The Unsaved World

August 31, 2013

Op-Ed Columnist

by Paul Krugman (09-29-13)

The rupiah is falling! Head for the hills! On second thought, keep calm and carry on.

In case you’re wondering, the rupiah is the national currency of Indonesia, and, like many other emerging-market currencies, it has fallen a lot over the past few months. The thing is, the last big rupiah plunge was in 1997-98, when Indonesia was the epicenter of an Asian financial crisis.

In retrospect, that crisis was a sort of dress rehearsal for the much bigger crisis that engulfed the advanced world a decade later. So should we be terrified about Asia all over again?

I don’t think so, for reasons I’ll explain in a minute. But current events do bring back memories — and they are, in particular, a reminder of how little we learned from that crisis 16 years ago. We didn’t reform the financial industry — on the contrary, deregulation went full speed ahead. Nor did we learn the right lessons about how to respond when crisis strikes. In fact, not only have we been making many of the same mistakes this time around, in important ways we’re actually doing much worse now than we did then.

Some background: The run-up to the Asian crisis bore a close family resemblance to the run-up to the crisis now afflicting Greece, Spain and other European countries. In both cases, the origins of the crisis lay in excessive private-sector optimism, with huge inflows of foreign lending going mainly to the private sector. In both cases, optimism turned to pessimism with startling speed, precipitating crisis.

Unlike Greece et al., however, the crisis countries of 1997 had their own currencies, which proceeded to drop sharply against the dollar. At first, these currency declines caused acute economic distress. In Indonesia, for example, many businesses had large dollar debts, so when the rupiah plunged against the dollar, those debts ballooned relative to assets and income. The result was a severe economic contraction, on a scale not seen since the Great Depression.

Fortunately, the bad times didn’t last all that long. The very weakness of these countries’ currencies made their exports highly competitive, and soon all of them — even Indonesia, which was hit worst — were experiencing strong export-led recoveries.

Still, the crisis should have been seen as an object lesson in the instability of a deregulated financial system. Instead, Asia’s recovery led to an excessive showing of self-congratulation on the part of Western officials, exemplified by the famous 1999 Time magazine cover — showing Alan Greenspan, then the Fed chairman; Robert Rubin, then the Treasury secretary; and Lawrence Summers, then the deputy Treasury secretary — with the headline “The Committee to Save the World.” The message was, don’t worry, we’ve got these things under control. Eight years later, we learned just how misplaced that confidence was.

Indeed, as I mentioned, we’re actually doing much worse this time around. Consider, for example, the worst-case nation during each crisis: Indonesia then, Greece now.

Indonesia’s slump, which saw the economy contract 13 percent in 1998, was a terrible thing. But a solid recovery was under way by 2000. By 2003, Indonesia’s economy had passed its precrisis peak; as of last year, it was 72 percent larger than it was in 1997.

Now compare this with Greece, where output is down more than 20 percent since 2007 and is still falling fast. Nobody knows when recovery will begin, and my guess is that few observers expect to see the Greek economy recover to precrisis levels this decade.

Why are things so much worse this time? One answer is that Indonesia had its own currency, and the slide in the rupiah was, eventually, a very good thing. Meanwhile, Greece is trapped in the euro. In addition, however, policy makers were more flexible in the ’90s than they are today.

The International Monetary Fund initially demanded tough austerity policies in Asia, but it soon reversed course. This time, the demands placed on Greece and other debtors have been relentlessly harsh, and the more austerity fails, the more bloodletting is demanded.

So, is Asia next? Probably not. Indonesia has a much lower level of foreign debt relative to income now than it did in the 1990s. India, which also has a sliding currency that worries many observers, has even lower debt. So a repetition of the ’90s crisis, let alone a Greek-style never-ending crisis, seems unlikely.

What about China? Well, as I recently explained, I’m very worried, but for entirely different reasons, mostly unrelated to events in the rest of the world.

But let’s be clear: Even if we are spared the spectacle of yet another region plunged into depression, the fact remains that the people who congratulated themselves for saving the world in 1999 were actually setting the world up for a far worse crisis, just a few years later.

