Numbers and Shifting Assets –Old Game by Sime Darby


April 13, 2017

A QUESTION OF BUSINESS | Numbers and Shifting Assets –Old Game by Sime Darby

by P. Gunasegeram@www.malaysiakini.com

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Sime Darby Restructuring benefits Investment Bankers, but not its shareholders. Let the evidence of its past merger and demerger exercises confirm this view.–Din Merican

It will be more accurate to say that plantation-based conglomerate Sime Darby Bhd’s proposed demerger of its businesses will not create value by itself but only if benefits of the intended demerger, coming nine years after its massive merger, is realised by proper execution.

The billion-ringgit question this time around is whether the proposed demerger will create value for the group when it seemed not to have the last time around when it was merged with other major companies.

Recall that this conglomerate, majority owned by Permodalan Nasional Bhd or PNB, the operators of the national unit trust scheme, merged mainly with Guthrie and Golden Hope – both under the PNB stable too – to become the largest plantation operator in the world in 2008.

Initially at that time, the expensive merger, costing some RM500 million in fees alone, was greeted by an enthusiastic market and galloping prices of palm oil which saw Sime Darby become the most valuable company on the local market for a while.

Eight listed entities were involved in the merger, proposed end-November 2006. They were Sime Darby Berhad, Sime Engineering Services Berhad, Sime UEP Properties Berhad, Golden Hope Plantations Berhad, Mentakab Rubber Company (Malaya) Berhad, Kumpulan Guthrie Berhad, Guthrie Ropel Berhad and Highlands & Lowlands Berhad.

The early reception by the market for the merger was enthusiastic. The share price almost doubled to RM13.30 by January 11, 2008 after the completion of the merger, from RM6.75 when the deal was announced end-November 2006.

But Sime Darby would never hit that level again. Barely two years later, its energy and utilities division chalked up heavy losses of over RM2 billion, entering into areas it had no knowledge off. Its then-CEO faced charges in court but was subsequently cleared.

Paradoxically, the energy and utilities division was a minnow but was able to get contracts because of Sime Darby’s size – it turns out that size in this case was not used to get viable contracts but enter into risky ones.

Despite a new CEO, Mohd Bakke Salleh, who sold the errant division in 2011, Sime Darby’s share price has been lacklustre and languished at around the RM7-8 level until excitement over the demerger emerged last November. The share trades around RM9.30 now.

Still Sime Darby is big, representing PNB’s largest investment in the stock market after Malayan Banking and is regularly among the top five most valuable companies listed on the Kuala Lumpur stock market, with a value of over RM60 billion. And it’s the only conglomerate in the top 10.

However, although known as a conglomerate, it continues to be heavily plantation based with over half of profit coming from that sector. Its fortunes are therefore intimately tied with the price of palm oil, its main plantation produce.

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Bakke said at a press conference end-November last year that the plantations unit may be demerged and listed separately next year, followed by its property division. That had sparked some interest in Sime Darby shares again.

In January, Bakke confirmed in a statement that Sime Darby will create “pure play” listed entities for its plantation and property divisions. Others, including its BMW distributorship, port operations and trading, will remain under the existing listed entity.

Meantime, PNB group chairperson, former Minister in the Prime Minister’s Department Abdul Wahid Omar, said last month that excitement over the restructuring of Sime Darby amongst others have led to a RM20 billion increase in the value of PNB’s six main listed entities.

True value creation

However, such an increase in market value arising from perception can be very short-lived as illustrated in the previous share price movements of Sime Darby. Short-term market sentiment should never be mistaken for true value creation which is creating value in the production process by improving productivity.

At the end of the day, that is the only way to create value – by improving productivity. Is a merger or demerger going to create value by itself? No, never.

It can if a merger results in economies of scale or where there are overlapping functions in which case staff can be laid off. That effectively means less people doing more work – an increase in productivity. But even so, the truly enlightened company will think of redeploying staff into other areas instead of laying off, although that’s the quickest way.

But most mergers destroy value – studies at the time of Sime Darby’s merger in 2008 showed that 85 percent destroyed value. It’s not hard to see why – sometimes mergers take years before their values can be realised and valuable time is wasted. Meantime, productivity suffers.

