FOCUS On POVERTY alleviation, not income creation for billionaires–Mahathir’s outdated policy prescriptions


January 16, 2019

FOCUS On POVERTY alleviation, not billionaires —Mahathir’s outdated policy prescriptions

by P. Gunasegaram

Image result for the malaysian maverick by barry wain

QUESTION TIME | When Prime Minister Dr Mahathir Mohamad sank low to say that wealth should be distributed equally among races, he indicated plainly that he has no solid plan to increase incomes and alleviate poverty for all Malays and Malaysians. His priorities are elsewhere.

Note that he talks about the distribution of wealth, not increasing incomes, which is more important because this is what will eventually result in a proper redistribution of wealth by valuing fairly everyone’s contribution  to wealth creation.

During his time as Prime Minister previously for a very long 22 years from 1981 to 2003 out of 46 years of independence at that time – nearly half the period of independence – he had plenty of opportunities, but squandered them.

He did not care for the common Malay, but was instead more focused on creating Malay billionaires overnight through the awarding of lucrative operations handled by the government or government companies previously, such as roads, power producers, telecommunications and others.

He depressed labour wages by bringing in millions of workers from Indonesia, and subsequently Bangladesh and the Philippines, to alter the religious balance in Sabah. A significant number of them became Malaysian citizens over the years, altering the overall racial and religious balance in the country.

By doing that he let his own race down, many of whom were workers and small entrepreneurs whose incomes were constrained by imported labour. Even now, Mahathir has not shown a great willingness to increase minimum wages, which will help many poor Malays and bumiputeras increase their incomes.

As Mahathir himself well knows, distribution is not an easy thing. Stakes held by others cannot be simply distributed, but they have to be sold, even if it is at depressed prices as it was under the New Economic Policy or NEP, when companies wanted to get listed.

Instant millionaires

There are not enough Malays rich enough to buy these stakes, but many of them in the Mahathir era and earlier, especially the connected elite, became rich by purchasing the 30 percent stakes for bumiputeras that had to be divested upon listing by taking bank loans.

By simply flipping the stakes on the market at a higher price after they were listed, they pocketed the difference and became instant millionaires.

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It was Mahathir’s brother-in-law – the straight, honest and capable Ismail Ali – who was the architect behind the setting up of Permodalan Nasional Bhd or PNB to hold in trust for bumiputera stakes in major companies. PNB now has funds of some RM280 billion and has been enormously successful in this respect.

But Mahathir, with advice from Daim Zainuddin who became his Finance Minister, still cultivated selected bumiputera leaders, many of them Daim’s cronies, and gave them plum deals. A slew of them who were terribly over-leveraged got into trouble during the 1997-1998 financial crisis.

The government, often through Khazanah Nasional Bhd, had to rescue some of the biggest ones, resulting in Khazanah holding key stakes in many companies such as Axiata, CIMB, PLUS and so on. Recently, the government has been talking about, not surprisingly, selling these stakes to investors, accusing Khazanah of not developing bumiputera entrepreneurship, which was not anywhere in its original aims.

It becomes more obvious what Mahathir is talking about. Redistribution of wealth now will come out of the selling of government (Khazanah) and PNB stakes to individual Malay entrepreneurs to equalise wealth distribution among the races. To make it more palatable, some willing Indian entrepreneurs, too, may be found.

The modus operandi will be to sell the stakes when prices are depressed and perhaps even to offer a bulk discount to these so-called entrepreneurs who, of course, will not only be among the elite, but who are cronies. That will ensure a steady flow of funds into Bersatu in future from donations to help make it the premier party in the Pakatan Harapan coalition.

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Mahathir knows full well that equal wealth distribution is impossible – it’s never been done anywhere before and makes wealth acquisition disproportionate to intelligent effort and hard work, a sure recipe for inefficiency, corruption and patronage. As eloquently argued by prominent political economy professor Terence Gomez, patronage is king in new Malaysia – if it was cash during Najib’s time.

Mahathir does not have the wherewithal to lead anymore, if he ever had it in the first place. Eight months after GE14, he is still bereft of a plan to increase incomes and improve livelihoods. He needs to recognise he does not have one and that he stays in power because of the strength of the other parties in the coalition.

Wrong direction

The only way to close the wealth gap is to increase future incomes across all races. Anything else is the expropriation of other people’s wealth. In the meantime, the holding of wealth in trust by state agencies is perfectly acceptable because the income comes back to the government.

This can be wisely used to improve the quality of education, get better quality investments, raise productivity and hence labour wages, and provide equal opportunities for growth and innovation among all communities. As so many people have said before me, you can equalise opportunities, but not outcomes.

So far, 61 years of UMNO-BN have not managed to equalise opportunities for all as the government education system is in shambles, among others. And eight months of Harapan is heading in the wrong direction under Mahathir.

