Intolerance, violence and the media we need to defend

May 4, 2016

Intolerance, violence and the media we need to defend

by Howard Lee | What You Think | Malay Mail Online

In a casual living room setting filled with diplomats, writers and bloggers, the conversation eventually turned to a question about whether a blogger can be considered a journalist. The room was undecided, compounded especially by bloggers who felt that they could not represent journalism in any professional sense. But one participant, highly regarded in our journalistic circles, brought it all back to the ground by giving this basic definition of “journalist” – “someone who keeps and writes a journal”.

While in no way definitive of the journalistic profession we are familiar with today, it does highlight what every society needs: Someone who is able to share the stories of a community, using media that extends beyond the scope of a one-to-one conversation. Journalism, when view in this way, is not about whether you have a press card or if you get paid to write for a bona fide newspaper. Journalism is about applying the skills of the trade for an audience that needs to read the stories you want to tell, and doing so with the best ethics that you can put into every single word. Around the world, these journalists do not just fill large corporate newsrooms, but also work for small town newspapers, local radio and community newsletters.

And Singapore, too, has no lack of such journalism, despite our small size that makes the concept of community media sound implausible. For too long, the ridicule of Singapore’s dismal ranking in international press freedom indices had but one saving grace: That there are still individuals committed to speaking up for their community, even if the mainstream media would not or cannot. These individuals have found their place in the (relative) freedom of the Internet, where they can express their views in their blogs or social media platforms. Unfortunately, recent years have given rise to an increasing threat of violence to such individuals.

Of course, compared to our regional neighbours, where journalists risk life and limb, face death threats and have real guns pointed at their heads while working in politically regressive regimes or societies overrun with organised crime, our woes seem laughably insignificant. But the slew of legal action brought against individuals like Alex Au, Roy Ngerng and Leslie Chew for voicing their opinions, as well as every major social-political website currently on our shores, should give us pause to ask: Are we any less under threat?

Ours is a political system of intolerance towards dissenting voices, and such intolerance has recently gotten bolder in attitude and harsher in tone. Even a teenager who posted disparaging remarks about a political leader can win the wrath of the law. Not only that, but we are starting to see a growing intolerance among our population, who have no qualms about advocating violence towards contrarian voices.

The same voices who are at times doing nothing more than applying the skills of the journalistic trade for an audience that they believe needs to read the stories they want to tell. For sure, not every case can be seen as applying standards worthy of the journalistic profession, and clearly the polish, nuancing and simple EQ of some leave much to be desired. But such factors should not, however, be justification for the State and individuals bent on reading only the “right thing” to clamp down on these contrarian voices.

Freedom of expression allows us to debate freely, disagree or come to a consensus. It lets society solve its own problems, not through the use of a gun, online lynch mob, police report or a letter of demand; but through reason and respect. Singaporean society, unfortunately, has relied too heavily and far too long on the State apparatus to resolve our differences for us, and it is clear today that it has made us more retarded in our ability to think critically and engage meaningfully. In effect, we gave up our collective right to free expression, in exchange for a police state, where we are happy only if we are all made deputies. This is not free speech. It is not even a sufficient excuse for championing responsible speech.

It is violence committed upon others who have done nothing more than state an opinion different from yours. It is violence that has consequences more lasting than simply unfriending someone on Facebook. It is violence that has seeped into our national psyche as something that is justifiable, when in reality nothing justifies it. World Press Freedom Day this year will be remembered as the day in a year where Singapore as a nation exhibit to the world precisely how narrow our minds are towards those who seek free expression.

Quality journalism enables citizens to make informed decisions about their society’s development. It also works to expose injustice, corruption, and the abuse of power. For this, journalism must be able to thrive, in an enabling environment in which they can work independently and without undue interference and in conditions of safety.” — UN Secretary-General Ban Ki-moon

We will stand in solidarity with those who have suffered violence for daring to speak out, for so have we suffered violence. The oppression we face is the same, even if the face of that oppression is different. Singapore needs to do better, and if the duty of making it better falls on those who keep and write a journal, then so be it.

