Putting Malaysia’s Future in the hands of Mahathir Mohamad


April 28, 2017

Putting Malaysia’s Future in the hands of Mahathir Mohamad

by P. Gunasegaram@www.malaysiakini.com

If only the Opposition thought like Mahathir and stayed focused on their goal – which is not to just remove Najib but to change the government for the better – they will stay well away from a man like Mahathir – his record is there for all to see. Instead they have been seduced by the mantra, let’s get rid of Najib first.

If Opposition, in its strange state of amnesia, continues to forget to remember, they are going to lose their chance to heal this nation, their agenda hijacked by the one who was ultimately responsible for all this.–P. Gunasegaram

Dr Mahathir Mohamad was the one who tore UMNO apart, six years after he became Prime minister in July, 1981 when a bruising battle saw him win the UMNO presidential elections against challenger Tengku Razaleigh Hamzah by the narrowest margin ever. But he did much worse than that.

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The Opposition trusts Mahathir, do we Malaysians? Hopefully we are not a bunch of suckers–Din Merican

When Razaleigh challenged the election results and the courts declared it illegal, he did not respect the law and hold a new election. Instead, he set up a new UMNO, UMNO Baru, using the power of incumbency to force officialdom to facilitate the transfer of assets to UMNO Baru from the old, original UMNO.

He excluded from UMNO Baru those who considered his opponents compelling Razaleigh to form the alternative Semangat 46. He went about solidifying his position in UMNO Baru by altering the party constitution making it well nigh impossible for anyone to challenge the party president again, removing a check-and-balance so vital for democracy.

In 1987, via Operasi Lalang, he imprisoned over 100 people under the Internal Security Act or ISA and shut down several newspapers ostensibly to defuse interracial tension and bring back order, sending waves of shock and fear throughout the country and consolidating his then tenuous hold on power.

He is the man who is a master at exploiting racial divisions for his own gain, using it pre and post the May 13, 1969 riots – riots whom by some accounts he “predicted” will happen – to gain rapid ascension after Malaysia’s First Prime Minister Tunku Abdul Rahman was effectively deposed by his deputy, Abdul Razak Hussein, current Prime Minister Najib Abdul Razak’s father. Razak worked closely with young Turks within UMNO who included Mahathir and Musa Hitam among them.

Mahathir took revenge on the Judiciary in 1988, emasculating them by suspending Tun Salleh Abas,the Lord President and several Supreme Court judges and putting puppets in their place, a body blow from which the judiciary is yet to recover. Then on, Mahathir played enforcer, prosecutor, and judge. He could pretty much do what he wanted without controls, setting the stage for Malaysia’s descend into an abyss from which it is struggling to crawl out of now

There’s a fuller list of questionable things he did in an article I wrote for The Edge in June 2006 which was used in The Sun, three years after he stepped down, which posed a series of 22 groups of questions on his leadership, one for each of the 22 years he held the reins of power in the country.

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Then and Now (below)

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During the Asian financial crisis in 1998, he again resorted to strong-arm tactics to stay in power when his deputy then Anwar Ibrahim, now jailed opposition leader, mounted a thinly-disguised challenge to his leadership as the ringgit declined precipitously and the region was in turmoil following sharp falls in regional currencies.

Mahathir reacted swiftly and sharply, expelling him from all government and party posts and then sending in an elite squad to capture him at machinegun-point and detain him under the infamous ISA. He simultaneously imposed capital controls to stem the damage on the currency. And then came the sodomy charges against Anwar.

Paradoxically, it was Anwar who ensured Mahathir’s narrow victory in the 1987 party election when he prevailed upon Najib to cast the votes controlled by his block to Mahathir. If Najib had not and favoured Razaleigh instead, Razaleigh would most likely have won.

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Mahathir Mohamad with Singapore’s Philosopher-King Lee Kuan Yew

Mahathir did not even use the benefit of his dictatorial powers for the sake of the nation the way Lee Kuan Yew did for Singapore as I pointed in an article comparing the two. Lee used his immense powers to cut corruption, improve the quality of education and evolve a strong, competent and incorruptible civil service amongst others. Mahathir effectively promoted corruption and patronage, oversaw a decline in educational standards and undermined one of the finest civil services in Asia with his arbitrary decision-making.