A version of this op-ed appears in print on August 30, 2013, on page A19 of the New York edition with the headline: The Unsaved World.

http://www.nytimes.com/2013/08/30/opinion/krugman-the-unsaved-world.html

After 56 Years: Race and Religion polarised Us

August 31, 2013

by Tommy Thomas@ http://www.malaysiakini.com

COMMENT: The social contract, social compact or bargain reached by the three communities under the watchful eye of the British imperial power as a condition to Merdeka was that in exchange for full citizenship, a right to use their language and observe their religion, the non-Malays had to concede special privileges to the Malays to assist the latter to ascend the economic ladder.

It was a quid pro quo. It was a consensus arrived after hard bargaining, and has formed the basis of nationhood. In this equilibrium, the non-Malays were not to be relegated to second-class citizens: citizenship was not on a two-tier basis and there was going to be no apartheid, partition or repatriation.

What was required from the non-Malays at the time of Merdeka was undivided loyalty to the new nation. They could no longer owe their allegiance to the mother country, China or India. Racial differences were recognised. Diversity was encouraged. There was no pressure to integrate into one Malayan race.

A new nation was to be integrated over time, but as a plural society. Assimilation was out of the question. Thus, a united Malayan nation did not involve the sacrifice by any community of its religion, culture or customs. Minorities were not to be discriminated in a system of parliamentary democracy based on constitutional supremacy. In many respects, the establishment of Malaysia six years after Merdeka strengthened the social contract.

But as Malaya completes 56 years as an independent sovereign nation today, and more significantly, Malaysia turns half a century on September 16, do the 28 million Malaysians have reason to celebrate? Unfortunately, the popular response would be very much in the negative.

Race and Religion

The twin forces of race and religion have substantially polarised the nation. Every issue of public life, however minor or insignificant, is given an ethnic undertone by politicians and the civil service, and glaringly publicised in the government-controlled mass media. Totally absent in the national landscape is a statesman like the Father of Merdeka, Tunku Abdul Rahman, the first prime minister, who is prepared to speak for the nation and the public weal, rather than from a parochial or sectarian perspective.

Even after the closest general election in our history, with the coalition governing the nation not enjoying majority popular vote, and with the next general election only due in five years, politicking of the worst kind continues daily.

The Prime Minister is not giving the leadership that he sought from the electorate, and which he received. With a 44-seat majority in the Dewan Rakyat, the BN government has a majority which is the envy of many governing coalitions across the globe. Yet, a sense of paralysis grips the centre.

Bread-and-butter issues which largely featured in the election campaign of four months ago, have still not been addressed at all. Not a day goes by without murders, rapes and armed robberies occurring in our homes and our streets. Rampant crime has undermined law and order.

The economy has been shaken by mounting debt; not just the national debt, but also consumer and corporate debt. Comparisons have already been made to the run-up to our 1997 financial crisis which was principally caused by a proliferation of debt.

Thousands of Malaysian companies and nationals speak with their wallets; they just take their money overseas in billions. Our currency has received a battering in the last month, resulting in speculation that Bank Negara may have to intervene to prevent further depreciation of the ringgit.

Bread-and-butter issues, as important as they are to the average Malaysian, still pale in comparison with the massive increase in ethnic tensions. What is the point of Talent Corporation spending hundreds of millions of taxpayers monies in an endeavour to attract Malaysians to return home when racial polarisation is on the increase in their nation.

Thousands of non-Malays have done brilliantly in businesses, professions and other private sector areas in Malaysia. They have flourished regionally and internationally in every society that values meritocracy. Hence there is a huge pool of talented non-Malays willing to be engaged in the public service.

Yet in their homeland, the civil service, the GLCs (government-linked companies), the universities, the army, the police – indeed senior positions in the entire public sector – are dominated by one race. How does one justify such massive hiring of personnel from one race to manage national institutions where national policies are made in a nation of multiple communities that claims there are no classes of citizenship or nationality.

Grand coalition

It is accordingly critical in the public interest that politicians of all parties cease polarising the nation any further. All Malaysians must be treated with sensitivity and delicately. Feelings of communities, however weak and influential, must not be hurt. Hate speech must be avoided at all costs. The government must take the lead, after all the whole purpose of electing leaders is for them to lead the nation.

