Congratulations. Dr Khalid


August 24, 2018

Congratulations. Dr Khalid

PM appoints Muhammed Abdul Khalid as economic advisor

   Dr Abdul Khalid and Hwok-Aun Lee

Economist Muhammed Abdul Khalid has been appointed as the economic advisor to Prime Minister Dr Mahathir Mohamad.

This follows Muhammed’s stint as the secretariat head for the Council of Eminent Persons (CEP), which has served past its 100-day tenure.

Muhammed is best known for his talk show appearances, where he explains economic issues in simple language.

In 2014, he authored the well-received “The Colour of Inequality: Ethnicity, Class, Income and Wealth in Malaysia” which illustrated how Malaysia’s wealth gap was widening in tandem with its economic success.

He was formerly a research head at the Khazanah Research Institute, chief economist with the Securities Commission and senior analyst with the Institute of Strategic and International Studies.

He has also held positions with the United Nations Development Programme (UNDP), United Nations Children’s Fund (Unicef) and United Nations Economic and Social Commission for Asia and the Pacific (Unescap).

The Penang-born economist was awarded a PhD with highest honours from the Paris Institute of Political Studies, better known as Sciences Po, and is the founder of big data firm DM Analytics.

His appointment will take effect on August 27.

1MDB case must be watertight, says Malaysia’s Mahathir


June 21, 2018

1MDB case must be watertight, says Malaysia’s Mahathir 

 

As prime suspect – and defeated Prime Minister – Najib Razak holidays in Langkawi, Malaysia’s new leader says it is better to build an indisputable case than be swayed by populist sentiment into hasty action.

By Zuraidah Ibrahim/ Bhavan Jaipragas

http://www.scmp.com/week-asia/politics/article/2151474/1mdb-probe-needs-time-be-watertight-malaysias-mahathir-calls-cool

The Malaysian government is taking time to build a watertight case in the 1MDB financial scandal and not be swayed by populist sentiment, according to Prime Minister Mahathir Mohamad.

Najib Razak: prime suspect in the 1MDB financial scandal. Photo: Xinhua

His predecessor Najib Razak is the prime suspect under investigation and has been banned from leaving the country. This week, Najib’s decision to go on holiday to the resort island of Langkawi – which coincidentally is the parliamentary seat of Mahathir – sparked fears he was trying to slip out of Malaysia.

Malaysia’s billion-dollar question: where did 1MDB money go?

The government and the people know that billions have been stolen, Mahathir said. But, calling for cool heads, Mahathir said in an interview with the South China Morning Post that the government wanted indisputable evidence. “So the prosecutors now are gathering that evidence so that when they go to the court of law, the judges don’t base their judgment on sentiment, but … on facts and evidence shown in the court of law. So that is why we are taking a little bit more time than we expected.”

 

He declined to give a timeline on the next stage of the investigations, even as speculation swirled in Malaysia that the charges could be filed against Najib as soon as the next two weeks.

But on Tuesday afternoon, he was quoted as saying that charges would be filed on key suspects – Najib, businessman Jho Low and “a few others” – within months, while a trial would begin later this year.

Charges against Najib would include “embezzlement, stealing government money, and a number of other charges,” he said in the interview with Reuters.

The 1MDB probe extends across six jurisdictions, including the United States, Switzerland and Singapore. It has also targeted Najib’s wife, Rosmah, known for her flagrantly ostentatious taste in luxury goods. Set up in 2009 as an infrastructure fund drawn from oil revenues, it has lost US$4.5 billion and is now insolvent. Around US$731 million allegedly ended up in Najib’s personal account. The beleaguered former premier has denied any wrongdoing, insisting that the money was a donation from an Arab benefactor.

 

Rosmah Mansor, wife of Najib Razak, arrives at the Malaysian Anti-Corruption Commission headquarters in Putrajaya, Malaysia. Photo: EPA

Pakatan Harapan: Vulnerable?

In the interview with the Post, Mahathir, who won a stunning election on May 9, was asked about his views of a rising China and the region. In addition to taking questions about the 1MDB scandal, he was also asked to comment on the possible vulnerabilities of his Pakatan Harapan coalition.

