10 unlikeable things about Dr M


March 28,2019

10 unlikeable things about Dr M

QUESTION TIME | Nurul Izzah Anwar’s misgivings about Mahathir, aired in an interview she gave to Singapore’s Straits Times, has been both condemned and praised for calling Dr Mahathir Mohamad a former dictator and a person who is very difficult to work with.

Unfortunately, less attention has been given to some of the reasons for her dissatisfaction, which is of greater importance to what is happening in our country. As she further said in the interview the government, led by Mahathir, has not done enough to embolden moderates.

Here’s an extract from the report in Malaysiakini: “We’re not doing enough to embolden the middle. We’re not doing enough to embolden those who are considered moderate,” she was quoted as saying.

The former PKR vice-president also admitted to being dismayed by how UMNO lawmakers are being courted to join Harapan over the last several months.

“It’s a horrible predicament, not just for Keadilan, (but) for Malaysia, for their voters, for our voters, for Malaysians as a whole.

“It’s just a sad state of affairs because I believe a two-coalition system is important for the future of Malaysia,” she lamented.

That hits out at the fundamental problem which is facing the ruling coalition. It really is not about gaining Malay support, but Mahathir boosting his own power within the coalition by swelling the numbers of Bersatu MPs through defectors. Bersatu has doubled its number of MPs to 26 from such defections. And it’s about what kind of reform should take place.

There is a lot not to like about Mahathir if we go back in history and he is everything and more what Nurul said he is. He changed the constitution and laws to become a virtual dictator both within Umno and the country, and paved the way for Najib Razak to abuse his powers to approve and condone the largest kleptocracy the world has seen.

The important question is how much is Mahathir a changed man post GE14? Here are 10 unlikeable things about Mahathir and what his fervent supporters say about him.

1. Without Mahathir, the elections would not have been won.

This is a rather ridiculous statement to make by his supporters. Would the elections have been won without PKR or DAP? Certainly not. The numbers indicate that without a doubt, with PKR having won a total of 47 seats, and DAP 42. Mahathir’s Pribumi won only 13 seats, while Amanah took 11.

PKR and DAP’s parliamentary seats win rate for Peninsular Malaysia was over 80 percent and 90 percent respectively. Amanah’s was 35 percent, but Bersatu’s was a mere 25 percent, despite the largest number of seats contested in the peninsula of 52. I have explained this in much greater detail here.

2. Mahathir came up with a rather lopsided cabinet.

Despite just having 13 parliamentary seats, Mahathir abandoned consensus, which the coalition had advocated, in favour of prime ministerial prerogative to give his party Bersatu – a right-wing Malay party – a disproportionate number of key seats in the cabinet.

Such was Mahathir’s patently unfair cabinet that out of the 13 MPs he had, six became full ministers, a further six deputy ministers, and one, Mahathir’s son, became menteri besar of Kedah. Four of the Bersatu ministers were first-time MPs, including a boy MP and minister, clearly ignoring those who had fought long and hard in PKR and DAP. I have dealt with this in detail here.

3. He deliberately caused schisms within the coalition.

By appointing Lim Guan Eng as finance minister without consultation and consensus within Harapan, he almost derailed the coalition in its first few days when there was a protest walkout by PKR leaders. The tense situation was only alleviated later after PKR and Harapan de facto leader Anwar Ibrahim intervened.

The DAP was elated with Lim’s appointment, and frequently cited prime ministerial prerogative in the early days when Mahathir had appointed just 10 key people to the cabinet. When Mahathir ignored his own promise to ensure ministerial composition reflects parliamentary representation, even the DAP was disappointed. (see table).

The other thing he did was to appoint PKR deputy president Azmin Ali as economic affairs minister when his name was not even in the list of PKR nominations because he was menteri besar of Selangor at the time. The more prescient among us saw that as a move to position Azmin as a possible successor to Mahathir, and to drive a wedge between Azmin and Anwar. It has worked very well.