In a demerger, it is possible that the increased focus and concentration on the core business can result in higher productivity but there has to be a focus on that by competent management.

On balance, demergers may have better chances of creating value than mergers but the most important factor is who is managing the change. If the same people are doing the same things in the same old, expect neither mergers nor demergers to create value.


P GUNASEGARAM says value cannot be created by simply rearranging the same assets differently – someone has to work the assets more efficiently. E-mail: t.p.guna@gmail.com.

Kampong Chhnang Province
Related image
Kampong Chhnang is one of the central provinces of Cambodia. Neighboring provinces are Kampong Thom, Kampong Cham, Kandal, Kampong Speu and Pursat. The capital city of Kampong Chhnang Province is Kampong Chhnang. Wikipedia
Area: 5,521 km²
Population: 472,616 (2011)
Area rank: Ranked 14th

NOTE: I am on an assignment to Kompong Chhnang from April 13-15 and will not be blogging during this period. I will also not be on Facebook either. Take care.–Din Merican

GDP or GNH (The Bhutan Way)?


March 24, 2017

GDP or GNH (The Bhutan Way)–Maybe it’s Time to screw the  Economists and start looking at alternative ways to measure what makes life worthwhile

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Listen to this TED presentation by Chip Conley and reflect. I enjoyed it and wonder why we continue to measure only the measurable (the tangibles) and ignore the intangibles. As  someone who is trained in Economics (and does being taught this academic discipline make a economist?), I am wonder how it is that  I can be so misled and still have not abandoned GDP as a measurement of national wealth if I know it is misleading when intangibles matter more today. Maybe it is a force of habit. Should be I Aristotelian or Maslowian?  Let me know what you think.–Din Merican

 

Remembering Herman Kahn–A Pioneer in Future Studies–Thinking the Unthinkable


February 6, 2017

Remembering Herman Kahn–A Pioneer in Future Studies

In Defense of Thinking

by Herman Kahn

Social inhibitions which reinforce natural tendencies to avoid thinking about unpleasant subjects are hardly uncommon.–Herman Kahn

https://hudson.org/research/2211-in-defense-of-thinking

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Futurist Herman Kahn with President Gerald Ford and Donald Rumsfeld

Seventy-five years ago white slavery was rampant in England. Each year thousands of young girls were forced into brothels and kept there against their will. While some of the victims had been sold by their families, a large proportion were seized and held by force or fraud. The victims were not from the lower classes only; no level of English society was immune to having its daughters seized. Because this practice continued in England for years after it had been largely wiped out on the Continent, thousands of English girls were shipped across the Channel to supply the brothels of Europe. One reason why this lasted as long as it did was that it could not be talked about openly in Victorian England; moral standards as to subjects of discussion made it difficult to arouse the community to necessary action. Moreover, the extreme innocence considered appropriate for English girls made them easy victims, helpless to cope with the situations in which they were trapped. Victorian standards, besides perpetuating the white slave trade, intensified the damage to those involved. Social inhibitions which reinforce natural tendencies to avoid thinking about unpleasant subjects are hardly uncommon.

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A Message  for Donald J. Tump

The psychological factors involved in ostrich-like behavior have parallels in communities and nations. Nevertheless, during the sixty years of the twentieth century many problems have come increasingly into the realm of acceptable public discussion. Among various unmentionable diseases, tuberculosis has lost almost all taint of impropriety; and venereal disease statistics can now be reported by the press. Mental illness is more and more regarded as unfortunate instead of shameful. The word “cancer” has lost its stigma, although the horror of the disease has been only partially abated by medical progress.

Despite the progress in removing barriers in the way of discussing diseases formerly considered shameful, there are doubtless thousands going without vital medical treatment today because of their inhibitions against learning, thinking, or talking about certain diseases. Some will not get treatment because they do not know enough to recognize the symptoms, some because they are consciously ashamed to reveal illness, and some because they refuse to think about their condition it seems too horrible to think about. It may now be possible to condemn unequivocally the extremes of Victorian prudery, but less doctrinaire forms of ostrichism must be considered with more care; they are, after all, often based on healthy instincts.

