Nurhisham is Back– Batting for Najib’s Malaysia


May 9, 2017

Nurhisham is Back– Batting for Najib’s Malaysia

Nurhisham Hussein outlines why it’s disingenuous and dangerous to dismiss economic data from Malaysia.

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Playing Malaysia’s number game

by Nurhisham Hussein

http://www.newmandala.org

I read with some interest a recent article on New Mandala by Manjit Bhatia on the effect of the assassination of Kim Jong-nam on the political fortunes of Malaysian PM Najib Razak. That the assassination has distracted attention from Malaysia’s domestic political scene is not in doubt. However, the author makes some strong allegations regarding the veracity of Malaysian economic statistics, as well as making some misleading and outright untrue statements on the state of the Malaysian economy.

Let me deal with each of the statements I found problematic in turn. The article makes the bold claim that, “Most credible economists, even the market type, know Malaysia’s official numbers are as rubbery as North Korea’s or China’s.” In my role as Chief Economist of the Employees Provident Fund (EPF), I meet nearly every market economist who covers Malaysia, as well as those in policy circles such as from the World Bank and IMF. I don’t know of any who have hesitated to take Malaysia’s official statistics at face value. One of the key tests to determine whether economic data is falsified is internal consistency and statistical irregularity. China for example fails on both counts. Malaysia does not.

The article further states that there is no data for the job participation rate in Malaysia. This is rather unconventional classification, as everyone else uses the term labour force participation rate (LFPR) instead. In any case, the article is completely mistaken. The LFPR for Malaysia has been available at monthly frequencies since 2009, quarterly since 1998, and annual frequencies going back to 1982. The annual numbers are further broken down by age, gender, education, and ethnic background. The data shows, far from a decline in labour market conditions, a steeply rising LFPR from 62.6 per cent in 2009, to a near record high of 67.6 per cent in 2016 (with a long term average of 65 per cent). It should also be noted that Malaysia’s long term average unemployment rate is just under 4 per cent. At the current rate of 3.6 per cent, the labour market would still be considered to be at full employment.

The article goes on to say that Malaysia’s minimum wage is scarcely enforced. On the contrary, data from the EPF, to which all salaried workers are required to contribute, show a massive shift in Malaysia’s salary distribution when the minimum wage was introduced in 2013. Fully 10 per cent of the workforce shifted from below the minimum wage to above it, and the wage effect was evident across the entire bottom half of the distribution.

Fourth, the article claims that, “In Kuala Lumpur alone, credible estimates put inflation at least twice the ‘official’ number”, and “inflation hits close to double-digits, in real terms, according to some investment banks’ research.” The second statement is nonsensical – there is no such thing as inflation in “real” terms, because in economics real prices of goods refer to inflation-adjusted prices. But the larger point – that inflation is perceived to be higher than official statistics – is actually well known. Well known because the same discrepancy has been documented nearly everywhere.

A recent Federal Reserve research note explicitly addressing this issue, found that US citizens perceptions of inflation were consistently twice as high as the official statistics. Why that is so is an interesting question in itself and would take far too long to explore, but the larger point is that differences between perception and official statistics cannot be taken as prima facie evidence that those statistics are false. There is plenty of evidence that the opposite is true, for example via MIT’s Billion Prices Project, that it is perceptions that are mistaken and not the statistics. Furthermore, research into the methodology and mechanics of constructing consumer price indices conclude that if anything, the CPI tends to overstate inflation, not understate it.

Fifth, the article claims Malaysia’s fiscal deficit and national debt are “ballooning”. In fact, the deficit has been halved since 2009, to just 3.1 per cent for 2016, while the debt to GDP ratio has been kept under the 55 per cent limit the government imposed on itself. Manufacturing, far from being routed, has continued to thrive, with sales breaching an all time high of ringgit 60 billion a month over the past few months. Moreover, Malaysia has been one of the very few countries in the region to record positive trade growth over the past two years.

In the Age of Trump, democratic institutions are under attack everywhere. Trust in public institutions has declined, not just in Malaysia, but globally. Globalisation itself is in retreat, and schisms and conflicts that we thought were gone, have arisen anew. Be that as it may, undermining confidence in public institutions without substantive evidence reinforces these troubling trends, and works against the very foundations of a democratic society. Without them, the very thing that Manjit Bhatia appears to be arguing for, becomes further from reality.

Nurhisham Hussein is General Manager, Economics and Capital Markets at Employees Provident Fund, Malaysia.