Despite Bersatu being a party expressly formed to fight for Malay rights, Mahathir’s party had the lowest support from Malays of parties looking after Malay rights, including Umno, PAS, PKR and Amanah.

He is still stuck in a mode to widen his rather narrow and vulnerable power base (his Bersatu won only 13 seats of 52 contested, the worst win rate of any party in the coalition) unethically by attracting tarnished MPs from Umno into the Bersatu fold, in the process willing to break agreements with other coalition partners and doing/advocating things which are against the principles of a properly functioning democracy.

He has also said he will not honour some manifesto promises, saying that these were made when Harapan did not expect to win the elections – a rather lame excuse. He has not even made solid moves to undo repressive laws introduced by his predecessor Najib Abdul Razak.

Mahathir, obviously, has no intention plan to improve the livelihood of the common Malay and all Malaysians;  he is stuck in old-school forced distribution which is injurious to the economy, maybe even fatal in the long term.

 Malaysians don’t want the creation of Malay (or any other ) billionaires from government wealth.


Old wine in a new bottle is still sour. 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 Malaysiakini.

 

 

Patronage is king in new Malaysia?


January 12, 2019

Patronage is king in new Malaysia?

by Dr.Terence Gomez

 

COMMENT | When Dr. Mahathir Mohamad led the opposition to a stunning election victory, he had an effective rallying cry that reflected why Umno’s form of governance was problematic: “Cash is king.”

If Mahathir is not careful, worrying recent trends indicate a similarly disconcerting problem about Pakatan Harapan’s government: “Patronage is king.”

When Harapan wanted to capture power, the coalition’s leaders told Malaysians to expect real change if UMNO was expelled from government. These reforms included ending ethnically-based policies, unfailingly applied since the 1970s to justify patronage favouring bumiputera, though extremely abused to enrich politicians in power.

The Prime Minister would also no longer concurrently serve as finance minister who had under his control a slew of GLCs like 1MDB and Tabung Haji, enterprises that had been persistently abused by UMNOo. Politicians would not be appointed as directors of GLCs.

These pledges contributed to Harapan’s considerable achievement of ending authoritarian rule in Malaysia. However, Harapan has been in power barely eight months and already alarming trends are appearing which suggest that this coalition is finding ways and means to renege on its pledges.

Equally troubling is a gradual and perceptible attempt to reinstitute the practice of selective patronage in the conduct of politics and in the implementation of policies, hallmarks of UMNO politics that led to its fall.

Soon after Harapan formed the government, it created the Economic Affairs Ministry, led by Mohamed Azmin Ali. Subsequently, numerous GLCs controlled by the Finance Ministry, under the jurisdiction of Lim Guan Eng, were transferred to the Economic Affairs Ministry.

Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from the Finance Ministry to the Prime Minister’s Department. The government did not publicly disclose why the shifting of these GLCs between ministries was necessary, but it is now clear that the Finance Ministry no longer holds enormous influence over the corporate sector.

With Khazanah under his ministry, Mahathir, though not also functioning as the Finance Minister, had secured control of Malaysia’s leading investment arm. When Mahathir argued that Khazanah had deviated from performing one of its original objectives, helping the bumiputera, this contention was disputed by numerous analysts.

Mahathir went on to appoint himself as chairperson of Khazanah, though this was, by convention, the practice. The convention also was that the finance minister should be a member of Khazanah’s board.

Instead, Azmin was given this appointment. Whether the prime minister and the economic affairs minister should have been appointed board members of Khazanah merited debate as Harapan had pledged that politicians would not be appointed as directors of government enterprises.

On Sept 1, 2018, a Congress on the Future of Bumiputeras and the Nation was convened by Azmin’s Ministry. Mahathir stressed at this convention the need to reinstitute the practice of selective patronage, targeting bumiputeras, though no longer would the government allow for the distribution of what he referred to as “easy contracts.”

Daim Zainuddin, the chair of the Committee of Eminent Persons (CEP), established to prepare a report reviewing the state of the economy, endorsed the need for such a bumiputera policy, though he acknowledged problems of the past when he said: “We want to get it right this time.” Daim also stressed that the government would strive to change the mindset of bumiputera.

The nation was not told how this policy will be altered to get it right, nor how mindsets will be changed. Meanwhile, the CEP report, though submitted to the government, was not publicly disclosed.

Instead, the bumiputera policy was stressed when the Economic Affairs Ministry released its Mid-Term Review of the 11th Malaysia Plan, while other ministers have actively affirmed that GLCs will be divested, an issue also in the 2019 budget. Given Malaysia’s long history of political patronage, worrying questions come to mind of these divestments.

For example, one important equity sale by Khazanah, an issue that barely secured any analysis in the press, was that of its interests in CIMB, the country’s second-largest bank. Khazanah reduced its equity holding in CIMB by 0.66 percent, a seemingly small divestment.

