CEP’s Dr. Jomo Kwame Sundaram–A Life of Public Service


September 24, 2018

CEP’s Dr. Jomo Kwame Sundaram–A Life of Public Service

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The Council of Eminent Persons (CEP), sometimes described as the Council of Elders, was set up to advice the Prime Minister Dr Mahathir Mohamad’s new Pakatan Harapan government.

However, the CEP has also attracted a fair amount of controversy, including criticisms from within Harapan about the council’s role and powers.

One of the council’s members, economist Jomo Kwame Sundaram, addresses those criticisms in a question-and-answer format.

Question: You have been quite quiet since you were appointed to the CEP.

Jomo: Yes. Given all the speculation and tendentious publicity, I did not feel it was helpful to provide more fuel to the fire. As you know, myths about the CEP thrived, and all manner of things were attributed to the CEP, often wrongly.

There were also things we did in our individual capacities, which were being attributed to the CEP. As a result, the initial goodwill, credibility and legitimacy the CEP enjoyed were undermined, and instead of being an asset to the government, especially the PM, we became the butt of many criticisms, including from within the Harapan coalition, largely due to misunderstandings and misperceptions.

I think I speak for all CEP members that if the PM needs our services, we will gladly serve in our individual capacities, and hopefully, become less of a liability to him.

Why are you reported to be against publication of the CEP report?

The issue is complex and nuanced. First, producing a single report for publication was not in the PM’s appointment letter or announcement.

Undoubtedly, some other bodies in the past, viewed by many as precedents, did produce reports after working for much longer periods, but some did not. For example, Tun Razak’s National Consultative Council after May 1969 did not do so.

Our brief was to help the PM, and the new government, with some immediate tasks at hand, especially the PH manifesto pledges for the first 100 days. To do that well, we tried to offer advice as soon as possible for him to consider and act upon, which is different from producing a report after 100 days.

But a report has been submitted to the PM?

While CEP members were agreed on most matters, there were also some disagreements, for example, on government-linked companies. As is known, some of us disagreed on privatisation policy decades ago, which has a bearing on contemporary debates.

It may be impossible to resolve some such differences, even after further discussion. In such situations, what does one do? Remain silent, or publish the chair’s view, as long as that is made clear.

The CEP chairperson has come under particular criticism from certain quarters.

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Former CEP Chairman Tun Daim Zainuddin–The Silent Man of Action

I am not sure what you are referring to, but his longstanding relationship to the PM was undoubtedly crucial to the CEP’s establishment and functioning, and the object of criticism by his or the PM’s detractors.

There were also many criticisms of his trip to China, but again, such criticisms were undeserved, in my view. Governments dispatch special envoys all the time to deal with sensitive matters discreetly.

But you were a critic of the earlier Mahathir administration.

Indeed, I was critical of some aspects, but if you read what I wrote, my criticisms were always intended to improve government policy, and I also shared his aspirations for the country, especially development, industrialisation, Wawasan 2020, economic nationalism, nation-building, the so-called Asian financial crisis.

The CEP has not been meeting after the 100 days, but yet a report has just been submitted to the PM.

While we have not met or reviewed draft reports since, our chair has been helping the MACC on certain urban land abuses, as he should. Remember he has vast experience in such matters for half a century, even before he was involved with UDA, the Urban Development Authority.

Some CEP meetings were like master classes where I personally learnt more than I could ever hope to learn from reading.

So, are you for or against publication of the report?

It is really up to the PM. There are many options, including partial publication. Remember there are some highly sensitive matters, in terms of official secrecy as well as other matters which may be sensitive in terms of market behaviour, international diplomacy or even legal procedure.

As someone who has been critical of the abuse of secrecy in the past, I must also acknowledge that there are legitimately sensitive matters, and full transparency may not always be in the public interest.

If the CEP had a different proposal on some issue from the one eventually adopted by the Harapan government, what is the point of publicizing such differences with the government of the day after the fact? It is likely to be used by detractors for their own purposes rather than for better purposes.

Also, as you know, two committees were set up. The Institutional Reform Committee prepared a long report with a view to publication, and the PM may wish to publish it. The other one on 1MDB has contributed to expediting investigation and action, but I doubt their recommendations were intended for publication.

