Latest World Bank Report on MALAYSIA


December 23, 2016

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Malaysia’s Finance Minister: He needs a lot of help; in stead as Prime Minister he is a victim of sycophancy

Note: All reports by the IMF, World Bank, Asian Development and other multilateral institutions should be read between the lines to discern what is not said. I am confident my readers will exercise due care when they are presented with reports on Malaysia by these institutions.–Din Merican

Latest World Bank Report on MALAYSIA

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Malaysia Economic Monitor December 2016: The Quest for Productivity Growth

Malaysia’s economic growth has slowed down but remains resilient to external challenges.

  • The gross domestic product (GDP) growth rate is projected to reach 4.2% in 2016 and 4.3% in 2017.
  • Private consumption is expected to continue driving economic growth, supported by low unemployment and government income-support measures.
  • Private investment growth is expected to moderate, as commodity prices and global economic activity remain subdued.
  • Fiscal consolidation remains on track despite lower oil-related revenues.
  • Uncertainties around the rebalancing of the Chinese economy, further declines in the world commodities’ prices, and evolving US economic policies on global trade are some of the key sources of risks to Malaysia’s economic outlook.

Productivity is the main driver of Malaysia’s economic development, though productivity growth has slowed over the past decade.

  • Capital and labor have mainly driven Malaysia’s robust economic growth over the past 25 years. While significant, Malaysia’s productivity growth over the past 25 years has been below several global and regional countries.
  • As capital and labor are expected to slow down, rising productivity growth, greater female labor-force participation, and continued investment in physical and human capital will be necessary for Malaysia to achieve high-income status.
  • Malaysia has performed relatively well on key aspects of productivity, such as in the quality of infrastructure, and non-technical innovations.
  • Malaysia’s existing institutional architecture has sustained consistent productivity growth for more than two decades. Challenges in the skills gap, quality of infrastructure, and research and development system need to be addressed in order to refocus attention on productivity growth.
  • Overcoming skill gaps, building innovation capacity, and addressing distortion in markets where firms sell their goods and services, could help accelerate productivity growth further.

LINKs FOR DOWNLOADING THE PRESENTATION AND THE FULL REPORT

http://pubdocs.worldbank.org/en/183141482112459157/MEM-Productivity-Presentation-December-19.pdf

http://documents.worldbank.org/curated/en/773621481895271934/Malaysia-economic-monitor-the-quest-for-productivity-growth

 

 

 

 

 

 

 

 

Happy New Year-2017


December 23, 2016

Happy New Year

Christmas is only two days away. Dr. Kamsiah and I wish Merry Christmas to all our Christian friends around the world. At the same time let us spare our prayers for the victims of war who are trying to survive.

2017 is likely to be a difficult and very troubled one. That said, we cannot allow our politicians a free hand to do what they please. We must now take charge our own future and have the courage to make our leaders accountable for their actions. Let us resolve to act in 2017.

To Fellow Malaysians, we have this to say–how much longer  can we tolerate this corrupt and incompetent  Najib regime? Don’t we, especially the sentimental and easy to pamper Malays,  realise that he and his cabals are running our country to the ground. It is time for us to use the ballot box to get rid of this political  cancer once and for all.  Together we can make a difference in 2017. Happy New Year.–Dr.  Kamsiah Haider and Din Merican

How Republics End–Paul Krugman


December 23, 2016

Supposedly free-market politicians are already discovering that crony capitalism is fine as long as it involves the right cronies. It does have to do with class warfare — redistribution from the poor and the middle class to the wealthy is a consistent theme of all modern Republican policies. But what directly drives the attack on democracy, I’d argue, is simple careerism on the part of people who are apparatchiks within a system insulated from outside pressures by gerrymandered districts, unshakable partisan loyalty, and lots and lots of plutocratic financial support.–Paul Krugman

Many people are reacting to the rise of Trumpism and nativist movements in Europe by reading history — specifically, the history of the 1930s. And they are right to do so. It takes willful blindness not to see the parallels between the rise of fascism and our current political nightmare.

