Business as usual: regime change and GLCs in Malaysia


March 14, 2019

Business as usual: regime change and GLCs in Malaysia

By Dr. Edmund Terence Gomez

https://www.newmandala.org/business-as-usual-regime-change-and-glcs-in-malaysia/

 

  • Edmund Terence Gomez is Professor of Political Economy at the Faculty of Economics & Administration, University of Malaya. His publications include Malaysia’s Political Economy: Politics, Patronage and Profits (Cambridge University Press, 1997), Political Business in East Asia (Routledge, 2002), The New Economic Policy in Malaysia: Affirmative Action, Horizontal Inequalities and Social Justice (National University of Singapore Press, 2013) and Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia (Palgrave-Macmillan, 2017).

    When Pakatan Harapan unexpectedly secured power after Malaysia’s 14th General Elections (GE14) in May 2018, voters expected the coalition and Prime Minister Mahathir Mohamad to dismantle an extremely well-entrenched government–business institutional framework that had contributed to extensive clientelism, collusion, nepotism and embezzlement. After all, the institutionalisation of more transparent and accountable governance was a Pakatan campaign pledge.

    However, barely nine months after taking control of government, Pakatan appears to be re-instituting the practice of selective patronage in the conduct of politics and through the implementation of public policies. In this inter-connected domain of public policies and selective patronage, government-linked companies (GLCs) will play a key role.

    The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

    Federal ministries, under the ambit of cabinet ministers, also control a vast number of quoted and unlisted GLCs that do a variety of things, including promoting development of strategic economic sectors, redressing spatial inequities by developing rural areas and industries, and financing research and development to drive industrialisation. However, of the 25 ministries in the federal cabinet in 2017, before the fall of Barisan, three in particular, the Prime Minister’s Department, Ministry of Finance (MoF) and Ministry of Rural and Regional Development (MRRD), had control of a huge assortment of companies that were deployed to channel government-generated rents to UMNO members and well-connected businesspeople.

    At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.

    Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.

    Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.

    Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

    Power struggles, persistent patronage

    Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.

    Image result for Anwar. mahathir and Azmin

    A PKR insider insists that the party is split into two factions, one loyal to party supremo Anwar Ibrahim and the other to deputy president Mohamed Azmin Ali.

    The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.

    Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

    Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.

    Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.

    Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous 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. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.

    In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

    The problem of instituting real change

    All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.

    The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.

    Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.

    There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

    Fragile state and political economic outcomes

    Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.

    What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful

    Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

    Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.
    itutions, has a majority equity interest in them.
    The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

    At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.
    Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.
    Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.
    Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

    Power struggles, persistent patronage
    Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.
    The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.
    Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

    Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.
    Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.
    Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous 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. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.
    In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

    The problem of instituting real change
    All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.
    The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.
    Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.
    There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

    Fragile state and political economic outcomes
    Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.
    What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful business elites or even oligarchs to check other political elites.
    Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

    Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.

       

MP Nik Nazmi brings back memories of the Anwar-led 2008 Pakatan Rakyat


February 16,2018

Nik Nazmi brings back memories of the Anwar-led 2008  Pakatan Rakyat

By Nik Nazmi Nik Ahmad  the MP for Setiawangsa.

https://www.malaysiakini.com/news/464186?fbclid=IwAR25cGcttcKWep_VuYlXm9uT0Vhj3nuWoO3kgVCarZFwiZ2X8e8PkOTaVB0

Image result for Anwar-led 2008 Pakatan Rakyat

MP SPEAKS | This week, seven former UMNO MPs joined Bersatu. Bersatu has also declared its entry into Sabah, contrary to its pledge before the 2018 election.

I have consistently said that I am against this—and many of my colleagues in Pakatan Harapan feel the same way.

Let us focus on the challenges facing us in the present and how to move forward into the future. One thing that we need to do is to be willing to listen to all arguments—including the ones we don’t necessarily agree with.

