It’s the Economy, Mr. Najib, so don’t blink


August 31, 2015

It’s the Economy, Mr. Najib, so don’t blink

by Martin Khor@www.thestar.com.my

FT Najib

TODAY(August 31) marks the completion of 58 years of Merdeka. On the economy, there is much to be proud of, with nearly six decades of generally good growth. One key reason is that the national economy has become well diversified. At Independence, Malaya was dependent on exporting just rubber and tin.

Through the years, more commodities including palm oil and petroleum were introduced and the raw materials were processed and manufactured, for example, into rubber gloves and furniture.

The manufacturing sector also diversified to include electronics. Construction has boomed and has high potential. There have been mistakes, too, along the way. Policies could have been better designed and implemented. And growth, though quite well-distributed, could have been more inclusive.

There are many regions and communities still left out of development. This Merdeka, we should resolve that those living at the bottom of the pyramid should receive the most attention and resources.

There is no reason why, 58 years after Merdeka, Malaysia cannot cater to the needs and interests of the poor and vulnerable. Despite the achievements, the economy is now facing what could be its greatest test. We are already inside the start of an economic crisis, and it will get worse before it gets better.

The fall in prices of petroleum and palm oil has rightly been blamed. Our economy is still reliant on commodities and thus affected by the booms and busts of the global commodity cycle, which turned downwards in the past couple of years. Even more important, Malaysia has also become dependent on another boom-bust cycle – that of global finance, the rapid inflows and outflows of funds.

This cycle is even more volatile and dangerous than the commodity cycle. Volatile because the flows can be huge and can change suddenly, and dangerous because the change can damage many parts of the system. There is a large body of literature on the dangers of global financial flows, when trillions of dollars of short-term funds go hunting for investment venues and modes in search of higher yield.

These funds choose Malaysia and other emerging economies to place many billions of dollars. When fundamentals or perceptions change, the funds move out.

Allowing the free flow of speculative funds is not a good idea. When too much comes in, effects include stock market and property price bubbles and currency appreciation.

And when the investors exit, there are other bad effects, as is now becoming evident. Foreign funds in the stock and bond markets are leaving the country. The ringgit has fallen more than 20% since a year ago, with expectations of further falls prompting further outflows. Local capital flight is also taking place.

Since the trade surplus has declined, it cannot fully offset the outflow of funds. Thus the overall balance of payments is now negative and this is reflected in the falls in the foreign reserves from US$132 bil (or RM424 bil at the exchange rate then) on August 29, 2014 to US$94.5bil (or RM356bil) on August 14, 2015.

Unless the investor mood reverses, there is potential ground for higher foreign outflows. The relevant foreign funds are in four categories: equities, bonds and deposits (denominated in ringgit) and loans to Malaysia denominated in foreign currency. Foreign investors have around RM300-400bil in the stock market. This year up to 31 July, they pulled out RM11.7bil from the stock market, according to MIDF Research. Foreign funds invested in bonds denominated in ringgit are high and falling fast. Foreigners own RM206.8bil of government and corporate bonds at end-July, down from RM226bil at end-2014 and RM257bil in July 2014, according to government data.

They also own deposits in Malaysian institutions of RM91bil as at end-March. Thus, there are RM600-700bil of foreign funds in the country as equities, bonds and deposits. If a sizable amount moves out, this would further drain the foreign reserves which stood at RM356bil on Aug 14.

On top of this, the public and private sectors also had RM399bil of external debt (of which RM157bil is short-term) denominated in foreign currencies as at end-March 2015, according to Bank Negara.

The country has thus become dependent on foreign funds and lenders to maintain their assets in and loans to Malaysia. The foreign reserves are still quite high, but has been declining and subject to future stress if outflows continue.

It is timely that an economic task force has been set up by the Prime Minister and it should examine all facets of the emerging crisis.

Should the country re-establish a currency peg? If this is done, there should also be controls on capital outflows, otherwise the fixing of the currency may not prevent and may instead cause further large capital outflows. The 1998-2000 policy measures that overcame the crisis were successful because they were done in combination: a fixed exchange system; control over certain types of capital outflows; and reflationary monetary and fiscal policies. One without the others would not have worked.

