Will David Malpass be a malady for multilateralism?


February 18, 2019

Will David Malpass be a malady for multilateralism?

Image result for david malpass
http://www.eastasiaforum.org/2019/02/15/will-malpass-be-a-malady-for-multilateralism/
by  Peter McCawley, ANU
 

In early January 2019, World Bank President Jim Yong Kim made the startling announcement that he is resigning. Reports suggested that the United States would nominate senior US Treasury official David Malpass for the post. Soon after, Donald Trump officially nominated him. 

Now that he has US backing, the chances are that he will quickly get the job. In principle, the Board of Executive Directors of the World Bank is committed to an internationally competitive selection process. As soon as Jim Kim announced his resignation, the board issued a list of Selection Principles proposing five key criteria to be considered. The list, which was a good one, includes having a proven track record of leadership, the ability to articulate a clear vision for the World Bank’s development mission and an appreciation for multilateral cooperation.

It’s a good try. But the board’s effort will almost certainly fail. The United States has come to regard the World Bank post as a gift from the US President. The Trump administration doubtless expects that the board will confirm Malpass as World Bank president without too much fuss.

Malpass has a solid Republican background. He worked in the Reagan and HW Bush administrations, had a career on Wall Street working for the Bear Stearns global investment bank before it collapsed in 2008, and ran (unsuccessfully) in a Republican primary in New York for the US Senate in 2010.

More recently he worked as an economic adviser to Trump during the 2016 presidential election campaign and was appointed as Undersecretary for International Affairs at the US Treasury Department in 2017.

Since joining the Treasury Department, Malpass has been an outspoken sceptic of both multilateralism and, more specifically, of the World Bank’s activities. In an extended interview in 2017 he outlined the Trump administration’s view that ‘multilateralism has gone substantially too far’. One of the problems of the multilateral system, he said, is that it ‘often drifts away from our values of limited government, freedom, and the rule of law’.

Malpass was also critical of the World Bank’s program of lending to China. He said that it ‘doesn’t make sense’ for China to receive money borrowed in the United States, using the US government guarantee, when Beijing has ‘plenty of resources’ of its own and access to capital markets.

Views of this sort reflect boilerplate Republican approaches to international agencies such as the World Bank. They will nevertheless dismay staff of the World Bank, many of whom were bewildered by the nature of Jim Kim’s abrupt departure.

It may be that not too much should be made of Malpass’ tough language. Senior US Treasury officials — Republican and Democrat alike — have a long track record of growling at the World Bank and pounding the table during international negotiations over funding. They need to demonstrate to their colleagues around Washington and especially to Congress that they are protecting US foreign policy interests.

Neither are their criticisms always unreasonable. It is certainly true that the World Bank and numerous other international agencies have fat that can be trimmed. It is also true that many of these agencies are subject to ‘mission creep’ and that close reviews of their work programs are often useful.

If and when Malpass takes up the post as President of the World Bank, he will find himself in charge of a sprawling bureaucracy that contains many internal fiefdoms. He will face much resistance to change, both from within the World Bank and from many of the 189 member countries that belong to it — including, no doubt, China.

Hopefully Malpass will balance scepticism with enthusiasm as president. His faith in US benevolence should help bolster him in his work. In the same 2017 interview, he explained that it is in the United States’ ‘own self-interest’ as a global leader to see neighbours do well.

If he can apply principles of this kind to his new job, Malpass might come to leave his mark as one of the more successful presidents of the World Bank.

Peter McCawley is Honorary Associate Professor in the Crawford School at the Australian National University. He is formerly an Australian Executive Director on the Board of the Asian Development Bank in Manila.

Reflections on Achieving the Global Education Goals


February 15, 2019

Reflections on Achieving the Global Education Goals

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In today’s deeply interconnected world, the benefits of strong and inclusive education systems are far-reaching. A quality education gives people the knowledge they need to recognize the importance of safeguarding the planet’s finite resources, appreciate diversity and resist intolerance, and act as informed global citizens.

https://www.project-syndicate.oryO8cnaCfxvpRj6xZQWIVfABNo8v98hSxJ6_Tzc6M

 

NEW YORK – Throughout my life, I have seen the power of education. I have witnessed how quality education for all can support the creation of dynamic economies and help to sustain peace, prosperity, and stability. I have also observed how education instills in individuals, no matter their circumstances, a strong sense of self, as well as confidence in their place in the world and their future prospects.