What is it about Mahathir that makes the Opposition so enamoured of him? People like Anwar and Lim Kit Siang who directly suffered so much from his blatant misuse of authority to perpetuate his own power and continuance?

Forget to remember

Perhaps the Opposition feels, like a lot of people, that Mahathir has some power of invincibility and that he can influence the people. But an examination of history does not show this as I explained in an article in 2006.

Mahathir was elected MP for the Kota Setar Selatan seat in Kedah in 1964. It was established early on that he was not invincible when he lost the seat to PAS’ Yusof Rawa in 1969. According to some accounts, he had said in 1969 that he did not need Chinese votes to win.

Following the May 13, 1969 riots, Mahathir wrote a widely-circulated letter criticising then Prime Minister Tunku Abdul Rahman. He was dismissed from his UMNO supreme council position and expelled from the party. The following year, he wrote the controversial book ‘The Malay Dilemma’ which was promptly banned, the ban being lifted in 1981 when Mahathir became Prime Minister.

Mahathir was readmitted into UMNO 1972 after Razak assumed the mantle. The Tunku had stepped down in 1970 after the 1969 riots. Mahathir stood for the Kubang Pasu parliamentary seat in 1974 and won unopposed, retaining the seat until 2004 when he did not contest after his retirement. He was appointed education minister in 1975. The vital turning point for Mahathir came the following year when Hussein Onn became Prime Minister following Razak’s untimely death. Hussein picked Mahathir as his deputy.

And this was not because Mahathir enjoyed overwhelming support in UMNO. Mahathir was picked over two UMNO Vice-Presidents who had higher votes than him, Ghafar Baba and Razaleigh. An accident of fate put Mahathir in line for the top position. When Hussein retired due to failing health, Mahathir became Prime Minister in 1981.

And in 2006 when he attempted to get elected as a delegate to UMNO, after stepping down as Prime Minister, so as to voice his opinions at the UMNO General Assembly, he got a thumping defeat, meriting an article in The New York Times. He was placed ninth in a field of 15 for delegates from Kubang Pasu, his former seat! Mahathir pleaded money politics – something he never bothered to check during his time.

Despite his intense, tireless campaigning at the age of over 90 in both Sungai Besar and Kuala Kangsar in June last year, BN won handsomely in both seats, indicating that Mahathir has insignificant sway with the Malay voters anyway.

The Opposition is not likely to benefit much from Mahathir and his party Bersatu, especially with PAS now seeming to align itself with the government. It seems unlikely that the disunited Opposition will win.

But what if the Opposition won? What if Bersatu held the balance of power? Would it stick with Pakatan Harapan or would it go over to UMNO and make a deal by telling to get rid of Najib and bring back Muhyiddin Yassin to take over as Prime Minister?

Surely Anwar as PM would be unthinkable for Mahathir even if a process of pardon could be initiated. Mahathir can tell Harapan, no deal unless Muhyiddin becomes PM. And so we go from Najib to Muhyiddin – is that a big improvement in the overall scheme of things.

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Mahathir Mohamad and his Accomplices in the Political Destruction of Malaysia

That’s what Mahathir wants to be – a power broker, the king-maker. That way no matter who is in power, he is not going to be brought into account for his past misdeeds. That way he has a pretty good chance of putting his son, Mukhriz, in a strong position to assume future leadership. That way he is assured that history – written by the victors as the wise tell us – will be far more kindly to him.

If any one takes the trouble to remember what this man did and stood for, he would be mad to think that Mahathir is the solution – he was, and is, the problem. Without him and his 22 years of misrule, Malaysia would not have descended to what it is today.

Mahathir was accountable to no one. Not the people, not the party, not the judges. He could do almost anything he pleased and get away with it using the apparatus and machinery of control he had put in place.

He made opaque many decisions of government, putting anything marked secret by the government as secret under the law by removing the power of judges to judge even if the secret posed no danger to the country but only embarrassed the government and exposed its corrupt ways

That was the legacy he left behind – and a leader who followed him used it to do nasty things, some worse than that by Mahathir. Now we expect Mahathir – the source of all this – to save us Malaysians from Najib!

