TPPA is good for Malaysia–Tan Sri Sheriff Kassim

January 16, 2016

TPPA is good for Malaysia–Tan Sri Sheriff Kassim


Let’s hope you are right, Tan Sri Sheriff Kassim

I agree with our Honourable Prime Minister that in view of the challenging economic scenario for 2016, a recalibration of the federal government budget is inevitable to take into account the continuing drop in the world price of crude oil.

Thankfully, due to the fiscal reforms introduced last year with the introduction of the goods and services tax and removal of fuel subsidies, the country is now better prepared to address the sharp fall in the price of crude oil and its impact on government revenue.

We can expect that while the calibration may involve expenditure cuts to the budget for this year and possibly next year too, the adjustment will not be too drastic – not like in previous economic downturns.

Malaysia is today confronted with poor sentiments among consumers due to the anticipated one-time effects of the GST and the depreciation of the ringgit, all feeding into the cost of living. There is a wait-and-see attitude in the private sector about how the 1Malaysia Development Bhd (1MDB) issues will be resolved and when the political infighting will end.

At the same time, the external economic outlook is not looking better. There are fresh worries about the sustainability of growth in the two largest economies in the world – the US and China, and with the geo-politics in conflict zones getting more complicated, there is likelihood of greater volatility in the world economy.

Despite these short-term worries, several Malaysian corporations are planning to increase their investments abroad in search of bigger markets and higher returns, as seen in the announcement from Khazanah Nasional Berhad recently.

The President of the Federation of Malaysian Manufacturers (FMM) also said at the Malaysian Economic Association (MEA) forum recently that many of its members are looking at external markets for growth as Malaysia is too small a market for expanding further. Sixty percent of its members are SMEs. They too are looking abroad for new opportunities.

It is therefore not surprising to see from the Malaysian government statistics that we are already a capital exporting country, with the outflows of investments outpacing the inflows of foreign direct investments.

This trend is clearly happening with the major GLICs – Petronas, EPF, Sime Darby and several private sector corporations. Basically, they have no choice but to go abroad. The government itself is encouraging Malaysian corporations to become global champions. When they go abroad, they will choose the countries which are safe for their investments – countries which practise high standards of governance.

One smart decision that the government can take to lift up business spirits and give a helping hand to the Malaysian corporations venturing abroad is by joining the Trans-Pacific Partnership Agreement, or TPPA, because this will open up their opportunities to have access to the biggest trading block in the world.

Investor sentiments will be encouraged that as a TPPA country, Malaysia is showing a commitment to the high standards of governance that are becoming the common expectation in international trade.

Our corporations should not have a problem meeting the high TPPA standards of doing business wherever they go because for the last 10 years, our regulatory authorities like the Securities Commission, the Bursa and Bank Negara Malaysia have been introducing guidelines on the codes of conduct and ethics, integrity and transparency to raise the standards of governance in the corporate sector.

Indeed, our standards are as high as those found in the most advanced countries. In Malaysia, it is mandatory for company directors and top executives to attend training on good corporate practices so that we can be prepared for the competition on the world stage and for attracting world class corporations to establish themselves in our country.

The TPPA is the most comprehensive, high standard trade agreement to date as its provisions on governance make it binding on member countries, unlike the ASEAN Economic Community agreement which is so loose on the obligations of member countries that business leaders are left wondering whether the AEC is serious about creating a regional free trade area.

Although Malaysia should not ignore ASEAN, this regional economic community is not a substitute for the stronger TPPA framework of trade in goods and services, which is governed by clear rules on transparency and integrity on the part of corporations and governments, so as to make the playing field level for all players.

No doubt the TPPA provisions on intellectual property rights, settlement of investor disputes (ISDS) state owned enterprises, government procurement, minority rights, labour standards, human rights etc go beyond trade issues but in modern day trade negotiations with developed countries, these are often the stumbling blocks for the West to open up their markets to developing countries that are in violation of these universal principles of justice and fair play.

Now that the TPPA has laid down the rules, it will facilitate the flow of trade as well as foreign investments to and from the developed countries. How much benefit this will bring to our GDP is a matter for discussion. Some estimates say the benefit will be minimal, only about 1% to 2% additional growth, while other estimates say 8%.

Malaysian manufacturers and exporters are saying that whatever the econometric models say about the benefits from TPPA, the fundamental point is that when free trade opens the doors wider for business, our corporate leaders, including the SMEs, will know how to grab the opportunities that come their way, either locally or in foreign countries.

Critics of TPPA argue that since the governance standards require that member countries must allow a separate legal authority to be set up, called ISDS, to settle investor disputes with the host country, Malaysia will be sacrificing its sovereignty if we join the international trade treaty, especially as it is driven by the US for its own strategic reasons.

US and European multinationals have also been prolific in suing foreign governments, including Australia. Critics argue that our legal system is already good and should be allowed to sit in judgment when a foreign investor sues the government for breach of promise.

They also recognise that there are flaws in our legal institutions and lack of trust in our courts, which explains why, even now, most commercial agreements with foreign partners stipulate that the arbitration on commercial disputes be done outside Malaysia, preferably Singapore.

