Obama in Malaysia: A Strategic Partnership?


by Joshua Kurlantzick via Council on Foreign Relations
April 8, 2014

During his upcoming late April trip to Asia, President Obama will visit two nations in Southeast Asia, Malaysia and the Philippines, in addition to stops in Northeast Asia. The White House already has been briefing reporters on the overall messaging of the trip, and the specific themes the president plans to hit in Malaysia and the Philippines. In Malaysia, it appears from several news reports and from speaking with several administration officials, President Obama will add to the Malaysian government’s self-promotion that Kuala Lumpur is a successful and democratic nation, an example of other Muslim-majority countries, and a force for moderation in the world. The president apparently plans to hit these themes despite the regional anger at Malaysia’s handling of the Malaysia Airlines vanished plane, which exposed to the world many of the problems with Malaysia’s governance.

No matter, say some Southeast Asia experts. Some of Obama’s advisors, and many Southeast Asia experts, are urging the president to use the trip to cement a strategic partnership with Malaysia and establishing a roadmap for the kind of higher-level strategic cooperation that the United States already enjoys with Singapore and Thailand, among other countries in the region.

This approach to the Malaysia visit would mean downplaying – or simply not even discussing – serious regression in Malaysia’s domestic politics, including the recent sentencing of opposition leader Anwar Ibrahim to five years in jail for sodomy, the highly flawed 2013 national elections that barely kept Prime Minister Najib tun Razak in office, and the increasingly shrill, anti-Chinese and anti-Indian rhetoric and legislation of the Najib government, hardly the kind of sentiments a supposed leader of political moderation should be espousing. According to this logic, if President Obama were to bring up such unpleasant issues as the Malaysian government’s crackdown on opponents over the past year or its unwillingness to reform pro-Malay policies that have entrenched a culture of graft and self-dealing at many Malaysian companies, that would sink the visit.

Under Najib, Malaysia and the United States have, on a strategic level, moved beyond some of the acrimony of the Mahathir and Abdullah years, and have made progress on a wide range of military-military and diplomatic cooperation. Najib definitely deserves some credit for this rapprochement, though growing Malaysian fear about China’s South China Sea policies are probably the main driver behind closer strategic ties with Washington.

But simply ignoring the disastrous Najib policies on human rights, political freedoms, and economic liberalization would not be a wise move by Obama. For one, it would play into the narrative that Obama cares little about rights and democracy promotion, a narrative that has gained significant force not only in Washington but also among many Southeast Asian activists and young people in general. And ignoring Malaysia’s opposition politicians, who won the popular vote in the 2013 national elections and enjoy their strongest support among young Malaysians, would be alienating the biggest growing pool of Malaysian voters. As in other countries in the region, like Cambodia and Indonesia, these young voters are increasingly favoring opposition parties or new figures like Jakarta governor Joko Widodo, breaking from long-ruling, autocratic parties. The United States should be cultivating these young voters who will prove critical to the region’s democratization. This new generation will eventually power the Malaysian opposition, in some form, to the prime minister’s office. It would be a shame if the United States president had ignored them, and their party leaders, before then.

Lim Guan Eng’s Institutional Economics 101: Good Governance


April 15, 2012

Lim Guan Eng’s Institutional Economics 101: Good Governance

by Terence Netto@www.malaysiakini.com

Chief Minister Lim Guan Eng gave a little homily on institutional economics on the occasion of state government awards to top students and schools in the 2011 STPM examination.

Lim told his audience of proud parents and top-scoring students at the award ceremony in Komtar today that the Pakatan Rakyat government’s clean and effective administration conduced to higher rewards for its citizens.

As example, he cited the RM500 rewards to the 50 top-finishing students in the state in the STMP examination of last year, up from RM400 given to top scorers in 2010.

The monetary awards were inaugurated in 2009, a year after the DAP-led Pakatan government came to power in Penang.“The reason we can give more this year is simple: we run a government that is not corrupt,” he said.

“Because our governance is competent, accountable and transparent, we can show a surplus of income over expenditure enabling us to plough back progressively higher benefits to the people,” he explained.

Lim went on to list the escalating range of recipients of annual state government handouts to Penang residents, from senior citizens (60 years and above), the bereaved, university entrants, and year one and four schoolchildren, and year one and four secondary school students.

He said that it was not for nothing that Penang was the top state in terms of gaining the highest quantum of manufacturing investment among Malaysian states for the years 2010 and 2011.

“We have gained that ranking because of our clean governance and we intend to stay that way to make Penang a clean, green, healthy and safe place for people to invest, work and live,” he claimed.

