Navigating ASEAN’s economic priorities


February 14, 2019

Navigating ASEAN’s economic priorities

By  Kaewkamol Pitakdumrongkit, RSIS

Southeast Asian economies may face major economic headwinds this year amid US–China trade tensions and US Federal Reserve interest rate increases. To help weather the impact, ASEAN member states should prioritise progress on regional economic initiatives.

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Some observers think that the 90-day truce between Washington and Beijing could beget better relations between the two powers. But they may be overestimating China’s ability to make concessions that fulfil what the Trump administration wants. Buying more American products is easy, but implementing measures to address ‘unfair’ trade practices to a degree that satisfies the United States is more difficult to achieve within 90 days. More rounds of tariff escalations or other trade-restricting measures could be in the offing.

On the financial front, in December 2018 the US Federal Reserve raised interest rates from 2.25 to 2.50 per cent and forecast the possibility of further increases in 2019. The Fed did so to ensure there will be room for it to use monetary policy and decrease interest rates to fight the next US recession.

Additional hikes could trigger capital pull-outs from Southeast Asian countries as investors move funds to seek higher yields in the United States. If not well-managed, such capital outflows may instigate financial instability in the ASEAN region.

Regional economies must brace themselves for future economic and financial turbulence. While they are unlikely to be able to avoid such headwinds, ASEAN member states can nevertheless cushion the impact through regional initiatives: the ASEAN Economic Community (AEC) 2025, ASEAN–Hong Kong Free Trade and Investment Agreements (AHKFTA and AHKIA), Regional Comprehensive Economic Partnership (RCEP) and Chiang Mai Initiative Multilateralization (CMIM).

Policymakers should prioritise the complete implementation of the AEC 2025. This is a regional economic integration project by the 10 ASEAN member states designed to achieve five objectives: a highly integrated and cohesive economy; a competitive, innovative and dynamic ASEAN; enhanced connectivity and sectoral cooperation; a resilient, inclusive, people-oriented and people-centred ASEAN; and a global ASEAN.

Advancing the AEC 2025 will enable businesses to better tap into the integrated market of over 600 million people, rendering regional economies more resilient to the incoming headwinds.

Southeast Asian governments should also ratify the AHKFTA and AHKIA signed in November 2017 so that these treaties can enter into force in early 2019 as expected. The agreements will enhance cross-border flows of goods, services and investment between ASEAN and Hong Kong.

The agreements will not only allow firms to enjoy greater access to goods and services markets and better investment protection, but also enable ASEAN nations to further tighten trade and investment ties with China. The latter will help Southeast Asian economies to recuperate from any damage that future Washington–Beijing trade spats may inflict on them.

ASEAN authorities should also concentrate on wrapping up RCEP talks. If concluded, this 16-economy free trade bloc will encompass a market of 3.6 billion people that contributes to a third of global GDP. It will cover 29 per cent of global trade and 26 per cent of the world’s foreign direct investment flows.

Concluding the negotiation will create more opportunities for businesses to deepen their supply chains, and provide RCEP economies with another means to diversify their economic relations and cushion against the negative effects of future US–China trade war spats.

Finally, ASEAN nations together with China, Japan and South Korea (ASEAN+3) should advance the CMIM, a regional financial safety net under the ASEAN+3 framework. Launched in 2010, the scheme provides financial support through a network of currency swaps to help ASEAN+3 nations weather their balance-of-payments difficulties.

Because future Fed rate hikes could trigger investor panic leading to financial instability and capital flights in certain regional economies, the CMIM can provide financial assistance to alleviate such problems.

Admittedly, the above initiatives face their own challenges. A major hurdle for implementing the AEC 2025 is a lack of coordination among domestic ministries and agencies. Individual ASEAN countries must sort out how to improve coordination among the involved authorities. Certain domestic hurdles must also be cleared for a successful ratification of the ASEAN–Hong Kong treaties.

Planned elections in Australia, India, Indonesia and Thailand in 2019 may delay the conclusion of RCEP negotiations in the first half of 2019. Politicians in these nations will likely prioritise their electioneering over international matters. And if the momentum of RCEP talks picks up in the second-half of the year, the parties’ different positions and preferences will still need to be reconciled to seal the deal.