The committee should also consider whether it was wise to have recently liberalised the financial system so much, to now have such free inflows and outflows of funds. Excessive fund inflows and debts could have been limited in the first place, as done in some other countries. Local institutions should also not have been encouraged or allowed to invest so much abroad; now it is not easy to get them to reverse the flow.

The policies have resulted in high dependence on foreign funds, and the economy being susceptible to the stress of capital outflows. We shouldn’t welcome or attract all the funds that want to enter to do so, and then later bewail the fact that these same funds now want to exit when the economy cannot afford them to do so.

In any case, it is important to give priority to reviving the economy, which is now clearly under stress and already inside a crisis.

 

Europe should restructure Greece Debt


August 19, 2015

Europe should restructure Greece Debt: Debt Relief?

http://www.nytimes.com/2015/08/18/opinion/europe-listen-to-the-imf-and-restructure-the-greek-debt.html?ref=opinion&_r=0

by NY Times Editorial Board

The International Monetary Fund is doing the right thing by not participating in a deeply flawed loan agreement that European leaders have negotiated with Greece.

Greece Debt BurdenThe Issue: Should Germany and others in EU bear cost of Debt Relief

Years of misguided economic policies sought by Germany and other creditors have helped to push Greece into a depression, left more than a quarter of its workers unemployed and saddled it with a debt it cannot repay. The latest European attempt to bail out Greece will make the situation even worse by requiring the country’s government to cut spending and raise taxes while increasing the country’s debt to 200 percent of its gross domestic product, from about 170 percent now.

The I.M.F., which joined European countries in their first two loan programs for Greece, says it cannot lend more money because Greece’s debt has become unsustainable. In a statement on Friday, the fund’s managing director, Christine Lagarde, said Greece’s creditors had to provide “significant debt relief” to the country. Last month, the fund said creditors needed to either reduce the amount of money Greece owes or extend the maturity of that debt by up to 30 years.

This is a much tougher position than the I.M.F. has taken before. In 2010, it did not insist that Greek debt be restructured. That was a big mistake because it left Greece with more debt than it had before the crisis and reduced the government’s ability to stimulate the economy. What Ms. Lagarde, a former French finance minister, says matters because European leaders like Chancellor Angela Merkel of Germany want the fund to be a part of the loan program since it has extensive expertise in dealing with financial crises.

European officials have said only vaguely that they might be willing to consider debt relief. Many lawmakers and voters in other European nations oppose providing more help because they think the Greek government has failed to carry out the economic and fiscal reforms that would make the country more productive.

There is no question that Prime Minister Alexis Tsipras of Greece needs to do more to raise economic growth. But even if he does everything European leaders are asking him to do — a list that includes cutting pensions, simplifying regulations, privatizing state-owned businesses — the country will still not be able to pay back the 300 billion euros it owes. Rather than go through a messy default in a few years, it is in Europe’s interest to heed the I.M.F.’s advice and restructure Greece’s debt now.

 

Malaysia: It’s The Economy But How to Fix It, Stupid


August 14, 2015

Malaysia: It’s The Economy But How to Fix It, Stupid

by MP Liew Chin Tong@www.malaysiakini.com

Let us not kid ourselves. A major economic crisis is looming with noliew-chin-tong sight at the end of tunnel as yet. The government is not even prepared to acknowledge that there is a crisis, not to mention to deal with some basic macroeconomic understanding of what’s going on and what’s next.

The Sick Ringgit: A Victim of Neglect

The ringgit hit the 17-year low of RM4 to US$1 on 12th August 2015. Within slightly over a month, not only was the RM3.80/US$ psychological line breached, it’s now crossed the RM4/US$ line!

Thus far, the responses from the government on the rapidly declining ringgit are that the weaker ringgit would be good for exports and tourism; and that the slide is triggered by global factors such as China’s renminbi’s unexpected devaluation.

For instance, newly minted Deputy Finance Minister Johari Abdul Ghani said that there is no need to press the panic button, while Tourism Minister Nazri Aziz claimed that a weaker ringgit is good for the tourism trade. Higher Education Minister Idris Jusoh said a weaker ringgit would bring more international students to study in Malaysia.Such talk won’t get us very far.

How we got here

If we look at the long-range perspective, since the 1997 Asian economic crisis, Malaysia has been heavily dependent on unskilled foreign labour with very little general improvement and upgrade in income, productivity, skills and technology.