It has been argued that these defectors are needed to shore-up Malay support for Harapan.

It has also been argued that the move is necessary to counter the emerging UMNO-PAS alliance, which is allegedly increasingly popular on social media as well as to strengthen our coalition’s standing in rural areas — such as the East Coast and Northern Peninsula.

It is true that Harapan did not win the popular vote in the last election—garnering only 48.31% of it. Indeed, much of the 50.79% of the vote that Barisan Nasional and PAS won was from Malays in the East coast and Northern Peninsula Malaysia as well as from Muslim Bumiputeras in Sarawak.

And it does appear that Malay sentiment towards Harapan is not exactly glowing. Although much of this is driven by the shrill and manufactured voices of UMNO and PAS surrogates, there is genuine concern among many Malays that the community is under threat: both politically and socio-economically.

Defections will not guarantee Malay support

But is taking in defectors from UMNO the best way to assuage these concerns?

Why can’t the various components of Harapan evolve so that we can, finally, access, engage and win the support of all Malaysians, including the rural Malays?

Why do some of our leaders seem intent on taking short-cuts, rather than the path of hard (but ultimately rewarding) work? Have we totally abandoned the idea of bipartisanship?

Why do some Harapan leaders assume that the Malay community will necessarily be impressed by taking in these defectors? Is the rural Malay community that monolithic? Is quantity really that more important in governance and politics rather than quality?

But if taking in defectors is not the way, how should Harapan resolve its “Malay dilemma”?

Image result for Anwar-led 2008 General election anwar poster

Negara ini bukan  Tun Dr.Mahathir punya. Ini adalah Malaysia–Negara kita semua. 2008 GE Tagline–UBAH SEBELUM PARAH

One way is to double-down on conservative Malay politics, including turning back on reform because it will allegedly weaken the community. This is the path that PAS has taken. That was their choice to make and theirs alone, but it also means they are no longer the party of Dr Burhanuddin al Helmy, Fadzil Noor and Nik Aziz Nik Mat.

Image result for dr syed husin ali

Dr.Syed Hussin Ali-The Intelletual behind PKR

The alternative is to stick to the progressive, inclusive promises we made via the Buku Harapan.

Our GE-14 campaign manifesto was a document that all Harapan parties agreed to. But it was also a platform that addressed the aspirations and problems of all segments of Malaysian society, including the Malays.

The Buku Harapan can be executed. We couldn’t deliver all of the 100 day promises—but it doesn’t mean that it cannot be realised. The same applies to the other pledges.

Some things may need to be sequenced, but they must be done if the country is to survive and thrive. We should not simply cast the Buku Harapan aside due to political exigencies.

Harapan won because it gave Malaysians hope

It is cynical and disingenuous to say that Harapan won only because of the 1MDB scandal and the anger towards Najib Razak. That’s simply not true.

Our critics—but also our own leaders, legislators and supporters—should give us more credit than that.

Malaysians voted for us not only out of anger over BN’s scandals and mismanagement, but because they believed that Harapan had a better vision for the future of the country. They voted for us because Harapan gave them hope. What I am saying is this: Harapan should learn to take “yes” for an answer.

Malaysians gave us an adequate majority on May 9

There is no need to worry about our parliamentary majority (which is adequate to govern). Unless some quarters have some political calculations to undermine the Harapan consensus.

Image result for dr syed husin ali

As I have said many times before, a two-thirds majority is sometimes more trouble than it is worth.

It is only moral and just that constitutional amendments—when they become necessary—be done via a bipartisan consensus, by talking and working with the Opposition and civil society.

Harapan should roll up our sleeves and get down to the business of governing the country. And “governing”, means reforming our economy and making it work for all Malaysians.

Malays will benefit from progressive politics

Part of this involves winning over the Malays to the idea that progressive politics and governance is in their interest. And it is.

Who makes up the majority of the urban poor? The Malays.

Who makes up the majority of low-wage earners? The Malays.