Save Malaysia from debilitating Bumiputraism

May 2, 2016

Save  Malaysia from debilitating Bumiputraism–The Agenda of the Third Force

Time to save Malaysia from neo-liberal capitalists, naked political opportunism, and racial discrimination.

by Dr Kua Kia Soong


The Bigots and Extremists rule the day–How is this related to Neo-Liberalism, Dr. Kua? Socialism is Dead

In March 2008 the two-front system that we had called for in the 1990 general elections finally came about, producing an alternative, namely Pakatan Rakyat (PR), to the Barisan Nasional. Barely eight years later, those days of hope have been dashed by the recent split between DAP and PAS in 2015 and now, the bickering between DAP and PKR and their failure to present the BN with a one-to-one challenge in six seats at the Sarawak state elections.

The name calling by DAP leaders we thought was only reserved for the PAS leaders has now been used against PKR leaders as well.

Dearth of leadership & alternative policies in PR (now the so-called Pakatan Harapan–Coalition of Hope)

Without a doubt, the PR coalition was held together at the start by the PKR leader Anwar Ibrahim, even though their alternative policies to the BN were never entirely clear. Their neo-liberal tendencies led to BN-type policies in the development of the states they controlled, ie. Selangor and Penang, policies which have produced little change in the living conditions of the lower income groups.

Private developers have had a field day in these PR-held states since 2008 with the promise of more multi-billion projects in reclamation, undersea tunnels, highways and luxury development.


The Rosmah-Centered Authoritarian of Malaysian Politics

Policies aside, Anwar’s leadership in holding the PR coalition together started to suffer a setback possibly because he was deflected by his sodomy trial as well as self-centred opportunistic tendencies among the component parties in PR.

This was clearly seen during the asinine ‘Kajang Move’ in 2014 when there was a “resignation of convenience” by the incumbent PKR Adun after internal politicking between the PKR Menteri Besar Khalid Ibrahim and the PKR strongman Azmin Ali who was opposing him.

The cost of this short-sighted ‘Kajang Move’ was to force a by-election and leave constituents without representation for weeks. It exposed an irresponsible attitude of PR in taking the Malaysian electorate for granted by forcing a by-election just to facilitate the entry of Anwar Ibrahim into the Selangor state government. It was a most cynical violation of the public trust.

The Checkmated Anwar Ibrahim

More costly for the PR coalition, the Kajang Move had been carried out without adequate consultation with the other PR partners and fissures soon began to appear between them. Three decades of engagement with PAS, the largest Malay-based party in the coalition, was about to come asunder.

The dearth of leadership in PR was clear when the former Menteri Besar was openly maligned as inept and corrupt by lesser DAP politicians to justify his ousting. It was also clear the PAS President was not consulted over this irresponsible political move. The Kajang Move showed not only contempt for the voters in Kajang but also insensitivity toward the PAS leaders who were part of the PR coalition.

Bad mouthing the PAS President

Malaysia’s Political Nightmare–Corruption

After months of name calling against the PAS President Hadi Awang, which can only be described as ‘kurang ajar’, Pakatan Rakyat was officially disbanded on 16 June 2015 after the DAP declared it could no longer work with PAS. It was a sad day for all Malaysians who had hopes for a viable alternative to the Barisan Nasional.

The long-term effect of such uncouth bad mouthing of the PAS leader remains to be seen. The DAP will have to measure the relative weight of their token Malays in the party against the loathing towards DAP among not only UMNO supporters but now also PAS supporters.

Is this behaviour the result of insensitivity, the lack of wisdom or naked opportunism that has blinded the DAP leaders to common sense needed to engage with PAS leaders and members if they are genuinely interested in “winning over Malays to the DAP”?

The DAP is now willing and able to work with the man who has been responsible for privatising practically all of Malaysian industry and destroying whatever semblance of democracy we had in his 22 years in office – all because of the stated need to “save Malaysia”.