Since the Gulf War in 2003, which triggered manifold increase in oil and commodity prices, Malaysia has been heavily depended on oil revenues to sustain the broader economy, as well as to sustain lavish government spending.

With the cheap credit that came with quantitative easing introduced by the US Federal Reserve in response to the 2008 global financial crisis, the Malaysian economy has been heavily dependent on debt-fuelled consumption and property speculation.

Malaysia’s predicaments

The long-term dependence on cheap labour means that our export sectors are not as strong and robust as we thought. Significant portion of Malaysia’s economic outputs come from oil and gas and commodities, the prices of which are declining.

Worse still, unlike during the 1997 crisis, Malaysia and Asian economies can no longer export our way out of the crisis because the ultimate export destination, the US economy, is no longer doing so well.

Today, out of the four major engines of world economy – US, Europe, Japan and China – only the US economy is doing reasonably well but it is still a pale shadow of its strength during the 1997 Asian economic crisis. The so-called ‘emerging economies’ of Russia, Brazil and others have by now more or less ‘submerged’.

So, on the one hand, Malaysia has no one to export to apart from the United States. On the other hand, there is a currency war, which saw Japan, Europe and now China competing to devalue their currencies with the intention of boosting exports. This is probably the most terrifying part of the impending crisis.

Ministers, stop talking nonsense

I hope that government ministers who claim that a weaker ringgit aids exports would stop talking nonsense. One just has to take a look at the latest Bank Negara report that shows gross exports declined by 3.7% in the second quarter 2015 (1Q2015: -2.5%) despite the ringgit depreciating throughout the period.

The other major challenge is adjusting to the “new normal” of post-quantitative easing scenarios.Oil prices collapsed soon after the US Federal Reserve ended its QE programme in late 2014. Inflated asset prices throughout Asia between 2009 and 2014 as a consequence of QE would have to face difficult adjustments.

Malaysia’s very high household debt ratio and property speculation quagmire are likely to make adjustments more painful. The next shock to the Malaysian economy would come if the US Federal Reserve hikes its rates in September.

Exports are not going to improve too much in the short-term (due to Malaysia’s limited export capacity, race to the bottom competitive devaluation of currencies and US’ limited appetite for imports) and the ringgit is likely to go south further (domestic political crisis, US rate hike, collapse of oil prices), but anyhow Malaysia still needs a way out.

Five ways to save the economy

I propose five ways to save Malaysia from the looming crisis:

1. Get Najib to quit as Prime Minister

Najib the Wolf of WSJ
Let us admit that Najib Razak is a problem. While there are other global factors contributing to the decline of our economy, Najib is the cause to the loss of confidence in the integrity of Malaysia’s institutions. As the “political dead man walking”, his continuation as prime minister is causing more harms to Malaysia’s economy.

2. Name a new and competent Finance Minister

Even if leaders of the ruling parties couldn’t get rid of Najib as Prime Minister as yet, for the sake of the Malaysian economy, a new and competent Finance Minister with clear understanding of macroeconomic factors should be appointed immediately.

It is time to end the practice of Prime Minister holding the finance portfolio concurrently. Najib has shown how disastrous such practice is.

Nazir Razak2Two names come to mind as new Finance Minister. From among the current ministers, Mustapha Mohamad is probably the best to steer the economy. From outside the system, perhaps Nazir Razak would be a decent choice.

3. Set GST at zero rate

The global market is stuck in an unsustainable situation, i.e. depended on the US economy as the sole and final consumer destination. There will only be limited growth the export, if there is any. Malaysia needs to quickly arrest the economic slide by ensuring that there is sufficient domestic consumption at the bottom.

With the ringgit sliding rapidly, imported inflation is going to result in higher prices soon. One intervention to ensure that domestic consumption would not collapse is to abolish GST or at the least set it at zero rate for a period of a year before further review.

4. Halt big-ticket crony projects

All big-ticket crony-like mega projects should be halted and be subjected to a ‘foreign currency impact’ assessment. Many of the big-ticket projects like Malaysia-Singapore High Speed Rail and even the MRT are unnecessarily expensive, and actually unnecessary if cheaper and more effective options were considered.

The government’s past responses to a crisis would be to inject more cash into the hands of the cronies for more construction projects. government-driven construction projects usually hire mostly unskilled foreign labour with very little spillovers to the wider economy. There are other ways to boost the economy.