But the ’30s isn’t the only era with lessons to teach us. Lately I’ve been reading a lot about the ancient world. Initially, I have to admit, I was doing it for entertainment and as a refuge from news that gets worse with each passing day. But I couldn’t help noticing the contemporary resonances of some Roman history — specifically, the tale of how the Roman Republic fell.

Here’s what I learned: Republican institutions don’t protect against tyranny when powerful people start defying political norms. And tyranny, when it comes, can flourish even while maintaining a republican facade.

On the first point: Roman politics involved fierce competition among ambitious men. But for centuries that competition was constrained by some seemingly unbreakable rules. Here’s what Adrian Goldsworthy’s “In the Name of Rome” says: “However important it was for an individual to win fame and add to his and his family’s reputation, this should always be subordinated to the good of the Republic … no disappointed Roman politician sought the aid of a foreign power.”

America used to be like that, with prominent senators declaring that we must stop “partisan politics at the water’s edge.” But now we have a President-Elect who openly asked Russia to help smear his opponent, and all indications are that the bulk of his party was and is just fine with that. (A new poll shows that Republican approval of Vladimir Putin has surged even though — or, more likely, precisely because — it has become clear that Russian intervention played an important role in the U.S. election.) Winning domestic political struggles is all that matters, the good of the republic be damned.

Former Malaysian Finance Minister Daim Zainuddin–The Economy under Corrupt Najib Razak


December 22, 2016

Former Malaysian Finance Minister Daim Zainuddin–The Economy under Corrupt Najib Razak

Received via e-mail

Get rid of the feudalism mindset, especially among those who are the trustees of this nation. If the leader is wrong or has committed a crime, it is the fiduciary duty of the subordinates, particularly the civil servants, to take corrective actions, instead of being in cahoots to cover up the wrongdoings.–Tun Daim Zainuddin

Image result for suharto and lee kuan yew

I have been asked to share my thoughts on key structural issues facing the country, and what we can do about it. I am most reluctant to put my thoughts into words or share them with the public. Since my retirement, I have stayed away from public discussions as I prefer to spend my time travelling. But times have changed and we are facing a very serious crisis.

Clearly, there are important long-standing structural issues that may affect our march towards developed country status. These are related to education, the labour market, the government’s fiscal policy, inclusive growth and sustainability, among others.

However, what this country needs at this moment is much simpler but seems harder to solve. What we need to address now, which I have repeated so many times, is the chronic trust deficit. In order to overcome this deficit, we must first understand its origins. There are a few reasons why we are facing this trust deficit.

First, it is the lack of integrity, honesty and moral courage. The lack of good moral character seems pervasive among the elites in this country, especially among those in power. Corruption and bribery remain rampant, to the extent that cases of public money being siphoned off for private use or government servants stashing away obscene amounts of hard cash do not amaze us anymore. It is as though systemic corruption has taken a hold of us and our nation, and we have accepted it. The culprits must be punished. We should have no sympathy for them.

But in some instances, politically connected culprits were not brought to the courts fast enough. In the case of the Sabah Water Department, it has been nearly two months since the main officers were released on bail. This has given room for further speculation and abuse of the system. The same goes for the Ministry of Youth and Sports’ case. And, of course, who can deny the existence of the biggest elephant in the room pertaining to corruption and abuse of power?

It is worth being reminded that lack of integrity has disastrous consequences, and it extends beyond the damage to the current generation. Studies have shown how countries that are perceived to be corrupt tend to grow at a much slower rate than those that are corrupt-free and this has a negative impact on long-term growth. No one would want to invest in a country that does not respect the rule of law.

Lest we forget, the root cause of why a community or a nation succeeds or fails, why great civilisations or empires collapsed, always comes back to one reason — integrity or the lack of it.

Tun Daim Zainuddin (right) and author of ‘The Colours of Inequality’ Dr Muhammed Abdul Khalid during the launch of the book at the International Islamic University of Malaysia in Kuala Lumpur, November 11, 2014. — Picture by Yusof Mat Isa

Thus, solving all those structural issues will depend on ensuring the highest level of integrity among those in power. In fact, a nation’s survival and its success depend on the integrity of everyone, most crucially, its leadership.

The leaders must always uphold the highest level of integrity and not betray the trust assigned to them or take advantage of their position. Those with positions must remember that there is no honour in abusing their power.

