Governor Zeti Aziz –Where is Integrity?


April 26, 2016

Bank Negara Malaysia: Questions for Zeti Aziz –Where is Integrity?

by Dr. Lim Teck Ghee

If I can anyway contribute to the diversion or improvement of the country in which I live, I shall leave it, when I am summoned out of it, with the satisfaction of thinking that I have not lived in vain.Stephen Grellet

Did the much quoted line attributed to Grellet (he escaped from execution during the French Revolution and went on to a new life as a Quaker reformer in the United States) run through Governor Zeti Aziz’s mind when her staff in Bank Negara Malaysia (BNM), monitoring the suspicious movement of unusual sums of money making their way through the nation’s banking system, drew her attention to the enormous funds making its way surreptitiously into the country through the Prime Minister’s personal account?

Leaving Bank Negara (Central Bank) Malaysia with a severely battered reputation

Perhaps she had been alerted by the Prime Minister himself earlier. So it may not have come as a surprise. It is possible that she told her staff : “Don’t worry; I am taking care of the matter myself”.

What is the explanation for the internationally lauded BNM’s top official’s inaction or inability to respond to what in any other part of the world would have triggered off alarm bells on the possibility of money laundering, and other concerns of illegal money transfer and corrupt practices arising from a massive and unprecedented deposit from abroad into the nation’s banking system?

It could not have been because of ignorance, negligence, oversight or incompetence. Then what? Only Governor Zeti can answer that. Zeti, and BNM, have on numerous occasions stressed the importance of ensuring the integrity of the country’s financial system.

In its latest press statement on cyber security BNM said that “it continuously reviews and enhances the resiliency of its control measures, governance and adopts best practices which involves robust defence mechanisms with timely transactions monitoring”.

In Accord with International Best Practice?

According to foreign reports, between opening his account at AmBank on January 13, 2011 and April 10, 2013, Mr. Najib received a total of more than $US1 billion — or, more precisely, $US1,050,795,451.58 — including a series of individual deposits that ranged between $US9 million and $US70 million. So much money was flowing into the account that it is supposed to have triggered money laundering alarm bells in AmBank which is part-owned by Australia’s ANZ Bank

(see http://www.abc.net.au/news/2016-03-29/najib-razak-bank-accounts-triggered-money-laundering-alert/7280244).

The initial money transfers would probably have been made known to Zeti perhaps even before their actual movement was effected. And discreet approval may have been granted well in advance. Nobody in his or her right mind would attempt to receive such hefty sums without making sure that the banking authorities will approve. Besides, the country’s gossip mill is notoriously tireless on money matters so that it would have been crucial that the transaction should remain a secret.

Najib Razak–A Leader of Unimpeachable Integrity?

Perhaps Zeti decided to close one or both eyes to the transfer because she was convinced that the Prime Minister is a leader of unimpeachable integrity doing the best for his country. And following the wisdom of Grellet, since she is passing through the world but once, her act of kindness towards Najib would be recognized for its goodness.

The Prime Minister may have confided to Zeti that the enormous sum deposited in his account was a personal donation from a member or members of the Saudi Royal Family. He may also have explained why the donation was made and what it was to be used for.

Zeti may have agreed that it was in the national interest that the deposit be permitted without the need for investigation, clearance or publicity; and that it was best to keep it as hush-hush as possible in view of the misgivings and misconceptions that would arise if the news was ever leaked.

Various versions of the use of the money and its intentions have now emerged. They include:

  • helping the Prime Minister win the 2013 elections by paying off politicians and projects

  • enlisting Malaysia’s help in the fight against ISIS

  • influencing the direction of the country’s Islamic development by keeping it firmly anchored with the Saudi-led Wahhabi camp

We can only speculate which is the correct one that persuaded Zeti to jettison the independence from political influence and other values and ethics that Bank Negara and other central bank authorities are supposed to swear allegiance to.

Was it to ensure victory for the Prime Minister beleagured by forces of bad intention and chaos from within? Or was it to help Najib preserve Malaysia’s standing as a moderate Islamic nation and to defeat the forces of evil and darkness from outside?

Zeti has not directly responded to the many questions asked of the personal donation as well as of the 1MDB scandal. She has left it to her mainly UMNO defenders who have brushed off accusations that she failed in her duty as the chief regulator of Malaysia’s financial system and financial adviser to the Government. Also the accusations that she is guilty of partisanship in the country’s politics, complicity in money laundering, and perhaps also looking after her own interests by striking a deal with a tainted regime in view of her husband’s alleged involvement in a corruption scandal and other alleged shady family businesses.