4. He brought in Daim, undermining the cabinet.

It is an open secret that Daim (above) and Anwar don’t get along, and that Daim has a finger in many economic and business pies. Thus, to appoint him the chairperson of the so-called Council of Eminent Persons (CEP) and to put him overall in charge of producing a blueprint for Malaysia Baru was a slap in the face of the new government which had reform in its mind.

Daim, despite all the unease that people have expressed to Mahathir about him and have written about in the media, still holds considerable power and is the lead negotiator with China, a country that undermined Malaysia by doing corrupt deals with Najib’s administration. He is also said to be in charge of 1MDB investigations and why this should be so is unclear.

Daim being put above the cabinet and reporting directly only to Mahathir, raises key questions as to how transparent the new government is and possible conflicts of interest because of his ties to business and his closeness with many businessmen.

5. Mahathir has not done anything about legal reform.

During his tenure, Najib introduced a whole slew of new laws to increase his hold on the country. These laws can easily be overturned pending a more holistic review of the legal system to put in checks and balances for the executive branch, but Mahathir has not moved at all on this. Instead, he said that the Official Secrets Act (OSA), which he tightened during his previous tenure to provide for mandatory jail sentences, will remain.

Then he rather ridiculously stated that many promises made in the Harapan manifesto cannot be implemented because Harapan did not expect to win the elections.

Some promises such as eliminating tolls may need to be dropped because of under-estimation of costs. But this is not the case for changing laws, which can be done by a simple majority. There is no need for a two-thirds majority to amend many of these laws.

6. He perpetuates the lie that the national debt is RM1 trillion.

He perpetuates the lie that the national debt is over RM1 trillion, first stated by finance minister Lim as an excuse for not fulfilling some promises.

While the national debt position may not be in the best possible situation, it is wrong to say the debt is RM1 trillion, as I explained here. It is so only after taking into account contingent liabilities, guarantees and lease payments. Not all contingent liabilities or guarantees became debt. And lease payments are not necessarily debt. Certainly not in terms of internationally accepted debt classifications.

7. He is reviving his pet failed projects and concepts.

After his Proton national car project failed spectacularly, requiring several rescues and resulted in losses to the public in terms of excess prices paid for cars of hundreds of billions of ringgit, Mahathir is still foolishly adamant about a third national car project.

The car industry is already being shaken up and mergers have taken place. The much bigger companies make it impossible for a new Malaysian car project to succeed. This is irrationality of the highest order.

Then he talks about privatisation again, when during his time the government gave up plum operations to connected businessmen, making them overnight billionaires. They include toll roads and the independent power producers amongst others.

8. He has shamefacedly accepted defectors into Bersatu.

Mahathir blithely talks about getting a two-thirds majority to change the constitution, but he has done nothing yet in terms of reform. That’s an excuse to just increase the pathetic number of MPs Bersatu has by pilfering other parties’ MPs. This is against the express wishes of the two largest parties in Harapan – PKR and DAP.

That these defections can happen now is because Mahathir, in his previous role as PM, changed laws and the constitution to make it legal for defections to happen, luring MPs into the ruling government to topple democratically elected state governments. He is doing the same now, not for any national interest, but to widen his narrow power base by dastardly means.

9. His government does not have a comprehensive plan and action programme.

Some 10 months after taking power, there is no plan on the table for the overall development of the country and to solve the various problems facing it. For the first few months, it was up to Daim and the CEP to come up with it. This has been submitted to the PM, but not made public. So no one, but a few, knows what they are.

Now, after the CEP, an economic council is being formed to formulate policy. What’s the point of the ministries then? Shouldn’t all of them have their own plans for the areas they supervise and should they not put it up before the cabinet and seek their approval?

10. He has not taken steps to be inclusive.

While Harapan campaigned on the promise of inclusiveness of all Malaysians in development and a needs-based approach to the assistance of deprived groups, Mahathir plays to the Malay gallery by talking about the Malay agenda, plans to distribute wealth among the races, and hiving off business activities to bumiputeras. Azmin echoes him, producing the schism between races that Harapan had promised to eliminate.

