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

I am Sarawakian. I am a Paloi (Fool)?


October 15, 2017

I am Sarawakian. I am a Paloi (Fool)?

by Francis Paul Siah

http://www.malaysiakini.com

Image result for Francis Paul Siah of Sarawak

 

COMMENT | “Orang Sarawak bukan bodoh, kata ketua menterinya” (The people of Sarawak are not fools, says Sarawak Chief Minister) was the header in many Bahasa Malaysia newspapers and news portals a week ago.

This proud and oft-repeated remark came from Chief Minister Abang Johari Abang Openg at a town hall session with some 5,000 Sarawakian diasporas in the Peninsula, as he took a swipe at former Prime Minister Dr Mahathir Mohamad who is now chairperson of the opposition Pakatan Harapan.

Oh really, Sarawakians are not fools? Well, maybe not most of the time. But I will be honest. As a Sarawakian, I have to admit, almost grudgingly, that I have been a fool at times – made some stupid decisions not beneficial to my home state and fellow Sarawakians and am now living in remorse and regret over them.

 

Of course, for Abang Jo (photo), who is in power and feeling on top of the world as the state’s chief executive, it would be pretty dumb of him to say that Sarawakians, the people whom he is supposed to lead, are fools.

Abang Jo is such a nice and decent guy, to the extent that many find him boringly nice. He does not beat around the bush and tells you as it is – you already know what his next sentence is even before he says it. In a nutshell – he is very plain. (Think nasi lemak, without the ikan bilis and sambal).

Sarawakians miss Adenan Satem. I do too. He was a breath of fresh air, after 33 years of the “White Hair”. Sadly, he came on board to helm Sarawak too late in his life and didn’t have the time to do more.

So, what did Abang Jo actually say when he met Sarawakians in Kuala Lumpur recently? According to a Malaysiakini report, the Chief Minister reminded Mahathir that Sarawakians are not fools who can be lied to.

He cited the Pan Borneo Highway as one example of Prime Minister Najib Abdul Razak’s contributions to the state, a request which has been made since the time of Mahathir’s 22-year rule.

“Sarawakians are people with principles… We want politics that can deliver,” said Abang Johari, who claimed that Mahathir has since sacrificed his own principles by working together with DAP stalwart Lim Kit Siang, whom he had demonised in the past.

“Let us determine our own destiny. Orang Sarawak bukan paloi (Sarawakians are no fools)… Don’t bluff us,” he said in pledging to continue negotiations with Putrajaya to reclaim Sarawak’s rights as provided under the Federal Constitution and Malaysia Agreement 1963.

Abang Johari earlier recalled his time serving as a state minister and difficulties to obtain funds for development, while Mahathir was still Prime Minister.

“At the time I was a minister in the (state) cabinet. We had asked if the (federal government under Mahathir) can build coastal roads,” he said, adding that the promises made were never fulfilled due to alleged short of funds.

“But when Najib came (into power), they (promised to) build roads like in the peninsula… So smooth!,” he said at the annual event dubbed Lan Berambeh Anak Sarawak, now in its 10th year, held at the Putra World Trade Centre in Kuala Lumpur.

 

The 2,325km Pan Borneo Highway, across Sarawak and Sabah, was first announced as part of Barisan Nasional’s manifesto during the 13th general election and later formalised in Budget 2015.

When met by reporters later, Abang Johari described the questions asked during the one-hour session as an indication that Sarawakians in the Peninsula are happy with his administration of the state.

Among others, he cited questions raised on various state policies, including matters which touch on negotiations with Putrajaya for more rights to royalty from oil and gas activities.

‘Putrajaya leadership today is more open’

“During Mahathir’s time, we can’t ask these questions because we are in fear. Alhamdulillah the leadership in Putrajaya today is more open (to negotiations),” he added.

To Abang Jo, I salute you for your new-found courage in coming out to slam Mahathir now. I am with you on your many statements of disappointment and disillusionment with the Mahathir (photo) administration. I believe they are true.

Image result for dr mahathir mohamad

 

But I must also let you know why, as a Sarawakian, I am bodoh and still feel like a fool.

This is why. In 1963, when Sarawak was enticed to team up with Malaya, Sabah and Singapore to form the new nation of Malaysia, I just signed the agreement without really understanding its fine print.