Who makes up the majority of the petty traders struggling to earn a living? The Malays.

Whose families are the majority of those struggling to service high household debts? The Malays.

Who are the majority of smallholders struggling from low commodity prices and delays in government payments? The Malays.

Delivering an economy that solves the plight of these segments of society, even in a non-racial manner, will do more to win over Malay voters than trying to outflank UMNO and PAS on the right – or luring opposition crossovers.

The voters in these constituencies did not vote for Harapan. They knowingly chose the vision that BN and PAS had for Malaysia. Their MPs moving over to Harapan will not likely make them feel any differently.

Instead, solving the bread-and-butter-issues of the voters will go a long way in addressing their racial and religious insecurities.

Harapan should trust our defend our Constitution

We must also learn to trust our Constitution and our system of governance, even as we repair both from decades of abuse.

Setting up the latest incarnation of the National Economic Action Council (NEAC) is the Prime Minister’s prerogative and so is its composition — although there were some interesting omissions.

The members who were selected are distinguished and respected in their several fields — one wishes them every success.

But the NEAC’s emergence has — fairly or unfairly — led to speculation over the performance of the Cabinet. There are perceptions — again, fairly or unfairly —that attempts are being made to circumvent the normal process of Cabinet-based governance in the management of Malaysia’s economy.

It is easy to dismiss these criticisms as grouses, but they have a real impact on how voters view this current Pakatan Harapan government.

If we lead, the people will follow

I hope this is something that the leaders of our government and alliance will take into account moving forward, especially when dealing with defectors and in how the administration’s agenda is to be executed.

The ends do not justify the means. Like it or not, processes sometimes matter as much as outcomes.

Malaysia needs solutions that work for the many, not the few. We need policies for these day and age. Too often we seem to be indicating of going back to the economic prescriptions of Old Malaysia.

Sticking to the spirit of Buku Harapan is the way forward.

This will go a long way towards winning over Malay fence sitters and not side-line our non-Malay and politically liberal supporters.

While UMNO and PAS embark on a journey rightwards, we should not dance to their tune.

But we must allow them the space to be a functioning Opposition that keeps us in check.

That is what leadership is. Pakatan doesn’t have to reinvent the wheel. Let’s be sure of who we are, what we want to do and where we want to go. If we are sincere, the people — including the Malays — will follow.


Nik Nazmi Nik Ahmad is the MP for Setiawangsa.

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

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.

Trump, Macron, and the Poverty of Liberalism


January 24, 2019trump macron

Trump, Macron, and the Poverty of Liberalism

by

https://www.project-syndicate.org/commentary/trump-macron-inequality-and-trust-by-kishore-mahbubani-2019-01

If liberals want to defeat populists, there is only one route: regain the trust of the voters that form much of their base. The choice for liberals is clear: they can feel good by condemning their opponents, or they can do good by attacking the elite interests that have contributed to their opponents’ success

 

DAVOS – No Western liberal would disagree that Donald Trump’s election was a disaster for American society, while that of Emmanuel Macron was a triumph for French society. In fact, the opposite may well be true, as heretical as that sounds

.The first question to ask is why people are engaged in violent street protests in Paris, but not in Washington, DC. I have personally experienced these Paris protests, and the smell of tear gas on the Champs-Élysées reminded me of the ethnic riots I experienced in Singapore in 1964. And why are the protesting? For many, at least initially, it is because they didn’t believe that Macron cared for or understood their plight.

Macron is trying to implement sensible macroeconomic reform. The proposed increases in taxes on diesel fuel would have reduced France’s budget deficits and helped lower its carbon dioxide emissions. His hope was that a stronger fiscal position would increase confidence and investment in the French economy so that the bottom 50% of society would eventually benefit. But for people to endure short-term pain for long-term gain, they must trust their leader. And Macron, it appears, has lost the trust of much of that bottom 50%.