However, does this sale mark the beginning of the transfer of control of CIMB to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s? Will Harapan, through such divestments, move to create a new breed of powerful well-connected business groups, even oligarchs, a trend seen in other countries transiting from authoritarian rule to democracy?

‘Dr M should know better’

Another worrying issue occurred recently. Rural and Regional Development Minister Rina Harun of Mahathir’s party, Bersatu, approved the appointment of politicians from her party to the boards of directors of GLCs under her control.

This is extremely worrying because, under UMNO, the Rural and Regional Development Ministry was persistently embroiled in allegations of corruption, with MARA being the prime example.

The practice of patronage through GLCs to draw electoral support was rampant under this ministry as it has a huge presence in states with a bumiputera-majority population.

So important is this ministry, in terms of mobilising electoral support, that it was always placed under the control of a senior UMNO leader. During Najib Abdul Razak’s administration, then UMNO Vice- President, Mohd Shafie Apdal, served as its minister before he was unceremoniously removed from office. Shafie was replaced by Ismail Sabri Yaakob, Najib’s close ally.

What Rina, once an UMNO member, has done by appointing politicians to GLCs under her authority is so reminiscent of patronage practices that had undermined the activities of these enterprises.

Azmin subsequently endorsed what Rina had done on the grounds that “there are some politicians who have professional background, such as accountants, engineers or architects, who can contribute to GLCs”.

Mahathir should know better than to allow this. After all, he had stressed that GLCs function to fulfil a “noble vision”, including the alleviation of poverty, equitable wealth distribution and spatial development, promotion of rural industries and the fostering of entrepreneurial companies in new sectors of the economy. Mahathir had also persistently referred to Malaysia’s complex ensemble of GLCs as a “monster.”

During Najib’s administration, this vast GLC network, created primarily to fulfil the bumiputera agenda, became tools easily exploited by UMNO, so visibly manifested in serious corruption associated with Felda and Tabung Haji.

However, Harapan has refused to establish an independent committee to review this extremely complex GLC network that operates at the federal and state levels. Is this reluctance because Harapan plans to similarly employ GLCs for the practice of patronage, as recent trends suggest?

What is clear, even becoming the norm, is Harapan’s consistent message to the nation: selectively targeted patronage will continue. The primary advocate of this message is Bersatu, an UMNO off-shoot.

 

At Bersatu’s first convention after securing power, held two weeks ago, its president, Muhyiddin Yassin, was quoted as saying: “As a party for the ‘pribumi’ or indigenous group, Bersatu should not be apologetic to champion the bumiputera agenda”.

Muhyiddin went on to say: “No one in our society will be left behind. Hence, this agenda is not a racial agenda, but a national agenda.” These statements are strikingly similar to what Umno had stressed when in power.

These trends suggest that for Harapan, and Bersatu in particular, consolidating power, by marshalling bumiputera support, is its primary concern, not instituting appropriate economic and social reforms.

If the government hopes to change mindsets, Harapan must focus on just universal-based policies that assist all Malaysians. In the process, disenfranchised bumiputera will also be supported. Patronage need not be king.


TERENCE GOMEZ is a professor of political economy at the Faculty of Economics and Administration, Universiti Malaya.

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

Public policy and the role of the public intellectual


Public policy and the role of the public intellectual

Opinion  

COMMENT | How can the government encourage more people to adopt public transport so as to solve the problem of traffic jams?

Should local elections – if these are re-introduced – consider the issue of racial composition and representation?

Would the proposal to transform our current healthcare system into a social insurance model enable more people to have accessible and affordable healthcare?

Out of the various models of sustainable development, which would be the most suitable for particular places in Malaysia to adopt, in order to preserve our natural environment and also promote our cultural heritage?

Finally, would changing our country’s electoral system from first-past-the-post to proportional representation give our citizens a more democratic voice?

The questions above involve public policy discussions to a certain extent. Some may be ideologically oriented, while others may be more technical.

The influence and consequences of public policy may vary, from issues with huge implications that might potentially decide your individual rights as a citizen or foreign resident, to basic needs such as a right to shelter and food; or its impact might appear to be so insignificant that you feel it has nothing to do with you.

Some policies could have long-term impacts on groups of people several generations down the line, such as the New Economic Policy (NEP) in the 1970s.

Some policies also could bring about permanent and irreversible changes, such as certain forest land management policies which permit oil palm plantations to convert and replace primary forests.

Knowledge is power

In Malaysia, policy making decisions seem to habitually stem from a top-down process. Sometimes, it could be rooted in a certain political actor’s will or out-of-the-blue ‘creative’ thoughts, such as the third national car and property ‘crowdfunding’ policy.

To many people, the ability to influence public policy debates seems to be confined to the political elite.

Some may believe that the realm of public policy is out of their reach, leading them to forfeit any opportunity to participate in meaningful public policy discussions.