So, you will have nothing to show for your 100 CEP days?

Serving the national and public interest was our priority, not publicity or publications.

What are you doing a month after the CEP’s 100 days ended?

No longer an elder, I already feel younger.Many people expect me to write about the CEP, its work and its recommendations. I have no such plans, but am very busy with earlier unfinished and postponed work as well as new work to help the new administration, preferably under the radar.

The Current Account Counts


August 30, 2018

The Current Account Counts

https://www.project-syndicate.org/commentary/current-account-imbalances-precursor-to-crisis-by-stephen-s–roach-2018-08

Despite the US government’s recent upward revision to personal saving data, the overall national saving rate, which drives the current account, remains woefully deficient. And the major surplus countries – Germany, China, and Japan – have been only too happy to go along for the ride.

 

NEW HAVEN – In an increasingly interconnected global economy, cross-border trade and financial-capital linkages have come to matter more than ever. The current-account balance, the difference between a country’s investment and saving position, is key to understanding these linkages. The dispersion of current-account positions tells us much about the state of global imbalances, which are often a precursor of crises.

The same is true of trade tensions, such as those now evident around the world. Current-account disparities often pit one country against another.

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Economies running current-account deficits tend to suffer from a deficiency of domestic saving. Lacking in saving and wanting to invest, consume, and grow, they have no choice but to borrow surplus saving from others, which gives rise to current-account and trade deficits with the rest of the world. The opposite is the case for countries with current-account surpluses. They are afflicted by subpar consumption, excess saving, and chronic trade surpluses.

There is a long-standing debate over who is to blame for this state of affairs – the deficit countries, which draw freely on the saving of others to finance economic growth, or the surplus countries, which choose to grow by selling their output in foreign markets. This blame game, which has long been central to disputes over international economic policy and trade tensions, is particularly contentious today.

The United States has the largest current-account imbalance in the world. It has recorded a deficit for all but one year since 1982, the sole exception being 1991, when foreign contributions to its military campaign in the Persian Gulf underpinned a miniscule surplus (0.05% of GDP).

During the 2000-2017 period, the US amassed $9.1 trillion in cumulative current-account deficits. That is larger than the $8.9 trillion of cumulative surpluses run collectively by the three largest surplus economies – Germany, China, and Japan – over the same period.

Many observers believe that the US is doing the rest of the world a huge favor by running chronic current-account deficits – namely, supporting the large surplus countries, which tend to suffer from a shortfall of domestic demand. Others, including me, are more critical of America’s long-standing penchant for excess consumption and the role that surplus economies play in enabling it. While there is undoubtedly some validity to both points of view, I worry more about the destabilizing role of the US.

America’s consume-now-save-later mindset, which is at the heart of its current-account deficit, is deeply embedded in its political economy. The US tax code has long been biased toward low saving and debt-financed consumption; the deductibility of mortgage interest, the absence of any value-added or national sales tax, and a dearth of saving incentives are especially problematic.

So, too, are the wealth effects from a profusion of recent asset bubbles. Aided and abetted by the Federal Reserve’s über-accommodation since the late 1990s, there was no stopping the interplay between America’s asset-dependent economy and an equally pernicious leverage cycle underwritten by bubble-inflated collateral. Why save out of income when frothy asset markets can do the job? The preference for asset-based saving over income-based saving is central to America’s current-account deficit.

The surplus countries have been delighted to go along for the ride. It didn’t matter that the US consumption binge was built on a foundation of quicksand. Excess export growth in the large surplus economies enabled the excesses of the world’s largest consumer.

That was especially the case in China. Spurred by Deng Xiaoping’s “reform and opening up,” China’s export sector increased sixfold – from 6% of GDP in 1980 to 36% in 2006.

Mirroring America’s massive current-account deficit, China’s current account went from relative balance in 1980 (+0.1% of GDP) to a massive surplus of 9.9% in pre-crisis 2007. The same was true in major developed economies, albeit to a lesser extreme: Germany’s export share of GDP went from 19% in 1980 to 43% in 2007, while Japan’s went from 13% to 17.5% over the same period.