Regarding the CMIM, while a laudable agreement was signed in December 2018 to create more favourable conditions that will enable the regional financial safety net to better assist in a crisis, efforts to advance other aspects of the CMIM have been lacklustre in recent years.

For one, its size has remained the same at US$240 billion since 2012. With this amount, the scheme can at best provide simultaneous lending support to a few small- and medium-sized economies should they come under a crisis. The participants must push for an expansion of the CMIM’s size.

US–China trade tensions and Fed rate hikes will likely generate undesired effects for Southeast Asian economies this year. Despite the challenges of the above initiatives, ASEAN countries must collectively pursue them to navigate through the coming economic headwinds. Time is running out and policymakers must act fast.

http://www.eastasiaforum.org/2019/02/11/navigating-aseans-economic-priorities

Kaewkamol Pitakdumrongkit is Deputy Head and Assistant Professor at the Centre for Multilateralism Studies, S Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore.

 

In defense of the elites


February 5, 2019

In defense of the elites

 

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2019/1/31/in-defense-of-the-elites

This year’s World Economic Forum, more than usual, prompted a spirited round of elite-bashing, which has now become the trendy political posture on both the right and left. On one side, President Trump and Fox News hosts slam the out-of-touch establishment that, according to them, has run things into the ground. On the other side, left-wingers decry the millionaires and billionaires who, in one author’s phrase, “broke the modern world.”

Underlying these twin critiques is a bleak view of modern life — seen as a dysfunctional global order, producing stagnant incomes, rising insecurity and environmental degradation. But is this depiction, in fact, true? Are we doing so very badly that we need to bring back the guillotines?

On the simplest and most important measure, income, the story is actually one of astonishing progress. Since 1990, more than 1 billion people have moved out of extreme poverty. The share of the global population living in these dire conditions has gone from 36 percent to 10 percent, the lowest in recorded history. This is, as the World Bank president, Jim Yong Kim, notes, “one of the greatest achievements of our time.” Inequality, from a global perspective, has declined dramatically.

And all this has happened chiefly because countries — from China to India to Ethiopia — have adopted more market-friendly policies, and Western countries have helped them with access to markets, humanitarian assistance and loan forgiveness. In other words, policies supported by these very elites.

Look at any measure from a global perspective and the numbers are staggering. The child mortality rate is down 58 percent since 1990. Undernourishment has fallen 41 percent, and maternal deaths (women dying because of childbirth) have dropped by 43 percent over roughly the same period.

I know the response that some will have to these statistics. The figures pertain to the world in general, not the United States. Things might have improved for the Chinese, but not for the denizens of rich countries. That sense of “unfairness” is what is surely fueling Trump’s “America First” agenda and much of the anger on the right at the international system. (More bewilderingly, the left, traditionally concerned about the poorest of the poor, has become critical of a process that has improved the lives of at least 1 billion of the world’s most impoverished people.)

When criticizing the current state of affairs, it’s easy to hark back to some nostalgic old order, the modern world before the current elites “broke” it. But when was that golden age? In the 1950s, when Jim Crow reigned in the United States and women could barely work as anything more than seamstresses and secretaries? The 1980s, when two-thirds of the globe stagnated under state socialism, repression and isolation? What group of elites — kings, commissars, mandarins — ran the world better than our current hodgepodge of politicians and business executives?

Even in the West, it is easy to take for granted the astounding progress. We live longer, the air and water are cleaner, crime has plunged, and information and communication are virtually free. Economically, there have been gains, though crucially, they have not been distributed equally.

But there have been monumental improvements in access and opportunity for large segments of the population that were locked out and pushed down. In the United States, the gap between black and white high school completion has almost disappeared. The poverty gap between blacks and whites has shrunk (but remains distressingly large). Hispanic college enrollment has soared. The gender gap between wages for men and women has narrowed. The number of female chief executives at Fortune 500 companies has gone from one to 24 over the past 20 years. Female membership in national legislatures of Organization for Economic Cooperation and Development member countries has almost doubled in the same period. No countries allowed same-sex marriage two decades ago, but more than 20 countries do today. In all these areas, much remains to be done. But in each of them, there has been striking progress.

I understand that important segments of the Western working class are under great pressure, and that they often feel ignored and left behind by this progress. We must find ways to give them greater economic support and moral dignity. But extensive research shows that some of their discomfort comes from watching a society in which these other groups are rising, changing the nature of the world in which they’d enjoyed a comfortable status.

