Former ASEAN Secretary-General Dr. Surin Pitsuwan dies at 68

November 30, 2017

Former ASEAN Secretary-General Dr. Surin Pitsuwan dies at 68

Former Thai Foreign Minister and ASEAN  Secretary-General Dr.Surin Pitsuwan died of acute heart attack. He was 68.

Former Foreign Minister and ASEAN Secretary-General Surin Pitsuwan died of an acute heart attack on Thursday. He was 68.

Surin collapsed while preparing to speak at the Thailand Halal Assembly 2017 at Bitec in Bang Na.

He was rushed to Ramkhamhaeng Hospital and later pronounced dead at 3.07p.m.

Surin was born on October 28, 1949 in Muang District, Nakhon Si Thammarat. He graduated from Claremont College in California in Political Science in 1972 and earned a master’s degree from Harvard University.

He entered politics in 1986 as a Democrat Party candidate and won a seat in his hometown in Nakhon Si Thammarat in all contests from 1986 to 2005.

Surin was the Deputy Foreign Minister from 1992-95 and rose to become the Foreign Minister from 1997 to 2001 under the premiership of Chuan Leekpai. He was the first Thai to become the ASEAN Secretary-General during which he served in Jakarta in 2008 for a five-year term before rejoining the Democrat Party.

A former Bangkok Post columnist, Surin was a speaker at the Bangkok Post Forum on November 16 this year. He was expected to run for Bangkok Governor when elections are allowed.

People can pay their last respects at his house on Soi Pitsuwan, tambon Sai Ma, Muang district, Nonthaburi province, from Thursday to Friday at noon. The religious ceremony is held all night.

English in the National Schooling System: Time for a Policy Shift

November 30, 2017

English in the National Schooling System: Time for a Policy Shift

by Dr. Lim Teck Ghee

The past few weeks has seen renewed attention on the re-establishment of English medium schools (EMS) in the country.

A combination of concerned and highly credible stake-players has come out in favour of the return to what was previously not just a medium of national schooling for young Malaysians. EMS was also the source of most of the leadership capability in economy and society, and a major reason for the country’s high international standing.

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Led by royalty in the person of HRH Sultan of Johor, Sultan Ibrahim Sultan Iskandar, the campaign for EMS is now supported by Minister in the Prime Minister’s Department Datuk Seri Abdul Rahman Dahlan and concerned civil society leaders from the G25 group.

For a long time, it was the indefatigable Datin Noor Azimah Abdul Rahim, chairman of the Parent Action Group for Education (PAGE), whose group waged an often-lonely battle to promote the expanded use of English in our national educational system.

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The indefatigable Datin Noor Azimah Abdul Rahim

Today the drive to restore ECMs to similar status as Chinese and Tami schools in the national system has been expanded. But it needs to be taken up by our political leaders if it is to succeed.

For what has been standing in it way – and it continues today – has been basically politics which has triumphed over national interest and the freedom for parents to choose the medium of instruction they want for their children.

As pointed out by HRH Johor Sultan, there are politicians who are in “self-denial” and who choose to play politics with education by being “heroes of their races”.

“They talk about “nationalism” but they too send their children to boarding schools in Australia and the United Kingdom.”

HRH Sultan has also expressed confidence that “if we have an education system based on a single stream for students from a young age, we will be able to create a community which is more harmonious and can work together to face challenges in the future.”

Malay Disadvantage

Although all communities have been disadvantaged by the absence of English medium schools in the national system, it is beyond doubt that it is the Malay community which has been most handicapped or punished by the political policy and insistence by misguided cultural zealots for the Malay masses to be restricted in their choice of schools to Malay medium ones, or to Islamic schools where the medium of instruction is Arabic.

Should a study be undertaken of the class divide which has emerged in Malay society during the last two or three decades, it is very likely that it will find that a contributory – perhaps the major – factor has been the ability of upper class Malays to access English education either in the MARA system or through private English education medium schools locally and abroad.

Students in the national Malay medium schools and graduates from public universities with Malay as the medium of instruction are not only severely handicapped in local private sector employment where English language fluency is a prerequisite especially for higher end jobs. They are also increasingly marginalized in this era of global markets and competition where a command and mastery of the English language is indispensable to knowledge acquisition and upward mobility.

Malaysia needs to re-establish itself as a bilingual country

This fact of growing Malay disadvantage and deepening socio-economic inequality – should there be no policy change – was not spelt out by the influential G25 grouping in its recent press statement which supported the call by Johoreans for English medium schools.