While Pakatan now claims 125 seats in the 222-seat Parliament, a recent survey by the reputable think-tank Merdeka Centre has found that the coalition did not win over the majority of Malays, who make up 65 per cent of the population.

Malaysian Prime Minister Mahathir Mohamad is interviewed by the South China Morning Post in Kuala Lumpur. Photo: SCMP Pictures

According to the Merdeka Centre survey, UMNO retained 35-40 per cent of the Malay vote, while the rest was almost evenly split between Pakatan and the Islamic-based party, PAS. In comparison, 95 per cent of Chinese voters chose Pakatan.

Malays have special rights granted by Malaysia’s Constitution. Almost all Malays follow Islam, the official religion of the country. Under the previous Barisan Nasional coalition, the Malay-based United Malays National Organisation was the dominant component party led by Najib. Umno had increasingly played the ethnic and religious cards in elections over the decades.

Supporters of Mahathir Mohamad celebrate his victory in the May 9 election. Photo: Reuters

Commentators credited Mahathir for attracting enough Malays into the Pakatan camp to tilt the balance decisively in its favour. Mahathir has immense stature among Malays as a respected former Prime Minister who held office from 1981 to 2003. The argument, if correct, begs the question of whether Pakatan will be able to retain Malay support after Mahathir steps down, which he has promised to do after two years.

In the interview, Mahathir said there was a clear swing of Malay votes from the Barisan coalition to the opposition in the recent election compared with the previous one in 2015 that contributed to their victory.

Ignoring 1MDB scandal caused Umno’s downfall in Malaysia: Najib

But the Malay vote itself was split between the rural, suburban and urban areas. It was in the latter two areas that Malays had turned against the previous government because they were disenchanted with the “bad things” happening within Umno, especially the corruption scandal.

For rural voters, he said, such issues were harder to grasp but they could understand cost of living woes.

He shrugged off his own personal appeal in winning the Malay vote for the future, saying: “Well, I can’t always be popular, one day I will become unpopular because when you are in the government, you have to do unpopular things. That is not something permanent.” But for now, people were upbeat and they felt that life during his first tenure as Prime Minister was better than during Najib’s time, he said.

Let’s Get Physical

Mahathir, who turns 93 on July 10, was also asked about his physical energy. He laughed, saying it was the number one question he was asked. Although Mahathir, a trained medical doctor, has had two heart bypass operations, he feels fortunate not to have suffered debilitating diseases such as cancer.

His secret to good health? “I think simple things like not putting on weight, not eating too much, proper sleep, a little bit of exercise,” he said, adding that he gets “enough” sleep – about six hours. When he is not able to do that, he has short power naps.

In May, a picture of him at the dining table with just a few spoonfuls of rice on his plate caught the attention of internet users. But then a close-up showed that next to his plate was a small green canister of multivitamin supplements, Berocca. Sales of the supplement received a sudden boost.

Anwar Ibrahim with Mahathir Mohamad in 1997, during the latter’s first stint as prime minister. File photo

Moving On

Under a pact made with his former nemesis turned coalition partner, former deputy premier Anwar Ibrahim, he is supposed to hand over the prime minister’s position after two years. However, there have been hints recently that Mahathir intends to stay beyond two years.

Asked about this, he admitted there was a lot to be done. Would he stay beyond two years? “Well, I don’t know whether people will permit me to stay longer. If there is some work I can still do, if I am still healthy, I can think and talk.”

But would he do so as Prime Minister? He demurred smilingly and said softly: “Ya”.

Throughout the interview, he answered questions evenly in his trademark unflappable tone, as an aide kept a strict watch on his time. Asked by a photographer for an autograph, he obliged willingly, noting aloud the date to write to accompany his signature. When the Post invited him to visit Hong Kong, the headquarters of the publication, Mahathir politely remarked about the times he spent there.

“My first ever visit to Hong Kong was in 1960. Where were you?” he quipped to his much younger interviewers.

New Malaysia’s Underclass: What to do?


June 11, 2018

New Malaysia’s Underclass: What to do?

by Dr. Lim Teck Ghee

“What’s important is that we will need to think out of the box and have the courage to challenge long held orthodoxy; or we will end up with more of the same old Malaysia”.–Dr. Lim Teck Ghee

Underclass by Definition

  1. the lowest social stratum in a country or community, consisting of the poor and unemployed.