Everyone is going to die, but surely it is a good thing that few of us spend much time dwelling on that fact. Life would be nearly impossible if we did. If thinking about something bad will not improve it, it is often better not to think about it. Perhaps some evils can be avoided or reduced if people do not think or talk about them. But when our reluctance to consider danger brings danger nearer, repression has gone too far.

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In 1960 I published a book (pic above) that attempted to direct attention to the possibility of a thermonuclear war, to ways of reducing the likelihood of such a war, and to methods for coping with the consequences should war occur despite our efforts to avoid it. The book was greeted by a large range of responses, some of them sharply critical. Some of this criticism was substantive, touching on greater or smaller questions of strategy, policy, or research techniques. But much of the criticism was not concerned with the correctness or incorrectness of the views I expressed.

It was concerned with whether any book should have been written on this subject at all. It is characteristic of our times that many intelligent and sincere people are willing to argue that it is immoral to think and even more immoral to write in detail about having to fight a thermonuclear war.

By and large this criticism was not personal; it simply reflected the fact that we Americans and many people throughout the world are not prepared to face reality, that we transfer our horror of thermonuclear war to reports about the realities of thermonuclear war. In a sense we are acting like those ancient kings who punished messengers who brought them bad news. This did not change the news; it simply slowed up its delivery. On occasion it meant that the kings were ill informed and, lacking truth, made serious errors in judgment and strategy. In our times, thermonuclear war may seem unthinkable, immoral, insane, hideous, or highly unlikely, but it is not impossible.

To act intelligently we must learn as much as we can about the risks. We may thereby be able better to avoid nuclear war. We may even be able to avoid the crises that bring us to the brink of war. But despite our efforts we may some day come face to face with a blunt choice between surrender or war. We may even have war thrust upon us without being given any kind of choice. We must appreciate these possibilities. We cannot wish them away. Nor should we overestimate and assume the worst is inevitable. This leads only to defeatism, inadequate preparations (because they seem useless), and pressures toward either preventive war or undue accommodation.

Many terrible questions are raised when one considers objectively and realistically the problems created by the cold war and the armaments race. For some years I have spent my time on exactly these questions both in thinking about ways to prevent war, and in thinking about how to fight, survive, and terminate a war, should it occur. My colleagues and I have sought answers to such questions as these: How likely is accidental war? How can one make it less likely? How dangerous is the arms race today? What will it be like in the future? What would conditions be if a nuclear attack leveled fifty of America’s largest cities? Would the survivors envy the dead? How many million American lives would an American President risk by standing firm in differing types of crises? By starting a nuclear war? By continuing a nuclear war with the hope of avoiding surrender? How many lives would he risk? How is it most likely to break down? If it does break down, what will be the consequence? Are we really risking an end to all human life with our current system? If true, are we willing to risk it? Do we then prefer some degree of unilateral disarmament? If we do, will we be relying on the Russians to protect us from the Chinese? Will the world be more or less stable? Should we attempt to disarm unilaterally? If the answers to these last questions depend on the degree of damage that is envisaged, are we willing to argue that it is all right to risk a half billion or a billion people but not three billion?

There seem to be three basic objections to asking these types of questions:

1. No one should attempt to think about these problems in a detailed and rational way. 2. What thinking there is on these problems should be done in secret by the military exclusively, or at least by the government. 3. Even if some of this thinking must be done outside the government, the results of any such thought should not be made available to the public.

It is argued that thinking about the indescribable horror of nuclear war breeds callousness and indifference to the future of civilization in our planners and decision makers. It is true that detailed and dispassionate discussion of such questions is likely to look incredibly hard-hearted. It should also be clear, at least to thoughtful readers, that such questions must be considered. The reality may be so unpleasant that decision makers would prefer not to face it; but to a great extent this reality has been forced on them, or has come uninvited.

Thanks to our ever-increasing technology, we are living in a terrible and dangerous world; but, unlike the lady in the cartoon we cannot say, “Stop the world, I want to get off. We cannot get off. Even the most utopian of today’s visionaries will have to concede that the mere existence of modern technology involves a risk to civilization that would have been unthinkable twenty-five years ago. While we are going to make major attempts to change the nature of this reality, accepting great risks if necessary, most of us are unwilling to choose either a pronounced degree of unilateral disarmament or a preventive war designed to “settle” our problems one way or another. We therefore must face the facts that thermonuclear bombs now exist [and that] unless we are willing to abdicate our responsibilities, we are pledged to the maintenance of terrifying weapon systems with known and unknown, calculable and incalculable risks, unless and until better arrangements can be made.

