Mujahid’s reformist facade


March 20, 2019

Mujahid’s reformist facade

 

Image result for Mahathir an Zakir Naik

 

Mujahid Yusof Rawa, the minister in charge of religious affairs, has carefully cultivated an image of himself as an open-minded political moderate and reformer, someone who stands apart from the rest of the extremist crowd.

Of late, however, his pronouncements and actions have led many to wonder just how deep his commitment to reform and moderation is.

His reaction to the recent International Women’s Day rally is a case in point. While he had nothing much to say about many of the legitimate issues concerning women’s rights that were raised, he expressed shock over the presence of members of the LGBT community who were also there to press for their rights.

Image result for Mujahid

Admittedly, the LGBT issue is controversial in Malaysia but to suggest that they were “abusing the democratic space” was simply outrageous. Clearly, he does not understand that in a democracy, everyone, including the LGBT community, has a right to be heard.

Image result for Mahathir an Zakir Naik

Harassing women fighting for their rights is common enough in a  Wahhabi state like Saudi Arabia. That it should happen in a secular democracy like Malaysia is cause for concern.

In the short span of a few months, Mujahid’s journey as a minister in Malaysia Baru has taken him from standing alongside a transgender activist and pleading with the public not to discriminate against the LGBT community, to open hostility against them.

Image result for Mujahid

 

He has gone from championing human rights to calling for greater restrictions on our democratic space. And he has shifted from insisting that Jakim and other Islamic agencies should be reformed to empowering them yet further.

Indeed, he is now defending Jakim’s excessive RM810 million budget as reasonable and justified.

Instead of moderating the worst excesses of agencies like Jakim, which he said was one of his priorities, he is allowing them to slowly radicalise his political views.

No surprise then that Mujahid met recently with the infamous Salafist preacher Zakir Naik, a fugitive wanted abroad for terrorism-related and money laundering offences and who remains blacklisted by several countries.

After the meeting, Mujahid shocked many Malaysians by declaring Naik, who he once criticised for demeaning other faiths, as “an inspiration”.

How Mujahid can bestow his admiration on the same man who, convinced that UMNO would win re-election, argued that it is better for Muslims to support a corrupt Muslim regime than an honest one that includes non-Muslims is also inexplicable.

Of course, as soon as UMNO lost power, Naik rushed over to kiss Dr Mahathir Mohamad’s hand and ingratiate himself with the new government.

His confidence in the absolute gullibility of Malaysia’s ruling elites was clearly not misplaced. Heroes, it seems, come quite cheaply in Malaysia.

Mujahid has since tried to justify his meeting as an attempt to educate Naik about the country’s Islamic administration. Few will be fooled by such a facile explanation.

Now that Mujahid has anointed Naik as a worthy role model, in effect Malaysia Baru’s new inspirer-in-chief, every ceramah door in the country will be open to him and his extremist teachings.

Don’t be surprised if Naik soon emerges as the most influential Islamic voice in the nation; quite a coup for a fugitive but what a setback for national unity!

But let’s face it: when it comes to Muslim radicals, the ruling elites seem to have tunnel vision. Even the police seem to go out of their way to avoid confronting the ugly reality that Malaysia is far too tolerant of extremism.

In explaining the increasing number of terrorists who use Malaysia as a base, for example, the police chief suggested that it was due to the fact that Malaysia has good air links with the rest of the world, as if somehow Malaysia is the only well-connected country in the region.

Image result for zakir naik quotes

A Life devoted to spreading a Message of Hate of the Other

The fact is terrorists choose Malaysia as their base of operations because they know that the religious culture here is more accommodating and supportive. Extremists only have to don the right religious garb and speak the same Ketuanan Melayu language and they are in.

Naik should have been kicked out of the country the moment Pakatan Harapan came to power. That he remains here – despite his fugitive status, his unsavoury background, his alleged links to terrorists, his taunting of religious minorities and his disgraceful support for the former regime – is just another indication of the misplaced priorities of Malaysia’s political elites.

