On Greece’s Rejection of Creditor Demands

July  7, 2015

On Greece’s Rejection of Creditor Demands

by Paul Krugman


Paul KrugmanEurope dodged a bullet yesterday. Confounding many predictions, Greek voters strongly supported their government’s rejection of creditor demands. And even the most ardent supporters of European union should be breathing a sigh of relief.

Of course, that’s not the way the creditors would have you see it. Their story, echoed by many in the business press, is that the failure of their attempt to bully Greece into acquiescence was a triumph of irrationality and irresponsibility over sound technocratic advice.

But the campaign of bullying — the attempt to terrify Greeks by cutting off bank financing and threatening general chaos, all with the almost open goal of pushing the current leftist government out of office — was a shameful moment in a Europe that claims to believe in democratic principles. It would have set a terrible precedent if that campaign had succeeded, even if the creditors were making sense.

What’s more, they weren’t. The truth is that Europe’s self-styled technocrats are like medieval doctors who insisted on bleeding their patients — and when their treatment made the patients sicker, demanded even more bleeding. A “yes” vote in Greece would have condemned the country to years more of suffering under policies that haven’t worked and in fact, given the arithmetic, can’t work: Austerity probably shrinks the economy faster than it reduces debt, so that all the suffering serves no purpose. The landslide victory of the “no” side offers at least a chance for an escape from this trap.


But how can such an escape be managed? Is there any way for Greece to remain in the euro? And is this desirable in any case? The most immediate question involves Greek banks. In advance of the referendum, the European Central Bank cut off their access to additional funds, helping to precipitate panic and force the government to impose a bank holiday and capital controls. The central bank now faces an awkward choice: If it resumes normal financing it will as much as admit that the previous freeze was political, but if it doesn’t it will effectively force Greece into introducing a new currency.

Specifically, if the money doesn’t start flowing from Frankfurt (the headquarters of the central bank), Greece will have no choice but to start paying wages and pensions with IOUs, which will de facto be a parallel currency — and which might soon turn into the new drachma.

Suppose, on the other hand, that the central bank does resume normal lending, and the banking crisis eases. That still leaves the question of how to restore economic growth.

In the failed negotiations that led up to yesterday’s referendum, the central sticking point was Greece’s demand for permanent debt relief, to remove the cloud hanging over its economy. The troika — the institutions representing creditor interests — refused, even though we now know that one member of the troika, the International Monetary Fund, had concluded independently that Greece’s debt cannot be paid. But will they reconsider now that the attempt to drive the governing leftist coalition from office has failed?

I have no idea — and in any case there is now a strong argument that Greek exit from the euro is the best of bad options.

Imagine, for a moment, that Greece had never adopted the euro, that it had merely fixed the value of the drachma in terms of euros. What would basic economic analysis say it should do now? The answer, overwhelmingly, would be that it should devalue — let the drachma’s value drop, both to encourage exports and to break out of the cycle of deflation.

Of course, Greece no longer has its own currency, and many analysts used to claim that adopting the euro was an irreversible move — after all, any hint of euro exit would set off devastating bank runs and a financial crisis. But at this point that financial crisis has already happened, so that the biggest costs of euro exit have been paid. Why, then, not go for the benefits?

Would Greek exit from the euro work as well as Iceland’s highly successful devaluation in 2008-09, or Argentina’s abandonment of its one-peso-one-dollar policy in 2001-02? Maybe not — but consider the alternatives. Unless Greece receives really major debt relief, and possibly even then, leaving the euro offers the only plausible escape route from its endless economic nightmare.

And let’s be clear: If Greece ends up leaving the euro, it won’t mean that the Greeks are bad Europeans. Greece’s debt problem reflected irresponsible lending as well as irresponsible borrowing, and in any case the Greeks have paid for their government’s sins many times over. If they can’t make a go of Europe’s common currency, it’s because that common currency offers no respite for countries in trouble. The important thing now is to do whatever it takes to end the bleeding. — The New York Times



The Straits Times: Difficult to dislodge Prime Minister Najib Razak

July 6, 2015

The Straits Times: Difficult to dislodge Prime Minister Najib Razak

MOF Najib RazakTough to dislodge him

UMNO will find it extremely difficult to remove Dato’ Seri Najib Razak as Party President in the wake of allegations made by the Wall Street Journal (WSJ) that money from a government investment firm was channeled to his private bank accounts, Singapore’s The Straits Times said.