 

IMF on Malaysia–Report Card


May 3, 2017

International Monetary Fund on Malaysia–Report Card

by The International Monetary Fund

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Putrajaya–The Administrative Capital of Malaysia

The IMF conducts an Annual Review of member country economic situation. At the conclusion of the consultations the Executive Board considers the findings which are also conveyed to the Government. A Press Release is issued  together with access to the full staff report on the Fund’s website. The Report  is in the nature of a “Report Card”.

The text of the Press Release is reproduced below. The full report can be accessed and downloaded from  ::

http://www.imf.org/en/Publications/CR/Issues/2017/04/28/Malaysia-2017-Article-IV-Consultation-Press-Release-Staff-Report-and-Statement-by-the-44869

On March 15, 2017, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation1 with Malaysia.

Despite a challenging global economic environment, the Malaysian economy performed well over the past few years. Notwithstanding the impact of the global commodity price and financial markets volatility, the economy remained resilient, owing to a diversified production and export base; strong balance sheet positions; a flexible exchange rate; responsive macroeconomic policies; and deep financial markets. While real GDP growth slowed down, Malaysia is still among the fastest growing economies among peers. The challenging global macroeconomic and financial environment puts premium on continued diligence and requires careful calibration of policies going forward.

Risks to the outlook are tilted to the downside, originating from both external and domestic sources. External risks include structurally weak growth in advanced and emerging market economies and retreat from cross-border integration. Although the Malaysian economy has adjusted well to lower global oil prices, sustained low commodity prices would add to the challenge of achieving medium-term fiscal targets. Heightened global financial stress and associated capital flows could affect the economy.

Domestic risks are primarily related to public sector and household debt, along with pockets of vulnerabilities in the corporate sector. Federal debt and contingent liabilities are relatively high, limiting policy space to respond to shocks. Although the household debt-to-GDP ratio is likely to decline, household debt also remains high, with debt servicing capacity growing only moderately.

Real GDP growth rate is expected to increase moderately to 4.5 percent year-on-year (y/y) in 2017 from 4.2 percent in 2016. Domestic demand, led by private consumption, continue to be the main driver of growth, while a drag from net exports, similar to 2016, will remain.

Consumer price inflation is projected to rise and average 2.7 percent y/y in 2017 on the back of higher global oil prices and the rationalization of subsidies on cooking oil. The current account surplus would be largely unchanged as impacts from an improved global outlook and higher commodity prices would be offset by the strength of imports on the back of a resilient domestic demand.

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Bank Negara Malaysia—in full control of the Pulse of the Malaysian Economy

Executive Directors commended the resilience of the Malaysian economy, which reflects sound macroeconomic policy responses in the face of significant headwinds and risks. While Malaysia’s economic growth is expected to continue in 2017, weaker-than-expected growth in key advanced and emerging economies or a global retreat from cross-border integration could weigh on the domestic economy. Against this background, Directors urged vigilance and continued efforts to strengthen policy buffers and boost long-term economic growth.

Directors agreed that the authorities’ medium-term fiscal policy is well anchored on achieving a near-balanced federal budget by 2020. The planned consolidation will help alleviate risks from elevated government debt levels and contingent liabilities and build fiscal space for future expansionary policy, as needed.

Directors recommended that the pace of consolidation reflect economic conditions and that any counter-cyclical fiscal policy measures be well-targeted and temporary. They noted that improvements to the fiscal framework, such as elaborating medium term projections and preparing and publishing an annual fiscal risks statement, would help anchor medium-term fiscal adjustment and mitigate risks.

Directors agreed that the current monetary policy stance is appropriate. Going forward, Bank Negara Malaysia (BNM) should continue to carefully calibrate monetary policy to support growth while being mindful of financial conditions.

Directors emphasized that global financial market conditions could affect the monetary policy space and should be carefully monitored.

Directors noted that the banking sector is sound overall and that financial sector risks appear contained. Nonetheless, they cautioned that potential pockets of vulnerability should be closely monitored. They noted that household debt remains relatively high, while in the corporate sector, there are emerging vulnerabilities in some sectors. Directors suggested that macroprudential measures be adjusted if needed.

Directors underscored the central role of macroeconomic policy and exchange rate flexibility in helping the economy adjust to external shocks. In this regard, they welcomed the authorities’ commitment to keeping the exchange rate as the key shock absorber. They recommended that reserves be accumulated as opportunities arise and deployed in the event of disorderly market conditions. Noting the authorities’ aim to improve the functioning of the onshore forward foreign exchange market, Directors urged the BNM to monitor the effects of the recent measures introduced in this regard, recognizing their benefits and costs.