If we are to have an expensive and lethal defense establishment, we must weigh all the risks and benefits. We must at least ask ourselves what are the likely and unlikely results of an inadvertent war, the possibilities of accident, irresponsibility, or unauthorized behavior on the other side as well as on our own.

A variation of the objection to careful consideration of these problems focuses on the personality of the thinker. This argument goes: Better no thought than evil thought; and since only evil and callous people can think about this, better no thought. Alternatively, the thinker’s motives are analyzed: This man studies war; he must like war much like the suspicion that a surgeon is a repressed sadist. Even if the charge were true, which in general it is not, it is not relevant. Like the repressed sadist who can perform a socially useful function by sublimating his urges into surgery, the man who loves war or violence may be able to successfully sublimate his desires into a careful and valuable study of war. It does indeed take an iron will or an unpleasant degree of detachment to go about this task. Ideally it should be possible for the analyst to have a disciplined empathy. In fact, the mind recoils from simultaneously probing deeply and creatively into these problems and being conscious at all times of the human tragedy involved.

This is not new. We do not continually remind the surgeon while he is operating of the humanity of his patient. We do not flash pictures of his patient’s wife or children in front of him. We want him to be careful, and we want him to be aware of the importance and frailty of the patient; we do not want him to be distracted or fearful. We do not expect illustrations in a book on surgery to be captioned: “A particularly deplorable tumor,” or “Good health is preferable to this kind of cancer.” Excessive comments such as, “And now there’s a lot of blood,” or “This particular cut really hurts,” are out-of-place although these are important things for a surgeon to know. To mention such things may be important. To dwell on them is morbid, and gets in the way of the information. The same tolerance needs be extended to thought on national security.

Some feel that we should consider these problems but view them with such awe and horror that we should not discuss them in normal, neutral, professional everyday language. I tend to disagree, at least so far as technical discussions and research are concerned. One does not do research in a cathedral. Awe is fine for those who come to worship or admire, but for those who come to analyze, to tamper, to change, to criticize, a factual and dispassionate, and sometimes even colorful, approach is to be preferred. And if the use of everyday language jars, that is all the more reason for using it. Why would one expect a realistic discussion of thermonuclear war not to be disturbing?

The very complexity of the questions raised is another reason why many object to their consideration. There is no doubt that if we reject hard thinking about alternatives in favor of uncritical acceptance of an extreme position we make the argument simpler and most of us prefer simple arguments.

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To summarize: Many people believe that the current system must inevitably end in total annihilation. They reject, sometimes very emotionally, any attempts to analyze this notion. Either they are afraid of where the thinking will lead them or they are afraid of thinking at all. They want to make the choice, between a risk and the certainty of disaster, between sanity and insanity, between good and evil; therefore, as moral and sane men they need no longer hesitate. I hold that an intelligent and responsible person cannot pose the problem so simply.

The last objection to detailed thought on thermonuclear war rests on the view that the subject is not only unpleasant but difficult. Many people feel that it is useless to apply rationality and calculation in any area dominated by irrational decision makers. This is almost comparable to feeling that it would be impossible to design a safety system for an insane asylum by rational methods, since, after all, the inmates are irrational. Of course, no governor or superintendent would consider firing the trained engineer, and turning the design over to one of the lunatics. The engineer is expected to take the irrationality of the inmates into account by a rational approach. Rational discussions of war and peace can explicitly include the possibility of irrational behavior.

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The Danger for America Today–The Unthinkable is Thinkable under Donald J. Trump  45th  POTUS

Of course, analysts may be misled by oversimplified models or misleading assumptions, and their competence readily attacked. However, except for irrelevant references to game theory and computers, such attacks are rare, and are usually so half-hearted that it is clear that their main motivation is not to expose incompetency. Given the difficulty of the problems, one would expect the critics to work more effectively on the obvious methodological problems and other weaknesses of present-day analysts.

