Ethics in business: When broken souls walk our corridors


March 19, 2019

Ethics in business: When broken souls walk our corridor

http://investvine.com/ethics-in-business-when-broken-souls-walk-our-corridors/

Education: In pursuit to nowhere
By Firoz Abdul Hamid

Have you ever been brought down to the depth of your chaotic heart and soul that you feel so broken, lost and alienated in all that surrounds you? A place where the heart never feels at home, or at peace, or in synch with all that others say identifies with you as a being. Only those who have been there will know how broken this place is. How endless in its hopelessness this place looks. And mostly how inescapable this place seems.

I have seen many who have visited this place. But visiting it has made the many I have met such great achievers, and mostly such wonderful beings that a normal trajectory could have never endowed them with such depth of gentleness, unpretentiousness and genuineness. Yet, I have also met those who have visited this place who have turned out to be dark troubled souls – those who truly believe in all their being that destroying and abusing others – be that mentally, emotionally or physically – really is their birth right.

Look around us – take a step back – ponder why people cheat on their partners, employees on their employers, employers on their employees, governments letting down their constituents, markets abusing the system and, alas, people hurting people.

This week alone has laid before me destruction of the human soul to such a proportion that if we cannot and do not find it in our souls to recapture our essence, we are but doomed to great destruction to the point of no return.

Ethiopian Airlines wreckage

READ ON :https://www.bbc.com/news/world-africa-47605265

 

The Ethiopian Airline Boeing 737 that crashed during take-off, killing all of its 157 people on board, and then on March 15 the cold-blodded killing of Muslims during their Friday prayers in Christchurch, New Zealand, begs the question – who allowed this plane to fly and then what society created a monster who would go so deep down into the darkness of his soul to then feel absolute numbness before committing such a crime, respectively. If one is sober with sound moral judgement, one will not and cannot in his/her making as a human being commit crimes – be that in a home environment, work environment or in public.

Ethics In Business: When Broken Souls Walk Our CorridorsWe each go through our daily grinds, really condoning the little bribery to enforcements, the pandering to houses of power, turning the blind eye when signing off JUST THAT one time in our board or cabinet meetings, not knowing those things have consequences. That we are even unable to discern what we do has consequences, which may or may not directly affect us, is a reflection of the state of our souls, the state of our hearts, the state of the society that enables this. That we think it is fine to seek loopholes not to pay the fine or the tax, or stay silent when wrong happens before us is not a reflection of what is outside, rather it is of what is inside us.

This, I would argue, is the new and postmodern mental illness. An illness so covert in suits and eloquence of Ivy School language and speech that we in the public and private sector are simply not equipped to discern and confront. They come in many forms – in form of C-suites, boards, politicians, educators, legislators, key decision makers, and this list really is inexhaustible. They were once called narcissistic by psychologists. No more. I would argue that the ones who would sell and allow substandard planes to fly (especially after a history of a similar crashing earlier), hate to be perpetrated in societies for their own political future or even good work of colleagues to be diminished for self-preservation suffer from post-modern mental illness. Those who do not bat an eye lid signing off the embezzlement of billions of dollars of public funds. And even those whose entire source of existence is just to see the wrong in everything and not be part of the solution is a problem societies need to address.

In my own country today I see my government putting forth plans after plans, initiatives after initiatives to improve our wellbeing. Yet within and without this same system we have those who are insistent upon keeping with the old, and finding ways to circumvent the credibility and governance intended of these plans. This, I would say, is our greatest threat today. Not our lack in plans for carbon emission, or good governance or sound economic outlook – rather the lack of people able to see beyond the darkness of their souls to aspire goodness for all. In Arabic this is called “maslahah” – for the benefit of the public interest.

If there is one project leaders in every parts of our societies need to embark on – spanning from our dinner tables to our schools to our board and cabinet rooms – is healing souls, saving those conspicuous who walk our streets and important places in our public and private sectors from destroying us collectively. To have sophisticated programmes that identify and heal these people and until this is done not allow them near anything that looks like power. If we do not and cannot address this, no amount of plans and initiatives no matter the sovereignty and market can save us all. No number of changes in elected representatives can save us. This I am certain to the point of the clarity of what my name is.

As Qasim Chauhan says – you are what you hide from others, these unsaid thoughts, emotions and secrets, make you, YOU.

(Firoz Abdul Hamid is an Investvine contributor. The opinions expressed are her own.)

 

 

 

 

 

 

 

 

 

Mahathir Using Economic Council to Edge Anwar Out in favour of Azmin Ali?


