Malaysia: Pakatan’s First Budget will be a tough one


October 19, 2018

Malaysia: Pakatan’s First Budget will be a tough one

by P. Gunasegaram

http://www.malaysiakini.com

Image result for Lim Guan eng

Malaysia’s Finance Minister Guan Eng

QUESTION TIME | Pakatan Harapan’s first budget to be announced on November 2 is going to be a terribly tough one because there are not going to be many sources of extra revenue nor many avenues for cost-cutting.

There is a reason why the Harapan government does not have enough money – and it isn’t debt that they claim they didn’t know about until they came to power. The real answer is the scrapping of the goods and services tax.

The cash crunch that resulted from the abolition of the GST in favour of the inferior sales and service tax will result in a yearly tax revenue loss of a massive RM22 billion initially, rising as the economy expands. Add to this the cost of fuel subsidies of RM3 billion, and the yearly shortfall is RM25 billion at least.

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That is the kind of yearly gap in revenue that Putrajaya faces. Using projected 2018 figures, according to 2018 Economic Report, the RM25 billion loss of revenue represents 10.7 percent of the projected operating expenditure of RM234.3 billion for 2018.

No tax that the government imposes will come anywhere close to breaching the RM25 billion gap. If it were to impose substantial taxes to recover this money, it will result in hardship to the people along with rising prices – which Harapan said it intended to contain with the abolition of GST in the first place.

A wrong move

The truth is, the abolition  of the GST was a terribly wrong move, and has needlessly strait jacketed the Harapan government and led to a deterioration of its financial position.

As I have said before, it should not even have been a campaign promise as the consumption tax was no longer contributing to higher prices, having been implemented with considerable difficulty back in April 2015.

Also, the GST affected the poor very little because there was a very large list of exemptions which ensured that the prices of essentials would not rise as a result. It is a tax on consumption, and therefore those who consume more (the rich) will pay more, catching in the tax net those who evade income tax. Also, GST records can be used to investigate tax evasions.

If there was one manifesto promise that Harapan broke, it should have been the abolition of GST. That would have ensured that the government finances are in good shape as reforms are being implemented – which could even have included more targeted benefits for the low-income group.

The main reason for higher prices was currency depreciation, a problem that continues to plague us despite the removal of a kleptocratic government. In fact, abolishing the GST may have contributed to currency weakness because analysts and funds view the revenue shortfall as negative in terms of the financial condition of the country.

Finance Minister Lim Guan Eng actually said last month that the ringgit strengthened relative to most countries, despite the transfer of power and weak external demand, but the period he used was incorrect – beginning with end-2017. He should have used May 9, the date of the election.

The table below shows how the ringgit performed relative to the currencies of the Asean-5 from May 9 to yesterday.

The table clearly indicates that the Malaysian currency significantly under performed all the ASEAN-5 countries – barring Indonesia, which has considerable economic problems of its own.

Tightened belts?

Hopefully, the new government and Finance Minister can demonstrate through the budget that they have a proper grasp of the issues at hand and how to handle it to reverse the currency trend.

It won’t be easy. While Lim has argued that the national debt exceeds RM1 trillion – and this has become wrongly used as the debt figure now – it is not. The debt as revealed in the 2018 in Accountant General’s Report for 2017 is still RM687 billion, and increases to over RM1 trillion only if contingent liabilities and guarantees are included, as I have previously explained.

Even if some of the contingent liabilities and/or guarantees have materialised as debt and are not classified as such, the interest on them will still have to be paid. Therefore, there will be little material increase in the overall costs of interest, even if they are reclassified into debt. The problem remains the RM25 billion shortfall.

Some potential positives include increased oil prices and more dividends from government companies, but these are likely to be well under RM10 billion incrementally.

An examination of government costs shows that salaries, retirement benefits and debt service charges account for 57.6 percent of total operating costs of RM234.3 billion. These can’t be cut.

