Nepotism in addition to Corruption and Cronyism=National Disaster

August 13, 2015

Malaysia: Nepotism in addition to Corruption and Cronyism=National Disaster

COMMENT: Kleptocracy, cronyism and nepotism, what next?dato-din-merican Corruption and Abuse of power are traits of a kleptocratic governance. The Deputy Prime Minister Zahid Hamidi is adding nepotism in the Malaysian governance lexicon by getting his brother Hakim Hamidi involved in the business of importing foreign labour into Malaysia.The UMNO-BN government cannot think beyond the politics of making money, citizens and country be damned.

We had a former Minister of Home Affairs and  Public Accounts Committee Chairman, Tan Sri Azmi Khalid who was rewarded for being a loyal crony; and then the son of the sacked Deputy Prime Minister and Education Minister receiving a contract for a large Ministry of Education project with YTL Group, well, that is nepotism. Now this by a newly minted Deputy Prime Minister supporting a bid by his own brother, that is nepotism in the making.  What else can we expect from Prime Minister Najib Razak and his cohorts?

Soon, in addition to those Bangladeshis already in our country, another  pro-UMNO 1.7 million of them will be invading us. We are compounding the political and social problems we face with Filipino, Indonesian, and Vietnamese  and other workers. We know that these workers have used as voters to keep the Najib ancien regime in power. There is no assurance that this will not happen in GE-14.

Mr Abdul Hakim has the right to do business. I will defend him on that score, but in this case, I can agree with MP Zairil Khir Johari that the Deputy Prime Minister Dr. Zahid Hamidi should disqualify his brother from making a bid for this contract. In addition, he should review our policy on migrant labour since foreign workers threaten the security and safety of our citizens.  –Din Merican

Disqualify bid from  DPM Zahid’s Brother, Abdul Hakim Hamidi


DPM Zahid Hamidi

The Home Ministry must disqualify the bid by Deputy Prime Minister Ahmad Zahid Hamidi’s brother, Abdul Hakim Hamidi, for a system to manage the 1.5 million Bangladeshi workers Malaysia plans to bring in, a DAP lawmaker said.

Bukit Bendera MP Zairil Khir Johari said there is a clear conflict of interest.

 “As his (Hakim’s) brother, Zahid is also the Home Minister and the ultimate approving authority for all foreign workers in our country. There is no denying the glaring element of conflict of interest involved. “(The Home Ministry) must take Malaysians for fools if it thinks the obvious conflict of interest in this case can be simply glossed over by an assurance that it will evaluate the proposal by the Home Minister’s brother in a fair and objective manner,” Zairil said in a statement today.

Yesterday, Malaysiakini reported that Hakim’s company, Real Time Networking Sdn Bhd, aims to provide an online management system for Bangladeshi workers, at RM3,000 per person. Zahid had given the Home Ministry a handwritten note to review the proposal.

However, the Ministry in a statement yesterday said the note was not an instruction or approval, and have its assurance that Real Time Networking’s bid would be evaluated fairly.

 Meanwhile, Hakim rubbished claims of nepotism and lamented that Malaysians don’t want him to do any business because his brother is a minister.

Zairil said this statement by Hakim smacked of ignorance. “It also makes a mockery of public accountability. The fact is that Hakim can do as much business as he wants to so long as it does not involve any government agency or department that any of his direct family member has an interest in,” he said.

Zairil then urged Putrajaya to follow the Penang state government’s example and forbid family members of elected representatives from conducting business with the state.

David Cameron talks to Najib on Democracy, Civil Rights and Corruption

July 31, 2015

Bilateral Relations

David Cameron challenges Malaysian PM Najib Razak on Corruption

The Prime Minister urged Mr Razak to clean up his government and challenged the treatment of Anwar Ibrahim, the country’s opposition leader in jail

Najib-Razak-david-_3392712bDavid Cameron and Najib

Allegations that $700 million (£450 million) in state development funds ended up in Mr Najib’s personal bank accounts overshadowed a visit by the Prime Minister designed to build trade ties.

During a long, one-to-one meeting, Mr Cameron on Thursday urged Mr Najib to clean up his government.