In many respects, a marriage of convenience between the surplus and deficit countries eventually blossomed into full-blown codependency. But then, with the wrenching global financial crisis in 2008, the music stopped. Since then, frictions between deficit and surplus countries have intensified, now risking the possibility of a full-blown trade war.

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President Donald Trump’s administration has played an especially antagonistic role in asserting that the US is being victimized by large trade deficits. Yet America’s trade gaps have, in fact, been spawned by a chronic deficiency of domestic US saving. Despite the government’s recent upward revision to a still-depressed personal saving rate, the overall US national saving rate, which drives the current account, remains woefully deficient, averaging just 1.9% in net terms (adjusted for depreciation) over the post-crisis 2009-17 period. That is less than one-third the 6.3% average during the final three decades of the twentieth century.

Large and growing federal budget deficits over the next several years will only exacerbate this problem. Blaming China misses the obvious and important point that the Chinese current-account surplus has fallen sharply in recent years, from 9.9% of GDP in 2007 to an estimated 1% in 2018. In 2017, China’s current-account surplus of $165 billion was well below that of Germany ($297 billion) and Japan ($195 billion).1

As China presses ahead with consumer-led rebalancing, it will continue to move from surplus saving to saving absorption, with the distinct possibility that its current account will shift into permanent deficit (a small deficit actually was recorded in the first quarter of this year). That will leave a deficit-prone America with one less surplus country to draw on in funding the growth of its saving-short, excess-consumption economy. Maybe the rest of the world will step up and fill the void. But with the Trump administration now disengaging from globalization, that seems less and less likely.

History suggests that current-account imbalances ultimately matter a great deal. A still-unbalanced global economy may be forced to relearn that painful lesson in the coming years.

Stephen S. Roach, former Chairman of Morgan Stanley Asia and the firm’s chief economist, is a senior fellow at Yale University’s Jackson Institute of Global Affairs and a senior lecturer at Yale’s School of Management. He is the author of Unbalanced: The Codependency of America and China.

When we will ever learn to do things on our own,nothing is gained from giveaways


August 23, 2018

When we will ever learn to do things on our own, not depend on others for help. Face it, nothing is gained from giveaways

By T K Chua

http://www.freemalaysiatoday.com.my

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“If the new government is to be any better than the old, we must find reasons and justifications before making decisions, not make decisions first and then find reasons and justifications to support them.”–T K Chua

As a nation, why do we always expect that others will help us?

We want others to give us technology without quid pro quo. We want others to give us favourable terms in trade and investment. We want others to concede and suffer with us because of our follies. We want others to teach us how to govern and manage our country.

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This man is the very antithesis of the rugged individual. He ended up selling Malaysia on the cheap.

Unless we are a war-torn nation in utter poverty and destitution, I don’t think we’re going to get any meaningful help from others. Let’s ditch the idea that a foreign nation would help another be strong and competitive. To compete and prosper, each nation must do it on its own.

We can see the success and failures of many nations around us. We can’t complain that others are not teaching us. They can’t and won’t. We have to learn from them on our own.

Learning from other countries means doing what they do, not just talking. We can’t keep condemning the subsidy mentality and “free lunches” but keep doing the same as we have for the last half a century.

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A Miracle is Discipline, Innovation, Entrepreneurship

We can’t keep saying meritocracy is good but keep doing the opposite.We can’t keep saying it’s good to be hardworking, conscientious and thrifty but reward incompetency and irresponsibility with easy money.

We can’t keep saying corruption and cronyism is bad if our fight against these comes only in dribs and drabs depending on the “convenience” of the day.

Malaysia has always had great ambitions – the “Malaysia Boleh” attitude, so to speak. We started Proton around the same time that Korea embarked on its auto industry. We started the multimedia super corridor much earlier than many others. We have InventQjaya, Biovalley and numerous other development corridors littering the whole country.

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Proton Saga–Malaysia’s Success Story. And so another of the same in Pro-3

But what did we get in the end? Sadly, we are now talking about starting another national car project. We are talking about learning basic things like online marketing from Alibaba. We are talking about revolutionising agriculture when at one time we were the world champion in rubber and palm oil research.