Whatever it is, it’s a sad day for Malaysia when Mujahid, someone we were all hoping would help moderate the trend towards religious extremism in our nation, draws inspiration from the likes of Naik.

It really makes you wonder what lurks behind the reformist façade of some of these PH leaders.

The views expressed are those of the author and do not necessarily reflect those of FMT.

Mourning the Passing of Economist Alan Kruger


March 20, 2019

Normally this newsletter would be concerned with events in the wider world. But right now I just have to write about the shocking death — reportedly by suicide — of my former Princeton colleague, the economist Alan Krueger, at the age of 58.

I thought I knew Alan reasonably well and never saw a hint that something like this might be coming. But people’s lives often feel very different from the inside than they look on the outside.

What I can talk about is Alan’s work and why it mattered so much to other economists, myself very much included. For his research arguably did more to change how we view the economy than that of any other modern economist.

Alan’s most influential, paradigm-shifting work was his 1992 study with David Card on the effects of minimum-wage increases.

Before Card and Krueger, most economists just assumed that raising the minimum wage leads to lower employment. But Card and Krueger realized that this was a proposition you can test. Their initial study compared employment in New Jersey and Pennsylvania before and after New Jersey raised its minimum wage. And they found no adverse effect on employment — if anything, a small rise in New Jersey relative to its neighbor.

His study opened a new frontier in economic research. Economics is always bedeviled by the lack of controlled experiments; there are so many things going on in the economy that it’s hard to tell what’s causing what. But unilateral state wage hikes amount to natural experiments that tell you far more than standard economic methods.

Furthermore, this was a method that could be replicated many times, and has been over the years, right up to the recent round of minimum wage increases in a number of cities. And the preponderance of the results have confirmed Card and Krueger’s initial finding: raising minimum wages has far less negative impact on jobs than standard economics would have predicted.

This has implications that go far beyond minimum wages themselves. What Card, Krueger and the research that follows tell us is that labor markets are a lot more complicated than we thought, that market power matters a lot and that there may be much more room for public policy to raise wages in general than Econ 101 would have it.

This paper alone would secure Alan Krueger’s reputation as one of the greatest labor economists ever. But he did far more, on everything from growth and the environment to the effects of computers on wages — and he was a public servant too. He will be sorely missed.

 

Business as usual: regime change and GLCs in Malaysia


March 14, 2019

Business as usual: regime change and GLCs in Malaysia

By Dr. Edmund Terence Gomez

https://www.newmandala.org/business-as-usual-regime-change-and-glcs-in-malaysia/

 

  • Edmund Terence Gomez is Professor of Political Economy at the Faculty of Economics & Administration, University of Malaya. His publications include Malaysia’s Political Economy: Politics, Patronage and Profits (Cambridge University Press, 1997), Political Business in East Asia (Routledge, 2002), The New Economic Policy in Malaysia: Affirmative Action, Horizontal Inequalities and Social Justice (National University of Singapore Press, 2013) and Minister of Finance Incorporated: Ownership and Control of Corporate Malaysia (Palgrave-Macmillan, 2017).

    When Pakatan Harapan unexpectedly secured power after Malaysia’s 14th General Elections (GE14) in May 2018, voters expected the coalition and Prime Minister Mahathir Mohamad to dismantle an extremely well-entrenched government–business institutional framework that had contributed to extensive clientelism, collusion, nepotism and embezzlement. After all, the institutionalisation of more transparent and accountable governance was a Pakatan campaign pledge.

    However, barely nine months after taking control of government, Pakatan appears to be re-instituting the practice of selective patronage in the conduct of politics and through the implementation of public policies. In this inter-connected domain of public policies and selective patronage, government-linked companies (GLCs) will play a key role.

