In search of academic antidote to Bullshitism


July 25, 2017

In search of academic antidote to  Bullshitism–From Plato and Aristotle to Descartes to Hume

by Dean Johns

http://www.malaysiakini.com

A couple of semesters ago, sick of inflicting pain on my brain for what seemed diminishing gain, I took a break from my Sydney University course with little or no intention of ever resuming it.

As I recall thinking at the time, I was too old and tired to ever hope to achieve more than the ‘little learning’ that Alexander Pope proverbially deplored as a ‘dangerous thing’, let alone to aspire to the paradoxical Socratic ideal of knowing so much as to know only that I knew nothing.

But at least, or so I consoled myself, the part of my degree that I’d completed had equipped me with enough skepticism to last me the rest of my life.

Every successive unit I’d done of Gender Studies had even further confirmed my initial suspicion that, however productively thought-provoking this course may have been in many ways, it was far too polemical if not outright propagandist to be considered properly or in other words open-mindedly academic.

And my admittedly limited expeditions into Philosophy had been similarly disconcerting, revealing as they did that, as Descartes (1596-1620) both declared and in my humble opinion amply demonstrated in his own work, ‘there is nothing so strange or so unbelievable that it has not been said by one philosopher or another’.

Even Plato, the philosopher that many consider the greatest of them all, at least in the Western tradition, deviated at times from truth-seeking philosophy into the false sophistry he otherwise claimed to deplore and despise, as in his advocacy of the so-called ‘Noble Lie’ that people were born with divinely-determined roles in society, and that ‘justice’ decreed that they remain in these roles under the rule of a class of ‘Philosopher Kings’ in his purportedly utopian ‘Republic’.

And Plato’s almost equally-esteemed pupil Aristotle, famously, or rather infamously, made the outrageous and utterly unsupported statement in his otherwise largely admirable Nicomachean Ethics that Greeks are superior to non-Greeks, and men superior to women and slaves.

For all their faults, however, Plato, Aristotle and most other philosophers both Western and Eastern have been rank amateurs when it comes to inventing lies, be they ‘noble’, ignoble or downright evil, compared with power-freaks with not a thought in their heads but to seize and hold power over as many of the ‘common’ people as possible.

And thus it behoves all of us, Greeks, non-Greeks, men and women alike, to refuse to be treated by such misleaders as slaves, or else a ‘silent majority’ of passive ‘citizens’, but as highly vocal and active critizens devoted to exposing and rejecting their lies.

A thought that leads me to my rationale for deciding to subject myself to yet another dose of academia, the lure of a Philosophy unit at Sydney University, code number PHIL2642, called Critical Thinking.

This, according to its description in the Arts Faculty Handbook, is ‘an introduction to critical thinking and analysis of the argument. By examining arguments drawn from diverse sources, including journalism, advertising, science, medicine, history, economics, and politics, we will learn how to distinguish good from bad arguments, and how to construct rationally persuasive arguments of our own.

Along the way, we will grapple with skepticism, conspiracy theories, and pseudoscience. The reasoning skills imparted by this unit make it invaluable not only for philosophy students but for every student at the university.’

And also, as I said earlier, for every citizen who prefers ‘critizenship’ to enslavement.

Let me not get too carried away with my expectations for this Critical Thinking unit, however. One fundamental problem with it that you were doubtless way ahead of me in spotting, is that, like most philosophy, it focuses on ‘rationally’ rather than emotionally persuasive arguments.

Image result for donald trump and the simpsons

 

As if David Hume (1711-1776) hadn’t centuries ago made it clear, as if it wasn’t always so, that ‘reason is the slave of the passions’. A truth that must be grimly self-evident to anyone who has imagined, let alone actually tried, rationally arguing against the passionately-expressed but patently false emotings of US President Donald Trump, Malaysian Prime Minister Najib Abdul Razak or any of his mendacious paid mouthpieces, or the ravings of any of the world’s countless other misleaders.

And not only are these peoples’ statements a pack of rationally-unarguable irrational lies, but many of the individual words they use are riddled with falsehood.