Because questions and accusations remain unanswered, Zeti will be leaving office with her reputation, and that of Bank Negara, damaged and tarnished.

But we may not need to wait long for some light to emerge. The links between 1MDB, where the official story line is unraveling rapidly and the personal donation are like a hydra. Official stonewalling and whitewashing may temporarily decapitate one of the heads but another soon re-emerges.

And hopefully, soon, Zeti Aziz’s part in the personal ” donation” scandal, and possibly also the 1MDB debacle, will become more clear to all even if she chooses to remain silent. Silence is not golden.

Joko Widodo prefers nuts and bolts approach


April 16, 2016

Joko Widodo prefers nuts and bolts approach

http://www.ft.com/intl/cms/s/0/b8a0ea4a-0165-11e6-99cb-83242733f755.html#axzz45zKt6k6J

As Joko Widodo clicks through a presentation on infrastructure projects he has launched, an adviser hurries him along, warning that his time is running out. But the Indonesian President is having none of it.

Indonesian President Joko Widodo gestures during an interview with Reuters at the Presidential Palace in Jakarta, Indonesia, February 10, 2016. Indonesia on Thursday opened dozens of sectors to foreign investors in what President Joko Widodo has described as a "Big Bang" liberalisation of its economy, Southeast Asia's largest. Picture taken February 10, 2016. REUTERS/Darren Whiteside - RTX26FW2

“No, it’s better I show you,” he says, pointing at photograph after photograph of port, highway and dam schemes he kick-started after years of delays caused by land acquisition problems and intra-governmental disputes.

Eighteen months into his five-year term as leader of the world’s fourth most populous nation, Mr Widodo is persisting with an approach he honed as a small-town mayor and then governor of Jakarta: driving progress, project by project, through spot checks.

“I’ve already been to the toll road in Sumatra six times to check land acquisition and construction,” he says in an interview with the Financial Times, explaining this was the only way to start work on the much-needed highway after 30 years of abortive efforts.

A rare G20 leader happier talking about cement and building permits than big-picture vision, Mr Widodo’s prosaic style has disappointed some of his most enthusiastic backers. But his focus on managing the budget, building infrastructure and trying to reduce regulation has helped see him through a difficult start to his presidency, which was beset by a slowing economy and political problems.

Investor sentiment towards Indonesia has improved of late, with its stock market and currency among the best performing in Asia this year.

Before departing on Sunday for a trip to Europe to drum up trade and investment, Mr. Widodo insists he will push ahead with his plans to deregulate the economy and accelerate infrastructure development.

“I will continue to make economic reforms, removing excessive permits, licences and restrictions,” he says, speaking sometimes in broken English.

“My commitment is to make Indonesia’s economy open and competitive.”

For much of last year Mr Widodo looked uncomfortable as he stumbled from one political problem to another, while the economy continued to weaken because of reduced Chinese demand for Indonesia’s commodities.

A dispute over the appointment of a graft-tainted police chief damaged his reputation for clean government. Policy U-turns, ministerial infighting and protectionist measures undermined hopes for reform — and his uncompromising defence of the execution of foreign drug traffickers prompted a diplomatic backlash.

Chart: Indonesia growth and the rupiah

 

But now the President who grew up in a riverside shack — the first democratic leader of Indonesia from outside the nation’s crony-ridden elite — is looking more at home in the palace. “I enjoy my job,” the 54-year-old says.

Not a bead of sweat forms on Mr Widodo’s forehead, even though the temperature is well over 30C and the air conditioning in the Dutch colonial-era Independence Palace is off.

A close adviser jokes that the President is a “cool customer”. Perhaps too cool, he adds, because he made a slow start to his presidency. “At the beginning, he did not know many people in Jakarta and many of the ministers initially appointed were not his choice,” he says. “But he is improving.”

Mr Widodo’s preoccupation with the nuts and bolts of road and bridge projects upsets those who were hoping for a bolder figurehead. However, for analysts who have seen previous plans for infrastructure investment and economic reform come up short, his approach is what Southeast Asia’s largest economy needs.

“He is not the guy who wants to come up with a grand plan, but [he is] a doer,” says Ray Farris, Asia strategist at Credit Suisse.

“I will continue to make economic reforms, removing excessive permits, licences and restrictions. My commitment is to make Indonesia’s economy open and competitive.” Mr Widodo’s focus on tactics rather than strategy has proved less effective in tackling Indonesia’s broader social and political problems.