February 16, 2019

By: Yusoff Rawther

Image result for azmin ali and mahathir

A glance at the newly-announced lineup of Malaysia’s Economic Action Council (EAC) poses more questions than answers. It was formed to respond and take action in addressing economic issues. Objectives include stimulating economic growth, ensuring fair distribution of wealth and improving the well-being of the people as well as focusing on issues related to cost of living, labor, poverty and home ownership.

What is its relevance? It sounds eerily like a cabinet within a cabinet, and at a transitionary period, it looks like a redundant idea that will prove to be merely a political tool.

In less than a year since assuming the premiership, the 93-year-old Mahathir Mohammad has flip-flopped on various issues, most obviously his firmly stated assurance in May 2018 that the victorious Pakatan Harapan coalition would not be accepting turncoats from the losing United Malays National Organization.

Yet, along with the announcement of the creation of the economic action body,  Mahathir happened to embrace seven former UMNO MPs into his own Parti Pribumi Bersatu, an act of betrayal to the people of Malaysia. UMNO was thoroughly discredited as a party corrupt to its very roots – by MPs who were kept loyal to the previous premier, the disgraced Najib Razak, by outright bribes.

Anwar Ibrahim has been unceremoniously left out from the EAC, an indication that Mahathir is once again vying to divert as much power and attention towards the lesser known and underperforming Minister of Economic Affairs, Mohamad Azmin Ali, the former chief minister of Selangor and an ambitious pretender for the leadership of the coalition.

Aside from the fact that the council’s existence shows failure on behalf of the prime minister to appoint qualified people to the cabinet, if we are to accept the premise that the council should exist, the right thing to do is to invite the premier-in-waiting to be a member in a move to demonstrate your confidence in your designated successor to the voters as well as giving Anwar a role to play in contributing to the agenda set forth in the EAC’s charter. Malaysians should beware lest Mahathir smuggles old failings into the mix whilst our attention is held elsewhere.

The political heavy lifting was done by Anwar, who from his prison cell pulled a lax opposition and the complaining class into the fight alongside his supporters to create the conditions for change. Conditions that proved vital in the overthrow of the Barisan Nasional regime.

It is evident that something more than elections are necessary to create a genuine new dispensation of sustainable democratic good governance.

 Creating the EAC and sidelining the PM-in-waiting is not a good indicator of that. Authoritarian rule is not just about figureheads. They use power th to maintain themselves is institutionalized and embedded in deep structures of privilege that corruptly deliver a nation’s bounty into the hands of a chosen few.

If Anwar Ibrahim is the icon for democracy, then Mahathir is the icon and spokesperson of the embedded structures of inequity.

As the principal architect of genuine reform,  to sweep aside the structures of authoritarian control and the inequity they beget, Anwar’s reform agenda seeks to eliminate  corruption, cronyism and nepotism, the elements of a bygone era.

It is the diligence and energy Anwar applies to promoting an alternate vision of good governance, one and of a free and competitive Malaysian economy and harmonious, multiracial society that  made him an important voice not only in Malaysia but around the world. Anwar has spent his career speaking for and articulating an alternative agenda of politics.

As a Deputy Prime Minister during the Asian Financial Crisis I988, Anwar came very close to dismantling the Mahathirist version of crony capitalism when he decided to implement an IMF style austerity program, suspend big-bulge infrastructure investment, and force big businessmen to take care of their own debts.

Anwarnomics promises to do away with state-backed racism. It promises to be inclusive, rules-based and competition-driven with a large, well-funded social safety net and he has reiterated time and again the need for uncompromising reforms.

Here are some of the things he has advocated for, long before the formation of the EAC:

Malaysia’s economic policies should be inclusive and to dismantle obsolete policies such as the New Economic Policy. Positive.

  • discrimination policies must be based on freedom, justice, and equity.
  • A sustainable economy is not one that is mainly driven by consumer spending fueled by high level household debt. “We cannot build a better life for our people if they need two to three jobs just to make ends meet. That is bad economics… even worst social policy.”
  • Affirmative actions taken must be based on needs.
  • It is important to enhance investment, trading and economic ties with China and India which are the engine of growth for global economy.
  • Social protection and poverty eradication remain central to the effort to ensure a better life for all.
  • Greater transparency and public participation is key in ensuring efficiency of social programs, to identify dubious programs, reduce duplication and waste of resources.
  • Economic policies to lure foreign direct investment must not neglect any region or community in the country. It is not a zero-sum game. If we choose to embark on pro-market reforms, it should not be an excessive capitalistic notion ignoring the plight of poor and marginalized.

Given the facts, it is only fair to question Mahathir’s  motives  in creating the EAC while failing to include the next Prime minister.

Malaysia is rich in resources and possibilities. Change will require more than just elections, it requires dismantling the institutional structures of inequity, most of all it will depend upon building the strength and capacity of civil society, the plethora of organizations and associations by which ordinary people hold their governments to account.