I was just impressed when Tunku Abdul Rahman Putra brought me to Kuala Lumpur and showed me the development taking place. He promised me that Sarawak would progress in a similar fashion if I sign up.

Then some British fellows brought me to London in a big plane. Wow, that was the first time I had flown to a foreign land. I felt very important sitting down with the “Orang Puteh” to discuss the Malaysia Agreement 1963 (MA63). Then, I sat at the high table (a British tradition for VIPs) and tucked in heartily at the many sumptuous dinners, not forgetting the fine whisky and brandy, offered.

Upon my return, I affixed my signature on the MA63, never bothered to think nor understand why my fellow Sarawakians, Ong Kee Hui, Stephen Yong and others from the Sarawak United People’s Party (SUPP), were opposed to it.

 

 

Now 54 years later and with the growing voices of discontent among my fellow Sarawakians towards Malaya, with some even calling for secession, my conscience suddenly pricks me. Did I betray my dear homeland, Sarawak, and my people by signing the MA63 without fully understanding its implications?

I think I have to concede that it was foolish of me to sign MA63 blindly. I was bodoh.

If not, why must Abang Jo pledge to continue negotiations with Putrajaya to reclaim Sarawak’s rights as provided under the Federal Constitution and MA63?

About the Pan Borneo Highway, I am happy that, at long last, my home state will have a superhighway. I am happy too that the Barisan Nasional, under the dynamic and caring PM Najib Abdul Razak, now sees it fit to keep his pledge made during the 2013 general election.

Questions on Pan Borneo Highway

But I am also bodoh because I am afraid to ask pertinent questions surrounding the multi-billion ringgit Pan Borneo Highway project.

 

The first question I didn’t ask and, which I should is: “Why was Fadillah Yusof (photo), a relatively unknown leader of Abang Jo’s Parti Pesaka Bumiputra Bersatu (PBB) suddenly appointed to head the senior Works Ministry in the federal cabinet in 2013?”

Fadillah is only the PBB Youth leader. Never has a junior person like a PBB Youth leader ever been entrusted with a senior federal ministry. Hey, the Works Ministry was helmed by none other than the MIC supremo S Samy Vellu for years.

Even the UMNO Youth leader and chairperson of BN Youth, Khairy Jamaluddin, was only given the junior Youth and Sports Ministry. And the MCA Youth leader, Chong Sin Woon, was only appointed as a deputy education minister. Isn’t MCA the second biggest BN partner?

The next question I have not asked is: “Was Fadillah appointed as the works minister just because his brother, Bustari Yusof, is the head honcho of the Pan Borneo Highway project? And Bustari was recently described in the media as the “No 1 go-to person in the Najib administration” and “the man who quietly guides Najib’s hand”.

Oh, I am bodoh. I fail to see the link. So I kept quiet, even now.

Now, what about Abang Jo’s allegation that Mahathir has since sacrificed his own principles by working together with DAP stalwart Lim Kit Siang (photo), whom he had demonised in the past?

Oh, that Chinese chauvinist Kit Siang! He is a racist to the core! He has even received RM1 billion from Mahathir because Mahathir wants to be chairman of Pakatan Harapan. And Kit Siang also wants to be the next Prime minister of Malaysia. Yes, let’s have a good chuckle over those allegations against the DAP veteran.

But if Kit Siang is a Chinese chauvinist and a racist, I didn’t speak up against him when DAP started its foray into Sarawak in 1979. I was bodoh then.

It is now an open secret that the then Sarawak Chief Minister Abdul Rahman Yakub was the one who wanted DAP in Sarawak to compete with the Chinese-based SUPP. Rahman was having problems with SUPP, its Secretary-General Stephen Yong in particular. Rahman was a shrewd politician and a master tactician. He wanted DAP to neutralise Chinese support for SUPP.

Even though I knew it was not right to back-stab a component party member, I was afraid to speak up against Rahman because he was a powerful chief minister and he usually gets what he wants.

Now, I know I was bodoh because I didn’t have the guts to put things right even though I knew it was wrong.

Today, DAP is the strongest opposition party in Sarawak. Serve me right!

Abang Jo also stated that with Najib at the helm in Putrajaya now, he would be negotiating for more rights to royalty from oil and gas activities for Sarawak.

“During Mahathir’s time, we can’t ask these questions because we are in fear”, the chief minister said.

My interpretation is this: I lived in fear of Mahathir in the past. Now with Najib, I am not afraid anymore.