On top of that Mahathir equated the injuries sustained by a fireman at the Seafield riots to “attempted murder,” adding oil to an already incendiary situation, to appease the Malay gallery and vilify Indians without first properly ascertaining the facts.

All these are a reflection of Mahathir wanting to go back to the old status quo under a different name of Malaysia Baru. It’s about Malay supremacy and Mahathir is a Malay supremacist. It is very obvious at this stage that Mahathir is not the prime minister to reform this country. Someone else has to.

At the end of the day, this is what Nurul Izzah’s concerns are about. We should not be too concerned about where she said it or if she should not have said some things. We must look at the substance of what she said, and there can be no doubt that her concerns are justified.

Harapan should do something or lose its soul.


P GUNASEGARAM says dictators, even former ones, don’t easily take to reforms. E-mail: t.p.guna@gmail.com.

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

The Perils of China’s “Debt-Trap Diplomacy”


September 10, 2018

Banyan

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Malaysia-China Relations:The Perils of China’s “Debt-Trap Diplomacy”

Malaysia’s rethink of Chinese belt-and-road projects has lessons for other countries

 Print edition | Asia

IN AUGUST, three months after his opposition coalition trounced the Malaysian party that had ruled since independence, Mahathir Mohamad, the country’s 93-year-old new Prime Minister, travelled to Beijing. His aim was to tell President Xi Jinping that his country was now the Malaysia that can say no.

Dr Mahathir’s predecessor, Najib Razak, had hewed close to China. His loss at the polls resulted more than anything from the stench of corruption within his ruling United Malays National Organisation (UMNO). But his chumminess with China was also a factor. The two issues were entwined.

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Najib Razak–Malaysia’s Voleur

During Mr Najib’s rule, huge holes appeared in the finances of a state investment vehicle, 1MDB, which Mr Najib chaired. America’s Justice Department estimates that $4.5bn was stolen from the fund by insiders. (Around the same time, nearly $700m turned up in Mr Najib’s own bank accounts.) As 1MDB teetered, Chinese state entities stepped in, taking stakes in 1MDB ventures.

The relationship with China grew ever cosier. Chinese-funded projects in Malaysia were packaged as part of China’s Belt and Road Initiative, a global infrastructure-building scheme close to Mr Xi’s heart. Jack Ma of Alibaba, a Chinese tech giant, won the right to turn a site near Kuala Lumpur’s main airport into a Digital Free Trade Zone. Malaysia’s government tried to silence criticism of its state-to-state dealings. And China showed its gratitude. In the run-up to Malaysia’s general election in May, the Chinese ambassador appeared to lend open support to the ruling coalition. Many people were surprised that Dr Mahathir managed to win, despite UMNO’s gerrymandering. Mr Xi had reason to be aghast.

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China is not used to recipients of its largesse challenging the terms on which it is offered. Yet growing numbers of them are struggling with debts to Chinese entities taken on to fund Chinese-staffed projects. The Centre for Global Development in Washington reckons that eight belt-and-road countries are at “particular risk of debt distress”, among them ones that border on China: Laos, Mongolia and Pakistan. That is why Dr Mahathir’s progress in disentangling his country from Chinese-funded ventures is being closely watched.

 

In Beijing Dr Mahathir was plain-speaking and deft. He said that Malaysia was cancelling the $20bn East Coast Rail Link, a massive belt-and-road project, as well as two oil pipelines in Sabah province. His message, in essence, was: very sorry—lovely projects, but since coming to office we’ve discovered we can’t afford them. Implicit was another point: we can’t afford them because we now know how inflated the costs are, and how skewed the deals are in China’s favour—or plain fishy. It appears the Najib government paid nearly 90% of the $2bn price of the Sabah pipelines, although they were only 15% complete. Part of a Chinese loan for them appears to have plugged financing gaps at 1MDB.

Since Dr Mahathir’s return, he has gone further, taking aim at a large, Chinese-led housing scheme in Johor state intended for wealthy investors in China. This week the Prime Minister declared that foreigners would not be given visas to live there. Most Malaysians, he complained, could not afford to live in the new development. (The government in Johor makes more reassuring noises to foreigners who might be interested.)