They emphasized that close consultation and communication by BNM (Bank Negara Malaysia–Central Bank) with market participants will be essential in further developing the foreign exchange market and bolstering resilience.

Directors underscored that steadfast implementation of the authorities’ ambitious structural reform agenda is key to boosting long-term economic potential. They supported the emphasis on increasing female labor force participation, improving the quality of education, lowering skills mismatch, boosting productivity growth, encouraging research and innovation, and upholding high standards of governance.

At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summings up can be found here: http://www.imf.org/external/np/sec/misc/qualifiers.htm.

Abenomics: A Success?


May 2, 2017

Abenomics: A Success?

by The Financial Times

https://www.ft.com/content/62cc7d40-2e65-11e7-9555-23ef563ecf9a

When a policy is applied for more than four years, and consistently fails to produce the intended result, it is tempting to declare it a failure. Critics of Japan’s economic stimulus declare exactly that. They are wrong. So-called Abenomics has not failed, and it should be sustained, not abandoned.

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Critics of Prime Minister Shinzo Abe’s economic policy, which aims to combine monetary and fiscal stimulus with structural economic reforms, make a simple case. Abenomics began in the spring of 2013. It was supposed to revive growth and end two decades of on-and-off deflation. Four years later, the Bank of Japan’s preferred measure of inflation is up by 0.1 per cent on a year ago. It follows, the critics say, that the medicine has not worked.

It has indeed proved hard to ignite inflation in Japan. Since the financial crisis, low inflation has been a problem everywhere, from the US to the eurozone to the UK. But the simple diagnosis of failure ignores how much Abenomics has achieved, the difficult backdrop to these achievements, and the reality that the stimulus was much smaller than its critics imagine. Growth, running at an annualised 1.2 per cent, has been well above Japan’s underlying rate every year save 2014. The unemployment level is at a 22-year low of 2.8 per cent — and that figure understates how tight Japan’s jobs market has become. Every shop and restaurant in Tokyo seems to have a “positions vacant” sign, and many are scrapping 24-hour opening to save labour. Yamato Transport, the country’s largest logistics company, is raising prices for the first time in 27 years in a deliberate attempt to cut volumes to a level its network can handle. Rather than cutting costs, chief executives spend their time working out how to hire and retain staff.

After more than two decades when labour was cheap and abundant, Japanese companies are finding ways to cut back, reducing their lavish service standards rather than raising prices. But this can only go so far. Japan is primed for inflation. The struggles of the stimulus must also be weighed against the global economic backdrop. The plunge in 2014 in commodity prices, followed by the 2015 slowdown in emerging markets, leading to a sharp appreciation of the yen, were a terrible environment in which to generate inflation. Only with the election of Donald Trump as US president, and the subsequent rally in the yen above ¥110 to the dollar, is the global economy once again a support. Of all the obstacles to success, the worst was self-inflicted: a 2014 rise in consumption tax from 5 to 8 per cent. In theory, Abenomics involved a fiscal stimulus. In reality, this only ever happened for a brief time, in 2013. Over the past four years, Japan has significantly tightened fiscal policy. The predictable result was to halt momentum towards higher prices.

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Recently, the Abe government has realised its mistake and loosened the purse strings a little. It should continue to do so, ignoring foolish and arbitrary fiscal targets, until inflation finally does pick up. There have been policy failures over the past four years, but they all involved too little Abenomics, not too much. To break Japan’s deflationary mindset for good may take several more years. Workers are slow to demand higher pay and employers are reluctant to offer it. But that does not mean the effort to restore inflation has failed. Rather, it has made significant progress, in a difficult environment, where the policy’s champions often failed to act when needed. The prize is a revived Japanese economy.

 

The G20’s Time for Climate Leadership since Donald Trump’s America won’t


April 30, 2017

The G20’s Time for Climate Leadership since Donald Trump won’t

by Teresa Ribera*

*Teresa Ribera, Director of the Institute for Sustainable Development and International Relations (IDDRI) in Paris, was Spain’s Secretary of State for Climate Change.

https://www.project-syndicate.org/commentary/g20-climate-change-in-trump-era-by-teresa-ribera-2017-04

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At the start of 2016, the United States was well positioned to lead the global fight against climate change. As the chair of the G20 for 2017, German Chancellor Angela Merkel had been counting on the US to help drive a deep transformation in the global economy. And even after Donald Trump won the US presidential election, Merkel gave him the benefit of the doubt, hoping against hope that the US might still play a leading role in reducing global greenhouse-gas emissions.