But it was probably in the minds of G25 members as they seek a return to establishing Malaysia as a bilingual country with Bahasa Melayu as the national language, and English the second language as is found in many of the most advanced non-English speaking nations of the world.

In a press statement, G25 noted that as a trading nation Malaysia needs to have a workforce with a high proficiency in English.

“G25 supports the establishment of the EMS as an alternative stream under the national school system. English is a language for acquiring knowledge. We are in support of initiatives that will help in the growth of the economy and improve the well-being of Malaysians”

Taking Finland as an example, the group has argued that “Finland’s education success is based on ensuring that everyone has equal opportunities to study.”

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Image result for Education in Finland In Malaysia UMNO idiots meddle in Education while they send their kids to study abroad.

This is not the case in Malaysia where there is no level playing field between the private and national school systems and where parents who wish to have their children enrolled in English medium schools cannot afford the expensive fees that are the norm for private schools.

G25’s call needs be emphasized: “We need to learn from past mistakes, and ensure that the implementation of the English-medium schools follows a model with a proven track record”

Fact-checking critics of Chinese aid

November 29, 2017

Fact-checking critics of Chinese aid

by Alvin Camba, John Hopkins University

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Pundits and journalists have often argued that Chinese loans are expensive and harmful to recipient countries. But they fundamentally misunderstand how Chinese aid and investment works across different countries.

Criticisms of Chinese aid suffer from four crucial problems. First, Chinese interest rates have been higher than comparable loans from other OECD Development Assistance Committee (DAC) countries because China lends to states with low investment grades. Interest rates vary across different donors but loan parameters depend on the recipient country’s investment grade and the donor state’s funding program. Put simply, DAC interest rates could have also been higher had these states funded similar projects.

Second, DAC countries follow one set of criteria for loans while China follows another. For the DAC, a loan becomes a concessional project when interest rates and the grace period are about 25 per cent cheaper than a comparable market loan. Although China’s concessional loans operate according to some DAC criteria, China’s Export–Import Bank often subsidises the interest of the project. As a result, the interest is charged to the Chinese government’s external assistance budget. In this loan agreement, the recipient country pays for the actual price of the project instead of the interest on the loan, departing from the DAC’s model. In other words, some of China’s loans are cheaper than the DAC alternatives.

Third, because the World Bank and other DAC countries have moved away from funding large-scale infrastructure while Japan has been wary of funding energy-intensive schemes, there are no other external funders willing to finance such projects in developing countries. China was the only willing financier of some crucial infrastructure projects in many sub-Saharan African and Latin American states. Those arguing that Chinese interest rates have often been higher fail to acknowledge that unless a similar offer was put forward by alternative funders, ‘base’ market rates cannot be used for comparison. It is misleading to compare Japanese, Chinese and World Bank loans directly because the funding parameters of these projects were calculated under vastly different conditions.

And last, for all the criticisms that China gets, Western countries have been equally guilty of sending developmental aid and investment when these actions suit their national interest. The United States sends aid to states with questionable human rights records, including Saudi Arabia, Israel and Pakistan. Similarly, when they need to acquire strategic resources or cheap labour, the French and British invest in the Western Sahara and former colonies despite their questionable human rights and governance records. Indeed, the West remains the biggest source of debt, aid and investment for African countries.

Despite all this, China has been disproportionally painted as a ‘bad investor’ by major Western newspapers while drawing the public’s attention away from the involvement of Western companies.

Rather than a downward impact on GDP per capita or nominal growth rates, China’s rise in the global economy has pushed more countries from the periphery into the semi-periphery. Chinese companies invest in developing countries that are ignored by other major investors and target key sectors that have been overlooked by Western aid. China’s participation often increases competition among investors for key development projects, allowing recipient countries to bargain more effectively for better returns.

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This is not to say that China is the saviour of the developing world. Chinese aid brings potential negative implications, but it is important for recipient governments and their constituents to recognise the evidence-based dangers rather than popular arguments with minimal empirics.

While pundits often misunderstand aspects of China’s economic engagements, academics and researchers have long recognised and debated three main dangers of China’s aid and investment.

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China has asked for political returns in exchange for debt forgiveness. Apart from territorial expansion, China has been interested in acquiring ports located in the participant states of the Belt and Road Initiative, including in Sri Lanka, Djibouti and Malaysia. China’s territorial interests and port acquisitions have and will continue to elicit responses from competing states.