China has a tendency to launch into tirades against countries that confront it. In this case the response from Beijing has been muted. That may be partly because of Dr Mahathir’s careful choice of words. But Malaysia is an influential country in South-East Asia, a region that China wants to draw closer into its orbit. And China does not want to make enemies among belt-and-road countries. One of the main points of the project is to boost China’s influence over them. For other countries badly needing to renegotiate their deals with China, that is a lesson worth learning.

Of these, Pakistan, which also has a new Prime Minister, Imran Khan, is by far the biggest debtor to China. The China-Pakistan Economic Corridor, a collection of energy and infrastructure projects supposedly worth $60bn, is the biggest plank of China’s belt-and-road strategy. Not for the first time, Pakistan faces a balance-of-payments crisis. It wants out of its debt.

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Mr Khan ought to do a Mahathir. And he is in an even better position. Far more than with Malaysia, there is a strategic dimension to China’s relations with Pakistan, says Husain Haqqani, a former Pakistani diplomat who is now at the Hudson Institute, an American think-tank. Officials in Beijing see Pakistan as a counterweight to India, China’s geostrategic rival. China needs Pakistan’s help in keeping Islamist extremism at bay. And it regards its neighbour as a vital route to the Arabian Sea. Unlike Dr Mahathir, Mr Khan himself seems not to grasp the problems of China’s debt embrace. But at least critics in Pakistan of the economic corridor are beginning to find their voice.

Debt divisions

China has more than its political ties with belt-and-road countries to consider. Chinese banks are getting worried about the safety of their lending. Commercial banks have sharply cut new belt-and-road financing since 2015. (So-called policy banks continue to lend.) And now the Belt and Road Initiative faces strong popular criticism at home. In part, the initiative is a victim of the Communist Party’s own propaganda: what debtors see as hard-to-service loans, state media paint as beneficent “aid”. That is a touchy word. At a summit in Beijing this week with African leaders, Mr Xi promised $60bn for the continent. Why, Chinese people asked on social media, is an indebted China spending so much abroad when it has pressing requirements at home? Censors rapidly shut down their criticisms of Mr Xi’s gesture.

China is right that many countries need more roads, railways and other infrastructure. But it is evident that the scheme it touts as a defining one of Mr Xi’s rule is losing its shine. Dr Mahathir’s trip may have taught some valuable lessons.

This article appeared in the Asia section of the print edition under the headline “Can’t pay”

 

New York Times : Malaysia pushes back against China’s Vision


August 24, 2018

New York Times :Malaysia pushes back against China’s Vision on account of Najib Razak’s stupidity

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Dr Kua Kia Soong hits out at PH ‘flip-flops’ ahead of 100-day milestone


August 15, 2018

Dr Kua Kia Soong hits out at PH ‘flip-flops’ ahead of 100-day milestone

Suaram Adviser Kua Kia Soong also says Putrajaya appears more interested in playing the blame game than getting down to business.

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Dr Kua Kia Soong, prominent activist,former Isa detainee, and prolific analyst, today accused the Pakatan Harapan (PH) government of flip-flopping on a number of issues, just days before the administration led by Dr Mahathir Mohamad marks its first 100 days in power.

Giving the example of the Unified Examination Certificate (UEC), Kua Kia Soong asked why it would take five years to recognise it when PH had stated in its manifesto that it was ready to accept it. He said other issues included the oil royalty promised to East Malaysia and the abolition of highway tolls.

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In July, Mahathir announced in Parliament that Putrajaya would honour its promise to provide 20% royalty to petroleum-producing states. But he later clarified the statement, saying the 20% payment would be based on profit instead of royalty.

The Suaram Adviser said it was also unacceptable that local elections could only be held after three years. “Delaying reforms in unacceptable. A really important reform we want to see concerns the redistribution of wealth,” he added.

Dr. Kua was speaking at Suaram’s presentation of its report card for PH’s first 100 days in government.He said following the election, Putrajaya seemed more interested in playing the blame game than getting down to business.