Naked opportunism the main culprit

The DAP’s significant political turnaround in their current readiness to work with the erstwhile oppressor and autocrat of Malaysia requires a more responsible political economic analysis by the DAP leadership to justify this volte face. They also owe the Malaysian people an analysis of class oppression in Malaysia today and how this ties in with their new agenda to “save Malaysia”.

It is certainly a sad day for Malaysians who have hoped for an alternative to the BN and who have carefully nurtured a working relationship with PAS since the Eighties, to see this Alternative Coalition wrecked by total lack of sensitivity to coalition principles, human relationships and dearth of leadership.The DAP leadership is now banking on their token Malay centrists and the former PAS “New Hopers” to get by.

No doubt the DAP will be complacent to rule Penang but succeeding to drive PAS out of PR is undoing more than thirty years’ work engaging with PAS to build the Alternative Coalition. The positive aspect of the last thirty years included PAS’ participation at so many May Day, anti-war and Bersih rallies. This has been an important contribution to inter-ethnic integration in Malaysia and the attempt to build an alternative to the BN.

What is to be done?

The squabbles within Pakatan Harapan over the apportionment of seats have to do with naked opportunism and the lack of higher principles in their respective party ideologies. The politics of opportunism can also be seen with the party elite monopolising federal seats and state seats in the same term and with no fixed term set for the party leader.

Nevertheless, with leadership and an adopted procedure as can be seen in the BN, even that naked opportunism can be managed with due diligence.

For now, we are back to square one as far as engagement with PAS is concerned. It remains to be seen how DAP’s alliance with PKR will hold. It is time for progressive Malaysians to take stock of the political situation and to consider what is to be done in the struggle to make Malaysia truly democratic, free and just for all Malaysians, and especially for our working peoples.

Building the socialist alternative

While there was hope of an alternative coalition to challenge the Barisan Nasional that has been in power for nearly sixty years, Malaysians were prepared to be patient until BN was deposed. It is now clear that some of these opposition parties are ideologically similar to BN in their commitment to neo-liberal capitalism evident in their own state policies.

With our hopes dashed, it is time to build a Third Force that is people-centred, free and equal and led by those who are committed to a common platform set on an alternative road to development.It is time to reclaim the national assets that have been sold to private magnates and to ensure there is fair redistribution of income to the people. There is a need for state intervention and nationalisation of basic resources such as oil and gas; utilities such as water, energy; health, education and social services.

We need progressive taxation to check unfettered capital transfers by speculators and finance moguls and to balance rampant income inequality. Such a socialist alternative differentiates itself from the Barisan Nasional or Pakatan Harapan.

Save Malaysia from Neo-liberal capitalism

Malaysia needs to be saved from neo-liberal capitalism that was unleashed by Mahathir when he came to power in 1981.

Mahathir is indeed the “father of neo-liberalism in Malaysia” after selling off our national assets through his privatisation policies in his 22 years, our national resources hived off to crony capitalists under the guise of affirmative action. Mahathir succeeded in creating private Malay capitalists out of the erstwhile state capitalists who had entrenched their power after May 13, 1969.

Privatisation in Malaysia since the eighties has not demonstrated that increase in efficiency, productivity, or competition, the elimination of sources of state deficit as privatisation has been purported to produce. The failures of MAS, Proton, KTM and other corporations testify to this fact. In most cases, privatisation has merely substituted a private monopoly for a public one without producing any of the benefits that are supposed to come from competition.

Neoliberal policies represent the political requirements of global capital, harmonising the national with the global economy, freeing capital from social forms in which it is under or open to state control and thereby turning those forms into corporate private property as Mahathir succeeded in doing. It will be more and more difficult to maintain a public sector to alleviate the living conditions of workers and the poor when all these public services have been privatised.