We know that each additional year of schooling raises average annual GDP growth by 0.37%, while increasing an individual’s earnings by up to 10%. If every girl worldwide received 12 years of quality education, lifetime earnings for women could double, reaching $30 trillion. And if all girls and boys completed secondary education, an estimated 420 million people could be lifted out of poverty. According to a 2018 World Bank report, universal secondary education could even eliminate child marriage.

In today’s deeply interconnected world, the benefits of strong and inclusive education systems extend even further. Education gives people the knowledge they need to recognize the importance of safeguarding the planet’s finite resources, appreciate diversity and resist intolerance, and act as informed global citizens.

The United Nations Millennium Development Goals, created in 2000 to guide global development over the subsequent 15 years, gave new impetus to efforts to ensure education for all. From 2000 to 2015, primary-school enrolment in the developing world rose from 83% to 91%, reducing the number of out-of-school primary-school-age children from 100 million to 57 million. Moreover, from 1990 to 2015, the global literacy rate among people aged 15 to 24 increased from 83% to 91%, with the gap between men and women declining substantially.

But much remains to be done. Globally, at least 263 million children were out of school in 2016. This includes half of all children with disabilities in developing countries. Furthermore, half of all children of preschool-age – the most crucial years for their cognitive development – are not enrolled in early-childhood education.

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The situation deteriorates further in conflict zones, where girls are almost two and a half times as likely to be out of school as their peers in stable countries. And this does not cover the estimated 617 million children and adolescents of primary and lower-secondary-school age – 58% of that age group – who are not achieving minimum proficiency in reading and mathematics.

To help close these gaps, the successor to the MDGs, the Sustainable Development Goals, also emphasizes education. SDG4 commits the world to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all – essentially to harness the power of education to unlock every person’s potential. Despite the scale of the challenge and the diverse barriers that can restrict and disrupt learning, we know what an effective strategy would entail.

First, to be a true force for change, education itself must be transformed in response to the realities of accelerating globalization, climate change and labor market shifts. While advanced technologies – such as artificial intelligence, cloud computing, and blockchain – raise new challenges, they may be able to play a role in improving educational outcomes. Digital skills must be part of any curriculum, and new alliances with the tech sector – which can provide valuable insights into these topics – should be actively pursued.

Second, an inclusive and lifelong approach, focused on reaching the most marginalized and vulnerable populations, is essential. As UNICEF’s Innocenti Report Card 15 shows, this does not mean sacrificing high standards. In fact, as the report points out, children of all backgrounds tend to do better when they are in a more socially integrated school environment. Such an inclusive approach will require sharing best practices and investing in what is proven to work. Meanwhile, development partners must provide long-term support that emphasizes capacity-building and institutions, and balances humanitarian, economic, and security imperatives.

For education systems and services to be truly inclusive, however, they must also leave no one behind, such as refugees. UNESCO’s latest Global Monitoring Report estimates that refugees have missed 1.5 billion school days since 2016. While eight of the top ten hosting countries, including several low- and middle-income countries, have shouldered considerable costs despite the strain on education systems to ensure that refugees attend school alongside nationals, most countries either exclude refugees from national education systems or assign them to separate facilities. This entrenches disadvantage and hampers social integration. The two landmark global compacts on migration and refugees adopted by UN member states last December point the way toward addressing this challenge.

Achieving the needed educational transformation will require far more financing than is currently on offer. As it stands, the global annual funding gap for education amounts to nearly $40 billion. Closing this gap will require not just increased domestic financing, but also a renewed commitment from international donors.

Everyone has the right to an education. Upholding this right – and achieving SDG4 – will require well-designed strategies, coupled with a prolonged commitment to implementation and effective cooperation among all relevant stakeholders. The UN and its agencies will continue to support such actions, as we strive to ensure that no one is left behind.