    The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

    Federal ministries, under the ambit of cabinet ministers, also control a vast number of quoted and unlisted GLCs that do a variety of things, including promoting development of strategic economic sectors, redressing spatial inequities by developing rural areas and industries, and financing research and development to drive industrialisation. However, of the 25 ministries in the federal cabinet in 2017, before the fall of Barisan, three in particular, the Prime Minister’s Department, Ministry of Finance (MoF) and Ministry of Rural and Regional Development (MRRD), had control of a huge assortment of companies that were deployed to channel government-generated rents to UMNO members and well-connected businesspeople.

    At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.

    Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.

    Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.

    Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

    Power struggles, persistent patronage

    Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.

    Image result for Anwar. mahathir and Azmin

    A PKR insider insists that the party is split into two factions, one loyal to party supremo Anwar Ibrahim and the other to deputy president Mohamed Azmin Ali.

    The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.

    Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

    Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.

    Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.

    Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous 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. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.

    In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

    The problem of instituting real change

    All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.

    The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.

    Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.

    There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

    Fragile state and political economic outcomes

    Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.

    What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful

    Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

    Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.
    itutions, has a majority equity interest in them.
    The core institutions employed by the Barisan Nasional coalition and the hegemonic party at its helm, the United Malays National Organisation (UMNO), that allowed for extensive profligacy are what are collectively known as GLCs. These GLCs are, in fact, a complex ensemble of statutory bodies, foundations, trust agencies, investment enterprises, a sovereign wealth fund, as well as companies, with representation in a wide array of industries. These institutions, controlled by the central and 13 state governments in the Malaysian federation, officially function primarily as “enablers” of domestic firms, to nurture a dynamic privately-owned enterprise base. But GLCs also constitute an estimated 42% of total market capitalisation of all publicly-listed firms. 67 quoted firms can be classified as GLCs, as the government, through various institutions, has a majority equity interest in them.

    At the state level, different public institutions own GLCs through the states’ chief ministers, through holding firms known as Chief Minister Incorporated (CMI). CMIs establish companies to undertake activities in specific constituencies to mobilise electoral support. Party members are liberally appointed as directors of these GLCs, a major source of political financing as their stipends are used for political activities. Through the CMIs, what had emerged was the fusing of bureaucratic and party apparatuses, allowing politicians to selectively channel government resources in a manner that would help them consolidate or enhance their political base.
    Another factor shaped modes of GLC development: a communal perspective to policy implementation, in keeping with the government’s longstanding affirmative action-based redistributive agenda to transfer corporate equity to the Bumiputera (Malays and other indigenous groups). However, rents meant for poor Bumiputera were hijacked by UMNO members. Eventually, these GLCs became sites of political struggles among elites attempting to consolidate power through patronage, a reason why critics have persistently excoriated them as inefficient and loss-making concerns.
    Interestingly enough, this GLC framework became entrenched in the economy as well as the political system during Mahathir’s long 22-year reign as prime minister, from 1981 until 2003. Other key figures who shaped how this political–business nexus evolved while they served with Mahathir previously include then-Finance Minister Daim Zainuddin (1984–1990), now his economic advisor, and Anwar Ibrahim (1990–1997), then and now the designated prime minister-in-waiting. By the time of GE14, this GLC structure had become so huge—and so abused by Barisan—that Mahathir himself described it as a “monster”.
    Despite Pakatan’s promise of a new approach to shaping Malaysia’s political economy, experience thus far suggests a surprising degree of continuity. Rather than give up an appealingly effective lever for consolidating power, Pakatan leaders seem inclined to borrow the same tools on which Barisan had so detrimentally relied.