Is there any way of rationally comprehending, let alone of rationally countering, whatever Trump might possibly mean by claiming his intention to make American ‘great’ again?

Admittedly the ‘again’ bit is rationally arguable, at least by those of us who recall such gruesome lapses of the US from greatness as, for example, the Vietnam War that cost President Lyndon Johnson his promised ‘Great Society’; the catastrophic levels of gun ownership that continually cost the country many times more casualties than terrorism or even wars; the shocking rates of poverty in the world’s richest country; and imprisonment rates that would be a disgrace to a totalitarian state like China, or, more accurately Chaina, let alone to the alleged ‘Land of the Free’.

But ‘great’? The only response Trump’s utterance of this word evokes in me is the urge to lampoon it by pretending to hear and read it as ‘grate’.

Image result for najib razak's spin doctors

As in yes, Trump sure does grate on me, to a truly great extent, in much the same way as Najib Abdul Razak of Malaysia does with his mindlessly mendacious employment of the word ‘one’, as in his ‘1Malaysia’, whatever it supposedly signifies, and everything else he says and does. But the very idea of dealing rationally with the verbal vomit such people constantly spew forth, and that their venal, vapid or utterly vacant supporters so eagerly lap-up, seems ridiculous to me.

I could be mistaken, however, and in fact, I hope I am, and that PHIL2642 Critical Thinking may well prove a very pleasant surprise.

In case not, however, I’ve enrolled in a backup dose of academia in the form of ANTH2653, partly because the lecturer is one of my favourites from way back, and also because Anthropology is a welcome change from the Eurocentricity of most other Western university disciplines.

Plus, into the bargain, this particular unit promises to provide me with lots of rational arguments, both rational and even perhaps otherwise, against one of my other personal pet hates besides political lying and criminality: the further elevation of greed over need and thus the rich over the rest, or in other words neo-liberalism.

 

MACC is serious about combating Corruption in BolehLand?


May 9, 2017

COMMENT: I always enjoy reading TK Chua’s plain speaking articles and have often featured them on my globally read blog. I thank http://www.freemalaysiatoday.com for hosting them and my friend Nelson Fernandez for allowing me to use them. Mr. Chua never fails to call a spade nothing but spade. But this is something elsehttp://www.freemalaysiatoday.com/category/opinion/2017/05/06/hail-to-the-macc-chief-for-being-bold/.

Image result for Justice Harun Hashim

The last of the Anti-Corruption Mohicans was the late Justice Tan Sri Dato’ Harun Hashim. He was competent, fearless and very professional. He had no regard for politicians because he was a public servant par excellence and an outstanding member of our Judiciary who served King and country with dignity and distinction.

Today, most of our civil servants starting from the top are apple polishers who are out to suck up to politicians in power. The manner in which the 1MDB scandal was handled is my case in point.  The Auditor- General, the Attorney-General and others  let us down. They did not have the conviction and courage to do what is right.

Yes, Mr. Chua, I note you used the word “resolve” in quotes. The present MACC Chief Commissioner is the new broom. I am not optimistic about what the Chief Commissioner can do to refashion the organisation, even with the benefit of the advice and wisdom of  former  UN Kofi Annan’s ethics crusader Tunku Abdul Aziz.

Image result for Malaysian Anti-Corruption Commission

Remember his predecessor, Tan Sri Abu Kassim.  Abu Kassim promised a lot but failed to do his duty faithfully.  Why? Because  there is no political will to fight corruption. After all, our Prime Minister himself is corrupt and worse still, he is incompetent.–Din Merican

MACC is serious about combating Corruption in BolehLand?

by TK Chua@www.freemalaysiatoday.com

I want to support the Chief of the Malaysian Anti-Corruption Commission (MACC) in his “resolve” to make the anti-graft agency more respectable in combating corruption in the country.

However, I would like to comment on some of his statements. First, one swallow does not a summer make. The arrest of a Tan Sri here and a Datuk Seri there does not signify that the MACC has become bold to “venture” into the turf of the rich and powerful.

I have seen enough of many agencies having the tendency to indulge in the “flash in the pan” syndrome. They do things to impress, not with the enduring objective to solve a problem at hand.

