The Demise of Dollar Diplomacy


October 17, 2017

The Demise of Dollar Diplomacy

by Barry Eichengreen*

http://www.project-syndicate.org

Pundits have been saying last rites for the dollar’s global dominance since the 1960s – that is, for more than half a century now. But the pundits may finally be right, because the greenback’s dominance has been sustained by geopolitical alliances that are now fraying badly.

WASHINGTON, DC – Mark Twain never actually said “Reports of my death have been greatly exaggerated.” But the misquote is too delicious to die a natural death of its own. And nowhere is the idea behind it more relevant than in discussions of the dollar’s international role.

Pundits have been saying last rites for the dollar’s global dominance since the 1960s – that is, for more than a half-century now. The point can be shown by occurrences of the phrase “demise of the dollar” in all English-language publications catalogued by Google.

The frequency of such mentions, adjusted for the number of printed pages per year, first jumped in 1969, following the collapse of the London Gold Pool, an arrangement in which eight central banks cooperated to support the dollar’s peg to gold. Use of the phrase soared in the 1970s, following the collapse of the Bretton Woods system, of which the dollar was the linchpin, and in response to the high inflation that accompanied the presidencies of Richard Nixon, Gerald Ford, and Jimmy Carter in the 1970s.

But even that spike was dwarfed by the increase in mentions and corresponding worries about the dollar starting in 2001, reflecting the shock of the terrorist attacks that September, the mushrooming growth of the US trade deficit, and then the global financial crisis of 2008.

Yet through all of this, the dollar’s international role has endured. As my coauthors and I show in a new book, the share of dollars in the foreign-currency reserves held by central banks and governments worldwide hardly budged in the face of these events. The greenback remains the dominant currency traded in foreign-exchange markets. It is still the unit in which petroleum is priced and traded worldwide, Venezuelan leaders’ complaints about the “tyranny of the dollar” notwithstanding.

To the consternation of many currency traders, the value of the dollar fluctuates widely, as its rise, fall, and recovery in the course of the last year have shown. But this does little to erode the attractiveness of the dollar in international markets.

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America First–Then What is Future of the US Dollar in the Trumpian Era?

Central banks still hold US Treasury bonds because the market for them is the single most liquid financial market in the world. And Treasury bonds are secure: the federal government has not fallen into arrears on its debt since the disastrous War of 1812.

In addition, US diplomatic and military links encourage America’s allies to hold dollars. States with their own nuclear weapons hold fewer dollars than countries that depend on the US for their security needs. Being in a military alliance with a reserve-currency-issuing country boosts the share of the partner’s foreign-exchange reserves held in that currency by roughly 30 percentage points. The evidence thus suggests that the share of reserves held in dollars would fall appreciably in the absence of this effect.

This under-appreciated link between geopolitical alliances and international currency choice reflects a combination of factors. Governments have reason to be confident that the reserve-currency country will make servicing debt held by its allies a high priority. In return, those allies, by holding its liabilities, can help to lower the issuer’s borrowing costs.

Here, then, and not in another imbroglio over the federal debt ceiling this coming December, is where the real threat to the dollar’s international dominance lies. As one anonymous US State Department official put it, President Donald Trump “does not seem to care about alliances and therefore does not care about diplomacy.”

South Korea and Japan are thought to hold about 80% of their international reserves in dollars. One can imagine that the financial behavior of these and other countries would change dramatically, with adverse implications for the dollar’s exchange rate and US borrowing costs, were America’s close military alliances with its allies to fray.

Nor is it hard to imagine how this fraying could come about. President Donald Trump has painted himself into a strategic corner: he needs a concession from North Korea on the nuclear-weapons issue in order to save face with his base, not to mention with the global community. And, for all of Trump’s aggressive rhetoric and posturing, the only feasible way to secure such a concession is through negotiation. Ironically, the most plausible outcome of that process is an inspections regime not unlike the one negotiated by Barack Obama’s administration with Iran.

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Visualizing the Size of the U.S. National Debt

How big is the U.S. National Debt?

The best way to understand these large numbers? We believe it is to represent them visually, by plotting the data with comparable numbers that are easier to grasp.

Today’s data visualization plots the U.S. National Debt against everything from the assets managed by the world’s largest money managers, to the annual value of gold production.

1. The U.S. national debt is larger than the 500 largest public companies in America.
The S&P 500 is a stock market index that tracks the value of the 500 largest U.S. companies by market capitalization. It includes giant companies like Apple, Exxon Mobil, Microsoft, Alphabet, Facebook, Johnson & Johnson, and many others. In summer of 2016, the value of all of these 500 companies together added to $19.1 trillion – just short of the debt total.

2. The U.S. national debt is larger than all assets managed by the world’s top seven money managers.
The world’s largest money managers – companies like Blackrock, Vanguard, or Fidelity – manage trillions of investor assets in stocks, bonds, mutual funds, ETFs, and more. However, if we take the top seven of these companies and add all of their assets under management (AUM) together, it adds up to only $18.9 trillion.

3. The U.S. national debt is 25x larger than all global oil exports in 2015.
Yes, countries such as Saudi Arabia, Kuwait, and Russia make a killing off of selling their oil around the world. However, the numbers behind these exports are paltry in comparison to the debt. For example, you’d need the Saudis to donate the next 146 years of revenue from their oil exports to fully pay down the debt.