5. Halt intake of unskilled foreign labour

Zahid at LIMA2013One important way to push for massive structural change to the Malaysian economy is to reduce the number of unskilled foreign labour and to push for mechanisation and automation so that Malaysian workers are paid better with more skill component in their jobs. Hence Home Minister Zahid Hamidi’s proposal to bring in 1.5 million Bangladeshi unskilled workers is foolish and against national interest.

Uncharted waters

Boosting income of the lower income group to boost domestic consumption when export will be limited would be an important strategy to survive the current crisis.

Boosting income at the bottom level is so important because Malaysia’s household debt ratio is already very high and domestic consumption must be pushed without more debts being accumulated.

We are in uncharted waters. Malaysia needs competent political and economic leaders with integrity to sail through the tough times.

The Ringgit slide spells trouble for Najib Razak


August 7, 2015

Malaysia: The Ringgit slide spells trouble for Najib Razak

by Asia Sentinel Corespondent

http://www.asiasentinel.com/econ-business/malaysians-seek-currency-havens-as-crisis-grows/

DPM Zahid HamidiWhat a Combination–Javanese and Bugis

Consumers in Malaysia are turning to money changers to trade the domestic currency for US and Singapore dollars, triggering a foreign currency shortage as a steeply falling ringgit cuts into their buying power.

Currency traders say the run on the ringgit is causing a shortage of US dollars as people try to move their money into safer currencies. At least two local banks are said to be limiting withdrawals to RM5,000 in cash at counters due to a shortage of cash. Any amount above RM5,000 must be withdrawn by bank check.

Under Malaysian banking regulations, retail customers are not allowed to change ringgit into foreign currencies. They must withdraw local currency and take it to domestic money traders to buy foreign currencies.

Because of the liquidity crunch, middle-class Malaysians also are said to be moving their savings out of the country to Singapore, hoping to protect their assets and to make a quick gain by buying cheap ringgit when the currency market bottoms out at some future date. Financial advisors are said to be telling their clients to move savings out of Malaysian banks or transfer to offshore accounts in safer currencies.

This is a fine mess you’ve got us into

It is a further sign that the political crisis that has gripped the country for more than a year over the scandal-ridden 1Malaysia Development Berhad fund is starting to spread into the public at large. With the political crisis deepening and Prime Minister Najib Razak himself implicated over the scandal, his government has been paralyzed on economic policy. A wave of cabinet dismissals and police investigations into press leaks seem to indicate that Najib is almost wholly intent on his own survival rather than governing the country.

Ahmad Maslan al Bodoh

The levers that might right the economy are thus being largely ignored by policymakers and consumer confidence, according to latest figures from the Malaysian Institute of Economic Research, nosedived to 72.60 in the first quarter of 2015 from 83 in the fourth quarter of 2014 after averaging 104.90 from 2005 until 2015.


 A wave of cabinet dismissals and police investigations into press leaks seem to indicate that Najib is almost wholly intent on his own survival rather than governing the country


An already-irritated middle class is growing more frustrated as a 6 percent goods and services tax has cut into spending and savings. Although the GST is theoretically a reform designed to improve accounting, reduce tax fraud and discourage dishonest business practices, it has caused confusion about its interpretation and outraged consumers.

“The economy is severely crimping,” said a Malaysian restaurant owner. “I have closed all six of my outlets. Businesses everywhere are closing. The GST has smashed the economy, with 1MDB and the political problems finishing it off. But the real issue affecting the whole country is the GST. We are facing a perfect storm. The GST, 1MDB, weak prime minister, weak Barisan Nasional, falling oil subsidies, the China slowdown, a possible rise in US interest rates and more.”

Paradigm Shopping Mall in Kelana Jaya in the Kuala Lumpur suburb of Petaling Jaya was among the first to record unusually high retail outlet closings with more than 20 retail shops shutting down within the first few months of the April 1 implementation of the GST.

Look out below

In the past year, the currency has fallen from RM3.80 to RM3.91 to the US dollar, heading for the psychologically important level of RM4 despite attempts by Bank Negara, the country’s central bank, to stem the slide by using the country’s US dollar reserves to buy ringgit. Global currency traders, sensing the deep problems in the Malaysian economy, have gone after the currency, driving it down in the past week alone from RM3.880.