Image result for Malaysian Anti-Corruption Commission Chief Commissioner

The New Broom at The Malaysian Anti-Corruption Agency (MACC)

Efforts against corruption must be relentless, imminent and without fear or favour. When too many perceive that the rich and powerful are being protected, usually it is because such a view has some semblance of truth to it.

To prove otherwise requires efforts more than arresting a Tan Sri or a Datuk Seri. A Tan Sri trying to broker a royal title is very different from other Tan Sris in charge of millions in government funds.

Persistence and being resolute are key to curbing corruption. The rich and the powerful have become bold and blatant in their deviant ways because they perceive the likelihood of being hauled up, too slim.

Most of us are creatures of greed. Given an opportunity, many would abuse the law and enrich themselves. But if the consequence of our corrupt practices is clear and imminent, I think many would think twice before committing it.

Another point the MACC chief mentioned was the lack of personnel and funding in combating corruption. According to him, the MACC has only 1,900 enforcement officers whereas there are 1.6 million civil servants to be monitored. Please forgive me for being harsh, I just find this excuse so typical of most government agencies.

No organisation, including the MACC, has unlimited resources to play with. Ultimately it is always the 80-20 rule and the need to prioritise.

Certainly not all the 1.6 million civil servants have the same opportunity to be involved in bribery. The MACC ought to know the departments and the agencies that are more prone to corruption.

This is where priority and concentration come in – MACC’s should focus on the 20% to give them the 80% result.

If the MACC chief knows that RM5 million is paid each month by syndicates to foil enforcement actions, it shows that corruption has become institutionalised and endemic. More than that, it shows that corruption is now a retainer.

If he knows the amount paid each month, he ought to know the personnel and the agencies involved.

By the way, it is quite illogical to assert that MACC’s action against corrupt politicians just prior to the next general election is considered as indulging in politicking. On the contrary, it is the lack of action that has given rise to the impression that the MACC is not above the politicians.

Action should be rightly based on offences committed and evidence adduced, nothing else matters.

TK Chua is an FMT reader.

Najib’s Bailout by China comes at a price to Malaysia


November 7, 2016

Najib’s Bailout by China comes at a price to Malaysia

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

Image result for najib sells malaysia to china

Embracing China for Political Survival

With Prime Minister Najib Razak dancing with the Chinese dragon, it is worth reminding him and his admirers that dragons have no dance partners, only prey.

Najib is using the old and dangerous game of playing the major powers against each other. During his latest visit to Beijing he railed against the Americans for lecturing him on lapses in his leadership, specifically his corruption and trampling on his fellow citizens’ human rights. Najib then went on to poke America’s eyes by putting out a joint declaration with his Chinese counterpart calling for no outside interference in the brewing South China Sea crisis.

Image result for Najib golfs with Obama

Only the deluded would believe that Najib had an equal or any say in that joint communique. His only contribution was to agree. Najib was there to beg China to bail out his 1MDB, as well as to borrow money. Beggars don’t get to choose.

The world is full of tragic examples of once stable nations now in tatters because their leaders thought they were smart or adroit enough to play one world power against the other. Egypt’s Nasser had the Russians finance his ambitious Aswan Dam, and banked on them to help Egypt against Israel. The humiliation of the Six Day War still haunts the Egyptians. His successor Anwar Sadat reversed course and cozied up to America, and in the process won the approval of the ultimate values gatekeeper of the West, the Nobel Committee, which awarded him the Peace Prize. At least Sadat brought peace to his people, albeit only too briefly. Egyptians today are still being whipsawed from one extreme to the other.

In dealing with others, local or foreign, small or great powers, we must be guided by our internal compass, our values. Those others may or may not share our qiblat. We have for example, no desire to emulate China on how it treats its minorities or dissidents. Nor does Malaysia wish to be treated like Tibet or China’s western Muslim provinces. Although I must admit that at times I wish Malaysia would adopt China’s treatment of its corrupt officials.