After 400 years of slavery, segregation and discrimination in the United States, blacks have been moving up. After thousands of years of being treated as structurally subordinate, women are now gaining genuine equality. Once considered criminals or deviants, gays can finally live and love freely in many countries. The fact that these changes might cause discomfort to some is not a reason to pause, nor to forget that it represents deep and lasting human progress that we should celebrate.

(c) 2019, Washington Post Writers Group

Nudging Mahathir into consensus mode


January 17,2019

Nudging  Mahathir into consensus mode

Opinion  |  P Gunasegaram

Published:  |  Modified:

 

QUESTION TIME | Prime Minister Dr Mahathir Mohamad’s current beef is wealth inequality, and so he wants to restart the redistribution of wealth – to Malays (and bumiputeras). This is something which I commented on here. But that’s not even a stopgap measure, because acquired wealth can be sold off. It also reflects the policies of old, which have been discredited.

The only way that wealth can be increased and retained within a community is to increase incomes, rather than to distribute existing wealth, even if it is held by the government. And the only way incomes can be increased is to put in place plans to raise incomes for all Malaysians, since 67 percent of the population is bumiputera, with Malays forming 50.5 percent of the population.

The issue of wealth and income equality comes back eventually to the effectiveness of the government and how successful it has been in narrowing opportunity gaps between rich and poor through well thought out and carefully implemented programmes.

For that to happen, it is necessary for some steps to be taken. I agree that for this to happen, it is not just the duty of Mahathir, but also the partners in the Harapan coalition government, to exert force, for at the end of the day, Mahathir only commands a small minority of MPs in the coalition.

Considering that he is advanced in age and may be lacking in vitality, it is necessary for change to start from his other partners – the leaders in PKR, DAP and Amanah – who had envisioned a different plan and programme than that of Mahathir’s Bersatu, a racial reconstruction of UMNO, where the membership is exclusively restricted to Malays and bumiputeras, with many of its members having come from UMNO.

Exerting influence

Thus, it is incumbent upon other leaders to push Mahathir into change and consensus mode. There are at least two ways this can be done – through the Harapan presidential council and the cabinet. First, Harapan’s presidential council rightly should be the place from which all broad policies for the government should emanate.

 

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Here is where Harapan’s de facto leader Anwar Ibrahim and his wife and Deputy Prime Minister Dr Wan Azizah Wan Ismail should exert their influence after discussions with DAP leaders such as Lim Kit Siang and Lim Guan Eng, and Amanah leaders such as Mohamad Sabu, Khalid Abdul Samad and Dzulkefly Ahmad.

Since the other parties are in the vast majority in terms of their number of MPs, their combined weight should hold a lot of sway, and Mahathir can be persuaded that the policies taken should reflect that of the majority view.

If the other Harapan leaders do not take such measures and wait patiently for Mahathir to exit the scene in a year and four months from now, they must also take joint responsibility for any wrong, improper move which delay things towards an open, freer country which moves forward based on government transparency, accountability, good governance and competence.

Pushing for Anwar’s inclusion in the cabinet

 

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The other thing that the presidential council should do is to push for Anwar’s inclusion in the cabinet and for him to become Deputy Prime minister like in 1998 soonest.

The other thing that the presidential council should do is to push for Anwar’s inclusion in the cabinet and for him to become deputy prime minister soonest. That is the natural thing to do if Anwar is to become prime minister 16 months from now, as agreed by all the coalition partners.

That may pave the way for Wan Azizah to step down from politics, as she has said many times beforehand that she wants to do after Anwar is in the picture.

It would ensure that Anwar has enough time to have a good grasp of everything that happens in the cabinet in the lead-up to him taking over as Prime Minister. It is necessary that Harapan leaders have the gumption, courage and conviction to push for this to take place.

With the presidential council becoming a greater force in making national policy with the input of all leaders, instead of being dominated by a minority leader, even if it is Mahathir, then decision-making is likely to better reflect the true aspirations of the overall Harapan coalition instead of that of Bersatu and Mahathir – as it is now. That would reflect, too, the aspirations of voters.

Get the necessary work done

Next, the cabinet. Cabinet members seem to be waiting for Mahathir’s approval before they do anything, even though it is impossible for Mahathir – or anyone else who is Prime Minister – to understand the full implications of all measures to be undertaken by the ministries.