You see, I was so bodoh. Even though I am in BN, I fear Mahathir and I didn’t dare to tick him off even when he did not fulfil his promises to Sarawak, for whatever reasons.

But with Najib now, I dare to do so. Come to think of it, I am still bodoh. Why must I kow-tow to Najib? Right now, he needs Sarawak more than Sarawak needs him. He is fighting for his political survival.

If I still have to beg Najib for development projects for Sarawak, I am a fool. Things are not going right for Najib. He is a desperate man. Now is the time to demand, not beg. If we, Sarawakians, do not know how to take advantage of the situation now, then let us forever be condemned as Sarawakians who are bodoh.

 

Or, in Abang Jo’s own word – “paloi


FRANCIS PAUL SIAH heads the Movement for Change, Sarawak (MoCS) and can be reached at sirsiah@gmail.com

International reaction to lambast Daw Aung San Suu Kyi and Myanmar is unhelpful


October 13, 2017

International reaction to lambast Daw Aung San Suu Kyi and Myanmar is unhelpful

by Kang Siew Keng

http://www.rsis.edu.sg/rsis-publication/rsis/co17183-after-shaming-aung-san-suu-kyi-then-what/#.WeBukTBRPIW

Image result for daw aung san suu kyi

ASEAN should consider coordinating action to help Daw Aung San Suu Kyi and Myanmar overcome the complex problem.–Kang Siew Keng

Synopsis

While the UN has described the latest atrocities in Myanmar on the Rohingya minority as textbook ethnic cleansing, the international reaction of shaming Aung San Suu Kyi for the Rohingya crisis is unhelpful to all parties. ASEAN should consider coordinating action to help Myanmar overcome the complex problem.

IN 1991, the international community honoured Ms. Aung San Suu Kyi with the Nobel Peace Prize while she was under house arrest. In 2015, her party, the National League for Democracy (NLD), won power on a popular electoral mandate. Then, practically overnight, Ms Suu Kyi went from democracy icon to international pariah.

On 4 October 2017, the City of Oxford, where she studied as an undergraduate, decided to withdraw an honorary title it bestowed on her in 1997. This growing disillusionment comes from the sense that Ms Suu Kyi has been too silent too long on the Rohingya issue and not virulent enough when she finally spoke.

Competing Narratives

The scale of the humanitarian disaster is disturbing and haunting. The United Nations High Commissioner for Human Rights has condemned the outbreak of violence in Myanmar that triggered the latest outflow of Rohingya refugees into Bangladesh as “textbook example of ethnic cleansing”. Human rights advocates, however, seem to be engaged in a campaign to disparage Ms Suu Kyi and Myanmar.

Image result for desmond tutu quotes if you are neutral

The New Yorker named her “the ignoble laureate”; Amnesty International accused her of “untruths.and victim blaming”. No less an icon than Desmond Tutu reportedly wrote her that “If the political price of your ascension to the highest office in Myanmar is your silence, the price is surely too steep”.

Yet, against the backdrop of media images of what is an ongoing, overnight, crisis, the international community cannot summarily dismiss Ms Suu Kyi’s counter-narrative of an “iceberg of misinformation” or the wider dispute about ground realities.

One story that has emerged in Myanmar social media is that the attacks on the military posts on 25 August 2017 by the Arakan Rohingya Salvation Army (ARSA) was timed to provoke precisely the kind of harshest possible response from the Tatmadaw military; the attacks came on the day before the release of the Report by Advisory Commission of Rakhine State.

According to this narrative, they were calculated to doom any prospects in the effort, commissioned by Ms Suu Kyi, to map “a peaceful, fair and prosperous future for the people of Rakhine”. For sure, no deemed past wrongs in history can justify present-day violence, but no present-day policy can bring about reconciliation until the old animosities have been addressed.

Complex and Complicated

The Rakhine situation is too complex for megaphone moral outrage. It is a particularly instructive example of bad communal dynamics, rooted in British colonial divide-and-rule strategy, reinforced by generations of politics and complicated by continuing poverty and economic deprivation that affect both the Rohingya and ethnic Rakhine.

It is easy to forget that Ms Suu Kyi’s NLD was elected to power in 2015 amid a growing tide of nationalism and communal mistrust. Ironically democracy unleashed deep-seated grievances that were more restrained by the iron hand of military rule.