In a pointed move, he then met with civil society leaders, including journalists, the G25 group of campaigners and lawyers, who are campaigning for greater democracy and a free press.Mr Cameron also challenged Mr Najib over the treatment of Anwar Ibrahim, the opposition leader in jail on sodomy charges.

Sir Kim Darroch, Mr Cameron’s national security adviser, met with Mr Anwar’s daughter who is playing a leading role in the opposition movement.They discussed building a free press and her father’s treatment.

The encounters followed demands from some opposition figures that Mr Cameron cancel the visit, during which he courted investors to fund the so-called Northern Powerhouse infrastructure projects in Britain.

The Prime Minister said: “It is right to go ahead with the visit, but nothing should be off the table. We should talk about these issues including the specific ones now,” he said.

“We always have discussions with civil society figures, anti-corruption campaigners, opposition leaders and all the rest and that will happen on this visit too.

“I don’t think it helps not traveling to a country and turning away. It is better to go and talk about these things.”

UK officials stressed the visit was to build relationships between “peoples”, not leaders.

After the one-to-one meeting, Mr Cameron is understood to have repeated the message to a wider gathering of Malaysian government figures in front of Mr Najib.

In an address in Singapore on Tuesday, Mr Cameron denounced corruption as the “enemy of progress” that held back growth and fuelled al-Qaeda and migration.

“We have a strong relationship and that enables us to talk difficult issues. I want to raise some of the issues I raised in my speech earlier in the week, such as ethics in business and fighting corruption,” he is understood to have said.

“We should be working together for an open society and open economy.”

Mr Najib is facing growing calls to resign over the allegations, which he denies. He this week fired attorney-general Abdul Gani Patail, who was investigating the scandal, and Muhyiddin Yassin, who had criticised him over the affair.

More on Greece’s Financial Debacle

July 21, 2015

Why Greece should QUIT the Eurozone

Shrey’s Finance Blog

A 15 year old’s thoughts about finance, economics and growing up as a trader!

Goldman's current CEO, Lloyd Blankfein.Taking Advantage of Greece

The debate over Greece leaving the Eurozone has been raging for a matter of years now. Some believe that Greece staying in the Eurozone is axiomatic, in that a Greek exit from the Euro would ravage the economy, perhaps causing hyperinflation. Others argue to look at the other side of the coin, and propagate the idea that a Greece exit would attenuate the suffering of the Greek people, as they might only have to suffer for the next 10 years, rather than the next 50. Personally, it is my firm belief; my avowal, if you will, that Greece should leave the eurozone, and start a new era, having ended the old era of economic pain.

Almost at the very command of Angela Merkel, the Greek Prime Minister Alexis Tsipras was forced to impose harsher austerity members than the previous weekend’s “No” vote had suggested. This paves the way for increased value added tax, increased privatisation of organisations previously owned by the state, and an increase in the retirement age, making the years that people have to work longer. The harsh austerity measures outlined in the plan forced on Tsipras make the deterioration of the economy an inevitability, which forces the Greeks to sell public assets. We can all agree on the fact that this is a malfeasance in itself, and that the Greek people should not be subjected to having the public assets sold in the interests of paying down Greece’s loans.

It can be clearly seen that Greece is in the midst of an economic depression. The latest measures imposed on Greece by Merkel will only make this worse, with the economy getting worse by the day. If Greece, however, exits the Euro and returns to the Drachma, they will have a substantially weaker currency on their hands, which will be a massive influence in helping Greece get themselves out of their deflation and debt. If Greece does get out of this negative spiral of deflation, they will be alleviated from the economic stagnation and high unemployment that currently pervades the country. This can only be a good thing, as more people can sustain a living due to an increase in jobs.

Moreover, it is arguable that the Greek economy will find it very hard to recover within the Eurozone. Greece needs a complete devaluation of its currency through a flexible exchange rate in order to make economic growth a likely scenario again. It is clear as a bell that the short term consequences would be quite damning for the Greek people, however this is a far better alternative than the other scenario, in which the people are suffering from hardship and poverty for the next half a century, potentially. This whole saga with Greece has affected other economies as well, which has led to fears of an Italian, or even a Spanish exit. If one of these two countries exits the eurozone, the ramifications of this would be irreversible for the euro and it would likely never bounce back.