  2. a group of people with a lower social and economic position than any of the other classes of society; “they are an underclass who lack any stake in popular capitalism and who are caught in the dependency culture”

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Poverty right in the heart of Kuala Lumpur

In the euphoria and after glow of the recent election and current preoccupation with correcting the excesses and abuses of the Barisan Nasional (BN) government, it is all too easy to forget about or ignore the plight of the Malaysian poor and underclass class.

Whatever is the actual poverty situation – we can expect the dispute over definition and numbers to continue endlessly – and whether we can believe the previous government’s boast that only 1% of the country’s households can be considered to be poor – the reality confronting our politicians and policy makers is that the country’s underclass (and this includes many more households than just those adjudged to be living below the poverty line) is sizable, growing and has remained relatively intractable and unyielding to the billions of ringgit poured into the group in the last few Malaysia Plans.

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A young Penan Maiden–A victim of Neglect

Why have so many socio-economic development and poverty alleviation projects failed to make a significant dent in the plight of the underclass should be an important part of the discourse among politicians. It also needs to be a concern for all stake players engaged in forging a new Malaysia that does not replicate the missteps, mistakes and wrongly focused projects and programmes deployed by the previous government in dealing with the underclass.

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Barisan Nasional Leaders in Sarawak–where are they today?

Here are some suggestions on the fresh start needed in Pakatan’s development planning which can make a greater impact in tackling the multitude of obstacles and problems that stand in the way of improving the lives of the underclass:

  1. Ditch or minimize approaches which reinforce rather than reduce dependency. Malaysia is not at the same development stage that it can afford the extensive social safety nets found in developed nations. Expensive subsidy programmes of any kind – and this includes the replacement for BR1M, and petrol subsidies – should be pruned back and targeted at a small number of the most vulnerable such as the elderly or female headed households. Able working age adults below a certain age – say 60 years – should not be eligible for any form of subsidy programme.

  2. Review all costly agricultural and rural development projects to assess their impact and real benefits. In view of continuing rural to urban migration, it is in urban and semi-rural areas where the underclass is mainly clustered and where public expenditure will have greater impact on the poor and vulnerable.

  3. Fragile families are a significant contributor to the intergenerational reproduction of poverty and should be a key concern for the authorities. They are also likely to be a major factor accounting for the racial and class disparities which have caused so much angst within the nation since the tendency towards fragility seems to be more pronounced in the Malay and Bumiputra community.

  4. Together with a focus on fragile families, there is a need to jumpstart the national family planning programme which has been put in cold storage for several decades. It is clear that given the relationship between very large and large families and underclass status – evidence for this can be found in many countries around the world – early family planning interventions will be able to help many large-sized poor and middle class families avoid later life marginalization by improving their socio-economic position through better planning and early intervention in their childbearing practices.

  5. A community’s socio-cultural and religious practices may either stand in the way or assist in the upward mobility of its most needy members. There needs to be an openness and readiness for politicians and policy-makers to discuss these issues and take corrective action even if it may involve touching on sensitive or taboo concerns.

  6. We have had a top down approach to development which has resulted in a stream – even, torrent – of opportunities and rewards especially for the elite and their support group in the civil service and professional class.  This top down approach, compounded by leakages and corrupt practices, needs to be replaced with, or at least complemented by one where resources and opportunities are directly channeled to and managed by groups at the community and grassroots levels. Although the decision has been made to abolish JKKKP’s, a revival of JKKK’s with membership of these committees extended to include youth and women members can provide an impetus to local level development. When led by motivated community leaders, JKKK’s can become a catalyst in local level development and slow down the burgeoning of the underclass.

  7. Experience in other countries has shown that the great wealth of technical expertise and human resources brought to bear on anti-poverty work – especially in terms of the administrative apparatus engaged in planning and implementation – has turned out to be a liability by diverting resources away from the target group to pay for staff salaries and operating costs. Some of the most reputable NGOs in other parts of the world engaged in anti-poverty work have ended up with three quarters or more of donor funds being used to meet administrative expenses. Information on public expenditure intended for poverty and underclass target groups should be widely disclosed and disseminated, especially to the target groups to ensure transparency and accountability.