They must cease immediately playing the racial, religious and ethnic card, and take policy decisions that would promote a plural society. If all these actions can only be taken by a government of national unity, that is, a grand coalition of BN and Pakatan Rakyat parties, the national interest compels such an urgent outcome.

There is a genuine widespread concern that we must all play our part in rolling back the loud public discourse on race and religion. This is an awakening call. Unless remedial measures are taken soon, young Malaysians who have the world at their feet, will desert the nation because they feel they have no place under the Malaysian sun.

They are our future, but they see no future at home. That is the tragedy that must be avoided this 56th Merdeka, and this 50th Malaysia Day.

Merdeka Day Message: Stay United, says Prime Minister of Malaysia

August 31, 2013

“Whatever challenges there are, we must not be despaired. On the other hand, we must move forward to develop the country based on national solidarity,”–Prime Minister Najib

To Prime Minister Najib,

Take your message (above) to former Prime Minister Tun Dr. Mahathir Bin Mohamad and make him understand that divisive race-based politics has no place in Malaysia of the 21st century. You want a United Malaysia, that is good. But be fair,and just to all Malaysians and end Mahathirism. It will be good for your political future as well if you can stop the Tun from playing with race. Good wishes to you, Sir and your Cabinet colleagues on Merdeka Day. –Din Merican

by Bernama (August 30, 2013)

Datuk Seri Najib Razak has called on the people to remain united to defend the sovereignty of Malaysia which has gained independence and free from the clutches of colonialism for decades.

In his message in conjunction with the 56th anniversary of the country’s independence tomorrow, the Prime Minister pointed out that now was not the time for Malaysians to be disunited.

 “Whatever challenges there are, we must not be despaired. On the other hand, we must move forward to develop the country based on national solidarity,” said Najib when delivering the message which was aired by local television stations tonight.

He said that being a sovereign nation, the people of Malaysia had full rights in all matters pertaining to the administration of the country and decide for themselves the direction the country was heading for.

“In fact, in animating the independence and the incidents involved in attaining it, we must also continue to preserve and defend matters pertaining to the Malay Rulers, the position of the Islamic religion as well as the special privileges of the Malays and Bumiputeras as had been enshrined by our forefathers in the Federal Constitution,” he said.

The Independence Day parade this year with the theme ‘Malaysiaku Berdaulat: Tanah Tumpahnya Darahku’ (‘My Sovereign Malaysia: My Native Land’) will be held at the Merdeka Square, here tomorrow, with the climax being the Merdeka Eve 2013 programme just before midnight to usher the arrival of Aug 31 scheduled to be held at the Pusat Maritim, Putrajaya tonight.

Subsequently, Najib took the opportunity to remind the people that sovereignty as a factor that buttressed Malaysia’s independence did not come on a silver platter.

“Too much sweat had been shed, too much blood had been sacrificed. All these were due to the struggles of the leaders together with that of the past generation, and continued until today,” he said.     Thus, Najib said, the Merdeka celebration was not merely to shout to evoke the people’s spirits because even more than that, it must be interspersed with a sense of deep appreciation.

“What is even more important is the developments that came with independence, it has been proven that we have gone through episodes such as racial disputes, financial crises and political differences. Thankfully, we have overcome all these with much success,” said the Prime Minister.

Stop him from doing more damage to our country

Najib said the main thing to be looked into in achieving the meaning of the Merdeka anniversary was to what extent would the present development attained by Malaysia be passed on to the future generation.He said various efforts must be mobilised and put into place so that the young generation, regardless of their religious background, race or culture would become literate in terms of history. The Prime Minister said the young generation must continue to be guided and prepared in terms of their identity and strengthened with their patriotic spirit.

 “Only then would Malaysia with its high-minded people remain as a sovereign nation in its real meaning,” he said.Referring to the armed intrusion incident in Lahad Datu, Sabah recently, Najib said the bloody incident was a lesson that Malaysia was not spared from exposure to external threat.