Finally, it is a definite fact that this whole drama has caused deep political instability and rifts within the Eurozone, which means that the tension between the people in the Eurozone has never been higher. It was revealed earlier that a majority of German citizens want Greece to exit the Eurozone, and if this is the case, then there will be gargantuan pressure on Angela Merkel to force this to happen (some would argue that she is already exhibiting this). In order to put this tension within the Eurozone to rest, Greece needs to exit so we can have some semblance of peace in the Eurozone. All these factors combined show that it is in the best interests of all the countries involved that Greece does exit the Eurozone, and although this may have significant short-term impacts, it is definitely the best thing to do to secure long term economic prosperity for all involved.


Is Greece insolvent, and what would that mean for the euro?

Greece financial crisisAs the new Greek government tries to fumble its way through the business of running a struggling country, more and more questions are being asked about the future of Greece and of the Eurozone. As this column asks, we need to know if Greece is, actually insolvent, and if so, how that can be reconciled with its position within the Eurozone. – FD

By James Saft

Feb 3 (Reuters) – Much hangs on the interpretation of a word, and in the case of Greece and the euro zone that word is: insolvent.

New Greek Finance Minister Yanis Varoufakis has been unusually frank, likening his country’s case to that of a jobless person being advised to take out advances on her credit card to pay the mortgage.

“Would you advise them that they should continue to take these tranches of loans from the credit card in order to deal with what is essentially an insolvency problem?” Varoufakis said days after taking office under the new Syriza-party-led coalition.

“This is the trouble over the last five years with Greece. Our European partners and the previous Greek government have been extending and pretending.”

Keeping up the pretense that one can honor one’s debts if only given room to maneuver and time is an old if not glorious tradition among the deeply indebted. Coming straight out and coping to insolvency, on the other hand, is not.

That’s because certain things tend to follow from an admission of insolvency. Creditors decline new advances, existing loans, where possible, are called and the debts of the insolvent, Greece, are no longer acceptable as collateral.

Guntram Wolff, Director of the Bruegel think tank, argues that Varoufakis has set a rapid clock ticking, making its debts theoretically beyond the pale for the European Central Bank and creating a pressing need for a new deal.

“When a Finance Minister declares the insolvency of his country, then the quality of all the debt he has issued should fall below the relevant thresholds for Emergency Liquidity Assistance as well as standard monetary policy operations. While I do not believe the ECB will be so consequential as to do this immediately, I also cannot believe that it will just continue lending for a long time,” Wolff wrote in a Bruegel piece.

“By talking about insolvency, he has raised the funding needs for Greece’s banking system and made government fund-raising on capital markets impossible,” Wolff said.

Insolvency is a state,  Default is an event

Important to remember that extend and pretend as a strategy, while obviously unfair to many participants, can sometimes work as a means of keeping an entity ticking over. Many leading U.S. banks were very likely insolvent during the crisis.

Like all relationships, good and bad, extend and pretend requires the participation of two partners, the creditor and debtor. All true, but these things are never simple, and far less when, as in Greece, the insolvency includes a euro member state.

While Greece’s liabilities may shortly exceed its ability to repay, its creditors and partners maintain that with current low interest rates and a very long repayment schedule its ongoing debt maintenance burden is not out of line with that of France, for example.

Varoufakis sees the situation as a debt deflation spiral, in which the conditions imposed on Greece stifle demand, pushing prices and output lower and making the debt ultimately impossible to repay without ruin. There is some justice in this position.

Varoufakis’ slapping down of the insolvency card is best seen as a gambit to bring the other side more rapidly to the table and to extract better concessions.

As for the ECB, it seems to be standing on ceremony, maintaining its hands will be tied as for extending Greek banks more credit when the Greek program extension expires at the end of February.

“We (ECB) have our own legislation and we will act according to that,” ECB council member Erkki Liikanen said.

That angle, that the ECB will have to follow its rules and that Greek debt and its banks will be high and dry, is heavily overplayed, argues Karl Whelan, an economics professor at University College Dublin.