These flaws, they argue, can be rectified by us internally without being forced to do so by outside parties. The truth is that without outside pressure, it’s unlikely third world countries will introduce the reforms to make their justice system independent and trustworthy and since its going to be difficult to make all countries raise their standards to the same high level of governance, the best solution is to have a separate system to deal with investment disputes involving foreign corporations.

I think this is an acceptable arrangement, given the reality that most large corporations prefer to operate abroad in safe countries. Indeed, as our own corporations have said, they too would feel safer to be in TPPA countries because of the ISDS provision, which is a much more binding requirement than in the other existing free trade agreements.

It is these high standards of protection against abuse of power by host country governments that make the TPPA superior to the free trade agreements that we have signed before with several countries.

MITI has explained that the ISDS under the TPPA has incorporated several safeguards against frivolous and unfair claims against the governments of host countries and that it will be more transparent to the public. These safeguards have been introduced at the insistence of the smaller countries in the final stages of the negotiations.

I believe that members of Parliament should support Malaysia signing up to the TPPA because the broad political consensus will have a positive impact on public sentiments, which in turn will help to create the feel good factor in the economy.

With Malaysia committing itself to the high standards of governance under the TPPA, this will give support to our sovereign ratings and help the ringgit to strengthen to a level closer to its fair value.

A more cheerful market sentiment is what we need in these trying times, especially for the working public. Many are now worried about their job security. When the mood in the market is more cheerful, workers will be less worried about retrenchment. Their families will be confident to spend more and with stronger consumer demand, this will help the country’s GDP to grow, despite the external uncertainties.

Parliament can help to boost up public and market sentiments by voting for the TPPA.


The Economic Outlook for Asia 2016

January 6, 2016

The Economic Outlook for Asia 2016

Economic forecasting is a mug’s game. But here are a few generalizations about issues likely to impact Asia in the coming year.


The year 2016 begins not with a bang but with a whimper, to misquote the poet Eliot. It marks the end of two trends without signalling the beginning of a new one. For Asia as a whole this promises to be another dull but not disastrous year. It is one which also sees the formal beginning of the ASEAN Economic Community, a nice idea which faces challenges both from economic nationalism in the larger member countries and competition between China and the US overshadowing the multilateralism of the World Trade Organization.

Of the medium-term factors, first there is the ending – slowly – of the era of minimal interest rates, years when major central banks have attempted with modest success to use monetary easing rather than fiscal stimulus to spur economic growth in the wake of the 2008 financial crisis. Second is the ending of the steep decline in commodity prices seen over the past two years.

The two have conspired to bring about the decline of almost all Asian currencies against the dollar –including those such as China and South Korea that are net beneficiaries of commodity price declines. Indeed for Korea and Taiwan, terms-of-trade gains are being more than offset by weak demand for manufactures from the west, softer markets in China and now difficulties in commodity-dependent developing countries whose currencies have declined by large amounts.

The prospect of higher interest rates should scarcely be frightening given that in real terms they will remain at historically low levels. The dangers lurk however in certain markets such as Hong Kong property where rates have encouraged a bubble which now faces the added challenge of a currency pegged to a rising US dollar.

Debt in Thailand

There is also plenty of corporate debt around the region, not least in Thailand, which was driven by empire-building acquisitions at a time when interest rates were not only low but currency stability against the US dollar had become assumed. There are echoes of 1997/98 – but mostly only faint ones as net foreign debt for most countries is minimal compared with then. The problem is at individual corporate level, not systemic.


The dramatic decline in energy and most mineral prices is probably close to an end but recovery is still distant. Declines in oil, coal and iron ore in particular have been caused mainly by increases in supply, not the fall-off in China’s growth. That new supply will not go away anytime soon. Similarly with the likes of gold and copper, cheap money and the 2013/14 price bubble saw new mining investment.

The issue for all these commodities now is how far the low-cost producers will go to sustain production in the hope that low prices will drive out the higher cost producer as the Saudis are trying with oil. It is a game of chicken which doesn’t augur well for exporters of iron ore, coal and gas, the most important of which in this region are Australia, Indonesia and Malaysia – all three in the case of Australia.

Agriculture looking good

Agricultural commodities on the other hand have better prospects. The El Niño phenomenon producing droughts in parts of Asia and excessive rain in South America has already caused a 20 percent recovery in palm oil prices. Its impact on rice and other cereal prices, sugar, etc., has so far been limited despite the likelihood of stronger import demand in Indonesia and the Philippines while weak prices as well as the weather could curtail Thai and Vietnamese output. The impact has yet to be fully felt. Any serious 2016 setback in India, currently a significant net agricultural exporter, could have a major impact especially on rice and cotton, and add to its palm oil imports.

Rubber prices can get a little lift from El Niño but cannot recover significantly while oil is still low while other tree crop exports will remain more impacted by weather and other issues in the main global producers.

It is difficult to see any significant improvement in manufactured exports over the year as the recoveries in the west will, even if they continue, remain sluggish. Asian currency falls have been roughly matched by those in Europe.


The Chinese economy is neither headed for disaster nor a return to fast growth. Some shakeout of money-losing excess capacity will happen in 2016 which will be of long run benefit but the transition to a more service-oriented economy will remain gradual. Excess capacity is having a depressive impact on global prices particularly of basic materials such as steel.