There is more room to cut ‘supplies and services’, and ‘subsidies and social assistance’ accounting for a total of RM60.2 billion, or 25.7 percent of total operating expenditure, but the cuts will have to be pretty sharp. Also, this will probably take away targeted aid to the poor if cash grants under the old BR1M are cancelled.

Harapan is finding out too late that they left themselves too little wriggle room when they abolished GST. Unless they reinstate it – and they aren’t likely to do that because it will be an admission of a major blunder – they have to find other ways to raise revenue or cut costs.

Since the best, broad-based, value-added tax which goes by the name of GST here and implemented in over 160 countries around the world seems no longer available to them, and revenue-raising measures are limited, tightening the belt and prudent cost-cutting may be the order of the day.

If they do a good job of it, and come with a plan of also stimulating the economy to put growth on an upward trajectory again, analysts, fund managers, and most of all Malaysians, will show more faith in them and start putting money into the country.

It would also help to put the ringgit back on an upward path and suppress rising prices, or even lower them over the longer term. That entails honesty, openness, consultation, competency and a willingness to put the country and people above all. Malaysians expect no less from the new government.


P GUNASEGARAM is disappointed that the new government has not always been honest and open. Email: t.p.guna@gmail.com.

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

Malay anxiety, exclusion, and national unity


September 21,2018

Malay anxiety, exclusion, and national unity

A fragmented Malay society is making ‘Malay unity’ more urgent for those defeated by GE-14.

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The Current Account Counts


August 30, 2018

The Current Account Counts

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

New York Times : Malaysia pushes back against China’s Vision


August 24, 2018

New York Times :Malaysia pushes back against China’s Vision on account of Najib Razak’s stupidity

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


August 18, 2018

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

By Tariq Ismail

http://www.freemalaysiatoday.com

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Tariq Ismail is a member of the PPBM Supreme Council.

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

A Hundred Days of Prevarication


August 15, 2018

A Hundred Days of Prevarication

Press statement by Kua Kia Soong, SUARAM Adviser

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The GE-14 election defeat of the BN which had ruled the country since 1957 was testimony to the determination of the Malaysian people and civil society who had opposed BN rule for decades. Sixty-one years of BN domination had included 22 years with Prime Minister Mahathir at the helm. The Malaysian people chose to cast their votes for the PH coalition because PH had promised in their GE14 manifesto to implement wide ranging reforms that made them seem radically different from the governance experienced under the BN.

In the first 100 days of the new PH government, we find that their report card scores around 20% based on their own promises alone. The flip flopping over the abolition of BTN and National Service shows the importance of civil society to voice our opposition to such bitterly toxic and noxious institutions in the country. Nor do their promises consider the more urgent comprehensive list of reforms that civil society has long argued is of higher priority. On top of all that, we have witnessed a disturbing trend of autocratic decision making and policies symptomatic of the old Mahathir 1.0 era.

Sacrifices at the altar of the trillion-ringgit debt mountain

The convenient opt out clause for the new government is to pile much of the blame on the previous administration including the accusation of them of having run up a debt of RM1 trillion, or 80% of our GDP and apparently stealing RM19 billion of GST refunds. That blame frame then provides the new government with an emotional basis for gaining sympathy by starting a ‘Tabung Harapan’ and appealing for donations. While the way in which this fund will be used remains unclear, it is probably the only fund in the world set up with the apparent aim of trying to plug a country’s debt hole. It is telling that while a little boy has contributed his piggy bank to the fund, the two richest men in the country who happen to sit in the “Council of Eminent Advisors” have not made a comparable sacrifice to the fund.

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As for the actual size of the national debt, there is dispute between economists depending on whether we include government guarantees and lease payments under public-private partnerships. The size of Malaysia’s government debt in international statistics for 2017 is actually 64% of GDP, compared to China’s 65%, Singapore’s 110%, US’ 108% and Japan’s 236%. Clearly, what is at stake is the country’s economic fundamentals, which the new Finance Minister assures us are still strong. It also depends on how the debt is financed since relying on overseas borrowing can carry higher risks. It also depends on the country’s prospects for economic growth. Japan has one of the largest public sector debts in the world but it also has a large pool of domestic savings on which to draw.