Whelan believes that even in March Greek access to ECB enabled credit will be based on discretionary decisions rather than mechanical outcomes. Greece and its negotiating partners can conceivably limp along together because both the ‘rules’ and the meaning of insolvency are such woolly concepts, offering insulation if not clarity.

Thus we have two sides, both seeking to pressure the other by creating what could be a false urgency to negotiate, and both hoping the other crumples and gives way. Meanwhile, capital, sensibly, flees Greece and the chance rises that an overplayed hand by either side leads to a bank run.

Do Employers in Malaysia discriminate ?

July 1, 2015

Do Employers in Malaysia discriminate ?

By Lee Hwok-Aun and Muhammed Abdul Khalid (

For a Full Report read:

Lee Hwok AunDo employers discriminate by race? The question typically elicits immediate and impassioned reactions from opposing ends.

Of course companies discriminate, some assert. It’s a known – even accepted – practice: Q companies prefer to hire Q people. It’s too hard to find suitable candidates from the Q group. The public sector practices pro-X policies, so the private sector reciprocates by favouring Y. Everyone has an anecdote to support their case.

No way, others retort. Why would profit-minded firms hire based on identity? They are only out to get the best quality person for the job. It wouldn’t make sense to prefer one race over another. If Z applicants do not get opportunities, it’s because they are less qualified. Anecdotes are supplied too.

This verbal and anecdotal dueling never ends. Both sides have valid but not decisive arguments, though positions are often exaggerated by personal bias and emotional baggage. Resolving the debate, while trying to avert combustion, requires objective empirical enquiry across a large sample of employers and employees.

Let us first specify the context. Sometimes we speak in code, but face it, the predominant images of labour market discrimination that form in our minds pit Chinese-owned private sector businesses against Malay graduates and a Malay dominated public sector against the non-Malay workforce.

How do we detect whether employers privilege one group and exclude another? We could ask them how they recruit, or ask graduates about their experience finding a job. However, their answers will very likely be biased. Racially discriminating employers will likely not reveal their true intentions, while graduates who feel they have been discriminated may overstate their grievance or may not be fully informed about the circumstances behind their rejected applications.

What about the effect of quality? If Chinese graduates are preferred in the private sector and Malays in the public sector, is it because of race, or is it academic attainment, compatibility of person with organisation, or other factors?

In a recent study, Muhammed Abdul Khalid and I tried to disentangle these gnarled issues. We conducted a field experiment that observes real decisions made by employers on persons they call for interview. Instead of asking employers whether they discriminate, we sent fictitious Malay and Chinese résumés to real job advertisements, then recorded the ones that got called back for interview and compared those with the ones that did not get called.

We ensured that the Malay and Chinese applicants in our pool were similarly qualified. We controlled for quality, in the way that experiments isolate the effect of the determinant in focus by controlling for – in other words, taking away – the effects of other determinants.

Here’s how the experiment went. We generated a pool of fictitious résumés of fresh degree graduates – credible job applicants with invented names and addresses. Résumés were clustered by quality, based on cumulative grade point average (CGPA). Those with CGPA of 3.1 -3.9 were considered “above average”, and those in the 2.2-3.0 range we classified as “below average”. Those with higher CGPA tended to be more impressive in terms of extra-curricular activities, language abilities and other positively regarded attributes.

Since we used CGPA to indicate quality, we chose not to include foreign university graduates. Foreign universities, especially in English-speaking countries, are more highly regarded; holding a foreign degree thus corresponds with being a higher quality applicant. To remove this overlap with CGPA as the quality marker, we confined our applicant pool to graduates of local universities – both public and private institutions.

Our research assistants sent four applications to entry level online job advertisements for engineering and accounting positions, one for each combination of race and quality: above average Malay, above average Chinese, below average Malay, below average Chinese. In total, we sent 3012 resumes to 753 jobs in the private sector. We attempted to apply to public sector jobs as well, but unfortunately could not proceed due to insurmountable technical hurdles

We then recorded callbacks for interview, and observed whether résumés of one race are significantly more likely to be called, after controlling for quality. Just to be clear, let me state again the basic scenario we are scrutinizing: when employers evaluate job applicants that are comparable in all aspects except for race, are they more inclined to one race over the other?

