It’s the Economy, Mr. Najib, so don’t blink

August 31, 2015

It’s the Economy, Mr. Najib, so don’t blink

by Martin

FT Najib

TODAY(August 31) marks the completion of 58 years of Merdeka. On the economy, there is much to be proud of, with nearly six decades of generally good growth. One key reason is that the national economy has become well diversified. At Independence, Malaya was dependent on exporting just rubber and tin.

Through the years, more commodities including palm oil and petroleum were introduced and the raw materials were processed and manufactured, for example, into rubber gloves and furniture.

The manufacturing sector also diversified to include electronics. Construction has boomed and has high potential. There have been mistakes, too, along the way. Policies could have been better designed and implemented. And growth, though quite well-distributed, could have been more inclusive.

There are many regions and communities still left out of development. This Merdeka, we should resolve that those living at the bottom of the pyramid should receive the most attention and resources.

There is no reason why, 58 years after Merdeka, Malaysia cannot cater to the needs and interests of the poor and vulnerable. Despite the achievements, the economy is now facing what could be its greatest test. We are already inside the start of an economic crisis, and it will get worse before it gets better.

The fall in prices of petroleum and palm oil has rightly been blamed. Our economy is still reliant on commodities and thus affected by the booms and busts of the global commodity cycle, which turned downwards in the past couple of years. Even more important, Malaysia has also become dependent on another boom-bust cycle – that of global finance, the rapid inflows and outflows of funds.

This cycle is even more volatile and dangerous than the commodity cycle. Volatile because the flows can be huge and can change suddenly, and dangerous because the change can damage many parts of the system. There is a large body of literature on the dangers of global financial flows, when trillions of dollars of short-term funds go hunting for investment venues and modes in search of higher yield.

These funds choose Malaysia and other emerging economies to place many billions of dollars. When fundamentals or perceptions change, the funds move out.

Allowing the free flow of speculative funds is not a good idea. When too much comes in, effects include stock market and property price bubbles and currency appreciation.

And when the investors exit, there are other bad effects, as is now becoming evident. Foreign funds in the stock and bond markets are leaving the country. The ringgit has fallen more than 20% since a year ago, with expectations of further falls prompting further outflows. Local capital flight is also taking place.

Since the trade surplus has declined, it cannot fully offset the outflow of funds. Thus the overall balance of payments is now negative and this is reflected in the falls in the foreign reserves from US$132 bil (or RM424 bil at the exchange rate then) on August 29, 2014 to US$94.5bil (or RM356bil) on August 14, 2015.

Unless the investor mood reverses, there is potential ground for higher foreign outflows. The relevant foreign funds are in four categories: equities, bonds and deposits (denominated in ringgit) and loans to Malaysia denominated in foreign currency. Foreign investors have around RM300-400bil in the stock market. This year up to 31 July, they pulled out RM11.7bil from the stock market, according to MIDF Research. Foreign funds invested in bonds denominated in ringgit are high and falling fast. Foreigners own RM206.8bil of government and corporate bonds at end-July, down from RM226bil at end-2014 and RM257bil in July 2014, according to government data.

They also own deposits in Malaysian institutions of RM91bil as at end-March. Thus, there are RM600-700bil of foreign funds in the country as equities, bonds and deposits. If a sizable amount moves out, this would further drain the foreign reserves which stood at RM356bil on Aug 14.

On top of this, the public and private sectors also had RM399bil of external debt (of which RM157bil is short-term) denominated in foreign currencies as at end-March 2015, according to Bank Negara.

The country has thus become dependent on foreign funds and lenders to maintain their assets in and loans to Malaysia. The foreign reserves are still quite high, but has been declining and subject to future stress if outflows continue.

It is timely that an economic task force has been set up by the Prime Minister and it should examine all facets of the emerging crisis.