When asked if he is concerned about rising discrimination against homosexuals, Mr Widodo’s perfunctory response is that “we respect human rights but Indonesia is the world’s largest Muslim country”.

As for the challenge of attracting investment from China while also pushing back against Beijing’s assertiveness in the South China Sea, he simply says that “all activities that may increase tension must be stopped”, before adding that it is not only Chinese boats that regularly plunder Indonesia’s fisheries.

After a recent skirmish between Indonesian and Chinese patrol vessels near Indonesia’s Natuna islands, his cabinet members offered wildly conflicting views on how to react. Analysts say the disarray betrayed Mr Widodo’s weakness when it comes to co-ordinating more complicated policy areas.

“The question is whether he can really control his cabinet,” says Yohanes Sulaiman, a political analyst in Jakarta. Others warn that he needs to lay out a more convincing plan to raise the money needed to fund his pet infrastructure projects. “There doesn’t seem to be a lot of focus or leadership on addressing the core revenue problem,” says Mr Farris of Credit Suisse.

Unperturbed, Mr Widodo insists that running a country of 255m people and 17,000 islands is ultimately not that different from being mayor of a city of 500,000. But is the bigger-scale job pushing him to become a stronger leader? “It’s better you ask the people,” he says with a chuckle.

US Economic Ties to ASEAN Demand a New Agility


April 6, 2016

Asia Pacific Bulletin

Number 338 | April 5, 2016
ANALYSIS

US Economic Ties to ASEAN Demand a New Agility

by Shankaran Nambiar

Shankaran Nambiar, Senior Research Fellow at the Malaysian Institute of Economic Research, explains that “US-ASEAN economic relations will receive a huge boost if the US makes a more concerted effort to address issues such as the financing of large-scale developmental projects, be they to improve regional connectivity, build roads and dams, or enhance capabilities in cyber security and satellite technology.”

The Association of Southeast Asian Nations (ASEAN) holds a pivotal position in configuring the space that China employs as it seeks to tilt the balance in global economic relations. In the last decade or more, China has been taking gradual but firm steps in establishing its economic hold over Africa, parts of South Asia, and of course ASEAN. Its grand connectivity projects and its role in the international funding system will further extend its reach.

Although China has taken a belligerent stance on the South China Sea, it has developed a constructive, non-intrusive approach to trade and investments with many ASEAN member states, resulting in some measure of reliance on China. China’s growing economic influence in Southeast Asia is a dimension that the US cannot afford to ignore.

Despite its rhetoric, the US lumbers along in its economic policy towards ASEAN. Although the Obama administration’s policy of “rebalancing” towards Asia includes ASEAN, the US has lost ground. The Expanded Economic Engagement (E3) Initiative, a successor to the Enterprise for ASEAN Initiative, is supposed to prioritize trade facilitation, improve connectivity between ASEAN economies, develop principles that will address investment policies, and harmonize standards across the region. But it is perceived as serving the business interests of multinational companies rather than those of individual ASEAN economies.

Moreover, Cambodia, Laos and Myanmar are still not at that stage of development where trade and investment facilitation matters or where the government can rely on the right institutions to make progress on the required reforms. Good governance and the right institutional framework are necessary ingredients for economic development. Assistance from the US in these areas will be useful, but the US has to participate more actively in helping to meet what ASEAN governments see as pressing current needs.

Some ASEAN governments and influential constituencies within them see investor protection, non-discrimination against foreign companies, and the simplification of customs procedures as tools to pry open domestic markets that would benefit multinational companies from the developed world, much to the disadvantage of domestic companies. Although there is great merit in eliminating the institutional barriers to trade and investment, China does not pursue these objectives, preferring to win support by extending assistance in building infrastructure, founding science parks, and offering development financing. US pressure for institutional reform must be balanced with assistance on the ground, simply because the latter is more tangible and its results more immediate.

Some progress will be achieved in securing commitment for institutional reform via the TPP, once it comes to fruition. But that is not enough, because only four ASEAN countries are TPP members (Singapore, Malaysia, Brunei and Vietnam). Other strategies for a more inclusive trade strategy have to be devised. Obvious candidates would include adding the US to the Regional Comprehensive Economic Partnership agreement (RCEP), including China in the TPP, or moving ahead with the proposed Free Trade Area of the Asia Pacific (FTAAP).