“We read news of the missing goods and services tax (GST) money, yet there has been no movement. Have the Police or Attorney-General acted on it? We should be told what happened to the money within a week,” he said.

He also took issue with Tabung Harapan Malaysia, a fund established to help settle the country’s RM1 trillion debt, saying he could not accept “sob stories” related to the initiative.

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“It’s about the management of the economy to plug the leaks, not the piggy banks of little boys,” he said, referring to the story of a youth who donated his savings to the fund.

As for the government’s war on kleptocracy, Kua asked why authorities had yet to zoom in on former Sarawak chief minister Taib Mahmud, who was accused of corruption in the past.

“And why haven’t Mahathir and his children declared their assets?”

Dr. Ramesh Chander Praises Malaysian Finance Minister for early statement on National Debt


July 2, 2018

Dr. Ramesh Chander Praises Malaysian Finance Minister for early statement on National Debt

R. Chander, first Malaysian Chief Statistician (1963-1977) praises Guan Eng for early statement on national debt and stresses urgency of coherent plan to manage Malaysia’s public sector debt

R. Chander, Malaysian Chief Statistician (1963-1977) praises Finance Minister Lim Guan Eng for early statement on national debt and stresses urgency of coherent plan to manage Malaysia’s public sector debt.

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I  received an expert opinion on Malaysia’s public sector debt by Dr. R. Chander, the first  Chief Statistician of (1963-1977), who went on to serve as the Senior Adviser to the World Bank’s Chief Economist-Vice President from 1977 to 1996. Upon retirement from the Bank, he served as international adviser to multiple international agencies and governments.

Dr. Chander said he was encouraged by the speed with which the Pakatan Harapan (PH) government had come to grips with the most pressing issues and praised the Finance Minister, Lim Guan Eng for making an early statement on Malaysia’s debt situation.

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Najib Razak caught right handed by the FBI for stealing Malaysian people’s money. But he says it is a donation from the Saudi Royal Family

He said: “This was most timely indeed and most astute: it sent a strong signal to markets and had a calming effect; it told the electorate the mess that PH had inherited.

“At the same time it sent a strong message that the debt situation would impede the implementation of several of the electoral promises.

“Concurrently it provided a rationale for the cancellation/suspension of several mega projects that were to be financed by loans – terms of which were rather unfavorable to Malaysia.

“A good side effect was the call to patriotism that was brought out by the launch of the Harapan Fund!” The question now is: Where do we go from here?

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In his opinion piece, which I attached below, he stressed the urgency of coming up with a coherent and sound plan to manage Malaysia’s public sector debt.

[Media Statement by DAP MP for Iskandar Puteri Lim Kit Siang in Kuala Lumpur on Monday, 2nd July 2018]

Taming Malaysia’s GLC ‘monsters’


June 24, 2018

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1MDB Top Honcho–Arul Kanda Kandasamy

“…recent revelations show Malaysia’s debt position may be more precarious than first thought. The new government has correctly highlighted the need to include certain off-balance-sheet items and contingent liabilities such as government guarantees and public–private partnership lease payments in any complete assessment of debt outstanding, as the use of offshoot companies and special purpose vehicles in the deliberate reconfiguration of certain obligations mean that traditional debt calculations underestimate Malaysia’s actual debt.”–Jayant Menon

About a month before Malaysia’s parliamentary election in May, then-opposition leader Mahathir Mohamad raised concerns over the role that government-linked companies (GLCs) were playing in the economy, being ‘huge and rich’ enough to be considered ‘monsters’.Data support his description — GLCs account for about half of the benchmark Kuala Lumpur Composite Index, and they constitute seven out of the top-10 listed firms in 2018. They are present in almost every sector, sometimes in a towering way. Globally, Malaysia ranks fifth-highest in terms of GLC influence on the economy.