Second, the lack of empathy and common sense among those in power plays a role in widening the trust deficit in the country. When the people are feeling the pinch of slower wage growth, higher cost of living with the removal of subsidies and weakening of the ringgit, we are pouring more than half a billion ringgit of the rakyat’s money into a public park. This is outright insensitive and mind-boggling when allocations for essential services, such as health and education, have been reduced. Yet, if the government is sincere about its concern about parks, why hasn’t it gazetted Bukit Kiara?

Third, expertise in oversight of the nation’s economy is seriously lacking. We proudly proclaim that our “fundamentals are strong”. But the economic growth is fuelled by debt. This is not sustainable. Government debt with its contingent liability has easily exceeded the debt limit. In fact, for next year’s budget, we have to borrow about 90% to finance our development expenditure.

For every RM1 we expect to collect next year, 98 sen will be spent on operational expenses, such as paying salaries, interest and subsidies, among others. This is not sustainable.

Household debt is already at an all-time high; in fact, it is one of the highest in the region. With lack of savings, our households are vulnerable to poverty. Our outstanding non-financial corporate sector debt is also high, about 105% of GDP as at end-2015, which is higher than the debt of emerging economies.

Yet, we are still proud to state that the economy is growing, and we are proud when the incoming president of US reportedly is impressed by our high economic growth. But the US is approaching full capacity as evidenced by falling unemployment and rising wages.

But growth alone is not enough. It needs to benefit the country and the rakyat. Despite registering positive growth, the number of unemployed in Malaysia keeps growing. Since early last year, the number of unemployed grew nearly 16%. Our graduates do not have jobs; a graduate engineer has to sell nasi lemak and the government seems proud of that!

Firms also are not hiring as before; the number of vacancies reported this year is the lowest in about a decade. In fact, the number of jobs created are mostly low to mid-skilled, and not high-skilled. Not surprisingly, the share of low-skilled workers in the labour force has increased while that of high-skilled workers has declined. This does not augur well for the country becoming a high-income nation. It is pointless for a country to achieve high income when the rakyat remains low income.

These are among the factors that lead to people losing trust in the government. What do we do then?

Image result for Daim and Najib

Household debt is already at an all-time high; in fact, it is one of the highest in the region. With lack of savings, our households are vulnerable to poverty. Our outstanding non-financial corporate sector debt is also high, about 105% of GDP as at end-2015, which is higher than the debt of emerging economies.

Yet, we are still proud to state that the economy is growing, and we are proud when the incoming President of US reportedly is impressed by our high economic growth. But the US is approaching full capacity as evidenced by falling unemployment and rising wages.

But growth alone is not enough. It needs to benefit the country and the rakyat. Despite registering positive growth, the number of unemployed in Malaysia keeps growing. Since early last year, the number of unemployed grew nearly 16%. Our graduates do not have jobs; a graduate engineer has to sell nasi lemak and the government seems proud of that!

Firms also are not hiring as before; the number of vacancies reported this year is the lowest in about a decade. In fact, the number of jobs created are mostly low to mid-skilled, and not high-skilled. Not surprisingly, the share of low-skilled workers in the labour force has increased while that of high-skilled workers has declined. This does not augur well for the country becoming a high-income nation. It is pointless for a country to achieve high income when the rakyat remains low income.

These are among the factors that lead to people losing trust in the government. What do we do then?

Two things need to be undertaken, one easier than the other. First, a new economic team must be assembled and empowered to fix the economy.

The rakyat and investors, both local and foreign, must have faith and confidence in those managing the economy. The members of this team must be professionals who are technically competent, with the highest level of integrity and dare to speak the truth. Lack of intelligence and incompetence cannot be compensated for by loyalty to the leader.

Indeed, the special economic team that was set up in August last year is a complete failure. It should be dissolved. Concurrently, the Prime Minister must let go of the Finance Minister’s post; this is bad governance.

Second, which is equally important, is to get rid of the feudalism mindset, especially among those who are the trustees of this nation. If the leader is wrong or has committed a crime, it is the fiduciary duty of the subordinates, particularly the civil servants, to take corrective actions, instead of being in cahoots to cover up the wrongdoings.