By contrast, Trump retains the trust and confidence of the bottom half of US society, or at least the white portion of it. At first sight, this seems strange and paradoxical: the billionaire Trump is socially much further from the bottom 50% than the middle-class Macron is. But when Trump attacks the liberal and conservative US establishments, he is seen as venting the anger of the less well-off toward an elite that has ignored their plight. His election may, therefore, have had a cathartic effect on the bottom 50%, which may explain the lack of street protests in Washington or other major American cities.

And these Americans have much to be angry about. Most tellingly, the United States is the only major developed society where the average income of the bottom half has not just stagnated but declined markedly, as Danny Quah of the National University of Singapore has documented. Even more shockingly, the average income of the top 1% was 138 times that of the bottom 50% in 2010, up from 41 times higher in 1980.By contrast, Trump retains the trust and confidence of the bottom half of US society, or at least the white portion of it. At first sight, this seems strange and paradoxical: the billionaire Trump is socially much further from the bottom 50% than the middle-class Macron is. But when Trump attacks the liberal and conservative US establishments, he is seen as venting the anger of the less well-off toward an elite that has ignored their plight. His election may, therefore, have had a cathartic effect on the bottom 50%, which may explain the lack of street protests in Washington or other major American cities.

And these Americans have much to be angry about. Most tellingly, the United States is the only major developed society where the average income of the bottom half has not just stagnated but declined markedly, as Danny Quah of the National University of Singapore has documented. Even more shockingly, the average income of the top 1% was 138 times that of the bottom 50% in 2010, up from 41 times higher in 1980.

There is no single explanation for why inequality in the US has rocketed while the economic interests of the bottom 50% have been ignored. But we can obtain at least a partial answer by looking at the two principles of justice that Harvard philosopher John Rawls articulated in his famous book A Theory of Justice. The first principle emphasizes that each person should have “an equal right to the most extensive liberty,” while the second says that social and economic inequalities are to be arranged so that they are to “everyone’s advantage.”

The undeniable fact is that Western liberals have emphasized the first principle over the second in both theory and practice, prioritizing individual liberty and worrying far less about inequality. They believe that as long as elections take place and people can vote freely and equally, this is a sufficient condition for social stability. It follows, therefore, that those who fail economically do so because of personal incompetence, not social conditions.

Yet there was no doubt when China joined the World Trade Organization in 2001 that “creative destruction” in developed economies would follow, entailing millions of job losses. These economies’ elites – whether in the US, France, or elsewhere – had a responsibility to help those who were losing their jobs. But no such help was forthcoming.

For this reason, liberals may have made a strategic mistake by focusing their anger on Trump himself. Instead, they should ask themselves why much of the bottom 50% trusts him (and may yet re-elect him). And if they were honest, liberals would admit that they have effectively let the bottom half of society down.

If liberals want to defeat Trump, there is only one route: regain the trust of the voters that form much of his base. This will require them to restructure their societies so that economic growth benefits the bottom half more than the top 1%. In theory, this can be done easily. In practice, however, major vested interests will invariably seek to block reform. The choice for liberals is clear: they can feel good by condemning Trump, or they can do good by attacking the elite interests that contributed to his election.

.If liberals can do the latter, Trump’s election would be seen by future historians as a necessary wake-up call, while Macron’s merely created the illusion that all was well. These historians might then conclude that Trump’s election was ultimately better for American society than Macron’s was for France.

 

 

Hadi, Le Hypocrite as Malaysian Prime Minister– GOD Save US from Bigotry


January 23, 2019

Hadi, Le Hypocrite as Malaysian Prime Minister– GOD Save US from Bigotry

by Dennis Ignatius

http://www.freemalaysiatoday.com

At a party political campaign meeting in Cameron Highlands in support of the Barisan Nasional candidate, PAS president Hadi Awang insisted that it was the religious duty of Muslims to vote only for Muslims so that they could bring an “Islamic voice” to Parliament. He urged Muslim voters to trust only Muslims to represent them because non-Muslims apparently have no concept of sin and heavenly reward. Presumably, that makes them unfit to sit in Parliament.

