Reclaiming Community


November 15, 2018

Reclaiming Community

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Stable families, good jobs, strong schools, abundant and safe public spaces, and pride in local cultures and history – these are the essential elements of prosperous societies. Neither global markets nor the nation-state can adequately supply them, and sometimes markets and states undermine them.

CAMBRIDGE – Economics teaches that the measure of an individual’s wellbeing is the quantity and variety of goods he or she can consume. Consumption possibilities are in turn maximized by providing firms with the freedom they need to take advantage of new technologies, the division of labor, economies of scale, and mobility. Consumption is the goal; production is the means to it. Markets, rather than communities, are the unit and object of analysis.

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Harvard’s Dr. Dani Rodrik

No one can deny that this consumer- and market-centric vision of the economy has produced plenty of fruit. The dazzling array of consumer goods available in the megastores or Apple outlets of any major city in the world would have been unimaginable as recently as a generation ago.

But clearly something has gone wrong in the meantime. The economic and social divisions within our societies have provoked a broad backlash in a wide range of settings – from the United States, Italy, and Germany in the developed world to developing countries such as the Philippines and Brazil. This political turmoil suggests that economists’ priorities may not have been entirely appropriate.

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The “third pillar” of the title is the community we live in. Economists all too often understand their field as the relationship between markets and the state, and they leave squishy social issues for other people. That’s not just myopic, Rajan argues; it’s dangerous. All economics is actually socioeconomics – all markets are embedded in a web of human relations, values and norms. As he shows, throughout history, technological phase shifts have ripped the market out of those old webs and led to violent backlashes, and to what we now call populism. Eventually, a new equilibrium is reached, but it can be ugly and messy, especially if done wrong.–The Third Pillar– R. Rajan

Two books, one forthcoming from Raghuram Rajan and another published this month by Oren Cass, revisit our economistic worldview and argue that we should instead put the health of our local communities front and center. Stable families, good jobs, strong schools, abundant and safe public spaces, and pride in local cultures and history – these are the essential elements of prosperous societies. Neither global markets nor the nation-state can adequately supply them, and sometimes markets and states undermine them.

The authors come from different vantage points. Rajan is an economist at the University of Chicago and a former governor of the Reserve Bank of India. Cass is at the right-of-center Manhattan Institute for Policy Research and was domestic policy director for Republican Mitt Romney’s presidential campaign. You would not necessarily expect either a Chicago economist or a moderate Republican to treat markets and hyper-globalization with skepticism. But both are disturbed by what they see as the effects on communities.

Rajan calls community the “third pillar” of prosperity, as important as the other two pillars – the state and market. No less than excessive centralized state power, he writes, unmanaged globalization can tear apart the fabric of local communities.

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Cass is explicit that US trade and immigration policy should focus on American workers first and foremost. This means ensuring that local labor markets are healthy and that there are plenty of goods jobs at decent wages. Both authors emphasize the gains from trade and reject US President Donald Trump’s protectionism. But they agree we may have gone too far into hyper-globalization and paid insufficient attention to the costs for communities.

When a local factory closes because a firm has decided to outsource to a supplier across the border, more is lost than the hundreds (or thousands) of jobs that move abroad. The impact is multiplied through reduced spending on local goods and services, which means workers and employers across the entire local economy feel the hit. The local government’s tax revenues fall as well, so there is less money to spend on education and other public amenities. Anomie, family breakdown, opioid addiction, and other social ills often follow.

Economists’ usual answer is to call for “greater labor market flexibiliy”: workers should simply leave depressed areas and seek jobs elsewhere. But as Cass reminds us, geographical mobility has to be coupled with “the opportunity to stay.” Even during times of significant migration, the bulk of local populations stayed put and needed good jobs and solid communities

Alternatively, economists might recommend compensating the losers from economic change, through social transfers and other benefits. Leaving aside the feasibility of such transfers, it is doubtful that they are the solution. Joblessness will undermine individual and community wellbeing even if consumption levels are propped up through cash grants.