Thus ministers should seek to take their ministries forward in terms of increased competence, work and efficiency, with full regard at all times to such key issues as integrity, honesty and doing away with patronage in decision-making and implementation. Surely no one, not even Mahathir, would fault them for coming up with good strategies and programmes for implementation that would work.

In other words, ministers should move their butts to get the necessary work done and not wait for orders and instructions from the top, who in this case is Mahathir. If they don’t take the initiative to get things done much better than before, they can’t turn around and blame Mahathir.

It’s their job to get action plans done and present them to the cabinet for approval. If their plans are found to be good and workable, it is unlikely that Mahathir or the other members of the cabinet are going to turn them down.

These are tough times and Mahathir may well need some help to initiate changes. If he is straying from the path the coalition agreed on, who better to tell him than his coalition partners and to steer him back to the right one?

That needs courage, conviction and the willingness to face confrontation, which could eventually lead to a conciliatory path that is more beneficial to the country. After all, is that not the way of consensus, which is how the election was won by Harapan?

Next: 10 ways to increase incomes and raise living standards.


P GUNASEGARAM believes consensus comes out of genuine desire to find the right path. E-mail: t.p.guna@gmail.com

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

DJT And His Team of Morons


January 15, 2019

DJT And His Team of Morons

DJT And His Team of Morons

by Paul Krugman

There have been many policy disasters over the course of U.S. history. It’s hard, however, to think of a calamity as gratuitous, an error as unforced, as the current federal shutdown.

Nor can I think of another disaster as thoroughly personal, as completely owned by one man. When Donald Trump told Chuck Schumer and Nancy Pelosi, “I will be the one to shut it down,” he was being completely accurate — although he went on to promise that “I’m not going to blame you for it,” which was a lie.

Still, no man is an island, although Trump comes closer than most. You can’t fully make sense of his policy pratfalls without acknowledging the extraordinary quality of the people with whom he has surrounded himself. And by “extraordinary,” of course, I mean extraordinarily low quality. Lincoln had a team of rivals; Trump has a team of morons.

If this sounds too harsh, consider recent economic pronouncements by two members of his administration. Predictably, these pronouncements involve bad economics; that’s pretty much a given. What’s striking, instead, is the inability of either man to stay on script; they can’t even get their right-wing mendacity right.

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First up is Kevin Hassett, chairman of Trump’s Council of Economic Advisers, who was asked about the plight of federal workers who aren’t being paid. You don’t have to be a public relations expert to know that you’re supposed to express some sympathy, whether you feel it or not. After all, there are multiple news reports about transportation security workers turning to food banks, the Coast Guard suggesting its employees hold garage sales, and so on.

So the right response involves expressing concern about those workers but placing the blame on Democrats who don’t want to stop brown-skinned rapists, or something like that. But no: Hassett declared that it’s all good, that the workers are actually “better off,” because they’re getting time off without having to use any of their vacation days.

Then consider what Sean Hannity had to say about taxing the rich. What’s that? You say that Hannity isn’t a member of the Trump administration? But surely he is in every sense that matters. In fact, Fox News isn’t just state TV, its hosts clearly have better access to the President, more input into his decisions, than any of the so-called experts at places like the State Department or the Department of Defense.

Anyway, Hannity declared that raising taxes on the wealthy would damage the economy, because “rich people won’t be buying boats that they like recreationally,” and “they’re not going to be taking expensive vacations anymore.”

Um, that’s not the answer a conservative is supposed to give. You’re supposed to insist that low taxes on the rich give them an incentive to work really really hard, not make it easier for them to take lavish vacations. You’re supposed to declare that low taxes will induce them to save and spend money building businesses, not help them afford to buy new yachts.

 

Even if your real reason for favoring low taxes is that they let your wealthy friends engage in even more high living, you’re not supposed to say that out loud.

Again, the point isn’t that people in Trump’s circle don’t care about ordinary American families, and also talk nonsense — that’s only to be expected. What’s amazing is that they’re so out of it that they don’t know either how to pretend to care about the middle class, or what nonsense to spout in order to sustain that pretense.

So what’s wrong with Trump’s people? Why can’t they serve up even some fake populism?

There are, I think, two answers, one generic to modern conservatism, one specific to Trump.