Another danger of Chinese investments and deals lies in the multiple actors involved in the process. China is not a monolithic actor, but comprises multiple state departments, state-owned enterprises, private corporations and citizens. While Chinese foreign direct investment has funded key strategic infrastructure, it has also spurred de-industrialisation and environmental degradation. Chinese aid and investors can be good or bad depending on the type of Chinese actor and the recipient governments’ response.

Finally, Xi’s China presents host states with a greater risk of falling into a debt trap. In previous cases when developing countries could no longer repay loans, China has allowed debt forgiveness and loan restructuring or has asked for specific and negotiable political or economic returns. Ironically, this is distinct from the policies of the World Bank and Western countries that put much of the developing world in a vicious debt trap in the 1980s. But with China’s economic slowdown, changes of leadership and geopolitical ambitions, China may not be as forgiving in the future.

Alvin Camba is a doctoral candidate at the Department of Sociology, Johns Hopkins University. He also writes at the Alitaptap Collective.


Mounting Pressure for Japan to tackle Immigration Policy

November 29, 2017

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Number 406 | November 28, 2017


Mounting Pressure for Japan to tackle Immigration Policy

By Toshihiro Menju

Prime Minister Abe has repeated over the past several years that he has no intention of formulating a new immigration policy. However, due to a population decrease and a serious shortage of workers, his administration is under pressure to change this policy. Japan has almost achieved full employment; the level of unemployment reached 2.8% in the latter part of 2017. This achievement is partly due to the success of Abenomics, but also due to the workforce shortage in Japan.

The working-age population (15-64 years old) has fallen since reaching its peak of 87 million in 1997. In 2015 it was as low as 76 million, and is expected to keep falling. Teikoku Databank recently announced that in the first half of 2017 business closures due to labor shortages were up by 290 percent from four years ago. The economic impacts of the labor shortage are becoming apparent.

To cope with the shortage of workers as well as depopulation, the Japanese government introduced a series of policies and created new ministerial posts such as Minister for the Promotion of Overcoming Population Decline and Vitalizing Local Economy in 2014, Minister in Charge of Promoting Dynamic Engagement of All Citizens in 2015, Minister in charge of Women’s Empowerment in 2015, and Minister for Human Resources Development in 2016. These measures have seen some success as female workers have increased to a record high level of 28.8 million. However, the birth rate remains low at 1.44 and the population continues to decrease.

Recent projections by the National Institute of Population and Social Security Research show that steeper population declines are ahead. The population is expected to fall by 6.2 million in the 2020s, 8.2 million in the 2030s and 9 million in the 2040s. While foreign residents have increased, the government has not changed the immigration policy at all. Vietnamese and Nepalese immigrants looking for work represent the largest increase of foreign residents. As of the end of June 2017, the number of Vietnamese residents reached 232,562 – 5.7 times higher than 10 years ago. Similarly, Nepalese residents increased sharply, reaching 74,300 – 6.4 times higher than 10 years ago.

How can foreigners come to Japan for work despite the Japanese government prohibiting foreign workers in blue collar jobs?

The main reasons for the increase are two-fold. In the case of Vietnamese immigrants, they come to Japan under the TITP (Technical Internship Training Program). TITP was ostensibly designed for technology transfer to developing countries; however, it has been used to hire foreign workers in the sectors which cannot attract Japanese workers or pay decent compensation. TITP has been internationally criticized for human rights violations including unlawfully long hours with very low compensation.

However, the government enacted a new TITP law which came into force in November 2017 to enlarge the program to include tight monitoring and penalty systems for companies acting illegally. Due to the severe worker shortage, the increase of TITP participants was increasing even before the enactment of the new law.

Another source of the sudden increase of foreign residents is the student visa program. Foreign students in Japan are allowed to work 28 hours per week legally. Many foreigners come to Japan as students registered at Japanese language schools which have been established everywhere by business corporations in the last few years. Local agents in Nepal send young Nepalese to Japan to enroll language schools, and many of them work beyond the 28 hour per week limit, often suffering under inhumane conditions.

If the Japanese government does not formulate an immigration policy, it heightens the risks of illegal work becoming more common and of more foreign nationals staying in the country illegally. For example, the number of absconders from TITP has nearly tripled in last three years. While TITP may help secure workers on a temporary basis, it will not serve as a medium to long-term solution to the population decline and aging.