Ultimately, it is only through the creation and expansion of well-paying jobs that local communities can be made vital. Cass’s proposal is to encourage employment through wage subsidies. Rajan emphasizes the role of local leaders who can mobilize community assets, generate social engagement on the part of local residents, and create a new image – all in the context of more supportive state policies and managed globalization.

Other economists have advocated regionally targeted manufacturing extension programs, fostering partnerships between local employers and universities. Yet others recommend local public spending, such as on job training programs for small and medium-sized enterprises.

We do not have a good fix on what works best, and a fair amount of policy experimentation will be needed to make progress. But the urgency of action is heightened by the fact that ongoing technological trends threaten to exacerbate communities’ existing problems. New digital technologies tend to exhibit scale economies and network effects, which produce concentration rather than localization of production. Instead of diffusing gains, they create winner-take-all markets. The globalization of production networks magnifies such effects further.How we balance these forces with the needs of communities will shape not only our economic fortunes, but also our social and political environment. As Cass and Rajan show, it is a problem that economists should no longer ignore.

ttps://www.project-syndicate.org/commentary/economists-focus-on-markets-too-narrow-by-dani-rodrik-2018-11

*Dani Rodrik is Professor of International Political Economy at Harvard University’s John F. Kennedy School of Government. He is the author of The Globalization Paradox: Democracy and the Future of the World Economy, Economics Rules: The Rights and Wrongs of the Dismal Science, and, most recently, Straight Talk on Trade: Ideas for a Sane World Economy.

Malaysians still count on bolder economic reform


November 13, 2018

Malaysians still count on bolder economic reform

Author: Editorial Board, ANU

ww.eastasiaforum.org

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READ ON: http://news.iium.edu.my/2016/04/10/book-review-a-new-malaysia-by-joaquim-huang/

The widely unanticipated ousting of Malaysia’s government in May not only left political analysts scrambling for explanations. It also had economists wondering what was in store for the economy.

The Najib Razak government had presided over relatively strong growth (5.9 per cent in 2017), low unemployment (around 3.5 per cent) and sound macroeconomic fundamentals. The eclectic group that gathered around former prime minister Mahathir and Pakatan Harapan (Alliance of Hope) to send the former government on its way had a less than stellar economic resume. Its campaign was mobilised around restoring good governance and unabashedly populist economics.

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Finance Minister Lim Guan Eng –Emulate Tun Tan Siew Sin-Take Care of our money and please don’t sleep on the Job

The promise of a sounder revenue base was abandoned with the scrapping of the goods and services tax (GST). The future of economic reform and sound economic management looked distinctly uncertain. The government’s first move on the economic front saw it outsource consideration of pressing economic and other national issues to a Council of Eminent Persons. The Council consulted widely with key academic, business and government stakeholders in developing an agenda for economic reform and delivered a report to government in August.

Despite the promise of transparent governance, the contents of the Council’s report have remained confidential. Meanwhile Finance Minister Lim Guan Eng focused his early efforts on exposing the former government’s accumulation of debt and corrupt contracting, alongside abolishing the GST and reintroducing petrol subsidies — prudent if poorly sold policies of the Najib government. While there has been silence on economic reform, there’s been a hive of activity from the new government on the governance front.

Mahathir sent a clear message to ministers that elected officials and civil servants are expected to act in the people’s interests. The pursuit of former prime minister Najib and his associates on corruption charges, the separation of powers for key agencies, push back on the empire that had developed around the Prime Minister’s Department and promises to end the most egregious political appointments are among the promising early signs of large-scale governance reform. Economic governance is also set to benefit under the recently updated Eleventh Malaysia Plan priorities. It affirms commitments to improve fiscal frameworks, tackle corruption-affected tender processes, strengthen the competition regulator and enhance frontline service delivery. The 2019 Budget released on 2 November supports these reforms with specific measures and resources. Action and optimism surrounding getting institutions fixed has staved off criticism about the lack of action on economic reform.

The revised Plan and the government’s first Budget were expected to provide clarity about the new government’s medium-term economic reform agenda. Despite the short-term fiscal bind, the hope was that ambitions for economic reform would match those for governance.