 “The tragic incident proves to be a stark reminder to Malaysians on the importance of remaining united for the sake of defending the country’s sovereignty,” he said, adding that continued efforts must be made to develop a national identity and spirit of patriotism among the people, especially the future generation.

Najib also called on the people to take as a lesson the internal crises brewing up in several Arab nations that seemed to be endless. “That’s what happens when the changes aspired by the people were merely reckless transformation,” said the Prime Minister, adding that there would be economic destruction and the growth of a particular country would be affected when there were no stability and unity. As such, he called on Malaysians to appreciate peace, preserve harmony and nurture solidarity with patriotism.

Najib said that Malaysia’s current status had been developed through various initiatives, careful planning and strategy by the government for decades according to its own mould and style.

Referring to Malaysia as a nation of various races that has made the country unique in the world, he said: “This uniqueness has made us special and an asset that will help us to achieve the developed nation status with high income in the next few years.” — BERNAMA

Source: http://www.nst.com.my

Malaysia Splits With ASEAN Claimants on China Sea Threat

August 30, 2013

“Just because you have enemies, doesn’t mean your enemies are my enemies,” said Hishammuddin Hussein, Malaysia’s Minister of Defense, on the sidelines of meetings with counterparts from the Association of Southeast Asian Nations as well as the U.S., China and Japan.

Just like Hishammudin who doesn’t understand Foreign policy, our youth don’t know how to distinguish PCM and China flag !

MY COMMENT: Our Novice Defense Minister. Hishamuddin Hussein who had mishandled the Lahad Datu incident when he was at the helm of the Home Affairs Ministry, is now causing a serious split within ASEAN over the South China Sea dispute with China. I wonder whether he had consulted the Prime Minister and his Cabinet colleagues especially with Dato Seri Anifah Aman, our Foreign Minister, before making this outrageous statement. 

Our Foreign Minister is hard at work with his ASEAN colleagues to craft a Code of Conduct which could be then discussed with China. Hishamuddin should understand that no country has the right to send its naval vessels into our territorial waters, no matter how friendly we think the country is towards us. Such incursions can be deemed acts of aggression. We cannot tolerate any violation of our national sovereignty and territorial integrity. Hishamuddin’s statement does reflect that his lack of understanding of one of the fundamentals in state relations. He is  also not conversant with the South China Sea issue and our foreign policy.

That being the case, he should refrain from making statements that can be detrimental to ASEAN solidarity and our national interest. He should now be asked to clarify his statement, and leave the entire South China Sea issue to our Foreign Minister and his diplomats.–Din Merican

By Sharon Chen – Aug 29, 2013 5:43 PM GMT+0800

Malaysia is not worried about how often Chinese ships patrol the areas it claims in the waters, Defence Minister Hishammuddin Hussein said in an interview in Brunei yesterday. Chinese Navy ships in March visited James Shoal off Malaysia, near where Royal Dutch Shell Plc (RDSA) and Petroliam Nasional Bhd (PETRONAS). have oil and gas operations.

“Just because you have enemies, doesn’t mean your enemies are my enemies,” Hishammuddin said on the sidelines of meetings with counterparts from the Association of Southeast Asian Nations as well as the U.S. The Chinese “can patrol every day, but if their intention is not to go to war” it is of less concern, he said. “I think we have enough level of trust that we will not be moved by day-to-day politics or emotions.”

Malaysia is one of six claimants to land features in the South China Sea, an area where competition for gas and fish has led to boats being rammed and survey cables cut. The Philippines and Vietnam reject China’s map of the sea, first published in the 1940s, as a basis for joint exploration.

“Asean is divided on the South China Sea dispute because all the members have different interests in the South China Sea and their relationships with China also differ,” said Ian Storey, a senior fellow at the Institute of Southeast Asian Studies in Singapore. “Vietnam and the Philippines see the dispute as a major national security concern while Malaysia and Brunei always downplay tensions.”

U.S. Concerns

U.S. Defense Secretary Chuck Hagel met Hishammuddin today, alongside defense ministers from ASEAN, China, Japan and South Korea, for the second ADMM-Plus security summit. Hagel told ministers he was concerned by a rise in maritime incidents and tensions in the waters.