So a shakeout would be good for the world as well as for China. But don’t expect economic logic to take precedence over interest in staying in power of the Communist Party and state enterprise bosses.

Some boost from infrastructure spending

The scope for wise additional state stimulus for infrastructure is limited but more social spending and improvement in social protection for migrant worker families should benefit the housing sector and consumption. The expected further decline of the yuan against the dollar may not happen and anyway will be insufficient to boost exports – unnecessary anyway given the continuing large trade surplus.

More significant is whether China’s move to higher-value-added exports can continue. Numbers mean little so one can assume that the actual GDP growth is 1-2 percentage points below the official figure. Southeast Asia is supposed to benefit from higher costs in China for other goods but so far at least Vietnam is the only obvious beneficiary and judging by the inflow of foreign investment should continue to support expansion there of 6 percent or so despite weak commodity prices.

Indonesian infrastructure spending problematical

Indonesia’s steep currency fall should in theory attract more manufacturing investment too. In practice the decline has helped the current account respond rapidly to low commodity prices so it is not a matter of concern. However, the upward pressure on import prices is suppressing consumer demand for items such as motorbikes. There is plenty of fiscal and private borrowing space for infrastructure spending to boost investment spending but realization will lag potential.

Malaysia–Fiscal Space in shorter supply

Fiscal space is in shorter supply in Malaysia. The currency may have fallen further than the external situation merits but politicians have yet to learn the lesson that the economy cannot for very much longer be propelled by governments deficits at the same time as private capital leaves the country. There is scant sign of new export industries and the hitherto fast growing tourism and Islamic finance sector will be impacted by the oil-induced problem of their Middle East patrons.


Oil may also finally prove a problem for Philippine remittances. To the surprise of many they were barely affected by the 2008 crisis but Middle East countries relying on US$100 a barrel oil will see declines in many sectors and hence their ability to sustain current lifestyles made easier by foreign labor, a major lifeline for many Filipino families in the form of remittances from their overseas members.

This may not be quite sufficient to offset the benefits of lower oil prices for Philippine consumers and continuing demand in developed countries for flexible foreign workers. The candidates for the presidential election cycle in July do not inspire a belief that the nation can make a major move forward but expectations for clean and decisive government are not high so the potential for disappointment is low.

Young demographic important

Like India, the Philippines will continue to fall well below potential but is sufficiently underpinned by labor force growth, lack of commodity dependence and the benefits of low oil prices to grow at 5-6 percent almost regardless. India itself may do better and with its young demographic profile growing faster than China will become the norm – as it should.

The Philippine problem with its labor surplus, which will persist for at least a generation, does however provide a contrast with the opposite fundamental problem of all of East Asia, and now also Thailand and Singapore. The lack of natural increase in the labor force and peaking of the workforce participation rate makes past rates of GDP growth a mirage.

Adding the influx of low-paid, unskilled labor imports – mostly illegal ones from Myanmar and Cambodia in Thailand and with zero rights to permanence in Singapore – to some extent hides the problem but also makes it worse by holding back investment in labor productivity.

It has rightly been noted that proof of a high level of development in big cities is when the rich use public transport and the ratio of domestic servants to population is minuscule. Near-stagnant productivity is already a problem for both. Japan struggles to grow but still manages some productivity growth as its population shrinks by about 300,000 a year and the median age rises inexorably.

Taiwan Stable

Fears that the likely election victory of the DPP in Taiwan will upset trade with China are unlikely to materialize. The weakness of China demand is a problem for Taiwan but just part of the issue of its narrow but advanced export base sustaining competitiveness in a fast-changing electronics environment. Few countries can beat Taiwan for stable economic and monetary management and that will continue, though it may continue to make the stock market one of the least volatile and least expensive in the region.


Korea’s export base is much broader but some such as shipbuilding have a hard time continuing with over-capacity and Chinese competition. But a bigger problem for the economy as a whole, which enjoys a large current account surplus, is domestic demand given the high level of household debt and low pace of new household formation.

None of the above augurs well for stock markets which are nowhere conspicuously cheap – though cheaper than the US so still potentially attractive to foreign money and now offering yields which can withstand modest rises in interest rates. China’s is so unpredictable that rational analysis is a waste of effort so foreign money may return to other markets.


Cultivate the Art of Serendipity

January 5, 2016

NY Times Sunday Review | Opinion

SundayReview | Opinion

Cultivate the Art of Serendipity

03kennedy-1451576711727-blog427In 2008, an inventor named Steve Hollinger lobbed a digital camera across his studio toward a pile of pillows. “I wasn’t trying to make an invention,” he said. “I was just playing.” As his camera flew, it recorded what most of us would call a bad photo. But when Mr. Hollinger peered at that blurry image, he saw new possibilities. Soon, he was building a throwable videocamera in the shape of a baseball, equipped with gyroscopes and sensors. The Squito (as he named it) could be rolled into a crawlspace or thrown across a river — providing a record of the world from all kinds of “nonhuman” perspectives. Today, Mr. Hollinger holds six patents related to throwable cameras.