Should the country re-establish a currency peg? If this is done, there should also be controls on capital outflows, otherwise the fixing of the currency may not prevent and may instead cause further large capital outflows. The 1998-2000 policy measures that overcame the crisis were successful because they were done in combination: a fixed exchange system; control over certain types of capital outflows; and reflationary monetary and fiscal policies. One without the others would not have worked.

The committee should also consider whether it was wise to have recently liberalised the financial system so much, to now have such free inflows and outflows of funds. Excessive fund inflows and debts could have been limited in the first place, as done in some other countries. Local institutions should also not have been encouraged or allowed to invest so much abroad; now it is not easy to get them to reverse the flow.

The policies have resulted in high dependence on foreign funds, and the economy being susceptible to the stress of capital outflows. We shouldn’t welcome or attract all the funds that want to enter to do so, and then later bewail the fact that these same funds now want to exit when the economy cannot afford them to do so.

In any case, it is important to give priority to reviving the economy, which is now clearly under stress and already inside a crisis.


In the Spirit of Merdeka, fast forward Bersih

August 31, 2015

COMMENT:  I disagree with you,  Mr Ng.  Bersih 4.0 on August 29-30, 2015 is not “the nexus of negativity”. It is a gathering of thousands upon thousands of Malaysians who demand free and fair elections, and good governance. They choose to express their discontent with the Najib administration in a mature, orderly and peaceful manner.

Din and Kamsiah at Bersih4.0We were among the many Malays who were at Bersih 4.0 with fellow Malaysians

It is not a Malay versus the Rest affair. That is what Najib and his cronies, apologists, sycophants and paid spinners would have us believe. In stead, it is a clear demonstration that Malaysian people power is alive and can no longer be ignored.

Malaysian democracy is very much in vogue. This is the most positive development from Bersih 4.0  and the significance of Merdeka 58, not the expensive display of meaningless pomp, arrogance and defiance, and pageantry which I saw on television this morning.

BERSIH'S demands

Those who were at Dataran Medeka and its surrounds want positive change; they want a responsible and accountable government. Read the 5 Bersih demands carefully. Because Prime Minister Najib can longer be trusted, they want him to step down. That is Demand No. 6. And it was a simple and clear message delivered in a resounding way.

Najib lacks credibility and there is a crisis of confidence and capital and financial markets are reacting negatively by dumping our stocks and shares and selling the Malaysian ringgit. Until this leadership question is settled,  we face uncertainty which can lead to the worst economic crisis we have witnessed in 58 years.

solat at Bersih 4.0The Malays were there. Make no Mistake about this

How can you expect us to lay down our arms and celebrate when we know that Najib is corrupt and incompetent and the root cause of current political, social and economic problems. He cannot be trusted to focus on his duties.

Our Prime Minister is only interested in remaining in power and will stop at nothing to ensure he survives politically. And if he has to go down, he will take Malaysia with him. So, this struggle for change must be relentless; it must not stop until we succeed in our mission. Fast Forward, Bersih.

IGP Khalid A Bakar

Finally, I congratulate Bersih 4.0 organisers and the Royal Malaysian Police for ensuring public order. To the Inspector-General of Police, Tan Sri Khalid Abu Bakar,  I say “terima kasih daun keladi, kalau boleh macam ini lain kali”. –Din Merican

In the Spirit of Merdeka, fast forward, Bersih

by Scott Ng

Tunku QuoteA Timely Reminder to our Current Prime Minister: Stop Playing Politics with Race and Religion

For two days, Dataran Merdeka, the place where Tunku Abdul Rahman declared our independence from the British, was the focal point of the nation. The place that celebrates our country’s greatest achievement became the nexus of this country’s negativity, expressed not by those who were against the government, but also by those who viewed the protest as unpatriotic. And the rhetoric has been ugly, to say the least.

The accusations levelled at Bersih by pro-government media and bloggers and the cries of “Where are the Malays? Don’t they care about this country too?” from the protestors defined the worst of us. They represent the basest, most repulsive urge we have, the need to blame and demonise those who are different from us. That’s ironical, for sure, given how much we harp on what it means to be Malaysian in our multi-cultural society.