    Power struggles, persistent patronage
    Soon after Pakatan formed the government, a disturbing series of events occurred. Shortly after the election, Prime Minister Mahathir inaugurated the Ministry of Economic Affairs (MEA), led by Azmin Ali, deputy president of Parti Keadilan Rakyat (PKR), Anwar’s party. Even before GE14, PKR was mired in a serious factional row, reportedly due to problems between Anwar and Azmin. Meanwhile, Mahathir is widely thought to be uncomfortable with transferring power to Anwar, who he had removed from public office in 1998.
    The newly-minted MEA took control of numerous GLCs from the Ministry of Finance (MoF), under the jurisdiction of Lim Guan Eng, leader of the Democratic Action Party (DAP). In this discreet shuffling of GLCs between ministries, Malaysia’s only sovereign wealth fund, Khazanah Nasional, was channelled from MoF to the Prime Minister’s Department, under Mahathir’s control. The government did not explain why these GLCs were shifted between ministries, but MoF’s enormous influence over the corporate sector has been significantly diminished. Under Barisan, the Prime Minister had also functioned as the Finance Minister, a practice Mahathir had started in 2001, but Pakatan, while in opposition, had pledged to ensure the same politician would not hold both portfolios.
    Even though Khazanah was under the Prime Minister’s Department, Mahathir appointed himself as its chairman, which is, by convention, the practice. The convention also is that the Finance Minister serve on Khazanah’s board of directors. Instead, Minister of Economic Affairs Azmin was given this appointment. The appointment of Mahathir and Azmin as Khazanah board members was contentious as Pakatan had pledged in its election manifesto that politicians would not be appointed as directors of government enterprises.

    Next, in September 2018, Azmin’s ministry convened a Congress on the Future of Bumiputeras & the Nation. Mahathir stressed at this congress the need to reinstitute the practice of selective patronage, targeting Bumiputera, a plan his economic advisor, Daim, endorsed. The following month, when Pakatan, through the MEA, released its first public policy document, the Mid-Term Review of the 11th Malaysia Plan, it emphasised the Bumiputera policy as being imperative. In the past, GLCs have been central to government efforts to advance Bumiputera interests.
    Meanwhile, numerous ministers began actively calling for the divestment of GLCs, an issue also in the 2019 budget. Subsequently, when Khazanah began reducing its equity holdings, including in CIMB, Malaysia’s second largest bank, rather than seeming simply a step toward the larger goal of scaling back government ownership, this divestment raised the question whether it marked the commencement of a transfer of control of key enterprises to well-connected business people, even proxies of politicians, a common practice by UMNO in the 1990s. In fact, in ensuing debates about such divestments, the question was raised whether such divestments were an attempt to create a new influential economic elite, even oligarchs, who could check politicians in power in the event of a leadership change.
    Then, another contentious issue occurred. Minister of Rural & Regional Development Rina Harun, of Mahathir’s Parti Pribumi Bersatu Malaysia (Bersatu), appointed politicians from her party to the boards of directors of GLCs under her control. Under UMNO, this ministry had persistently been embroiled in allegations of corruption, undermining the activities of its GLCs that had been created to redress spatial inequalities and reduce poverty. The practice of patronage through GLCs to draw electoral support was rampant under this ministry as its enterprises have an enormous 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. Hence, the minister’s directorial appointments suggested a worrying trend of continuity of irresponsible practices of the old regime.
    In December 2018, Bersatu leaders openly declared their intent to persist with the practice of selectively-targeted patronage. At its first convention after securing power, when its president, Muhyiddin Yassin, declared that “Bersatu should not be apologetic to champion the Bumiputera Agenda”, his statement was enthusiastically supported by members, suggesting an element of opportunism, even self-interested rent-seeking, in the party. UMNO leaders had made similar arguments in the past to justify state intervention, including through GLCs, a process that they abused to transfer government-generated rents to party members, to the detriment of poor Bumiputera. These trends suggested that Bersatu’s primary concern was its immediate need to consolidate power, not instituting appropriate long-term socioeconomic reforms, which might do less to muster support.