“Actions at sea to advance territorial claims do not strengthen any party’s legal claim,” Hagel said, according to remarks prepared for delivery. “Instead, they increase the risk of confrontation, undermine regional stability, and dim the prospects for diplomacy.”

The situation in the South China Sea is “stable,” said China’s Foreign Minister Wang Yi, after meeting his Thai counterpart Surapong Tovichakchaikul in Beijing today. “Such a stable situation does not come easily and we should dearly cherish it,” he said. “There is no real problem with freedom of navigation in the South China Sea, nor will there be a problem in the future.”

Defense Spending

An increase in defense spending in the region is “of serious concern to all of us,” Singapore Defence Minister Ng Eng Hen told reporters in Brunei today, adding he had raised the matter during talks with other ministers. Spending by Asian countries rose 75 percent from 2002 to 2012, compared with 12 percent for the same period in Europe, he said.

“The trend is likely to continue because Asian countries will modernize their militaries as their economies grow,” Ng said. He said Singapore had talked about the need to assure other countries in Asia that this process “will add stability to the region.”

Collaboration Option

Malaysia could consider collaborating on the development of oil and gas resources with China in the area, Hishammuddin said in the interview.

“Provided our friends in ASEAN know, those who have an interest in the region know, and if they want to object, I would like to know why?” Hishammuddin said. “If they’re just objecting for the sake of objecting, that doesn’t make sense.”

China National Offshore Oil Corp. estimates the South China Sea may hold about five times more undiscovered natural gas than the country’s current proved reserves, according to the U.S. Energy Information Administration. In June, Malaysia Prime Minister Najib Razak called for parties to jointly develop resources to avoid conflict and prevent “extra-regional states” from becoming involved.

Najib cited a joint development zone in waters claimed by Thailand and Malaysia as a precedent that could be applied in the South China Sea. China has agreed to talks on a code of conduct for the area, with discussions to begin in September.

Code of Conduct

“China is somewhat reluctant to reach a consensus on the code of conduct with ASEAN members, if the area covered by the code of conduct is in certain portions of the South China Sea claimed by China,” said Arthur Ding, a research fellow at the Institute of International Relations in Taiwan.

China still calls for disputes to be handled directly by the countries in involved, Defense Minister Chang Wanquan said in Brunei today, speaking through a translator.

China opposes any effort to internationalize, “escalate or complicate the disputes,” Chang said. “These disputes should not and will not undermine the overall relationship between China and ASEAN.”

Hagel will visit Vietnam next year at the invitation of Vietnam’s defense minister, said a senior U.S. defense official who can’t be named according to government policy. Hagel also met his counterpart from Myanmar for talks in Brunei yesterday, the first meeting of top defense figures from the two countries in 20 years, the official said.

To contact the reporter on this story: Sharon Chen in Singapore at schen462@bloomberg.net

To contact the editor responsible for this story: Rosalind Mathieson at rmathieson3@bloomberg.net

http://www.bloomberg.com/news/2013-08-28/malaysia-splits-with-other-asean-claimants-over-china-sea-threat.html

HAPPY 56th Birthday, Malaysia

August 30, 2013

They fought so that we are free, but that freedom is now under threat

August 31, 2013 is Merdeka Day to commemorate 56 Years of Malaysian Independence. Congratulations to all and let us hope we can become a truly free and united people. We need no slogans and other fuzz words for that. We need to trust one another and never allow politicians to destroy the trust and goodwill among us.

Trust is a sacred but fragile attribute and the gel that binds our people . If we allow racism and religious extremism to take root in our country, we on the road to self destruction since we would have destroyed that bond in our plural society by playing the politics of race and religion.

On this special day, let us remember the men and women who had worked hard to build the foundations for our nation and defend our Freedom, and honour them by working even harder to preserve racial harmony and goodwill among all Malaysians, at home and abroad. Happy Merdeka.–Dr Kamsiah and Din Merican

5 reasons to be thankful this Merdeka

August 30, 2013

MY COMMENT: You can’t be serious, Aidila. If you are (and I inclined to think you are) you must be dreaming to say we are free. We are not free; and as someone who is working for Malaysiakini, you should know better. 