A surprising number of the conveniences of modern life were invented when someone stumbled upon a discovery or capitalized on an accident: the microwave oven, safety glass, smoke detectors, artificial sweeteners, X-ray imaging. Many blockbuster drugs of the 20th century emerged because a lab worker picked up on the “wrong” information.

While researching breakthroughs like these, I began to wonder whether we can train ourselves to become more serendipitous. How do we cultivate the art of finding what we’re not seeking?

For decades, a University of Missouri information scientist named Sanda Erdelez has been asking that question. Growing up in Croatia, she developed a passion for losing herself in piles of books and yellowed manuscripts, hoping to be surprised. Dr. Erdelez told me that Croatian has no word to capture the thrill of the unexpected discovery, so she was delighted when — after moving to the United States on a Fulbright scholarship in the 1980s — she learned the English word “serendipity.”

Today we think of serendipity as something like dumb luck. But its original meaning was very different.

In 1754, a belle-lettrist named Horace Walpole retreated to a desk in his gaudy castle in Twickenham, in southwest London, and penned a letter. Walpole had been entranced by a Persian fairy tale about three princes from the Isle of Serendip who possess superpowers of observation. In his letter, Walpole suggested that this old tale contained a crucial idea about human genius: “As their highnesses travelled, they were always making discoveries, by accident and sagacity, of things which they were not in quest of.” And he proposed a new word — “serendipity” — to describe this princely talent for detective work. At its birth, serendipity meant a skill rather than a random stroke of good fortune.

Dr. Erdelez agrees with that definition. She sees serendipity as something people do. In the mid-1990s, she began a study of about 100 people to find out how they created their own serendipity, or failed to do so.

Her qualitative data — from surveys and interviews — showed that the subjects fell into three distinct groups. Some she called “non-encounterers”; they saw through a tight focus, a kind of chink hole, and they tended to stick to their to-do lists when searching for information rather than wandering off into the margins. Other people were “occasional encounterers,” who stumbled into moments of serendipity now and then. Most interesting were the “super-encounterers,” who reported that happy surprises popped up wherever they looked. The super-encounterers loved to spend an afternoon hunting through, say, a Victorian journal on cattle breeding, in part, because they counted on finding treasures in the oddest places. In fact, they were so addicted to prospecting that they would find information for friends and colleagues.

You become a super-encounterer, according to Dr. Erdelez, in part because you believe that you are one — it helps to assume that you possess special powers of perception, like an invisible set of antennas, that will lead you to clues.

A few months ago, I was having a drink in Cambridge, Mass., with a friend, a talented journalist who was piecing together a portrait of a secretive Wall Street wizard. “But I haven’t found the real story yet; I’m still gathering string,” my friend told me, invoking an old newsroom term to describe the first stage of reporting, when you’re looking for something that you can’t yet name. Later that night, as I walked home from the bar, I realized “gathering string” is just another way of talking about super-encountering. After all, “string” is the stuff that accumulates in a journalist’s pocket. It’s the note you jot down in your car after the interview, the knickknack you notice on someone’s shelf, or the anomaly that jumps out at you in Appendix B of an otherwise boring research study.

As I navigated the brick sidewalk, passing under the pinkish glow of a streetlight, I thought about how string was probably hiding all around me. A major story might lurk behind the Harvard zoology museum ahead or in the plane soaring above. String is everywhere for the taking, if you have the talent to take it.

In the 1960s, Gay Talese, then a young reporter, declared that “New York is a city of things unnoticed” and delegated himself to be the one who noticed. Thus, he transformed the Isle of Manhattan into the Isle of Serendip: He traced the perambulations of feral cats, cataloged shoeshine purveyors, tracked down statistics related to the bathrooms at Yankee Stadium and discovered a colony of ants at the top of the Empire State Building. He published his findings in a little book titled “New York: A Serendipiter’s Journey.”

The term “serendipiter” breathed new life into Walpole’s word, turning serendipity into a protagonist and a practitioner. After all, those ants at the top of the Empire State Building didn’t find themselves; Mr. Talese had to notice them, which was no easy matter. Similarly, Dr. Erdelez came up with the term super-encounterer to give us a way to talk about the people rather than just the discoveries. Without such words, we tend to become dazzled by the happy accident itself, to think of it as something that exists independent of an observer.

We can slip into a twisted logic in which we half-believe the penicillin picked Alexander Fleming to be its emissary, or that the moons of Jupiter wanted to be seen by Galileo. But discoveries are products of the human mind.

As people dredge the unknown, they are engaging in a highly creative act. What an inventor “finds” is always an expression of him- or herself. Martin Chalfie, who won a Nobel Prize for his work connected with green fluorescent protein — the stuff that makes jellyfish glow green — told me that he and several other Nobel Prize winners benefited from a chain of accidents and chance encounters on the way to their revelations. Some scientists even embrace a kind of “free jazz” method, he said, improvising as they go along: “I’ve heard of people getting good results after accidentally dropping their experimental preparations on the floor, picking them up, and working on them nonetheless,” he added.