Many of Ms Suu Kyi’s electoral base regard the Rohingya as a late political construct, that many of them were transient migrants on a porous and troublesome border, and were now being used to legitimise old claims for greater autonomy and independence. Significantly, in Rakhine State, the NLD did not perform as well as it largely did in the rest of the country.

Impact of Public Shaming

Image result for ultra-nationalist buddhists

ASEAN must acknowledge that the Rohingya is no longer just a domestic problem, but has important implications for regional peace and stability. Left alone, the Rohingya will continue to be a festering wound and destabilise the entire operating environment and regional order in ASEAN.

The international reaction to lambast Ms Suu Kyi and Myanmar is unhelpful to all parties. First, what passes for international moral outrage makes the Myanmar angrily defensive. It serves only to dull the voices of those in Myanmar that are against demonisation of a minority. Instead, it feeds the ultra-nationalist rhetoric that a democratic Myanmar faces an existentialist crisis, which Ms Suu Kyi and her party are ill-disposed to address.

Second, the end of decades of isolation and sanctions has fanned expectations of the economic boom promised by democratic rule. But there are now signs that Myanmar’s economic growth has slowed. Reform has also been slow, not least because Ms Suu Kyi was trying to do too much in too little time. If international opprobrium ends in politically-motivated moves like re-sanctions, it could derail the already very late catch-up in a country that remains one of the poorest in ASEAN.

Third, Ms Suu Kyi has the unenviable task of leading with one hand tied, not possessing all the levers of power, as even her worst critics know. Ultimately her democratically-elected government must find a modus operandi with the military leaders. She needs all the help she can get, inside or outside Myanmar.

Administering a country faced with a multitude of challenges while bringing about national reconciliation is statecraft. It requires political savviness and immense energy for protracted negotiations in a country with a history of communal uprisings that involve not only the Rohingya.

A Role for ASEAN

ASEAN finally issued a predictably anodyne Chair statement on the Rakhine situation following an ASEAN Foreign Ministers meeting on the sidelines of the UN General Assembly in New York. Not unexpectedly, Malaysia disassociated itself from the statement. Kuala Lumpur, in early 2017, had hosted a special session of the Organisation of Islamic Cooperation (OIC) that issued a strong rebuke to the Myanmar government. Malaysia is, after all, host to nearly 60,000 UN-registered Rohingya refugees.

Yet, ASEAN must acknowledge that the Rohingya is no longer just a domestic problem, but has important implications for regional peace and stability. Left alone, the Rohingya will continue to be a festering wound and destabilise the entire operating environment and regional order in ASEAN.

ASEAN’s dialogue partner, India, is already threatening to deport its Rohingya refugees on the grounds of growing security concerns. Even if one doubts the hand of terrorist elements using the Rohingya as shield, the chaos and scale of humanitarian disaster is fertile ground for radicalisation and recruitment, which is something all ASEAN countries must be concerned about.

Time for Coordinated Action

It is time for ASEAN to consider a coordinated course of action, and perhaps work with vested dialogue partners like China and India, which can also engage Bangladesh. Myanmar needs a regional solution. ASEAN would do well to engage in the kind of quiet diplomacy it is best equipped to do, across the spectrum of relations, including military diplomacy.

The Myanmar who only see the Rohingya as a political construct must eventually get past the prison of history, be persuaded to put behind real and perceived historical injustices, and acknowledge the ground realities of generations of people who call Myanmar home.

Yet this conversation cannot happen with the world heaping such derision on, and threats of new economic sanctions against, Myanmar and its popularly elected leader. ASEAN can work to counter the potential international isolation of Myanmar that helps neither Myanmar nor the Rohingya.

About the Author

Kang Siew Kheng is Senior Fellow with the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. She was formerly Singapore’s Ambassador to Laos.

 

Why Malaysia needs credible international election observers?


October 7, 2017

Why Malaysia needs credible international election observers?

by Geraldine Tong and Andrew Ong

INTERVIEW | For many developing countries, inviting credible international groups to scrutinise their elections is a norm because it encourages transparency and lends legitimacy to the electoral process.

Notable international monitoring groups which operate in Asia include the European Parliament, the National Democratic Institute and the Asian Network for Free and Fair Elections (Anfrel).

Such groups would normally publish their list of observers, address the press, engage stakeholders and publish a final report which would include their assessment and recommendations. The objective will normally entail examining if the elections process was up to international standards, and if not, how things could be improved.

