m not here to support one, but I am here to criticize all, on a principled position. I very much value the position of counter power. I think this is where ethics should be, in front of power as I said in Radical Reform. The power of counter-power is very important.

So I see great potential here, but risks everywhere.

Forthcoming Tariq Ramadan Lecture: Rethinking Islamic Reform


July 6, 2012

Public Service Announcement

In this lecture, Professor Tariq Ramadan explores the need for a new vision of Islamic reform. He reflects on the challenges faced by Muslims in the 21st century, living in a complex globalized world, and how we are to appreciate the sources of Muslim tradition and intellectual history in a new light while engaging with other traditions of thought and morality. In the current state of affairs, Muslims must proceed with a new and inclusive understanding of democracy and social justice that takes into account the past and present without compromising either one.


Thank you for your interest in our event. The public intellectual lecture is held for the purpose of raising fund for the organization. The talk will be followed by a sumptuous hi-tea. Therefore we are selling tables and individual seats for that purpose.

Tables: RM5000, RM3000, RM1500
Individual seats: RM150

Tax-exemption receipt is available for RM3000 and RM5000 tables upon request.And if you are attached to a corporate body, we would appreciate if you could inform your management to sponsor a table for the event. Kindly send us your particulars to tariqinkl@irfront.org

The Third Penang in Asia Lecture by Professor Tariq Ramadan


July 5, 2012

Public Service Announcement

The Third Penang in Asia Lecture by Professor Tariq Ramadan

Islam, Democracy, and Human Rights: The Awakening of the Muslim World

Date: July 17, 2012 (Tuesday)

Time: 11:30am – 3:30pm

Venue: Pinang Ballroom, Traders Hotel, Penang, Malaysia

The Penang Institute, the public policy think tank of the state government of Penang, will be holding the third Penang in Asia lecture at Traders Hotel in Penang, Malaysia on  July 17, 2012 (Tuesday).

This year’s edition will be delivered by the world’s leading contemporary Islamic philosopher and thinker, Professor Tariq Ramadan. The topic of the lecture will be, “Islam, Democracy and Human Rights: The Awakening of the Muslim World”.

Professor Tariq Ramadan is the son of Said Ramadan and Wafa Al-Bana, who was the eldest daughter of Hassan al Banna who in 1928 founded the Muslim Brotherhood in Egypt. Gamal al-Banna, the liberal Muslim reformer is his great-uncle. His father was a prominent figure in the Muslim Brotherhood and was exiled by Gamal Abdul Nasser from Egypt to Switzerland, where Tariq was born.

Professor Ramadan studied Philosophy and French literature at the Masters level and holds a PhD in Arabic and Islamic studies from the University of Geneva. He also wrote a PhD dissertation on Friedrich Nietzsche, entitled Nietzsche as a Historian of Philosophy.

He taught at the College de Saussure, a high school in Geneva, Switzerland, and held a lectureship in Religion and Philosophy at the University of Fribourg from 1996 to 2003. In October 2005 he began teaching at St Antony’s College at the University of Oxford on a Visiting Fellowship. In 2005 he was a senior research fellow at the Lokahi Foundation.In 2007 he successfully applied for the professorship in Islamic studies at the University of Leiden, but then declined to take up the position, citing professional reasons. He was also a guest professor of Identity and Citizenship at Erasmus University Rotterdam till August 2009 when the City of Rotterdam and Erasmus University dismissed him from his positions as “integration adviser” and professor, stating that the program he chairs on Iran’s Press TV, Islam & Life, was “irreconcilable” with his duties in Rotterdam. Ramadan described this move as Islamophobic and politically charged.Beginning September 2009, Ramadan, was appointed to the His Highness Hamad Bin Khalifa Al-Thani Chair in Contemporary Islamic Studies at Oxford University.

Professor Ramadan established the Mouvement des Musulmans Suisses (Movement of Swiss Muslims), which engages in various interfaith seminars. He is an advisor to the EU on religious issues and was sought for advice by the EU on a commission on “Islam and Secularism”.In September 2005 he was invited to join a task force by the government of the United Kingdom. He is also the President of the Euro-Muslim Network, a Brussels-based think-tank.–wikipedia

He is widely interviewed and has produced about 100 tapes which sell tens of thousands of copies each year. In recent years, he has come to Malaysia several times on speaking engagements and has a lot of friends who share his views on Islam and the Modern World.

The “Penang in Asia” lecture series is an annual lectureship awarded under the patronage of His Excellency the Governor of Penang. It is organised by the Penang Institute to bring together renowned scholars, public intellectuals and thinkers from diverse fields to Penang to speak about issues relevant to the cultural, intellectual and economic development of Penang as an historical and future growth centre in Asia. The previous “Penang in Asia” lecture was delivered by Nobel Laureate Professor Sir James Alexander Mirrlees.

Those interested are welcome to register. Please fill in all relevant details in our online registration form by clicking hereAlternatively, you may fax or email the attached registration form to Mr. Desmond Wee or Ms. Wendy Yeong (Email: secretariat@penanginstitute.org; Phone: +604 228 3306; Fax +604 226 7042). Please note that due to the limited seating available, participation is strictly for those who have registered before the deadline.


 

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