 

 

Could a Green New Deal help Malaysia invest in clean energy?–Getting our Priorities Right.


January 20, 2019

Could a Green New Deal help Malaysia invest in clean energy?–Getting our Priorities  Right.

Opinion  |  Kenneth Cheng, Penang Institute

   Image result for antonio guterres

United Nations (UN) Secretary-General, António Guterres

COMMENT | The United Nations (UN) Secretary-General, António Guterres, did not mince words when he proclaimed in March last year that climate change is “the most systemic threat to humankind”.

The report subsequently issued in October 2018 by the UN Intergovernmental Panel on Climate Change (IPCC) was equally damning when it stated that the Earth is projected to reach a 1.5 degree Celsius increase in average global surface temperatures compared to pre-industrial levels between 2030 and 2052.

Once that happens, sea levels will rise and this translates to increasing instances of floods and heatwaves. Some parts of the world would experience either intense droughts or rainfall.Malaysia will not be absolved of the sobering reality the world is currently grappling with. It is saddening that the devastating impact wrought upon Malaysia through floods, droughts and extreme wildfires are becoming an accepted truth to most Malaysians. According to the findings of the International Disaster Database, major floods are the most frequent natural disaster in Malaysia, while their impacts are also getting more severe. Floods, especially in the east coast region, in 2014 and 2017 were arguably the worst climate disasters in Malaysian history.

Ironically, the attitude of Malaysians towards our planet’s greatest threat remains lukewarm at best.

Pertinent environmental issues are not usually on the minds of most Malaysians.

The survey by Merdeka Centre in December 2016 found that under a third of Malaysians showed great concern about climate change.

However, 42.5 percent of Malaysians do concede that they have been not contributing enough in terms of protecting the environment, and more than half of Malaysians, in the same survey, also admitted the average temperature has been higher in the last three years.

Malaysians are generally perceived to be indifferent to the environmental challenges the world is facing now, but at the same time, they do acknowledge that the responsibility of protecting the environment lies with each individual and that the climate is indeed changing abruptly.

Existing measures

Thus, the onus remains on the government to take an active role in educating the public about the importance of preserving the environment.

Initiatives such as introducing environmental subjects, as was mooted by the previous government, should be debated once again within the cabinet. Early exposure to various environmental issues during adolescence would inculcate within young Malaysians the sense of civic responsibility that is much needed in preserving the environment.The government – having rightly recognised the threats posed by climate change – has tried to focus on ensuring continued economic growth through environmental sustainability, while building Malaysia’s resilience against natural disasters.

For example, the government has a Government Green Procurement (GGP) policy, whereby the procurement of products or services by any ministry or government agency is required to meet strict environmental criteria and standards set by the government.

According to the government, the implementation of GGP resulted in a reduction of 100.431 kilotonnes of carbon dioxide emissions in 2016 alone. The government also believes that the implementation of GGP would encourage the growth of a more environmental-friendly market.

Malaysia should also be applauded for introducing alternative green financing schemes such as green sukuk (bonds) and the Green Technology Financing Scheme (GTFS), to finance and stimulate sustainable projects. Both of these schemes are touted to be instrumental in growing Malaysia’s clean technology industry.

Green technology is loosely defined as technological processes which would keep environmental damage to the minimum.

Green sukuk is hailed as an innovative manner through which to raise funds to support environmentally sustainable infrastructure projects. Meanwhile, the GTFS was introduced with the aim of inducing the private sector into supporting the development of the green technology industry.

Areas for improvement

While the government’s numerous policies to combat climate change are commendable, they do not go far enough in terms of climate change mitigation.

Firstly, Malaysia’s research and development (R&D) in the fields of the environment and climate change is still lacking.

While the aforementioned financing schemes may bring inventive new technologies to the mainstream, its effects are limited as long as Malaysia’s green technology industry is stagnated as a whole.

This would further disincentivise the private sector from dipping their hands into the green economy, since the availability of green technology in Malaysia is limited and would result in a high capital cost should the private sector utilise such technology.