  8. Lastly, in view of the fact that the larger proportion of the underclass comprises members of the Malay community, it is imperative that successful members of the community step up to the plate to help the less fortunate members move out of their depressed situation. This has to begin with a critical and honest appraisal of the causative factors found within the community which accounts for why the Malay underclass continues to grow despite the government’s best efforts in the last fifty years.

       Image result for the orang asliThe Orang Asli of Malaysia

What’s proposed here is an example of the changes – and paradigm shifts – needed to conventional strategies and current wisdom if we are to make greater progress in arriving at a fairer and more equal society.

They may or may not work. What’s important is that we will need to think out of the box and have the courage to challenge long held orthodoxy; or we will end up with more of the same old Malaysia.

Malaysia’s GE-14: Putting The Future on the Line


April 22, 2018

Malaysia’s GE-14: Putting The Future on the Line

by Nicholas Chan

http://www.newmandala.org

“Chances are political fatigue has affected reform-minded Malaysians after two missed opportunities since 2008, which has led to centrifugal politics that generated even more social tensions. Not even Dr Mahathir’s surprise (re)emergence can mend those fractures in the short term.”–Nick Chan

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Malaysia Decides on May 9. 2018

Elections are about the future. And Malaysians will get to decide theirs on  May 9,  2018. What future are Malaysians are facing and voting for? And, to some extent, what bearing will electoral politics have on it?

For now, many Malaysians are voting for the immediate future, as bread-and-butter issues such as housing, cost of living, and jobs were found to be the major concerns of Malaysians. The palpable outpouring of anger most visible in social media in the lead-up to this election, including from the Malay-Muslim electorate that has been the bastion of the ruling coalition-Barisan Nasional (BN), suggests that it’s driven mainly by concerns of the immediate future.

Both the federal government and an opposition-held state government have been splashing benefits on civil servants who are predominantly ethnic Malays. Even the Islamist party Pas has shelved the ‘Islamic state’ debate to focus on more profane concerns, such as abolishing the Goods and Services Tax (GST) to curb inflation.

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UMNO’s Najib Razak or Pakatan Harapan’s Dr. Mahathir Mohamad

The impetus for change in this round of elections does not look to be as ideational as the previous two elections, where the incumbent’s ethnocentric conservatism was met with a loose consociationalist alliance between secularists, left-leaning progressives, and Islamists of various stripes.

Chances are political fatigue has affected reform-minded Malaysians after two missed opportunities since 2008, which has led to centrifugal politics that generated even more social tensions. Not even Dr Mahathir’s surprise (re)emergence can mend those fractures in the short term.

Devoid of a clear-cut ideational divide, the certainty of a graspable, common goal such as ‘Vision 2020’ is long gone now for most Malaysians. Even immediate aspirations vary depending on whom one asks.

This is reflected in both Pakatan Harapan (PH)’s and BN’s manifestos that run hundreds of pages thick. Part of the reason is that Malaysia is a highly centralised federation. Anyone aiming for federal power is expected to deliver a wide spectrum of public goods, including policing, education, and public transport planning that are usually reserved at the level of states and municipalities of other federations

But another part of the reason is that the development gap between states and regions remains stark. The GDP per capita in 2016 of Kuala Lumpur (RM101,420; A$33,566), for example, is more than double that of relatively industrialised Penang (RM47,322; A$15,662), not to mention the poorer states such as Terengganu (RM27,268; A$9,025) and Sabah (RM21,081; A$6,977). According to data from the Brookings Institution, Kuala Lumpur continues to outgrow the country in terms of GDP per capita and employment. Yet, even the Kuala Lumpur-Klang Valley region, which hosts one-fifth of Malaysia’s population, is a hotbed of inequality itself, as a study from UNICEF found.

In other words, there are two worlds politicians will have to speak to, the First and the Third. In one, even basic services are craved; but in the other, five-figure salary earners are comfortable enough to insist on non-material needs. To be fair, such inequalities have not escaped the government’s attention and redistributive interventions were made. According to the latest plan, cash aid is now disbursed to close to half the households in Malaysia if one goes by the data from the latest household income survey. An almost surreal fact for a country claiming to be achieving ‘high income nation’ status in two years’ time.