4. The U.S. national debt is 155x larger than all gold mined globally in a year.
Gold has symbolized money and wealth for a long time – but even the world’s annual production of roughly 3,000 tonnes (96 million oz) of the yellow metal barely puts a dent in the debt total. At market prices today, you’d need to somehow mine 155 years worth of gold at today’s rate to equal the debt.

5. In fact, the national debt is larger than all of the world’s physical currency, gold, silver, and bitcoin combined.

That’s right, if you rounded up every single dollar, euro, yen, pound, yuan, and any other global physical currency note or coin in existence, it only amounts to a measly $5 trillion. Adding the world’s physical gold ($7.7 trillion), silver ($20 billion), and cryptocurrencies ($11 billion) on top of that, you get to a total of $12.73 trillion. That’s equal to about 65% of the U.S. national debt.

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To get there, Trump’s administration will have to offer something in return. The most obvious bargaining chip that could be offered to make the North Korean regime feel more secure is a reduction in US troop levels on the Korean Peninsula and in Asia in general, With that, the US security guarantee for Asia will weaken, in turn providing China an opportunity to step into the geopolitical breach.

And where China leads geopolitically, its currency, the renminbi, is likely to follow.

*Barry Eichengreen is Professor of Economics at the University of California, Berkeley, and a former senior policy adviser at the International Monetary Fund. His latest book is Hall of Mirrors:The Great Depression, the Great Recession, and the Uses – and Misuses – of History.

Jomo: Whither the Malaysian economy ?


October 17, 2017

Jomo: Whither the Malaysian economy under Najib Razak?

http://www.malaysiakini.com

Image result for Finance Minister Najib Razak and the National Debt
Malaysia’s Worst Finance Minister Najib Razak–Fiscal Mess, Heavily in Debt and Lowest Reserves in Asia.

This interview with economist Jomo Kwame Sundaram, former Assistant Secretary-General for Economic Development at the United Nations, was conducted in August for publication in the run-up to the country’s next Budget for 2018 due to be announced next Friday.

Developed country status

Question: Malaysia is close to achieving developed country status and is growing at a reasonable pace. Why are you concerned then?

Jomo: Becoming a developed country involves much more than achieving high-income status. But even by reducing ‘developed country’ status to becoming a ‘high-income’ country, we are not quite there unless we resort to statistical manipulation, e.g., by using 2013 exchange rates, or by ignoring about a third of the labour force who are ‘undocumented’ foreign workers.

For example, the ringgit declined from RM3.2 against the US dollar in 2014 to almost RM4.5 before recovering to the current RM4.2! But then we continue to use the old exchange rate or purchasing power parity (PPP) to pretend that we are almost there. The only people we are cheating is ourselves.

Also, if we continue to grossly underestimate the number of foreign workers in the country, then the denominator for calculating per capita income goes down. Similarly, by excluding the lowest paid foreign workers, income inequality has been declining when their inclusion may give a different picture. Thus, we can reach supposed high-income status more quickly if we pretend there are only one or two million foreign workers, when even the minister admitted last year to about 6.7 million!

Seven million, mainly undocumented foreign workers in Malaysia comes to over a third of the country’s total labour force. Many of them work and live in far worse conditions than the worst-off Malaysian workers. We are thus dependent on a huge underclass, largely foreign, whom we are in denial about.

New Economic Model

What do you think of Prime Minister Najib Razak’s New Economic Model?

Jomo: Let us be clear about this. The New Economic Model, or NEM, is really a wish-list of economic reforms desired from an essentially neo-liberal perspective. That does not mean it is all good or all bad. It contains some desirable reforms, long overdue due to the accumulation of excessive, sometimes contradictory regulations and policies.

 

Although the NEM made many promises and raised expectations, most observers would now agree that it has rung quite hollow in terms of implementation despite its promising rhetoric. As we all know, the NEM was dropped soon after it was announced for political reasons, and has never been the new policy framework it was expected to be.

Turning to actual policy initiatives, to the current administration’s credit, it accepted the minimum wage policy and BR1M (Bantuan Malaysia 1Malaysia) idea, both long demanded by civil society organisations, and supported by many, mainly opposition parties. The minimum wage policy has probably been far more important than BR1M in improving conditions for low-income earners.

Premature deindustrialisation

The contribution of manufacturing to growth and employment has been declining in this century. Yet, you seem to be nostalgic for industrialisation when the leadership wants to move to tertiary activities.

Jomo: Sadly, instead of acknowledging the problem, ‘premature deindustrialisation’ is being cited as proof of Malaysia being developed although services currently account for most job retrenchments.

Indeed, Malaysia has been deindustrialising far too early, even before developing diverse serious industrial capacities and capabilities beyond refining palm oil and so on. We have abandoned the past emphasis on industrialisation, but have not progressed sufficiently to more sophisticated, higher value-added industries.

In Japan, South Korea and China, policies to nurture industrialists and other entrepreneurs to become internationally competitive, enabled these countries to grow, industrialise and transform themselves very rapidly.

We are suffering great illusions if we think we can leapfrog the industrial stage and go straight to services. We should not try to emulate Hong Kong because we are a different type of economy. Even Singapore has not gone the Hong Kong way and continues to try to progress up the value chain in terms of industrial technology.