This self-defeating mentality probably has to do with the impression that policy making is technically too complex, or that they are unable to fully grasp the nuances of policy debates.

Furthermore, others may have lost faith and hope in the country’s political system. The euphoria that has been generated from witnessing the change of federal government for the first time in history has long gone.

Instead, they are more inclined to believe that policy discussion would change nothing, because it is politics akin to Game of Thrones – whereby politicians would act in a similar way to serve their self-interest by keeping the status quo when it comes to politically advantageous policies.

Former United Nations Secretary-General and Nobel Peace Laureate the Late Kofi Annan once said: “Knowledge is power. Information is liberating. Education is the premise of progress, in every society, in every family.”

The statement should also apply to our political and civil education. This is because if the people can understand the issues and policies better, then they could be more aware of their own rights, and will not be easily swayed or cheated.

In that way, public opinion could be recognized and turned into a formidable force to oppose and resist unreasonable or unjust policies. It would also help to promote a rational, progressive, democratically mature society.

Policy discussions may take place in a kopitiam, grassroots style, or be held in a posh and premium hotel ballroom and rigorously debated by fellow academics. Despite all that, the outcome still has to go back to the discussant, and whether he or she has conducted any study.

Serious public policy work must show professionalism and integrity in taking account all possible facets of evidence (within a reasonable limitation), that would determine whether the analyses and deductions can convince the public.

If a public policy does not go through a deep and thorough research process, or does not rely on facts and evidence for future projections, it would lack robust theoretical support and a foundation in widely accepted international best practices. The probability of such a policy failing to reach its intended goals is high.

In the end, who should answer for the consequences, cost, and responsibility for such policy failures? Instead of delegating the task of scrutinising government policies to opposition parties, could the public themselves effectively monitor the government’s performance, and directly hold them accountable?

A learning process

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The Penang Institute

Public policy research is a learning process. As a member of the Penang state government’s think-tank and a public policy research analyst, it is my duty not just to amass knowledge but also to spread the seeds of thought, hoping that a new perspective could influence or change society or at least create public discussion.

In order to gain the public’s trust and confidence, what is most important is to be persistent in maintaining the standards of one’s objectivity and professionalism when expressing and defending one’s research outcome in a fair and transparent manner.

If public policy research is publicly funded, it should imply that public interest is very much involved, and thus the research outcomes should be shared with the public. In other words, I believe that I should be seen as an employee of taxpayers, and therefore held accountable to the public.

So, here I am in my position of some influence, and therefore I have to honour my obligation as a public intellectual. For that reason, I have to walk out of my ‘armchair and air-conditioned room’ comfort zone and walk into the daily lived experiences of the man on the street. Only then would my proposed policy be worth anyone’s salt.

If policy making were to be compared to a battle of ideas, policy advocates pacing around this ‘battlefield’ must recognise the current situation and be well-versed in the ‘topography’ of issues that one feels strongly about.

He or she could then be in control of the defensive-offensive strategy in winning the battle of influencing and implementing the said policy. There could be room for the omission of menial details, but policymakers or advocates must ensure that the crux of a policy should be steered in the right direction.

Penang is my base, and my work as a public intellectual originates from there. However, my work should not be constrained within the aforementioned locality.

In what is being identified as a strongly federated nation such as Malaysia, the most contentious policy ideas are arguably centred around Parliament in Kuala Lumpur and the corridors of power in Putrajaya.

We have witnessed the historic moment in the 14th general election when the peaceful democratic transition of federal power took place in Putrajaya. The new ruling coalition was named after ‘hope’ and consists of parties which fought for a long period persistently on the ideals of Reformasi and an overarching multiracial philosophy of ‘Malaysian Malaysia’.

The remaining question is, what are the policies and strategies in place to build a progressive and hopeful new multiracial Malaysia?

I would argue that policies that truly solve the needs of the public are the real backbone of reforms that are badly required in a country which had been mismanaged for decades.

For the coming weekends, my colleagues from the Penang Institute will talk about issues and policies, and share their stories in this space, hopefully to continue inspiring new narratives in the new political era of Malaysia.


Dr. LIM CHEE HAN is a senior analyst in the political studies section at Penang Institute. He holds a PhD in infection biology from Hannover Medical School, Germany. He believes that a nation would advance significantly if policy making were taken seriously.

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

Note: The Techo Sen Sen School of Government and International Relations,@The University Of Cambodia, Phnom Penh offers postgraduate programmes in Public Policy. http://www.tss.uc.edu.kh

 

Jomo named National Academic Figure


November 28, 2018

Jomo named National Academic Figure

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Economist Jomo Kwame Sundaram was announced as the 12th National Academic Figure at the National Academic Awards (AAN) ceremony in Putrajaya last night.