We should not carry our “handicapped” mentality to the international level. When we trade, invest and conduct business dealings with others, we mustn’t expect favours or help from others. We should extract what we can from others and defend and protect our interests based on our faculties and abilities.

At the international level, no one is going to feel sorry for us and our follies. We must have people with faculties holding strategic and important positions in the country.

If the new government is to be any better than the old, we must find reasons and justifications before making decisions, not make decisions first and then find reasons and justifications to support them.

TK Chua is an FMT reader.

The views expressed are those of the author and do not necessarily reflect those of FMT.

 

The Paradox of Globalization: Development Cooperation at Risk


August 22,  2018

The Paradox of Globalization: Development Cooperation at Risk

by Dr. Jomo Kwame Sundaram

http://www.ipsnews.net/2018/08/globalization-enhanced-development-cooperation/

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Protracted economic stagnation in rich countries continues to threaten the development prospects of poorer countries. Globalization and economic liberalization over the last few decades have integrated developing countries into the world economy, but now that very integration is becoming a threat as developing countries are shackled by the knock-on effects of the rich world’s troubles.
Trade interdependence at risk
As a consequence of increased global integration, growth in developing countries relies more than ever on access to international markets. That access is needed, not only to export products, but also to import food and other requirements. Interdependence nowadays, however asymmetric, is a two-way street, but with very different traffic flows.
Unfortunately, the trade effects of the crisis have been compounded by their impact on development cooperation efforts, which have been floundering lately. In 1969, OECD countries committed to devote 0.7% of their Gross National Income in official development assistance (ODA) to developing countries. But the total in 2017 reached only $146.6 billion, or 0.31% of aggregate gross national income – less than half of what was promised.
In 2000, UN member states adopted the Millennium Development Goals to provide benchmarks for tackling world poverty, revised a decade and a half later with the successor Sustainable Development Goals. But all serious audits since show major shortfalls in international efforts to achieve the goals, a sober reminder of the need to step up efforts and meet longstanding international commitments, especially in the current global financial crisis.
Aid less forthcoming
Individual countries’ promises of aid to the least developed countries (LDCs) have fared no better, while the G-7 countries have failed to fulfill their pledges of debt forgiveness and aid for poorer countries that they have made at various summits over the decades.
At the turn of the century, development aid seemed to rise as a priority for richer countries. But, having declined precipitously following the Cold War’s end almost three decades ago, ODA flows only picked up after the 9/11 or September 11, 2001, terrorist attacks. The Monterrey Consensus, the outcome of the 2002 first ever UN conference on Financing for Development, is now the major reference for international development financing.
But, perhaps more than ever before, much bilateral ODA remains ‘tied’, or used for donor government projects, rendering the prospects of national budgetary support more remote than ever. Tied aid requires the recipient country to spend the aid received in the donor country, often on overpriced goods and services or unnecessary technical assistance. Increasingly, ODA is being used to promote private corporate interests from the donor country itself through ostensible ‘public-private partnerships’ and other similar arrangements.
Not surprisingly, even International Monetary Fund staff have become increasingly critical of ODA, citing failure to contribute to economic growth. However, UN research shows that if blatantly politically-driven aid is excluded from consideration, the evidence points to a robust positive relationship. Despite recent efforts to enhance aid effectiveness, progress has been modest at best, not least because average project financing has fallen by more than two-thirds!
Debt
Debt is another side of the development dilemma. In the last decade, the joint IMF-World Bank Heavily Indebted Poor Countries initiative and its extension, the supplementary Multilateral Debt Relief initiative, made some progress on debt sustainability. But debt relief is still not treated as additional to ODA. The result is ‘double counting’ as what is first counted as a concessional loan is then booked again as a debt write-off.
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At the 2001 LDCs summit in Brussels, developed countries committed to providing 100% duty-free and quota-free (DFQF) access for LDC exports. But actual access is only available for 80% of products, and anything short of full DFQF allows importing countries to exclude the very products that LDCs can successfully export.
Unfortunately, many of the poorest countries have been unable to cope with unsustainable debt burdens following the 2008-2009 financial crisis. Meanwhile, there has been little progress towards an equitable and effective sovereign-debt workout framework despite the debilitating Argentine, Greek and other crises.
Technology gap
In addition to facing export obstacles, declining aid inflows, and unsustainable debt, the poorest countries remain far behind developed countries technologically. Affordable and equitable access to existing and new technologies is crucial for human progress and sustainable development in many areas, including food security and climate-change mitigation and adaptation.
The decline of public-sector research and agricultural-extension efforts, stronger intellectual-property claims and greater reliance on privately owned technologies have ominous implications, especially for the poor. The same is true for affordable access to essential medicines, on which progress remains modest.
An international survey in recent years found that such medicines were available in less than half of poor countries’ public facilities and less than two-thirds of private facilities. Meanwhile, median prices were almost thrice international reference prices in the public sector, and over six times as much in the private sector!
Thus, with the recent protracted stagnation in many rich countries, fiscal austerity measures, growing protectionism and other recent developments have made things worse for international development cooperation.
Dr. Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