It seems the government is overly afraid of the political consequences of admitting immigrants to Japan. It was regarded as almost taboo until a few years ago; however, the view of the general public towards immigrants has dramatically changed due to the severity of the population decline and labor shortage. In addition, the explosive increase in foreign tourists to Japan – which is championed by the government – has helped ordinary citizens to directly interface with foreigners at the grassroots level. In 2017 the number of foreign tourists is expected to reach 29 million, which is much higher than the 8.6 million in 2010.

The government also underestimates the grassroots experience of accepting foreigners. Mr. Kazuyohi Hamada, mayor of Akitakata city (population: 29,000), Hiroshima Prefecture publicly announced that his city welcomes foreign residents to support older Akitakata citizens, and presented the demography projections for 2035, when the largest population cohort will be over 80 years old. Akitakata is not an exception; rural cities of the same size will face the same challenge if Japan does not accept immigrants.

One of the main reasons that the government is slow in making decisions on tackling immigration policy is that there is a perception gap between people living in local regions and in Tokyo, where political and business leaders reside. Tokyo is still young compared with the rest of Japan and its population will continue to grow until 2025 although Japan started to suffer from population decline around 2010.

However, Tokyo is expected to eventually age rapidly as well, and it will not able to survive without foreign caregivers. The time has come for Japan to make decisions on immigration.

About the Author

Toshihiro Menju is Managing Director at the Japan Center for International Exchange. He can be contacted at
The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

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The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

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Pakatan Harapan– The One Platform Party in Disarray

November 29, 2017

To  Anwar Ibrahim from an old Friend–Open Letter

There is reliance on only one policy plank. Label Najib a kleptocrat and attack him non-stop on 1MDB…In strategic terms, it is an instance of what Dr Wong Chin Huat terms “strategic ambiguity” – avoid the thorny issues and focus on safe issues like corruption and living costs. Mahathir’s strategy goes even further – “Topple Najib first, leave everything for later”.

It is easy to see why PH is adopting this strategy. Dr Wong calls it “communal incoordination”. In more simple language, it means if you try to please the Chinese, you lose Malay votes; if you try to please the Malays, you lose Chinese votes. So just concentrate on the issues both sides can agree on i.e. corruption.–Dr. Ronnie Ooi

by Dr. Ronnie Ooi

Dear Anwar,

You may remember me from the time we worked together in Majlis Belia Malaysia (MBM) when I was chair of MBM Penang and worked with your late brother Rani and others.

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Anwar Ibrahim cannot do much since Najib Razak has placed him in Sungei Buloh Prison

I left for the UK in 1990 mainly because of disillusionment with the political situation. I returned in 2008 as Prime Minister Najib Razak was in his liberal phase and things looked quite hopeful.

I feel somewhat guilty that, as a friend, I had not come forward earlier to offer to help, but I wanted a quiet life. I now put pen to paper with some reluctance but unfortunately, I think the warning lights are flashing for Pakatan Harapan (PH).

I feel I cannot in good conscience keep quiet any longer. I point to these warning signs not to discourage people from continuing or joining the fight, but as an indication that PH has weaknesses which must be reviewed.

I am making this letter public as I do not know how else I can be certain of getting my views to you. Besides these proposals will be of interest to the rakyat.

The resignation of three founding members of Bersatu (PPBM) on the grounds that the leadership is unable to accept criticism, is worrying. One bad apple is to be expected, but three all at once?

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UMNO style shadow play (wang kulit)–Advantage Najib Razak

The Merdeka Centre Youth Opinion Survey shows that high dissatisfaction with the government is not translating into support for the opposition. Most telling of all is Zaid Ibrahim, Dr Mahathir Mohamad’s greatest cheerleader, now advises Malays to emigrate if they have the chance.

The weaknesses of Pakatan Harapan

There is reliance on one man, Dr Mahathir, in the belief that his name plus the 1MDB and other financial scandals will be sufficient to trigger a Malay tsunami. I truly admire him for coming out of a comfortable and privileged retirement to lead the opposition. But I do worry whether his age prevents him from understanding the demands and aspirations of today’s voters, especially the youth.

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That’s Fine, Tun Dr. Mahathir when you were the Prime Minister. Today, Najib Razak is in charge of Malaysia and he can shut you up.