Calls to do something about GLCs have increased since the election following the release of more damning information, although most of it relates to the GLCs’ investment arm: government-linked investment companies (GLICs). Recent reports confirm that the former government had been using Malaysia’s central bank and Khazanah (a sovereign wealth fund) to service the debt obligations of the scandal-laden 1 Malaysia Development Berhad government fund. The central bank governor has since resigned.

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The GLCs have not been immune from scandals either. The most recent relates to a massive land scandal involving Felda Global Ventures, which is the world’s largest plantation operator. There have also been a series of massive bailouts of GLCs over the years, the cumulative value of which is disputed but could be as high as RM85 billion (US$21 billion). All of this led one prominent critic to proclaim that ‘GLCs are a nest for plunderers’ and that the government should ‘sell them all’. Although this may be extreme, it does raise a critical question — what, if anything, should the government do?

Some experts have proposed the formation of an independent body with operational oversight for GLICs after institutional autonomy is established and internal managerial reforms are introduced. Unlike most GLCs, GLICs are not publicly listed and face little scrutiny. The same applies to the various funds at the constituent state level.

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For GLCs, the answer is less straightforward. Mahathir claims that GLCs have lost track of their original function. Before the Malaysian government decides on what to do, it needs to examine the role GLCs should play — as opposed to the role they currently play — and to examine their impact on the economy.

In Malaysia, GLCs were uniquely tasked to assist in the government’s affirmative action program to improve the absolute and relative position of ethnic Malays and other indigenous people (Bumiputera). The intention was to help create a new class of Bumiputera entrepreneurs — first through the GLCs themselves and then through a process of divestment.

Given the amounts of money involved and the cost of the distortions introduced, the benefits to Bumiputera were unjustifiably small and unequally distributed. The approach of using GLCs as instruments of affirmative action failed because it led to a rise in crony capitalism, state dependence, regulatory capture and grand corruption. There is also empirical evidence that GLCs have been crowding out private investment, a concern raised in the New Economic Model as early as 2011.

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Malaysia’s National Debt is said to be around 65 percent of current GDP

Additionally, recent revelations show Malaysia’s debt position may be more precarious than first thought. The new government has correctly highlighted the need to include certain off-balance-sheet items and contingent liabilities such as government guarantees and public–private partnership lease payments in any complete assessment of debt outstanding, as the use of offshoot companies and special purpose vehicles in the deliberate reconfiguration of certain obligations mean that traditional debt calculations underestimate Malaysia’s actual debt.

All these factors combine to place new impetus on reconsidering the extent of government involvement in business. Divestment will not solve Malaysia’s debt problem, but it can help if there are good reasons to pursue it. So how should the government proceed?

It is important to recognise at the outset that there is a legitimate role for government in business — providing public goods, addressing market failures or promoting social advancement. And like in most other countries, there are good and bad GLCs in Malaysia. If a GLC is not crowding out private enterprise, operates efficiently and performs a social function effectively, then there is no reason to consider divestment. But a GLC that crowds out private enterprise in a sector with no public or social function or one that is inefficiently run should be a candidate for divestment.

In assessing performance, one needs to separate results that arise from true efficiency versus preferential treatment that generates artificial rents for the GLC. The latter is a drain on public resources and a tax on consumers. Divestment in this case will likely provide more than a one-off financial injection to government coffers — it will provide ongoing benefits through fiscal savings or better allocation of public resources.

The divestment process should be carefully managed to ensure that public assets are disposed at fair market value and that the divestment process does not concentrate market power or wealth in the hands of a few. This has apparently happened before.

The new government has committed itself to addressing corruption and improving the management of public resources. As part of this process, one must re-examine just how much government is involved in business. This is one of the many tasks that the Council of Eminent Persons is undertaking in the first 100 days of the new government. If done correctly, this should rejuvenate the private sector while enabling good GLCs to thrive, and it should fortify Malaysia’s fiscal position in the process. This is what Malaysians should expect — and indeed demand — of the ‘new Malaysia’.

Jayant Menon is Lead Economist in the Economic Research and Regional Cooperation Department at the Asian Development Bank and Adjunct Fellow of the Arndt–Corden Department of Economics, The Australian National University.