We need to stop blindly following policies espoused by international institutions. GST (Goods and Services Tax) is a variant of value-added taxation, long promoted by the IMF (International Monetary Fund). To accelerate progress, we need to develop better understanding of the Malaysian economy – of its real strengths and potential, rather than assuming that the current mantra in Washington is correct, let alone relevant.

Middle-income trap

According to the World Bank and others, Malaysia is stuck in a middle-income trap. The argument is that the NEM as well as financial services development are needed to get out of it.

Jomo: The idea of a ‘middle-income trap’ is due to Latin American and other countries uncritically following Washington Consensus prescriptions promoted by the Bank and the IMF. The promise is that following their prescriptions would lead to development.

Key elements of our own ‘middle-income trap’ are actually of our own making, e.g., by giving up so quickly on industrialisation. The prescriptions imagine we can somehow leap-frog to accelerate development without making needed reforms.

 

The NEM and current official development discourse emphasise modern services, especially financial services, for future growth. But why would investors want to come here rather than, say, Singapore? If they want lower costs, there are other locations.

To offer tax breaks or loopholes, or to make Malaysia a tax haven, the question again is why come here rather than Singapore.

And how much has the national economy really benefited from the Labuan International Offshore Financial Centre? Do we need to keep making the same errors?

Looking at other international financial centres, it is not clear that it will be a net plus for the country, and provide the basis for sustainable development suitable for an economy like ours. Remember, we are no Hong Kong.

Historically, we have been heavily dependent on foreign direct investment, not for want of capital, but for access to markets, technology and expertise. To make matters worse, over the last decade, foreign investors have taken a growing share in publicly listed companies, helped by the falling ringgit in recent years.

Arguably, foreign ownership of the Malaysian economy has never been as high since the 1970s. As large corporations are increasingly dominant, they have often crowded out small and medium-sized enterprises (SMEs) and other Malaysian firms.

Macroeconomic management

In his recent book, Dr Bruce Gale (author of ‘Economic Reform In Malaysia: The Contribution Of Najibnomics’) has praised current macroeconomic management.

Jomo: Well, Gale is a political consultant and needs to ‘cari makan’. He is not a serious macroeconomist the last time I checked, but should nonetheless be taken seriously because he reminds us that well-managed ‘public relations’ influence market and public sentiment, including credit and other ratings. He heaps praise on ‘conventional wisdom’ which remains very influential, even if wrong.

Gale’s book reminds us that ‘creative accounting’, involving the transfer of debt and liabilities to state-owned enterprises or government-linked companies, has enabled the government to limit the growth of mainly ringgit-denominated federal government debt by rapidly expanding federal government-guaranteed ‘contingent liabilities’.

His defence and justification for GST ring quite hollow as his premise is that the middle class has been evading income tax, whereas it is mainly the rich who have successfully done so, whether legally or otherwise.

Although he has been writing on Malaysia for over three decades, he appears to have selective amnesia, only giving credit to the prime minister and his late father, whom no one would grudge, while ignoring other prime ministers and finance ministers, in line with the new official narrative.

Malaysians worse off?

Earlier, you acknowledged that Malaysian economic growth has continued, albeit at a lower rate, over the last two decades. Yet, you also argue that Malaysians may have become worse off in recent years. That sounds contradictory.

Jomo: Moderate economic growth has continued since the 1997-1998 financial crisis. More recently, this has been partly due to foreign financial inflows, helped by unconventional monetary policies in OECD economies.

Between 2012 and 2014, most people, especially low-income earners, became better off, thanks to the introduction of the minimum wage, continued ‘full employment’ and higher commodity prices.

Since then, commodity prices have fallen, unemployment has been rising (especially for youth), the GST was introduced, and consumer confidence has fallen lower than during the 1997-1998 or 2008-2009 financial crises.

However, consumer sentiment in Malaysia has been negative for some time according to CLSA and MIER (Malaysian Institute of Economic Research). Indeed, according to Nielsen, the international polling company, it has been poor since 2013, and is now the lowest in Southeast Asia.

Food prices have generally continued rising, as transport charges – for tolls, trains, etc. – have been increasing again, with floating petrol prices. Meanwhile, lower commodity prices and climate change have reduced many farm incomes.

Official unemployment has gone up from 2.9% in 2014 to 3.5% in 2016, still commendably low, although there are concerns about high youth unemployment, especially among the tertiary educated.

Retrenchments have been worst for services, casting doubt on future employment prospects as the authorities rely increasingly on services for growth and jobs. With unemployment low, but rising, wage growth has slowed after the initial introduction of the minimum wage, while real incomes have been hit by higher prices and taxes.

Wage depression

You seem to imply that Malaysian wages have been artificially lowered.

Jomo: Malaysians, in general, have higher incomes now than before. However, official numbers are misleading as we do not account for the massive presence and contribution of foreign labour, especially undocumented immigrant workers.

Their status has also served to depress wages for low-income Malaysian workers. Not surprisingly then, labour’s share of national income has gone down relatively.

This decline is not due to declining labour productivity, even if that may be the case. After all, higher labour productivity does not automatically raise workers’ incomes. Prevailing low wages retard technical change which would, in turn, raise productivity.

Thus, the unofficial low wage policy stands in the way of labour-saving innovation, such as mechanical harvesting, so necessary for development. We need a medium-term development strategy far less reliant on cheap foreign labour.