There is reliance on only one policy plank. Label Najib a kleptocrat and attack him non-stop on 1MDB.

In strategic terms, it is an instance of what Dr Wong Chin Huat terms “strategic ambiguity” – avoid the thorny issues and focus on safe issues like corruption and living costs. Mahathir’s strategy goes even further – “Topple Najib first, leave everything for later”.

It is easy to see why PH is adopting this strategy. Dr Wong calls it “communal incoordination”. In more simple language, it means if you try to please the Chinese, you lose Malay votes; if you try to please the Malays, you lose Chinese votes. So just concentrate on the issues both sides can agree on i.e. corruption.

Politics of hope vs politics of hate

I do not want to hurt your feelings Anwar, but it is best to be blunt. What PH is offering the voters of GE14 is the politics of hate (hate Najib), and the politics of personality (Mahathir can solve everything).

There is no message of hope, nothing of policy. It looks back to the past (what Najib and Mahathir have done), not how to meet the challenges of tomorrow.

Elections are won on the politics of hope, although I admit the politics of hate can be a useful aid.

Trump won the American presidency elections because his message of hope to his right-wing supporters was very clear and powerful i.e. “Build the wall, keep Muslims out, make America great again” and his message of hate was also useful – “Crooked Hilary”.

Hilary lost because, although she had a message of hate (“Trump temperamentally unfit to be President”), her message of hope was muddled and unclear.

Chong Eu won Penang on the politics of hope i.e. “Economic development, Free Trade Zones, Penang bridge”. He had no message of hate.

In the urban areas and amongst the educated elite, hatred of what Najib is doing is very strong and for many of them, probably even a majority, the politics of hate is sufficient. They willingly accept Mahathir’s position of “Topple Najib first, leave everything for later”.

But the rural Malays have received benefits from the government, and although they may be disturbed by allegations of systemic corruption, they will not have the hatred of Najib that the urban voters have.

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The registration of Pakatan Harapan is held up by the Registrar of Societies–Checkmate?

To say to the rural Malays “Topple Najib first, leave everything for later” is like saying, “Your house is in bad condition. We will tear it down for you. When you are homeless by the road side, only then we will think how we can build a new house for you.” No sane normal person will allow his house to be torn down until he is certain he will get a better replacement.

Four steps to bring about the politics of hope:

1. Mahathir’s position of “Topple Najib first, leave everything for later” has to be discarded

This position prevents PH from telling the people how life under PH will be better and it prevents PH from hearing what the people want to say.

The Merdeka Centre Youth Opinion Survey found that 40% of respondents were not registered as voters, 70% were not interested in politics and 71% felt politicians do not listen to them.

If PH says to these youths “Mahathir knows best”, they will turn their backs on PH. If PH is willing to listen to them, to discuss how best to meet their hopes and aspirations, PH will win their support and votes and by doing so, win GE14.

2. Saving Malaysia requires a two-election process

Those who think that toppling Najib will solve all problems mistake the PM to be the cause of the country’s problems, whereas he is only the symptom. The real cause is the growing distrust and antagonism between the Malay and non-Malay communities, which sustains and protects leaders like Najib.

Removing Najib will not prevent a Najib clone from emerging a few years later if this inter-communal antagonism is not tackled.

There is a deep fault line in PH. Bersatu (PPBM) is constructed to be like UMNO to attract discontented UMNO members. But, as a result, their core political ideology of discriminating in favour of Bumiputeras conflicts with PKR’s and DAP’s core ideology of economic policies based on need and not race.

This means that whilst Bersatu and PKR/DAP/Amanah are completely united that Najib must be toppled to save Malaysia, there is no agreement over what Dr Wong terms inter-communal bargains on issues like economic redistribution and social inclusion, religion and lifestyle, language and education.

The way to resolve this contradiction in objectives is simple: use GE14 to defeat the BN government to bring about institutional change and use GE15 to resolve the breakdown in the inter-communal bargains concerning economics, education, etc.

GE14 is about whether voters want an honest government, GE15 is for voters to decide how best to resolve inter-communal antagonism.

In GE14, Bersatu (PPBM) and PKR/DAP/Amanah work together to fight Najib’s BN. In GE15 Bersatu (PPBM), possibly in combination with a BN without Najib, may be contesting against PKR/DAP.

If we try to solve everything in one election, a voter who would like to vote for an honest candidate may instead vote for a dishonest candidate of his own race if he fears domination by another race.