Neither the supreme council nor divisional leaders of the ruling coalition’s lynchpin party would be able to come up with the numbers to call for an emergency vote against Najib, who by virtue of his post as Party President, is also Malaysia’s Prime Minister.

This is because UMNO would need the support of two-thirds of the council members to call for one in writing, or more than half of the party’s 191 divisions to approve such a motion at an extraordinary general meeting (EGM).

“Beyond just rallying the numbers, divisional EGMs are easily challenged in court and in the ensuing legal wrangle, UMNO members will start being sacked and suspended, among other things,” The Straits Times said.

It added that even before the WSJ exposé on funds from 1Malaysia Development Bhd (1MDB) being funneled to Najib’s personal bank accounts, opposition party PAS had in April proposed a no-confidence motion against Najib over debt-ridden state fund and its alleged financial management.

But a vote of no-confidence in Parliament would not be easy given that the ruling government under Barisan Nasional (BN) had a clear majority, The Straits Times added.

BN would have to break ranks and work with the opposition for such a vote to be passed, the report said. It also noted that Malaysia had never seen any motion of no-confidence passed against a Prime Minister. Another reason that such a vote was unlikely was because BN leaders would not want to risk losing power, and that “they will simply rally behind another PM candidate”,The Straits Times added.

The daily also said that no previous Malaysian leader had been removed through a formal vote, although two party leaders were pressured to make “graceful exits”, namely, Tun Abdullah Ahmad Badawi, who was forced out upon pressure from former Prime Minister Tun Dr Mahathir Mohamad, and the nation’s founding father Tunku Abdul Rahman.

The Straits Times added that UMNO MPs felt the allegation of 1MDB funds being transfers into Najib’s personal accounts was a “real problem” for the party as it would seem that the money was used to help BN win the last general election.

Last Thursday, WSJ and UK-based website Sarawak Report made the revelation that up to US$700 million (RM2.6 billion) was allegedly transferred to two bank accounts under Najib’s name with AmBank in 2013, ahead of the general elections in May that year.

The Prime Minister, however, has denied ever taking any funds from 1MDB for personal gain and instead pinned the blame for the latest report on Dr Mahathir whom he also accused of working with foreign agents against his administration.

Deputy Prime Minister Tan Sri Muhyiddin Yassin has urged Najib to provide a “convincing” explanation to the claims.

Najib, meanwhile, has said he intends to sue WSJ. The financial paper is standing by its story, saying its report was based on solid documentation and proof.

This allegation follows an earlier one, reported by WSJ also, that 1MDB had indirectly funded part of Najib’s general election campaign in 2013 through an overpriced purchase of assets from the Genting Group.



BERSIH to Putrajaya: Make Fundamental Changes in Governance

July 6, 2015

BERSIH to Putrajaya: Make Fundamental Changes in Governance


Election reforms pressure group BERSIH has urged Putrajaya to institute 10 major institutional reforms to prevent cabinet members from abusing their powers.

Najib and !MDB Executives
This is in view of allegations that RM2.6 billion was transferred into Prime Minister cum Finance Minister Najib Abdul Razak’s personal account.

Among others, BERSIH said Putrajaya must do away with Dr Mahathir Mohamad’s legacy which allowed the Prime Minister to simultaneously hold the portfolio of Finance Minister.

Najib has held the position of Finance Minister since coming to power in April 2009.  Mahathir was Finance Minister between September 1998 and January 1999 and again between June 2001 and October 2003.

The fifth Prime Minister Abdullah Ahmad Badawi held the Finance Minister during his entire premiership between October 2003 and April 2009. This means that of all three, Najib has the record of being the longest-serving Prime Minister  cum Finance Minister.

Fundamental changes

Najib is currently under heavy scrutiny due to 1MDB’s business decisions. The company was established by the Finance Ministry after Najib took reigns. His written approval is also needed for the company’s key decisions.

This has been exacerbated a Wall Street Journal report which alleged that nearly US$700 million was channeled into his personal account.