But at Merkel and Trump’s first in-person meeting, no substantive statements were issued, and their body language made the prospect of future dialogue appear dim. Trump’s slogan “America first” seems to mean “America alone.”

By reversing his predecessor’s policies to reduce CO2 emissions, Trump is rolling back the new model of cooperative global governance embodied in the 2015 Paris climate agreement. The countries that signed on to that accord committed themselves to sharing the risks and benefits of a global economic and technological transformation.
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“Trump’s climate-change policy does not bode for US citizens”–Teresa Ribera

Trump’s climate-change policy does not bode well for US citizens – many of whom are now mobilizing resistance to his administration – or the world. But the rest of the world will still develop low-carbon, resilient systems. Private- and public-sector players across the developed and developing worlds are making the coming economic shift all but inevitable, and their agendas will not change simply because the US has a capricious new administration. China, India, the European Union, and many African and Latin American countries are still adopting clean-energy systems.

As long as this is the case, businesses, local governments, and other stakeholders will continue to pursue low-carbon strategies. To be sure, Trump’s policies might introduce new dangers and costs, domestically and worldwide; but he will not succeed in prolonging the fossil-fuel era.

Still, an effective US exit from the Paris agreement is a menacing development. The absence of such an important player from the fight against climate change could undermine new forms of multilateralism, even if it reinvigorates climate activism as global public opinion turns against the US.

More immediately, the Trump administration has introduced significant financial risks that could impede efforts to address climate change. Trump’s proposed budget would place restrictions on federal funding for clean-energy development and climate research. Likewise, his recent executive orders will minimize the financial costs of US businesses’ carbon footprint, by changing how the “social cost of carbon” is calculated. And his administration has already insisted that language about climate change be omitted from a joint statement issued by G20 finance ministers.

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Congrats, Tan Sri  Dr. Jeffery Cheah of Malaysia and Prof. Dr Jeffery Sachs, The Earth Institute @Columbia University,  New York for this initiative. If we cannot take care of Nature, don’t expect Nature to protect us.–Din Merican

These are all unwise decisions that pose serious risks to the US economy, and to global stability, as United Nations Secretary-General António Guterres recently pointed out. The US financial system plays a leading role in the world economy, and Trump wants to take us all back to a time when investors and the general public did not account for climate-change risks when making financial decisions.

Since 2008, the regulatory approach taken by the US and the G20 has been geared toward increasing transparency and improving our understanding of possible systemic risks to the global financial system, not least those associated with climate change and fossil-fuel dependency. Developing more stringent transparency rules and better risk-assessment tools has been a top priority for the financial community itself. Implementing these new rules and tools can accelerate the overall trend in divestment from fossil fuels, ensure a smooth transition to a more resilient, clean-energy economy, and provide confidence and clarity for long-term investors.

Given the heightened financial risks associated with climate change, resisting Trump’s executive order to roll back Wall Street transparency regulations should be a top priority. The fact that Warren Buffet and the asset-management firm Black Rock have warned about the investment risks of climate change suggests that the battle is not yet lost.

Creating the G20 was a good idea. Now, it must confront its biggest challenge. It is up to Merkel and other G20 leaders to overcome US (and Saudi) resistance and stay the course on climate action. They can count as allies some of the world’s large institutional investors, who seem to agree on the need for a transitional framework of self-regulation. It is incumbent upon other world leaders to devise a coherent response to Trump, and to continue establishing a new development paradigm that is compatible across different financial systems.

At the same time, the EU – which is celebrating the 60th anniversary of the Treaty of Rome this year – now has a chance to think about the future that it wants to build. These are difficult times, to be sure; but we can still decide what kind of world we want to live in.

Black Swan Moments–Najib Razak’s Options


April 19, 2017

Black Swan Moments – Najib Razak’s Options

by Liew Chin Tong, MP

http://www.malaysiakini.com

In the first half of my article (Expect more black swans to appear in Malaysian politics), I explained why Prime Minister Najib Abdul Razak was in a precarious position. What then are Najib’s strategies for survival? It is not that Najib doesn’t understand the precarious position he is in. He does know that Umno will not be able to win an outright mandate in the coming election.

Hence, Najib has been trying to break up the opposition as soon as the 2013 General Election was concluded.

There were even attempts by Indonesian Vice-President Yusof Kala, between June and August 2013, to broker deals between Najib and Anwar Ibrahim, which Anwar rejected.