Save Malaysia from racism and racial discrimination

Malaysia needs to be saved from racism and racial discrimination. For years now and especially since the New Economic Policy, “race” (“bumiputeraism”) has been used to divide the Malaysian masses so that they cannot unite against their common oppressors and exploiters. Racial discrimination further worsens the plight of workers in the non-Bumiputera communities. Neither the BN or PH have categorically pledged to abolish the New Economic Policy that has been the racist/ populist strategy to try to win over the Bumiputeras and to enrich the well-placed Bumiputeras.

Powerful capitalist interests control our resources and markets and thrive on the cheap labour of Malaysian workers and migrant labour even in the states run by Pakatan Rakyat. The price has been paid by workers and the poor whose living standards continue to be pushed downwards.

If voting changed anything, they’d have made it illegal’

This resistance to neo-liberal capitalism can only be led by a Third Force that tries to empower oppressed people in the process of democratic participation. Popular democratic participation is not just in economic but also political institutions. Real democracy will never be attained merely through periodic general elections and relying on parliament alone. As Emma Goldman put it, “If voting changed anything, they’d have made it illegal!”

Peoples’ power comes about through direct action, based on the self-organisation of workers and other communities in their struggle against capital, with directly elected workplace and community councils taking responsibility for their own affairs and linked to decisions for society at large. The idea is to create an entirely new form of politics centered on direct popular power. When working class people are organized, they can start to believe in their capacity to change the world.

This is the task before us. Can you see any alternative?

Kua Kia Soong is the advisor of SUARAM (Suara Rakyat Malaysia).


Through The Looking Glass – Into The World Of Najib Razak COMMENT

May 1, 2016

Through The Looking Glass – Into The World Of Najib Razak COMMENT by The Sarawak Report

'Seditious' cartoonist Zunar gives his take on the Sarawak scene

The present election abuses in Sarawak, spearheaded by Najib Razak, present a truly appalling spectacle.Blatant and jaw-dropping bribery, bullying and law-breaking by the ruling BN party have reached unprecedented levels, even for Malaysia, as every day reports of new excesses continue to shock.

But the desperate Prime Minister plainly does not care.  He has personally taken charge of the whole charade, touring around the state handing out money “from BN” to everyone he wants to bribe.

The Chief Crook and Associates in Laughter–Rakyat Bodoh da!

Meanwhile, opposition leaders and activists are being openly barred from the state or told by the score that they have to leave in advance of the election, so that they cannot be present to assist in monitoring the count. So much for Adenan reforming the bad old ways of Taib Mahmud.

Postal votes from thousands of absent West Malaysian soldiers are being utilised to flood constituencies they are not from;  the practice of refusing to issue ID cards to opposition communities persists and of course the gerrymandering alone means that the opposition would have to win over 70% of all votes to even gain a simple majority of seats.

Browbeaten and exhausted opposition folk, who have no money, compared to resources of hundreds of millions of ringgit, fleets of helicopters and all the apparatus of the state in the hands of BN, can only stand by and protest.

Public money from 1MDB is being thrown at Sarawak

RM2 million for St Jude’s Church in Bunan Gega - even more for mosques

Najib and Adenan are clearly perfectly willing to use money that has been stolen from the state, through 1MDB and timber cronies, to lavish on communities, who know that they only see this manna from heaven when elections come around.

Gifts of a couple of million ringgit to a church here, cheques of thousands of ringgit to schools there, crackly notes for every voter….The fact that these gifts are peanuts, compared to what BN’s politicians have looted from the people of Sarawak, in terms of their natural resources and land rights, is something they have taken care to hide. During their decades of cynical exploitation this ruling clique have sneered that Sarawakians are “blind” to the wealth of their own state.

The shocking and blatant examples are numerous - here from one of our own comments

To observers from the outside world it is all, therefore, a total shocker: a sham election if there ever was one.

And another instance from our comment column

Najib no longer cares about appearances

However, Najib has plainly ceased to care about appearances, if he ever did.  In his looking glass world it simply doesn’t matter that he is blatantly indulging in such outrageous abuses and illegalities, because he will make sure his client Malaysian media reports a completely different story for his domestic audience.