Today, however, is an occasion for all Malaysians. Without Merdeka, none of us would be where we are today, in this beautiful, often schizophrenic country that somehow keeps a hold on our heartstrings no matter what is going wrong. Without the bravery of our forefathers – Malay, Chinese, Indian, Orang Asal it matters not – there would not be the Malaysia that we call home.

There is so much hate and anger in the air that we have even forgotten to celebrate Merdeka this year. This is not to say that the rakyat are angry without reason. There are indeed many reasons to be angry right now, but we must not forget that fateful day 58 years ago that our forefathers won the right to self-determination, the right to live in a way only we Malaysians can live.

Just for today, it is time to lay down arms. In the name of those who came before us, and those who sacrificed for us, this is a day to celebrate.

This day exemplifies the will of Malaysians to live a life as free as anyone else in the world, on our own terms. This day represents the end of oppression, the end of coercion, the end of having our voices ignored. It is a day of freedom and emancipation. If we do nothing else, we should be shouting Merdeka from the rooftops to reinforce the fact of our independence, and to bring to mind what we struggled against as a people.

If only just for today, let us be undivided by ideological, communal, or political lines. Let us just be a people who finds themselves on the cusp of something tremendous and who must reconnect with the same spirit that once made us great. As Merdeka leads to Malaysia Day, we must keep up our faith in what makes us who we are, and hold fast to the spirit of Merdeka, to the dream of a nation of equals, working together for the success of our grand experiment.

Malaysia: Shameless and Spineless Najib clings to the Job

August 31, 2015

Malaysia: Shameless and Spineless Najib clings to his Job

by Asiasentinel Correspondent

Supporters of beleaguered Malaysian Prime Minister Najib Razak are claiming a tactical victory out of what might otherwise be regarded as a defeat – the presence of tens of thousands of yellow-shirted protesters on the streets of Kuala Lumpur over the weekend calling for his resignation.

Generated by  IJG JPEG Library

BERSIH'S demandsDemand No.6: Undur Lah, Najib

United Malays National Organization leaders characterized the two-day rally organized by the reform movement Bersih 4.0 as composed almost entirely of the country’s Chinese and Indian ethnic minorities, with only 10 to 20 percent of the protesters coming from the country’s majority ethnic Malay population.

That was an indication, in UMNO eyes, that the rally, to protest massive corruption in the disastrously managed 1Malaysia Development Bhd. state-backed investment fund and vast sums in Najib’s bank account, was actually an attempt by the Chinese to destabilize the country’s democratically elected parliament, which is dominated by Malays.

Whatever the reason, despite the presence of a huge crowd estimated at 200,000 by the organizers, 80,000 by government-dominated local media and 35,000 by the Police – “a sea of yellow shirts,” said Americk Sidhu, a prominent Indian lawyer – it clearly wasn’t enough to dislodge Najib.  The betting is that unless there are further defections from his party or even more sensational revelations, he has the backing to stay in power until the next general election.

Din and Kamsiah at Bersih4.0Bersih’s Message Delivered in Resounding Fashion

Whether the Barisan Nasional, the ruling national coalition, can stay in power beyond that time, however, is unsure, according to political analysts. There is widespread and growing disgust with the deep levels of corruption, particularly in UMNO. “UMNO is likely to be finished,” a Malay lawyer told Asia Sentinel.

The Prime Minister has waged a dogged fight to stay in office, firing his Deputy Prime Minister and Attorney-General as they allegedly closed in him, and neutralizing several other figures.  Ominously, he and other UMNO leaders have openly fanned racial attitudes in the attempt to blame others for the country’s deepening economic and social troubles. 

In the weekend’s event, the protesters were careful to stay within the boundaries of political protocol, thronging the city center but not entering Merdeka Square under Police orders.  Unlike previous Bersih rallies, the government, while threatening to arrest anybody who wore a yellow shirt emblazoned with the words Bersih 4.0, used kid-glove tactics to handle the crowd, thus avoiding allegations of Police brutality such as were made in previous rallies.