On the generic point: To be a modern conservative is to spend your life inside what amounts to a cult, barely exposed to outside ideas or even ways of speaking. Inside that cult, contempt for ordinary working Americans is widespread — remember Eric Cantor, the then-House majority leader, celebrating Labor Day by praising business owners. So is worship of wealth. And it can be hard for cult members to remember that you don’t talk that way to outsiders.

Then there’s the Trump effect. Normally working for the president of the United States is a career booster, something that looks good on your résumé. Trump’s presidency, however, is so chaotic, corrupt and potentially compromised by his foreign entanglements that anyone associated with him gets tainted — which is why after only two years he has already left a trail of broken men and wrecked reputations in his wake.

So who is willing to serve him at this point? Only those with no reputation to lose, generally because they’re pretty bad at what they do. There are, no doubt, conservatives smart and self-controlled enough to lie plausibly, or at least preserve some deniability, and defend Trump’s policies without making fools of themselves. But those people have gone into hiding.

A year ago I pointed out that the Trump administration was turning into government by the worst and the dumbest. Since then, however, things have gotten even worse and even dumber. And we haven’t hit bottom yet.

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Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography.

@PaulKrugman

 

A version of this article appears in print on , on Page A23 of the New York edition with the headline: Donald Trump And His Team Of Morons. Order Reprints | Today’s Paper | Subscribe

 

 

 

 

 

Public policy and the role of the public intellectual


Public policy and the role of the public intellectual

Opinion  

COMMENT | How can the government encourage more people to adopt public transport so as to solve the problem of traffic jams?

Should local elections – if these are re-introduced – consider the issue of racial composition and representation?

Would the proposal to transform our current healthcare system into a social insurance model enable more people to have accessible and affordable healthcare?

Out of the various models of sustainable development, which would be the most suitable for particular places in Malaysia to adopt, in order to preserve our natural environment and also promote our cultural heritage?

Finally, would changing our country’s electoral system from first-past-the-post to proportional representation give our citizens a more democratic voice?

The questions above involve public policy discussions to a certain extent. Some may be ideologically oriented, while others may be more technical.

The influence and consequences of public policy may vary, from issues with huge implications that might potentially decide your individual rights as a citizen or foreign resident, to basic needs such as a right to shelter and food; or its impact might appear to be so insignificant that you feel it has nothing to do with you.

Some policies could have long-term impacts on groups of people several generations down the line, such as the New Economic Policy (NEP) in the 1970s.

Some policies also could bring about permanent and irreversible changes, such as certain forest land management policies which permit oil palm plantations to convert and replace primary forests.

Knowledge is power

In Malaysia, policy making decisions seem to habitually stem from a top-down process. Sometimes, it could be rooted in a certain political actor’s will or out-of-the-blue ‘creative’ thoughts, such as the third national car and property ‘crowdfunding’ policy.

To many people, the ability to influence public policy debates seems to be confined to the political elite.

Some may believe that the realm of public policy is out of their reach, leading them to forfeit any opportunity to participate in meaningful public policy discussions.

This self-defeating mentality probably has to do with the impression that policy making is technically too complex, or that they are unable to fully grasp the nuances of policy debates.

Furthermore, others may have lost faith and hope in the country’s political system. The euphoria that has been generated from witnessing the change of federal government for the first time in history has long gone.

Instead, they are more inclined to believe that policy discussion would change nothing, because it is politics akin to Game of Thrones – whereby politicians would act in a similar way to serve their self-interest by keeping the status quo when it comes to politically advantageous policies.

Former United Nations Secretary-General and Nobel Peace Laureate the Late Kofi Annan once said: “Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.”

The statement should also apply to our political and civil education. This is because if the people can understand the issues and policies better, then they could be more aware of their own rights, and will not be easily swayed or cheated.

In that way, public opinion could be recognized and turned into a formidable force to oppose and resist unreasonable or unjust policies. It would also help to promote a rational, progressive, democratically mature society.

Policy discussions may take place in a kopitiam, grassroots style, or be held in a posh and premium hotel ballroom and rigorously debated by fellow academics. Despite all that, the outcome still has to go back to the discussant, and whether he or she has conducted any study.

Serious public policy work must show professionalism and integrity in taking account all possible facets of evidence (within a reasonable limitation), that would determine whether the analyses and deductions can convince the public.