Is that why Mahathir is sticking his neck out? For the good of the country? But remember he had his chance – 22 years of it. He bungled – all he did was to stay in power and do the greatest damage to the country ever by any one, Prime Minister or not

His goal now is not to get into power but to ensure that whoever comes into power does not destroy him. As far as Mahathir is concerned, it is always about him – not Malaysia, not Malaysians, not even the Malays.

If only the Opposition thought like Mahathir and stayed focused on their goal – which is not to just remove Najib but to change the government for the better – they will stay well away from a man like Mahathir – his record is there for all to see. Instead they have been seduced by the mantra, let’s get rid of Najib first.

If Opposition, in its strange state of amnesia, continues to forget to remember, they are going to lose their chance to heal this nation, their agenda hijacked by the one who was ultimately responsible for all this.

 

Sarawak Report: 1MDB Settlement CONFIRMS DOJ’s Case


April 26, 2017

1MDB Settlement CONFIRMS DOJ’s Case

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The Relentless  and Fearless Crusader–Sarawak Report Founder Clare Rewcastle Brown

The settlement between 1MDB and the Abu Dhabi’s International Petroleum Investment Corporation (IPIC) has derailed the US Department of Justice (DOJ) civil suit to seize more than US$1 billion in assets allegedly purchased using funds siphoned from 1MDB, said an Umno leader.“This arbitration settlement has weakened the US DOJ civil suit and claims that 1MDB’s funds were stolen,” said UMNO Supreme Council Member Mohd Puad Zakarshi in a statement today.

Mohd Puad is also the Director-General of the Information Ministry’s Special Affairs Division (Jasa).

The settlement announced yesterday will see 1MDB pay IPIC US$1.2 billion, as repayment after IPIC covered interest payments on 1MDB bonds in June 2015. The bonds, valued at US$3.5 billion, were issued in 2012 to finance 1MDB’s energy unit – 1MDB Energy (Langat) Limited and 1MDB Energy Limited. Both bonds are due by 2022.

MDB was supposed to pay IPIC US$3.5 billion for guaranteeing the bonds but IPIC said it never received payment. 1MDB said it had paid Aabar BVI, a British Virgin Island registered entity with an almost identical name as IPIC’s subsidiary. IPIC said it is not linked to Aabar BVI

Won’t touch taxpayer’s funds

This portion of the dispute will be further negotiated in “good faith” between the parties, IPIC said in its filing to the London Stock Exchange yesterday. “The parties have also agreed to enter into good faith discussions in relation to payments made by 1MDB Group to certain entities,” it said.

Meanwhile, Puad said the settlement shows that 1MDB will be able to pay its debts without touching taxpayers’ funds.This is through monetising the “investment units” redemeed from the Cayman Islands and held in a Singapore bank via 1MDB’s subsidiary Brazen Sky Limited, which is reported to be worth US$940 billion.

“These obligations will be met by 1MDB, primarily via monetisation of 1MDB-owned investment fund units. 1MDB is pleased to confirm that a first tranche monetisation of approximately US$50 million has been received, in cash,” 1MDB said yesterday.

The Prime Minister’s Office said 1MDB will cash out all of its “investment fund units”. Fuad said this shows that the “investment units” have value, and are not worthless as earlier claimed by the opposition.

Sarawak Report comments:

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 Mohd Puad Zakarshi

Whatever qualifications were achieved by Mohd Puad Zakarshi, they plainly did not demand logic. Because, the settlement by 1MDB doesn’t undermine the DOJ case, to the contrary it confirms it. Period.

If 1MDB had really paid $3.5 billion in ‘guarantee deposits’ to IPIC, as Najib continues to laughably claim, then Malaysia would never have lost the arbitration case and been forced to pay back the $1.2 billion that IPIC later bailed them out with.

Instead, the court would have pointed out that the bail out was just a third of the up-front deposit and IPIC would actually still have over $2 billion of 1MDB’s money left.

This is not what has happened.  The settlement involves an agreement by 1MDB to pay back the bail out money and to take over the responsibility for the remainder of its debts.

It is therefore a concrete admission by Malaysia that it could not prove its claims that it had deposited a single cent let alone billions with IPIC.And that means that the money trails supplied by the DOJ investigations, showing instead that all the money was siphoned off into a bogus BVI account to pay for Jho Low, Rosmah and Khadem Al Qubaisi’s fun and frolics, has been confirmed by the settlement and not weakened.