Moreover, government-backed financing schemes are limited in terms of being able to provide fundamental R&D for green technology. For instance, R&D projects are not included in GTFS, as it can only finance projects which are ready for commercialisation.Arguably, the biggest barrier towards successfully tackling climate change in Malaysia, and changing the preconception of climate change in Malaysia, is the dichotomy between economic development and environmental protection.

As a nascent developing nation, Malaysia – perhaps being desperate to rise through the economic ranks internationally – is more likely to forego environmental sustainability in pursuit of present-day development.

Malaysia’s climate change dilemma is also exacerbated by how its economy is predicated upon coal, natural gas or palm oil – natural resources which bring about enormous and irreversible impacts on the environment.

Green New Deal

Having said that, what if there was a way to propel the economy forward and yet, at the same time, preserve our environment?

Lately, the United States has been contemplating a ‘Green New Deal’ in an attempt to kick start the country’s slowing economy, while ensuring reductions in carbon dioxide emissions.The essence of a green new deal is simple enough: a government economic stimulus aimed specifically at clean technology designed to modernise the American economy while achieving the effect of mitigating climate change.A green new deal aims to energize the economy through huge public investment with the focus of constructing a more extensive renewable energy infrastructure.

The spillover effects of these public green investments would also lead to the creation of a swathe of green jobs and, crucially, expand the job market in renewable energy technology.

The Malaysian context

I believe it is worth contemplating the possibility of replicating a stimulus policy akin to the green new deal in America within the context of Malaysia. As I mentioned earlier, there is currently a dearth of investment in green technology in Malaysia, since the private sector is reluctant to invest in green technology as of now. Therefore, we are left with only the government as our only viable source to kickstart investment in green technology.

Significant but wisely targeted investments in clean, low-carbon technology would have the multiplier effect of boosting our economy and leading to the creation of modern and sustainable green energy jobs.The merits of such a move cannot be overstated enough. Aside from protecting the environment, the introduction of green energy jobs in Malaysia would also have the knock-on effect of transitioning Malaysia’s economy from one relying on non-renewable resources to a strong but self-sufficient economy powered mostly through renewable energy.

Green energy jobs also have the advantage of being mostly high-skilled jobs. The creation of such jobs would give the employment markets in Malaysia a much-needed lift, since we are currently suffering a mismatch of having too many low-skilled jobs but a large quantity of skilled labour.

It is no surprise that China, despite being the world’s largest coal consumer, is equally committed toward investing in green energy because of the economic potential it entails. By investing heavily in green energy, China is actually outpacing the US in terms of creating clean energy jobs.

Major public green investment does not appear to be popular enough, since it usually suffers from the time-lag effect and requires consistent funding.However, this wouldn’t be the case if the Malaysian public was aware of the huge monetary costs of natural disasters in Malaysia, and the projected future costs of climate change.

The floods in Kelantan between 2014 and 2015 caused an estimated RM200 million in losses, with buildings and government infrastructure most affected.

Additionally, the Penang state government has allocated a total of RM22.7 million for rebuilding infrastructure damaged by floods in 2017.

Heavier investment in clean energy will likely give us the opportunity to avoid such economic damage moving forward.Nevertheless, it would be difficult to obtain the approval of Malaysians to increase public investment in green technology at this current juncture, let alone have it debated in Parliament. But I argue that this is the only possible way to steer our country towards a modernised economy that truly puts the term ‘sustainable development’ into actual practice.Most importantly, it also ensures that our children possess the same privileges as us to take pleasure in what this planet offers us. Therefore, it is about time Malaysians started talking and acting strongly on the issue of climate change.


KENNETH CHENG is an analyst at Penang Institute. He holds a bachelor’s degree in economics and graduate diploma in politics. Hailing from the Silver State (Perak), he believes the challenge of a researcher is to temper his/her ‘pessimism of the intelligence’ with ‘optimism of the will’.