Granted, all nations are complex with their own identity, ideology, class, and developmental divides. Yet this ostensibly last election before the 2020 milestone also signals a wander into the unknown for there is no longer any developmental—teleological even—model that speaks of the choices and challenges for Malaysians ahead. There are at least two aspects to this.

First, while the end goal of the New Economic Policy (NEP) is to eliminate inter-ethnic inequality, the rather simplistic framework has led to a more complicated outcome. According to a World Bank report, most income inequality now exists within ethnic groups. Yet, the instruments aimed at boosting inter-ethnic equality have also resulted in public-private inequities that stemmed from the state’s ownership of the economy, an oversized civil service, and labour benefits accrued to said service (such as higher minimum wages as well as ostensibly higher purchasing power).

At the same time, Malaysia remains a low-wage society, even for university graduates. The kind of wages being afforded to fresh graduates in Singapore, even on a dollar-to-dollar basis, is almost unthinkable in Malaysia. Both of which combined to form a situation of over-reliance on state employment, low productivity, and the encouragement of talent outflow.

This happens at the same time as Malaysia reports encouraging GDP growth figures, as well as visibly high income consumerist patterns (and housing prices), creating a confounding situation—high growth data with little personal wealth increase; high consumerist options matched by low income— interlocutors stuck in old race-based paradigms are unwilling and unable to articulate.

Tearing apart the old consensus of racial progress as Progress also contributed to the proliferation of political parties and movements in Malaysia as there is no longer a grand narrative to adhere to. Insecurity seeps in. Protectionist sentiments increase. Interest groups multiply, more so in a political economy touched by the many hands of the state.

Second, not only have First World countries such as Japan (via the Look East Policy) expired as role models for Malaysia, the country has, whether by choice or not, begin to experience ‘First World Problems’ of its own. Urban-rural, intra-urban income and opportunity gaps plague Malaysia as much as it plagues Britain. The aforementioned urban poverty might make some uncomfortable for its comparison to African countries, but the same problem has occurred in the United States and New Zealand. Youth un- and underemployment is as much a Malaysian problem as it is a South Korean one.

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Disruptive change brought on by artificial intelligence and social media will reach Malaysian shores like any technological change: rapid, revolutionary, and ruthless. Climate change will impose its effects (for some, it already has) and like most countries, probably with the exception of Europe, it will be an issue that has long-term effects but almost zero short-term incentives for politicians to act on it, more so in a time of climate change denying and anti-vaxxers.

It’s worth noting that out of the manifestos of the three major contenders (BN, PH, and PAS), only PH’s has explicitly addressed the issue of climate change.

To be clear, I am not saying Malaysia is similar to other First World countries. For example, it will have to deal with the problem of growing old before growing rich (enough), unlike Japan which only needs to deal with first half of the problem. Malaysia’s educational institutions are still lagging far behind its First World counterparts, which is probably why Singaporean fresh graduates can fetch salaries Malaysia’s graduates can’t.

Elections are good for deciding pathways of change, only if those pathways are carefully thought-out, comprehensively debated, and creatively sold. For too long Malaysians have strived for a dream to go from Third World to First. It may now need to figure out a way to connect First World and Third.–Nick Chan

What is for sure for Malaysia is that it cannot spend its way out of it. The decline of humanities and social science in universities also means that the state has hoarded much of the critical thinking to its own – a fact to be dealt with regardless of the outcome of the elections. The passing of the anti-fake news bill and the populist streak dispensed by unpopular parties are not promising signs. Like the world writ large, Malaysia has entered terra incognita. It will need to devise ways and philosophies of managing a hyperconnected yet fragmented world. And it needs to do so now not as a nation catching up, but as a member within a global incubator.

Elections are good for deciding pathways of change, only if those pathways are carefully thought-out, comprehensively debated, and creatively sold. For too long Malaysians have strived for a dream to go from Third World to First. It may now need to figure out a way to connect First World and Third.