Pretty much a carnival atmosphere prevailed, with singing, prayer, skits, criticisms of the government and interminable speeches. Hundreds of Bersih adherents crowded downtown restaurants and bars, turning the event into a largely happy one. Events continued into the early hours of August 30, with thousands of people sleeping in the streets and wakening to aerobics and calisthenics workouts to resume the previous day’s crusade to oust the Prime Minister.

Nonetheless, “Malays think Bersih is entirely the [Chinese-dominated Democratic Action Party],” said a Malay lawyer in an interview. Pro-UMNO bloggers repeated the theme, saying the event was actually a DAP action to attempt to wrest political power from ethnic Malays.

Bersih organizers disputed the claim, saying there was adequate participation by ethnic Malays.  “I was there,” Sidhu said. “There were many Malays but you know what, I didn’t even think about it as I am colorblind. But look at the prayer sessions [in local mosques], the gathering at the National Mosque….who were these? Chinese Buddhists or Indian Hindus?”

However, their absence was clear.  The first Bersih rallies drew a majority of ethnic Malays although subsequent rallies have seen Malay participation drop off.  The first Bersih rally in 2007 to rally for campaign reform was composed of 80 percent Malays and 20 percent other minorities. The ratio fell to 60 percent Malays in the second Bersih march and to 50-50 in the third.

The drop-off is regarded as due to the split in Parti Islam se-Malaysia, the rural-based fundamentalist Islamic party, which left the three-party opposition Pakatan Rakyat coalition earlier this year over the refusal of the Chinese-dominated Democratic Action Party and the moderate urban Parti Keadilan Rakyat to agree to the implementation of hudud, or seventh-century religious punishments including stoning of adulterers and amputation of limbs of thieves, in Kelantan, the only state that PAS governs.

At previous Bersih rallies, PAS provided healthy organizational skills and money to round-up rural Malays and bus them to Kuala Lumpur to join in the protests.  Ominously for the opposition, the lack of ethnic Malays meant that neither Parti Keadilan nor Gerakan Harapa Baru, composed of the moderates who quit PAS to remain in the opposition coalition, had the star power or the organizational abilities to get large numbers of ethnic Malays to the rally.  If they are to come together as a cohesive force to contest the next general election to be held in 2018 at the latest, the development considerable organizational skills are going to be necessary.

Former Prime Minister Mahathir Mohamad, who has been attempting to oust Najib from office for months, sought to bolster the impression of Malay support for the event by showing up on Aug. 30 in the evening with his 89-year-old wife, Siti Hasmah Mohd Ali, to see and be seen, although he stayed only a short time and left. He returned, however, on Aug. 30 to renew his call for Najib to go.

Accompanied again by Siti Hasmah and Zaid Ibrahim, the former law minister who left UMNO several years ago, he was swarmed by followers, saying “I just want Najib to step down.” He called for continuing street demonstrations, saying the only thing that drove former Philippine President Ferdinand Marcos from power in 1986 were massive crowds.

Those crowds were in the millions, and they were backed by the country’s business and religious establishment as well as much of the social structure.  Malaysia, riven with Malays siding with the government out of fear and envy of the much richer Chinese, shows little promise of that kind of action.


Happy 58th Birthday, my Country

August 30, 2015

Happy 58th Birthday, my Country

Din and Kamsiah at Bersih4.0August 31, 2015, Malaysia, my country, turns 58. I congratulate fellow Malaysians. I pray that we remain free, strong and united as a people, that we will no longer in the coming years be identified by the color of our skin, our ethnicity and religion, and that we will live in peace. We must not just call ourselves Malaysians, we must think and act like Malaysians.