Hadi, of course, is a bitter foe of DAP (although he was happy to embrace them when it suited him). His comments, however, speak to wider issues on race and religion in Malaysia and cannot be allowed to let stand.

Where was the Islamic voice?

In the first place, if an “Islamic voice” in Parliament is needed, Hadi and his cohort of Islamist politicians are hardly the ones to represent it.

For years Hadi and the whole bunch of PAS and Umno members of Parliament aided and abetted the cover-up of the 1MDB scandal, the biggest scandal in our history. Billions of ringgit of taxpayers’ money, money belonging to the voters of Cameron Highlands, Muslim and non-Muslim, was looted and squandered on high living, debauchery and partying all over the world. Expensive champagne, paid for with taxpayer funds, was flowing in distant playgrounds while the voters in Cameron Highlands had to struggle to earn a decent living.

Where was the “Islamic voice” of Hadi when all this was going on? Instead of speaking up for the voters and defending their rights in Parliament, Hadi was defending the kleptocrats and dismissing the 1MDB scandal as fake news.

A concept of sin without integrity

As a multiracial, non-religious political party, DAP, of course, takes no position on concepts of sin and heavenly reward. Nevertheless, DAP has a far better track record when it comes to integrity, justice and public service than religiously-inclined parties like Umno and PAS. Indeed, it was this commitment to integrity, justice and public service that led DAP on a long and lonely quest to expose the 1MDB scandal while Umno and PAS were doing their best to cover it up or look the other way.

Of what use is a concept of sin and heavenly reward if it does not lead to integrity, honesty and respect for truth here on earth? Umno was rejected by the people because it came to be seen as a highly corrupt party that was more interested in earthly rewards than heavenly ones. Did the millions in cash and jewellery found in Najib Razak’s house reveal nothing to Hadi? Even now, as the new Pakatan Harapan government uncovers scandal after scandal, PAS keeps insisting that Umno is the right party to represent the people simply because it is a Muslim one.

Is Hadi so blinded by his disdain for non-Malays and non-Muslims that he’d rather have a corrupt and discredited Malay-Muslim party in power than a clean and honest coalition of Muslims and non-Muslims in office?

And let’s not forget that the biggest victims of Umno’s abuse of power and the conniving silence of PAS were the Malays themselves. Even cherished institutions like Tabung Haji, LTAT and Felda that were set up specifically to help Malay-Muslims were mismanaged or plundered by Umno cronies. Nothing was sacred to them. All the talk about “bangsa, agama and negara” was simply a cover to enrich themselves.

Non-Muslims

Amazingly, after suggesting that non-Muslims were not fit to represent the citizens of Cameron Highlands in Parliament, Hadi had the audacity to appeal to non-Muslims to support the Umno candidate because Umno “has already proven that it respects their rights”.

Is Hadi delusional? Has he forgotten that under Umno our democratic space was vastly reduced, our economy was mismanaged, our sovereignty was endangered through unsustainable levels of debt, and the country itself became the world’s biggest kleptocracy?

Hadi himself has persistently advocated a kind of religious apartheid state where non-Muslims would be barred from holding high office, reduced to “dhimmitude” in their own country and subject to a form of shariah law that is so harsh that even Muslim countries shy away from it.

Hadi has done nothing to earn our trust and everything to earn our disgust. He’s the last person that anyone should listen to when it comes to casting their vote. If anything, voters can’t go wrong rejecting any candidate that Hadi endorses.

At the end of the day, our nation’s interests are surely better served by people with integrity and a proven track record of public service rather than by people who may have a concept of sin but are utterly lacking in integrity and a commitment to good governance and respect for diversity. Better non-religious politicians committed to serving the people than hypocritical ones hiding behind religion.

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.