PSM and GE-14: On Principle,Go It Alone, Michael


April 3, 2018

PSM and GE-14: On Principle, Go It Alone, Michael

by Michael Jeyakumar Devaraj

Read : https://dinmerican.wordpress.com/2011/07/14/dr-michael-jeyakumar-devaraj-social-critic-tireless-activist-and-mp-for-sungai-siput/

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With PRU 14 fast approaching there are many Malaysians, especially urbanites, who feel that a change of government is at hand. Several among them urge the PSM not to “create 3-corner contests” but to take stock of the big picture and go along with the Pakatan Harapan. This would mean standing down all PSM candidates except for myself – I alone will be allowed by PH to contest Sg Siput under PKR logo.

To our friends and supporters who urge this course of action, I would like to point out three facts. The first is that the 3 corner scenario has been foisted upon us by the PH itself as they went ahead and apportioned all the seats in Semenanjung amongst themselves. The PSM, which has indicated since 2011 that we wished to work with the Pakatan Rakyat (as they were then) to bring a change in government, was never invited to any seat negotiations. As a result, wherever we stand in Semenanjung there will be a 3-corner situation. But is it fair to say that the PSM has “created” these?

The second point is even more important – what happens to the Reformasi agenda in the aftermath of  PRU 14? (The day after – the 2 years after). This is I think, the even bigger picture that people who want genuine change must take into account. Can the Pakatan Harapan, which is making a number of tactical compromises, in a good position to oversee the reform agenda, or do we need other political parties around to help push that forward? Reading the PH Manifesto might give some clues –

–          There is no mention of Local Council elections;

–          They seem to be backing away from Free Education at varsity level;

–          Ethnic based policy pitches seem to be making a comeback;

–          Several of their economic policies have a strong neo-liberal flavor.

 Now don’t get me wrong –  the PSM is calling on the people of Malaysia to support the PH in PRU 14 (except in the few seats that the PSM is standing – at this point in time 5/222 Parliament and 11/545 State seats). The PH is the better of the 2 alternatives available at present.

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 But the question that Malaysians who want to see politics moving in a more healthy direction need to ask themselves is – will the PH be able to deliver what we hope for, on their own? Or is there a need for a party like the PSM that keeps reminding all of us that

–          Poverty in Malaysia cannot be comprehensively tackled without addressing the massive transfer of profits out by the 500 richest Multi National Corporations which control the “global chains”;

–          We need to call out the World Bank and the IMF who would like us all to believe that poverty in developing countries is due to our low “productivity”. We are the only political party in Malaysia that is pointing out there is a problem with how productivity of our workers is measured. Consider – the selling price of an electronic chip produced in Bayan Lepas is about a fifth of the selling price of an identical chip produced in California. Based on the current formula, the “productivity” of the Californian worker is five times that of our worker – for the same product, and the same volume of output! The oligopolistic position of the MNCs enables them to suppress the prices of good that they subcontract out to us and other 3rd world countries. So the root problem is not productivity but the excessive market power of the biggest MNCs.

–          We need to counter the perception that liberalizing the economy and giving more scope to businesses is the best way to tackle bureaucracy and inefficiencies in the Public Sector. We believe that such an approach would tend to push costs up and further marginalize the bottom 80% of the population.

–          We are keenly aware that increasingly, the richest business groups in Malaysia have great influence over the political process in the country as they fund both sides of the political divide. Our democracy is being undermined by massive political funding by the business elites. The PSM has been calling for public funding for political parties, and we have suggested mechanisms for doing this in a way that enhances the peoples’ influence;

–          We seem to be the only party that feels there are concrete reasons why the rural Malays are apprehensive about regime change. We have been studying the rural economy for the past few years to ascertain why rural poverty persists despite the billions of ringgit the government has thrown at it. We have the framework of a program to address this problem – a program that has great potential to allay the fears of the rural Malay voters and get them to support our reform agenda.

–          We believe that political leaders have to be more accountable regarding their wealth accumulation. We advocate that those who want to amass wealth should choose some other profession and not come into politics and rip off the people.