As this week’s lead article by Stewart Nixon notes, the commitment to reform in key areas is underwhelming.

‘The Mid-Term Review provides a blueprint loaded with high-level aspirations that would represent an impressive reform agenda if translated into successful policies,’ says Nixon. ‘But aspects of the Review raise questions about the government’s real capacity to navigate medium-term risks. The 2020 balanced budget target has been abandoned and the budget deficit has widened to 3.7 per cent of GDP (with an aim to reduce this to 3 per cent of GDP by 2020), while public investment — most notably in major rail and pipeline projects — is set to contract.’

Malaysia has a low level of taxation revenue and public expenditure, but the government’s role in the economy is still pervasive. As Nixon observes, ‘The highly centralised top-down federation (that cripples local government initiative) and government ownership of more than half the local stock market ensure that the vast majority of economic activity is directly affected by the state.’ There is a worrying disconnect between government rhetoric recognising the need to act in these areas and policies under the Review and Budget that would achieve the opposite.

Perhaps the biggest drag on Malaysia’s economic performance and handicap to its breaking through the middle-income trap is flailing human capital development. Nixon writes, ‘It is therefore a positive that human capital retains high policy priority in Malaysia — commanding its own pillar in the Mid-Term Review and the highest share of budget expenditure.’ But while the government is pursuing worthwhile measures to address immediate skills mismatches, invest in school infrastructure and raise the quality of education, it still lacks a plan to address key shortcomings, including an outdated learning culture, centralised decision-making and politicisation.

As Nixon identifies, ‘The large program of policies favouring Malays and other indigenous groups (Bumiputera) in the Mid-Term Review is another possible economic destabiliser.’ The hope that Mahathir’s more representative government would bring an end to the country’s long-running and ill-targeted affirmative action program is still just a hope. The Review simply reaffirms the government’s commitment to continuing it while the budget extends discrimination into the digital arena. ‘Outdated and divisive policies serve to perpetuate negative perceptions of the majority Malays, deter investment and encourage the brain drain of discriminated-against minorities,’ says Nixon.

The challenge over time will be to build the tax base and put in place a transfer system that targets need and addresses universal problems of inclusiveness. Reforms that reduce pervasive federal government presence across the economy and influence in local governance are a high priority. Without these changes, tackling corruption-riddled systems of political patronage will be a job that’s never properly done.

The continuation and extension of pro-Bumiputera policies represents a disappointing failure to promote a more inclusive approach to ethnic relations. Fixing Malaysia’s floundering education system is also now a top priority.

If ever a government had the mandate and popularity to progress a bold reformist economic agenda in Malaysia it is now. Taking the leap to developed economy status rests on challenging reforms in areas of well-publicised and politicised weakness. Instead, the government’s first major economic policy announcements delivered mixed messages on debt reduction, unproductive handouts, minimalist tax tinkering and increased dependence on SOEs and their dividends.

Post-election uncertainties affecting investor confidence, the looming global trade wars and emerging-economy financial risks all call for more determined fiscal re-prioritisation and bolder structural reform to send a strong signal that the new government has the nous and determination to meet the people’s economic expectations.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

 

 

Blame the Economists?


November 7, 2018

Blame the Economists?

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economists

Ever since the 2008 financial crash and subsequent recession, economists have been pilloried for failing to foresee the crisis, and for not convincing policymakers of what needed to be done to address it. But the upheavals of the past decade were more a product of historical contingency than technocratic failure.

 

BERKELEY – Now that we are witnessing what looks like the historic decline of the West, it is worth asking what role economists might have played in the disasters of the past decade.

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From the end of World War II until 2007, Western political leaders at least acted as if they were interested in achieving full employment, price stability, an acceptably fair distribution of income and wealth, and an open international order in which all countries would benefit from trade and finance. True, these goals were always in tension, such that we sometimes put growth incentives before income equality, and openness before the interests of specific workers or industries. Nevertheless, the general thrust of policymaking was toward all four objectives.