Among other institutional changes sought by BERSIH are:

  • Legislative changes to allow the Malaysian Anti-Corruption Commission (MACC) to be answerable to Parliament and given prosecutorial powers.
  • A policy to restrict the Attorney-General to being a legal consultant to the federal government and transferring prosecutoral powers to an independent Director of Public Prosecution.
  • A law to compel all members of the Cabinet, Deputy Ministers, those in top public officials and their spouses to declare their assets publicly.
  • Legislative changes to make the Election Commission accountable to Parliament.
  • A clean electoral roll and eliminating malapportionment of electoral boundaries before the next general election.

Happy Birthday, America: It is the Fourth of July

July 4, 2015

4th of July

It is The Fourth of July for Americans at home and abroad. As a friend of your country and a graduate of The George Washington University in Washington D.C., I ( and my wife Dr. Kamsiah) extend to you our warmest wishes  and congratulations on your country’s birthday.

Once again, thank you for the generosity and consideration you gave me when I was a graduate student Kamsiah and Din4(1968-1970).  During my time at DC some 40+ years  ago–I visited your beautiful city again with my wife in June, 2013 as a guest of former US Ambassodor to Malaysia John R. Mallot–I witnessed you moan the loss of Martin Luther King and Robert Francis Kennedy and agonise over the loss of American lives in Vietnam.

I admired the manner in which you sought to end that bloody and costly war which destabilised South East Asia and brought untold tragedy and genocide to Prime Minister Hun Sen’s Cambodia where I now live and work at the Techo Sen (Hun Sen) School of Government and International Relations, The University of Cambodia in Phnom Penh.

The idea of America is best summed up in these words in Latin e pluribus unum–out of many, one.  These words led me to read Dean Anne-Marie Slaughter’s  delightful and educational book, The Idea that is AMERICA: Keeping Faith with Our Values in a Dangerous World.  Maybe by sheer coincidence, I just finished reading it today. Anne-Marie’s book comes to you with my recommendation.

Adlai StevensonStatesman and Presidential Candidate

In the opening of her concluding chapter (pg.215), Anne-Marie quotes my favorite American Statesman, Presidential Candidate and Diplomat, Adlai Stevenson as follows:

When an American says that he loves his country,  he means not only that he loves the New England hills, the prairies glistenng in the sun, the wide and rising plains, the great mountains, and the sea. He means he loves an inner air, an inner light in which freedom lives and in which a man can draw the breath of self respect.–Adlai Stevenson

In the opening paragraph of that chapter, Stars to Steer By,  she says in almost Stevensonian fashion, and I quote her: “American patriotism is grounded not only in our love for the values our country stands for–of the idea that is  America, no matter how far short we may fail in practice. It is the idea that knits us together in our vast diversity. It is the idea that our soldiers fought for. It is the idea that all patriotic citizens stand for, even against our own government. And it is an idea that ultimately belongs to all the world’s peoples.”

James Balwin and Msrtin Luther KingJames Baldwin with Dr. King

Grandiose indeed. But inspirational. And yes, the idea is enshrined in the Declaration of Independence, the Constitution and the Bill of Rights of the United of America. Anne-Marie also quotes my favorite African-American novelist who said: “I love America more than any other country in this world; and, exactly for  this reason. I insist on the right to criticise her perpetually.”(pg.14)

On the occasion of the 239th Anniversary of your freedom from the tyranny of King George III, I have a simple message to the Obama White House, the members of the US Congress and captains of American Industry. Diplomacy is about making friends. Foreign policy is about the pursuit of peace and cooperation and building partnerships founded on mutual respect and trust.

It is time to put an end to the era of regime change initiated by George W. Bush and his neo-conservatives. Make friends, not enemies. The world does not need hegemons, and prophets of war. We need enlightened leaders, not egotists and dictators.

To celebrate the Fourth of July, Dr. Kamsiah and I have to chosen John Denver to entertain us. Mr. Denver,  may God Bless you and thank you for your musical legacy.–Dr. Kamsiah and Din Merican.

We Are Malay-Muslims, so we can do as we please

July 3, 2015

COMMENT: This article  by lawyer Syahredzan Johan on the entitlement of Malay-Muslims isdr-ahmad-farouk-and-din-merican being shared widely on social media.The article originally appeared on LoyarBuruk’s website in 2012. It was translated into Malay in 2013. And this is still relevant today.