Bangsa Malaysia? Liew’s Canard


August 20, 2018

Bangsa Malaysia? Liew’s Canard

by S. Thayaparan

http://www.malaysiakini.com

“Propaganda is to a democracy what the bludgeon is to a totalitarian state.”

― Noam Chomsky, ‘Media Control: The Spectacular Achievements of Propaganda’

COMMENT | I noticed a radio station that before the elections did not cover politics is now covering politics with a newly discovered vigour. I really have no problem with this. Indeed, journalists from what was the alternative media before the elections have now become “mainstream” in the sense that where mention of them was verboten before the elections, now they and their opinions have become important in this “new Malaysia”.

I noticed that in one of these radio stations’ latest gimmick is centred upon the “Bangsa Malaysia” kool-aid, which I do have a problem with.

Ever since I started writing for Malaysiakini – seven or eight years ago – the major theme of my articles has been a rejection of state propaganda. However, rejecting state propaganda is like shooting fish in a barrel. Far more dangerous was the propaganda of the then opposition, carried out mainly by the DAP, which was the Bangsa Malaysia canard.

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An Empty Vessel makes the most noise–Stop Waffling: “I may be Chinese culturally but politically I participate in public life as a Malaysian, not as a Chinese.” Hey, look at yourself and your own party before you talk.  I see no difference between Pakatan Harapan (DAP, PKR, Bersatu, Amanah, Warisan),  and the New Opposition (UMNO, MCA, MIC, Gerakan and PAS)–Din Merican

I had assumed that after May 9 and the realities of power sharing at a federal level between various Malay-Muslim power structures and the DAP, this nonsense would be dropped. But the reality is that if anything, it has become more virulent. DAP’s Liew Chin Tong’s latest piece is evidence of this.

The piece starts off with a justification of why the 100 days promises were difficult to sustain, which as usual – for some local politicians – meant alluding to the American experience. Cherry picking from the American experience is a mistake that most local politicians make. For the record, most criticism of the 100 days promises of Pakatan Harapan is not that they could not fulfil those promises but rather they were waffling on them.

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The Way Forward–Bangsa Malaysia which was officially introduced by Dr Mahathir in 1991, as part of the package in his Vision 2020 project is horse manure today.

Nearly every promise they kept had to be dragged out of Harapan and this is a good thing. Politicians do what is politically expedient, while the citizenry who voted for them have to keep them in check. But this preamble of the hardships Harapan faced when committing to their promise is merely a prelude to the rise of the Bangsa Malaysia canard that Liew is shovelling at us.

Liew says, “For instance, I may be Chinese culturally but politically I participate in public life as a Malaysian, not as a Chinese.”

Really? Forget that the personal is political, but what does political life really mean? Political life in the Malaysian context is defined by constitutional provisions that are manipulated by Malay power structures to maintain racial and religious hegemony at the expense of the minorities. To claim that one participates in political life as a Malaysian is absurd when the majority ethnic group in this country participate in politics as Malays.

Never mind the lunacy of such a claim when the DAP made it very clear that the reason why they joined forces with Bersatu’s Dr Mahathir Mohamad was because they needed the “Malay” vote to save Malaysia.