If we do not separate out an election for an honest government from an election over communal anxieties and inter-communal bargains, we may have a dishonest government for a very long time.

I am excited to see Dr Wong Chin Huat recently come up with roughly the same idea, which he terms a two-step transition pact.

3. PH must show its commitment to institutional reform

PH must set up a readily available central reference of all its proposals for institutional reform.

Some of the questions PH must answer are:

  • What oppressive laws are they going to repeal or amend? We must remember that when Najib proposed repealing the Sedition Act, Mahathir was in the forefront of UMNO criticism of the move. Mukhriz is on record expressing “his disappointment at the abolition of the ISA”.
  • How should the Universities and University Colleges Act be amended to enable the brightest of our youth to play their proper role in our society?
  • How does PH intend to prevent a recurrence of the 1MDB scandal?
  • The Prime Minister has too much power. How does PH intend to reduce the power of the PM?

Proposals for institutional reform require only mental effort, unlike physical projects which require time-consuming study and planning. It is too late now for PH to promise the rakyat it will build 100,000 low-cost homes but there is still plenty of time before the election for PH to say whether it will or will not repeal the Sedition Act. Besides, there are many social activists who can help PH draft and finalise details of proposals for institutional reform.

To prove the truth of what I am saying, Anwar, in the second part of my letter to you, I will set out my ideas on how the powers of the Prime minister should be reduced.

4. Announce a limited-time fixed programme election manifesto

Because institutional reforms require only changes in laws and legal procedures, they can be implemented in a short time, say a year, especially if a lot of work has been done before the election.

PH should therefore announce that, if they win GE14, they will govern for only one year, to implement a limited, specific and publicly-agreed programme of eradicating corruption in government, carrying out institutional reform, repealing oppressive laws, and undertaking any such other programmes as PH component parties can agree on, such as abolishing the GST.

Following this, an early GE15 will then be called, at which the parties will be able to fight each other over their different political ideologies.

Advantages of a limited-time fixed programme election manifesto:

  1. Policy differences in economic re-distribution, education, etc cannot be postponed for the normal government term of five years. But they can be postponed for a period of one year.
  2. Many people have doubts about a PH government. They are more likely to give PH a chance if they can throw out a bad PH government after one year.
  3. With a fixed programme, Malays who fear that PH will be dominated by the DAP, can see exactly what they will get under a PH government.

Go where no one else has gone before

Confronted with difficult questions, Malaysians, both politicians and the general public, have a habit of sweeping them under the carpet and pretending to themselves that there are no problems.

They insist on remaining within their comfort zones, rejecting the mental discomfort of thinking new thoughts. They bury their heads in the sand, dreaming of a PH victory in GE14.

They get very angry when disturbed from their dreams, demanding why their side’s weaknesses are being advertised to the enemy.

But exposing weaknesses before the election campaign starts allows time for them to be corrected. Burying heads in the sand prevents solutions to problems being found. If solutions are missed, we suffer defeat when it could so easily have been a victory.

My voice is not loud enough to be heard by the people. But if you, Anwar, speak, people will listen. If you think my ideas are good, let us work together to implement them. If you think them bad, do not hesitate to say so, in order that better solutions can be found.

To members of the public reading this, I say: we best serve the party we support not by keeping quiet but by giving them feedback and ideas. Those who have feedback and ideas to give are invited to contact me at so that by banding together, we have a stronger voice.

To solve Malaysia’s problems, we need to go where no one else has gone before. Remember: he who dares, wins.

Your old friend,
Dr Ronnie Ooi

Dr Ronnie Ooi is a former politician and medical practitioner based in Penang.

Beware Public Private Partnerships

November 29, 2017

Beware Public Private Partnerships

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Prof. Jomo Kwame Sundaram

Public-private partnerships (PPPs) are essentially long-term contracts, underwritten by government guarantees, with which the private sector builds (and sometimes runs) major infrastructure projects or services traditionally provided by the state, such as hospitals, schools, roads, railways, water, sanitation and energy.

Embracing PPPs

PPPs are promoted by many OECD governments, and some multilateral development banks – especially the World Bank – as the solution to the shortfall in financing needed to achieve development including the Sustainable Development Goals (SDGs).

Since the late 1990s, many countries have embraced PPPs for areas ranging from healthcare and education to transport and infrastructure with problematic consequences. They were less common in developing countries, but that is changing rapidly, with many countries in Asia, Latin America and Africa now passing enabling legislation and initiating PPP projects.