 

Jomo, 66, a former assistant secretary-general for Economic Development in the United Nations, is an expert in political economy of development, especially in the Southeast Asian region .Jomo received RM200,000, a trophy and a certificate.

 

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The National Academic Figure award is presented to academicians who are committed, wholly engaged and always contributing to the discovery and development of knowledge, wealth generation and fulfilling the aspirations of the tertiary institution as a national development vehicle.

Meanwhile, Juan Joon Ching, a professor with Universiti Malaya, was announced as the most promising academician award winner. This award is given to affluent scholars under the age of 40.

Earlier, Mahathir in his speech expressed hope that the awards would motivate the individuals to pursue further excellence while setting a benchmark for others to emulate.

“Without their (academicians’) support, I believe we cannot build a knowledgeable generation that is par excellence, and at the same time produce balanced individuals for the development and progress of the country,” the Prime Minister said.

Bernama

 

The Paradox of Globalization: Development Cooperation at Risk


August 22,  2018

The Paradox of Globalization: Development Cooperation at Risk

by Dr. Jomo Kwame Sundaram

http://www.ipsnews.net/2018/08/globalization-enhanced-development-cooperation/

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Protracted economic stagnation in rich countries continues to threaten the development prospects of poorer countries. Globalization and economic liberalization over the last few decades have integrated developing countries into the world economy, but now that very integration is becoming a threat as developing countries are shackled by the knock-on effects of the rich world’s troubles.
Trade interdependence at risk
As a consequence of increased global integration, growth in developing countries relies more than ever on access to international markets. That access is needed, not only to export products, but also to import food and other requirements. Interdependence nowadays, however asymmetric, is a two-way street, but with very different traffic flows.
Unfortunately, the trade effects of the crisis have been compounded by their impact on development cooperation efforts, which have been floundering lately. In 1969, OECD countries committed to devote 0.7% of their Gross National Income in official development assistance (ODA) to developing countries. But the total in 2017 reached only $146.6 billion, or 0.31% of aggregate gross national income – less than half of what was promised.
In 2000, UN member states adopted the Millennium Development Goals to provide benchmarks for tackling world poverty, revised a decade and a half later with the successor Sustainable Development Goals. But all serious audits since show major shortfalls in international efforts to achieve the goals, a sober reminder of the need to step up efforts and meet longstanding international commitments, especially in the current global financial crisis.
Aid less forthcoming
Individual countries’ promises of aid to the least developed countries (LDCs) have fared no better, while the G-7 countries have failed to fulfill their pledges of debt forgiveness and aid for poorer countries that they have made at various summits over the decades.
At the turn of the century, development aid seemed to rise as a priority for richer countries. But, having declined precipitously following the Cold War’s end almost three decades ago, ODA flows only picked up after the 9/11 or September 11, 2001, terrorist attacks. The Monterrey Consensus, the outcome of the 2002 first ever UN conference on Financing for Development, is now the major reference for international development financing.
But, perhaps more than ever before, much bilateral ODA remains ‘tied’, or used for donor government projects, rendering the prospects of national budgetary support more remote than ever. Tied aid requires the recipient country to spend the aid received in the donor country, often on overpriced goods and services or unnecessary technical assistance. Increasingly, ODA is being used to promote private corporate interests from the donor country itself through ostensible ‘public-private partnerships’ and other similar arrangements.
Not surprisingly, even International Monetary Fund staff have become increasingly critical of ODA, citing failure to contribute to economic growth. However, UN research shows that if blatantly politically-driven aid is excluded from consideration, the evidence points to a robust positive relationship. Despite recent efforts to enhance aid effectiveness, progress has been modest at best, not least because average project financing has fallen by more than two-thirds!
Debt
Debt is another side of the development dilemma. In the last decade, the joint IMF-World Bank Heavily Indebted Poor Countries initiative and its extension, the supplementary Multilateral Debt Relief initiative, made some progress on debt sustainability. But debt relief is still not treated as additional to ODA. The result is ‘double counting’ as what is first counted as a concessional loan is then booked again as a debt write-off.
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At the 2001 LDCs summit in Brussels, developed countries committed to providing 100% duty-free and quota-free (DFQF) access for LDC exports. But actual access is only available for 80% of products, and anything short of full DFQF allows importing countries to exclude the very products that LDCs can successfully export.
Unfortunately, many of the poorest countries have been unable to cope with unsustainable debt burdens following the 2008-2009 financial crisis. Meanwhile, there has been little progress towards an equitable and effective sovereign-debt workout framework despite the debilitating Argentine, Greek and other crises.
Technology gap
In addition to facing export obstacles, declining aid inflows, and unsustainable debt, the poorest countries remain far behind developed countries technologically. Affordable and equitable access to existing and new technologies is crucial for human progress and sustainable development in many areas, including food security and climate-change mitigation and adaptation.
The decline of public-sector research and agricultural-extension efforts, stronger intellectual-property claims and greater reliance on privately owned technologies have ominous implications, especially for the poor. The same is true for affordable access to essential medicines, on which progress remains modest.
An international survey in recent years found that such medicines were available in less than half of poor countries’ public facilities and less than two-thirds of private facilities. Meanwhile, median prices were almost thrice international reference prices in the public sector, and over six times as much in the private sector!
Thus, with the recent protracted stagnation in many rich countries, fiscal austerity measures, growing protectionism and other recent developments have made things worse for international development cooperation.
Dr. Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought in 2007.