Consequently, wages and living conditions are too low, especially in agriculture. And even smallholder agriculture has been neglected by officialdom in Malaysia for some time, especially after Pak Lah’s (Abdullah Ahmad Badawi’s administration.

Fighting a jihad against middlemen was not only thinly disguised misinformed and misguided stunt intended to score ‘ethno-populist’ points, but also irrelevant to addressing contemporary challenges.

Shifting tax burden

How have recent tax reforms affected Malaysian households?

Jomo: Following the introduction of the GST in April 2015, tax revenue from households increased from RM42 billion in 2014 to RM67 billion in 2016, with GST more than doubling the contribution of indirect tax from RM17 billion to RM39 billion.

At the same time, income tax revenue has risen modestly from RM24 billion in 2014 to RM28 billion in 2016. On average, Malaysian households paid taxes of RM5,600 each, more than ever before.

Meanwhile, government subsidies and assistance have declined, falling from RM43 billion in 2013 to RM25 billion in 2016, with most food price subsidies removed between 2013 and 2016.

Inflation numbers

Official inflation numbers are low. Why does the public doubt official inflation numbers?

Jomo: There are many reasons why the public doubts official inflation numbers, but perhaps most importantly for the country’s open economy, the ringgit exchange rate dropped from RM3.2/USD to RM4.5/USD before recovering to RM4.2 recently.

People presume that a decline in the international value of the ringgit by about a quarter must surely have inflationary consequences.

The GST of 6% has been imposed since April 2015, directly affecting about half of household spending, with up to a fifth more indirectly affected. Again, this is expected to have affected the cost of living.

Price subsidies for sugar, rice, flour and cooking oil have been removed since 2013, raising prices by 14% to 31%. Meanwhile, transport – including fuel and toll – prices have risen on several fronts.

Hence, you can understand why people are sceptical.

Transformasi Nasional 2050 (TN50)

After announcing and then abandoning the New Economic Model, there is now much ado about an economic transformation agenda for 2050.

Jomo: The TN50 exercise has been broadly consultative, involving young people, which surely is a good thing. Unfortunately, as with BR1M, it has been used to mobilise political support for the regime before the forthcoming elections rather than open up a more inclusive debate about where the country is headed.

The conversation should be about where the country should go and how to get there. It is still unclear to what extent we are going beyond the usual feel-good, futuristic sounding clichés, but this should open up an important debate to give serious consideration to actually achieving the transformation.

 

The country is presently mired in a political crisis that has paralysed effective economic policymaking. Malaysia desperately needs a legitimate and consultative leadership to implement bold measures to take the country forward.

Many people in the country know what ails the economy, but we do not have the open discussion needed to really tackle the challenges the nation faces. For example, a free and independent media will not only improve the quality of public discourse, but also the legitimacy and acceptability of resulting public policy.

Yesterday: Jomo in defence of honest, constructive criticism

The Demise of A Secular State


October 16, 2017

The Demise of  A Secular State

by S. Thayaparan

http://www.malaysiakini.com

“What the State can usefully do is to make itself a central depository, and active circulator and diffuser, of the experience resulting from many trials. Its business is to enable each experimentalist to benefit by the experiments of others, instead of tolerating no experiments but its own.”
John Stuart Mill, “On Liberty”

Malaysiakini columnist P Gunasegeram ends his latest piece, ‘I am a pendatang and proud of it,” with the appropriate “And know that I am here to stay whether you bloody like it or not because this country is mine too!” which is exactly how most non-Malay/ non-Muslims feel whenever they read about the use of the weaponised Islam in this country.

All you have to do is read the comments on social media when Johor’s HRH Sultan Ibrahim Sultan Iskandar stands up for what is right and decent when it comes to countering the agendas of Islamists in this country, who would use religion as a demarcation line to understand the frustrations non-Malays have with a system that on the one hand, finds utilitarian value in non-Malay contribution to this country, and on the other, is disgusted by their very existence as Malaysians with hopes and agendas of their own. These agendas are not necessarily different from each other but are anathema to the agendas of these state-sponsored Islamists.

Image result for hrh sultan of johor

Johor’s HRH Sultan Ibrahim Sultan Iskandar stands up for what is right and decent when it comes to countering the agendas of Islamists in this country. The Malaysian Opposition led by Tun Dr. Mahathir Mohamad and his sidekick DAP’s Lim Kit Siang is deaf and dumb on this issue.
 

People often miss the larger narrative when it is easier to digest sound bites. When a religious school burns down, this should have been an opportunity for a national discussion on why these religious schools exists in the first place, what values they are promoting, how safe are they and the corrupt practices that goes in the creation and maintenance of these schools. Instead, nobody was really interested in this, but carried on putting all their eggs in the 1MDB basket.

The Muslims-only launderette issue becomes about how:

1)HRH The Sultan of Johor was the line in the sand when it comes to this type of religious mischief because politicians offered only mild condemnation which sounded more like bemusement, and

2) the relevance of an institution like Jakim (Islamic Development Department) to state religious bodies is questioned by the moves of the Johor Sultan, who, by cutting off contact between the federal religious authorities and his state’s religious department, is making it clear that – for the time being at least – he does not want religious extremism from the federal level contaminating Islamic moderation at the state level.