The Declaration resulting from the US-ASEAN Summit at Sunnylands, California in February attempts to take E3 forward. The Declaration has some useful points. Chief among them is the acceptance of “ASEAN centrality,” the notion that ASEAN is a cohesive and integrated region that is able to form reliable relationships with the rest of world. The Declaration also contains a veiled call for stability in the South China Sea and support for growth and development in the region. The question is how these goals can be made more concrete.

The new US-ASEAN Connect initiative, also a result of the summit at Sunnylands, has four pillars that can ostensibly work towards achieving these objectives: Business, Energy, Innovation, and Policy Connects. However, the Business Connect pillar seems aimed at increasing commercial engagement between the private sectors in the US and respective ASEAN member states. Business Connect officially claims to offer “coordinated, proactive support for US business,” which has undertones of bias against business in ASEAN member states. Domestic companies in ASEAN typically worry that the domestic market will be deluged by foreign investors who will put them out of business. In addition, the state is often heavily involved in ASEAN businesses. The TPP negotiations adopted an accommodative stance towards state-owned enterprises, prominent as they are in Singapore, Malaysia and Vietnam. Business Connect should be similarly realistic.

The Policy Connect pillar is concerned with creating a favorable policy environment for information, communications, and technology (ICT). The main focus of this pillar is trade and investment, with specific programs to expedite trade and investment facilitation and the simplification and computerization of customs procedures. Presumably, standards and conformance will be given due attention, thorny as these issues are and given the technical complexities that are involved.

The Innovation Connect pillar is rather fuzzy and not likely to draw much attention since it has not been clearly enunciated. This pillar is directed at entrepreneurial development. Although venture capital, coaching and mentoring for aspiring entrepreneurs, and seed funding are matters of great interest in the US, there is not the same enthusiasm in ASEAN. The nature of entrepreneurship in, say, Manila is not quite what it is in Silicon Valley. Innovation Connect will have to take into account national differences and levels of development as well as providing a bridge to the US.

The Innovation Connect pillar is rather fuzzy and not likely to draw much attention since it has not been clearly enunciated. This pillar is directed at entrepreneurial development. Although venture capital, coaching and mentoring for aspiring entrepreneurs, and seed funding are matters of great interest in the US, there is not the same enthusiasm in ASEAN. The nature of entrepreneurship in, say, Manila is not quite what it is in Silicon Valley. Innovation Connect will have to take into account national differences and levels of development as well as providing a bridge to the US.

“Though US-ASEAN economic relations have gathered speed in recent years, by comparison with what China has been doing, US efforts are slow and clumsy.”

The choice of Connect Centers raises yet another problem because no Center has been selected to represent Cambodia, Laos, Myanmar, and Vietnam. These countries lag behind the other members and deserve the extra push that the US can give them.

In the short-term, the US has to design initiatives that support the developmental needs of individual states. China has done this eminently well in recent years. The longer-term strategy should be to work towards institutional reform that supports trade and investment and also draws all of ASEAN into a wider form of trade architecture. US-ASEAN economic relations will receive a huge boost if the US makes a more concerted effort to address issues such as the financing of large-scale developmental projects, be they to improve regional connectivity, build roads and dams, or enhance capabilities in cyber security and satellite technology. Cooperation can also be extended to build technological universities. Though US-ASEAN economic relations have gathered speed in recent years, by comparison with what China has been doing, US efforts are slow and clumsy. A more nimble and proactive approach that is in line with ASEAN’s aspirations will do much for both ASEAN and US-ASEAN relations.

About the Author

Shankaran Nambiar is Senior Research Fellow at the Malaysian Institute of Economic Research. He can be contacted at sknambiar@yahoo.com.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington.
APB Series Coordinator: Alex Forster, Project Assistant, East-West Center in Washington.

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

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The American Dream: Detroit’s resuscitation


April 4, 2016

The American Dream: Detroit’s resuscitation

by Shrey Srivastava

If one could epitomise the phrase “could have been” in one simple image, it would indubitably be the image of Detroit. The unyielding forces of time have taken a once great city and denigrated it to the status of one of not only one of America’s most economically destitute, but also one of its most dangerous regions. Nowadays, Detroit carries many of the hallmarks of the lesser developed countries of the world, especially with roughly 47% of the population being described as “functionally illiterate” by The National Institute for Literacy, a rate only 13.8% higher than that of Afghanistan. Despite this, Detroit still carries as much, if not more potential as it did in the 20th century, and is simply crying out for some economic solutions to its varied and diverse range of problems. Much of Detroit’s high crime rate can, in truth, be narrowed down to a high unemployment rate, leading to a lack of jobs for people to occupy themselves with, so even this ailment, is, at its core, financial. What this means is that there is still hope for this long-suffering city, as long as the relevant American policymakers act in a fashion that is both effective and sustainable; alas, it is clear to see that this has not happened thus far. Nevertheless, what I endeavour to achieve with this article is to perhaps shed some light on how Detroit can again become the bustling, cosmopolitan hub that it once was, through, primarily, the introduction of a special economic zone.