A Hundred Days of Prevarication


August 15, 2018

A Hundred Days of Prevarication

Press statement by Kua Kia Soong, SUARAM Adviser

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The GE-14 election defeat of the BN which had ruled the country since 1957 was testimony to the determination of the Malaysian people and civil society who had opposed BN rule for decades. Sixty-one years of BN domination had included 22 years with Prime Minister Mahathir at the helm. The Malaysian people chose to cast their votes for the PH coalition because PH had promised in their GE14 manifesto to implement wide ranging reforms that made them seem radically different from the governance experienced under the BN.

In the first 100 days of the new PH government, we find that their report card scores around 20% based on their own promises alone. The flip flopping over the abolition of BTN and National Service shows the importance of civil society to voice our opposition to such bitterly toxic and noxious institutions in the country. Nor do their promises consider the more urgent comprehensive list of reforms that civil society has long argued is of higher priority. On top of all that, we have witnessed a disturbing trend of autocratic decision making and policies symptomatic of the old Mahathir 1.0 era.

Sacrifices at the altar of the trillion-ringgit debt mountain

The convenient opt out clause for the new government is to pile much of the blame on the previous administration including the accusation of them of having run up a debt of RM1 trillion, or 80% of our GDP and apparently stealing RM19 billion of GST refunds. That blame frame then provides the new government with an emotional basis for gaining sympathy by starting a ‘Tabung Harapan’ and appealing for donations. While the way in which this fund will be used remains unclear, it is probably the only fund in the world set up with the apparent aim of trying to plug a country’s debt hole. It is telling that while a little boy has contributed his piggy bank to the fund, the two richest men in the country who happen to sit in the “Council of Eminent Advisors” have not made a comparable sacrifice to the fund.

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As for the actual size of the national debt, there is dispute between economists depending on whether we include government guarantees and lease payments under public-private partnerships. The size of Malaysia’s government debt in international statistics for 2017 is actually 64% of GDP, compared to China’s 65%, Singapore’s 110%, US’ 108% and Japan’s 236%. Clearly, what is at stake is the country’s economic fundamentals, which the new Finance Minister assures us are still strong. It also depends on how the debt is financed since relying on overseas borrowing can carry higher risks. It also depends on the country’s prospects for economic growth. Japan has one of the largest public sector debts in the world but it also has a large pool of domestic savings on which to draw.

Nonetheless, this mythical “trillion-ringgit debt mountain” has become an altar on which promises made by PH in the GE14 manifesto are sacrificed – local government elections, new approved Chinese schools, minimum wage, abolishing highway tolls and postponing PTPTN loans. This is definitely not acceptable as an excuse for putting off these urgent election promises since PH had assured us that they could manage the economy once they had ousted BN.

But then the much-trumpeted review of all mega projects so as to reprioritise and reduce the debt mountain is not consistent with the approval of the Penang Transport Master Plan nor with the recently announced Proton 2.0 project by the PM. The Infrastructure Development Minister Peter Anthony has also announced that a dam costing RM2 billion will be built at Kampung Bisuang in Papar when Parti Warisan Sabah had promised to scrap the Kaiduan Dam project.

Back to privatising national assets and Proton 2.0

So far, the new PH government has not spelled out their fundamental difference in economic policy from the old BN regime. What we have heard so far is the alarming news of the return of the old discredited Mahathirist policies, namely, privatisation of our national assets in the name of Bumiputeraism and the revival of the national car, Proton 2.0.

Image result for khazanah and its stable of top flight companies

 

The PM has said that the sovereign wealth fund, Khazanah will be privatised for the benefit of Bumiputeras. Malaysians need to be reminded that during the financial crisis of 1997/98, it was Khazanah that had stepped in to take over the assets of the failed companies owned by the Bumiputra crony capitalists in Renong, MAS and TRI. After taking over the assets, Khazanah revamped these GLCs with professional managers and better rules of governance. Khazanah currently owns 51% of PLUS Expressways, with the EPF owning the other 49%. By end 2017, the net worth of companies under Khazanah was RM125.6bil. Thus, Khazanah is successfully achieving its purpose of creating a sovereign wealth fund for the benefit of ALL Malaysians. Its expressed purpose never has been to be privatised to Bumiputera crony capitalists.