Those who don’t comply are already being harassed and threatened by Najib’s stack of new laws designed to ‘protect a democratically elected government’ from ‘seditious forces’ etc etc.

Adenan bought in

The Institute of Journalists has protested at this persecution of their members, trying to report the truth, but Najib, supported by Adenan, has shown no hesitation in abusing his authority over the Election Commission, the police, the civil service and even the once independent judiciary to ignore all such complaints.

Thus he determines to bludgeon a “great victory” in Sarawak.  If in the end this also demands a further bit of cheating at the ballot box, so what?  The opposition can always be banned from the count or their officials bought over by huge bribes, the logic goes. It’s all happened before.

Najib will then announce through the looking glass world of his Malaysian media that the glorious result has entirely vindicated his position – in a nutshell, that he has been “cleared” by the electorate. “Foreign” critics and domestic “subversives” will be told to take a hike.

The fact that the world knows that the money Najib has been lavishing in Sarawak was stolen from the public purse will be ignored – the anonymous ‘Saudi Royal donor’ can always be said to have returned back what was previously allegedly returned to him – who cares?  The Prime Minister will present himself as an all Malaysian hero and the whole of the domestic media will be forced to report the matter in this fashion – or else risk jail.

Maybe this ‘victory’ will present him with his widely mooted opportunity to slam his own former party leader, the 90 year old Dr Mahathir behind bars, for having dared point out his grand theft from 1MDB?

Looking Forward to being in Jail with Bro Anwar Ibrahim

The opposition leader, Anwar Ibrahim, has already been trapped in jail for over a year, for the sin of being far too effective an opponent for Mr Najib …. another outrageous advantage granted to BN over the leaderless PR coalition in Sarawak.

To Najib’s way of thinking it simply doesn’t matter if the world knows the truth, even most Malaysians, because as long as he can mobilise huge sums of cash then he can control the party leaders in charge of UMNO and control the electoral charade he calls democracy.

The reality is different

However, in the real world on the other side of the looking glass from Malaysia, an entirely separate scenario is starting to unfold, which Najib Razak appears determined to ignore, in a triumph of wishful thinking over stark reality.

Najib and those around him have lost their judgement if they think Malaysia can defy the rest of the world economy, along with the global regulators and enforcers of law and order, simply to save the position of one man, who has been caught stealing vast sums from his own country.

Yet whilst he has cavorted around Sarawak the past few days, handing out cash, the Prime Minister cum Finance Minister has failed to issue one word about the fact that the instrument of this theft, 1MDB, has now gone into default.  A US$6 billion cross default looms large and he stays silent.

Add to that the demand yesterday from Bank Negara that 1MDB further repay the US$1.8 billion it deceptively ‘invested’ into PetroSaudi.And to that the blood-curdlingly deadly investigations that are daily progressing in Singapore against the managers of BSI Bank, who processed the cash stolen through Good Star by Jho Low along with other key accounts for 1MDB, SRC and Aabar Investments PJS Limited.

Not only has the Singapore Commercial Affairs Department described this BSI investigation as the most complex cross-border money-laundering exercise they have ever undertaken, they have also highlighted the “staggering amounts of money” involved.

The rest of the world, Luxembourg, Abu Dhabi, Switzerland, the United States and a growing list of other investigating jurisdictions are all shocked too – and they clearly mean business given the actions and statements of recent weeks.  Now the wheels are in motion does Najib seriously think he can stop this process in a wider world, where he has no powers whatsoever?

This is money that was taken out of 1MDB and then laundered through a network of companies managed by Jho Low and later his accomplices from Aabar.  A great deal of this money went to Najib and his step-son’s Hollywood production company.

The details are complex and need to be teased out, but sooner rather than later players are going to be prosecuted and the money trail revealed.Does Najib think he can escape the situation by continuing to say black is white in his looking glass bubble of Malaysia and handing out yet more of the stolen public cash to his client party fixers?