FOCUS On POVERTY alleviation, not income creation for billionaires–Mahathir’s outdated policy prescriptions


January 16, 2019

FOCUS On POVERTY alleviation, not billionaires —Mahathir’s outdated policy prescriptions

by P. Gunasegaram

Image result for the malaysian maverick by barry wain

QUESTION TIME | When Prime Minister Dr Mahathir Mohamad sank low to say that wealth should be distributed equally among races, he indicated plainly that he has no solid plan to increase incomes and alleviate poverty for all Malays and Malaysians. His priorities are elsewhere.

Note that he talks about the distribution of wealth, not increasing incomes, which is more important because this is what will eventually result in a proper redistribution of wealth by valuing fairly everyone’s contribution  to wealth creation.

During his time as Prime Minister previously for a very long 22 years from 1981 to 2003 out of 46 years of independence at that time – nearly half the period of independence – he had plenty of opportunities, but squandered them.

He did not care for the common Malay, but was instead more focused on creating Malay billionaires overnight through the awarding of lucrative operations handled by the government or government companies previously, such as roads, power producers, telecommunications and others.

He depressed labour wages by bringing in millions of workers from Indonesia, and subsequently Bangladesh and the Philippines, to alter the religious balance in Sabah. A significant number of them became Malaysian citizens over the years, altering the overall racial and religious balance in the country.

By doing that he let his own race down, many of whom were workers and small entrepreneurs whose incomes were constrained by imported labour. Even now, Mahathir has not shown a great willingness to increase minimum wages, which will help many poor Malays and bumiputeras increase their incomes.

As Mahathir himself well knows, distribution is not an easy thing. Stakes held by others cannot be simply distributed, but they have to be sold, even if it is at depressed prices as it was under the New Economic Policy or NEP, when companies wanted to get listed.

Instant millionaires

There are not enough Malays rich enough to buy these stakes, but many of them in the Mahathir era and earlier, especially the connected elite, became rich by purchasing the 30 percent stakes for bumiputeras that had to be divested upon listing by taking bank loans.

By simply flipping the stakes on the market at a higher price after they were listed, they pocketed the difference and became instant millionaires.

Image result for the permodalan nasional

It was Mahathir’s brother-in-law – the straight, honest and capable Ismail Ali – who was the architect behind the setting up of Permodalan Nasional Bhd or PNB to hold in trust for bumiputera stakes in major companies. PNB now has funds of some RM280 billion and has been enormously successful in this respect.

But Mahathir, with advice from Daim Zainuddin who became his Finance Minister, still cultivated selected bumiputera leaders, many of them Daim’s cronies, and gave them plum deals. A slew of them who were terribly over-leveraged got into trouble during the 1997-1998 financial crisis.

The government, often through Khazanah Nasional Bhd, had to rescue some of the biggest ones, resulting in Khazanah holding key stakes in many companies such as Axiata, CIMB, PLUS and so on. Recently, the government has been talking about, not surprisingly, selling these stakes to investors, accusing Khazanah of not developing bumiputera entrepreneurship, which was not anywhere in its original aims.

It becomes more obvious what Mahathir is talking about. Redistribution of wealth now will come out of the selling of government (Khazanah) and PNB stakes to individual Malay entrepreneurs to equalise wealth distribution among the races. To make it more palatable, some willing Indian entrepreneurs, too, may be found.

The modus operandi will be to sell the stakes when prices are depressed and perhaps even to offer a bulk discount to these so-called entrepreneurs who, of course, will not only be among the elite, but who are cronies. That will ensure a steady flow of funds into Bersatu in future from donations to help make it the premier party in the Pakatan Harapan coalition.

Image result for the malaysian jomo and gomez

Mahathir knows full well that equal wealth distribution is impossible – it’s never been done anywhere before and makes wealth acquisition disproportionate to intelligent effort and hard work, a sure recipe for inefficiency, corruption and patronage. As eloquently argued by prominent political economy professor Terence Gomez, patronage is king in new Malaysia – if it was cash during Najib’s time.

Mahathir does not have the wherewithal to lead anymore, if he ever had it in the first place. Eight months after GE14, he is still bereft of a plan to increase incomes and improve livelihoods. He needs to recognise he does not have one and that he stays in power because of the strength of the other parties in the coalition.

Wrong direction

The only way to close the wealth gap is to increase future incomes across all races. Anything else is the expropriation of other people’s wealth. In the meantime, the holding of wealth in trust by state agencies is perfectly acceptable because the income comes back to the government.

This can be wisely used to improve the quality of education, get better quality investments, raise productivity and hence labour wages, and provide equal opportunities for growth and innovation among all communities. As so many people have said before me, you can equalise opportunities, but not outcomes.