Mahathir’s privatization drive during his first term (1981-2003) was a boon for private crony capital, especially those linked to UMNO. Malaysian tax payers were the losers since these erstwhile profitable public utilities were sold for a song to the private capitalists and we became captive to UMNO-linked monopolies, such as the North-South Highway operator. Furthermore, these failed crony capitalists had to be bailed out with our money during the financial crisis of 1997/98.

During these 100 days, the Prime Minister has also announced the revival of yet another national car, or Proton 2.0. After the fiasco of Proton 1.0 and the huge cost to Malaysian taxpayers, our public transport system and Malaysian consumers, it is unbelievable that such a failed enterprise could be supported by a PH leadership full of former critics of the first Proton project. Another national car project will surely fail with further losses to the national coffers and we will have to underwrite the losses. The PH government won’t have 1MDB to blame for that anymore. We should further note that one of Mahathir’s former crony capitalists, Syed Mokhtar Al-Bukhary, owns a majority 50.1% in Proton Holdings through DRB-Hicom. This hare-brained idea to start another national car project reminds me of what somebody said about politicians: “Politicians are people who, when they see light at the end of the tunnel, go out and buy some more tunnels…”

Back to Mahathirist autocracy

It is truly alarming that no Cabinet member nor “eminent person” in the CEF has voiced any objections to Mahathir’s proposed plans to privatise Khazanah and to start another national car. They will have to bear collective responsibility for the consequences in the event of its failure. We are witnessing the same “silence of the lambs” culture for which the DAP used to criticise the BN leaders under Mahathir 1.0 with the new ministers saying “We’ll leave it to the prime minister” and “I’ll discuss this with the prime minister to let him decide”, ad nauseum.

The PH manifesto prohibits the PM from also taking over the Finance portfolio but Dr Mahathir has in the 100 days taken over the choicest companies, namely Khazanah, PNB & Petronas under his PMO. It is the return to the old Mahathirist autocracy. Was the Cabinet consulted in the decision to start Proton 2, privatise Khazanah, Malaysia Incorporated and the revival of the failed F1 circuit?

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The appointment of Prime Minister Dr Mahathir Mohamad and Economic Affairs Minister Azmin Ali to the board of Khazanah Nasional Berhad also goes against the PH manifesto promise of keeping politicians out of publicly-funded investments since it leads to poor accountability. Only by insisting on boards being comprised of professionals and on rigorous parliamentary checks and balances for bodies such as Khazanah can we ensure a high level of transparency and accountability. Mahathir’s response to this criticism was the old feudal justification: “I started Khazanah so why can’t I be in it?” In other words, “Stuff your high ideals and democratic principles!”

We will have to wait for Lim Guan Eng’s memoirs in the future to see how he responded to Mahathir leaving him out of Khazanah. Did the PM even discuss this with him? After all, Khazanah is still under MoF Inc. If the finance minister is left out of the Khazanah board, how will he be privy to what the Khazanah board is doing? No doubt Mahathir knew that having given the DAP Secretary-General the Finance Minister post, he could get away with anything…

Consistency in the war on kleptocracy

The new PH government had pledged to wipe out kleptocracy and this promise was key to the victory at GE14. They have disappointed the people of Malaysia and especially Sarawakians who have seen the wealth of their state sucked dry by the rapacious greed of the kleptocrats there. The PH government has not yet acted to make the former Chief Minister Taib Mahmud declare all his assets and those of his spouse and family’s. The PH Government has shown us that where there is a political will in getting to the root of the 1MDB scandal, there is a way to get rid Malaysia of corruption and crony capitalism. However, by letting off his long-time ally in Sarawak, Taib Mahmud, arguably the richest man in Malaysia, the Prime Minister makes his campaign against the former PM Najib look like a personal vendetta. The Prime Minister has also failed to lead by example and declare his assets and those of his spouse and children’s.

Conflict of interest having corporate heads in Councils

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The Constitutional status of the appointed ‘Council of Eminent Persons’ has already been called into question especially when the Chairman of the Council, Daim Zainuddin is in a position in which he is able to call up judges and even represent the Government in negotiating with the Chinese Government over their investments in Malaysia. Now it has been reported that the Perak government has established the State Economic Advisory Council (SEAC) with corporate heads of MK Land Bhd, KL Kepong Bhd and Gamuda Bhd as “eminent advisors”.

There is gross conflict of interest with such arrangements when these corporate leaders still have interests in the local and international corporate scene. It is well known that Daim Zainuddin has corporate and banking interests all over the world. His business interests extend beyond banking to other key sectors of the country’s economy such as plantations, manufacturing, retailing, property development and construction.

Delaying urgent reforms is unacceptable

Using the excuse of the government debt to delay local government elections which have been suspended in our country since 1965 is not acceptable. It is a simple matter of abolishing a provision under the Local Government Act 1976 and reviving the Local Government Election Act in order to introduce local government elections. If the PH government is prepared to see billions going down the drain with the revived Proton 2.0 project, don’t tell us there is no money for running local council elections please.