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Najib Razak and Bull Buddies

It is plain as daylight, yet this Minister of Disinformation is attempting to say the opposite. How stupid does he think people are in Malaysia? He is also asking people to believe that the payment is going to come from the ‘monetisation’ of non-existant ‘units’ that 1MDB also doesnt have, because all the PetroSaudi money was funnelled into another off-shore company (Good Star Limited) and stolen as well.

Puad says we should believe his story because the PM’s office said it (just like they said IPIC received money which it didn’t). So, who is going to believe this illogical and mendacious fellow when he goes on to say that Najib won’t be touching taxpayer’s funds to repay the debt? Is there a single voter who believes that?

Malaysia’s 1MDB, Abu Dhabi State Investment Fund Reach Repayment Agreement


April 25, 2017

Malaysia’s 1MDB, Abu Dhabi State Investment Fund Reach Repayment AgreementPassing the Buck to Malaysian Taxpayers with more to come

Malaysian state investment fund to pay $1.2 billion to settle part of its dispute with Abu Dhabi sovereign fund

by Bradley Hope and Tom Wright

http://www.wsj.com

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State investment funds in Abu Dhabi and Malaysia struck an agreement to avoid potentially embarrassing arbitration proceedings related to billions of dollars that were allegedly misappropriated by a conspiracy of former executives and advisers to both funds, according to people with direct knowledge of the deal.

The agreement could ease tension between 1Malaysia Development Bhd., or 1MDB, and Abu Dhabi’s International Petroleum Investment Co., or IPIC, according to an agreement signed by the parties on Saturday, the people said.

The Malaysian fund agreed to pay $1.2 billion to IPIC, and both sides agreed to keep discussing a further $3.5 billion of disputed payments. A formal announcement on the London Stock Exchange, where IPIC bonds are listed, could come as early as Monday, the people added. News of the deal was earlier reported by the Straits Times in Singapore.

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Former IPIC Chairman Khadem Al Qubaisi, is now  is now in jailAbu Dhabi, but this Malaysian Chinese Arab is scot free because of his connections to Prime Minister Najib Razak

Malaysia and Abu Dhabi have been in a dispute since last year over who should foot the bill for billions of dollars that U.S. investigators allege was stolen from 1MDB. The money was allegedly funneled out with the help of former 1MDB executives and people close to the fund, as well as assistance from former senior executives of IPIC, U.S. prosecutors said in their filings.

The former chairman of IPIC, Khadem Al Qubaisi, is now in jail in Abu Dhabi, although he hasn’t been formally charged, while many of the alleged Malaysian conspirators are living overseas. They include Jho Low, a 35-year-old Malaysian who the U.S. Justice Department believes directed the fraud, and who has been living in Thailand and China.

Attempts to reach Messrs. Low and Al Qubaisi weren’t successful. Both have previously denied wrongdoing.

The Justice Department filed civil lawsuits last summer seeking to seize assets worth more than $1 billion—including mansions in Los Angeles and New York, as well as some of the rights to profits from the movie “The Wolf of Wall Street”—which it claims were financed with money from 1MDB. The department is building a criminal case against Mr. Low for alleged money laundering among other potential charges, according to people aware of the matter.

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This Man is  feeling the heat from Malaysian civil society–Tranquilizers could be keeping him from losing sleep or is it because he has a thick face?

Before the scandal was publicized in 2015, IPIC was a key business partner of 1MDB, helping guarantee $3.5 billion in bonds that Goldman Sachs Group Inc. sold for the Malaysian fund. Under the cover of these dealings, IPIC executives, including Mr. Al Qubaisi, helped Mr. Low and officials from 1MDB siphon billions of dollars from the fund, the Justice Department alleged. When a consortium led by Deutsche Bank AG pulled a loan to 1MDB over concerns about the collateral, IPIC stepped in with an emergency loan of $1 billion.

But as the scandal erupted, relations deteriorated between Malaysia and Abu Dhabi, and both sides began trading public accusations over who was to blame.