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I am reminded of the rich towkay in a Malay village, charitable to his customers, extending them easy credit. Soon he owned the entire village. As we Malays say, Menang sorak, kampung tergadia (win the applause but mortgage the village).–M. Bakri Musa

Najib thinks that he looks elegant and puffed up dancing with the Chinese dragon. To me, he is more the painted lady on the dance floor of a Vegas whorehouse. We know who is paying for Najib’s services, on the dance floor and afterwards. Najib is paid well to act like an equal and enthusiastic partner, but we know what his role really is, as well as his price tag.

It is well  over RM140 billion. Regardless, a high-priced hooker is still a hooker.Najib would like us to believe that China is investing in Malaysia, and he has convinced many. The reality is that Malaysia is borrowing those hundreds of billions. That money has to be repaid. The only positive aspect is that some of the money would be for financing infrastructures like the East Coast Rail and Trans Sabah Gas Pipeline, not for skyscrapers and fancy headquarters for civil servants.

Image result for 1MDB Assets sold to China

Left unanswered however, is how much those projects would have cost had there been competitive international bidding. Nor do we know the financing terms. The 1MDB bonds cost several hundred basis points above the prevailing rates. Another unknown is how much of the Chinese money would be shifted to Najib’s personal account a la the Saudi investor and 1MDB, in gratitude for Najib’s ‘leadership?’

Beijing was generous to Najib. I am reminded of the rich towkay in a Malay village, charitable to his customers, extending them easy credit. Soon he owned the entire village. As we Malays say, Menang sorak, kampung tergadia (win the applause but mortgage the village).

China is an important country, quite apart from it being Malaysia’s biggest trading partner and sharing an extensive and contested maritime border. That relationship should be based on mutual respect and in accordance with international laws and norms, acknowledging that China is a major power while Malaysia isn’t. Being deeply in hock to China is not a good start to that kind of relationship.

The sparkle of Najib’s golf soiree with President Obama in Hawaii during Christmas of 2014 was short-lived, eclipsed by the blasting Malaysian sun. Najib is discovering to his sorrow that America has robust independent institutions. You may be Obama’s golfing partner, but if you indulge in illicit activities, its media will expose you and the Attorney-General will prosecute you. Malaysian officials may be bought with cheap titles and trinkets, not so America’s.

The Malaysian media is Najib’s lapdog, not so foreign ones or local social media. Thanks to the Guardian, The Wall Street Journal, and others, Najib is being subjected to unaccustomed scrutiny. Local alternate media amplify and extend the reach of those foreign news sources to average Malaysians.

There are a few certainties to Najib’s leadership. One, it will end. As for when, how and under what circumstances, the bomohs have as much credibility as the experts. With his echo chambers well amplified, Najib feels invincible. So did Saddam and Gaddafi not too long ago; they were even more ruthless and in power far longer than Najib. Two, the massive debts through 1MDB and now the Chinese loans incurred by Najib will burden Malaysians for generations. Three, Najib’s rank corruption. Regardless of the outcome of the current US Department of Justice’s 1MDB asset forfeiture lawsuit, it has already put a black mark on Malaysia.

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Najib’s future does not interest me. As for the debt load, at least that is quantifiable; not so the soiling of Malaysia’s name. The plastic glitter of Najib dancing with the dragon star, like his earlier soiree with Obama, will also be short-lived. The dragon will not be denied its prey. Najib, and Malaysians, may yet feel the true impact of a tsunami, the Chinese version.

Congrats UNESCO and Irina Bokova for being sensitive and smart


September 21, 2016

http://mobile.nytimes.com/2016/09/19/world/asia/award-malaysia-children-group-unesco.html?_r=1&referer=http://m.facebook.com/

Rosmah Mansor, the first lady of Malaysia, in Kuala Lumpur, the capital, last month. She is known for her lavish spending on luxury items like Hermès Birkin bags.CHRIS JUNG / NURPHOTO, VIA GETTY IMAGES

Congrats UNESCO and  Irina Bokova for being sensitive and smart

By Louise Story

The event, to be held Thursday at the Metropolitan Museum of Art, honors people and groups that have fought extremism. Among the scheduled honorees wasPermata, a Malaysian children’s organization that was founded several years ago under the auspices of Rosmah Mansor, the wife of the Malaysian Prime minister,Najib Razak.