Where is our glorious opposition in all of this? As I said before – “If you are waffling on your commitment to a secular state, then you have to make your case for an Islamic state and this is where the trouble begins and ends. If oppositional Muslim political operatives and their allies would just stop using religion as the basis of critique and concentrate on furthering the agenda of the secular state, oppositional Muslim MPs would not have to worry about attempting to ‘out-Islam’ their rivals because this would not be the grounds on which they battle for votes.”

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Prime Minister Ayahtollah Najib Razak, Malaysia Al-Islam

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Ayahtollah Abdul Hadi Awang–Deputy Prime Minister, Malaysia al-Islam

Deputy Minister in the Prime Minister’s Department Asyraf Wajdi Dusuki  reminds us that BN – not Umno but BN – is committed to make Malaysia an Islamic state and of course, we will not hear anything from the MCA and MIC about this glorious agenda. Neither will we hear anything from our doughty opposition, because they have convinced themselves that they need to be “Islamic” to win the votes of the majority of the Malay community to replace the current Umno poohbah who is apparently the enemy of the state.

Which brings up the uncomfortable question of what kind of state? The enemy of an Islamic state or a secular state?

Forsaking the Constitution

Communications and Multimedia Minister Salleh Said Keruak blathers on about how we should embrace new politics – whatever that means – and not abandon the Constitution, but the reality is that by chipping away at the Constitution which is what Umno is doing in its attempt to create an “Islamic” state, it is just further evidence that the Constitution is not worth the paper it is printed on.

Meanwhile, the opposition is doing nothing about this. Nobody in the opposition has ever made statements that reaffirm the primacy of the Constitution or the opposition’s agenda of ending the Islamisation process. We do not even know if this is one of the reforms that would “save Malaysia” that the opposition intends to carry out.

 

Remember, “this meme that by benching UMNO, we as Malaysians, whatever our religion or credo, would be safe from the machinations of Islamic extremists, is irrational considering that we neither have a committed secular opposition nor Muslim politicians who openly commit to secular agendas. As long as this remains the default setting of Malaysian politics, there will never be a period where secularism is safe from encroaching Islamic extremism.”

I mean really, this whole idea of making Malaysia an “Islamic” state is really about making Malaysia more like Saudi Arabia. And you know what the Johor sultan thinks about that, right? Here is a reminder – “If there are some of you who wish to be an Arab and practise Arab culture, and do not wish to follow our Malay customs and traditions, that is up to you. I also welcome you to live in Saudi Arabia.”

But what I really want to know is, what does the opposition think of that? Does the opposition think that Malay culture should emulate Arab culture and if so, does the opposition advocate that Malays who don’t want to follow “Malay” customs and traditions are welcome to live in Saudi Arabia?

Depending on your point of view, the balkanisation of Malaysia is something that is a very real possibility because of this agenda of turning Malaysia into an “Islamic” state. This is not something that any rational person would want and I am including the Malays in this equation, because if they really wanted to live in an Islamic paradise, they would have voted for PAS a long time ago.

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Young Malaysians on a Mission: #TangkapNajib

Writing for Malaysiakini has presented me with opportunity to talk to young people from all over Malaysia. This is purely anecdotal, but what young people tell me is that they are disgusted by politics in this country. They voted for change and even on a state level, this has not happened. Most, if not all, of them say that if UMNO stops “playing” with race and religion they will vote BN because they know all over the world politicians are corrupt.

A common complaint or some variation of the same, is that Pakatan Harapan is not doing anything to stop Malaysia for becoming an Islamic state. Most young people who choose to leave do not leave because of corruption, but because of race and religion.

Image result for mahathir and lim kit siang

Pakatan Harapan is not doing anything to stop Malaysia for becoming an Islamic state.

I am beginning to realise that the idea of voting for the opposition to create a two-party system and the almost zealous advocacy (mine?) of such, is an idea of diminishing returns.

Aung San Suu Kyi unveils relief plans for Rohingya Muslims


October 16, 2017

Aung San Suu Kyi unveils relief plans for Rohingya Muslims

Nobel laureate aims to restore reputation by setting up civilian-led agency in Myanmar to deliver aid and resettle refugees

Aung San Suu Kyi delivers a speech to the nation over the Rakhine and Rohingya situation in Naypyitaw in September
Aung San Suu Kyi has been criticised for failing to denounce a brutal army crackdown on the Rohingya in Rakhine state. Photograph: Soe Zeya Tun/Reuters

Myanmar’s de facto leader, Aung San Suu Kyi, has announced plans to set up a civilian-led agency, with foreign assistance, to deliver aid and help resettle Rohingya Muslims in Rakhine state.

A close adviser, speaking with Aung San Suu Kyi’s knowledge, said the proposed body had been long planned, and was part of an attempt to show the civilian government she leads, rather than the Burmese military, can deliver humanitarian relief, resettlement and economic recovery.

The Nobel laureate has been criticised for failing to denounce a brutal army crackdown on the Rohingya in Rakhine state, which has forced hundreds of thousands to flee to neighbouring Bangladesh.

Thousands of refugees have continued to arrive in recent days from across the Naf river separating the two countries, even though Myanmar insists military operations ceased on 5 September.

Aid agencies estimate that 536,000 people have arrived in Cox’s Bazar district in Bangladesh, straining scarce resources of aid groups and local communities.