Unlike someone like me who was 18 years old when we got independence by negotiation with our British colonial masters, obviously, you do not have institutional memory. After seeing 6 Prime Ministers govern our country, I say that we are less free today than we were 56 years ago and we have, therefore, nothing to be grateful to the current regime. By all indicators, we are heading towards being a failed state. Even Myanmar after decades of international isolation is beginning to smell like roses.

State propanganda is everywhere we go. Signboards carry slogans and the mainstream media spins for those in power, in stead providing news. The reality is that our government remains corrupt and very embittered after GE-13. The state intrudes into the lives of Muslim Malaysians and people from other Faiths because the secular administration and our courts cannot deal with our mullahs and ulamaks (pronounced ular-mak).

Muslims are taught religious rituals, but Islam is not about rituals and politics; it is about iman (faith), ehsan (compassion) and ilm (love of knowledge). Racists in UMNO talk Malay supremacy. Must we be thankful for incompetence, the high crime rate, and rampant corruption? Think.

Just another point, are we truly Malaysians? As far as I know, we are either bumiputras or pendatangs. Race based politics is the order of the day, and yet you think we are lucky because we live in Malaysia. If we are in such a fabulous place, why are Malaysians emigrating for better education and opportunities.

Mederka will be celebrated tomorrow as Malaysians will witness the spectacle at the Merdeka Day parade at Dataran Merdeka (Freedom Square). There will be messages of unity and harmony, starting with the Prime Minister’s Medeka Address on national television this evening, and a show of our military and police power at the national day parade tomorrow morning. Merdeka still remains a distant dream. Come Monday, next week, it will be business as usual. Our problems don’t just disappear; they need to solved. And there is an apparent lack of political will to tackle them.– Din Merican

by Aidila Razak@http://www.malaysiakini.com

Growing up, we were never the family that put up flags. In contrast, I was the child who would be the first to volunteer for Pertandingan Nyanyian Lagu Patriotik and would secretly wish my mother was the type to make us cake with icing the colour of the Malaysian flag for August 31.

Many moons later, still ever patriotic, I have taken it upon myself to remind you that as Malaysians, we should be thankful that we are free people. And what better way to do this than to revisit events in the past few weeks. We are free people because:

1) We can choose what movies we want to watch, and decide for ourselves what is true or what is fiction…and what is sneakily in between.

Our government trusts us enough not to take it upon themselves to ‘advise’  cinema-operators not to screen this film or the other.

Cinemas here also can screen or not screen what they like without being reminded that their licences are on the line.

We get to hear both supporters and detractors of films claiming to be historically accurate argue their points on equal footing, on all media platforms, if we choose to.

2) We get the benefit of regional artists coming to Malaysia to stage their work, which has enjoyed successful runs overseas.  We don’t have anyone presumptuous enough to say that something we haven’t even watched will “touch our sensitivities”.

Indeed, we are free enough to put up our own fight if someone is belittling us, especially if they’re from that little red dot in the south who think we live in Gangsta’s Paradise. How dare they?

3) We can exhibit our artwork without anyone taking insult, or worse still lodging a Police report claiming some sort of criminal offence.

We can plant as many flags on the ground, or hang them from a ceiling, as a homage to our nation without anyone claiming we are hurting their sensibilities.

4) We don’t have to endure state propaganda everywhere we go, and especially not in our private time of leisure be it at home or, God forbid, in the cinema.

No patriotic reels to whip up our spirits (hang on, are we at war? Oh yes, the Sulu still want Sabah nor anyone to guilt trip us into raising the flag, because goodness gracious, we are mature enough, but more importantly, free enough to decide how we want to express our love for our country.

5) We can practice our religion as we deem fit, as long as we do not hurt or maim anyone. And if we adopt a view different than the majority, we need not suffer being labeled an unbeliever. Malaysians know better than to pretend to be God, and God knows us better than any of these mortals. God knows we believe.

Thank God we are Malaysians. May we always be free.