–          We are against populist policies like toll-free highways, lower prices for cars and cheaper petrol. Concern for the environment cannot be limited to speeches on Earth Day! We need to cut our carbon footprint – we should use economic incentives to shift to public transport and develop more electric powered vehicles while working on electricity generation from renewables.

–          We believe that automation and AI should be a boon for humankind and not a cause of unemployment and gloom. The rapidly increasing productivity of our global economy means that we do not need to work 12 hours a day to make ends meet. But at present, those who can’t find work can’t consume – its painful both for them and the global economy as aggregate demand will remain sluggish if people do not consume. The solution, as we see it, is a massive increase in the hourly wage rate coupled a 32 hour working week – so people will be able to get a living wage for working less, and all families will have work and businesses will have adequate markets to sell to. We all will then have more time for ourselves, our families, the community, religion the arts sports etc – the full flowering of human potential. I doubt if any other party in Malaysia has a similar vision of a better society if we could order our economy on the basis of social solidarity and not the avariciousness of the Forbes 500.

 

People might say we are deluded, but we in the PSM really believe that we have a great deal to contribute to the political process in Malaysia – and I haven’t yet touched on the commitment and selflessness of our frontline activists who stand each day with the marginalized groups in our society. That is why we will not quietly “close shop” and retreat to the sidelines of politics.

We remain committed to bring regime change – and we agree that at this point in time, only the Pakatan Harapan is big enough to do this. We are prepared to work with them. We would be quite prepared to compromise and stand down half the seats that we are preparing to stand in – if we are given the remainder as 1:1 contests against the BN (ie the PH backs out of these). Which seats? – That can be settled through discussions and we called for these more than 24 months ago. Only now, at the 11th hour are representatives from the PH reaching out to us. We have replied that we are ready to meet asap.

 I would like to appeal to all Malaysians who support the Pakatan Harapan – you too have a role to play in the resolution of this problem. Tell your PH leaders to deal fairly with the PSM – convince them that the PSM can add value to the reform movement. Sometimes, (and this is the third point I want to raise) it’s your uncritical support for them that leads to a touch of arrogance in the way they deal with others!

 

Jeyakumar Devaraj

Voodoonomics: How successive governments impoverished Malaysians


March 15, 2018

Voodoonomics: How successive governments impoverished Malaysians

by P. Gunasegaran@www.malaysiakini.com

A QUESTION OF BUSINESS | At least two ways – both very wrong in the longer term – were used to support the export sector in Malaysia in believing that growth through exports was the right thing for a developing country like Malaysia.

Even though there was economic growth, which means more wealth was created, there was impoverishment too. But how could that be? Basically, those who were rich got richer and those who were poor got poorer.

How did the government achieve export competitiveness over the years? Through two measures. First, they reduced the number of things Malaysians generally could buy by opting for a policy which weakened the ringgit. And two, they imported poverty by allowing the uncontrolled import of cheap labour.

Both improved Malaysia’s competitiveness not by raising productivity, although there was some of that, but by cutting down the cost of labour through the import of cheap labour (imported poverty) and lowering the relative value of the currency or currency depreciation, effectively lowering costs in US dollars.

Let’s look at these measures in turn.

1. Currency Depreciation

The ringgit fell in value from around as strong as around RM2.2 to the US dollar in 1980 to around RM4.0 now. The US dollar appreciated by over 80% during the period and the ringgit lost over four-tenths of its value relative to the US dollar.

Consider what that does: if an imported food item cost US$1, it was RM2.2 in 1980. But it rises to RM4 now, an increase of some 82%. But consider it now from the exporter’s perspective: If he sells something for US$1 overseas now, he gets RM4 versus RM2.2 then, again 82% more.

Unless he shares this benefit equitably with the worker – and in practice, he does not – a depreciated currency is a subsidy to exporters and a tax on workers because everyone depends on imported goods and even services for a good part of what they consume. Think in terms of food, clothing and buying from foreign chains.

While a depreciated currency improves the appearance of export figures in ringgit terms, it is still not a long-term solution for the betterment of people because it directly impoverishes a major part of the public by reducing their purchasing power – the amount they can buy with the ringgit.

2. Importing poverty through cheap foreign labour

The next major stupid move successive governments did was to import cheap labour from overseas. Until today, this is largely from Indonesia, Philippines, Bangladesh and India.