 

The point being that “political life” was defined along racial lines, political strategies was endorsed along racial lines, and the outcome of this election is because the majority Malay community was politically fractured. There is a reason why Liew talks about the majority of Malaysians that were happy with the results. The reality is that a majority of Malays did not vote for this coalition.

In fact, the current Prime Minister warned of this very situation when he cautioned that UMNO would fall if the Malays were not unified back in the day when he was called ‘Mahafiruan’ by his political enemies.

The reality

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“Unlike what Liew contends, the past 100 days did not see the emergence of the Bangsa Malaysia identity but rather that the reality of the power-sharing formula meant that the DAP finally understood what it meant to be MCA. PKR leader Anwar Ibrahim’s rejoinder of not spooking the Malays is a direct refutation of this Bangsa Malaysia horse manure.”–S. Thayaparan

This is not a disconnect. I do not think that this is even some sort of cognitive dissonance. The reality is that most political operatives understand that this Bangsa Malaysia is horse manure. They know that when it comes to Bangsa Malaysia, it does not withstand constitutional scrutiny or even ideological scrutiny but more importantly, it means cannibalising your community to further mainstream Malay agendas.

I talked about this here – “When it comes to racial politics, minorities squabbling for the political interests of majoritarian stakeholders is painful to watch. Malays from either side of the political divide at least sometimes can meet halfway on those politically-designed issues of race and religion. Throw in culture and you have Malay power structures at war, but not tearing each other’s eyes out like how the non-Malay component parties do in the service of gaining political power for their Malay overlords.”

 

Unlike what Liew contends, the past 100 days did not see the emergence of the Bangsa Malaysia identity but rather that the reality of the power-sharing formula meant that the DAP finally understood what it meant to be MCA. PKR leader Anwar Ibrahim’s rejoinder of not spooking the Malays is a direct refutation of this Bangsa Malaysia horse manure.

The religious and racial issues, whether it is the restructuring of Biro Tatanegara (BTN), the waffling on the National Security Council (NSC), the various racial and religious incidents or policies that the DAP has been strangely quiet on, demonstrates that the Bangsa Malaysia kool-aid means nothing when it comes to the realpolitik of race and religion in this country. Actually, most of my articles leading up the 100-day mark are about these racial and religious tensions in the post-May 9 milieu.

Liew says that there is a need to define what this new Malaysia stands for. Liew says for him, it means that we all see ourselves as first and foremost Malaysian citizens. What does this even mean? Everyone in Malaysia have always seen themselves as Malaysian citizens – that is, if we are lucky enough to have our citizenship acknowledged by the state – but the problem has always been that the state does not view us as equal citizens. Put simply, politics does not view us as equal citizens.

This is the danger of the Bangsa Malaysia kool-aid – it attempts to hide this stark reality.


S THAYAPARAN is Commander (Rtd) of the Royal Malaysian Navy.

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

Tariq Ismail takes on The Economist for calling Dr. Mahathir Mohamad “Chief of Everything”


August 18, 2018

Tariq Ismail takes on The Economist for calling Dr. Mahathir Mohamad  “Chief of Everything”

By Tariq Ismail

http://www.freemalaysiatoday.com

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I refer to the article referencing an editorial in The Economist entitled “Malaysia’s New Leaders Have Found Their First 100 Days Tough”.

The Economist editorial board opined that although Dr. Mahathir Mohamad’s Pakatan Harapan (PH) government has made headway in fulfilling key election pledges, in effect Mahathir is hindered by a “novice” Cabinet.

The article further contends that this has resulted in Mahathir having to become the “chief of everything”, thus reverting to his old autocratic ways. The piece also claims this is why Mahathir is retaining “cronies” such as those in the Council of Eminent Persons (CEP) and Daim Zainuddin.

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Malaysia’s ” Chief of Everything (The Economist)” or a strong crisis Leader ?

Worse still, The Economist is mischievously insinuating that Mahathir has no intention of dismantling racial policies seen as favouring the majority Malays despite his unexpected move in appointing Lim Guan Eng as Finance Minister.

The Economist further, and I have to say very subtly, insinuates that this state of governance is hindering Malaysia’s economic growth, by comparing Malaysia’s expected growth rate of 5% for 2018 against 6% in 2017.