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

Crunch time for Malaysia on economic reform


November 15, 2018

Crunch time for Malaysia on economic reform

by Stewart Nixon

http://www.eastasiaforum.org/2018/11/04/crunch-time-for-malaysia-on-economic-reform/

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Prime Minister Mahathir Mohamad’s honeymoon period after he swept to power in Malaysia may now be facing an economic reality test. Mahathir’s recent admission that his pre-election promises exceeded what can possibly be delivered is just the start. Analysts and investors alike are now hanging on further details of the government’s economic policy priorities.

In the six months since Pakatan Harapan (Alliance of Hope) under Mahathir ended more than six decades of one-party rule in Malaysia, the new government has taken a measured approach to policy development, allowing inexperienced ministers to get on top of their portfolios while it enjoyed electoral grace.

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“Under-investment in human capital is perhaps the single biggest drag on Malaysia’s economic development. It is therefore a positive that human capital remains a high policy priority in Malaysia — commanding its own pillar in the Mid-Term Review and the highest share of budget expenditure. Some of the worthwhile measures include policies to address immediate skills mismatches, invest in school infrastructure and raise the quality of education.”– Stewart Nixon

The release of the Mid-Term Review of the Eleventh Malaysia Plan, as well as the government’s first budget, throws some light on where the government might head on economic policy. Stronger governance and alleviating cost of living pressures are underlined as priority areas, along with greater regional development, entrepreneurship and digitalisation. These priorities represent positive investment in government effectiveness and inclusiveness. But there are questions about economic policy direction.

The Mid-Term Review provides a blueprint loaded with high-level aspirations that would represent an impressive reform agenda if translated into successful policies. But aspects of the Review raise questions about the government’s real capacity to navigate medium-term risks. The 2020 balanced budget target has been abandoned and the budget deficit has widened to 3.7 per cent of GDP (with an aim to reduce this to 3 per cent of GDP by 2020), while public investment — most notably in major rail and pipeline projects — is set to contract.

The cancellation and postponement of mega rail and pipeline projects has rightly been applauded on governance grounds, but the fallout presents some economic risks. Debate about future infrastructure needs has been sidelined by fear mongering about debt. Investors also now face higher levels of uncertainty and risk. While Chinese investors have been hit hardest by the cancellations, both governments appear to have so far handled the diplomacy of recontracting deftly.

The Review also foreshadows a host of new expenditure in healthcare, social protection, rural infrastructure and the environment that will need to be financed by either undeclared budget cuts in other areas or additional revenues.

Revenue raising — or the failure to address the need for it — is a serious weakness in government plans. Tax revenue has fallen to around 13 per cent of GDP — compared to the OECD average of over 34 per cent — and the government’s decision to dump the goods and services tax (GST) for a narrower ‘sales and service’ tax will accelerate the decline. The budget estimates tax revenue at just 11.5 per cent of GDP in 2019.

The Mid-Term Review hints at plans to diversify indirect taxes and increase non-tax revenue. Increasing indirect taxes appears ambitious after the noisily populist anti-GST campaign, while non-tax revenue is code for increasing dependence on revenues from state-owned enterprises (SOEs). The budget highlights this, reporting a 33 per cent drop in indirect tax revenue in 2018 and dividend hikes on PETRONAS in particular amounting to a doubling of non-tax revenue by 2019.

The budget hits some easy targets with higher taxes on property gains, sugar beverages, casinos, imports and online services. However it ignores potential reforms to wealth and property taxes or to the income tax system that currently covers only 15 per cent of workers and transfers very little from rich to poor households.

While the Malaysian government’s footprint may be low in taxation and expenditure, its participation in the economy is pervasive. The highly centralised top-down federation (that cripples local government initiative) and government ownership of more than half the local stock market ensure that the vast majority of economic activity is directly affected by the state.

Despite enabling the corruption scandals that brought down the former government, SOE dominance is not earmarked for meaningful reform in the near future. The budget speech declares that stakes in ‘non-strategic’ government businesses are to be reduced, yet if anything the Mid-Term Review is a blueprint for reinforcing paternalistic control of local governments and enhancing the primacy of SOEs. This is moving the Malaysian economy in the wrong direction. Rather, the government needs to focus on decentralising local governance and diluting SOE market concentration.