We also compiled data on the companies to which we sent job applications, and derived a profiled for each company based on the group holding a majority of directorships and shareholdings and therefore most likely to exercise control. The main categories that emerged were Chinese-controlled, foreign-controlled (including foreign-local joint ventures), and Malay-controlled, with a smattering of Indian-controlled and mixed-controlled companies (where no group clearly exerted control).

Similar experiments have been conducted and validated around the world, notably in the UK, US, India, and France. All of them find the presence of discrimination, to varying extents, based on race, ethnicity, gender, or caste.

Ours is the first study in Malaysia employing this method. And what did we find? Race matters – a lot. Chinese applicants are much more likely than Malay applicants to be called for interview. Quality also matters, but much less so.

The numbers give us a better sense of our main findings. As shown in the first line of the table, Chinese applicants on the whole registered a callback rate of 22.1 – that is, for every 100 Chinese résumés sent to job ads, 22.1 got called for interview. For every 100 Malay résumés sent, only 4.2 got called for interview. The ratio of these callback rates indicates strong preference for Chinese graduates. For every Malay applicant that gets called, 5.3 Chinese applicants get called. Discrimination was significantly larger in engineering jobs than in accounting jobs.

The gap is smaller, but still large, for higher quality résumés. An above average Chinese applicant is 4.5 times more likely to get called than an above average Malay, while the corresponding ratio for below average Chinese and below average Malays is 6.5.

These findings robustly indicate that private sector employers discriminate in favour of Chinese fresh graduate applicants and against their Malay counterparts. This is not surprising, although the magnitudes probably exceed our hunches.

Resume quality Chinese  callback rate

(per 100)

Malay callback rate

(per 100)

Chinese callback rate per Malay callback rate
Overall 22.1 4.2 5.3
Above average 23.5 5.2 4.5
Below average 20.7

Since publicizing these findings in November 2012, two broad criticisms have recurred that are worth discussing here. The first criticism denies that discrimination could occur or tries to explain it away, based on personal or company experience. However, such views overlook important aspects of our research and the extent to which we control for quality.

We have noticed that people, especially employers, refer to scenarios or experiences of filtering out Malay applicants before the interview stage because their academic records, on average, fall short. Sadly but truly, the educational achievement gap between groups remains substantial at graduation from university.

However, this study precisely addresses the issue by ensuring that equivalent numbers of Malay and Chinese applicants attain high CGPAs. Our data show that even top of the class Malays, graduating with CGPAs above 3.6 from the more reputable local universities, are considerably less likely than even below average Chinese graduates to be called for interview.

Another criticism asserts that the study merely confirmed what we “already know” and is thus worth little. True, we may have already known that discrimination existed – but only from personal observation, experience, hearsay, or presumption. Now we have empirical proof, from sample of over 3000 job applications and 750 companies.

More importantly, though, let us not be too convinced and comfortable that we already know all there is to know on the matter. Indeed, we found out much more than we thought we knew. Within the Chinese and Malay applicant pools, personal characteristics besides race impact on the prospects for interview.

Take Chinese proficiency, which is often divisive in discourses on graduate employment. Actually, it should be a more unifying issue. Our study finds that Malays who declare proficiency in Chinese language are more likely to be called for interview than Malays who do not. Chinese proficiency is also an advantage for Chinese applicants, of course.

We also found that type of university or tertiary institution makes a difference, but not entirely in line with common perceptions of “unemployable” public university graduates. Malays holding degrees from Universiti Malaya, Universiti Sains Malaysia, Universiti Kebangsaan Malaysia and Universiti Putra Malaysia – the major and more established public universities – enjoy better than average prospects for getting an interview.

The outlook for University Teknologi MARA (UiTM) graduates varies across job type. In engineering jobs, they are evaluated on par with peers from major public universities, but UiTM accounting graduates are viewed less favourably. On the whole, it is Malay graduates of private institutions who face the slimmest chances of getting called for interview.