Then came 2008, when everything changed. The goal of full employment dropped off Western leaders’ radar, even though there was neither a threat of inflation nor additional benefits to be gained from increased openness. Likewise, the goal of creating an international order that serves everyone was summarily abandoned. Both objectives were sacrificed in the interest of restoring the fortunes of the super-rich, perhaps with a distant hope that the wealth would “trickle down” someday.

At the macro level, the story of the post-2008 decade is almost always understood as a failure of economic analysis and communication. We economists supposedly failed to convey to politicians and bureaucrats what needed to be done, because we hadn’t analyzed the situation fully and properly in real time.

Some economists, like Carmen M. Reinhart and Kenneth Rogoff of Harvard University, saw the dangers of the financial crisis, but greatly exaggerated the risks of public spending to boost employment in its aftermath. Others, like me, understood that expansionary monetary policies would not be enough; but, because we had looked at global imbalances the wrong way, we missed the principal source of risk – US financial mis-regulation.

Still others, like then-US Federal Reserve Chairman Ben Bernanke, understood the importance of keeping interest rates low, but overestimated the effectiveness of additional monetary-policy tools such as quantitative easing. The moral of the story is that if only we economists had spoken up sooner, been more convincing on the issues where we were right, and recognized where we were wrong, the situation today would be considerably better.

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The fact that Obama failed to take aggressive action, despite having recognized the need for it beforehand, is a testament to Tooze’s central argument. Professional economists could not convince those in power of what needed to be done, because those in power were operating in a context of political breakdown and lost American credibility. With policy making having been subjected to the malign influence of a rising plutocracy, economists calling for “bold persistent experimentation” were swimming against the tide – even though well-founded economic theories justified precisely that course of action.—

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The Columbia University historian Adam Tooze has little use for this narrative. In his new history of the post-2007 era, Crashed: How a Decade of Financial Crises Changed the World, he shows that the economic history of the past ten years has been driven more by deep historical currents than by technocrats’ errors of analysis and communication.

Specifically, in the years before the crisis, financial deregulation and tax cuts for the rich had been driving government deficits and debt ever higher, while further increasing inequality. Making matters worse, George W. Bush’s administration decided to wage an ill-advised war against Iraq, effectively squandering America’s credibility to lead the North Atlantic through the crisis years.

It was also during this time that the Republican Party began to suffer a nervous breakdown. As if Bush’s lack of qualifications and former Vice President Dick Cheney’s war-mongering weren’t bad enough, the party doubled down on its cynicism. In 2008, Republicans rallied behind the late Senator John McCain’s running mate, Sarah Palin, a folksy demagogue who was even less suited for office than Bush or Cheney; and in 2010, the party was essentially hijacked by the populist Tea Party.

After the 2008 crash and the so-called Great Recession, years of tepid growth laid the groundwork for a political upheaval in 2016. While Republicans embraced a brutish, race-baiting reality-TV star, many Democrats swooned for a self-declared socialist senator with scarcely any legislative achievements to his name. “This denouement,” Tooze writes, “might have seemed a little cartoonish,” as if life was imitating the art of the HBO series “Veep.”

Of course, we have yet to mention a key figure. Between the financial crisis of 2008 and the political crisis of 2016 came the presidency of Barack Obama. In 2004, when he was still a rising star in the Senate, Obama had warned that failing to build a “purple America” that supports the working and middle classes would lead to nativism and political breakdown.

Yet, after the crash, the Obama administration had little stomach for the medicine that former President Franklin D. Roosevelt had prescribed to address problems of such magnitude. “The country needs…bold persistent experimentation,” Roosevelt said in 1932, at the height of the Great Depression. “It is common sense to take a method and try it; if it fails, admit it frankly and try another. But above all, try something.”

The fact that Obama failed to take aggressive action, despite having recognized the need for it beforehand, is a testament to Tooze’s central argument. Professional economists could not convince those in power of what needed to be done, because those in power were operating in a context of political breakdown and lost American credibility. With policymaking having been subjected to the malign influence of a rising plutocracy, economists calling for “bold persistent experimentation” were swimming against the tide – even though well-founded economic theories justified precisely that course of action.