So how many big ideas emerge from spills, crashes, failed experiments and blind stabs? One survey of patent holders (the PatVal study of European inventors, published in 2005) found that an incredible 50 percent of patents resulted from what could be described as a serendipitous process. Thousands of survey respondents reported that their idea evolved when they were working on an unrelated project — and often when they weren’t even trying to invent anything. This is why we need to know far more about the habits that transform a mistake into a breakthrough.

IN the late 1980s, Dr. John Eng, an endocrinologist, became curious about certain animal poisons that damaged the pancreas, so he ordered lizard venom through the mail and began to play around with it. As a result of this curious exercise, he discovered a new compound in the saliva of a Gila monster, and that in turn led to a treatment for diabetes. One of Dr. Eng’s associates (quoted in a 2005 newspaper article) remarked that he was capable of seeing “patterns that others don’t see.”

Is this pattern-finding ability similar to the artistic skill of a painter like Georgia O’Keeffe? Is it related to the string-gathering prowess of Gay Talese? We still know so little about creative observation that it’s impossible to answer such questions.

That’s why we need to develop a new, interdisciplinary field — call it serendipity studies — that can help us create a taxonomy of discoveries in the chemistry lab, the newsroom, the forest, the classroom, the particle accelerator and the hospital. By observing and documenting the many different “species” of super-encounterers, we might begin to understand their minds.

A number of pioneering scholars have already begun this work, but they seem to be doing so in their own silos and without much cross-talk. In a 2005 paper (“Serendipitous Insights Involving Nonhuman Primates”), two experts from the Washington National Primate Research Center in Seattle cataloged the chance encounters that yielded new insights from creatures like the pigtail macaque. Meanwhile, the authors of a paper titled “On the Exploitation of Serendipity in Drug Discovery” puzzled over the reasons the 1950s and ’60s saw a bonanza of breakthroughs in psychiatric medication, and why that run of serendipity ended. And in yet another field of study, a few information scientists are trying to understand the effects of being bombarded on social media sites with countless tantalizing pieces of “string.”

What could these researchers discover if they came together for one big conversation?

Of course, even if we do organize the study of serendipity, it will always be a whimsical undertaking, given that the phenomenon is difficult to define, amazingly variable and hard to capture in data. The clues will no doubt emerge where we least expect them, perhaps in the fungi clinging to the walls of parking garages or the mating habits of bird-watchers. The journey will be maddening, but the potential insights could be profound: One day we might be able to stumble upon new and better ways of getting lost.

A version of this op-ed appears in print on January 3, 2016, on page SR1 of the New York edition with the headline: Cultivating the Art of Serendipity.

Message to Prime Minister Najib Razak

January 3, 2016

Message to Prime Minister Najib Razak–2016

Hey, Prime Minister Najib Razak.

Stop playing politics of the worst sort–racial discrimination. You are perpetrating a serious injustice to ordinary struggling Malaysians who are technically stateless and have thus been denied their rights which are embodied in our Constitution including the right to go to school and jobs, to medical care, and  to status.

12,000 of them–small in number as a percentage of our 30 million population– have yet to be recognised as citizens of our country. But then aren’t they our people, like you and me and others who are citizens?

It is well known to us that you are corrupt, dishonest, and incompetent. You have broken your promise to protect our country. Your indifference about the plight of these people shows yet another ugly side of your persona, that is, you are downright heartless and totally insensitive.

You can spend time in pointless pontificating, enjoying the perks of your office and jet setting around the globe on a purpose fitted corporate aircraft at taxpayers expense,  shopping with your expensive to maintain wife and messing up the economy, yet you cannot grant the 12,000 Malaysians their right to citizenship.

It is simple decision to make, if you really care. What is really wrong with you? Is it any wonder why we Malaysians who believe in the Constitution and the Rule of Law want you to resign your office.

Najib and Rosmah2

This issue bothers me so much–Azrul is polite and politically correct– that I have to resort to being blunt and nasty to get my message across to you. We in the 21st century of which 15 years  have gone. We continue to have this nagging problem. You may have inherited this from your predecessors, but you now have the power to change this. In stead of using your awesome power to fight injustice, you have resorted  to repressive means to make life difficult for citizens who criticise your leadership and question your competence.

Face it. If you cannot fix a simple problem and take the heat, do us all a favour, just get out of the kitchen. We in Malaysia will be great again without your irritating presence. Take those MIC leaders along with you. You bet we will be a better people and our country without you and those self serving people around you.–Din Merican

I belong here too

I honestly cannot imagine being stateless. We easily take for granted the fact that we live as citizens of Malaysia. 

Meanwhile countless others are deprived of the sense of belonging and identification that comes with citizenship. –Azrul

by Azrul Mohd Khalib

As we go about celebrating the end of one year and the beginning of another, it is sobering to be reminded of at least 12,000 people in Malaysia who have yet to be recognised as citizens of a country.

Despite more than half a decade since Merdeka and the formation of Malaysia, thousands of people, from infants to adults, have been and continue to be left out of their right to Malaysian citizenship.

For the past week, DHRRA (Development of Rural Resources in Rural Areas) Malaysia and the United Nations Refugee Agency (UNHCR) have held a photo exhibition at Publika White Box highlighting the issue of statelessness in Malaysia and around the world.