And, since then, Najib’s strategies have included:

  • Putting Anwar Ibrahim behind bars, hence depriving the Opposition of its prime ministerial candidate and unifying figure;
  • Luring PAS into a de facto alliance with UMNO on the pretext of promoting hudud legislations; and
  • Portraying the Opposition as a DAP/Chinese-dominated alliance.

However, in his grand scheme to win by default, Najib did not anticipate:

  • The Opposition surviving despite Anwar’s imprisonment;
  • A sizable number of ousted PAS leaders forming Parti Amanah Negara in September 2015 to continue the struggle, and many in PAS still disagreeing with their top leaders’ collusion with UMNO; and
  • UMNO splitting in 2016, and Parti Pribumi Bersatu Malaysia being formed and joining Pakatan Harapan.

Broadly, even without Najib at the helm, UMNO is weaker than in the 2013 General Election for the following reasons:

First, since independence till the 2004 general election, UMNO had ruled through an extended coalition of Alliance/Barisan Nasional, and governed with substantial support from the non-Malays.

But the comfort of buffers formed by BN component parties in the Peninsula eclipsed after UMNO made a right turn – becoming more visible in its claim of Malay supremacy – in July 2005 with Hishammuddin Hussein waving the kris at the UMNO General Assembly, which led to massive defeats for its allies, the MCA, MIC and Gerakan, in both the 2008 and 2013 general elections.

UMNO dug in deeper since 2008 to push racial politics in the hope of expanding Malay support, but has achieved surprisingly little.

Second, since UMNO was incapable of expanding its support base since 2013, collaborating with PAS became an attractive option. ithopes that by colluding with PAS to polarise society into a struggle between Muslims/Malays and non-Muslims, the UMNIO-PAS de facto alliance will win enough seats between them to form the next government.

However, as an unintended consequence, such a move further alienates non-Malay voters in the Peninsula, as well as a majority of voters in Sabah and Sarawak.

Third, while Najib the man managed to command more support among Malay voters compared with UMNO the party in the 2013 election, such is no longer the case. Najib is now a burden to UMNO due to the 1MDB mega scandal, and unpopular economic policies such as the implementation of the goods and services tax (GST), fuel hikes and cuts to subsidies for basic amenities like health and education.

Frustrated UMNO leaders and members led by former Prime Minister Tun Dr. Mahathir bin Mohamad formed Bersatu and this new Malay party is making rapid inroads in areas previously inaccessible to the Opposition.

In short, UMNO under Najib is on a narrowing path that now relies on a much smaller base than ever. If Najib is still perceived as strong, it is because the Opposition is seen as weak and disunited.

What lies ahead?

The knowns are that Najib is not popular, and there is serious discontent among the Malays. But there are certainly challenges for the Opposition to overcome in order to precipitate change.

First, the Opposition needs to stand for something inspiring and visionary, and not depend solely on the anger against Najib as its forward strategy. The Opposition must stand for more than just removing Najib. The economy and the well-being of the people should be its number one priority.

Second, the coming together of Bersatu and the Pakatan Harapan parties, namely Parti Keadilan Rakyat, Parti Amanah Negara and Democratic Action Party is a reconciliation of former foes.

Who could have imagined Tun Dr. Mahathir Mohamad and Anwar Ibrahim forming an alliance nearly 20 years after their very bitter fallout in 1998? But the coming together of the once political father-and-son can unleash huge energy, if handled properly. After all, both Mahathir and Anwar are positive leadership figures compared to Najib, and they each appeal to certain segments of the Malay electorate.

Third, to present a common agenda that appeals to both Mahathir’s audience and to DAP’s supporters is a big challenge. If Mahathir and Bersatu go on a racial campaign, it will depress the support of non-Malay voters and create a lose-lose situation for the entire Pakatan Harapan coalition.

Likewise, the regime’s argument against Mahathir and Bersatu is that they are associating with the DAP. The presence of the DAP can also depress the support for Bersatu and other Malay-based parties like PKR and Amanah if the opposition is unable to break out of Umno’s racial playbook, and articulate a new narrative that can rally all groups in a larger vision.

In short, Pakatan Harapan needs to ‘reset’ the national conversation to one that centres around ‘Bangsa Malaysia’ and ideas of common destiny for the nation.

Fourth, PAS, as UMNO’s ‘new friend’ as Zahid calls the party, is a reality, and the sooner a deep line is drawn between the genuine/official Opposition, Pakatan Harapan, and the pseudo ‘third force’ PAS, the clearer the situation becomes for voters. This will weaken PAS’ usefulness as an UMNO-directed spoiler in the coming election.