Still, I do not find Tooze’s arguments to be as strong as he thinks they are. We economists and our theories did make a big difference. With the exception of Greece, advanced economies experienced nothing like a rerun of the Great Depression, which was a very real possibility at the height of the crisis. Had we been smarter, more articulate, and less divided and distracted by red herrings, we might have made a bigger difference. But that doesn’t mean we made no difference at all.

J. Bradford DeLong is Professor of Economics at the University of California at Berkeley and a research associate at the National Bureau of Economic Research. He was Deputy Assistant US Treasury Secretary during the Clinton Administration, where he was heavily involved in budget and trade negotiations. His role in designing the bailout of Mexico during the 1994 peso crisis placed him at the forefront of Latin America’s transformation into a region of open economies, and cemented his stature as a leading voice in economic-policy debates.

Welcome to Malaysia’s Brave New World


November 5, 2018

Welcome to Malaysia’s Brave New World

by: John Berthelsen

https://www.asiasentinel.com/econ-business/malaysia-brave-new-world/

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“Euphoria is dying off and bodies like Bersih, he continued, have started criticizing the new government. Many from civil society are keeping silent. “I suppose the saving grace is that Najib and his cohorts are gone. But that can’t console people forever.”_- J. Berthelsen

Six months into the rule of Malaysia’s new reform government, the bloom has started to fade as the Pakatan Harapan coalition attracts growing criticism while it seeks to find its feet against the political and economic debris left by the outgoing Barisan Nasional, driven from power on May 9 after six-plus decades in office.

The problems the government faces were starkly outlined on Nov. 1 by Finance Minister Lim Guan Eng in a marathon 14,000 word speech outlining the 2019 budget, in which he stated that the previous government, which he characterized as “kleptocratic,” had understated debt and liabilities by nearly 40 percent, rising to a stunning RM1.05 trillion (US$256.8 billion) in an effort to hide corruption, and that debts from the scandal-scarred 1Malaysia Development Bhd development fund could total as much as RM43.9 billion, not including RM7 billion in interest secretly paid on 1MDB debts using taxpayer money illegally.

To Malaysia’s credit, the frighteningly poisonous racial equation, in which ethnic Malays make up about half the population, the Chinese 23 percent and Indians 7 percent, with the rest split between expatriates and bumiputera tribes in East Malaysia, seems to have cooled markedly. The previous government’s attempt to use fundamentalists Islam to pound minorities has largely ceased although UMNO and the fundamentalist Parti Islam se-Malaysia continue to attempt to fan the flames. It remains to be seen what strains there are between the Chinese-dominated Democratic Action Party, Mahathir’s Parti Bersatu Pribumi, and Anwar Ibrahim’s moderate, urban Malay Parti Keadilan Rakyat – and what internal strains there are inside PKR.

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The country is faced with a long series of monumental tasks – rebuilding a judiciary that was thoroughly corrupted by the previous government’s 61 years in power. The education system is a shamble, built on Malay privilege instead of academic achievement.  Lim called attention to educational shortcomings with a long series of measures allocating funds to lower-income students, upgrading failing schools and educational infrastructure, training and vocational education programs. Other sources say the government is being hamstrung to a certain extent by a civil service loyal to the previous government.

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A series of murders including that in 2006 of Mongolian translator and party girl Altantuya Shaariibuu, AMBank founder Hussain Najadi and prosecutor Kevin Morais (pic above), all believed to be at the hands of high government officials, remain to be solved or even looked into.

The new government, caught by circumstances, has compounded its problems by campaigning against a deeply unpopular Goods and Services Tax (GST) implemented by the government of former Prime Minister Najib Razak, and then actually repealing it once in office, leaving a gigantic hole in government revenues.

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‘–at the same time it has agreed to go along with Mahahir’s ill-conceived hobby horse, another national car project.