We face difficult times in the months ahead. The politicians like  Prime Minister Najib Razak want you and I to think that our economic fundamentals are strong. Economists and pundits have been paid to endorse that view. If we believe them, we do so at our own peril. If you want to know about our economic health, please talk to small businessmen and the ordinary struggling Malaysian workers, and they will  tell you the truth.

The performance of the Ringgit against the US dollar and other major currencies including those in ASEAN is good indicator of loss of confidence in our government led by Najib Tun Razak.  I was with my wife, Dr. Kamsiah at the Bersih rally in the Dataran Merdeka and Jalan Tun Perak area this afternoon and was privileged to have the opportunity to a number of Malaysians who had spent the previous night sleeping in the open space. They showed great courage and determination, not despair because they know change is coming because they want change.

Our Prime Minister cannot connect with ordinary Malaysians like I was able to do. I am one of them. Like these Malaysians, I know what it takes to make our country great again. It will require commitment, hard work and self belief.  So my fellow Malaysians, Malaysia is you and I, not brick and mortar. You and I as free individuals can determine its future. When politicians let us down, we remove them. Prime Minister Najib can no longer be trusted.  And that is  why thousands upon thousands of Malaysians at Bersih 4.0 want him to go.

Congratulations to you all, my fellow Malaysians on Merdeka Day. Let us resolve on this special day to do our best for our King and country. –Din Merican

Farewell, Bersih 4. We shall meet again. READ THIS:

Mahathir: I’m here for the people

August 30, 2015

COMMENT: I cannot understand why Malaysians who were at Bersih 4.0 last night and this afternoon are excited at the sight of Tun Dr. Mahathir Mohamad in their midst. I am glad that my wife Dr. Kamsiah and I missed him on both occasions. We both feel that the former autocrat is not interested in electoral reform, democracy, human rights and good governance. He has a different agenda, which is basically to protect his legacy and UMNO Baru which he created after UMNO was outlawed.

Bersih 4.0 in Jalan Tun Perak

Tun Dr. Mahathir has always been an astute politician of the Machiavellian mould with a Master Yoda touch. He said he came to Bersih 4.0 to support the people, not Bersih’s struggle which goes beyond the removal of Najib as Prime Minister.

I want to remind him that Bersih is  a people’s movement  for political change. Bersih 1.0, 2.0 and 3.0 were all about people power against the corruption, electoral politics, and abuses of power of the UMNO-BN clique.

BERSIH'S demandsBoth Ambiga and Maria Chin and their associates have not changed Bersih’s mission.  Bersih 4.0 is  continuation of our fight for free and fair elections. Since Najib is a major obstacle to electoral reform, Bersih 4.0 is also about asking him to step down as Prime Minister on grounds of corruption and abuses of power and mismanagement of our economy. Tun Dr. Mahathir’s presence at Bersih 4.0 is not a good move since he has exploited rally to serve his self-interest.–Din Merican

Mahathir: I’m here for the people

by FMT Reporters

Najib’s arch-critic captures attention with sensational second appearance at KL protest rally

Dr Mahathir Mohamad made a sensational second appearance at the Bersih protest rally today, this time accompanied by former law minister Zaid Ibrahim, as he took advantage of the huge turnout to press his year-long campaign to force UMNO President and Prime Minister Najib Razak out of office.

Speaking to reporters at Central Market, the former Prime Minister remarked that it was his first time at a street rally and reiterated that he had come in support of the people, and not Bersih.

Dr M at Berish 4.0He said the people had no other choice but to take to the streets – a position in marked contrast to his position during his 22 years in power when he cracked down hard on opposition and demonstrations, and was responsible for Operation Lalang (1987) in which more than 100 were detained under the Internal Security Act.

Dr Mahathir said Najib had closed off all other avenues for the people to make their voices known and gave as examples the popular uprisings that led to the overthrow of Ferdinand Marcos of the Philippines.

He had made similar remarks at a public forum in Johor yesterday at which he had said that this weekend’s rally, in which tens of thousands of people had peacefully occupied the streets of central Kuala Lumpur, was different from previous Bersih rallies.