About 200,000 Rohingya were already in Bangladesh after fleeing persecution in Myanmar, where they have long been denied citizenship and faced restrictions on their movements and access to basic services.

The adviser said Aung San Suu Kyi had been deeply affected by the crisis in her country, and was determined to fix it, but needed to be careful not to inflame the situation further.

“She is appalled by what she has seen. She does care deeply about this. I know that does not always come across. But she really does,” said the adviser, who asked not to be named. “What was not clear to her [before now] was how to fix it, and how to give the civilian government the powers it needed”.

In a speech carried by state TV late on Thursday, Aung San Suu Kyi said: “There has been a lot of criticisms against our country. We need to understand international opinion. However, just as no one can fully understand the situation of our country the way we do, no one can desire peace and development for our country more than us.”

Many of Aung San Suu Kyi’s former allies have been exasperated by her failure to criticise the military, but the adviser said she was treading a fine line, knowing her government could become under threat of being overthrown by the military.

The adviser added her speech marked an attempt to wrestle Buddhism out of the hands of extremists.

Aung San Suu Kyi came to power ending years of military rule in a compromise that left the military with sweeping powers.

In her new proposal, she said she was setting up a new body to deliver relief and resettlement on the ground, as well as implement projects in all sectors of the region.

“It is going to be an implementation unit and will introduce a degree of transparency into the government that will allow the international community to participate and provide aid”, the adviser added.

The aim is for the body to be a vehicle through which recovery aid, including that delivered by the UK, can be funnelled.

Her adviser said Aung San Suu Kyi understood the moral priority of humanitarian assistance, the need to build new homes for those who had to flee as well as the need for economic development in the region.

“She has put herself front and centre of this and said ‘I will lead this’ ”. The adviser added: “She is someone who through her whole life has been committed to the values of human rights. That has not gone away, but she is very focused on fixing the problem, rather than identifying it.

“She recognises there have been particular tragedies amongst the Muslim communities, and amongst other small minority groups. But, yes, she does see this latest and most dreadful upsurge of violence as stemming from carefully timed political attacks on police stations.”

Aung San Suu Kyi’s speech made no mention of the allegations levelled against security forces, over which she has no formal control under the military-drafted constitution. State media in recent weeks, however, has offered repeated denials of the human rights allegations, often blaming misreporting by the west.

In her speech, she said: “Rather than rebutting criticisms and allegations with words, we will show the world by our actions and our deeds. In the Rakhine state, there are so many things to be done.”

Her adviser said: “She is trying to move away from inflammatory and divisive remarks towards a coherent national solution that is civilian-led. The perilous state of the democratic transition in her country is understood.”

Aung San Suu Kyi listed repatriation of those who have fled to Bangladesh as a top priority, a task that faces political and practical hurdles, notably due to the fact that tens of thousands of Muslim refugees who fled to Bangladesh do not have the documentation likely to satisfy the military that they have a right of return.

However, detailed work remains on possible forms of new registration to allow the Rohingya to return.

In another attempt to respond to western criticisms, Myanmar’s military has launched an internal investigation into the conduct of soldiers during the army’s offensive in Rakhine, which was launched after attacks by Rohingya insurgents on security posts in late August.

 

The passing of Kassim Ahmad, the quiet Public Intellectual


October 16, 2017

NOTE:

This moving gut wrenching tribute to my late friend and public intellectual, Pak Kassim Ahmad who passed away October 10, 2017 escaped my attention. It is accounts for why its appearance on this blog was delayed. My sincere apologies for that.

Image result for kassim ahmad and din mericanAn Iconoclast and Quiet Revolutionist, Jebat and Rebel with a Cause but most of all a devout Muslim

 

Thayaparan is  an interesting writer who is known to say what he means in plain, very readable, and direct English. I enjoy reading his pieces in malaysiakini.com and thank him for this fitting tribute to a man who never forgot his roots from Malaysia’s Rice Bowl Kedah  with a passion for knowledge and ideas, a Malaysian who did his best to speak the truth to power. He single-handedly took on Malaysia’s bigoted religious establishment and won, and left an imprint in legal history. –Din Merican

The passing of a quiet Public Intellectual

by S. Thayaparan

http://www.malaysiakini.com

COMMENT | For Kassim Ahmad, a discourse has no winners or losers, only people interested in discovering their faith.

“According to government data, the objectives of the NEP have yet to be achieved. But I think the Malays have this consensus… these special privileges that have made them comfortable. They have this comfort zone where they face no challenges. Because of this, they don’t see the necessity in putting in the effort to progress. So they are weak and lack competitiveness. It is better to end something that does no good to the people anymore.”

– Kassim Ahmad

There is this meme as to the kind of Muslim the late Kassim Ahmad was. To his admirers, the persecution of this public intellectual demonstrated the fear the state had to what he wrote and said, and this made him the poster child for the kind of Islam they believed was “acceptable” in a multiracial and multi-religious country like Malaysia.

To his detractors, he was a purveyor of falsity that threatened Muslim solidarity and he was a puppet of the “opposition” whose writings and speeches would cause the collapse of Malay/Muslim political and religious hegemony.

Indeed, some opposition supporters would be perplexed of some of the things he said about certain opposition politicians and the UMNO state would be perplexed at some of the positions he advocated after they had branded him a deviant and an “enemy” of Islam.