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Malaysia’s Beauty Queen and Model with her corrupt Prime Minister Husband

Ms. Rosmah is known for her lavish spending on luxury items like Hermès Birkin bags.

The couple’s family and close friends are at the center of a Justice Department lawsuit claiming that $1 billion in assets — including a $30.6 million penthouse at the Time Warner Center in New York and a $39 million mansion in the Los Angeles hills — were bought with money stolen from Malaysia’s sovereign wealth fund, called 1Malaysia Development Berhad, or 1MDB.

A statement on Sunday from Tudor Parfitt, a scholar involved in the event, confirmed that the honor had been withdrawn.

The statement said that questions had been raised about the sources of Permata’s funding, and that although the event organizers were not aware of any specific wrongdoing, they did not have time to vet the organization.

The event is co-hosted by the head of UNESCO, Irina Bokova. Ms. Bokova is running to be secretary general of the United Nations, so her actions are also being closely scrutinized.

The Right to Protest


August 28, 2016

The Right to Protest: that’s Merdeka

 by Amb (rtd) Dennis Ignatius
 Image result for Merdeka Malaysia

While Malaysians tend towards political apathy, many now feel that enough is enough, that it is not the Malaysian way to sit idly by while our beloved nation slips into the abyss of corruption, extremism and misgovernance.

Malaysia is wonderful but the Leadership is incompetent, dishonest. greedy, irresponsible and incorrigibly corrupt

When the people fear the government there is tyranny, when the government fears the people there is liberty ~ John Basil Barnhill

Ever since Bersih (now more than just a movement for clean and fair elections) announced its intention to organize a rally to protest the embezzlement and laundering of billions of ringgit of public funds linked to the 1MDB scandal, the government appears to be going out of its way to hinder it. The TangkapMO1 rally is being similarly chastised.

For all the wrong reasons

A whole array of reasons have been conjured up to explain why these demonstrations should not be allowed – its against the national interest, it’s disruptive, it will harm the economy, it could lead to violence, it leaves a mess, etc.

This being Malaysia, it won’t be long before religious officials also get in on the act with edicts, injunctions and warnings against joining such demonstrations on pain of losing one’s soul.

In the meantime, one minister, in urging would-be demonstrators to respect DBKL (City Hall), argued that DBKL is the “owner” of Dataran Merdeka (Independence Square) and that it has “exclusive rights” to it.

This is part of the problem with politicians who remain in office for too long; they think that everything belongs to them, that only they have exclusive rights to public property.

The Minister should know that Dataran Merdeka belongs to the nation and all citizens have a right to access it. DBKL’s task is simply to manage it for and on behalf of the people. If the people wish to peacefully gather there, DBKL should facilitate it.

Our Prime Minister, for his part, insists that protest and demonstrations are “not the Malaysian way.” Obviously, he has forgotten that the party he now leads was itself born out of a protest movement ( against the Malayan Union). He also asked the electorate to bring their grievances to him, promising that he would listen and learn from them; if only he had, citizens would not need to demonstrate (this a big lie, promises, promises, empty promises–DM).

And then there are the phony democrats who pretend to uphold the rights of the people by suggesting alternative venues for demonstrations and even offering to pay for the them. People are not so foolish to see such moves as anything but an orchestrated ploy to marginalize the demonstrators by pushing them to more discreet locations.

Of course, whenever there is talk about demonstrations the bully boys in red – that rent-a-band of rowdies with nothing better to do than to hurl insults, act provocatively and play racist games – invariably spring into action. By insisting on the right to hold counter-demonstrations at the same time and at the same place, they provide the police with the perfect excuse to worry about public order.

Few doubt, though, that they are anything more that bullies allied to people in high places with a licence to disrupt, sow fear and scare off concerned citizens who wish to exercise their democratic right to protest.