So far, 61 years of UMNO-BN have not managed to equalise opportunities for all as the government education system is in shambles, among others. And eight months of Harapan is heading in the wrong direction under Mahathir.

Despite Bersatu being a party expressly formed to fight for Malay rights, Mahathir’s party had the lowest support from Malays of parties looking after Malay rights, including Umno, PAS, PKR and Amanah.

He is still stuck in a mode to widen his rather narrow and vulnerable power base (his Bersatu won only 13 seats of 52 contested, the worst win rate of any party in the coalition) unethically by attracting tarnished MPs from Umno into the Bersatu fold, in the process willing to break agreements with other coalition partners and doing/advocating things which are against the principles of a properly functioning democracy.

He has also said he will not honour some manifesto promises, saying that these were made when Harapan did not expect to win the elections – a rather lame excuse. He has not even made solid moves to undo repressive laws introduced by his predecessor Najib Abdul Razak.

Mahathir, obviously, has no intention plan to improve the livelihood of the common Malay and all Malaysians;  he is stuck in old-school forced distribution which is injurious to the economy, maybe even fatal in the long term.

 Malaysians don’t want the creation of Malay (or any other ) billionaires from government wealth.


Old wine in a new bottle is still sour. E-mail: t.p.guna@gmail.com

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

 

 

Patronage is king in new Malaysia?


January 12, 2019

Patronage is king in new Malaysia?

by Dr.Terence Gomez

 

COMMENT | When Dr. Mahathir Mohamad led the opposition to a stunning election victory, he had an effective rallying cry that reflected why Umno’s form of governance was problematic: “Cash is king.”

If Mahathir is not careful, worrying recent trends indicate a similarly disconcerting problem about Pakatan Harapan’s government: “Patronage is king.”

When Harapan wanted to capture power, the coalition’s leaders told Malaysians to expect real change if UMNO was expelled from government. These reforms included ending ethnically-based policies, unfailingly applied since the 1970s to justify patronage favouring bumiputera, though extremely abused to enrich politicians in power.

The Prime Minister would also no longer concurrently serve as finance minister who had under his control a slew of GLCs like 1MDB and Tabung Haji, enterprises that had been persistently abused by UMNOo. Politicians would not be appointed as directors of GLCs.

These pledges contributed to Harapan’s considerable achievement of ending authoritarian rule in Malaysia. However, Harapan has been in power barely eight months and already alarming trends are appearing which suggest that this coalition is finding ways and means to renege on its pledges.

Equally troubling is a gradual and perceptible attempt to reinstitute the practice of selective patronage in the conduct of politics and in the implementation of policies, hallmarks of UMNO politics that led to its fall.

Soon after Harapan formed the government, it created the Economic Affairs Ministry, led by Mohamed Azmin Ali. Subsequently, numerous GLCs controlled by the Finance Ministry, under the jurisdiction of Lim Guan Eng, were transferred to the Economic Affairs Ministry.

Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from the Finance Ministry to the Prime Minister’s Department. The government did not publicly disclose why the shifting of these GLCs between ministries was necessary, but it is now clear that the Finance Ministry no longer holds enormous influence over the corporate sector.

With Khazanah under his ministry, Mahathir, though not also functioning as the Finance Minister, had secured control of Malaysia’s leading investment arm. When Mahathir argued that Khazanah had deviated from performing one of its original objectives, helping the bumiputera, this contention was disputed by numerous analysts.

Mahathir went on to appoint himself as chairperson of Khazanah, though this was, by convention, the practice. The convention also was that the finance minister should be a member of Khazanah’s board.

Instead, Azmin was given this appointment. Whether the prime minister and the economic affairs minister should have been appointed board members of Khazanah merited debate as Harapan had pledged that politicians would not be appointed as directors of government enterprises.

On Sept 1, 2018, a Congress on the Future of Bumiputeras and the Nation was convened by Azmin’s Ministry. Mahathir stressed at this convention the need to reinstitute the practice of selective patronage, targeting bumiputeras, though no longer would the government allow for the distribution of what he referred to as “easy contracts.”

Daim Zainuddin, the chair of the Committee of Eminent Persons (CEP), established to prepare a report reviewing the state of the economy, endorsed the need for such a bumiputera policy, though he acknowledged problems of the past when he said: “We want to get it right this time.” Daim also stressed that the government would strive to change the mindset of bumiputera.

The nation was not told how this policy will be altered to get it right, nor how mindsets will be changed. Meanwhile, the CEP report, though submitted to the government, was not publicly disclosed.