“This Bersih is not the same as Ambiga’s Bersih,” he had said. “This one is about the people, about people power, where the people must take to the streets because they have no other choice, Najib has closed down all other avenues.”

His reference to Ambiga Sreenevasan was to the Berish rally of 2012 which was put down with tear gas and water cannons, when some rally-goers were reported to have attempted to take down barricades around Dataran Merdeka, and opposition politicians were accused of having hijacked the demonstrations.

A few hours after his Johor appearance, Dr Mahathir and his wife Dr. Siti Hasmah turned up outside Kuala Lumpur City Hall, and were mobbed by enthusiastic rally-goers. He said little last night, except to encourage them to carry on, “teruskan, teruskan”.

At today’s media conference, he once again made a careful distinction between Bersih itself, and the rally proper, to keep at arms-length any association with the political parties and politicians who have dominated at previous street rallies.

Dr M in and Out of Power“I’m here not because I support Bersih but because I support the people. We are not here because we hate UMNO or Barisan Nasional. We just don’t want a Prime Minister like him (Najib Razak),” Dr Mahathir said.

He reiterated his support for a confidence motion to be brought against Najib in Parliament, in order to remove him from office. “We cannot allow this man to abuse his position as Prime Minister. We should move a motion of no confidence in Parliament,” Dr Mahathir said.

Opposition politicians such as Lim Kit Siang as well as Zaid Ibrahim have campaigned for a new political alignment across the parliamentary aisle, for like-minded MPs to come together and form a new transitional government for political reforms in the two years before the next general election.

Zaid has also championed UMNO veteran Tengku Razaleigh Hamzah as the People’s PM to replace Najib after a confidence motion. However, on Saturday, Tengku Razaleigh announced that he would not seek re-election after nine successive terms as MP for Gua Musang.

In the 1980s Tengku Razaleigh led a challenge to Dr Mahathir as UMNO President and came within 41 votes of ousting him. The power struggle led to UMNO’s deregistration, the formation of a new party with a similar name, and years of what many regarded as iron-fisted rule by Dr Mahathir.

The former premier made no mention of past events but accused Najib of having abused his power as Prime Minister and said: “We cannot allow this man to make use of his election as an MP to be the prime minister and abuse the power”. In order for Najib to be removed, “the people must show the people’s power”, he said.

He brought up questions regarding the controversial 1Malaysia Development Bhd as well as a reported US$700m million deposit in Najib’s private bank accounts, and accused Najib of having stayed in power by buying support.

“He has told me that cash is king. If you give money to people, they will support you,” Dr Mahathir said, and disparaged Najib’s explanation that the money in his account was a donation from the Middle East.

“No Arab would give that amount of money to anyone. It doesn’t make sense,” he said.

Your Weekend Entertainment

August 29, 2015

Your Weekend Entertainment

For this weekend, Dr. Kamsiah and I dedicate this BERSIH themedin and kamsiah at klinik2 song to all Malaysians who are participating in the BERSIH 4.0 rallies today and August 30, 2015. Please keep calm as victory is coming sooner than we realise it.

UMNO members are at the grassroots are restless and hurting as the economy slows down and the ringgit continues to drop in value. Once they react, our Prime Minister will get the message loud and clear that it is time for him to resign his office.

Sometimes, it takes bad times for us to realise that we have been lulled by our leaders and sycophantic economists and pundits into thinking that our economic fundamentals are sound. The reality is something else. Tough times are ahead. We must now tighten our belts and face the difficult times that lie ahead. But take comfort in the fact that tough times do not last, only tough and disciplined individuals do.


Let us feature, Vince Hill with his popular hit titled Look Around which was the theme song of Ali MacGraw and Ryan O’Neal’s movie, Love Story, Earl Grant’s Till the End of Time and The Winds of Change by The Scorpions– Dr. Kamsiah and Din Merican

Bonus–Tina Dahari