Surprisingly, even Suhakam, once seen as a small ray of light in an otherwise dark human rights environment, now appears to be taking the government line that such demonstrations are counterproductive. Its new chief dismissed protestors as little more than unwashed and unprincipled agitators who accomplish little at great inconvenience to the rest of society.

He also went on to draw parallels with the Arab Spring, now a by-word for chaos and instability, implying that the same thing could happen here if we are not careful.

Those who use the Arab Spring to discredit all popular protests often tend to ignore the real lessons from those seminal events.

Rather than blaming autocratic governments that oppressed the people for decades, they blame the victims of oppression, corruption and tyranny for rising up to protest. The real lesson from the Arab Spring, which autocratic governments should take to heart, is the one that John F Kennedy warned about decades earlier – that those who make peaceful revolution impossible make violent revolution inevitable.

The run around

Given the government’s views, it comes as no surprise that the authorities are trying to give the organizers of upcoming demonstrations the run around. The Inspector-General of Police says the police have no objections provided City Hall agrees. City Hall, of course, will find every excuse not to agree.

It is clear that neither of these agencies are independent of political influence. Their actions suggest that their primary objective is to find administrative reasons to stymie demonstrations at Dataran Merdeka.

This kind of thinking was also evident in the government’s decision to institute a claim for damages against the organizers of the 2012 Bersih 3 rally. They were hoping to make it too prohibitive financially for demonstrators to use the square. Kudos to the courts for rejecting it.

The government must also not hide behind the controversial Peaceful Assembly Act. When it was introduced in 2012, the prime minister dismissed the concerns of human rights groups and insisted that it was a democratic measure designed “to give room for the people to express themselves.” Contrary to his assurances, it has been used to harass, intimidate and prosecute demonstrators. It might as well be renamed the ‘prohibition of assembly act.’

The government must do the right thing

Clearly, while Malaysians tend towards political apathy, many now feel that enough is enough, that it is not the Malaysian way to sit idly by while our beloved nation slips into the abyss of corruption, extremism and misgovernance.

Street demonstrations may or may not be the best way to press for change but it is the citizens who must make that call. In any case, it is one of the few options left to concerned citizens in our nation today to express their unhappiness over the direction the nation is taking.

The government needs to understand that the protestors are not the enemy. They are not looking for trouble, not looking to violently overthrow the government. They too love their country, value peace and stability. In insisting on the right to gather at Dataran Merdeka to make their views known, they are acting responsibly and in accordance with their rights under the constitution.

If there are security concerns, our police should be on hand – to protect the protestors rather than attack them. If City Hall is concerned about orderliness and cleanliness, it should work with the organizers to make this the cleanest, most orderly, most organized demonstration thus far.

The government can war against its own citizens or let them roar. They can try to silence the voices of dissent or hear the cries for justice, democracy and good governance.

Its not the people who are on trial here; it is the government!

Dennis Ignatius is a former Malaysian Ambassador.

 

1MDB Highlights Need For Institutional Reform of State’s Role in Business


August 16, 2016

1MDB Highlights Need For Institutional Reform of State’s Role in Business

by  Teck Chi Wong
1MDB Highlights Need For Institutional Reform of State’s Role in Business

Malaysia has a long history of high-level financial scandals, some of them involving the country’s government-linked companies (GLCs). Yet, the recent case of 1MDB is particularly shocking. This is the first time that its sitting Prime Minister ( pic above) is directly implicated.

The 1Malaysia Development Berhad (1MDB) scandal in Malaysia which has recently become the subject of a high-profile lawsuit by the United States Department of Justice’s asset recovery initiative highlights the problems with state-ownership in the Malaysian economy. To prevent such scandals from recurring in the future Malaysia must define the role of the government in business and develop adequate institutional arrangements to counter potential abuse by politicians.

Malaysia has a long history of high-level financial scandals, some of them involving the country’s government-linked companies (GLCs). Yet, the recent case of 1MDB is particularly shocking. This is the first time that its sitting Prime Minister is directly implicated.