Ending today, the exhibition presents a powerful narrative of lost childhoods, missed opportunities, discrimination, endless frustration and a lifetime of despair.

I honestly cannot imagine being stateless. We easily take for granted the fact that we live as citizens of Malaysia. Meanwhile countless others are deprived of the sense of belonging and identification that comes with citizenship.

The effects of being born stateless and not being recognised as a national of any country are severe. It creates formidable and often insurmountable barriers which prevent access to education, healthcare and job opportunities.

For the past week, DHRRA Malaysia and UNHCR have held a photo exhibition at Publika White Box highlighting the issue of statelessness in Malaysia and around the world. ― Picture courtesy of UNHCR

For the past week, DHRRA Malaysia and UNHCR have held a photo exhibition at Publika White Box highlighting the issue of statelessness in Malaysia and around the world. ― Picture courtesy of UNHCR

Imagine your daughter or son being denied a chance to go to school because your child doesn’t have a birth certificate or an identity card. Or being told that you can’t take the Sijil Pelajaran Malaysian examination due to the same reason.

Or being turned away from public healthcare facilities and medical treatment because you cannot afford the higher fees imposed on foreigners which they assume you to be because you don’t have a proper Malaysian identification card. Travelling could be a problem, as you could be arrested by police for not having any identification or on suspicion of being an undocumented migrant.

Imagine being denied your rights as a citizen of this country despite having lived here all your life and knowing no other home. It seems inconceivable and unimaginable for many of us to think that a person living in modern Malaysia does not even have a birth certificate or be in such a state. Yet this is the reality for so many who are being missed out due to urban and rural poverty, illiteracy, plain ignorance and lack of awareness on the importance of having identity documentation.

Some would argue that it is incumbent upon the affected individuals to ensure that they be registered and that the state is not at fault for the predicament of those who are stateless. However, it is worthwhile recognising that many of them are often born in circumstances not of their own or parents’ control.

Conditions of hardship where home births in remote villages and plantations are common, marriages are rarely registered, abandoned children, and costly trips to the nearest town with a hospital or a National Registration Department (NRD) office. In fact, many of those affected would have been entitled to citizenship by operation of law under the Federal Constitution of Malaysia. However, it is often a reality that this status is denied to them as they are often unable to produce the prerequisite documents such as parents’ marriage certificates or death certificates, especially if those were issued before 1957.

According to the Federal Constitution, a person is considered to be a national by birth if born in the Federation:

• Article 14 (a) – On or after Merdeka Day and before October 1962. After September 1962, a person is a national if at least one parent is either a citizen or a permanent resident, or was not born a citizen of any country.

• Article 14 (b) – On or after Malaysia Day (16 September 1963). With at least one parent being a citizen or a permanent resident at the time of birth. Or is born within the Federation who is not born a citizen of any other country.

It is important to note that Article 14 (b) actually incorporated a humanitarian clause to extend assistance to those who are bereft of any citizenship. The framers of the Constitution anticipated a time when there will be such a need to help those who have slipped through the cracks and have rightful claim to citizenship.

There is a vicious cycle which exists and perpetuates statelessness. A decision by uninformed and illiterate parents to not register the birth of their baby daughter four decades ago, would have severe effects and impact her life and future. She would encounter obstacles in getting herself properly registered as a Malaysian, especially if her parents were originally not registered. She would have difficulty in securing registration of her marriage, the birth of any children and so forth. Her children would suffer similar consequences and the likelihood of them becoming stateless themselves is altogether too real.


Due to her statelessness status, Shanti, the mother of a four-year-old boy was forced to give birth at home without any medical assistance due to the high prohibitive costs of treatment for non-citizens at the local public hospital. Unable to travel due to distance and cost, this made it difficult for her to secure registration documents for her baby despite regulations requiring that all births must be registered within 14 days of the birth. Unfortunately, her boy is now stateless and she fears for his future.

Kavita, 22, was born and raised in Malaysia and is another example of such circumstances. She lacks a nationality because her father died and her mother left with no one to care for her welfare. Today, because of her status, she is unable to further her studies and fulfil her ambition of becoming an art teacher. By being stateless, she is denied a future.

The thing is, statelessness is preventable and there is remedial action available under the Federal Constitution. Yet, when we look at the statistics from DHRRA Malaysia on this issue, the confirmation of citizenship status by NRD still seems to be woefully out of reach of those affected. Out of the 11,538 people registered with the NGO, 4,634 applications (for identification card, citizenship determination, birth registration) were able to be submitted to the NRD. However, only 250 thus far succeeded in acquiring documentation.

It is a long and complicated legal process where applicants have even died waiting for an answer to Malaysian citizenship that was not forthcoming. Why is this so?

Looking at the many photos of the exhibition, I couldn’t help but notice that almost all of the featured cases of statelessness in Malaysia are those of Indian ethnicity. If ever there was a more compelling reason to be rid of the race-based political system which plagues our country, this is one of them.

The future of individuals and communities in need of such urgent assistance cannot depend on the competency and mercy of politicians from ethnocentric political parties to fight for them. The statelessness of so many who should rightfully be called Malaysians is a damning stain on how this political system has failed to fight for those who cannot speak for themselves.