If a public policy does not go through a deep and thorough research process, or does not rely on facts and evidence for future projections, it would lack robust theoretical support and a foundation in widely accepted international best practices. The probability of such a policy failing to reach its intended goals is high.

In the end, who should answer for the consequences, cost, and responsibility for such policy failures? Instead of delegating the task of scrutinising government policies to opposition parties, could the public themselves effectively monitor the government’s performance, and directly hold them accountable?

A learning process

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The Penang Institute

Public policy research is a learning process. As a member of the Penang state government’s think-tank and a public policy research analyst, it is my duty not just to amass knowledge but also to spread the seeds of thought, hoping that a new perspective could influence or change society or at least create public discussion.

In order to gain the public’s trust and confidence, what is most important is to be persistent in maintaining the standards of one’s objectivity and professionalism when expressing and defending one’s research outcome in a fair and transparent manner.

If public policy research is publicly funded, it should imply that public interest is very much involved, and thus the research outcomes should be shared with the public. In other words, I believe that I should be seen as an employee of taxpayers, and therefore held accountable to the public.

So, here I am in my position of some influence, and therefore I have to honour my obligation as a public intellectual. For that reason, I have to walk out of my ‘armchair and air-conditioned room’ comfort zone and walk into the daily lived experiences of the man on the street. Only then would my proposed policy be worth anyone’s salt.

If policy making were to be compared to a battle of ideas, policy advocates pacing around this ‘battlefield’ must recognise the current situation and be well-versed in the ‘topography’ of issues that one feels strongly about.

He or she could then be in control of the defensive-offensive strategy in winning the battle of influencing and implementing the said policy. There could be room for the omission of menial details, but policymakers or advocates must ensure that the crux of a policy should be steered in the right direction.

Penang is my base, and my work as a public intellectual originates from there. However, my work should not be constrained within the aforementioned locality.

In what is being identified as a strongly federated nation such as Malaysia, the most contentious policy ideas are arguably centred around Parliament in Kuala Lumpur and the corridors of power in Putrajaya.

We have witnessed the historic moment in the 14th general election when the peaceful democratic transition of federal power took place in Putrajaya. The new ruling coalition was named after ‘hope’ and consists of parties which fought for a long period persistently on the ideals of Reformasi and an overarching multiracial philosophy of ‘Malaysian Malaysia’.

The remaining question is, what are the policies and strategies in place to build a progressive and hopeful new multiracial Malaysia?

I would argue that policies that truly solve the needs of the public are the real backbone of reforms that are badly required in a country which had been mismanaged for decades.

For the coming weekends, my colleagues from the Penang Institute will talk about issues and policies, and share their stories in this space, hopefully to continue inspiring new narratives in the new political era of Malaysia.


Dr. LIM CHEE HAN is a senior analyst in the political studies section at Penang Institute. He holds a PhD in infection biology from Hannover Medical School, Germany. He believes that a nation would advance significantly if policy making were taken seriously.

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

Note: The Techo Sen Sen School of Government and International Relations,@The University Of Cambodia, Phnom Penh offers postgraduate programmes in Public Policy. http://www.tss.uc.edu.kh

 

“Look East” to Japan –MAKE Agriculture exciting and profitable for an ageing Malaysia


November 20, 2018

Look East” to  Japan –MAKE Agriculture  exciting and profitable for an ageing Malaysia –FIMA Group 2.0

Opinion

by Phar Kim Beng

COMMENT | Between 1990 and 2020, the size of the Malaysian population increased by 80 percent. But in the same period, the number of people who aged also increased by a whopping 210 percent.

By 2050, 23.5 percent of the total population of Malaysia will be above 65 years of age. By then, Malaysia will be an aged society. But Malaysia could be there even sooner. By 2030, 15 percent of the Malaysian population will be above 60 years of age.

An ageing society is one where up to seven percent of its population is above the age of 65; whereas an aged society is one which has 15 percent of its population above this age range. Currently, Malaysia is moving towards being an ageing society by 2030, then an aged society by 2040. Time is of the essence given the size, and speed, of this problem.

Based on the statistics of 1990-2020, those above the age of 65, in other words, have increased at almost three times the rate of youths in Malaysia.

While it took France 115 years to become an aged society, Malaysia will experience it in 24 years. Invariably, learning from Japan is not an option now but a strategic necessity. Between 2019-2025, Japan will be in need of 500,000 skilled and semi-skilled workers a year.