The agreement would repay the emergency loan that IPIC made to 1MDB, plus interest the Abu Dhabi fund paid when 1MDB was unable to service its bonds. Malaysia will pay IPIC about $600 million by the end of July and another $600 million by the end of December, the people said.

The agreement doesn’t resolve the $3.5 billion in funds 1MDB says it transferred to a shell company in the British Virgin Islands set up by Mr. Al Qubaisi and an associate. That shell company had a similar name to an IPIC subsidiary. Abu Dhabi says IPIC or the subsidiary never received the money; Malaysia claims the shell company was a de facto part of IPIC.

Hundreds of millions of dollars of 1MDB money also allegedly found their way into the accounts of Malaysian Prime Minister Najib Razak via a chain of intermediaries, including the disputed shell company, according to court documents. Much of that money was returned to the web of offshore companies from where it came, records show. Mr. Najib has said the money was a donation from Saudi Arabia and that most of it was returned. The Malaysian attorney general has cleared him of any wrongdoing.

A company controlled by Mr. Najib’s stepson, Riza Aziz, also received hundreds of millions of dollars originating from 1MDB and transferred to him by intermediaries, the Justice Department said. He has denied wrongdoing.

Negotiations between IPIC, 1MDB and the Malaysian government broke down on several previous occasions, including in January. Abu Dhabi merged IPIC with another state fund called Mubadala Development Co. earlier this year. The new fund is called Mubadala Investment Co.

Write to Bradley Hope at bradley.hope@wsj.com and Tom Wright at tom.wright@wsj.com

 

Malaysia: Harassment of Critics intensified


April 24, 2017

Malaysia: Harassment of Critics intensified

by John Berthelsen@www.asiasentinel.com

http://www.asiasentinel.com/politics/new-round-repression-malaysia/

Image result for Najib Razak --Harassment of OpponentsSorry Dad, I messed up Felda and stole billions from the rakyat(people)

Malaysian authorities have increased the pace of their harassment of critics, according to human rights organizations in Kuala Lumpur, which political analysts view as a prelude to early elections.

Ominously, five people have been kidnapped or disappeared and people are being arrested over Facebook postings and held for three or four days, critics say. Opposition websites and independent news publications have been warned to mute their criticism or face being shut down. The Chinese-language newspaper Nanyang Siang Pau was warned over a cartoon satirizing the Speaker of Parliament as a monkey and told to suspend the staff involved.

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Hudud Monkees–Pandikar Amin (Tak) Mulia and PAS Hadi Awang

A general election must be held before August 23, 2018. However, Parliament is expected to be dissolved sometime in August or September of this year in preparation for the polls, to allow time for slippage in case unexpected events take place, such as the possible prosecution in the United States of the scandal-scarred Prime Minister Najib Razak, who is under investigation by the US Justice Department’s kleptocracy unit on suspicion that as much as US$1 billion from the Malaysian state-backed 1Malaysia Development Bhd. investment fund found its way into his personal accounts.

“They have been warning people, there have been many arrests over Facebook postings, things deemed to be critical, not only of government but of government leaders,” said Ambiga Sreenevasan, one of Malaysia’s most prominent lawyers and civil rights advocates. “There is a general feeling that the government is not going to tolerate dissent.”

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By all rights, the government should be confident of a landslide in the upcoming polls. The opposition’s most charismatic figure, Anwar Ibrahim, languishes in prison on what human rights organizations have criticized as trumped-up charges of sexual perversion. Other leaders have been threatened with sedition or criminal libel. The opposition, led by Anwar’s Parti Keadilan Rakyat, is in disarray with one wing – the rural-based Parti Islam se-Malaysia, or PAS, having collapsed into two organizations, neither of which has much remaining clout.  The conservative wing has largely aligned itself with the government over religious issues.

Najib Running Scared?

But, according to Ambiga and other sources, the reason Najib may be running scared is Mahathir Mohamad, the 91-year-old former Prime Minister, Najib’s most implacable critic, who with other dissidents established Parti Pribumi Bersatu Malaysia, and set to woo away ethnic Malays from the United Malays National Organization.