Of course, this study would not be quite complete without examining if a hiring company’s profile affects job applicant’s chances. Well, it does, but it is not a simple, caricatured story of Chinese companies obstructing Malay entry. For accounting positions, Malays applying to Chinese-controlled companies are less likely to be called back, compared to Malays seeking work in Malay-controlled or foreign-controlled companies.

For engineering jobs, our results are most interesting. A foreign-controlled company is least likely to call a Malay applicant. However, a Malay engineering graduate has a better chance of getting an interview in a Chinese-controlled firm than a Malay-controlled firm.

We trust and hope our work has shed cool light on a heated and nationally vital subject. Undeniably, this study has limitations.

This research just examines discrimination in selection for interview, not the job offer stage, let alone employment and promotion, which impact further on our economy and society. Investigating discrimination at those levels is exceedingly more controversial and difficult, if not impossible, since it will involve research assistants posing in person as job candidates.

Nonetheless, our findings have broader implications. Our evidence of discrimination means that qualified Malay applicants are potentially being overlooked and excluded from job opportunities. Also, if discrimination occurs at this stage, it probably occurs at later stages as well – although the magnitude is likely to be less than what we observe in this study. Employers are more likely to discriminate at this early job application stage, because there is much less information about job applicants than employed personnel, and the process is impersonal and removed from scrutiny.

More importantly, though perhaps frustratingly for some readers, this research does not directly address the burning question: why do employers discriminate? We too would dearly like to know, but our chief objective was to probe and measure discrimination, and that’s made for a big enough project.

Before generalizing anecdotes or pondering why discrimination occurs, we ought to investigate its form and prevalence, and this field experiment has produced a careful, methodical and objective gauge of this phenomenon.

While we have not produced data to empirically inform why employers discriminate, we have highlighted the complexities of the problem and the need for further investigation.

Our findings demonstrate that factors not revealed in résumés have a major bearing on graduates’ selection for interview – whether related to attitude, compatibility of applicant with company, past hiring experience, or other factors and combinations of factors. Perhaps some employers expect Malay applicants to not socially fit into the company and hence do not bother calling them for interview. Perhaps they feel a need and justification for private sector to counterweigh the pro-Malay policies public sector. We cannot confidently evaluate these arguments without further study. Emphatically, we must not be hasty to blame the discrimination we detect on malevolent motives and racial stereotyping, prejudice or bigotry.

Clearly, there’s more work to be done in this thorny, fertile field. We hope that the cause will be taken up by the academic community, private organizations, governments,… indeed, all of society. These are shared problems demanding shared solutions.

*Dr Lee Hwok Aun is Senior Lecturer in the Department of Development Studies, Universiti Malaya. Dr Muhammed Abdul Khalid is now Research Fellow at Malaysian Institute of Economic Research 

UMNO and all its linen are out on the international washing line

June 20, 2015

UMNO and all its linen are out on the international washing line

by Terence

COMMENT The unremitting battle between Dr Mahathir Mohamad and Prime Minister Najib Abdul Razak has now overflowed domestically to reach the pages of the New York Times (NYT).

Foreign Minister Anifah Aman  has taken to the letters column of the NYT to denounce Mahathir’s washing of allegedly fabricated linen in overseas media outlets.

Anifah’s letter is in presumable response to adverse comments made by Mahathir to the NYT on the imbroglio surrounding sovereign wealth fund, IMDB, and other issues affecting Prime Minister Najib Razak.

In an intervew with the NYT, Mahathir has described Najib’s conduct as verging on the “criminal”, a term that must have prompted Anifah’s epistolary response which contains the accusation that it was Mahathir who created the “yes men” culture in UMNO, a charge that is certain to beget another round of bitter recrimination in an already acrimonious tussle between the ex-PM and the sitting one.

Reverberations of domestic disputes in foreign capitals are a sign that the the crisis has raged past the point of local containment; it is the closest thing one could have to confirmation that the contretemps has gone beyond the bounds amenable to mediation and negotiation.

In times past, UMNO-BN leaders would lambast opposition politicians whenever the latter spoke badly about the government in foreign councils and shores.