What happens when the global economy inevitably reacts to the revelation that Malaysia is being run by a master thief and criminal, whose bank accounts are frozen world-wide and whose pet fund is billions of dollars in the red? How will Malaysian business respond to a plunging ringgit, which this will inevitably trigger?  Suddenly, Najib’s cash will seem less helpful to his crony clients and business borrowers.

Malaysians will discover that their country has become an international scandal with a world record thief for a leader, taxes rocketing to bail him out and a plunging currency to boot.

So, although Najib thinks he can use all his concentrated powers to force black to be called white in the domestic media, the truth is that this Prime Minister has lost control. He can no longer steer events, even though he tells himself he can….. because the alternative is something he fears to contemplate.

Apathy an attractive option

May 1, 2016

Apathy an attractive option

by Dean Johns

Dean: There is now every reason to stay engaged–for reasons greater than yourself. Apathy  means Surrender to the Darth Vader Types. Be a Master Yoda. –Din Merican in Cambodia

Some weeks, I have to confess, I totally lost my customary enthusiasm for criticising the power-freaks, incompetents, criminals and outright crazies who make life as miserable as possible for the majority of mankind by posing as political leaders.

And this past week I’ve been especially tempted to give up expressing my antipathy to these bleeders and misleaders, as for a couple of days my attention was diverted from the deadly state of politics by dire personal news.

My doctor doubtless had the best of intentions when she referred me for a chest X-ray. Whether this was a ploy on her part to panic me into stopping smoking after her all her attempts at persuasion had failed, or whether she genuinely suspected that 52 years of the filthy habit had finally given me lung cancer, I’m not sure.

In any event I got a call from her the moment she got the X-ray results, urgently requesting to see me the next day. So naturally I presumed the worst, and forgot politics in favour of frantically trying to figure-out what to do with what presumably precious little remained of my life.

Of course, as you can tell already by the fact that I’m back on deck here at Malaysiakini, the whole thing proved a false alarm.But the experience has proven salutary in some ways, one of which is to give me at least a shred of sympathy for those people I’m forever criticising for their pathetic political apathy.

Only the barest shred of sympathy, however, as it strikes me that the prospect of imminent death is a far better reason for no longer caring about political oppression than the petty self-absorption that appears to motivate most political apathetics.

But then, of course, as I mentioned up front in this column, there is the fact that the sheer quantity of political bad news, not to mention all the lying and spin by the crooks who cause it all, can be absolutely overwhelming of even the least apathetic among us.

To confine ourselves just to Malaysia for a start, it is absolutely paralysing to be continuously confronted by an endless string of political atrocities, currently ranging from the 1MDB fraud to the theft of yet another election, this time in Sarawak, and everything in between, including the retailing of guns and ammunition by a company co-owned by a daughter of the inspector-general of police, and a scheme involving the brother of the deputy prime minister to profit from the import of 1.5 million workers from Bangladesh.

What’s the Difference–Two sides of the same coin in Sarawak

And outside of Malaysia, much of the news is equally bad, if not worse. I can’t decide what’s the most extreme political turn-off in the world right now, but is surely has to be either the continuing destruction of Syria resulting from the al-Assad regime’s UMNO BN-style determination to cling to power, or the endless domination of the North Korean people by the deranged Kim dynasty.

The word ‘deranged’ inevitably takes us to other many other parts of the globe, too. To the Middle East and Africa, for example, where it is utterly impossible to overstate the ravages inflicted on people by Islamic State, al-Qaeda, the Taliban, Boko Haram and sundry other religio-political bands of homicidal maniacs.

By no means exempt from political idiocy

And the so-called ‘free’ world is by no means exempt from political idiocy, as evidenced by the determination by Donald Trump to ‘make America great again’ in even more idiotic ways than even previous Republican presidents like Nixon, Reagan, Bush Senior and Bush Junior have attempted to do it.