Image result for Mahathir takes on NajibThe Malaysian Kantoi All Party Team

From the start, it seemed a lost cause. Mahathir has been attempting to dump Najib since before the 2013 General Election, with little effect. His son Mukhriz has been fired by Najib as Menteri Besar (Chief Minister) of the state of Kedah. Muhyiddin Yassin, the former Deputy Prime Minister and Deputy President of UMNO, was kicked out of the party. Others have been neutralized or driven out, while the remainder of UMNO chieftains have been bribed/bought to support Najib.

But, according to a political analyst, the key is the Federal Land Development Authority, or FELDA, which was founded to handle the resettlement of the rural poor, most of them ethnic Malays.

The government listed FELDA on the Malaysian stock exchange in 2012 and allowed the thousands of settlers – whose territory covers 54 of UMNO’s 86 seats in parliament – to invest in the shares. Because of a variety of missteps, the shares have fallen  in value steeply, impoverishing the settlers who bought into them. FELDA Global Ventures as the public vehicle is now known, may be forced to delist.

Mahathir and PPBM, which he calls Parti Bersatu against the wishes of the government, have capitalized on the discontent to the point where political analysts believe he will pull away a number of those UMNO seats, perhaps 10 or 11 – two of which are held by Najib’s lieutenants.

FELDA in Revolt

“Bersatu isn’t really viable, but he’s making inroads into the Malay areas,” said one knowledgeable source. “Two ministers – Ismail Shabri Yaacob in Pahang and Ahmad Shabery Cheek in Terengganu – could lose their seats. If they lose two ministers, Najib’s position is dicey.”

If the other opposition parties, including the Chinese-dominated Democratic Action Party and Anwar’s PKR, plus the shards of PAC – can do well, especially in the face of brutal gerrymandering by the government – perhaps they could pull 100 seats in the 222-member parliament.

That would mean the East Malaysia states of Sabah and Sarawak, whose representation in Parliament is outsized compared to their population, and which have been demanding a bigger share of oil revenues now flowing to the central government from their own areas, plus increased development, would be in a position to blackmail the government for more spoils.

Scorched-Earth Policy

New Round of Repression in Malaysia

 FELDA Settlers in Revolt–Costly to Najib Razak

Accordingly, according to Ambiga and sources who prefer not to be named, the government has embarked on a scorched-earth program to suppress dissent. The most troubling is the kidnapping or disappearance of five social activists, including the well-organized kidnapping and disappearance of a Chinese Christian pastor, Raymond Koh Keng Joo on Feb. 13 in the middle of Petaling Jaya, a suburb of Kuala Lumpur, whose car was rammed and who was driven away in broad daylight. As Asia Sentinel reported, “His disappearance and the lack of any news or ransom demand suggest he has likely been killed and his body disposed of.”

The others who have disappeared are social activists Peter Chong, Joshua and Ruth Hilmy and Amri Che Mat.

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In addition, Nalini Elumalai, the Malaysia representative of Article 19, an international human rights organization with a Malaysia chapter, said that “recent arrests, investigations and charges under the Multimedia & Communications Act 1998 (MCA) are becoming more and more frequent. This is no longer just a crackdown on public figures (i.e. activists, human rights defenders, opposition politicians or journalists), but the targeting of ordinary social media users, in what appears to be an exercise in clamping down on criticism.”

Article 19 in particular identified one individual who was arrested last week for carrying a placard and wearing a yellow T-shirt identifying him as a member of the election reform organization Bersih. His phone and other articles were seized.

“The arrest and confiscations represent a violation of the individual’s right to privacy and freedom of expression, as it targets him for expressing his opinion on government corruption.

Article 19 also specified the cases of the graphic artist Fahmi Reza, Malaysian cartoonist Zulkiflee Anwar Haque, known as Zunar, and Bersih Chairperson Maria Chin Abdullah under the Security Offences Special Measures Act (SOSMA), the organization said.

“There is grave concern about how SOSMA has been extended for another five years,” Ambiga said. “Maria [Chin’s] detention was a classic example of the abuse of security legislation. The detention under SOSMA of Maria was completely unacceptable. I anticipate a worsening situation for human rights in view of the elections. It’s going to be even dirtier than the last.”

Najib Razak’s Baloney Economics


April 22, 2017

Najib  Razak’s Baloney  Economics

by TK Chua

http://www.freemalaysiatoday.com

Since when is inflation not due to bad policies, poor macroeconomics management, inefficiency, massive corruption and loss of confidence? Sorry, are there new economic theories emerging?