This practice of hanging dirty linen out to dry in foreign forums has come in for a bad rap in domestic circles since the time Australian Labor Party leader Arthur Calwell hailed Lee Kuan Yew as a progressive leader during a visit by the PAP chief Down Under in the mid-1960s when Singapore was part of the federation.

“But he has some tough nuts to crack in UMNO,” quipped Calwell, whose remarks touched off a barrage of criticism of Lee from UMNO types at the time.

Thus began the era in Malaysian politics where domestic critics who vent their spleen about their country in foreign circles are held up to the opprobrium reserved for fornicating preachers and shady scientists: they are told that their betrayals consign them to the lower rungs of the social totem pole.

Even when these criticisms are uttered by somebody of nonpartisanTun Suffian Hashim stature such as Suffian Hashim (photo), the former Lord President who in 1990 told a Singapore audience that had sought his views on the judicial crisis involving Salleh Abbas’s impeachment in 1988, that the average UMNO leader cared only for his Mercedes Benz and other perks, the reaction is unseemly adverse.

In recent months, with respect to Mahathir’s differences with Najib on the IMBD issue, the former PM has made similar remarks about the moral fibre of UMNO leaders to that made by Suffian to his Singapore audience a quarter century ago.

Marking a nadir in relations

Mahathir joined in the imprecations hurled against Suffian at the time of former judicial chief’s oft-repeated public dismay at what had happened to Salleh Abbas and how it marked a nadir in relations between the executive and the judiciary in Malaysia.

The issue of the morality of berating one’s country abroad aside, the spilling of the crisis between Mahathir and Najib in the newspaper of record in America represents the first time a local conflagration has generated publicity in far away places.

On the Richter scale of political earthquakes, this dispute is not far short of 10. Previously, reverberations from domestic political earthquakes would only register in one or two ASEAN capitals, Jakarta more likely than the others, because of ties of language and kinship between Indonesia and Malaysia.

Even then, interest in Jakarta in what some luminary from Malaysia says about someone under interdiction in Kuala Lumpur would not bulk large in the public estimation.

One remembers the derision that Tun Ghafar Baba was subjected to when he went to the Indonesian capital to explain the action taken by Mahathir against Anwar Ibrahim in late 1998 after the Prime Minister had sacked his deputy from government and UMNO and had him charged with corruption and sodomy.

Tun Ghafar Ghafar (photo) hurriedly returned home after he reacted caustically to Indonesian cynicism about the accusations against Anwar by saying that Malaysia did not want leaders of Anwar’s alleged sexual orientation but that if Indonesia did, Malaysia would be glad to offer them to its neighbour.

The remarks caused a furore that was doused only by Ghafar’s swift exit from the Indonesian capital and Wisma Putra’s backroom diplomacy at mollifying ruffled Indonesian feathers.

Malaysia’s domestic imbroglios usually do not resonate in capitals beyond the ASEAN perimeter, but the IMDB contretemps, due to the transnational reach of its money trails and the subterranean alleyways in which some of its operatives appear to have forged its schemes, is the juiciest thing to have happened since sovereign wealth funds became a matter of interest to unelected business coteries blithely unmindful of French novelist Honore de Balzac’s warning – that behind every great fortune there lies a crime.

Honore de Balzac

For these reasons, 1MDB has become an issue whose reverberations have drawn the attention of the NYT, still the biggest name among newspapers of record. Now UMNO and all its linen are out on the international washing line, a dubious distinction in this the 69th year of its founding.


Malaysian leader gets a needed dose of real talk

June 19, 2015

Malaysian leader gets a needed dose of real talk

by William Pesek

Mahathir Mohamad-2014Asia-based journalists have missed Tun Dr Mahathir Mohamad since he left office in 2003. The former Malaysian Prime Minister’s mercurial governing style and fiery rhetoric made for great copy. I was in a Hong Kong ballroom in 1997 when Dr Mahathir ― the man credited with turning the agricultural backwater Kuala Lumpur, which literally means “muddy river,” into one of Asia’s most impressive skylines ― responded to his country’s crashing economy by castigating hedge fund managers. He singled out George Soros as a “moron.”