I have to say, this is a very mischievous and almost maligning piece by The Economist. I thus feel compelled to enlighten the public, both local and foreign, of the state of matters as it stands.

The Economist, as influential as it is, must surely understand the nature of change, particularly involving changes in government. Who can forget the case of the Missing W’s when President George W Bush took over from President Bill Clinton? Or even the debacle of the US Cabinet appointments under the leadership of President Donald Trump? Yet, The Economist expects immediate and absolute perfection in the new Malaysian Cabinet line-up despite a game-changing opposition win after 60 years of single-party rule.

The Economist apparently fails to understand that in situations of change, there will be learning curves and gaps in knowledge and experience. That is only to be expected.

I challenge The Economist to undergo an equally momentous change without similar issues, just within its own organisation.

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The Council of Eminent Persons is, in fact, a crisis management team. It is being led by former Finance Minister Daim Zainuddin who took Malaysia out of two serious economic recessions. His leadership of CEP and his steady stewardship of the economy (in 1986 and 1998) is welcome by the international and domestic business community, given the uncertain times ahead as the trade war between America and China heats up. –Din Merican

The appointment of the CEP was made in recognition of this gap in experience and knowledge, particularly given the anticipated challenges in cleaning up after the Najib Razak administration. Professionals in the field of change will know that in such situations of extreme challenges, it is important to establish a team focused on clearing and cleaning up while the existing managers ensure that business runs as usual.

Failure to do so will exacerbate the tremendous problems currently faced.

It is just good change management practice and should be more relevant given the situation the new Malaysia finds itself in.

As for becoming the “chief of everything”, I am surprised The Economist says this. After all, isn’t a CEO a chief of everything? Yes, under normal circumstances, a CEO approves by exception only. However, these are exceptional times for new Malaysia. A new ruling alliance and fresh-faced ministers are confronted with a corruption and money-laundering scandal which has inspired a new field of study in international money-laundering, and these same fresh-faced ministers have to contend with the fall-out of that scandal domestically.

I ask the CEO at The Economist, had you been the incoming CEO in such a situation, would you freely delegate as you would in more normal circumstances? Or would you keep tighter control on the reins of power?

I have to say that despite all this, Mahathir has been admirably receptive and flexible to the suggestions and objections of the coalition ministers in his crafting of policies and handling of issues.

I think The Economist and regrettably most Western commentators on the new Malaysia underestimate the fine balance between the PH coalition and the public support behind it. There is an assumption, especially in the international media, that change was imminent simply based on the change instigated by PKR 20 years ago, and that this meant the PH coalition partners are all cut from the same cloth, so to speak, and are thus of one mind. This is a simplistic and careless analysis of Malaysian politics.

The reality is that Malaysia’s voting demographics, whether by economic standing or ethnicity, is fractious at best. This extends to political party support as well. PKR would never have made it on its own without the other coalition partners who are more modest in comparison but who still commanded crucial support from the section of society that could push PH over the 50% mark to win the election.

At this juncture, everyone would do well to remember that a coalition by definition is “a temporary alliance for combined action, especially of political parties forming a government”. Massive amounts of negotiation and give-and-take are required to make a coalition work, and even more so to make it historically successful. This does not happen without a firm leader guiding the numerous coalition partners in thought and deed, such that everyone reaches a consensus. If this is mistaken for Mahathir reverting to his “old autocratic ways”, I can assure you, a significant number of voting Malaysians are happy for it to remain so for now.

I say this because The Economist, and probably many others, seem to have forgotten the most important lesson of the new Malaysia. It is this: ordinary individuals who share the same universal values and the desire to do what is right by their own selves have the power to effect change regardless of race, ethnicity, economic standing, gender, age and ideology.

As such, The Economist’s pathetic attempts at stoking the fire of dissent and racial enmity topped by a prediction of poorer economic performance will not work in the new Malaysia. The people of the new Malaysia have always been the drivers of our own economic and political fortunes, good or bad. We know this for certain. And we know that as we did before, we can do so again if need be. The power is in our hands.

Tariq Ismail is a member of the PPBM Supreme Council.

The views expressed are those of the author and do not necessarily reflect those of FMT.