…That is despite 30-odd years of his previous ill-conceived hobby horse, the Proton national car, which cost the treasury billions of ringgit and billions more to consumers in lost opportunity costs from paying through the nose for heavily tariffed competitors. “- J. Berthelsen

It is seeking to fill the hole with a variety of piecemeal taxes – at the same time it has agreed to go along with Mahahir’s ill-conceived hobby horse, another national car project. That is despite 30-odd years of his previous ill-conceived hobby horse, the Proton national car, which cost the treasury billions of ringgit and billions more to consumers in lost opportunity costs from paying through the nose for heavily tariffed competitors.

“There was a lot of euphoria when Pakatan won the elections, but expectations were also very high,” said a prominent business source in Kuala Lumpur. “They have a small window. If they don’t deliver, that window will start closing.  But unfortunately, politicians will be politicians. They are inexperienced, and the euphoria is wearing off. So far, we have had no exciting government programs. New Malaysia is like Old Malaysia, minus Najib Razak and his 40 thieves.”

Najib and his wife Rosmah Mansor have both been arrested and are expected to go on trial next year. Hundreds of millions of dollars have been confiscated by Malaysian and US authorities although hundreds of millions more, perhaps billions, remain outside he government grasp.  Jewelry, handbags, watches, cash and other riches belonging to Rosmah that have been confiscated total at least US$273 million, putting her in a league even above Imelda Marcos, the wife of the late Philippine strongman Ferdinand Marcos, who held the public record for corruption. It remains to be seen if the Najibs surpass it.

The businessman’s assessment could be a bit pessimistic.  The government has abolished with capital punishment and the press appears to remain largely free despite reluctance on the part of the government to abolish a “fake news” bill pushed through at the last minute by the previous administration in an effort to muzzle pre-election critics.

But a sedition act used against the previous government’s foes remains on the books and has been used against critics. Civic organizations including Suaram have called attention to government inactions on a variety of rights issues. There is also concern on the part of the Coalition for Free and Fair Elections, known as Bersih, and others that MPs from the thoroughly disgraced United Malays National Organization are migrating to Parti Pribumi Bersatu Malaysia, headed by once and current Prime Minister Mahathir Mohamad, diluting the reformist zeal of the Pakatan Harapan coalition.  Although as many as 40 UMNO MPs are said to be contemplating such a move, Mahathir said they would be vetted individually and known crooks would be kept out.

But, said Kim Quek, a spokesman for opposition leader Anwar Ibrahim’s Parti Keadilan Rakyat in an email, “I foresee mounting tension when UMNO MPs slip into Bersatu, one after another quietly, causing endless suspicion…and mounting public disapproval.”

The headwinds outlined by Finance Minister Lim paint a pessimistic picture for both business and government. With the Trump administration cracking down on trade in Washington, DC, and the global economy beginning to slow, the budget, at a record RM314.6 billion, is forecast to run 3.7 percent of GDP in the red with economic growth expected to slow to 4.8 percent from 5.9 percent in 2017.  The ringgit, Malaysia’s currency, has fallen by 10 percent against the US dollar, in line with troubles across the world as interest rates rise in the United States, causing a flight out of emerging markets.

Lim, in his speech, set out a series of measures designed to help business and vowed to get government out of commerce, saying “clearly, government owned companies have been competing directly with private companies in non-strategic sectors. The outcome was the apparent ‘crowding out’ of private sector investments where private companies are unable to grow and compete.”

The private sector, he said, must lead, and the finance ministry is expected to establish a task force designed to evaluate and reduce duplication of functions,  a ray of hope that the country’s notorious rent-seeking government-linked companies, which funneled millions from inflated contracts to UMNO, could be cut back and its even more notorious cronyism could be reduced.

“Going forward, the government will focus its expenditure and investments only in strategic sectors and areas where the markets are unable to meet the needs of the people,” he said..

Nonetheless, business investment remains lackluster while the sector tries to figure out which way the government is going to go.

“Malaysia will undoubtedly be affected by the US-China trade war given that both these countries are among our top three trading partners,” Lim said in his budget speech. Exports remain a significant driver of the economy, particularly including electronics, oil and gas and palm oil.