The truth was that Kassim Ahmad was a devout Muslim who believed that his faith was hijacked by interpreters who had agendas of their own that were not compatible with his own interpretation of what would lead to a liberated world.

He had many young followers of his work who often told me that what was inspiring of his interpretation of Islam was that it did not foster fear but hope and that through questioning of what they were told and taught, they would be liberated from the falsities that were all around them.

He encouraged dissent, especially on his own writings, and he was cognisant that ultimately this was a discourse that had no winners or losers, only people who were interested in discovering their faith.

 

Unfortunately for him, the world is a cruel place. Those who make the claim that theirs is really a religion of peace do not have the empirical evidence to support such a claim. Indeed, the persecution of Kassim Ahmad was evidence that thinking was verboten.

Image result for kassim ahmad and din merican

 

The duplicity, arrogance, and illegality of the Federal Territory Islamic Religious Department (Jawi) in its persecution of this religious scholar is a matter of public record. Indeed, not only was Kassim Ahmad targeted but also his long-time advocate Rosli Dahlan.

There were things he said and wrote about that a person could disagree with. Depending on your own belief system, they were roads that Kassim Ahmad walked that you would have no desire to travel on but what separates Kassim Ahmad from the petty religious bigots that persecuted him was that he would never dream of imposing his beliefs on others.

Indeed, he welcomed discourse. He welcomed the challenges his ideas inspired. He wanted Muslims to think about their religion, but more importantly, think for themselves. His was a quiet revolution of the Muslim soul.

Blind faith

This is an example of what baffled him – “Malaysia happens to be a strong upholder of hadith(s). Sometimes the so-called experts, appearing on the Forum Perdana every Thursday night, quote the hadiths more than the Quran.

“Muslim scholars, Bukhari and five others, collected many thousands of so-called hadiths and classified them as authentic or weak 250 to 300 years after the death of Prophet Muhammad. These are collections of the Sunni sect. The Syiah have their own collections of so-called hadiths.

“To my mind, these fabricated hadiths are a major source of confusion and downfall of Islam.”

If ideology and religion is the lens through which some view the world, it is understandable (for those who know anything about Islam) as to why someone like Kassim Ahmad would find succour in this religion which has been weaponised here in Malaysia and the rest of the world. A religion he thought –  which is different from “believed” because he put in a great deal of effort and time into “thinking” about his religion – could be a salvation to the problems of the world.

Here is another snippet in his own words – “In the University of Malaya in Singapore, I joined the leftist Socialist Club and later joined the People’s Party of Ahmad Boestamam, and quickly became its leader for 18 years! Somehow or other, I did not feel real about the power and success of socialism. It was simply to identify myself with the poor to whom I belong.

“I was therefore critical of things I inherited from my ancestors. The first scholar I criticised was Imam Shafi’e for his two principal sources (Quran and Hadis). The book ‘Hadis – Satu Peniliai Semula’ in 1986 became the topic of discussion for two months, half opposed and half supporting me. After two months, it was banned.”

Anyone who has read what this scholar believed his religion was about, would understand that Kassim Ahmad’s sympathies for the marginalised were paramount in his belief structure. You could make the argument that his beliefs gave structure to what he eventually hoped rational Islam could accomplish.

Having the mindset of being critical of what you inherited from your ancestors is the most potent tool an adversary of state-sponsored repression could have. This was why they feared this quiet scholar who simply spoke of things that his interpretation of his religion inspired in him.

His intellectual contribution to Islam was anathema to people who believed that blind faith was true faith and his steadfastness in not disavowing what he said, his noncompliance to the diktats of the state was a wound that would not heal for those who wish to impose their beliefs on others.

When I read of how the state persecuted him, I understand why he posed such a threat. If Muslims realised that their interpretation mattered then the so-called scholars would lose their influence and their hegemony of the debate would vanish. Kassim Ahmad was a constant reminder of what would happen if people embraced a religion that they had thought out for themselves.

In a time when the Islamic world is suffering from a dearth of outlier voices, the passing of Kassim Ahmad is a great loss not only to Malaysians but to the other sparks in the Muslims world waiting to be ignited by people who choose not to subscribe to fear but who genuinely want to understand their religion.

I will end with this quote by Henry David Thoreau. Hopefully, it means something –

“On the death of a friend, we should consider that the fates through confidence have devolved on us the task of a double living, that we have henceforth to fulfil the promise of our friend’s life also, in our own, to the world.”

S THAYAPARAN is Commander (Rtd) of the Royal Malaysian Navy.

 

Jomo Kwame Sundaram–Need to Speak Truth to Power


October 16, 2017

Jomo Kwame Sundaram–Need to Speak Truth to Power

by Malaysiakini Team

http://www.malaysiakini.com

Tomorrow: Jomo on why Malaysians are worse off today

INTERVIEW | Jomo Kwame Sundaram, former Assistant Secretary-General for Economic Development at the United Nations, talks about the need to “speak truth to power,” among others.

Image result for dr jomo kwame sundaram

 

Question: In a recent speech, Prime Minister Najib Razak accused you of taking “every opportunity to attack me and my policies, from our participation in the TPPA, to the administration of welfare payments, to foreign investment in Malaysia.” What do you have to say?