While in South-East Asia, the ever-ridiculously corrupt, inept and criminal UMNO BN regime seems about to get a run for its money from the Philippines, whose front-running candidate for the presidency, Rodrigo Duterte, is evidently addicted to making jokes about such deadly-serious issues as rape, and is also alleged to have operated death squads during his term as mayor of Davao.

As for the situation in Australia, words almost fail me. Admittedly it is still a pleasant country to live in for many if not most of us, thanks largely to the proper separation of powers between the government and other institutions, and general adherence to and respect for the rule of law.

But both sides of politics here apparently have a blind-spot for international refugee law, as thousands of asylum-seekers have been incarcerated in so-called ‘detention centres’ or in other words concentration camps for years.

So ridiculously and disgracefully determined have the major political parties been to deny these unfortunate human beings the chance of a new life in Australia that Cambodia, of all countries, was paid A$40 million to accept some of them.

A total of just five refugees have agreed to be resettled in Cambodia, and three of these have since left for their original homelands.In light of such outrageous waste, on top of the sheer inhumanity of it all, I can’t imagine how I could bring myself to vote for either the current Liberal-National Coalition federal government or the major alternative, Labor, so I guess I’ll have to go for the Greens.

Which of course brings me to the thought that at least I have an acceptable option to fall back on. Unlike the people of Sarawak, who are about to face a choice between an opposition composed of the hopelessly-conflicted PKR and DAP, not to mention the impossible PAS, and a long-ruling clique that has ruthlessly robbed the state of its timber resources and thus deprived the populace of its due social and economic progress.

Faced with such a stark choice between a pathetic opposition and a perennially parasitical and outright predatory UMNO BN-backed incumbent government, it’s hardly any wonder that even the most otherwise enthusiastic of voters might see apathy as their most attractive, indeed only option.

DEAN JOHNS, after many years in Asia, currently lives with his Malaysian-born wife and daughter in Sydney, where he coaches and mentors writers and authors and practises as a writing therapist. Published books of his columns for Malaysiakini include ‘Mad about Malaysia’, ‘Even Madder about Malaysia’, ‘Missing Malaysia’, ‘1Malaysia.con’ and ‘Malaysia Mania’.

A New Man at the helm of Bank Negara Malaysia

April 27, 2016

A New Man at the helm of Bank Negara Malaysia

by John Berthelsen

With Malaysia in danger of defaulting on billions of debt obligations and the ringgit looking shaky, Prime Minister Najib Razak has moved to shore up confidence by appointing a professional to the leadership of the country’s central bank.

The appointment to a five-year term of Muhammad Ibrahim, the bank’s serving Deputy Governor, as the new Bank Negara Governor to replace the respected long-serving chief, Zeti Akhtar Aziz, had a positive effect on both the currency and the stock markets, at least in the short term.

Muhammad will take over on May 1 when Zeti’s term ends. Since early March, speculation had centered on Irwan Serigar Abdullah, the Secretary-General of the Ministry of Finance and others. Sirigar was considered close to Najib and critics expressed concern that his appointment would be tantamount to handing control of the now-independent institution to the Prime Minister.

The appointment comes at a time when Najib is in the fight of his life over a gigantic long-running scandal involving the state-backed 1Malaysia Development Bhd that culminated this week with a missed payment of US$50.3 million on bonded debt obligations of more than US$6.481 billion to units of the Gulf emirate including US$1.75 billion guaranteed by International Petroleum Investment Corporation (IPIC) of Abu Dhabi.

IPIC, believing the money was stolen, is refusing to cover the US$50.3 million payment. A cross default triggered by the affair is said to potentially pose a serious threat to Malaysia’s investment-grade ratings, with traders and lawyers scrambling to work out the implications.

One of the targets of bondholder ire is likely to be Goldman Sachs, the US-based investment bank, which engineered a US$6.5 billion bond sale to fund 1MDB acquisitions that netted it a commission of 7.69 percent, netting Goldman fees which are believed to have totaled US$500 million. Goldman recalled its Southeast Asia chief, Tim Leissner, several months ago. Leissner, now in Los Angeles, was subpoenaed by US officials in March.