Bear in mind that political leaders who are elected by the rakyat to lead the government are basically the rakyat’s servants. They are merely given the mandate and power by the rakyat to lead the government and to rule on their behalf. Thus, the ability to be respectful and accountable towards the people who voted them in is paramount.

The leaders are not gods that must be obeyed. This clarion call is not new; nearly half a century ago, our great philosopher and sociologist, Syed Hussein Alatas, warned us of the danger: “…man in authority … expects the subordinate to be loyal and faithful in a manner that sometimes comes into conflict with the norms or ethics … he is supposed to be loyal under almost all circumstances, even if the circumstances violate the present values and philosophy of Malaysian society” (Feudalism in Malaysian society: A study in historical continuity. Source: Civilisations, Vol. 18, No. 4 [1968], pp. 579-592).

This requires, again, integrity and honesty, even if that means one is in the minority. Our first prime minister said it best: “If you think you are rich, there are many who are richer than you. If you think you are clever, there are more people cleverer than you. But if you think you are honest, then you are among the few and in this instance, it is best to be among the few.”

 

In dealing with the rakyat, whether on economic, social or political issues, honesty is really the best policy. Lies can only lead to more lies, and once the rakyat has lost faith in you, even when you are stating the truth, they will not believe you. You cannot fix the problems of the nation when there is a trust deficit.

In my experience during the 1986 and 1998 crises, I was upfront about the problems we faced but the people had the confidence to give us time and space to solve the problems. Without the people’s trust and support, it will be difficult to solve the economic problems, especially when it affects them. It is a partnership between government and the governed.

Reforms in institutions are also required. We must take all necessary actions, including amending laws, to ensure the independence of judiciary and security institutions. Tolerance for dissent and differences in opinion and ideologies must be welcomed, and not prosecuted. These are the ingredients for a truly open and functioning democracy.

Failure to undertake these paramount reforms means we are moving away from prosperity. Otherwise, we all should be seriously worried about the future that we are leaving for our children and grandchildren.

Bear in mind that political leaders who are elected by the rakyat to lead the government are basically the rakyat’s servants. They are merely given the mandate and power by the rakyat to lead the government and to rule on their behalf. Thus, the ability to be respectful and accountable towards the people that voted them in is paramount.

The leaders are not gods that must be obeyed. This clarion call is not new; nearly half a century ago, our great philosopher and sociologist, Syed Hussein Alatas, warned us of the danger: “…man in authority … expects the subordinate to be loyal and faithful in a manner that sometimes comes into conflict with the norms or ethics … he is supposed to be loyal under almost all circumstances, even if the circumstances violate the present values and philosophy of Malaysian society” (Feudalism in Malaysian society: A study in historical continuity. Source: Civilisations, Vol. 18, No. 4 [1968], pp. 579-592).

This requires, again, integrity and honesty, even if that means one is in the minority. Our first Prime Minister said it best: “If you think you are rich, there are many who are richer than you. If you think you are clever, there are more people cleverer than you. But if you think you are honest, then you are among the few and in this instance, it is best to be among the few.”

 

In dealing with the rakyat, whether on economic, social or political issues, honesty is really the best policy. Lies can only lead to more lies, and once the rakyat has lost faith in you, even when you are stating the truth, they will not believe you. You cannot fix the problems of the nation when there is a trust deficit.

In my experience during the 1986 and 1998 crises, I was upfront about the problems we faced but the people had the confidence to give us time and space to solve the problems. Without the people’s trust and support, it will be difficult to solve the economic problems, especially when it affects them. It is a partnership between government and the governed.

Reforms in institutions are also required. We must take all necessary actions, including amending laws, to ensure the independence of judiciary and security institutions. Tolerance for dissent and differences in opinion and ideologies must be welcomed, and not prosecuted. These are the ingredients for a truly open and functioning democracy.

Failure to undertake these paramount reforms means we are moving away from prosperity. Otherwise, we all should be seriously worried about the future that we are leaving for our children and grandchildren.