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A Political Baloney

Why single out some external factors igniting inflation when these factors are also applicable and affecting other economies?

Malaysia is a net oil exporting country, but global oil prices have now become a major factor accounting for our high inflation. Can we not see the baloney and the irony here? What about countries with no oil to begin with? Would they not be affected by high or low prices of oil as well?

The “Trump phenomenon” is a uniform factor likely to affect most countries. Why should Malaysia suffer more than others if indeed Trump has caused reverse capital flows and currency realignments globally?

The ringgit has depreciated not just against the US dollar, but also against the Singapore dollar, Chinese Renminbi and Thai baht, just to name a few.Malaysia’s inflation is unprecedented in recent months. When global oil prices were more than US$100 per barrel, did Malaysia’s inflation reach 8%?

I hope some of us have heard of this statement before, “Inflation is always and everywhere a monetary phenomenon.” The primary cause is always too much money chasing after too few goods.

The Shrinking Ringgit

We can argue and debate whatever we want, but inflation is invariably caused by the following factors:

First, high taxes and unproductive use of tax money. I have lived in this country long enough to know that the GST is a major culprit of inflation, causing prices to escalate higher than the GST rate due to our half-baked implementation.

 Second, when there is too much fat or unproductivity in the economy. When there are sectors that get the bulk of the income/subsidies/wages for doing nothing, they cause inflation.

Third, when we have too many over-priced projects and contracts. When contractors and promoters get too much profit, the people must pay for it through higher prices. There are no free lunches in this world.

Fourth, when government borrows and spends too much. Fiscal deficit is a given in Malaysia, regardless of the state of the economy. Borrowing to finance deficit from inflationary sources could make the situation worse.

Fifth, when policies favour the cronies. When we have massive distortions and profiteering due to collusion and complicity, prices will escalate. Prices of homes are high because developers have always got what they wanted at the expense of the buyers.

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Najib Razak’s Non-Bumiputra Crony

Sixth, when foreign monies are allowed to pour in indiscriminately. When we have too much foreign money going into our real estate and property sector, it is almost certain the locals, including the middle class, would not be able to compete. Probably, the purchasing power of 5% of rich Chinese is bigger than the whole middle class of this country.

Seventh, we have too much “bad news”. It is almost a daily affair for us, hearing of mega deals going wrong. I must say Malaysia is a strong young man but has subjected himself to constant drugging, drinking and smoking. Sooner than later, something must give.

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International Rogues Gallery

This is the essence of lack of confidence being manifested in our country today. I believe the ringgit is suffering not just because foreigners are pulling out. I think many high net worth Malaysians too are hedging to protect themselves.

We owe ourselves the responsibility to look at issues confronting us honestly and objectively. Even if there are external factors affecting inflation, we must still avail ourselves macroeconomic tools to mitigate them.

Have we resolved issues that are likely to restore confidence? Have we reduced the distortions and inefficiency prevailing in the economy? Some have argued that Pakatan Harapan-controlled states, namely Penang and Selangor, are also suffering from high inflation and hence, it is something to be accepted.

I think this is a “political” argument devoid of economic logic and reality. Penang and Selangor are subjected to the same economic and political environment as the rest of the federation. They are not exempted from the effects of bad policies or the erosion of confidence arising from bad policies.

TK Chua is an FMT reader.

 

Malaysia: Vision 2020 on Track? Nah, Bangsa Melayu, Not Bangsa Malaysia


April 21, 2017

Malaysia: Vision 2020 on Track? Nah, Bangsa Melayu, Not Bangsa Malaysia

by Wan Saiful Wan Jan

http://www.thestar.com.my

IT is sometimes disheartening to see the spat between Datuk Seri Najib Tun Razak and Tun Dr Mahathir Mohamad. Nevertheless, when a sitting Prime Minister is attacked, regardless by whom, of course he would react. What we see today is unavoidable.

 

There are some instances that require us to put aside our feelings about the spat. Vision 2020 is one of them. Despite the spat, Vision 2020 remains our national agenda.