In the 1980s, this happened in the plantations affecting mainly Indian Malaysians who were displaced from the estates due to cheap Indonesian legal and illegal labour. Soon, this imported cheap labour spread into all areas, heavily depressing labour wages, affecting all Malaysian labour including Malays.

Was wealth ever created?

How terribly short-sighted! While developed countries were importing skilled and white-collar workers from developing countries, Malaysia, still very much a developing country then (and still is despite what others say), was importing cheap labour from other countries, depressing wages of a large section – probably as much as 50% – of its own workforce.

What kind of a madness was this that at the same time inhibited improved productivity by opening the tap to cheap labour and delayed the invention and adoption of new processes to reduce labour input while improving productivity per person through training and automation?

Till this day, when employers complain of labour shortage, it irritates one to see imported labour at car parks, for instance, being used to hand out parking tickets even after the process has been automated at the entry points.

Drive further in and you see others directing traffic and blowing loudly on whistles. The price of labour is so cheap that imported labour is used for such menial tasks. Are Malaysians so illiterate that they can’t read and follow signs?

As if the whole situation is not ridiculous enough, government officials and ministers regularly regurgitate garbage by saying that labour imports are necessary because Malaysians do not want to do these jobs. Pay them enough and Malaysians will do the job. Perhaps the ministers should send their daughters and sons to do this kind of work for a pittance.

And as many millions of workers are imported, a thriving business sanctioned by the government sprouts up living off the blood and sweat of workers and exploiting employers by making both parties pay ridiculous amounts for legal import, driving them towards employing illegal workers.

One may ask, what then is the alternative? If you want a broad section of the public to get richer and more affluent, the only way is to create wealth for everyone.

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That means improving the overall productivity or output per person so that he or she deserves a higher wage. Not by creating wealth for some and impoverishing most via currency depreciation and depressing wages.

Ah, yes but how do you do that? There is only the hard way. First, improve the quality of education for all and focus on the right kind of education which will make people employable.

Next promote the kind of industries which will increase the dollar value of output per person and ensure that productivity gains drive wealth creation, not cost-cutting.

Third, ensure that as much as possible of the resources go towards improving educational opportunities and building the necessary infrastructure for continuing productivity improvements with as little leakage as possible.

How much of this has been done since independence? Little.

The frightening part

According to Khazanah Research Institute’s (KRI) ‘State of Household Report’ dated November 2014 and Employees Provident Fund (EPF) data on individual incomes which includes salary or wages, overtime payments and bonus in 2013:

  • 96 percent of active EPF members earned less than RM6,000 a month
  • 85 percent less than RM4,000
  • 62 percent less than RM2,000

That’s a telling figure – 62 percent of workers earn less than RM2,000 a month. How can many of them live comfortably with such an income, especially when they have children to support?

Meantime, the median monthly salaries and wages per month for individuals was RM1,700 in 2013 (see chart below). That means half of all workers get this much or less, KRI explains.

And what does an illegal Indonesian worker earn in a month these days? In March, there are 27 working days including Saturdays on which they typically work as well. Industry employers say Indonesian illegal workers cost RM70 a day, casual, that means not contracted. Multiply that figure by 27, we get RM1,890 for the month of March.

Now, the frightening part is that this is more than the RM1,700 median salary for Malaysia which means that 50% of Malaysians earn less than casual Indonesian workers!

Clearly, the majority of the country lives in poverty. Income gains for the wage-earner have not gone up enough. And for a country like Malaysia with abundant resources and which once had the highest income in Asia after Japan, that reflects a failure of government.

If one needs an example of successful economic development, you just need to look across the Causeway which started pretty much from where Malaysia did and look where it is now with the adoption of the right policy mix coupled with an incorruptible government.

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The currency–the Singapore Dollar– is now valued at three times Malaysia’s against about parity in 1980 and its per capita income is among the highest in the world.

We are not saying that Singapore is the perfect state but in terms of economic development, they have beaten us by far and continue to do so.


P GUNASEGARAM still hopes that sometime in the future (perhaps soon?) there will be a government not only of the people but for the people. E-mail him at t.p.guna@gmail.com

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