    The problem of instituting real change
    All told, then, these specific, sometimes discreet, steps since GE14 have called into question the extent of political economic reforms expected of Pakatan, based on its own manifesto. Moreover, under Pakatan, by its own admission, the volume of state intervention in the economy will still be substantial. Industrial development will be fostered through GLCs, as will attempts to nurture dynamic domestic Bumiputera-owned enterprises. Worryingly, what is absent is a coherently-structured industrial plan to cultivate entrepreneurial private firms. There is similarly no roadmap to reform these GLCs, or even to get them to target specific core industries requiring heavy capital investments and extensive research and development funding to rapidly industrialise the economy. Since politicians will control most of these GLCs as directors, they will determine the recipients of rents distributed to nurture domestic enterprises.
    The current state of play raises an important question about an interesting phenomenon: what happens, in terms of dismantling rent-seeking and patronage and instituting reforms to curb corruption, when a new regime comprises politicians who see this framework as a mechanism to consolidate power? A link between two core issues remains in place after regime change: elite domination and the continued practice of selective patronage, legitimised by advocating race-based policies that are to be implemented through GLCs. Under UMNO, elite domination was obvious, with Barisan component members subservient to then-Prime Minister Najib. In Pakatan, a multi-party coalition, Prime Minister Mahathir and Daim appear to have disproportionate influence when it comes to decision-making on core issues, though the parameters of their power remain unclear.
    Meanwhile, elite domination of the economy at the state level varies as several different parties are in power. State governments are controlled by UMNO, Bersatu, PKR, DAP, Parti Warisan Sabah, Parti Islam Se-Malaysia (PAS) and Parti Pesaka Bumiputera Bersatu (PBB). The latter two parties have long governed Kelantan and Sarawak respectively, while Bersatu and Warisan are new parties run by UMNO factions, though ostensibly with a reformist agenda. The governance dynamics of these parties in these state governments will differ, specifically in terms of how they employ GLCs, further indicating the ubiquity of these enterprises in the economy. These GLCs have persistently been used to distribute different types of rents such as financial aid, contracts, permits, licences, etc., to party members as well as others in the electorate in key constituencies. Even with regime change, the presence of covert networks of power created through GLCs in these states is unlikely to be reformed, thus contributing to continued serious wastage of scarce resources.
    There is plainly no clear method to the madness of how the new federal or state governments employ GLCs. Different sets of political and business elites operate at the national and state levels. In fact, before GE14, business elites were known to be creating ties with politicians in both UMNO and Pakatan parties, specifically PKR and DAP. Meanwhile, in Sarawak, wealthy businessmen had long since begun entering politics, even getting elected as parliamentarians, thus giving them access to federal government leaders. This diversity in political–business ties, where government institutions figure, is an indication of how complex the GLC problem has become. However, GLCs remain an opaque form of state intervention in the economy. And, since there is little public knowledge of GLCs, the opacity of these enterprises has allowed for their abuse by politicians.

    Fragile state and political economic outcomes
    Since Pakatan is a coalition of parties led by politicians who coalesced only because they had a common agenda—the removal of Najib from power—what prevails in the post-GE14 period can be described as a “fragile state”. This fragility is also because of the uneasy relationship between Mahathir, who leads the second-smallest party in Pakatan, and his long-time-nemesis-now-political-ally Anwar, who leads the party with the highest number of parliamentary seats. PKR, however, is ridden with serious factionalism, including an uneasy truce between Anwar and Azmin, who apparently is closely associated with Mahathir.
    What is emerging is new forms of power relations through the unhealthy circulation of political elites from the old regime into Pakatan, as well as alliances between leaders from different parties in this coalition. UMNO parliamentarians are lining up to join Bersatu, a quick route back to power for them after their unexpected ouster. By co-opting them, Mahathir’s new party can swiftly fortify its extremely weak base in Bumiputera-dominant states. Bersatu’s co-optation of discredited UMNO members is, however, seriously undermining support for Pakatan among the urban middle class, as well as Mahathir’s credibility. In fact, there has been recent talk in the public domain that a no-confidence motion against Mahathir as Prime Minister may be tabled in the March sitting of parliament, led apparently by leaders within Pakatan. Because of this complex situation of political in-fighting, there is much fear that politicians in power may move to create, through the divestment of GLCs, powerful business elites or even oligarchs to check other political elites.
    Since a structural framework that allowed politicians to exploit institutions in various ways to serve vested political and economic interests remains in place, a key question has emerged. What are the possible political outcomes to this situation, in which contending elites in the new regime struggle to consolidate their respective power bases? Political outcomes can involve protecting the property rights—through ongoing and much-needed institutional reforms—of business elites who acquire privatised GLCs, thereby preventing expropriation of these companies by the government in the event of a change of premiership. Political outcomes can also entail endorsing entitlements that give one large segment of society privileged access to government-generated rents, as is already actively occurring. Inevitably, a related issue is the necessity of targeted race-based policies. These policies serve as a mechanism to retain patronage-based networks and consolidate power bases. This approach can, however, stymie domestic investments by non-Bumiputera, a serious and persistent problem during Barisan’s rule.