Unlike most countries in the ASEAN region, Malaysia has never had any such bodies monitoring its elections. The closest the Election Commission (EC) has come was to invite 18 individuals from the region for a monitoring mission during the General Elections in 2013.

The group comprised  six individuals each from Indonesia and Thailand, two each from Myanmar and Cambodia, and the ASEAN Secretariat. However, they had no access to the media and their recommendations were never made public.

Scratching each other’s backs

For Anfrel chairperson Damaso Magbual, a respected veteran polls observer, the observation mission in 2013 was less about ensuring electoral integrity but more on lending each other legitimacy.

“The Malaysian EC invited commissioners from other ASEAN countries. Among others, they invited people from Cambodia and Myanmar.The problem here is this: When Myanmar held their elections in 2010, they also invited people from Malaysia and Cambodia. They are scratching each other’s back. They will say each other’s elections is free and fair, in line with international norms,” said Magbual during a recent interview in Kuala Lumpur.

 

This lack of transparency and accountability is a missed opportunity for the Malaysian elections commission to shore up its credibility, he stressed, echoing what election reform group Bersih has been urging the EC on since its inception.

Magbual, who has observed at least 30 elections across the globe including conflict zones such as Afghanistan, believes that international election observation missions, when done correctly, can greatly benefit the host country. For instance, it would encourage those running the elections to undertake efforts to ensure the election process is credible, which in turn helps to reduce complaints by those who lose an election, he explained.

Election observation missions can also help instill public trust in the electoral process, which is important in restive regions.

Transparency is key

Magbual said that election monitoring missions which he has been involved in would undertake efforts to ensure its own transparency by inviting scrutiny from stakeholders. This, in turn, would instill public trust in the electoral process.

He recalled how a parallel count by the Philippines National Citizens’ Movement for Free Elections (Namfrel) had led to the downfall of dictator Ferdinand Marcos during the 1986 Presidential Elections.

The parallel count mechanism gained public acceptance after Namfrel had allowed the election commission and other stakeholders to test it out a few days before polling.

“So three days before the elections, the parties and the election commission were asked to try the system… So they had confidence in it.So in that election, the public believed our count and not the election commission’s. The election commission proclaimed Ferdinand Marcos the winner while our count said Cory (Corazon Aquino) was the winner. So people celebrated on the streets and this led to the downfall of Marcos,” said Magbual.

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Any prediction that indicates Najib Razak will lose GE-14 is grossly exaggerated.  Why must he hold elections if he knows that he will lose? Something does not compute here. He will let Jamal Ikan Bakar and his Red Shirts loose and allow Special Branch agent provocateurs to create havoc and then declare emergency rule. Alternatively, there will be massive vote rigging under the ever watchful eye of our now infamous Elections Commission–Din Merican

If a credible international election observation mission were to be held in Malaysia, one of the most obvious problems of Malaysian elections to be talked about would likely be malapportionment.

Magbual (photo) believed that presently, Malaysia has the worst case of malapportionment – a situation where one constituency has significantly more voters than another – in the whole of Asia.

Recall that Article 166 (4) of the Federal Constitution once stated that the difference between each constituency should not be more than 15 percent, according to state averages.

Following a constitutional amendment in 1962, this was adjusted to effectively change the quantifiable cap of deviation from the national average to one-third. Again, the relevant constitutional stipulations were removed altogether in 1973.

In comparison, Magbual said that countries such as Myanmar, Cambodia and the Philippines maintain and respect mathematical integrity when drawing their electoral borders.

“Suffrage means one person, one vote, equal value,” he said. “When you have 145,000 people voting in Kapar and 16,000 voters in Putrajaya, then you violate this principle.”

 

Last week, Election Commission chairperson Mohd Hashim Abdullah said Malaysia has no plans to invite international election observers. He said invitations will only be extended to the EC’s counterparts who have invited them to witness their elections in the past.

When asked if this would lead to a conflict of interest, Hashim replied: “No. This is how it should be.”

Malaysia: 2018 National Budget–Need for Greater Fiscal Discipline


October 5, 2017

Malaysia: 2018 National Budget–Need for Greater Fiscal Discipline

by T K Chua@www.freemalaysiatoday.com

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In a couple of weeks, the 2018 national budget will be revealed and a peek into the options and challenges awaiting us, is in order.