Malaysian students fail to enter Harvard

Lim derided the view that the education system in Malaysia was superior to ones in United Kingdom and Germany and noted as reproof the failure of Malaysian students to gain entry into Harvard University for the second year in succession.

He said that Thailand and Vietnam had bested Malaysia in this respect, sending more students to the world’s premier tertiary institution.

He urged the top-scoring STPM students, whom he envisaged would proceed to the study of medicine, law, engineering, accountancy and architecture, to pursuits that would require a multidisciplinary orientation.

To fortify his point, he cited US President Barack Obama’s nominee for the post of World Bank president, Jim Yong Kim, a medical doctor who went on to head the World Health Organisation HIV/AIDS programme and to co-found Partners in Health, an NGO that did good work combating the scourge of tuberculosis in the Third World. Jim went on to be President of Dartmouth College, a prestigious liberal arts academic institution in the US.

Lim told students that the “world was their oyster” and that they should steer by a compass that would lead them to be trailblazers, more than just successful professionals.

“After your have qualified, come back to Penang to make this state a green, clean, healthy and safe place in which to live and work,” advised Guan Eng.

The bulk of the 50 recipients who all obtained 4As in the STPM were from Jit Sin Secondary in Bukit Mertajam, the top scoring school in the state, and from Chung Ling chapters in Georgetown and Butterworth.

Without Democracy, China’s Modernisation is Incomplete


March 24, 2012

The New Straits Times-Frank Ching

Without Democracy, China’s Modernisation is Incomplete

By Frank Ching  | Frank.ching@gmail.com

“China’s leaders should realise that without democracy, the country cannot be culturally advanced; without democracy, it cannot really be modern, and without democracy, the great rejuvenation of the Chinese nation will be incomplete”.–Frank Ching

WEN Jiabao, beginning his 10th and final year as China’s premier, again called for political reform and warned that failure to make progress may bring tragedy, such as the eruption of another Cultural Revolution, which tore the country apart for a decade.

But the Premier, speaking at the annual press conference at the end of the meeting of the National People’s Congress (NPC), China’s rubber-stamp Parliament, emphasised the need for gradual change, without indicating when, if ever, Chinese would be able to choose their own national leaders.

Asked about the prospect of direct elections in China, Wen (right), speaking slowly and deliberately, declared: “If people are able to run the affairs of a village well, eventually they’ll be able to run a township, and a county.

“I believe China’s democratic system will, in accordance with China’s national conditions, develop in a step-by-step way. No force can stop this,” the Premier said. The words were spoken with evident sincerity. Unfortunately, they have all been heard before.

Eight years ago, at a similar press conference, he had asserted with great earnestness: “We should promote primary-level democracy by ways of self-governance among villagers, direct elections at the village level and greater transparency in government affairs at the county and township levels.”

Village elections began after a trial  in 1987 and, since 1998, villages across the country have been mandated by law to hold elections every three years. But, after almost 25 years of experimentation, the  authorities have not moved them to the township and county level yet.

At the NPC meeting, it was disclosed that beginning next year, there would be a reduction in the proportion of Communist Party and government officials among the roughly 3,000 deputies, with more seats allocated to workers and farmers.

This was hailed as “major democratic progress” even though all the deputies will continue to be screened by the party. It is telling that when Wen was asked about the progress of democratisation, he did not even cite this step.

More than three decades ago, then Chinese leader Deng Xiaoping decided to make economic development the country’s top priority. However, he also made democracy a goal, albeit a more remote one.

Deng had a three-stage development plan for China. The first step was to double gross domestic product from 1981 to 1990. The second was to double it again in the following decade. Both those goals were achieved ahead of schedule.

The third and final step, which China’s leaders are engaged in now, is to achieve modernisation by the middle of the 21st century so that Chinese people will enjoy a lifestyle similar to that of people in medium-sized developed countries.

In 1997, months after Deng’s death, the Communist Party held a congress in which it adopted Deng Xiaoping Theory as the party’s guiding ideology. As a result, the party constitution now says that the party’s goal is to “turn China into a prosperous, strong, democratic, culturally advanced and harmonious modern socialist country.”

It is important to note that one of the characteristics of a strong, modern China is that it will also be democratic.

On the eve of the 21st century, then President Jiang Zemin,  in an interview with The Times of London, declared: “The main objectives for China by the middle of the next century are to achieve modernisation by and large, turn China into a strong, prosperous, democratic and culturally advanced socialist country, and realise the great rejuvenation of the Chinese nation.”