The large program of policies favouring Malays and other indigenous groups (Bumiputera) in the Mid-Term Review is another possible economic destabiliser. There was much hope that Mahathir’s more representative government would bring an end to the country’s long-running and ill-targeted affirmative action program. Yet the Review simply reaffirms the government’s commitment to continuing it. Outdated and divisive policies serve to perpetuate negative perceptions of the majority Malays, deter investment and encourage the brain drain of discriminated-against minorities.

Underinvestment in human capital is perhaps the single biggest drag on Malaysia’s economic development. It is therefore a positive that human capital remains a high policy priority in Malaysia — commanding its own pillar in the Mid-Term Review and the highest share of budget expenditure. Some of the worthwhile measures include policies to address immediate skills mismatches, invest in school infrastructure and raise the quality of education.

Still, the perpetuation of myths that low-skilled foreign workers are a drag on the economy and misguided plans to curb migrant inflows through increased levies and by further outsourcing responsibility to businesses with a vested interest in increasing numbers raise doubts about whether the government understands the extent and causes of Malaysia’s human capital deficiencies.

In the face of headwinds from global economic crises and trade wars, ambitious reforms are a must for Malaysia’s new government. Replacing current unproductive and populist measures with a medium-term policy platform that tackles distortions and disadvantage would not only enhance the country’s economy but also give needed weight to the government’s economic credentials.

Stewart Nixon is a Research Scholar in the Crawford School of Public Policy, The Australian National University. He is lead author of a new report from the Asian Bureau of Economic Research in the Crawford School on the Malaysian economy and was co-author of the OECD’s inaugural Economic Assessment of Malaysia.

Directions for Malaysia’s Economic Policy


October 28, 2018

Directions for Malaysia’s economic policy

by Cassey Lee / Khmer Times
Image result for 11th malaysia plan

History repeats itself but often in slightly different ways. So it is with the tabling of the Mid-Term Review of the Eleventh Malaysia Plan (MTR-11MP) on October 11 by Prime Minister Mahathir Mohamad.

Some 34 years ago, in March 1984, Mr Mahathir unveiled the mid-term review for the Fourth Malaysia Plan (4MP) (his first since assuming power in 1981). The Eleventh Malaysia Plan (11MP) is the country’s latest five-year development plan covering the period 2016 to 2020. It serves as a tool for medium-term economic planning. The mid-term review of the Plan essentially takes stock of the progress achieved half-way through its implementation period.

Though both the 4MP and 11MP were crafted under heightened fiscal constraints and contained significant new policy directions, there are some notable differences. A key difference is that the new policy directions in the MTR-11MP are noticeable but contain less implementation details. This is to be expected, as the new Pakatan Harapan (PH) government, which came into power in May, probably only had about three to four months to shape the MTR-11MP report. Work on the report commenced in October 2017 and was supposed to be tabled in Parliament by July or August.

Taking this time-constraint into account and the fact the new administration has had to struggle with a host of concurrent issues (including fiscal consolidation), the report is nevertheless a compelling read as it provides the first broad overview of the future directions of the PH government’s economic policies.

The report itself is divided into two major components. The first component which covers chapters two to eight provides reviews of the six strategic thrusts of the 11MP which were crafted by the Barisan Nasional government.

Aside from providing statistical updates on the progress achieved, the reviews are generally critical in the sense that they often attribute problems to existing institutional deficiencies. This then leads to the second component of the report (chapters 10 to 15), each of which contains one of the six “pillars” or new policy directions.

These are: (i) reforming governance towards greater transparency and enhancing efficiency of public service, (ii) enhancing inclusive development and well being, (iii) pursuing balanced regional development, (iv) empowering human capital, (v) enhancing environmental sustainability through green growth, and (vi) strengthening economic growth.

Comparing the MTR-11MP with the 11MP, there are some similarities in the themes and emphases of the two reports e.g. human capital, environmental sustainability and inclusiveness.