The central bank has thrown at least US$10 billion into the latest attempt to save the ringgit. But the world’s currency markets, with trillions of dollars to throw at the assault on the currency, can easily overcome any defenses. The government faces the unappetizing choice of either turning to capital controls, which would constrict the economy, or letting the ringgit slide, which would drive up the price of imports and irritate consumers even more.

It is not all politics, of course. The pressure on the ringgit has been triggered in large measure by a slowing macro economy hit by the global slump in crude oil, palm oil and rubber among other key commodities. Two of Malaysia’s top trading partners, China and Singapore, have also suffered slowdowns. At least one Swiss bank is said to have downgraded Malaysia’s risk profile internally because of the country’s problems.

 

chart

In addition, according to the Hong Kong-based financial analysis and securities firm Asianomics, “the investment cycle has turned sharply and decisively down ever since spending by the government sponsored but private sector led Economic Transformation Program on infrastructure surge came to an end. Real fixed investment spending is growing significantly slower than GDP and as a result the ratio of investment to GDP has fallen below trend, with residual spending in negative territory and signaling an impending recession.”

Those economic problems have been exacerbated by the year-long political crisis triggered by 1MDB, which has the government scrambling to find funding sources to meet RM42 billion of liabilities. If Najib digs in and nothing can be done to move him aside, the crisis could drag on for years. Key institutions are already suffering, with more pain to come.

Bank Negara’s Zeti Akhtar Aziz, the long-serving central bank governor, has come under unprecedented attack from pro-Najib bloggers over allegations that her family has secret bank accounts in the British Virgin Islands. The internationally respected official, whom many believe could have evidence linked to the suspicious movement of hundreds of millions of dollars linked to 1MDB and the prime minister, has not been seen in several days.

She and several top officers of the bank are under suspicion of having given details of the 1MDB and other scandals to either reporters or government investigators whom Najib has now fired. The government is now said to be after Zeti’s head, a move that would deepen uncertainty and creation additional policy problems.

RM2.6 billion doggie in Najib’s window


August 6, 2015

Malaysia: RM2.6 billion doggie in Najib’s window

by Azrul Mohd Khalib

http://www.malaymailonline.com

Penderma UtamaPrime Minister Najib Razak’s Generous Donor

If, like me, you are frustrated and furious with the recent revelation by the Malaysian Anti-Corruption Commission that the RM2.6 billion that was deposited into Prime Minister Datuk Seri Najib Razak personal bank account was found to be from donor contributions and not from 1Malaysia Development Berhad (1MDB), let me assure you that you are not alone.

Thousands of people across the country are clustered around tables at kedai kopi, mamak shops, dining rooms and even hipster cafes wondering what the hell is going on.

The whole thing feels like it was stage-managed to help take the heat off this particular issue in the wake of the reportage from The Wall Street Journal (WSJ), The Edge Financial Daily, The Edge Weekly and the Sarawak Report.

Earlier tweets from the honourable Member of Parliament for Kota Belud disparaged and mocked WSJ’s report last month, describing it as “gutter journalism” and a “wanton allegation.”  There was also his earlier vocal support for the continuation of the work of the parliamentary Public Accounts Committee into the 1MDB issue to “end it” and provide closure.

Then came the recent Cabinet reshuffle, the raids on the MACC, the agency’s revelation regarding the RM2.6 billion, and the suspension of the PAC hearings.

azalinaMinister of Sycophancy

Newly-minted Minister Datuk Seri Azalina Othman wasted no time in distinguishing herself from the pack by actually saying that the amount in the Prime Minister’s personal bank account was not a big issue.

Congratulations Datuk Seri, on starting your ministerial stint by polishing the apple with a touch of sycophancy. But to be fair to that lot in the Cabinet, it sounds like precious little is shared on this issue during those weekly meetings. As was confirmed by a former member, you find out more from reading a copy of The Edge Financial Daily or The Wall Street Journal.

After all, collective responsibility only goes so far. It must also be great being a minister.

By stating that the amount in question originated from donor contributions rather than the 1MDB, the MACC announcement inadvertently confirms the following points which were earlier reported by the abovementioned publications:

That the funds existed and were a total of US$700 million or RM2.6 billion (would be worth more in today’s depressing value of the ringgit). That the amount was deposited into a personal bank account.