Instead, the bumiputera policy was stressed when the Economic Affairs Ministry released its Mid-Term Review of the 11th Malaysia Plan, while other ministers have actively affirmed that GLCs will be divested, an issue also in the 2019 budget. Given Malaysia’s long history of political patronage, worrying questions come to mind of these divestments.

For example, one important equity sale by Khazanah, an issue that barely secured any analysis in the press, was that of its interests in CIMB, the country’s second-largest bank. Khazanah reduced its equity holding in CIMB by 0.66 percent, a seemingly small divestment.

However, does this sale mark the beginning of the transfer of control of CIMB to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s? Will Harapan, through such divestments, move to create a new breed of powerful well-connected business groups, even oligarchs, a trend seen in other countries transiting from authoritarian rule to democracy?

‘Dr M should know better’

Another worrying issue occurred recently. Rural and Regional Development Minister Rina Harun of Mahathir’s party, Bersatu, approved the appointment of politicians from her party to the boards of directors of GLCs under her control.

This is extremely worrying because, under UMNO, the Rural and Regional Development Ministry was persistently embroiled in allegations of corruption, with MARA being the prime example.

The practice of patronage through GLCs to draw electoral support was rampant under this ministry as it has a huge presence in states with a bumiputera-majority population.

So important is this ministry, in terms of mobilising electoral support, that it was always placed under the control of a senior UMNO leader. During Najib Abdul Razak’s administration, then UMNO Vice- President, Mohd Shafie Apdal, served as its minister before he was unceremoniously removed from office. Shafie was replaced by Ismail Sabri Yaakob, Najib’s close ally.

What Rina, once an UMNO member, has done by appointing politicians to GLCs under her authority is so reminiscent of patronage practices that had undermined the activities of these enterprises.

Azmin subsequently endorsed what Rina had done on the grounds that “there are some politicians who have professional background, such as accountants, engineers or architects, who can contribute to GLCs”.

Mahathir should know better than to allow this. After all, he had stressed that GLCs function to fulfil a “noble vision”, including the alleviation of poverty, equitable wealth distribution and spatial development, promotion of rural industries and the fostering of entrepreneurial companies in new sectors of the economy. Mahathir had also persistently referred to Malaysia’s complex ensemble of GLCs as a “monster.”

During Najib’s administration, this vast GLC network, created primarily to fulfil the bumiputera agenda, became tools easily exploited by UMNO, so visibly manifested in serious corruption associated with Felda and Tabung Haji.

However, Harapan has refused to establish an independent committee to review this extremely complex GLC network that operates at the federal and state levels. Is this reluctance because Harapan plans to similarly employ GLCs for the practice of patronage, as recent trends suggest?

What is clear, even becoming the norm, is Harapan’s consistent message to the nation: selectively targeted patronage will continue. The primary advocate of this message is Bersatu, an UMNO off-shoot.

 

At Bersatu’s first convention after securing power, held two weeks ago, its president, Muhyiddin Yassin, was quoted as saying: “As a party for the ‘pribumi’ or indigenous group, Bersatu should not be apologetic to champion the bumiputera agenda”.

Muhyiddin went on to say: “No one in our society will be left behind. Hence, this agenda is not a racial agenda, but a national agenda.” These statements are strikingly similar to what Umno had stressed when in power.

These trends suggest that for Harapan, and Bersatu in particular, consolidating power, by marshalling bumiputera support, is its primary concern, not instituting appropriate economic and social reforms.

If the government hopes to change mindsets, Harapan must focus on just universal-based policies that assist all Malaysians. In the process, disenfranchised bumiputera will also be supported. Patronage need not be king.


TERENCE GOMEZ is a professor of political economy at the Faculty of Economics and Administration, Universiti Malaya.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.

The War on Huawei


December 20, 2018,Image result for huawei meng wanzhou

The War on Huawei

The Trump administration’s conflict with China has little to do with US external imbalances, closed Chinese markets, or even China’s alleged theft of intellectual property. It has everything to do with containing China by limiting its access to foreign markets, advanced technologies, global banking services, and perhaps even US universities.

 

NEW YORK – The arrest of Huawei CFO Meng Wanzhou is a dangerous move by US President Donald Trump’s administration in its intensifying conflict with China. If, as Mark Twain reputedly said, history often rhymes, our era increasingly recalls the period preceding 1914. As with Europe’s great powers back then, the United States, led by an administration intent on asserting America’s dominance over China, is pushing the world toward disaster.

The context of the arrest matters enormously. The US requested that Canada arrest Meng in the Vancouver airport en route to Mexico from Hong Kong, and then extradite her to the US. Such a move is almost a US declaration of war on China’s business community. Nearly unprecedented, it puts American businesspeople traveling abroad at much greater risk of such actions by other countries.