Daim Zainuddin is former finance minister of Malaysia

Academic Freedom and The University


December 21, 2016

Academic Freedom and The University

by Teoh King Men@www,freemalaysiatoday.com

“If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter.”–George Washington

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Historically, our academic freedom had its origins in the 1960s, cherished and upheld by the Universiti Malaya Student Union (UMSU) and the Persekutuan Bahasa Melayu Universiti Malaya (PBMUM). Led by Anwar Ibrahim, these movements were instrumental in getting then Prime Minister Tunku Abdul Rahman to step down. It also implicated the police force, who invaded Universiti Malaya and subsequently disrupted the protests against the erstwhile PM.

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We forget that it is this man as Prime Minister for 22 years+who was  the slayer of academic freedom when he was Minister of Education in the 1970s.–Din Merican

Likewise, in 1979, a large-scale demonstration by students in solidarity with poor farmers in Baling, Kedah, faced similar consequences. Hishamuddin Rais, a student activist, was forced to flee the country as the Malaysian government went out of its way to arrest the demonstrators.

As these two brief recollections of past events have shown, students of past decades were broadly active in raising awareness on issues of great concern to both public and private interests – issues both political and personal, national and local.

Turning to the present, it should then come as no surprise that in light of the country’s recent 1Malaysia Development Berhad and public finance scandals, the freedom to protest has once more been trampled upon. Universiti Malaya student Anis Syafiqah Md Yusof and two other student activists were recently suspended for a semester and slapped with a RM400 fine for their involvement in the “Tangkap MO1” (MO1) rally.

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It must be emphasised that students play an integral part in the exchange of ideas and truth in our society, and therefore, should be permitted a platform on which to speak up on pressing issues, such as on corruption, governmental irresponsibility and betrayal of public trust.

 After the Malaysian Federal Constitution came into force in August 1957, we were granted the right to freedom of speech, assembly and association, protected under Article 10 of the Federal Constitution – or rather, that is what the authorities would like us to believe. The rights of students, and indeed of everyone and anyone, to say what they think and to protest is pivotal to our democracy and the prevention of state tyranny.

Freedom of speech has no limits, and should always be respected. There is a clear distinction to be made between free speech and incitement to violence. The government, however, has been attempting to label any form of political dissent or criticism as incitement to violence. I quote George Washington: “If the freedom of speech is taken away then dumb and silent we may be led, like sheep to the slaughter.”

Free speech was the predominant mechanism that granted the Malays their United Malays National Organisation (UMNO) – which was inaugurated on May 11, 1946 in Johor Bahru – and the emergence of Datuk Onn Jaafar as its first President. UMNO obtained support from all strata of Malay society in opposing the Malayan Union – the aristocrats, the radical Parti Kebangsaan Melayu Malaya (Malay Nationalist Party or MNP), Islamic groups, civil servants, rural leaders like the penghulu (village heads), and even the Police and ex-service personnel.

“Freedom of speech is the great bulwark of liberty; they prosper and die together: And it is the terror of traitors and oppressors, and a barrier against them. It produces excellent writers, and encourages men of fine genius.” – Benjamin Franklin

Image result for University of Malaya in 1960

It is thus a matter of utmost importance that we do not stifle debate among students in the academic community. The reason being, this country is abundant in financial capital but lacking in intellectual capital – the solution to corruption is not more corruption, nor the remedy to state tyranny being more tyranny, but it is the need for intellectual honesty and expression.

Above all, the University was once a highly held institution for the free expression of ideas. And protests and rallies are inevitably part of such milieu. Academic freedom should be respected in the University in order for the students to think critically and voice up against the issues that concern them. Let us never lose sight of this, and preserve our rights.

Teoh King Men is an FMT reader.

The Pangs of an Itinerant Thinker– Of Ethics and Deathics


December 19, 2016

The Pangs of an Itinerant Thinker– Of Ethics and Deathics

by Dean Johns@www.malaysiakini.com

In the course of my long-running participation in the human race, and my increasingly urgent strivings to figure-out where I’m likely to be placed in this enthralling event when old age and death finally force me to drop out of it, I’ve become increasingly confused about its rules.

At the start it seemed to be childishly simple. Obey the so-called commandments of some alleged heavenly father and earthly representatives like priests, parents and teachers, and you’re a guaranteed winner in either this life or the next, if not both.