For these Malaysians who have been forgotten, we must do better. The NRD must seek them out rather than wait for those who are affected to go to them.

Let me end this article with the words of Ms. Puanesway, 65 years old, who is currently waiting for the results of her NRD application to obtain an identity card:

“I have waited all my life to be recognised as a Malaysian. I feel like I am re-born again. To all those people who said ‘No’ to me, I want to show them, I belong here too.”

The Question I’d ask but Jahabar Sadiq did it First

January 3, 2016


COMMENT: I have just returned to Phnom Penh from a short visit to Kuala Lumpur. While I was there in the company of my dear wife Dr. Kamsiah, I was able to meet friends like Ambassador Deva Ridzam, Cmdr (rtd) Thayaparan, Tawfik Ismail, publishers Pak Chong and Rashid Azad Khan, Dr. Shahrin Merican, and Dato Zain Yusoff  and speak to others on the phone like Ambassadors Razali Ismail and Kamil Jaafar, Tan Sri Ramli Kushairi, Halim Rejab, Ahmad Zakie, and others. I also received a return call from my favorite Chief Minister of Penang, Sdr. Lim Guan Eng.

One of them told me bluntly that “we do not have any government, only a system operated by band of thieves who are squeezing blood out of their citizens”. Another buddy asked me,”Do you where is Najib?” I jokingly answered, “He has gone into hiding”. Yet another told me that “pressure on Najib will increase in 2016. He will be forced to take drastic action against his political opponents. Unlike his predecessor Tun Abdullah Ahmad Badawi, he will cling to power whatever the cost to the country”.

Most Malaysians are frustrated and angry with our dishonest Prime Minister and his accomplices in the civil service and public agencies, but feel that there is nothing they can do about our racist politics. The system, which former Prime Minister Dr. Mahathir created to perpetuate his rule, is now being used by Najib to prevent Malaysians the opportunity to speak and stand up against the government. They hope that their chance will come in GE 14.

The question to ask ourselves is will there be a GE-14?  Who will hold elections if he knows he will be  voted out of office? Najib may be corrupt, dishonest, and incompetent, but he is not politically stupid. So far he has successfully resisted all attempts to force his resignation using all means at his disposal.

In 2016, when pushed in a corner, Najib will use the new NSC Law against his political adversaries and civil society critics. So I see uncertain times ahead for the Malaysian economy and more bad news to come. –Din Merican

The Question I’d ask but Jahabar Sadiq did it First

by Jahabar Sadiq

Cash is King

We’re in 2016. The question is, have we turned the corner or will it be the same as 2015 or worse, are we going to dig ourselves further into a rut? Will we be inundated further with asinine comments and ideas from politicians, get taxed further and hold it all before deciding at the ballot box? No. We must question and demand answers for everything being done and spent in our name from all sides of the political equation. Let’s make sure they are all accountable for their elections or face the boot when their time is up for another mandate.– The Malaysian Insider.


On US Interest Rates

December 11, 2015

On US Interest Rates

by Anatole Kaletsky


Janet YellenThe Federal Reserve is almost certain to raise US interest rates at its next policy meeting, on December 15 and 16. The first US rate increase since June 2006 will be a pivotal moment for the global economy, launching what Mohamed El-Erian calls the “great policy divergence,” with repercussions in every region and financial market. The impact will be particularly powerful in emerging countries, where currencies are vulnerable to a rising dollar and tightening liquidity conditions in the US. Project Syndicate’s commentators – some of the world’s preeminent economists and policymakers – have examined the issue from four broad angles.

What is the immediate and longer-term outlook for US monetary policy?

The Fed’s leaders have repeatedly said that they plan to raise interest rates much more slowly than in previous periods of monetary tightening. Such assurances from central bankers cannot always be trusted, but Fed Chair Janet Yellen’s promises to move more gradually than in the past are credible, because the Fed is genuinely determined to push inflation higher and to ensure that it never again falls much below 2%.

Nobel laureate Joseph Stiglitz provides further grounds for discounting the likelihood of faster tightening. Instead of trying to control inflation, according to Stiglitz, the Fed’s main concern now is to reduce unemployment and counteract inequality. To do this, the Fed must continue to stimulate the US economy with easy money. Even the quarter-point rate hike expected at the Fed’s upcoming policy meeting is, in Stiglitz’s view, dangerous and premature.

Moreover, while the Fed’s official responsibility is to manage the US economy, its leadership fully understands the international impact of Fed decisions. Thus, Harvard’s Carmen Reinhart, an authority on global debt crises, believes the Fed will “favor gradualism” to avoid wreaking havoc in emerging economies that are overloaded with dollar debts. In a related argument, Barry Eichengreen, the Berkeley economic historian, suggests that US monetary policy is now effectively “Made in China,” because China’s efforts to stabilize the renminbi have already tightened US monetary conditions by the equivalent of the quarter-point rate hike expected on December 16.

Is gradualism the right approach?

Like Stiglitz, UNCTAD’s Richard Kozul-Wright argues that a rate hike in December would be premature and opposes any tightening at all: If the Fed “follows through on raising interest rates,” this could cause serious trouble for the global economy, and especially emerging markets, because of “the enormous tsunami of debt bearing down on households, businesses, banks, and governments.”