Beware of Off-Budget Agencies

FIRST, the budget is not what it used to be. Increasingly there are expenditures and commitments outside the purview of the budget but their impact may eventually impinge on government finance. These are off-budget agencies of which the revenues, expenditures and debts should be tabulated and presented as addendum to the budget.

Keep Budget Deficits under Control

SECOND, in all likelihood, the 2018 budget will be another year of deficits. This means there will be new borrowings or sales of government assets to finance the deficit. New borrowings mean more accumulated debts and more debt service charges going forward. When more is provided for debt service charges, less will be available for other operating expenditures.

THIRD, most government revenue has almost reached its limits unless income and expenditure continue to grow. In recent times, the government has been relentless in its enforcement efforts to extract the maximum from individuals and business establishments. Similarly, the implementation of the GST is in full swing. It is doubtful that the government will be able to cover more loopholes and tax leakages/avoidance cases or to increase further the GST rates at this stage.

If revenues are limited, the government will not be able to offer new expenditure programmes unless it incurs more borrowing and debt.

FOURTH, most expenditure programmes are “locked in”, stifling the government’s ability to look at the new impetus. The government’s commitments toward BR1M, civil service salaries and benefits, pensions, and debt service charges will continue to grow. This will leave little room for the budget to meet new challenges lurking in the horizon.

Watch the Expenditure Side of Things

FIFTH, the government has looked at the revenue side by introducing new taxes and by enforcing stricter compliance of existing taxes. However, this trend can’t go on forever. It is time to look at the expenditure side of things.

The annual audit report has given more than sufficient information on wastage, inefficiency and abuse of government allocations and expenditures. Sometimes corruption is due to allocations being too lavishly handed out. If government departments and agencies have too much money, the tendency is to be careless with the expenditures.

 

MALAYSIA ‘SCREWED UP’ BY WORST FINANCE MINISTER NAJIB – RESERVES THE LOWEST IN ASIA THAT MoF UNABLE TO PAY EVEN US$600 MILLION DEBT?

Who is the de facto Minister of Finance– Najib Razak or Handbag Rosmah Mansor? How did she spend the funds  allocated for her signature project Permata?

Stringent and optimal budget allocations do not have to affect output or service to the people, as was commonly claimed. We only need those responsible to work harder and be more careful with the money.

The National Budget is not a Mundane or routine exercise

I think it would be a big mistake if we continue to look at the budget formulation as a mundane or routine exercise. Some of the trends are obviously unsustainable. Even if we start to reverse or correct the trends now, it may take us many years to restore sustainability.

TK Chua is an FMT reader.

Increasing Islamisation will trigger mass hijrah


October 2, 2017

Increasing Islamisation will trigger mass hijrah

by Dr. M.Bakri Musa
Morgan-Hill, California

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This is what will remain in Malaysia with increasing Islamization

In his recent blog “Hijrah To London,” Datuk Zaid Ibrahim wrote on the Erasmus Forum lecture he attended celebrating Martin Luther. Zaid highlighted the exemplary humanist qualities of both great Christian leaders. He went on to make a short side comment urging young Malays to emigrate.

He had a torrent of responses, not on Erasmus or Luther, the focus of his essay, rather his side commentary, which was more an expression of his despair and frustration over the increasing role of Islamist extremists in Malaysia, as well as Malay (and thus Muslim) leaders’ egregious corruption and mind boggling incompetence.

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Zaid urged young Malays not to repeat his mistake in not undertaking Hijrah (emigrating).

For Muslims, following the seerah (the Prophet’s sayings and practices) is the highest expression of faith. Malay men already ape it with gusto in such areas as having long beards and multiple wives. So why not hijrah?

Zaid is no ordinary Malay, Malaysian, or mortal. After qualifying at a local MARA institution, he went on to London University to get an additional law degree. He later founded Malaysia’s largest law firm, and the first to have foreign branches. He is also an entrepreneur and philanthropist.

Zaid remains unique in that he is the only Malaysian Minister to have resigned on a matter of principle. To be historically meticulous, Dr. Ismail did too, but he was ailing and had contemplated retiring. More telling, Zaid’s reputation soared with his resignation. No minister or even prime minister could claim either point.