But then adolescence kicked-in, activating not just antagonism to the rules, but a growing awareness that adults seemed to be running the human race according to not just a single set of rules, but countlessly competing and conflicting ones.

Some clearly and sincerely intended to render the race as fair as humanly possible, and thus genuinely ethical; but others designed to rig the contest in favour of themselves and their running-mates, and thus downright unethical, or, if you like, deathical to the rest of us also-rans.

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In other words, there is an ethical/deathical divide in the human race that explains but by no means excuses the dismal fact that, as Aristotle wrote 2,500 or so years ago in his ‘Politics’, “man is the best of all animals when he has reached his full development, so he is the worst of all when divorced from law and justice.”

And, despite the system of ‘virtue’ ethics that Aristotle famously advocated as a solution to this infernal contest between good and evil in the human race, and all the myriad other ethical systems, both ‘sacred’ and secular that have been proposed before and since, the problem is seemingly eternal.

Possibly the oldest and most widely-known ethical principle, and certainly the first secular one I recall hearing about, is the so-called ‘Golden Rule’ to do unto others what we would wish others to do to us.

But, while at first sight this is a perfectly reasonable rule for the fair and successful running of the human race, on further examination it has a fatal flaw lurking in the apparently innocent word ‘others’.

Because as has been horribly evident throughout history, the word ‘others’ has been routinely (mis)interpreted as meaning and including ‘others just like ourselves’, and thus excluding all other others.

As including only other Aryans, to cite an especially evil perversion of the Golden Rule by the Nazis, but excluding non-Aryans and even allegedly non-humans like Jews, Gypsies, homosexuals and other groups thus targeted for torture and killing.

And in a perennial virtually worldwide sense, including ‘others’ of our own race, skin-colour, creed, gender, nationality or some other equally spuriously significant common factor, and excluding other others accordingly.

‘He who makes the rules gets the gold’

A further problem with the Golden Rule as an ethic, of course, is that it is so easily subverted by such cynically self-serving deathics, as, for example, ‘he who has the gold makes the rules’, and the corollary intended to form greed into a vicious circle with power, ‘he who makes the rules gets the gold’.

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These Guys of the Eastern Philosophy School are beginning to make sense to us in the 21st century world–Holistic Thinking

Given all these difficulties with the Golden Rule, I personally, like Confucius (551-479BC), Thomas Hobbes (1588-1679) and doubtless many other philosophers, vastly prefer the Silver Rule: do not unto others what you would not want them to do to you.

While superficially this seems just a negative version of the Golden Rule, the crucial difference that becomes clear on further examination is that, while what we want for ourselves and others tends to be impossibly vague and various, we’re far more sure what we definitely don’t want and thus should not inflict on others, or, for that matter, on other others.

In other words, the Silver Rule in both theory and practice sets us free to aspire and strive toward the most golden of our aspirations by equally denying us the right to kill, rob, abuse, persecute, impoverish or otherwise disadvantage each other in ways that anybody in his or her right mind would possibly want.

And, thank goodness it’s largely the Silver Rule that forms the basis for our systems of ‘religious’ and secular law.

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UMNO’s Strategic Thinker

Unfortunately, however, laws and the systems of ethics underpinning them have always, as today by Islamic State, Boko Haram and similar rogue organisations, along with allegedly criminal ruling regimes in countless countries ranging from Russia and Syria to Zaire and Zimbabwe, not to mention Malaysia, been supplanted by the deathic variously known as the Law of the Jungle or the Iron Rule declaring that ‘might is right’.

And under this deadly deathic it is possible to discern a good many subsidiary ones that might be called, for example, the Steel Law that apparently grants the potentates, or in the case of Malaysia, the UMNOputras, the power to take what they want from the people; the Copper Law that decrees that the regime owns the police; and the Rubber Law designed to render the constitution and laws of the country sufficiently flexible as to always protect the regime and its cronies and to punish its critics and opponents.

But thankfully there are finally some signs that UMNO-BN’s Steel Law is getting rusty, its Copper Law terribly tarnished, and its Rubber Law perished beyond repair. And that there are so many good, honest, courageous and truly ethical Malaysians who are hell-bent on finally destroying this deathical regime that it’s finally and deservedly doomed.