We are too full ourselves that we expect non-Muslims not too eat during fasting day. We Malay-Muslims have become “holier than thou” bigots with an entitlement mentality that defies common consideration for Malaysians who are not Muslims. My generation of Muslims were taught differently. We do not wear Islam on our sleeves. Yes, we fast and respect the month of Ramadan with special prayers and read the Holy Quran. At the same time, we never prevented others from eating during the day in Ramadan since they are not Muslims.

We uphold the constitution under which Malaysians have equal rights.Unfortunately under Najib and his predecessors (Mahathir and Badawi) who play the politics with Islam and race, Malay-Muslims are made to feel special and exceptional. That gives us the ground to trample on the rights of Malaysians of other faiths. Our leaders pander to the whims and fancies of ulamas like Perak’s Harussani and Hadi Awang,  religious functionairies in JAKIM and JAWI and so-called intellectuals like Ridhuan Tee Abdullah and other self appointed interpreters of Islam .

Let us accept that we are not exceptional people; in fact, today we are a lost generation with inferiority complex; we are unable to think for ourselves or decide between what is right and wrong. We allow ourselves to be misled led by ulamas with warped minds who use Islam as an instrument to promote a kind of mullahism. We must learn to be exemplary Muslims who respect the dignity of difference.  –Din Merican.

We Are Malay-Muslims, so we can do as we please

by Syahredzan Johan

Syahredzan Johan

So you are fasting. The sun is bearing down on you, your stomach is growling and your throat is parched. It is only 12.30 in the afternoon; you still have hours to go before you may break your fast. All of a sudden, a non-Muslim person appears before you, enjoying an icy cold can of your favourite cola. He looks like he is savouring the cola. You could imagine the sensation of that very same cola filling your throat with diabetes-inducing caffeine goodness. So you flare up. How dare this person drink in front of you? Does he have no respect for the holy month of Ramadan, to be wantonly quenching his thirst in full view of Muslims? Does he not know that Muslims form the majority of this country and therefore must be respected?

This is the basic premise prevalent amongst many Malay-Muslims in this country. Muslims form the majority and therefore they are entitled to be respected. Malay-Muslim sensitivities must not be offended; the Malay-Muslim public must be protected from harm, confusion and many other bad and insidious things that may threaten the ummah. In recent times, these deep rooted sentiments are brought to the fore by opportunistic politicians. Thus it appeared as if Malay-Muslims have become more and more intolerant of minorities.

Malay-Muslims are entitled not to have a Hindu temple in the vicinity of their housing estate. Malay-Muslims are entitled to dictate what names others may use to invoke the Creator. Malay-Muslims are entitled to stop the sale of alcohol beverages and deny the establishment of a cinema in Malay majority areas.

Every Friday, Malay-Muslims are entitled to abandon their civic consciousness and park all over the place as if the streets belong to them. Malays-Muslims are entitled to blare religious ceramahs to every corner of the neighbourhood and into the wee hours of the night.

The Prime Minister must be Malay-Muslim, the civil service must be filled with Malay-Muslims and government bodies are seen as Malay institutions, tasked first and foremost to safeguard Malay and Muslim interests.

This premise of entitlement has also been used to justify the persecution and discrimination against sexual and religious minorities, purportedly because Article 3 provides that Islam is the religion of the Federation. So we say that LBGTs do not enjoy protection of the Constitution because their sexual orientations are against Islam, although we conveniently forget that other things, like gambling, are also forbidden in Islam but are still legal in this country. Books are seized and banned and fatwas are made absolute. In a recent decision, the Federal Court went so far to say that the integrity of the religion needs to be safeguarded at all costs. Does ‘at all costs’ include the supremacy of the Federal Constitution as the highest law of the land?

Make no mistake, this is not about Islam. It is about how we justify the discrimination, persecution and blatant disregard for fundamental liberties, all in the name of religion. It is how we view and treat others as inferior to us because we believe that we are entitled to do so. We permit transgressions because we labour under this presumption that Malay-Muslims, by virtue of being Malays and Muslims, are entitled to the best of the country as they occupy a higher standing than the rest of the rakyat out there.