Critics frequently refer to the icy rationality of the Hudson Institute, the Rand Corporation, and other such organizations. I’m always tempted to ask in reply, “Would you prefer a warm, human error? Do you feel better with a nice emotional mistake?” We cannot expect good discussion of security problems if we are going to label every attempt at detachment as callous, every attempt at objectivity as immoral. Such attitudes not only block discussion of the immediate issues, they lead to a disunity and fragmentation of the intellectual community that can be disastrous to the democratic dialogue between specialist and layman. The former tends to withdraw to secret and private discussions; the latter becomes more and more innocent, or naive, and more likely to be outraged if he is ever exposed to a professional discussion.

Finally, there is the objection that thermonuclear war should not, at least in detail, be discussed publicly. Even some who admit the usefulness of asking unpleasant questions have advocated raising them only in secret. One objector pointed out to me that if a parent in a burning building is faced with the problem of having to save one of two children, but not both, he will make a decision on the spur of the moment; it wouldn’t have made any difference if the parent had agonized over the problem ahead of time, and it would have been particularly bad to agonize in the presence of the children. This may be true, but other considerations dominate our nation’s choices; our capabilities for action and the risks we are assuming for ourselves and thrusting on others will be strongly influenced by our preparations both intellectual and physical.

Other reasons for this objection to public discussion range all the way from concern about telling the Soviets too much, and a fear of weakening the resolve of our own people, through a feeling that public discussion of death and destruction is distastefully comparable to a drugstore display of the tools, methods, and products of the mortician. Perhaps some or all of these objections to public discussion are well taken. I do not know for sure, but I think they are wrong.

They are wrong if we expect our people to participate rationally in the decision-making process in matters that are vital to their existence as individuals and as a nation. As one author has put it: “In a democracy, when experts disagree, laymen must resolve the disagreement.” One issue is whether it is better that the lay public, which will directly or indirectly decide policy, be more or less informed. A second issue is whether the discussion itself may not be significantly improved by eliciting ideas from people outside of official policy-making channels.

There are in any case at least two significant obstacles to full public debate of national security matters. The first, of course, is the constantly increasing problem of communication between the technologist and the layman, because of the specialization (one might almost say fragmentation) of knowledge. The other lies in the serious and paramount need to maintain security. Technical details of weapons’ capabilities and weaknesses must remain classified to some degree. Nonetheless, technical details may be of vital importance in resolving much broader problems. (For instance, who can presume to say whether the military advantages of atomic weapons testing outweigh the obvious political and physical disadvantages unless he knows what the military advantages are.) Moreover, those who feel that in some areas “security” has been unnecessarily extended must concede that in certain areas it has its place. To that extent the functioning of the democratic processes must be compromised with the requirements of the cold war and modem technology. Fortunately, non-classified sources often give reasonable approximations to the classified data. I would say that many of the agonizing problems facing us today can be debated and understood just about as easily without classified material as with provided one carefully considers the facts that are available.

It is quite clear that technical details are not the only important operative facts. Human and moral factors must always be considered. They must never be missing from policies and from public discussion. But emotionalism and sentimentality, as opposed to morality and concern, only confuse debates. Nor can experts be expected to repeat, “If, heaven forbid. ….,” before every sentence. Responsible decision makers and researchers cannot afford the luxury of denying the existence of agonizing questions. The public, whose lives and freedom are at stake, expects them to face such questions squarely and, where necessary, the expert should expect little less of the public.

*Herman Kahn, Founder, Hudson Institute

January 1st, 1962 Adapted from Thinking About the Unthinkable (Horizon Press), © Hudson Institute

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Fareed Zakaria from Davos, Switzerland


January 25, 2017

Fareed Zakaria from Davos, Switzerland

https://www.washingtonpost.com/opinions/everyone-seems-to-agree-globalization-is-a-sin-theyre-wrong/2017/01/19/49bded68-de8b-11e6-918c-99ede3c8cafa_story.html?utm_term=.2786e5e7a9d7

The World Economic Forum this year feels like an exercise in ritual self-flagellation, which — as with the old Christian practice of fasting and whipping one’s own body — is supposed to purify the sinful nature of man. The sin, of course, is globalization, which everyone now seems to agree has been lopsided, inequitable and dangerous. In fact, most of the flaws attributed to globalization are actually mistakes in national policy that can be corrected.