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Comeback kids: Like Dr M, other political figures have had second and even third acts during their careers, including (from left) Netanyahu, Abe, Berlusconi and Churchill    

Leadership remains somewhat unsettled, with Mahathir, at 93 the world’s oldest government leader, committed to staying for two years after the formation of the government. Anwar Ibrahim, now 71, has been waiting in the wing for decades, from the time when he was Mahathir’s chosen successor only to be fired and jailed after disagreements in 1998. Although he said he would study abroad and recover from his most recent imprisonment, he forced a by-election to return to parliament a few weeks ago, disconcerting some of his followers, who accused him of acting too quickly.

In the meantime, two of Anwar’s deputies – Mohamad Azmin Ali, the Minister of Economic Affairs, and Rafizi Ramli, the Parti Keadilan general secretary,  are staging their own internecine squabble to become deputy party leader with an eye to succeeding Anwar, raising concerns over party – and coalition – unity.  Pakatan Harapan remains a work in progress. Azmin is said to be aligned with Mahathir, Rafizi with Anwar.

That raises the spectre of Mahathir and Anwar continuing to try to do in each other despite public pledges of amity, including Mahathir campaigning for Anwar in the Port Dickson by-election that brought him back into the parliament.

“The Harapan guys thought that since they couldn’t get worse than Najib, people would continue to support them,” another source said. “They forget that there will always be alternatives; if not in the next five years, then in the next 10 maybe.  Inflation is creeping up; wages have not gone up; new taxes are being introduced and people still struggle to put food on the table. Business is slow; businessmen are not re-investing as they are unsure of this government’s policies.”

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Award winning Journalist John Berthelsen

Euphoria is dying off and bodies like Bersih, he continued, have started criticizing the new government. Many from civil society are keeping silent. “I suppose the saving grace is that Najib and his cohorts are gone. But that can’t console people forever.”

Language, Civilisation, Politics, and Malay Chauvinists


November 1, 2018

Language, Civilisation, Politics, and Malay Chauvinists 

by Dr. Sharifah Munirah Alatas

http://www.freemalaysiatoday.com

Since 9/11, global scrutiny turned to contentious concepts such as terrorism, mono-polar, bipolar, superpower, economic and cultural imperialism, as well as linguistic colonialism.

It is the latter which is the subject of this commentary because it has stirred harsh, aggressive and sometimes, amusing reactions in the media (local, regional and global), as well as in Malaysia’s recent parliamentary sitting.

A few days ago, Parliament was entertained by the rantings of a particular opposition MP who claimed that English is not an intellectual language. Among the many incoherent sentences that were uttered, he cited examples of ancient civilisations and conquerors, attempting to rationalise that, “English is not an intellectual language that develops the mind and brain”. He also confidently pontificated that “modern economies like Japan, Taiwan and non-English speaking Europeans do not use English in their journey to become developed nations”.

I hope this issue commands the attention of most Malaysians because for a multi-cultural, multi-religious, economically-developing and relatively-peaceful nation, we need to separate the “wheat from the shaft”.

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Linguistic colonialism or imperialism as a concept is a derivative of Edward Said’s conceptualisation of cultural imperialism (in his two famous books Culture and Imperialism, and Orientalism). I doubt, though, that the recent local uproar about the use of English as a medium of instruction of a few subjects in school is based on any knowledge of Edward Said’s work.

Nevertheless, anti-English language crusaders keep creeping out of the woodwork because it seems fashionable. It is glaring that all of these narratives to date have been devoid of historical context. And this makes for extremely wimpy analyses.

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UMNO Intellectuals

Hasan Arifin, BN’s MP for Rompin, is not alone. There are many in Malaysia, among the public, government and elite who feel that English is being “deified”. They also believe that English speakers never created great civilisations. Leaving aside that this notion is erroneous, it also begs the question, “what is a great civilisation?”

In my  understanding, a great civilisation is based on a network of cities (territories) comprising cultures that are defined by the economic, political, military, diplomatic, social and cultural interactions among them.