There is no legal or constitutional basis for this. Article 3 does not make Malaysia an Islamic state and Article 4 expressly provides that the Federal Constitution is the supreme law of the land.  Article 8 provides that every citizen is equal before the law and enjoys equal protection of the law. The oft quoted Article 153 does not make Malay-Muslims superior in law or fact, it only provides for the reservation of quotas for Malays and natives of Sabah and Sarawak in certain matters.

So what if Muslims are the majority? We have such a flawed understanding of democracy; as if in a democracy, the rights of minorities are inferior to the rights of the majority. That is why we have a Constitution, which protects and guarantees the fundamental liberties of citizens from the tyranny of the majority.

We find ourselves up in arms at the fate of Muslims minorities in other countries like Thailand, Philippines, Myanmar and China.  We invoke freedom of religion when we hear of minarets being banned in Switzerland or burqas being banned in France. But if the rights of Muslim minorities should be protected in the face of the majority, why is it that we do not have the same vigour to protect the rights our non-Muslim minorities? Why must the rights of others here only be exercised if we deem those rights as exercisable?

So before you take offence at someone who is drinking in front of you while you are fasting, take a step back and think of your religion. Put aside your sense of entitlement and think; just because you are fasting, does it mean that everyone else around you must stow away their food and drinks?

Remember what Islam has instilled in you, not what Muslims have told you.

Kedah’s Kassim Ahmad : Modern Day Hang Jebat

July 1, 2015

Kedah’s Kassim Ahmad : Modern Day Hang Jebat

by Shahril Ahmad@www.freemalaysiatoday.com

Malay scholar and public intellectual Kassim Ahmad may have unwittingly cast himself into the role of Hang Jebat by his latest blog post.

kassim-ahmadAt 80+ he remains a fighter and seeker of Truth

In his 1964 dissertation, Perwatakan dalam Hikayat Hang Tuah, Kassim had dared to challenge traditional Malay thinking by contending that Hang Jebat, not Hang Tuah, was the true Malay hero for his earnestness in defending honour and principles, even if it meant turning against the Sultan.

Fast forward 51 years to last weekend, and we find Kassim challenging Malay thinking once again. The occasion this time was a press conference last Friday following a meeting of the UMNO Supreme Council. Party President Najib Razak told the gathered press that the 59-member council had decided to postpone UMNO’s general assembly and elections by another 18 months and that the decision complied with the party’s constitution.

The purpose, Najib said, was to enable the party “to focus on service to the rakyat, to reduce tensions within the party and to prepare for the 14th general elections.”

“The question UMNO members and the rakyat ought to ask,” Kassim writes, “is whether the reasons are valid. Will the general assembly prevent service to the people? Will it really be an obstacle in the party’s preparations for the next general election?”

“I think otherwise,” he says. “The general assembly will cure everything.” It will, he suggests, provide government leaders with a platform to brief delegates. It will also provide the delegates the opportunity to reprimand party elders and propose moves that the party should take.

“All this will only serve to improve service to the people and strengthen UMNO to face the next general election,” Kassim adds.

Kassim thinks that deferring the general assembly will only increase criticism of Najib’s administration.“It seems that Najib and the Supreme Council are afraid to face the delegates,” he says. “They appear intent on hiding certain weaknesses.”

“Yet, truth emboldens us while wrongs raise fears,” he says, adding that the UMNO leaders must be brave enough to receive constructive admonishment and suggestions from party delegates, claiming that it will strengthen the party and bring it greater victories in the future.

Malay folklore tells the tale of the covenant struck between Sang Sapurba, of royal descent, and local chief Demang Lebar Daun, who abdicated his throne in favour of the former.

Agreeing that his descendants shall henceforth be the subjects of Sang Sapurba and his descendants, Demang Lebar Daun made one request – that his descendants be treated well by their new rulers.

“If they offend,” Demang Lebar Daun was supposed to have said, “they shall not, however grave their offence, be disgraced or reviled with evil words. If their offence is grave, let them be put to death, if that is in accordance with the divine law.”

Sang Sapurba agreed. “In turn, your descendants shall never, until the end of time, be disloyal to my descendants, even if my descendants oppress them and commit evil.”

The pact was agreed to, but with the provision that if either side departed from the terms, so would the other.