That the account holder was Datuk Seri Najib Tun Razak, the current Prime Minister of Malaysia. RM2.6 billion is a heady sum. It would be strange if you felt that there is nothing wrong with this picture and that the PM is entitled to have that amount in his personal bank account.

To put the US$700 million into context, consider that this amount is equivalent to 1 per cent of the 2014 Federal Government Budget of RM262.1 billion.

If I were to take the MACC announcement at face value, I would have at least three questions to ask:

1. Who were the donors of such largesse? 

2. What were they expecting as a result of their generosity?

3. Why was the prime minister the recipient/ beneficiary/ trustee of these donations?

Let me say right now that to explain away RM2.6 billion as coming from contributions of UMNO members and various supporters, would be an insult to the Malaysian people’s intelligence. Don’t even try it.

If it didn’t come from 1MDB funds, from whom and where did this funding come from? I must surmise that with all this sudden talk about how it is alright for politicians to receive foreign funding, that this amount allegedly came from sources abroad.

If this funding which the ministers are now suddenly acknowledging exists and are claiming is above board, why then the need for secrecy and the reticence? Sure, it’s not a crime to receive all that money but whose money is this? Are the donors governments, organisations, companies or special interest groups? It is extremely important to highlight not only how much but where the money came from.

Is this why we have been bowing and scraping to various entities in the Middle East? What kind of influence do these unknown donors and benefactors have over our country?

Which leads me to the second question, what were or are they expecting in return? What is the quid pro quo? Nobody gives this kind of money dengan penuh tulus ikhlas, without expecting something in return. Let’s not be naïve.

This is a sobering reality as money is endemic in a democracy. There is a famous quote attributed to American politician Jesse Unruh who said that “money is the mother’s milk of politics.” Or in our case, this is probably susu kambing of some kind.

Private financing is a legitimate and necessary tool for political parties and their candidates. Campaign war chests are growing ever bigger with each election. In many countries, record amounts are being spent on elections.

Consider the following:

In the last US election according to the New York Times, Barack Obama’s re-election campaign in 2012 raised around US$770 million (not including the Democratic Party and political action committee funding). His opponent Mitt Romney raised US$467 million through his own campaign fundraising. In total, each had more than a billion dollars on hand to spend.

On the lower end of the scale, the cost of Angela Merkel’s Christian Democratic Union (SPD) campaign in the last German federal election, was around 30 million euros or RM127 million. That was for everyone. From her all the way down to the junior parliamentarians. Not individually but everyone combined.

If RM2.6 billion was divided by the 726 seats (221 parliamentary and 505 state assembly) contested by the Barisan Nasional in the last general election, it would come up to RM3.6 million per seat. That’s assuming that the disputed funds were shared with all the Barisan Nasional partners and not for Umno alone.

However, under Section 19 of the Malaysian Elections Offences Act of 1954, each candidate is not allowed to spend more than RM200,000 (parliamentary seat) or RM100,000 (state seat) for campaigning.

The ability to raise private funds to finance political activities, especially from abroad, makes politicians and political parties vulnerable to a wide range of threats to democracy, especially those which affect government policies and actions.

Finally, the Prime Minister was the recipient and trustee of these funds. If we are to hold ourselves to a higher standard of transparency and accountability like that of developed countries, it would be very clear that nobody gives campaign donations direct to the personal bank account of a politician. Certainly not in these huge amounts.

For the sake of the dignity, honour and credibility of the position of the Prime Minister, this issue must be further clarified and explained.

PARLIMEN / ANIFAH AMAN / KIMANISNot too long ago back in 2012, Foreign Minister Anifah Aman stated that foreign funding of NGOs in Malaysia, could be “seen as interference in the domestic affairs of a sovereign state.” A whole buffet of pro-establishment Malay rights NGOs attacked their counterparts who received funding from abroad and accused them of helping to “destabilise the peace of the country.” Despite the fact that these civil society organisations were working to strengthen democracy and human rights in Malaysia, they got hell for this and were even accused of being foreign agents.

Suddenly, some are barking that “politicians are free to accept financial aid or contribution from abroad.” What are we to think?

There is an obvious and urgent need for political campaign finance reform in Malaysia as big money politics is threatening and compromising the integrity of this government and the country.