Prime Minister Najib Razak has vehemently denied the allegations and claimed that the money was a ‘donation’ from the Saudi Royal Family. But the investigation by the US Department of Justice

Research into state ownership has long argued that GLCs are vulnerable to the problems of politicisation, corruption, and rent-seeking, which can cause them to be inefficient and mired in scandal. In Malaysia, GLCs have been used as a tool for politicians to direct benefits to their political supporters or even themselves.

Syed Ali Alhabshee–Jangan bohong dan Tembak Lah

The case of 1MDB illustrates the problem. It is alleged a total of US$7 billion of funds has gone missing. A majority of the misappropriated funds has allegedly flowed to offshore companies. It is also suspected that some of these funds were used to support the ruling coalition’s campaign in the 2013 Malaysia General Election.

The concerns only erupted into a scandal in 2015 when the issue was raised by former Prime Minister Mahathir Mohamad in an internal party fight with Najib. Hundreds of thousands of people then went into the streets to protest, but Najib has so far successfully resisted the call for him to step down. He has also strengthened his position by sacking critics and the attorney general from his government. He was later cleared of any wrongdoing by the new attorney general.

Excessive State Influence in Business

Malaysia has a long history of high-level financial scandals, but this is the first time a sitting prime minister is directly implicated. Some $7 billion of funds has gone missing from 1MDB. The failure of institutional safeguards to prevent or take action against such irregularities points to major deficiencies within Malaysia’s governance of GLCs.

The failure of institutional safeguards to prevent or take action against such irregularities points to major deficiencies within Malaysia’s governance of GLCs. Six decades of rule by the United Malays National Organisation (UMNO), the main ruling party in Malaysia, has undermined Malaysia’s democratic institutions. There are now no effective institutional checks and balances on the handling of GLCs by the state and politicians.

Underlying the 1MDB scandal is the problem of excessive state influence in business. It is estimated that GLCs account for approximately 36 per cent of the market capitalisation of Bursa Malaysia and 54 per cent of the benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index (FBMKLCI). GLCs do not only participate in natural monopolies or strategic industries, but compete with the private sector in highly lucrative businesses such as retail, construction and property development.

In the case of 1MDB, the state-owned investment company also has a huge involvement in property development, through the projects of Tun Razak Exchange (TRX) and Bandar 1Malaysia. These projects were particularly controversial because the land was sold to 1MDB at a very low price by the government. Critics argued that the land should instead have been auctioned publicly and that the projects could be handled more effectively and efficiently by private companies.

Although the government embarked on a GLC transformation program in 2004 and committed to divest their non-core holdings and non-competitive assets in 2010, its influence in Malaysian business has never really faded. On the contrary, as argued by Malaysian economist Dr. Edmund Terence Gomez, there is increasingly an ‘extreme concentration of powers by the executive’. To prevent future scandals Malaysia should curb the excessive role of the state in business and put in place institutional mechanisms that subject politicians to proper checks and balances.

There are increasing discussions at a global level, particularly by the Organisation for Economic Co-operation and Development (OECD), regarding which institutional governance frameworks can best regulate the state in its handling of GLCs while also improving their performance and accountability.

Malaysia should consider adopting the OECD guidelines on corporate governance of state-owned enterprises (SOEs) to benchmark itself against the world’s best practices. The guidelines recommend a clear separation between the state’s ownership function and regulatory function, which is currently lacking, particularly in the 1MDB case where the prime minister is the ultimate decision-maker.

Both the state and GLCs must also observe a higher standard of transparency. A clear and consistent ownership policy should be established to define the overall objective of state ownership and the state’s role in corporate governance. This move must also be complemented by wider reform in Malaysia’s democratic system. The problem goes beyond the current prime minister. Lasting reform will require ensuring free and fair elections and a true separation of powers between executive, legislative and judiciary branches as well as strengthening the independence of key institutions, including the central bank and the Attorney- General’s Office.

Comprehensive institutional reform is necessary to restore public confidence. But this process is expected to be difficult given the deep influence that the ruling party holds within the different branches of government.

This article was written by Teck Chi Wong,  a Masters student at the Crawford School of Public Policy at the Australian National University (ANU). It first appeared on East Asia Forum under a Creative Common license and is produced  here with its  permission.

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