Fifth, the ultimate challenge for the newly re-aligned Pakatan Harapan that now  includes Bersatu will come if Najib suddenly exits the scene and takes out the raison  d’être for the opposition and dissipates much of the anger in the Malay community.

 

If this is to happen, can the opposition in its present format survive this unlikely, but not impossible, Black Swan?


This perspective is based on a public seminar given by LIEW CHIN TONG at the Institute of South-East Asian Studies (ISEAS)-Yusof Ishak Institute on April 13, 2017. Liew was formerly a Visiting Fellow at  the Institute. He is the Member of Parliament for Kluang, and a member of the central executive committee of the Democratic Action Party (DAP).

Trump was right about health care for most of his life


March 31, 2017

Trump was right about health care for most of his life–Go Back to Basics

by Dr. Fareed Zakaria

https://www.washingtonpost.com

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Since becoming POTUS, DJT is under pressure

The recent Republican debacle on health care could prove to be an opportunity. It highlighted, yet again, the complexity of the U.S. system, which continues to be by far the most expensive and inefficient in the advanced world. But President Trump could actually use the legislative collapse to fix health care if he went back to basics and to his core convictions on the topic, which are surprisingly intelligent and consistent.

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Markets would not work well in Healthcare

There is an understandable impulse on the right to assume that health care would work more efficiently if it were a free market, or a freer market. This is true for most goods and services. But in 1963, economist Kenneth Arrow, who later won a Nobel Prize, offered an explanation as to why markets would not work well in this area. He argued that there was a huge mismatch of power and information between the buyer and the seller. If a salesman tells you to buy a particular television, you can easily choose another or just walk away. If a doctor insists that you need a medication or a procedure, you are far less likely to reject the advice. And, Arrow pointed out, people think they don’t need health care until they get sick, and then they need lots of it.

Every advanced economy in the world has implicitly acknowledged his argument because they have all adopted some version of a state-directed system for health care. Consider the 16 countries that rank higher than the United States on the conservative Heritage Foundation’s Index of Economic Freedom. All except Singapore (which has a unique state-driven approach) have universal health-care systems that can be described as single-payer (Medicare for all), government-run (the British model) or Obamacare-plus (private insurance with a real mandate that everyone opt in). Hong Kong, often considered the most unregulated market in the world, has a British-style government-run system. Switzerland, one of the most business-friendly countries, had a private insurance system just like the United States’ but found that, to make it work, it had to introduce a mandate.

While producing a CNN documentary on health-care systems around the globe, I was particularly struck by the experience of Taiwan, another free-market haven. In 1995, 41 percent of its population was uninsured and the country had very poor health outcomes. The government decided to canvass the world for the best ideas before instituting a new framework. It chose Medicare for all, a single government payer, with multiple private providers. The results are astonishing. Taiwan has achieved some of the best outcomes in the world while paying only 7 percent of its gross domestic product on health care (compared with 18 percent in the United States). I asked William Hsiao, an economist who helped devise the country’s model, what lessons they took, if any, from the United States. “You can learn what not to do from the United States rather than learn what to do,” he replied.

Americans often assume that despite its costs, American health care provides better services than others. We often hear about the waiting time for care in other countries. But according to the Commonwealth Fund, among industrialized countries the United States is in the middle of the pack for wait times, behind even Britain . Moreover, one of the world’s leading experts, Uwe Reinhardt of Princeton, has found that Americans use less care than the average for developed countries when it comes to things such as seeing a doctor and spending time in the hospital. The problem with the free market is that there is little profit in prevention and lots in crisis care.

Trump has now taken up the call to repeal Obamacare. But until recently, health care was actually one of the rare issues on which he had spoken out, before his campaign, with remarkable consistency. In his 2000 book “The America We Deserve,” he wrote:

“I’m a conservative on most issues but a liberal on this one. We should not hear so many stories of families ruined by healthcare expenses. . . . We must have universal healthcare. . . . The Canadian plan . . . helps Canadians live longer and healthier than Americans. There are fewer medical lawsuits, less loss of labor to sickness, and lower costs to companies paying for the medical care of their employees. . . . We need, as a nation, to reexamine the single-payer plan, as many individual states are doing.”

Trump was right on this issue for much of his life. He has now caved to special interests and an ideology unmoored by facts. He could simply return to his convictions, reach out to Democrats and help the United States solve its health-care crisis.