Nonetheless, this mythical “trillion-ringgit debt mountain” has become an altar on which promises made by PH in the GE14 manifesto are sacrificed – local government elections, new approved Chinese schools, minimum wage, abolishing highway tolls and postponing PTPTN loans. This is definitely not acceptable as an excuse for putting off these urgent election promises since PH had assured us that they could manage the economy once they had ousted BN.

But then the much-trumpeted review of all mega projects so as to reprioritise and reduce the debt mountain is not consistent with the approval of the Penang Transport Master Plan nor with the recently announced Proton 2.0 project by the PM. The Infrastructure Development Minister Peter Anthony has also announced that a dam costing RM2 billion will be built at Kampung Bisuang in Papar when Parti Warisan Sabah had promised to scrap the Kaiduan Dam project.

Back to privatising national assets and Proton 2.0

So far, the new PH government has not spelled out their fundamental difference in economic policy from the old BN regime. What we have heard so far is the alarming news of the return of the old discredited Mahathirist policies, namely, privatisation of our national assets in the name of Bumiputeraism and the revival of the national car, Proton 2.0.

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The PM has said that the sovereign wealth fund, Khazanah will be privatised for the benefit of Bumiputeras. Malaysians need to be reminded that during the financial crisis of 1997/98, it was Khazanah that had stepped in to take over the assets of the failed companies owned by the Bumiputra crony capitalists in Renong, MAS and TRI. After taking over the assets, Khazanah revamped these GLCs with professional managers and better rules of governance. Khazanah currently owns 51% of PLUS Expressways, with the EPF owning the other 49%. By end 2017, the net worth of companies under Khazanah was RM125.6bil. Thus, Khazanah is successfully achieving its purpose of creating a sovereign wealth fund for the benefit of ALL Malaysians. Its expressed purpose never has been to be privatised to Bumiputera crony capitalists.

Mahathir’s privatization drive during his first term (1981-2003) was a boon for private crony capital, especially those linked to UMNO. Malaysian tax payers were the losers since these erstwhile profitable public utilities were sold for a song to the private capitalists and we became captive to UMNO-linked monopolies, such as the North-South Highway operator. Furthermore, these failed crony capitalists had to be bailed out with our money during the financial crisis of 1997/98.

During these 100 days, the Prime Minister has also announced the revival of yet another national car, or Proton 2.0. After the fiasco of Proton 1.0 and the huge cost to Malaysian taxpayers, our public transport system and Malaysian consumers, it is unbelievable that such a failed enterprise could be supported by a PH leadership full of former critics of the first Proton project. Another national car project will surely fail with further losses to the national coffers and we will have to underwrite the losses. The PH government won’t have 1MDB to blame for that anymore. We should further note that one of Mahathir’s former crony capitalists, Syed Mokhtar Al-Bukhary, owns a majority 50.1% in Proton Holdings through DRB-Hicom. This hare-brained idea to start another national car project reminds me of what somebody said about politicians: “Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnels…”

Back to Mahathirist autocracy

It is truly alarming that no Cabinet member nor “eminent person” in the CEF has voiced any objections to Mahathir’s proposed plans to privatise Khazanah and to start another national car. They will have to bear collective responsibility for the consequences in the event of its failure. We are witnessing the same “silence of the lambs” culture for which the DAP used to criticise the BN leaders under Mahathir 1.0 with the new ministers saying “We’ll leave it to the prime minister” and “I’ll discuss this with the prime minister to let him decide”, ad nauseum.

The PH manifesto prohibits the PM from also taking over the Finance portfolio but Dr Mahathir has in the 100 days taken over the choicest companies, namely Khazanah, PNB & Petronas under his PMO. It is the return to the old Mahathirist autocracy. Was the Cabinet consulted in the decision to start Proton 2, privatise Khazanah, Malaysia Incorporated and the revival of the failed F1 circuit?