Fifteen years have passed since Deng’s death, years during which China has made remarkable economic achievements. Modernisation has been achieved in many spheres and China is increasingly strong militarily and prosperous economically. China is now the world’s second largest economy and is poised to overtake the United States and become No 1 probably before the end of this decade.

And yet, in the area of democratic reform, not much seems to have been done. Deng is hailed by China’s leaders as the chief architect of reform. And yet, three decades after his  plans were first unveiled, part of them appear to be missing — those relating to democracy.

China’s leaders should realise that without democracy, the country cannot be culturally advanced; without democracy, it cannot really be modern, and without democracy, the great rejuvenation of the Chinese nation will be incomplete.

Elizabeth Taylor dead (1932-2011)


March 23, 2011

Farewell Miss Taylor, we will miss you

Farewell Miss Taylor; you were great and ravishingly beautiful and talented. Our representative in Bronx, New York, Mongkut Bean originally from Bakaq Bata, Alor Staq, Kedah, will be there with some flowers.–Din Merican

Elizabeth Taylor (1932-2011)


Nuclear Crisis in Japan


March 15, 2011

Japan’s Nuclear Crisis deepens

By Steven Mufson and Chico Harlan of The Washington Post

Japan’s nuclear emergency turned more dire on Tuesday after the third explosion in four days rocked the seaside Fukushima Daiichi complex and fire briefly raged in a storage facility for spent fuel rods at a fourth, previously unaffected reactor.

Officials from Tokyo Electric Power Co., owner of the nuclear complex, said radioactive substances were emitted after a 6:14 a.m. explosion, which took place in the unit 2 reactor. The blast took place near or in the suppression pool, which traps and cools radioactive elements from the containment vessel, officials said. The explosion appeared to have damaged valves and pipes, possibly creating a path for radioactive materials to escape.

A grave Prime Minister Naoto Kan told the nation Tuesday morning that radiation had already spread from the reactors and there was “still a very high risk of further radioactive material escaping.” He advised people within 19 miles of the plant to remain indoors. He urged calm.

Tokyo Electric, which over the weekend said it had 1,400 people working at the complex, said it was evacuating all but 50 workers. Kan hailed those workers, who he said “are putting themselves in a very dangerous situation.”

A no-fly zone was declared covering a 19-mile radius from the facility. The setbacks came as Tokyo Electric was still wrestling to regain control of ultra-hot fuel rods in two other nuclear units, nos. 1 and 3, by flooding them with seawater.

Tuesday began with a fire that broke out in a pool storing spent fuel rods at the base of unit 4, which had been shut down for inspection before last Friday’s earthquake. Experts said the fire most likely broke out because the pool water had run low or dry, allowing the rods to overheat. Radioactive substances spewed outside from the fire, officials said, because the structure housing the pool was damaged by Monday’s explosion at unit 3.

Half an hour later, the explosion at unit 2 took place. Experts said that, unlike the two previous explosions that destroyed outer buildings, this explosion might have damaged portions of the containment vessel designed to bottle up radioactive materials in the event of an emergency.

The explosion — more serious than the earlier ones — was followed by a brief drop in pressure in the vessel and a spike in radioactivity outside the reactor to levels more than eight times the recommended limit for what people should receive in a year, the company said. Japanese government officials later said it was unclear whether the spent fuel fire or the explosion had caused the spike in radiation.

The new setbacks came on the heels of a difficult Monday at Fukushima Daiichi unit 2, one of six reactors at the site. Utility officials there reported that four out of five water pumps being used to flood the reactor had failed and that the other pump had briefly stopped working. As a result, the company said, the fuel rods, normally covered by water, were completely exposed for 140 minutes.

That could have grave consequences, worsening the partial meltdown that most experts think is underway. By comparison, in the 1979 Three Mile Island, Pa., nuclear plant accident, it took just two hours for half the plant’s nuclear fuel to melt.

According to a report by the Kyodo news agency, the fifth pump was later restarted, and seawater mixed with boron was again injected in a desperate bid to cool the reactor, but the fuel rods remained partially exposed and ultra-hot. On Tuesday morning, Tokyo Electric said that 2.7 meters, or less than half, of the rods were still exposed.

The other four pumps were thought to have been damaged by a blast Monday that destroyed a building at the nearby unit 3 reactor, Kyodo reported. That blast, like one on Saturday at unit 1, was caused by a buildup in hydrogen generated by a reaction that took place when the zirconium alloy wrapped around the fuel rods was exposed to steam at 2,200 degrees Fahrenheit.