A longtime western observer in Kuala Lumpur called the situation a “game of chicken” with Abu Dhabi officials and one that Malaysia is likely to lose. Given the fact that at least US$3.5 billion in payments appears to have been diverted into a fraudulent account in the British Virgin Islands, it appears likely that Malaysia is going to have to pick up all of the outstanding obligations.

“The Arabs are not going to back off,” said a businessman with close ties to the leadership. “We are going to have to resign ourselves to the fact that we will eventually have to bail 1MDB out. The money is going to have to come from the government of Malaysia.”

Malaysia's Prime Minister Najib Razak inspects the United Malays National Organisation (UMNO) youth during the annual assembly in Kuala Lumpur

As often happens in such cases, the debt may well be discounted, with bondholders eventually collecting less than the full value on the bonds. The key is whether the bondholders demand immediate payment, which appears unlikely. If they did, it would trigger a major financial crisis in the country. It is more likely that they will renegotiate. They may well be asked to take a haircut, which could trigger lawsuits.

Despite assurances by 1MDB officials that the debt is manageable and covered by assets, bondholders are growing increasingly concerned about a default. Tony Pua, the opposition Democratic Action Party and others have estimated the unfunded liability at RM25 billion to RM30 billion (US$6.3-7.6 billion). The assets, including a former air base at the fringes of Kuala Lumpur’s downtown, have been repeatedly upgraded in value to cover the debt but most believe the real market price is far below its assessment.

Najib was at loggerheads for months with Zeti, the former Governor and one of the world’s most respected central bankers, over her insistence that financial irregularities revolving around both 1MDB and deposits in Najib’s own private account be investigated. In October, amid rumors that Najib was attempting to drive Zeti out of the bank, the central bank issued a statement saying it had requested a criminal investigation into 1MDB’s affairs despite the fact that Najib’s hand-picked Attorney General Mohamed Apandi Ali, to whom it had forwarded the case, said there was no reason for prosecution.

 “As an investigative authority, the bank is duty bound to conduct its investigations with the highest professional care and diligence,” according to October statement. “The bank at all times expects full and accurate disclosure of information by applicants in considering any application under the ECA. On its part, the bank concluded that permissions required under the ECA for 1MDB’s investments abroad were obtained based on inaccurate or without complete disclosure of material information relevant to the Bank’s assessment of 1MDB’s applications.”

In an effort to forestall the domestic probe requested by Zeti and other investigations, Najib has fired his deputy prime minister, the attorney general and the head of the police special branch investigative unit and stalled or terminated investigations by the Malaysian Anti-Crime Commission, the central bank and a special parliamentary committee.

Bank Negara, however, responded with a statement contradicting the attorney general’s office and saying 1MDB had secured permits for investment abroad based on inaccurate or incomplete disclosure of information, breaching banking regulations, and added that it had revoked three permits granted to 1MDB for investments abroad totaling US$1.83 billion (RM7.53 billion) and ordered the state fund to repatriate the funds to Malaysia.

Muhammad Ibrahim joined Bank Negara in 1984, working in a variety of positions before he was named Deputy Governor in 2010. He is also a member of the bank’s Monetary Policy Committee and Financial Stability Committee. He was the Chairman of Irving Fisher Committee of the Bank for International Settlements (BIS).

“I am confident that under Muhammad’s leadership, Bank Negara Malaysia can continue its service in helping the government, providing advice and views for catalyzing the country’s economic growth, as well as administer monetary policy and overseeing the country’s financial industry, including continuing Bank Negara Malaysia’s efforts to grow the financial industry,” Najib said in a prepared statement.


What The Country, Especially The Malay Must Decide And Do

April 24, 2016


What The Country, Especially The Malay Must Decide And Do – By Matthias Chang