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It took a Chinese billionaire to speak frankly on this topic. Jack Ma, the founder of the e-commerce giant Alibaba, estimated that over the past three decades the U.S. government spent $14.2 trillion fighting 13 wars. That money could have been invested in America, building infrastructure and creating jobs. “You’re supposed to spend money on your own people,” he said. He pointed out that globalization produced massive profits for the U.S. economy but much of that money ended up on Wall Street. “And what happened? Year 2008. The financial crisis wiped out $19.2 trillion [in the] U.S.A. alone. . . . What if the money [had been] spent on the Midwest of the United States developing the industry there?” he asked. “It’s not [that] the other countries steal jobs from you guys — it is your strategy,” he concluded.

You don’t have to accept Ma’s specifics and statistics to recognize the validity of his general point. Globalization created huge opportunities for growth, many of which were taken by U.S. companies. The global economy is still dominated by large American firms; 134 of Fortune’s Global 500 are American. And if you look at those in cutting-edge industries, the vast majority are American. These companies have benefited enormously by having global supply chains that can source goods and services around the world, either to lower labor costs or to be close to the markets in which they sell. Since 95 percent of the world’s potential consumers live outside the United States, finding ways to sell to them will have to be a core strategy for growth, even for a country with a large domestic economy such as the United States.

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Jack Ma said “It’s not [that] the other countries steal jobs from you guys — it is your strategy”

Obviously globalization has large effects on national economies and societies, and it produces some significant problems. What complex phenomenon does not? But it also generates opportunities, innovation and wealth for nations that they can then use to address these problems through good national strategies. The solutions are easy to state in theory — education, skills-based training and retraining, infrastructure. But they are extremely expensive and hard to execute well.

It is much easier to rail against foreigners and promise to fight them with tariffs and fines. But the cost of addressing these problems at the global level is massive. The Economist reports, in a survey on globalization, that in 2009 the Obama administration punished China with a tariff on its tires. Two years later, the cost to U.S. consumers was $1.1 billion, or $900,000 for every job “saved.” The impact of such tariffs is usually felt disproportionately by the poor and middle class because they spend a larger share of their income on imported goods, such as food and clothing. That same Economist survey points to a study that calculated that, across 40 countries, if transnational trade ended, the wealthiest consumers would lose 28 percent of their purchasing power, but the poorest tenth would lose a staggering 63 percent.

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Keeping pace with technology change–Learn, Unlearn and Relearn

Perhaps most important, the key driver depressing wages and eliminating jobs in the industrialized world is technology, not globalization. For example, between 1990 and 2014, U.S. automotive production increased by 19 percent , but with 240,000 fewer workers.

Even when manufacturing comes back to the United States, it is high-end manufacturing. It’s not just new Intel plants that have few workers anymore. Adidas has set up a new shoe factory in Germany that is run almost entirely by robots. It will open a similar one near Atlanta later this year. And the few workers in these factories tend to be highly skilled technicians and software engineers.

You can’t turn off technological revolutions. Nor is there a quick fix to stop business from going to other countries. Tariffs on China will simply mean that production will come from some other developing country.

The best approach to the world we are living in is not denial but empowerment. Countries should recognize that the global economy and the technological revolution require large, sustained national efforts to equip workers with the skills, capital and infrastructure they need to succeed. Nations should embrace an open world, but only as long as they are properly armed to compete in it. And that requires smart, effective — and very expensive — national policies, not some grand reversal of globalization.

The Malays are weak, says Dr. Mahathir.


January 10, 2017

The Malays are weak, says Dr. Mahathir. That’s rather bizarre logic

by S. Thayaparan@www.malaysiakini

“I’m a realist, I do what I can do, if I can’t do, I don’t.”

De facto Opposition Leader Dr Mahathir Mohamad

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What if I said that Malays have a lazy, rent-seeking culture, relying on political and social influence to gain wealth and unable to retain power despite all their special privileges? Would this be wrong? Would this be racist? Would this be seditious?

How about if former Prime Minister and now de facto Oopposition Leader Dr Mahathir Mohamad said this? Would it still be “racist”? Would this be considered some sort of truth telling? Would it make a difference when he said this last week or when he was Prime Mminister of this country?