So, the Roman, Spanish, Arab, French, British and Chinese (with their various dynasties) were great civilisations. How did language then become the signature dish, so to speak, of that civilisation?

Through these empires, languages spread and shifted in dominance. In the past, empires spread their influence through their armies, and after the conquests, so began the social and linguistic assimilation. Between the 3 BC and 3 AD, the Roman Empire was bilingual — Latin and Greek. This was because the Romans knew that Greek was a language of prestige, philosophy and higher education — an “intellectual” language.

Spain succeeded in making over 20 sovereign states today, that speak Spanish, excluding millions of Spanish speakers in immigrant communities in other non-Spanish speaking nations such as the United States, Canada and the Philippines.

Castillian Spanish became the most important language of government and trade. It was the lingua franca of the Spanish empire, a derivative of Latin. Latin was still the “intellectual” language of the Spanish and of the Church.

The Chola Dynasty was one of the longest, most civilised empires in the history of southern India. Tamil and Sanskrit were the official languages.Tamil and Sanskrit are two distinct languages, the former being Dravidian and the latter being an Indo-Aryan language. As we can see, all three great civilisations were bi-lingual.

In 21st century Malaysia, however, we are faced with a backlash of a-historical pundits who reject the ebb and flow of civilisational change, yet advocate for national progress and development.

Let me educate them on the current position of English in the world today. First, it is an intellectual language. The British Empire, between the reigns of Elizabeth I and Elizabeth II (1588-1952), had about 250 million English language speakers. English achieved unique conditions of development. The large continents of North America, Africa and Asia were colonised with industrialisation and trade in mind.

Global conditions at the time facilitated the transition towards the flourishing of English in previously French and Spanish colonial territories of North America and Africa. Due to abundant natural resources and human capital in these regions, the wheels of commerce and trade helped to “deify” (not my word) the English language. English was “at the right place, at the right time”.

Today, all civilisations are enriched by the ideas, thoughts and knowledge disseminated world wide in English. Of course there are other languages that perform this function, but English is predominant.

Second, people like Hasan Arifin and his supporters cannot distinguish between modernisation, Westernisation and imperialism.

Modernisation is the development and application of current and innovative science in the development process of all sectors of society. Westernisation is a process subsumed under modernisation when specifically-Western notions of what it means to be modern are accepted as universal values of modernisation.

Many aspects of Westernisation should not be accepted as modernisation. Imperialism, on the other hsnsd, is the process of domination of policies and ideas with a specific agenda in mind. In history, imperial powers have imposed power and influence through diplomacy or military force.

I think the current discourses in France and India of a “linguistic imperialism” are far-fetched.  Like Westernisation, there is good and bad imperialism. It is also era-specific.

In the 21st century, military and economic powers like the US, China, Great Britain, Japan, Germany and Russia do not mirror the same imperialistic goals of the World War Two era.

Anintellectual, would realise that the need to master the English language is hardly the imposition of an imperialistic agenda.

The inadequacy of the historical-context approach is dangerous for nation building. A system oiled by pseudo-intellectuals who run the policy-making machinery will be suicidal for our “new” Malaysia.

My advice is to be firmly grounded in historical processes, be up-to-date with current economic and socio-political trends and subdue ethnocentric tendencies which are embarrassing and underdeveloped.

Critics of the English language quote China and Japan as being ignorant of the English language, yet they challenge the US and other great powers economically and militarily. It takes more, however, to become a global hegemon.

Anti-English crusaders in Malaysia believe religiously that China and Japan, despite their incapacity to speak and write in English, have reached a level of global economic hierarchy that threatens US and other major power positions. However, even this notion is skewed.

China, for example is known as “the factory of the world” and “the bridge-builder of the world”. But China’s global hegemonic status is in doubt because it lacks the capacity for economic reform, to minimise economic inefficiencies and it has proven inadequate at reforming the financial sector in order to provide investors with consistently profitable returns (the failure of Sri Lanka’s Hambantota port construction is a case in point). Therefore, the issue of language does not figure in the equation.

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