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The appointment of Prime Minister Dr Mahathir Mohamad and Economic Affairs Minister Azmin Ali to the board of Khazanah Nasional Berhad also goes against the PH manifesto promise of keeping politicians out of publicly-funded investments since it leads to poor accountability. Only by insisting on boards being comprised of professionals and on rigorous parliamentary checks and balances for bodies such as Khazanah can we ensure a high level of transparency and accountability. Mahathir’s response to this criticism was the old feudal justification: “I started Khazanah so why can’t I be in it?” In other words, “Stuff your high ideals and democratic principles!”

We will have to wait for Lim Guan Eng’s memoirs in the future to see how he responded to Mahathir leaving him out of Khazanah. Did the PM even discuss this with him? After all, Khazanah is still under MoF Inc. If the finance minister is left out of the Khazanah board, how will he be privy to what the Khazanah board is doing? No doubt Mahathir knew that having given the DAP Secretary-General the Finance Minister post, he could get away with anything…

Consistency in the war on kleptocracy

The new PH government had pledged to wipe out kleptocracy and this promise was key to the victory at GE14. They have disappointed the people of Malaysia and especially Sarawakians who have seen the wealth of their state sucked dry by the rapacious greed of the kleptocrats there. The PH government has not yet acted to make the former Chief Minister Taib Mahmud declare all his assets and those of his spouse and family’s. The PH Government has shown us that where there is a political will in getting to the root of the 1MDB scandal, there is a way to get rid Malaysia of corruption and crony capitalism. However, by letting off his long-time ally in Sarawak, Taib Mahmud, arguably the richest man in Malaysia, the Prime Minister makes his campaign against the former PM Najib look like a personal vendetta. The Prime Minister has also failed to lead by example and declare his assets and those of his spouse and children’s.

Conflict of interest having corporate heads in Councils

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The Constitutional status of the appointed ‘Council of Eminent Persons’ has already been called into question especially when the Chairman of the Council, Daim Zainuddin is in a position in which he is able to call up judges and even represent the Government in negotiating with the Chinese Government over their investments in Malaysia. Now it has been reported that the Perak government has established the State Economic Advisory Council (SEAC) with corporate heads of MK Land Bhd, KL Kepong Bhd and Gamuda Bhd as “eminent advisors”.

There is gross conflict of interest with such arrangements when these corporate leaders still have interests in the local and international corporate scene. It is well known that Daim Zainuddin has corporate and banking interests all over the world. His business interests extend beyond banking to other key sectors of the country’s economy such as plantations, manufacturing, retailing, property development and construction.

Delaying urgent reforms is unacceptable

Using the excuse of the government debt to delay local government elections which have been suspended in our country since 1965 is not acceptable. It is a simple matter of abolishing a provision under the Local Government Act 1976 and reviving the Local Government Election Act in order to introduce local government elections. If the PH government is prepared to see billions going down the drain with the revived Proton 2.0 project, don’t tell us there is no money for running local council elections please.

It is equally absurd to tell Malaysian Independent Chinese Secondary School graduates that their UEC certificate can only be recognised in five years’ time. The UEC certificate went unrecognised by the BN for 61 years even though it has internationally proven its efficacy with thousands of graduates since 1975. This is a serious breach of promise in the PH GE14 manifesto since more than 80 per cent of Chinese voters voted for PH because of this promised reform. The only steadfast decision made by the Education Minister so far is the decision that students will have to wear black shoes instead of white ones.

Many lawyers have pointed out that the repeal or review of our laws that violate basic human rights can be expeditiously accomplished within the first 100 days of the new PH government. These include abolishing laws that allow detention without trial, namely, the Security Offences (Special Measures) Act 2012 (Sosma), Prevention of Crime Act 1959 (Poca), and the Prevention of Terrorism Act (Pota) 2015.