Jomo: What can I say? One should not read him out of context. He said this as proof of freedom of speech and democracy in the country. Obviously, I appreciate his commitment to freedom of speech, and presumably, freedom after speech [laughs]. In fact, some people now tease me as the PM’s “poster boy” for free speech in Malaysia.

But unfortunately, his fact-checkers did not do their homework, or perhaps facts don’t matter in this age of fake news. As many know, I have also been criticised by the PM’s critics for supporting several of his policy initiatives, most notably BR1M (Bantuan Rakyat 1Malaysia) and the minimum wage policy.

BR1M goes directly to beneficiaries and is hence much appreciated by recipients. Understandably, as with the mid-year deal for Felda settlers, opposition politicians see BR1M as bribing the electorate, but one should not condemn BR1M itself.

Image result for najib razak

However, labour market interventions, such as the minimum wage policy, have been far more significant for improving a lot of low-income earners although the public may not realise it.

I recently lauded the Health Ministry initiative to get an affordable Hepatitis C treatment, for a small fraction of the US price, for the almost half million Malaysians who suffer from it.

So factually, his speechwriters were wrong. But he was right to say that I do not blindly support everything his government has done, and have been critical of specific policies, which I have done for decades, long before he became PM.

Najib said you have been critical of the Trans-Pacific Partnership Agreement (TPPA).

Jomo: He is correct that I have long been critical of the TPPA. Before I came back to Malaysia last year, I joined some UN colleagues to critically assess the TPPA. The report was launched in Washington DC in early 2016, soon after I left the UN.

That work was not focused on Malaysia, and simply pointed out that the methodology used simply assumed away the problems the TPPA would generate, including for the US. In the US, both Democrats and Republicans cited our work to oppose the TPPA.

After returning to Malaysia, I felt obliged to point out that the gains promised by the TPPA, even by its most fervent US advocates, were actually very modest and exaggerated by its Malaysian proponents.

Image result for Trump withdraws from TPPA

 

I also pointed out that most of the gains to the US were at our expense. Strengthened intellectual property rights (IPRs) would raise the costs of medicines, for example.

The TPPA’s investor-state dispute settlement (ISDS) provisions would allow private tribunals to make rulings in favour of powerful foreign corporations at potentially great expense to the Malaysian government.

Even now, although the TPPA is dead in law because President (Donald) Trump rejected it, there are those trying to push TPP 11 through while the government and public are distracted by other matters.

This would be worse as it would sell out the national and public interest for next to no gain. My concern throughout has been the Malaysian public interest, including the government interest.

What about foreign investments?

Jomo: As for foreign investment, again he is correct that I am concerned about how the government is encouraging foreign portfolio investment, as in the period before the 1997-98 crisis.

Unlike Thailand and Indonesia then, the government and Malaysian corporations had not borrowed very heavily from abroad. But we were vulnerable because of the sudden exit of mainly foreign holdings from the Malaysian stock market.

Such investments have grown so much in the last decade that some estimates suggest that they exceed foreign share ownership in the mid-1970s, more than four decades ago. It is also misleading to think that because Malaysians have been encouraged to invest abroad, we should encourage foreign portfolio investments here.

 

Greenfield foreign direct investments are a different story as they may bring in new productive capacities and capabilities, including technology, management and market access. But my concern remains that Malaysian industrial capacities and capabilities remain modest, and we still have relatively few internationally competitive industrial firms.

My concerns have been expressed with the country’s interests and future progress foremost. I pray that the space for such discussion and debate will be expanded, not diminished. The PM’s affirmation of freedom of speech should, therefore, be welcomed, not feared.

So, what inspires you to do what you do?

Jomo: Many people have inspired me. Those who fought to free us from imperialism, oppression and exploitation. While in school, especially at the Royal Military College, I was inspired by Malcolm X, Martin Luther King, Yasser Arafat, Kwame Nkrumah, Ho Chi Minh and Nelson Mandela.

And yes, I do not identify with the other man I was named after – Jomo Kenyatta, father of Kenya’s current president, who was unfairly jailed by the British from 1952 until 1959, but became increasingly corrupt and tribalistic after becoming president in 1963.

Chinua Achebe’s writings turned from the disruptive colonial impact to the gangrene of corruption. Then, in 1983, I was shaken by the brutal torture and murder of my senior in school, the late Jalil Ibrahim, in Hong Kong.

We are all enjoined to “speak truth to power.” Initially, when I was at UKM (Universiti Kebangsaan Malaysia) with the late Ishak Shari, Osman Rani and Ismail Muhd Salleh, and later with others after I moved to Universiti Malaya.

Image result for dr.mahathir

During Dr Mahathir (Mohamad)’s long tenure, I was also known as a critic, even though I appreciated many aspects of particular policy initiatives. Although I was quite outspoken in those days, BN politicians did not harass me.

 

Rather, petty university administrators who had ambitions or agendas of their own were the vindictive ones. But most left me alone as I had no ambitions in terms of university positions.

Also, there is no personal animus on my part towards the Prime Minister. As is well-known, I greatly admire his late father (Tun Abdul Razak )for many reasons. In fact, I wrote an article early last year, just after leaving the UN, on the occasion of the 40th anniversary of his untimely passing.

As a student then, in the cold winter of early 1976, we organised a memorial meeting at MIT (Massachusetts Institute of Technology) to honour his contributions soon after he passed.

Tomorrow: Jomo on why Malaysians are worse off today