    Ironically, it was these forms of unproductive government–business networks that Pakatan had promised to dismantle when in opposition, in order to forge a “New Malaysia”. This New Malaysia was supposed to be devoid of race-based political discourses and policies, with the GLCs deployed to promote equitable development and redress social inequities. The GLCs were not to be led by politicians who have no clue how to utilise them productively in the economy. These pledges have been broken. Evidently, consolidating power is more important for Malaysia’s new political elites than restructuring an economy in dire need of reform.

       

Change in education will come, but wait


February 15, 2019

Change in education will come, but wait

 

At a recent forum attended by the education minister, I had a unique chance to observe the citizenry in action with regards to the issue of education.

I suppose 30 years of pent-up anger about the issue was suddenly unleashed after May 9 and, with the openness of the new minister, an opportunity was raised to vent out these frustrations.

Everyone has ideas on revamping the education system. I, too, in many ways, have written or voiced out those exact comments in other forums and talks.

But what seems to be missing is patience and appreciation on the part of the citizenry of what has already been done: the planning and complexity of manoeuvring things in order to effect change in education.

The ministry has addressed many housekeeping issues on the provision of basic infrastructure like abandoned projects, broken furniture, inadequate book stocks, teachers’ workloads, and trying to change attitudes towards education management.

But the middle-class elites seem unimpressed with these efforts. They want to see change now.

Image result for malaysian education blueprint 2018

What are we waiting– for the Sun to rise in The West?

We can only expect to see change if we start to think in the right direction. In the case of religious education, it will be a miracle if we see change in the next 30 years.

On the issue of English, on the other hand, I can see change in five years’ time.

Why can’t change occur now? I think the reasons are pretty obvious.

Changing 450,000 teachers is a doable, but Herculean task. Changing the mindset of the academia will not be easy after 30 years of complacency due to the Universities and University Colleges Act.

Changing the curriculum of professional education will be near-impossible if the ministry has no control over the professional bodies who ride roughshod over universities’ professional programmes. But it can still be done.

Fighting off extremist Malay and Islamic groups is like walking on water. We need a miracle! But miracles, too, can be engineered and managed, and change will come eventually.

For me, hearing about “values-driven education” and “humanising education” is already the signal for change.

The ministry has proposed a drastic change from the factory production-oriented school leavers and university graduates to a more tolerant citizenry on differences of faiths and culture. All teachers and academics should answer this call immediately and with utmost urgency.

What we can do now, we should do. What we can plan to change a little later, we put plans in place. The onus is on us not to wait for another education blueprint.

The call for change has already been sounded. The strategies for change have already been placed. The long-term issues of education are already being planned and are undergoing minute scrutiny before implementation.

What is required of the citizenry is their own efforts to understand the vision and change according to their own capacities and abilities.

What is needed are new ideas and suggestions to strengthen the framework that is already in existence. What is desired most of the citizenry is an open mind to the various sensitivities and time bombs of socio-political constructs surrounding the issue of education.

At the end of the day, we must understand that the minister concerned has no magic wand to conjure miracles.

As long as the objectives of change are clear and some small change has occurred, we should accept patience as an investment in life.

The battle to put in place the right people and perspective of change has already been won. The question for the citizenry now is: can we accept what has come and endure with patience for what is promised?

Can we look at change as a continuing process and not as a singular momentous event?

The views expressed are those of the author and do not necessarily reflect those of FMT.