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PAS’Nik AbduhA Member of P.Ramlee’s Tiga Abdul (remamed Abduh)

Boundaries are meaningless in today’s globalized world. In practice however, that’s true for only two groups. First are the poor, destitute, and desperate. For them, survival comes ahead of visas and passports, or political boundaries, as Western Europe now discovers. Second are gems like Zaid. With their wealth, language fluency, entrepreneurial flair, and social graces, they are welcomed in London, Sydney, and New York, or even Dubai and Bahrain.

Most Malays, young or old, male or female, are not like Zaid. Most lack skills, could speak only the local kampung dialect, and have minimal entrepreneurial desires. The Rempits, both Mat and Minah, are more typical. No country would want them. Even Malaysia would be better off without them. At least the Minah Rempits could work abroad as maids, a la the Filipinos and Indonesians. The Mat Rempits are but a road menace.

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Mat and Minah Rempits–By-Product of Islamisation

After over sixty years of Malay rule, with the sultans, prime ministers and most ministers being Malays, and public institutions in Malay control, how come we produce a glut of Rempits and scant few of Zaids? If you leave things alone, simple momentum would dictate that the Zaids would grow in number, his sterling success inspiring others.

It would not be far wrong to suggest that it is not incompetence, stupidity, or even dereliction of duty by Malay leaders that we are inundated with the Rempits and not blessed with the Zaids, rather a deliberate policy, the willful intent of Malay leaders, incredulous as that may sound.

In mid 1960s in Canada, I met a Malay graduate student from Brunei who would later become his country’s top educator. I remarked on the splendid educational opportunities afforded young Canadians and added that wouldn’t it be wonderful if a rich country like Brunei were to do likewise for its young. Then Brunei could again assume its pivotal role in Malay civilization.

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The Father of Mat Rempit-ism

I was stunned when he disagreed, and with atypical Malay forcefulness. Educating them would only make them uppity, dissatisfied, and rebel, he thundered. Brunei had then gone through a near-successful coup with Ahmad Azahari sending the sultan scooting off to Singapore. He would have remained there if not for the Gurkhas.

Such a sentiment was also shared by my kampung folks. Educate your children, especially daughters, and they will marry someone from outside the village and never return. Who would then take care of you in your old age?

I was tangentially associated with Universiti Kebangsaan in 1976. I suggested then that it drop its proposed MMed program and instead have its trainees sit for the FRCS and MRCP. Those learned Malay professors, all from English-medium universities, disagreed. They would then migrate, one academic sniffed. He was no different from my fellow villagers or that Brunei guy.

Perhaps UKM was traumatized when its first Professor of Surgery, one Hussein Salleh, absconded to Australia the moment his received his professorship.

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The language nationalist Nik Safiah Karim (pic above), also the product of English education right up to her doctorate, asserted that Malaysia needs no more than five percent of her population to be English-fluent. Rest assured that her children and grandchildren would be in that select group.

Tun Razak too exhorted the masses to support Malay schools, but then sent his to England! His children, today’s leaders, and others like Khairy Jamaluddin, are doing likewise. Hypocrisy is a now the norm with Malay leaders.

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Those Malay leaders remind me of the ancient Chinese who bound the feet of their infant daughters so when they later got married, they could not run away from their husbands. Trapping by handicapping.

While I share Zaid’s concerns, I have a contrarian take. Let the likes of Zakir Naik, Hadi Awang, and that Perak Mufti loose. Their zeal would force Malays, young and old, and especially the Mat and Minah Rempits, to grab the nearest sampan to escape Malaysia.

Millions of Muslims today are forced to undertake their Hijrah not by the crusaders and atheists invading but by their own leaders. Millions are forced out of Syria not by the Israelis or Americans but by Islamic radicals.

Zaid is on to something profound. Ironically, the current frenzy of Islamization may just be the tipping point for a Malay mass hijrah.

Anticipating that, young Malays should prepare themselves for the global stage; the old kampung panggung won’t take you far. Learn another language, acquire some skills, and go beyond mere tolerating to embracing the differences we have with others.

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UMNO’s Islamic Imam–An Fugitive from India

To non-Malays, encourage Malays to be consumed with hadith and revealed knowledge. The fewer of them pursuing STEM, the less the competition for you. Support them when they want to build more Tahfiz schools, introduce hudud, or ban modern banking and finance. Not only would that make you a hero to Malays, you would also make tons of money. Malaysia’s increasing Islamization is not a crisis but an opportunity, and a very lucrative one.