More than a decade ago, in an UMNO General Assembly speech (which also coincided with a celebration of sorts – 21 years in office), Dr.Mahathir as UMNO President engaged in some “realist” assessment of the Malay community he had led for over two decades.

As reported by Malaysiakini, he claimed – “If today they (Malays) are colonised, there is no guarantee they will have the capacity to oppose the colonialists.” The former Premier said Malays had failed because they were lazy and sought the easy way out by reselling their shares, licences and contracts to non-Malays.

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“They cannot be patient, cannot wait a little, they want to be rich this very moment… no work is done other than to be close to people with influence and authority in order to get something. After selling and getting the cash, they come back to ask for more”,he said.

Therefore, there is a rather bizarre logic in his thinking when he said that he had no regrets about stifling dissent in young Malay people during his tenure. Bizarre because the former Prime Minister has never been afraid of using the stereotype of the Malay community as a means of galvanising support.

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And this extends to the other communities as well. Well by “others”, I really mean the Chinese community because as we all know the Indian community is absent from the discourse. In the same speech at the 2002 UMNO General Assembly, he also referenced the Chinese community – the very community that UMNO has always demonised as a threat to Malay hegemony but in reality, meant they were perceived as a threat against UMNO hegemony.

He said, “If we take out the Chinese and all that they have built and own, there will be no small or big towns in Malaysia, there will be no business and industry, there will be no funds for the subsidies, support and facilities for the Malays. Learn from the Chinese.”

Only Mahathir could balance such contradictions, playing the racial card against communities, including the one UMNO claims to represent. Which is why in Mahathir’s thinking there is really no reason why he should not be standing shoulder to shoulder with his former opponents in an attempt to bring down the Najib Abdul Razak regime.

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This is  truly bizzare

He really does not care what political pundits, who seek to remind people of what he did during his tenure, say because he knows that he then enjoyed the support of the majority of Malaysians and he did this using the kind of realpolitik that oppositional parties during his regime did not grasp or were uninterested in learning.

While some opposition supporters blather on about “truth and conscience” but offer no real evidence that these form the desideratum for oppositional forces in this country, the former prime minister has no problem twisting the facts on the ground or contorting social and economic realities to fit his narratives.

A clear example of this would be when in an interview, he acknowledged that discrimination was part of the system but that there were communities who thrived in spite of it – “The Chinese in Malaysia have no special rights, they experience discrimination. But they are more successful than us.”

This is exactly the system a Gerakan political operative was talking about when he mocked the opposition for subscribing to the same system as BN. And the same kind of thinking that for years sustained BN which led to the creation of the leviathan which in the Najib regime. We get the world we deserve.

Slaying sacred cows

And keep in mind that during Mahathir’s tenure, UMNO defined oppositional racial preoccupations because the slaying of UMNO sacred cows were the very definition (and still is) of any kind of egalitarian agenda that would truly “save Malaysia”. All those other so-called racial preoccupations, religious, social and economic are a direct result of the UMNO agenda and the mendacious ‘social contract’.

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Not True, Mahathir forgets easily

However, since the short-term goal of saving Malaysia means removing Najib, the real power brokers, those invested in the system – and they are not only Malays – would like to keep the gravy train moving, only with a different railroad engineer.

Unlike some oppositional voices who pontificate about “principles” or at least attempt to control the discourse, demonising those who dredge up so-called ancient history and engaging in victimhood to facilitate political expediency, the former prime minister is clear about the purpose of his alliance with the oppositional forces in this country.

As he told me when I brought up the trust deficit when it comes to opposition supporters and his new role as oppositional leader – “If Najib is there, the opposition will suffer. If Najib is there, even UMNO will suffer, the whole country will suffer. I think the opposition is not supporting me, they are interested in removing Najib. I have the same interest. It is okay to work together – only on that issue, not on other issues.”

Furthermore, he has had no problems claiming that he would slay Malay sacred cows for the benefit of the community – “I cannot predict how much longer this (affirmative action) will go on but at the moment, we are trying out… some kind of experiment… by withdrawing some of the protection in education,” he said. “We want to see whether they will be able to withstand the competition or not. Obviously if they prove themselves able to, we can think of reducing further some of the protection.”