This labour shortage is caused by ageing effects which Malaysia will continue to face in 2030 and 2050 respectively. Therefore, it is important to learn from Japan now, especially when switching to robotics./technology and knowledge

Indeed, Japan has long passed the stage of being an aged society as defined by the UN. By 2045, its total population will further shrink from 130 million to 90 million people. But is ageing affecting the agriculture and fishing industry in Japan? Not quite. Malaysia should learn from this Japanese experience.

Research has shown that in 2016, the average age of Japanese farmers was already at 66 years. Those in the fishing industries are aged between 60 and 65.

But Japanese agriculture has increasingly used robotics and mechanisation to make up for the shortfall of labour. The top five Japanese fishing companies are Maruha Nichiro, Nihon Suisan, Toyo Suisan and Kyokuyo.

Each of them is doing well and will continue to do well with strong support from the Japanese government.

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Aquaponics, for example, can produce three times a higher yield than natural methods of farming. A greenhouse that uses robotics, and an automatic system of water sprinklers, can produce 30,000 to 50,000 tonnes of cabbage a day as opposed to 21,000 tonnes a day with just human labour

The Ministry of Agriculture and Agro-based Industries in Malaysia may often be overlooked by the national planners. It received the lowest budget allocation last month. This is wrong and must be reversed if Malaysia wants to be the top food producer country in Asia.

Adapting to ageing

This ministry, however, can reverse the process of benevolent neglect especially if it begins to take the Look East initiative as a powerful policy compass. Looking East, it can learn from Japan on how to attenuate the problems of ageing and agro-farming and fishing in the long run.

To be sure, while Malaysia does not show it, the country will become an aged society in 15 years, when fifteen percent of its population will be above the age of 65.

Thus, it is incumbent upon Malaysia, especially the Agriculture and Agro-based Industries Ministry to Look East in order to understand how Japan adapts to the process of becoming an ageing society.

There is no silver bullet solution to all of the above. But a strong and confident ministry should not be ruled out as a potential national saviour; this provided it can set up a unit to learn from the aged population of Japan even as Malaysia is ageing. Why is this important?

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What about FIMA2.0?

First of all, the contribution of agriculture to the GDP of Malaysia has always remained between 8-11 per cent between 1957-2018. Japan has faced the same dilemma before and overcome it.

Agriculture in Malaysia is coming from a low base and contributes close to RM3.5 billion to the GDP every year. But this is also how and why the agricultural economy can grow further, according to the Agriculture and Agro-based Industries Minister. All one needs is tenacity, a concerted effort of modernisation and mechanisation, all of which are possessed by Japan in abundance.

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Furthermore, the establishment of AirAsia, a low-cost carrier, has expanded the reach of Malaysia to half of the world’s population within a span of six hours. The latter is critical. What was originally an impediment – a large Asian geography – is now a strategic opportunity.

If anything, it is important to learn from Japan in terms of how fast it can deliver its exotic fruits and food to almost half of Asia. Indeed how? Even with a low population farmer base of fewer than two million farmers in Japan in 2017, Japan has become adept at combining robotics, aquaponics and the use of farmland banks to improve its exports.

Nevertheless, farming and fishing are two planks of the industry that require careful planning at all stages. Malaysia is no exception. This is why it is better to learn from Japan now.

If the Agriculture and Agro-based Industries Ministry seems to feel that Malaysian agriculture might be facing the same problems in terms of an ageing society, shortage of labour and high migration to urban centres, it is high time that it has a Look East policy that draws from the inspiration of Japan.

In this sense, in an interview with Johan Jaffar in Sinar Harian last week, Salahuddin Ayub was right in affirming the importance of Look East, not just in focusing on the revival of Malaysian agriculture but also learning on other matters from Japan.

The sooner this ministry learns from Japan, including Japan’s industry and livestock, the sooner Malaysia will move away from the perpetual fear that the farmlands and industries will collapse.

Indeed, it would be wonderful to see Malaysia’s Agro Bank and farmland banks working side-by-side to make Japan and Malaysia the fruit basket of the whole of Asia ranging from tropical fruits to saltwater fish.


PHAR KIM BENG is a multiple award-winning head teaching fellow on China and the Cultural Revolution at Harvard University.

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