The International Atomic Energy Agency reported that injections of seawater into units 1 and 3 had been interrupted because of a low level in a seawater supply reservoir, but the seawater injections were later restored.

A commercial satellite photo of the complex showed piles of debris on top of units 1 and 3, which raised new fears about the condition of the pools where spent fuel is stored, especially at unit 1, where a design by General Electric placed the pool on top of the reactor but below the outer structure that was destroyed. In the satellite photo, there was no sign of a large crane that had been sitting on the roof before the blast. The ability of workers to assess the damage was hindered by fears that another explosion might occur.

In March 2010, 1,760 tons of spent fuel was stored in the six pools — 84 percent of capacity, according to Tokyo Electric. After Monday’s explosion at unit 3, Japanese government officials were quick to assert that it did not damage the core containment structure, and they said there would be little increase in radiation levels around the plant. But the explosion prompted Japan’s nuclear agency to warn those within 12 miles to stay indoors. The blast also injured 11 people, one seriously.

The string of earthquake- and tsunami-triggered troubles at the Fukushima Daiichi plant began Friday, when a loss of grid power (caused by the earthquake) followed by a loss of backup diesel generators (caused by the tsunami) led to the failure of cooling systems needed to keep reactor cores from overheating.

The IAEA reported that Japan has evacuated 185,000 people from towns near the nuclear complex. The agency said Japan has distributed 230,000 units of stable iodine to evacuation centers from the area around the Fukushima Daiichi and Fukushima Daini nuclear power plants. The iodine has not been administered to residents; the distribution is a precautionary measure. The ingestion of stable iodine can help to prevent the accumulation of radioactive iodine in the thyroid.

The U.S. 7th Fleet said Monday that some of its personnel, who are stationed 100 miles offshore from the Fukushima Daiichi plant, had come into contact with radioactive contamination. The airborne radioactivity prompted the fleet to reposition its ships and aircraft.

Using sensitive instruments, precautionary measurements were conducted on three helicopter aircrews returning to the USS Ronald Reagan after conducting disaster relief missions near Sendai. Those measurements identified low levels of radioactivity on 17 crew members.

The low-level radioactivity was easily removed from affected personnel by washing with soap and water, and later tests detected no further contamination. The political fallout spread all the way to the United States and Europe. German Chancellor Angel Merkel said Monday that she was suspending a deal that would have extended permits for 17 aging nuclear plants.

Many nuclear experts also called for a tougher scrutiny of U.S. plants, noting that the Japanese nuclear crisis exposed the limits of human ingenuity and imagination and pointed to the possible failure of the best-laid backup plans.

David Lochbaum, a nuclear engineer and director of the Nuclear Safety Program of the Union of Concerned Scientists, said in a conference call that in certain respects, the U.S. nuclear plants are not as prepared as the Japanese ones for a catastrophic power outage. After the earthquake and tsunami knocked out the electrical grid and backup generators, the Japanese engineers switched to batteries that could last for eight hours, he said.

“In this country, most of our reactors are only designed with battery capacity for four hours,” Lochbaum said. “Many of our reactors are in situation where earthquakes, or hurricanes in the gulf, or ice storms in the northeast, or a tree in Cleveland, can cause an extensive blackout,” he said.

The August 2003 blackout that affected 52 million people across the upper Midwest, New York and parts of Canada was triggered when overheated wires sagged into trees in northeastern Ohio. Nine nuclear units switched to diesel backup generators, which are the size of locomotives without wheels.

Despite the cascade of equipment failures at the Fukushima Daiichi complex, some nuclear experts noted on Monday that the fuel rods there, whose temperature could have risen to as high as 4,000 degrees Fahrenheit, would lose some of their heat over the next few days and would probably remain encased, even in the worst-case scenario, in a secondary containment structure with several feet of steel and concrete walls.

But the new explosion raises new questions. With it impossible to see into the reactor vessels, officials were in large part speculating about what is happening inside by using a variety of gauges and indicators.

“Let’s hope they can get these reactors under control,” said Richard Lester, head of the department of nuclear science and engineering at the Massachusetts Institute of Technology. “They’re not there yet.”

mufsons@washpost.com and harlanc@washpost.com

http://link.email.washingtonpost.com/r/TNGYL1/5C7JF5/CYOHS6/RMLI3K/KOHVD/YT/h

Will Next Time Be Different?


March 13, 2011

Will Next Time Be Different?

by Raghuram Rajan

Chicago–Carmen Reinhart and Kenneth Rogoff, in their excellent, eponymous book on debt crises, argue that the most dangerous words in any language are “This time is different.” Perhaps the next most dangerous words are “Next time will be different.”