It is equally absurd to tell Malaysian Independent Chinese Secondary School graduates that their UEC certificate can only be recognised in five years’ time. The UEC certificate went unrecognised by the BN for 61 years even though it has internationally proven its efficacy with thousands of graduates since 1975. This is a serious breach of promise in the PH GE14 manifesto since more than 80 per cent of Chinese voters voted for PH because of this promised reform. The only steadfast decision made by the Education Minister so far is the decision that students will have to wear black shoes instead of white ones.

Many lawyers have pointed out that the repeal or review of our laws that violate basic human rights can be expeditiously accomplished within the first 100 days of the new PH government. These include abolishing laws that allow detention without trial, namely, the Security Offences (Special Measures) Act 2012 (Sosma), Prevention of Crime Act 1959 (Poca), and the Prevention of Terrorism Act (Pota) 2015.

It is alarming to hear the Law Minister Datuk Liew Vui Keong say recently that the PH government is now reconsidering its initial pledge to abolish several contentious laws including, the Sedition Act 1948, Prevention of Crime Act (Poca) 1959, Universities and University Colleges Act 1971, Printing Presses and Publications (PPPA) Act 1984 and the National Security Council (NSC) Act 2016. This is totally unethical backtracking on the PH GE14 manifesto.

The death penalty is a violation of human rights and must be abolished. Meanwhile, there ought to have been an immediate moratorium on all executions pending abolition and commuting the sentences of all persons currently on death row. The implementation of the Independent Police Complaints & Misconduct Commission (IPCMC) and other recommendations of the Royal Police Commission in 2005 is long overdue to ensure transparency and accountability by the police and other enforcement agencies such as the MACC.

During the 100 days under the PH government, we have witnessed the Sedition Act and the CMA still being used against activists and prevarication on the issue of child marriages. We have also seen the rule of law being flouted when a Minister in the PM’s Department can order the removal of portraits of LGBTQ Malaysians from an exhibition in Penang. Just as alarming is the statement by another Minister that cyanide used by gold miners in Bukit Koman is perfectly safe and non-hazardous to people or the environment.

Reneging on manifesto promises

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From the failure by the PH government to fulfil their election promises in the 100 days, it is clear that the GE14 manifesto was drafted in a slipshod manner in order to secure populist votes. These include the promises to abolish toll from the highways within the stipulated time promised; no firm position regarding the PTPTN loan repayments; wavering on the promise to pay a 20 per cent instead of 5 per cent royalty to oil producing states based on revenue from gross production; the deduction of a percentage from a husband’s EPF contributions to go into the accounts of his wife, etc. PH has so far implemented less than half of their election promises. Will the PM apologise for reneging on these election promises?

Real reforms we expect in “new” Malaysia

Within the first year of the PH administration, Malaysians expect serious transformational reforms that will reconstitute truly democratic institutions and improve the lives of the 99 per cent and especially the B40 Malaysians. Of the highest priority, we expect urgent initiatives to implement the 8 key reforms including:

1. An end to race-based parties and policies especially replacing race-based policies with needs-based measures that truly benefit the lower-income and marginalized sectors and basing recruitment and promotion in the civil and armed services strictly on merit;

2. Re-instatement of our democratic institutions including bringing back elected local councils and enacting a Freedom of Information (FoI) Act at federal and state levels;

3. Zero tolerance for corruption and political leaders who have been charged with corruption must step down while their case is pending in the courts;

4. A progressive economic policy that will renationalize privatised assets, especially land, water, energy, which belong to the Malaysian people instead of local and foreign capitalists, opening up GLCs to democratic control of the people and directing them to implement good labour and environmental policies;

5. Redistribute wealth fairly through progressive taxation on the high-income earners, their wealth and property and effective tax laws to ensure there are no tax loopholes for the super-rich;

6. A far-sighted and fair education policy with equal opportunities for all without any racial discrimination with regard to enrolment into all schools including tertiary educational institutions;

7. Defend workers’ rights and interests especially their right to unionise and a progressive guaranteed living wage for all workers, including foreign workers;

8. People-centred and caring social policies including an effective low-cost public housing programme for rental or ownership throughout the country for the poor and marginalized communities;

9. Prioritise Orang Asal rights and livelihood by recognizing their rights over the land they have been occupying for centuries, prohibiting logging in Orang Asal land and ensuring all Orang Asal villages have adequate social facilities and services;

10. Sustainable development & environmental protection by allowing all local people to be consulted before any development projects and all permanent forest and wildlife reserves are gazetted.

The lesson of the first 100 days of the PH administration teaches us that, as always, civil society must be ever vigilant to push for these reforms because the government of the day will drag its feet and renege on these election promises when they have the opportunity.

 

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