The significant departures from the original foci of 11MP are in pillar (i) on institutional reforms and pillar (iii) on regional development.

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The institutional reforms detailed in chapter 10 are likely to have drawn from the report from the Institutional Reforms Committee which submitted its final report in July. The reforms include policies to strengthen check and balance mechanisms, revive the spirit of federalism, deepen the anti-corruption agenda and drive political reforms.

One political reform proposal that has received media attention is the implementation of a two-term limit for the Office for the Prime Minister, Chief Minister and Menteri Besar. Given the importance of institutions as key determinants of long-term economic development and growth, the emphasis on institutional reforms is both appropriate and encouraging.

The renewed emphasis on regional development is refreshing and surprising. Surprising, because regional development was largely neglected during Mr. Mahathir’s first term as Prime Minister (1981-2003). Though the 11MP did promote the development of regional economic corridors, the new emphasis is on reducing state-level developmental gaps that have persisted. The report contains proposals to improve development allocations to less-developed states, namely, Sabah, Sarawak, Kelantan, Terengganu, Kedah and Perlis.

This strategy is both equitable and politically astute – the latter because the PH government needs to win the trust of rural Malay voters in northern Peninsular Malaysia and East Malaysian voters before the next general election.

Dr Cassey Lee is Senior Fellow, and co-coordinator of the Malaysia Studies Programme, at the ISEAS-Yusof Ishak Institute. This article first appeared in ISEAS Commentary and it can be read at https://bit.ly/2PgakFW

Political financing reforms should top PH Government’ s political agenda – Jomo


Political financing reforms should top PH Government’ s political agenda – Jomo

Koh Jun Lin  |  Published: September 27, 2018@ http://www.malaysiakini.com





Reforming how political activities are financed in Malaysia should be on top of the government’s political agenda, said the former Council of Eminent Persons member Jomo Kwame Sundaram.

He said Malaysia has a “very decadent” political system that had been abused, giving examples such as the 1MDB scandal and the inflated costs of the East Coast Rail Link (ECRL) project and two gas pipeline projects that have since been cancelled.

“It is important to recognise that we have a system of political financing which has been so abused that we cannot get ourselves out of this, unless we develop a legitimate, accountable, system of political financing. “So, I would put the whole system of political financing at the top of the list of political priorities that needs to be addressed by the current government,” he said.

He was speaking as a panellist at a talk titled “The Way Forward for Malaysia” last night together with Rembau MP Khairy Jamaluddin Abu Bakar in Kuala Lumpur last night. The event was organised by the Oxford and Cambridge Society of Malaysia and was attended by approximately 170 people.

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Former Prime Minister Najib Abdul Razak has been accused of siphoning money from 1MDB and SRC International and using part of the money to fund political activities through his personal bank account. Najib had maintained that the money had come from foreign donors.

Malaysiakini set up a microsite in July detailing some of the outflows from one of his bank accounts to political entities.

After Najib was implicated in the 1MDB scandal in 2015, he set up the National Consultative Council on Political Financing (JKNMPP) that went on to produce 32 recommendations to reform political financing in Malaysia.

However, the reforms were not in place in time for the 14th General Election.

ECRL ‘a hoax’
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As for the ECRL project, Jomo described it as a hoax that is not part of China’s Belt and Road Initiative projects, and would not be able to pay for itself even if its development expenses are written off.

The government has claimed the cost of the project is RM81 billion – compared to the previous administration’s estimate for RM55 billion – adding it is worth no more than RM30 billion.

China Communications Construction Company Limited (CCCC) Vice-President Sun Ziyu has defended the cost of the project.

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Meanwhile, Jomo said there needs to be consensus involving all political parties in Malaysia on what needs to be done to tacklecorruption, where political financing is only a part of the problem.

Otherwise, he said there won’t be much progress in the area.

“I have a great deal of concern with addressing other sources of corruption, and this of course is very, very important and necessary to address. But we have a very decadent and corrupt economic system as well as a political system. In other words, we have been thoroughly compromised,” he said.

Read More: How political financing is done in other countries https://www.malaysiakini.com/news/444827