Fast forward now to the age of Hang Tuah. Perhaps it was Sultan Mansur Shah who broke the pact when he sentenced the loyal Hang Tuah to death.

Raja adil raja disembah, raja zalim raja disanggah (A just king is a king to venerate, a despotic king is a king to repudiate),” Jebat bellowed as he ran amuck.

And so it is told that the Sultan, on learning that Tuah was still alive, summoned him and ordered the killing of Jebat. Tuah, ever loyal to the Sultan, obliged. Jebat, despite his loyalty to his comrade, would succumb.

Dictionary.com defines “democracy” as “a government by the people; a form of government in which the supreme power is vested in the people and exercised directly by them or by their elected agents under a free electoral system.”

Kassim Ahmad knows this. To him supreme power in UMNO lies with its delegates. Which is probably why he questioned the decision of the body which by name is supreme – the Supreme Council of UMNO – to cast aside the general assembly.

To him also, council members would have been like Tuah, showing misplaced loyalty to their leaders at a time when the people whom they were elected to serve had genuine concerns that needed to be addressed.

Who else then to play Jebat, anti-hero to the masses but defender of the honour and principles of true democracy? Stand proud, Pak Kassim. Hopefully, you will not stand alone.

UMNO tangguh Perhimunan Agung kerana Perdana Menteri Najib takut menghadapi kenyataan

Oleh: Kassim Ahmad

27 Jun, 2015

Dalam satu kenyataan semalam, Presiden UMNO Najib mengumumkan Majlis Tertinngi (MT) UMNO telah menangguh Perhimpunan Agung Tahunannya sehingga 18 bulan untuk menumpu kepada perkhidmatan kepada rakyat, mengurangkan ketegangan dalam parti serta membuat persediaan untuk mengahadapi pilihanraya umum ke-14.

Soalan yang perlu ditimbulkan oleh ahli UMNO dan rakyat, adakah Perhimpunan Agung menghalang perkara-pekarang yang disebut oleh Najib sebagai alasan penangguhan? Betulkah Perhimpunan Agung akan menghalang perkhidmatan kepada rakyat? Betulkah Perhimpunan Agung akan menghalang persediaan untuk menhadapi pilihanraya umum akan datang? Saya fikir sebaliknya. Perhimpunan Agung akan membaiki semua itu.

Najib the Bugus Warrior Bugis Ayam

Dalam Perhimpunan Agung, Presiden UMNO dan Perdana Menteri bersama-sama menteri-menteri lain boleh memberi taklimat kepada para wakil dan seterusnya kepada rakyat . Para wakil boleh menegur, bertanya dan memberi cadangan kepada ahli-ahli MT dan Jemaah Menteri. Ini semua akan membolehkan ahli-ahli MT dan Jemaah Menteri memberi perkhidmatan yang lebih baik kepada rakyat serta memperkuatkan UMNO untuk menghadapi pilihanraya umum akan datang.>

Sebaliknya, penangguhan akan menimbulkan banyak masalah dan menambah kritikan rakyat kepada kepimpinan Najib, seperti yang telah disuarakan oleh bekas Perdana Menteri Tun Dr. Mahathir.

Kita nampak Najib dan MT takut hendah menghadapi para wakil. Ada kelemahan-kelemahan yang hendak mereka sembnyikan dari para wakil dan rakyat. Tetapi, seperti kata pepatah, berani kerana benar, takut kerana salah. Kita nasihatkan beranilah berdepan dengan para wakil, sampaikan taklimat tentang keadaan Kerajann dan parti, terima teguran mereka yang membina dan cadangan mereka yang baik. Ini akan memperteguhan parti dan akan membawa parti mencapai kemenangan yang lebih besar di masa hadapan.

Saya membuat kritikan ini kerana saya sayang kepada UMNO. Saya juga ahli UMNO sejak 1986. Saya ahli, tetapi saya bukan pakturut. Tuhan Sendiri mengarah saya menyerukan kebaikan dan melarang kejahatan. Persis inilah yang saya kena lakukan. Saya harap Najib dan Majlis Tertinggi UMNO akan dengar kritikan saya.

KASSIM AHMAD seorang penulis bebas Malaysia. Lama web beliau www.kassimahmad.blogspot.com