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In defense of the elites


February 5, 2019

In defense of the elites

 

by Dr. Fareed Zakaria

https://fareedzakaria.com/columns/2019/1/31/in-defense-of-the-elites

This year’s World Economic Forum, more than usual, prompted a spirited round of elite-bashing, which has now become the trendy political posture on both the right and left. On one side, President Trump and Fox News hosts slam the out-of-touch establishment that, according to them, has run things into the ground. On the other side, left-wingers decry the millionaires and billionaires who, in one author’s phrase, “broke the modern world.”

Underlying these twin critiques is a bleak view of modern life — seen as a dysfunctional global order, producing stagnant incomes, rising insecurity and environmental degradation. But is this depiction, in fact, true? Are we doing so very badly that we need to bring back the guillotines?

On the simplest and most important measure, income, the story is actually one of astonishing progress. Since 1990, more than 1 billion people have moved out of extreme poverty. The share of the global population living in these dire conditions has gone from 36 percent to 10 percent, the lowest in recorded history. This is, as the World Bank president, Jim Yong Kim, notes, “one of the greatest achievements of our time.” Inequality, from a global perspective, has declined dramatically.

And all this has happened chiefly because countries — from China to India to Ethiopia — have adopted more market-friendly policies, and Western countries have helped them with access to markets, humanitarian assistance and loan forgiveness. In other words, policies supported by these very elites.

Look at any measure from a global perspective and the numbers are staggering. The child mortality rate is down 58 percent since 1990. Undernourishment has fallen 41 percent, and maternal deaths (women dying because of childbirth) have dropped by 43 percent over roughly the same period.

I know the response that some will have to these statistics. The figures pertain to the world in general, not the United States. Things might have improved for the Chinese, but not for the denizens of rich countries. That sense of “unfairness” is what is surely fueling Trump’s “America First” agenda and much of the anger on the right at the international system. (More bewilderingly, the left, traditionally concerned about the poorest of the poor, has become critical of a process that has improved the lives of at least 1 billion of the world’s most impoverished people.)

When criticizing the current state of affairs, it’s easy to hark back to some nostalgic old order, the modern world before the current elites “broke” it. But when was that golden age? In the 1950s, when Jim Crow reigned in the United States and women could barely work as anything more than seamstresses and secretaries? The 1980s, when two-thirds of the globe stagnated under state socialism, repression and isolation? What group of elites — kings, commissars, mandarins — ran the world better than our current hodgepodge of politicians and business executives?

Even in the West, it is easy to take for granted the astounding progress. We live longer, the air and water are cleaner, crime has plunged, and information and communication are virtually free. Economically, there have been gains, though crucially, they have not been distributed equally.

But there have been monumental improvements in access and opportunity for large segments of the population that were locked out and pushed down. In the United States, the gap between black and white high school completion has almost disappeared. The poverty gap between blacks and whites has shrunk (but remains distressingly large). Hispanic college enrollment has soared. The gender gap between wages for men and women has narrowed. The number of female chief executives at Fortune 500 companies has gone from one to 24 over the past 20 years. Female membership in national legislatures of Organization for Economic Cooperation and Development member countries has almost doubled in the same period. No countries allowed same-sex marriage two decades ago, but more than 20 countries do today. In all these areas, much remains to be done. But in each of them, there has been striking progress.

I understand that important segments of the Western working class are under great pressure, and that they often feel ignored and left behind by this progress. We must find ways to give them greater economic support and moral dignity. But extensive research shows that some of their discomfort comes from watching a society in which these other groups are rising, changing the nature of the world in which they’d enjoyed a comfortable status.

After 400 years of slavery, segregation and discrimination in the United States, blacks have been moving up. After thousands of years of being treated as structurally subordinate, women are now gaining genuine equality. Once considered criminals or deviants, gays can finally live and love freely in many countries. The fact that these changes might cause discomfort to some is not a reason to pause, nor to forget that it represents deep and lasting human progress that we should celebrate.

(c) 2019, Washington Post Writers Group