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Nevertheless, experiences with PPPs have been largely, although not exclusively negative, and very few PPPs have delivered results in the public interest. However, the recent period has seen tremendous enthusiasm for PPPs.

Financing PPPs

Undoubtedly, there has been some success with infrastructure PPPs, but these appear to have been due to the financing arrangements. Generally, PPPs for social services, e.g., for hospitals and schools, have much poorer records compared to some infrastructure projects.

One can have good financing arrangements, e.g., due to low interest rates, for a bad PPP project. All over the world, private finance still accounts for a small share of infrastructure financing. However, concessional financing arrangements cannot save a poor project although they may reduce its financial burden.

PPPs often involve public financing for developing countries to ‘sweeten’ the bid from an influential private company from the country concerned. ‘Blended finance’, export financing, and new aid arrangements have become means for governments to support their corporations’ bids for PPP contracts abroad, especially in developing countries. Such business support arrangements are increasingly passed off and counted as overseas development assistance (ODA).

Undermining rights

PPPs often increase fees or charges for users of services. PPP contracts often undermine consumer, citizen and human rights, and the state’s obligation to regulate in the public interest. PPPs can limit government capacity to enact new policies – e.g., strengthened environmental or social regulations – that might affect certain projects.

PPPs are now an increasingly popular way to finance ‘mega-infrastructure projects’, but dams, highways, large-scale plantations, pipelines, and energy or transport infrastructure can ruin habitats, displace communities and devastate natural resources. PPPs have also led to forced displacement, repression and other abuses of local communities and indigenous peoples.

There are also growing numbers of ‘dirty’ energy PPPs, exacerbating environmental destruction, undermining progressive environmental conservation efforts and worsening climate change. Typically, social and environmental legislation is weakened to create attractive business environments for PPPs.

PPPs often expensive, risky

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Since the late 1990s, many countries have embraced Public-Private Partnerships for areas ranging from healthcare and education to transport and infrastructure as a solution to persistent underdevelopment. Credit: IPS


In many cases, PPPs are the most expensive financing option, and hardly cost-effective compared to good government procurement. They cost governments – and citizens – significantly more in the long run than if the projects had been directly financed with government borrowing.

It is important to establish the circumstances required to make efficiency gains, and to recognize the longer term fiscal implications due to PPP-related ‘contingent liabilities’. Shifting public debt to government guaranteed debt does not really reduce government debt liabilities, but obscures accountability as it is taken ‘off-budget’ and no longer subject to parliamentary, let alone public scrutiny.

Hence, PPPs are attractive because they can be hidden ‘off balance sheet’ so they do not show up in budget and government debt figures, giving the illusion of ‘free money’. Hence, despite claims to the contrary, PPPs are often riskier for governments than for the private companies involved, as the government may be required to step in to assume costs if things go wrong.

Marginalizing public interest

Image result for Najib Razak the corrupter

Malaysia’s Corrupter-in-Chief Najib Razak

Undoubtedly, PPP contracts are typically complex. Negotiations are subject to commercial confidentiality, making it hard for parliamentarians, let alone civil society, to scrutinize them. This lack of transparency significantly increases the likelihood of corruption and undermines democratic accountability.

PPPs also undermine democracy and national sovereignty as contracts tend to be opaque and subject to unaccountable international adjudication due to investor-state dispute settlement (ISDS) commitments rather than national or international courts. Under World Bank-proposed PPP contracts, national governments can even be liable for losses due to strikes by workers.

Thus, PPPs tend to exacerbate inequality by enriching the wealthy who invest in and profit from PPP projects, thus accumulating even more wealth at the expense of others, especially the poor and the vulnerable. The more governments pay to private firms, the less they can spend on essential social services, such as universal social protection and healthcare. Hence, PPP experiences suggest not only higher financial costs, but also modest efficiency gains.

Government procurement viable

One alternative, of course, is government or public procurement. Generally, PPPs are much more expensive than government procurement despite government subsidized credit. With a competent government doing good work, government procurement can be efficient and low cost.

Yet, international trade and investment agreements are eroding the rights of governments to pursue such alternatives in the national interest. With a competent government and an incorruptible civil service or competent accountable consultants doing good work, efficient government procurement has generally proved far more cost-effective than PPP alternatives. It is therefore important to establish under what circumstances one can achieve gains and when these are unlikely.