The US rarely arrests senior business people, US or foreign, for alleged crimes committed by their companies. Corporate managers are usually arrested for their alleged personal crimes (such as embezzlement, bribery, or violence) rather than their company’s alleged malfeasance. Yes, corporate managers should be held to account for their company’s malfeasance, up to and including criminal charges; but to start this practice with a leading Chinese businessperson, rather than the dozens of culpable US CEOs and CFOs, is a stunning provocation to the Chinese government, business community, and public.

Meng is charged with violating US sanctions on Iran. Yet consider her arrest in the context of the large number of companies, US and non-US, that have violated US sanctions against Iran and other countries. In 2011, for example, JP Morgan Chase paid $88.3 million in fines in 2011 for violating US sanctions against Cuba, Iran, and Sudan. Yet Jamie Dimon wasn’t grabbed off a plane and whisked into custody.

And JP Morgan Chase was hardly alone in violating US sanctions. Since 2010, the following major financial institutions paid fines for violating US sanctions: Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank (now known as Beacon Business Bank), Standard Chartered, and Wells Fargo.

None of the CEOs or CFOs of these sanction-busting banks was arrested and taken into custody for these violations. In all of these cases, the corporation – rather than an individual manager – was held accountable. Nor were they held accountable for the pervasive lawbreaking in the lead-up to or aftermath of the 2008 financial crisis, for which the banks paid a staggering $243 billion in fines, according to a recent tally. In light of this record, Meng’s arrest is a shocking break with practice. Yes, hold CEOs and CFOs accountable, but start at home in order to avoid hypocrisy, self-interest disguised as high principle, and the risk of inciting a new global conflict.

Quite transparently, the US action against Meng is really part of the Trump administration’s broader attempt to undermine China’s economy by imposing tariffs, closing Western markets to Chinese high-technology exports, and blocking Chinese purchases of US and European technology companies. One can say, without exaggeration, that this is part of an economic war on China, and a reckless one at that.

Huawei is one of China’s most important technology companies, and therefore a prime target in Trump administration’s effort to slow or stop China’s advance into several high-technology sectors. America’s motivations in this economic war are partly commercial – to protect and favor laggard US companies – and partly geopolitical. They certainly have nothing to do with upholding the international rule of law.

The US is trying to targeting Huawei especially because of the company’s success in marketing cutting-edge 5G technologies globally. The US claims the company poses a specific security risk through hidden surveillance capabilities in its hardware and software. Yet the US government has provided no evidence for this claim.

recent diatribe against Huawei in the Financial Times is revealing in this regard. After conceding that “you cannot have concrete proof of interference in ICT, unless you are lucky enough to find the needle in the haystack,” the author simply asserts that “you don’t take the risk of putting your security in the hands of a potential adversary.” In other words, while we can’t really point to misbehavior by Huawei, we should blacklist the company nonetheless.

When global trade rules obstruct Trump’s gangster tactics, then the rules have to go, according to him. US Secretary of State Mike Pompeo admitted as much last week in Brussels. “Our administration,” he said, is “lawfully exiting or renegotiating outdated or harmful treaties, trade agreements, and other international arrangements that don’t serve our sovereign interests, or the interests of our allies.” Yet before it exits these agreements, the administration is trashing them through reckless and unilateral actions.

The unprecedented arrest of Meng is even more provocative because it is based on US extra-territorial sanctions, that is, the claim by the US that it can order other countries to stop trading with third parties such as Cuba or Iran. The US would certainly not tolerate China or any other country telling American companies with whom they can or cannot trade.

Sanctions regarding non-national parties (such as US sanctions on a Chinese business) should not be enforced by one country alone, but according to agreements reached within the United Nations Security Council. In that regard, UN Security Council Resolution 2231 calls on all countries to drop sanctions on Iran as part of the 2015 Iran nuclear agreement. Yet the US – and only the US – now rejects the Security Council’s role in such matters. The Trump administration, not Huawei or China, is today’s greatest threat to the international rule of law, and therefore to global peace.

Jeffrey D. Sachs, Professor of Sustainable Development and Professor of Health Policy and Management at Columbia University, is Director of Columbia’s Center for Sustainable Development and of the UN Sustainable Development Solutions Network. His books include The End of Poverty, Common Wealth, The Age of Sustainable Development, Building the New American Economy, and most recently, A New Foreign Policy: Beyond American Exceptionalism.

Ethics in Governance: The dethroning of our value system


Ethics in Governance: The dethroning of our value system

by Firoz Abdul Hamid

Image result for Richard P. Feynman

“So I have just one wish for you – the good luck to be somewhere where you are free to maintain the kind of integrity I have described, and where you do not feel forced by a need to maintain your position in the organization, or financial support, or so on, to lose your integrity. May you have that freedom.” 