But many economists who focus on risks to financial stability believe that the Fed should have tightened rates earlier and now needs to move faster than planned. Gita Gopinath of Harvard University objects to what she calls the Fed’s “dollar distraction,” whereby US policymakers have deviated from their inflation-fighting mandate because of unnecessary concern about the dollar’s strength. In a similar vein, Stephen S. Roach, former chief economist of Morgan Stanley, argues that the Fed has already made a “fatal mistake” by keeping interest rates so low for so long, thereby transforming monetary policy “from an agent of price stability into an engine of financial instability.”

Howard Davies, former Deputy Governor of the Bank of England, points out that it is “justifiable to increase interest rates in response to a credit boom, even though the inflation rate might still be below target.” And Nobel laureate Robert Shiller agrees, warning that excessively low interest rates have created “overheated asset markets – real estate, equities, and long-term bonds – [which] could lead to a major correction and another economic crisis.”

On balance, considering that the Fed is under fire from both directions, perhaps the expected timing of a modest tightening of monetary policy is about right, says former IMF chief economist Kenneth Rogoff. He points out that US interest rates will remain low even after several quarter-point increases. The real risk of monetary tightening, he suggests, is political: “If the Fed starts hiking, it will be blamed for absolutely every bad thing that happens in the economy for the next six months to a year, which will happen to coincide with the heart of a US presidential election campaign.”

I agree with Rogoff. The coming rate move is now so universally expected that it will have little financial or economic impact. The sense that monetary policy is starting to normalize will help to reassure investors and businesses, thereby dispelling lingering memories of the 2008 financial crisis.

Winners and losers

Economists are almost unanimous that the main effects of the Fed rate hike will be felt outside the US. Harvard’s Jeffrey Frankel fears a “possible repeat of previous episodes, notably in 1982 and 1994, when the Fed’s policy tightening helped precipitate financial crises in developing countries.”

The key problem, says Jose Antonio Ocampo, former UN Under-Secretary for Economic Affairs, is the dollar’s dominant reserve-currency status, which means that monetary policy in emerging economies is overly influenced by the US. In the future, however, this vulnerability will be lessened by the Chinese renminbi’s inclusion in the basket of reserve currencies that the International Monetary Fund uses to set the value of its Special Drawing Right (SDR), says Yu Yongding, Director of Global Economics at the Chinese Academy of Social Science.

Even in the short term, admission to the SDR could help by convincing markets that China’s currency adjustment in August was not the start of a big devaluation. That would relieve downward pressure on other emerging-market currencies, especially in Asia, according to Lee Jong-Wha, director of Korea University’s Institute of Asia Research. Nouriel Roubini, who famously forecast the 2008 financial crisis, agrees that “a correction has already occurred in emerging markets, limiting the need for further adjustment when the Fed moves.”

Turning to the US and Europe, most Project Syndicate commentators, with the notable exception of Stiglitz, believe that the first US rate hike will have limited impact on economic activity directly. Although Shiller and Roach express serious concerns about the buildup of debt and high asset prices in developed countries, both Roubini and Berkeley’s Brad DeLong downplay concerns about financial instability, because interest rates will remain low by historic standards for many years, even after Fed tightening begins.

The lessons of zero interest rates

Stiglitz criticizes the Fed for neglecting its legal mandate to promote “maximum employment” in favor of a narrow focus on inflation that is no longer relevant. By contrast, I believe that the Fed has effectively abandoned inflation targeting and thereby “buried monetarism,” implying a welcome return to the Keynesian emphasis on minimizing unemployment, even if that means higher inflation.

DeLong, however, contends that five years of zero interest rates have failed to end stagnation and believes that the only thing the Fed has effectively abandoned is hope of accelerating economic growth. Instead of giving serious consideration to unfounded theories speculating that excessively low interest rates could, under certain conditions, discourage growth and investment, the Fed should have committed itself even more decisively to zero or even negative rates.

Adair Turner, Chairman of the Institute for New Economic Thinking, agrees that more radical policies are needed. To overcome stagnation government should run bigger deficits, financed directly by printing money. To avert financial crises, credit creation by banks needs to be controlled directly or even eliminated altogether, in favor of direct lending to businesses by savers through capital markets.

Almost all of these commentators agree that monetary policy should focus on economic growth, not financial stability (tougher regulation is needed to achieve that). Davies disagrees, as do Shiller and Roach, but they fail to explain how growth can be accelerated if monetary policy is tightened to avoid credit bubbles.

Meanwhile, economists who believe that further monetary loosening is required to pull the world out of stagnation must look elsewhere. They can pin their hopes on China, where monetary policy will become more expansionary, according to Fudan University’s Zhang Jun, or on Europe, where the European Central Bank is providing increasingly powerful stimulus as monetary union evolves into a “deeper political union,” according to ECB President Mario Draghi.

The final bastion of radical monetary-policy experimentation is Japan. Koichi Hamada, chief economic adviser to Prime Minister Shinzo Abe, provides a reminder that seems all the more relevant as the US experiment comes to a close: “The belief that monetary policy does not matter is the most dangerous idea in economic history.”