Dr Mahathir now has a new target – Datuk Seri Najib Razak, Malaysia’s current Prime Minister. The daily squabbling between Najib and his predecessor has unsettled Malaysian markets, with the ringgit falling to its lowest value in a decade. But Najib has nobody to blame but himself for the attacks, given the country’s underlying economic distress. Malaysia’s prolonged slow growth, which has Fitch now threatening a downgrade of the country’s credit ratings, traces back to Najib’s refusal, or inability, to make good on his pledges to dismantle race-based policies that strangle innovation, feed cronyism and repel multinational companies.

You don’t have to take Dr Mahathir’s word for it ― Malaysia’s most successful entrepreneurs say the same thing. Just ask Tan Sri Tony Fernandes of AirAsia.

Tony-Fernandes-007The man often referred to Asia’s Richard Branson has been waging his own battle with the government on Twitter. Fernandes has been decrying, 140 characters at a time, the Malaysian government’s misguided priorities and its utter lack of accountability. “Government and opposition spend so much time on race and religion. Will there ever be a truly Malaysian party that puts people first?” he tweeted recently. Another message reads: “Good education, good hospitals, fair distribution of wealth, an economy that creates jobs, honest clean government. Transparent leadership.”

My favourite was Fernandes’s take on the kind of national culture the government should be cultivating: “Where all Malaysians respect each other’s culture, religion but work together to benefit all. If you need an example look at AirAsia.”

This last point deserves closer attention. AirAsia has admittedly had a rocky six months, beginning in December with its first crash (killing all 155 on board) and culminating in today’s share-price plunge (its accounting practices are being questioned by GMT Research). But Fernandes has earned his status as a major player ― and Malaysia’s most recognisable face ― on the global stage. With his Bransonesque daring and social-media savvy, the billionaire Formula One team owner personifies the heights to which the Malaysian economy might climb if the country’s dysfunctional politics didn’t stand in the way.

Indeed, AirAsia might never have gotten off the ground if Najib had been in office at the time of its inception, rather than Dr Mahathir. Fernandes had three big strikes against him when he started out 14 years ago: He’s not Malay (the majority ethnicity coddled by Malaysia’s affirmative-action policies); he was intent on challenging the flagship Malaysian Airlines; and he was starting an airline just as the September 11, 2001 terrorist attacks in the US was sending the industry into the throes of an existential crisis.

Nonetheless, Dr Mahathir’s government gave Fernandes the green light to create the company. In the interim, AirAsia has literally changed the world. Although the company’s “Now Everyone Can Fly” slogan seemed somewhat trite at the time of its founding, it has gone on to inspire myriad developing-world copycats.

Malaysia needs more homegrown success stories that raise living standards and the country’s global status. Sadly, when Malaysia makes headlines these days, they’re often about the government’s dysfunction ― whether the never-ending effort to jail opposition leader Datuk Seri Anwar Ibrahim on sodomy charges, legal tussles over who exactly is permitted to utter the word “Allah,” or clueless castigations of foreign tourists (a group of whom allegedly caused an earthquake by taking nude photos atop Mount Kinabalu).

Najib and the Mad Mullah of PASSince becoming Prime Minister in 2009, Najib should have worked to level Malaysia’s playing field for would-be entrepreneurs. Instead, he has protected race-based quotas and deepened the economy’s reliance on oil and gas production. Najib seems to be more concerned about retaining power for his ruling Barisan Nasional coalition, which has been in power for almost six decades, than attending to the aspirations of Malaysia’s 30 million people.

Meanwhile, some of his supposed reforms are dragging down the Bloombergeconomy. A case in point is 1Malaysia Development, the state investment company Najib created, and which Dr Mahathir claims is missing “huge sums of money” and buckling under debt. The scandal has contributed to the plunging of Malaysia’s currency some 13 per cent over the past 12 months.

The ringgit’s fluctuations are a decent summary of the country’s wayward course in recent years. It’s now close to 3.80 to the dollar, the level where Dr Mahathir pegged it during the 1997-1998 Asian crisis. Dr Mahathir now says it may be time to peg the currency anew to stabilise it. That speaks to how little progress Najib has made internationalising the economy ― and how urgent new political leadership (or a return to old political leadership, as it were) would be for entrepreneurs like Fernandes.


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