Najib himself has not dismissed Vision 2020. Just a few months ago, Najib was quoted saying, “A lot of people asked about Vision 2020. The Government has put in place numerous programmes and the framework for us to achieve what we have aimed for. This includes the 11th Malaysia Plan and National Transformation Policy, aimed at ensuring that our country attains developed nation status in the year 2020. There is no issue about this and I want to stress that we are working according to schedule.”

Vision 2020 sets nine challenges. They are, in summary: establishing a united Bangsa Malaysia, creating a developed society, fostering a democratic society, establishing an ethical society, establishing a liberal society, establishing a scientific society, establishing a caring society, ensuring economic justice and establishing a competitive economy.

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The drafting of the Vision is largely credited to the leadership of the late Tan Sri Noordin Sopiee. He made crucial contributions when he was Director-General of the Institute for Strategic and International Studies.

Today, quite a few people are questioning if we are still on track to achieve Vision 2020. I, too, have serious concerns.

When our research team looked into the issue, those concerns were confirmed. We found that the Economic Planning Unit, under the Prime Minister’s Department, has said that the average income per person has fallen by as much as 15% from US$10,345 in 2013 to US$8,821 in 2016. To be a high-income nation by 2020, our gross national income per capita (GNI) must be US$15,000. This means we must double our GNI in just three years. This is almost impossible.

IDEAS issued a statement on this, in which our Research Director Ali Salman said, “When our GNI was US$10,345 in 2013, the goal was realistic but challenging. Now it will be extremely difficult and with 2020 being just three years away we simply cannot afford to drop further down.”

One of the main reasons behind the drop in GNI is the currency depreciation that we suffered. The main lesson here is that we must stop giving excuses about the depreciation, and fix the situation so that our ringgit does not fall further.

Various people have commented on this matter. There are junior commentators who become childishly emotional, failing to see that critical voices are valuable contributions to push the country forward.

I hesitate to entertain them because there are so many out there who try a bit too hard to seek attention from their paymasters. Hopefully, given time and opportunity, these beginners will mature into adults, and then we can take them more seriously.

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Malaysia’s Top Economist

It is the comments by more worthy experts that worry me. For example, I asked Professor Dr Jomo Kwame Sundaram what he thinks. Dr Jomo hardly needs an introduction. He has held various posts at the international level, and he is now the holder of the Tun Hussein Onn Chair at none other than ISIS.

I asked Dr Jomo if he thinks we are en route to creating a united Malaysia and a robust economy by 2020. Let me quote him directly here. On creating a united Malaysia, Dr Jomo said we are “off track because of the ethno-populist nature of the Barisan Nasional and its peninsular (and Sabahan) component parties”.

On creating a robust economy, he said we are “off track as we grossly understate the denominator. We pretend we have one or two million migrant workers although the minister says 6.7 million”.

He added that the recent depreciation of the ringgit by one third, which was not helped by the 1MDB scandal, has greatly diminished the numerator as well.

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Kuala Lumpur, Malaysia

Impressive Infrastructure but at the expense of Quality Education and Human Resource.–Corruption at an all time high, thank you, Mr. Prime Minister Najib Razak

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And this in Kuala Lumpur too: Crammed into a one-room flat at a people’s housing project in Sentul, Kuala Lumpur, Abdol Wahab Musa’s family of 16 offer a glimpse of how the urban poor in the capital city make ends meet.–http://egagah.blogspot.com

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We do have some big challenges that need resolving. We should conduct open conversations about this. From my experience, there are many people in government who welcome critical comments positively. We should all ramp up efforts to stop the country from getting even more off track, and everyone should contribute ideas where they can.

For starters, I think it would be helpful if the Government ensures that we are consistent when introducing or implementing policies affecting businesses. The Government has said they want the private sector to be the engine of growth.

Thus, hurdles preventing them from becoming the engine of growth should be removed. Otherwise businesses will never be able to play their role to help us make the economic leap by 2020.

Wan Saiful Wan Jan is chief executive of the Institute for Democracy and Economic Affairs (www.ideas.org.my). The views expressed here are entirely the writer’s own.

Read more at http://www.thestar.com.my/opinion/columnists/thinking-liberally/2017/04/11/are-we-achieving-vision-2020-with-three-years-to-go-there-are-some-major-challenges-ahead-if-we-are/#PFmBckJGaqXo3vgZ.99