We need reform urgently because when you look at history and precedence, the pattern where there are huge amounts being spent which are extremely disproportionate to the number of registered voters and population, can be found in banana republics, authoritarian regimes and tin-pot regimes where corruption runs rampant and unchecked.

KUALA LUMPUR 29 NOVEMBER 2012 - PRESIDEN UMNO, Datuk Seri Najib Tun Razak tersenyum melihat Timbalan Presiden UMNO, Tan Sri Muhyiddin Yassin yang mempamerkan sepanduk `Saya Sayangkan PM' semasa Majlis Perasmian Perhimpunan Agung UMNO 2012 di Dewan Merdeka PWTC di sini hari ini. Gambar: MOHD NAIM AZIZ Pemberita: TEAM UMNO UTUSAN/KOSMO!

The Price of Loyalty–Out of The Cabinet and Public Office–Stab in the Back Politics in Malaysia

The emergence of such “black money” in elections often leads to erosion of public confidence in the political process. We cannot let that happen.

I am willing to bet that there are many, many questions that the Malaysian people are asking about this RM2.6 billion which is probably just a part of a very large iceberg in our democracy.

But I have just one more before I end my piece: Unless it was all spent during the 2013 elections and its aftermath, where is the rest of the RM2.6 billion?

* This is the personal opinion of the columnist.

Anwar Ibrahim: A Lone Voice from Prison delivers a Message of Hope


July 25, 2015

MALAYSIA: A Lone Voice from Prison delivers a Message of Hope

Anwar --The Prisoner

Anwar Ibrahim

by http://www.themalaymailonline.com

http://www.themalaymailonline.com/malaysia/article/malaysia-ready-for-change-imprisoned-anwar-writes-in-wsj-amid-1mdb-scandal

With the Najib Administration facing even more pressure now to explain the 1Malaysia Development Berhad (1MDB) scandal, Dato’ Seri Anwar Ibrahim has seized the opportunity to rally his supporters, saying although tough times are expected ahead for Malaysians, the country’s growing opposition cannot be silenced.

Anwar, who was given the opportunity to pen an Op-Ed for the Wall Street Journal (WSJ), the international daily now facing the possibility of lawsuit by Malaysia’s Prime Minister Datuk Seri Najib Razak, said Malaysia is ready for the change long-trumpeted by the federal opposition, one that he claimed would see a return to the underpinnings of the Federal Constitution.

The PKR de facto leader, now five months into his five-year jail sentence for sodomy, also said a “brighter future” is possible with good governance and the rule of law.

“We believe in the dismantling of Malaysia’s system of race-based privileges that has devolved into nothing more than rent-seeking for the privileged few. We believe that corruption is a slow bleed that robs future generations of the education and business opportunities that will make them prosper,” he wrote in the piece.

Anwar, who was the Deputy Prime Minister from 1993 to 1998, said his decision to stay in the country to face prosecution had not been easy and had put a “tremendous burden” on his family but insisted that he had done so because he believes the country is ready for change.

“Malaysia is ready for change.This is why, rather than flee my country, I chose to stay and continue the fight for peaceful, democratic reform from my prison cell,” he said.

He also said in four decades in public service, this was the first time racial and religious sensitivities have become so inflamed, and at the same time so poorly managed by the country’s political leadership.

He said the “real danger ahead” is that Malaysia could devolve into a failed state after several decades of economic mismanagement, opaque governance and overspending.

“The irresponsible manner in which the current leadership is handling religious issues to curry favor from the extreme right is fueling sectarianism.Increased political repression may drive some to give up on the political system altogether and consider extralegal means to cause change, thus creating a tragic, vicious cycle,” Anwar added.

The only way out of this “mess”, he said, was to uphold the Malaysian Constitution, to ensure better checks and balance in the administration, keep the elections free and fair; and a media that is not afraid to challenge authority.

The Najib government is currently under pressure to explain the 1MDB scandal, following the series of exposes by media outfits claiming to be in possession of documents that show impropriety in the state investor’s allegedly opaque deals.

In its July 2 exposé, WSJ, citing documents from Malaysian investigators currently probing 1MDB’s financials, said a money trail showed that US$700 million (RM2.6 billion) had been funnelled into what is believed to be Najib’s accounts.