This was always the stick component of the carrot-and-stick approach, and the former Prime Minster knew very well that affirmative action programmes had a deleterious effect on the Malay community.

Moreover, when he hinted that he would slay sacred cows, he was greeted with rapturous applause as some sort of truth sayer by the very same Umno who now endorse the Najib regime’s attempt to further consolidate power and engage with Mahathir’s sworn enemy, PAS.

But of course, now that the Malay community is fractured and the Malay opposition needs to reassure the Malay community, all those special privileges, all those affirmative action programmes, everything that the former prime minister said was holding back the Malay community, are off the table.

The only thing that discerning Malaysians have to take away from any of this is that Mahathir acknowledges that he failed to change the Malay community – “What else (can I do) … I have tried to be an example, tried to teach, scolded, cried and even prayed. (But) I have failed. I have failed to achieve the most important thing – how to change the Malays.”

When asked if there was anything he would do differently, he claimed that he wanted to be a “normal” UMNO member because he could not do anything for the Malays. Well, he is not even a member now and he is the power behind a nascent Malay power structure.

The big question is, will he fail again. More importantly, is changing the Malays really the agenda of the game for him or anyone else.

Populism ‘not inevitable’:


January , 2017

Populism ‘not inevitable’:  Deputy Prime Minister Tharman Shanmugaratnam at LKY School of Public Policy

by Charissa Yong

http://www.straitstimes.com/singapore/drift-towards-populism-not-inevitable

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Deputy Prime Minister Tharman Shanmugaratnam delivers his keynote address at the Annual Meeting of the Association of Professional Schools of International Affairs (APSIA) held on January 7, 2017.

Govts must offer hope and real solutions by helping people regenerate careers, and those left behind: Tharman

While Singapore has experienced some of these disquieting trends, he believes policies here and in some other societies made a difference in addressing their impact.

He cited four global trends: stagnant wages, declining social mobility, the sense of togetherness in society eroding, and politics and the media becoming more polarised.

“The only surprise is how long it has taken for those underlying domestic changes in society to be reflected in politics,” he told 350 people at a global affairs conference, Has The Game Changed?, hosted by the Lee Kuan Yew School of Public Policy. While last year’s populist upsets, driven by anti-globalisation, have created a despondency about global cooperation, Mr Tharman said: “The real challenge is not about globalisation. The real challenge is in domestic policy responses.”

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He added: “There are countries where you don’t get the same trends played out, although globalisation happens in the same way.”

 He cited how in Sweden and Singapore, middle-income workers’ pay went up by more than that in other advanced economies. But lower- and middle-class workers’ wages in America, parts of Europe, Britain and Japan have stagnated.

In America, in 1970, 90 per cent of 30-year-olds had real incomes above what their parents had at 30. Today, the figure is only half, and it affects people’s sense of hope.

The second trend he highlighted was a general decline in social mobility across advanced economies.It is now a stubborn fact and “people know that their chances of moving up in life are less than they used to be if they start off at the bottom”.

Third, people no longer think of themselves and society in terms of “we” but in terms of “us versus them”. This is complicated by how sectarian strife in one area can go global, widening domestic fissures.

Fourth, politics is increasingly polarised, reinforced by how social media algorithms filter “news” in ways that reinforce people’s bias.

Mr Tharman suggested four ways countries can tackle these issues. One, pay attention to cities that have been left behind, in particular through schools and education.

Two, help people regenerate their careers throughout their lives, through skills training.

“You need redistribution in society, and you may need more in some areas, but it’s not at the heart of the matter. It doesn’t give hope. Regeneration is what brings hope because you allow individuals, communities and cities to rise through their own abilities,” he said.

Three, neighbourhood and urban planning must discourage segregation and encourage people to mix. This will enable communities to do well together, said Mr Tharman.

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Four, bring honesty and the need to look to the long term back into politics. He noted a long drift towards “short-termism” reflected in the brazen neglect of issues such as unsustainable pensions and healthcare funding. And neither the left nor the right has offered solutions which give confidence for tomorrow’s generation, he added.

There is a need for honest politics that “tells it like it is” but offers hope and real solutions, he said.

“There is nothing inevitable about the drift towards populism. We have to regenerate the politics of the centre. It can be done.”