Richard P. Feynman, a Nobel Prize winner for Physics in 1965

faffTrust. Integrity. Honour. Lexicons or Values? The month of November 2018 witnessed many boardroom dramas. Revelations of Facebook in the New York Times spoke of an unbecoming culture of ‘Delay, Deny and Deflect’ allegedly practised by the most senior people in one of the largest corporations ruling this world today: People who we idolise, our children want to emulate, those who frequent talk shows and international business forums. These are people we trust as exemplars for our companies, yet in a public listed company that necessitates high levels of governance, we hear reports of culture that promotes the contrary.

Image result for saw Carlos Ghosn

And then we saw Carlos Ghosn, the Chairman and CEO of Renault who allegedly used company funds for personal purposes. Another case of a public listed company that missed its mark on governance, it would seem. We had German police raiding Deutsche Bank’s headquarters in Frankfurt as part of an investigation into whether the lender helped criminals launder money through offshore tax havens when it was not long back HSBC was fined for money laundering offences in Mexico.

These cases and companies are by no stretch of the imagination small feat adventures. These companies are and have been emulative models of case studies for management schools, its leaders receive invites to Davos and we in the ‘developing world’ are made to believe that they are who we should model our market success on.

 

Now – zooming into my own country, Malaysia. It is heart breaking to read day in day out, of late, how the house of cards is crumbling in its own weight in some of our companies with long legacies and national agendas, like Felda Corporation where its entire former board has been sued for losses and bad investment decisions. As if this was not heart wrenching enough this week, we then read Malaysia’s 64 billion ringgit ($21 billion) Muslim pilgrimage saving fund, Tabung Haji (TH), is said to be short of  four billion ringgit of deposits. The story which broke in the Singapore Sunday Times alleges that TH faked its 2016 accounts to justify its dividends. This in the same month we were told the movie-bound 1MDB Auditor General Report was tampered with. Having had several books written after it, made into documentaries and now waiting for its casts to be selected so they can film an all-Hollywood movie with all its trappings for more Malaysians to go watch how we were lied to and how our hard earned monies misused – these escapades are no longer amusing.

Added to this, we are witnessing politicians being hauled up for alleged corruption, the existing government (Pakatan Harapan) being questioned for their said promises in their election manifesto and their intent in honouring the promises. Yes in a glass half full scenario one can argue, we are witnessing transparency and rule of law taking its course. But the bigger question really is – how did we get here 61 years since our independence. Shouldn’t the systems, processes and institutions be solid enough to avert such malfeasances? Shouldn’t we have a civil service and/or leaders of government-linked companies who know that political campaigning is just wrong – yet we had very highly educated leaders, not least highly respected ones who ignored this basic ethics.

So my questions are: How did these people get to these positions? Who selected the company boards and its management teams for these companies? What were the criteria of these selection processes and what are their performance measures – or is it arbitrarily done by a few (in the corridors of power) peoples’ likes/dislikes as was suggested in a recent article in The Star?

Shouldn’t the criteria of selection be made public, for after all they are being paid by the public? Shouldn’t they (i.e. those who selected these leaders – CEOs and boards) too be hauled up for accountability when those they selected or appointed fail the country and its people?

Shouldn’t the criteria of selection be made public, for after all they are being paid by the public? Shouldn’t they (i.e. those who selected these leaders – CEOs and boards) too be hauled up for accountability when those they selected or appointed fail the country and its people?

We have CEOs in this country leading companies on behalf of the government who themselves are struggling with words like vision, mission and governance. They simply cannot understand the concept of business judgement and sustainability. Yet these candidates make the cut. I have sadly come face to face with one too many.

We have CEOs in this country leading companies on behalf of the government who themselves are struggling with words like vision, mission and governance. They simply cannot understand the concept of business judgement and sustainability. Yet these candidates make the cut. I have sadly come face to face with one too many.

Image result for mahathir

When I interviewed the current Prime Minister of Malaysia, Mahathir Mohamad, in July 2018, he spoke of his total frustration and exasperation in the breakdown of governance in our public sector and government-linked companies. He stressed on the rule of law being the way forward. This sentiment I am certain is shared by many in the country – from housewives to fishermen, from the jobless graduate to a janitor, from an underpaid and overworked teacher to a well-paid executive in a leather office.

Yet my gut keeps nagging the one question – the ones leading these companies and departments in government are no fools. They ARE well educated, they are sent to programmes (after programmes) and courses by their companies and the regulators regularly here and abroad (all paid for I might add) – yet we find these missteps, these blunders and these blood boiling news of blatant failure in public trust.