It is alarming to hear the Law Minister Datuk Liew Vui Keong say recently that the PH government is now reconsidering its initial pledge to abolish several contentious laws including, the Sedition Act 1948, Prevention of Crime Act (Poca) 1959, Universities and University Colleges Act 1971, Printing Presses and Publications (PPPA) Act 1984 and the National Security Council (NSC) Act 2016. This is totally unethical backtracking on the PH GE14 manifesto.

The death penalty is a violation of human rights and must be abolished. Meanwhile, there ought to have been an immediate moratorium on all executions pending abolition and commuting the sentences of all persons currently on death row. The implementation of the Independent Police Complaints & Misconduct Commission (IPCMC) and other recommendations of the Royal Police Commission in 2005 is long overdue to ensure transparency and accountability by the police and other enforcement agencies such as the MACC.

During the 100 days under the PH government, we have witnessed the Sedition Act and the CMA still being used against activists and prevarication on the issue of child marriages. We have also seen the rule of law being flouted when a Minister in the PM’s Department can order the removal of portraits of LGBTQ Malaysians from an exhibition in Penang. Just as alarming is the statement by another Minister that cyanide used by gold miners in Bukit Koman is perfectly safe and non-hazardous to people or the environment.

Reneging on manifesto promises

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From the failure by the PH government to fulfil their election promises in the 100 days, it is clear that the GE14 manifesto was drafted in a slipshod manner in order to secure populist votes. These include the promises to abolish toll from the highways within the stipulated time promised; no firm position regarding the PTPTN loan repayments; wavering on the promise to pay a 20 per cent instead of 5 per cent royalty to oil producing states based on revenue from gross production; the deduction of a percentage from a husband’s EPF contributions to go into the accounts of his wife, etc. PH has so far implemented less than half of their election promises. Will the PM apologise for reneging on these election promises?

Real reforms we expect in “new” Malaysia

Within the first year of the PH administration, Malaysians expect serious transformational reforms that will reconstitute truly democratic institutions and improve the lives of the 99 per cent and especially the B40 Malaysians. Of the highest priority, we expect urgent initiatives to implement the 8 key reforms including:

1. An end to race-based parties and policies especially replacing race-based policies with needs-based measures that truly benefit the lower-income and marginalized sectors and basing recruitment and promotion in the civil and armed services strictly on merit;

2. Re-instatement of our democratic institutions including bringing back elected local councils and enacting a Freedom of Information (FoI) Act at federal and state levels;

3. Zero tolerance for corruption and political leaders who have been charged with corruption must step down while their case is pending in the courts;

4. A progressive economic policy that will renationalize privatised assets, especially land, water, energy, which belong to the Malaysian people instead of local and foreign capitalists, opening up GLCs to democratic control of the people and directing them to implement good labour and environmental policies;

5. Redistribute wealth fairly through progressive taxation on the high-income earners, their wealth and property and effective tax laws to ensure there are no tax loopholes for the super-rich;

6. A far-sighted and fair education policy with equal opportunities for all without any racial discrimination with regard to enrolment into all schools including tertiary educational institutions;

7. Defend workers’ rights and interests especially their right to unionise and a progressive guaranteed living wage for all workers, including foreign workers;

8. People-centred and caring social policies including an effective low-cost public housing programme for rental or ownership throughout the country for the poor and marginalized communities;

9. Prioritise Orang Asal rights and livelihood by recognizing their rights over the land they have been occupying for centuries, prohibiting logging in Orang Asal land and ensuring all Orang Asal villages have adequate social facilities and services;

10. Sustainable development & environmental protection by allowing all local people to be consulted before any development projects and all permanent forest and wildlife reserves are gazetted.

The lesson of the first 100 days of the PH administration teaches us that, as always, civil society must be ever vigilant to push for these reforms because the government of the day will drag its feet and renege on these election promises when they have the opportunity.

 

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