These words are often uttered when politicians and central banks want to bail out some troubled segment of the economy. “Yes,” one can almost hear them saying, “we understand that bailing out banks will subvert market discipline. But you cannot expect us to stand by and watch the system collapse, causing millions of innocent people to suffer. We have to live with the hand we are dealt. But next time will be different.” They then use every tool they have to prevent economic losses on their watch.

The government’s incentives are clear. The public rewards them for dealing with the problem at hand – whether building levees to protect houses built on a flood plain or rescuing banks that have dodgy securities on their balance sheets. Politicians and central bankers gain little by letting the greedy or careless face the full consequences of their actions, for many innocent people would suffer as well. A sympathetic press would amplify their heart-rending stories of lost jobs and homes, making those counseling against intervention appear callous. Democracies are necessarily soft-hearted, whereas markets and nature are not; government inevitably expands to fill the gap.

To the extent that the rough justice meted out by markets or nature teaches anyone to behave better, it has consequences far beyond the horizon of anyone in power today. When asked to choose between the risk of being known to posterity as the central banker who let the system collapse and the intangible future benefits of teaching risk takers a lesson, it does not take genius to predict the central banker’s decision. Democracy tends to institutionalize moral hazard in sectors that are economically or politically important, such as finance or real estate, allowing them to privatize gains and socialize losses.

Even though the authorities insist that the next time will be different, everyone knows that they will make the same decision when confronted with the same choice again. So, knowing that next time will not be different, the authorities try their best to prevent a “next time.” But risk takers have every incentive to try their luck again, knowing that, at worst, they will be bailed out. In this cat-and-mouse game, risk takers have the upper hand.

For one thing, risk takers are typically small, cohesive interest groups that, once rescued, have a powerful incentive, as well as the resources, to buy the political influence needed to ensure a return to the status quo ante. If risk takers were allowed to face more serious losses, they would have fewer resources to fight political attempts to constrain their risky activities.

Moreover, the public does not have a long memory, a long time horizon, or an appetite for detail. Even as the United States’ voluminous Dodd-Frank bill tried to ensure that bankers never subjected American taxpayers to undue risk again, public attention had moved on to the state of the real economy and unemployment. Why focus on financial regulation when the risks of an immediate collapse are small, and when the details are so tedious? As technical experts and lobbyists took over, and the public lost interest, Dodd-Frank became friendlier and friendlier to the banks.

So how can this one-way betting be stopped? The scary answer may be that it does not end until governments run out of money (as in Ireland) or the public runs out of sympathy (as in Germany vis-à-vis the rest of Europe).

To avoid that fate, governments should start by recognizing that the system is programmed to respond to deep distress, and that they can do nothing about it. But they must try to ensure that they do not destroy incentives by doing too much. And they must offset the distortions created by intervention in other ways.

For example, the US Federal Reserve has essentially guaranteed the financial sector that if it gets into trouble, ultra-low interest rates will be maintained (at the expense of savers) until the sector recovers. In the early to mid-1990’s, rates were kept low because of banks’ real-estate problems. They were slashed again in 2001 and kept ultra-low after the dot-com bust. And they have been ultra-low since 2008. Senior Fed policymakers deny that their interest-rate policy bears any responsibility for risk taking, but there is much evidence to the contrary.

It would be difficult for the Fed to respond differently if the financial sector gets into trouble again. But it does not have to maintain ultra-low interest rates after the crisis has passed, especially if those rates have little impact on generating sustainable economic activity. Doing so merely rewards banks for their past excesses – and taxes savers.

More importantly, if the Fed wants to restore incentives for risk takers and savers, it should offset the effects of staying “low for long” in bad times by increasing interest rates more rapidly than is strictly necessary as the economy recovers. This will, of course, be politically difficult, because the public has been programmed to think that ultra-low rates are good, and higher rates bad, for growth, without any consideration for the long-term sustainability of growth.

Finally, the pressure on governments to intervene would be lower if individuals had access to a minimum safety net. Official US policy is so activist in downturns (regardless of its effectiveness) partly because unemployment is so costly to workers – who have little savings, unemployment benefits that run out quickly, and health care that is often tied to a job. A stronger safety net for individuals might allow politicians to accept more corporate or financial-sector distress, and help bolster their claim that next time really will be different.

Raghuram Rajan, a former chief economist of the IMF, is Professor of Finance at the University of Chicago and the author of Fault Lines: How Hidden Fractures Still Threaten the World Economy.

Copyright: Project Syndicate, 2011.
http://www.project-syndicate.org