Who exactly is in charge one can’t help but wonder? Who is checking and monitoring these boards and CEOs and their management teams? In a 2014 debate at the Oxford Union, Christopher Hedges, a journalist and writer, argued that often we really do not know who is covering up for who. The committees know they are being lied to. The whole system is designed to cover up each other and this right to the door of parliamentary committees or its equivalent.

 

A friend of mine in his recent fit of frustration of this barrage of government-linked companies news argued that maybe they (the public sector and government-linked companies) have no sense of accountability because they know these funds are government-guaranteed. At the most they would be suspended or demoted within the public sector (unless clear proof of corruption). He also said that the infamous ‘passing of the buck’ rotates from the board to the CEO, to the audits (internal and external), back to the umpteen committees we have in an organisation as a feel-good factor, never mind our love for taskforces as soon as we hit a wall of problems yet no one is really in charge. No clear accountabilities. No clear indication where the buck stops.

Image result for Arnold J. Toynbee,

The well-known historian Arnold J. Toynbee, who famously wrote the nine-volume book A Study of History said that civilizations start to decay when they lose their moral fibre and the cultural elite turns parasitic, exploiting the masses and creating an internal and external proletariat.

He emphasized the importance of spiritual dimension in shaping civilisations. Toynbee studied the rise and fall of 21 civilisations and amongst others concluded civilisations fail when pride and hubris kicks in. Standard. We all know this. But he also speaks of the importance of the creative minority. This is the group of people who are able to challenge the status quo. Able to unfix and fix problems. Most of the time we have people who create a problem and then have no clue how to fix them. We also have those who give solutions to a problem but have no clue how it should then work.

The creative minority, Toynbee argue are those able to decipher what ails the society, and produce solutions that works in  order that society/civilisation moves to its next echelon of dignity – or growth as we call it today. These people are beyond your standard technocrats. They understand human dimension, sociology, culture and, in essence, they build the very fundamentals and the fabric of a strong society. When a society loses this creative minority, and when hubris and arrogance kicks in, the all famous ‘yes man’ syndrome will be its default setting. That’s when you start witnessing the house of cards fall right before your eyes.

The Roman Empire rose because of its greatness in structure and discipline. Its ultimate demise happened when lawlessness crept in, similar to the Ottomans. Hubris ruled and a sense of conceit and arrogance became honourable to embrace. The entire Abrahamic depiction of Pharaoh (the master) and Moses (the slave) plays out in every aspect of society even now in the 21st century. Today we can safely say the story of Pharaoh and Moses is well and truly alive in many parts of our own society, waiting to be destroyed by the parting of the Red Sea. In his recent essay, Terence Fernandez, a Malaysian journalist,  for instance wrote of the culture of sabotage in the public service and how it is affecting the new government operating and this after walking into a post-election (GE14) with such hope for change.

The entire governance system in Malaysian institutions needs to see a deep overhaul and the leadership at the very top has to own this problem and set it right. For if we do not, no amount of measures, programmes, talks, committees, task forces or retreats will save the day. It is a fundamental change of value system and culture necessary -one that takes time — one that isn’t always popular with politicians who by and large work towards the next election, and certainly not a top priority for three-to-five-years contract chief executives whose key performance measure is bottom line.

Malaysia needs to expand and grow its creative minority. We need many more who are able to stand up in the crowd and say: this is wrong and, no, this will not work. We need people who speak truth to power in our public sector and government-linked companies. We really are in desperate need of more people with moral courage in our boardrooms and the corridors of power, people who are able to rationally articulate wrong when it simply is wrong. This does not require an Ivy League degree. It does not require scores of titles. It requires a culture that incentivises moral courage. For this to happen throughout the entire value system, its incentives and remuneration system and culture must change. This has to be led by the CEO of the country (our Prime Minister), not a task force.

In the wake of the brutal Washington Post columnist, Jamal Khashoggi’s, murder in Istanbul on October 2, 2018, US President Donald Trump was faced with making a call on his stand on the case and he said (and I paraphrase) – the front and center is American interest and that is jobs and money. When interests are aligned to parameters that change with the next stock market cycle and speculative traits, a company really is doomed to fail. A country on its way to destruction. A civilisation on its journey to ruins.

If we do not exert values, by that, good values, on our core interests to growth, for fear of losing our jobs, titles and status, we are literally opening the doors for our children to bear the burden of our own self-interests. To put it simply if not bluntly, if we do not stand apart with moral courage and are willing to take the bullet for speaking the truth today in highlighting wrongs in our companies and institutions, what we are essentially doing is diverting that bullet for our kids and grandchildren to take, for our sins.

That really is the simple truth. This is why Feynman’s quote above is so poignant for our times.

(Firoz Abdul Hamid is an Investvine contributor. The opinions expressed are her own.)