Special economic zones, which seem like a highly unusual step for a developed country such as the USA, may in fact be a simple and effective solution to revitalise the city of Detroit. The step of making the city a special economic, or more specifically, an industrial zone could potentially be the catalyst for a holistic revitalisation of the Detroit economy. In a nutshell, an industrial zone is a zone specifically made out for industrial development, where tax cuts and tax holidays, among other financial incentives, would incentivise corporations to set up operations in Michigan’s largest city.

Detroit’s unemployment rate was a whopping 29% during the worst that we saw of the 2008 recession, meaning that more than 1 in 4 people were unemployed at the time. Despite having reduced somewhat due to, among other causes, a steady outflow of people from the city, unemployment rates are still grossly high, and if Detroit wants to reverse its fall from grace, this is one of its first facets that need changing. The only way to do this, in truth, is by somehow persuading businesses to come to this dilapidated zone of urban decay, and invest in the revitalisation of the area. Now, feasibly, the only way in which this can happen is by supplying them with the aforementioned financial incentives to encourage them to locate in Detroit, supplying jobs for a great proportion of the population. This is the intuitive first step to Detroit’s regeneration.

exposures-detroit-slide-L6QT-videoSixteenByNine1050.jpg

Functional illiteracy, as alluded to above, is also a major proverbial roadblock to the future success of Detroit. The solution to this is almost as obvious as its problems itself; to invest more in education. Despite politicians’ repeated assertions stating the importance of education, they themselves seem not to believe in what they say, the evidence of which lies in Detroit’s astonishingly abysmal literacy rates. Regardless, education is quite frankly one of the most important facets of any developed region, so for Detroit’s schools to be in the state they are in (as repeatedly shown by the mass media) is frankly shocking. Needless to say, this can only be solved through an increase in education spending in the city, which would give a better education to many residents of the city, thus giving them more transferable skills with which to work and earn money. In addition to this, education has a vital role to play in keeping school-aged adolescents off the streets, thus reducing crime rates, and making the city overall more attractive for people to relocate to. With the low house prices across the whole of Detroit nowadays, it could prove a popular location for many individuals desiring a lower cost of living, if only there was a basic level of security and educational services in the area. By spending more on education, many of Detroit’s fundamental problems could perhaps be ameliorated or even eradicated altogether.

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To make sure that Detroit does not fall prey to the same evils which caused its dilapidation decades ago, they need to learn from their various mistakes. The biggest of these was to rely far too much on the car industry, which turned into its Achilles heel when Ford Motors, among other corporations, left the city. Diversification is the key here to financial prosperity, as Detroit needs to ensure that when one industry perhaps fails in the city, there are many others to continue to back up the city financially. This was exactly the problem with the city before; they did not have a backup plan for when demand for automobiles lessened. The conversion of Detroit into an industrial zone and a renewed focus on education will only be sustainable if the city manages to provide wide-ranging sources of income; otherwise, they will simply consign themselves to the same fate as before. In addition, without diversification, a great deal of brain drain would occur, with talented residents leaving the city due to lack of opportunity in their chosen field of expertise. As such, it is crucially important for Detroit to spread its roots far, not deep, if they want to ensure their continued financial prosperity. Of course, in addition to the 3 economic reforms outlined here, much social reform needs to take place in the city before we can truly say that it has been regenerated, but these financial steps provide the building blocks to restore Detroit, again, into a great pillar of the USA.

 

 

China’s Lancang-Mekong Diplomacy


April 2, 2016

China’s Lancang-Mekong Diplomacy

by Dr.(Tan Sri) Munir Majid

http://www.thestar.com.my

HE Dr. Kao Kim Hourn, Minister attached to Cambodian Prime Minister Hun Sen’s Office

AT the Mekong-Lancang Cooperation Leaders’ Meeting in Hainan recently, Chinese Prime Minister Li Keqiang offered the five ASEAN countries along the Mekong river that attended it with China, US$11.5billion in loans and credit for infrastructure and other projects.

There was no time frame on disbursement and there was no indication on how the facilities would be distributed among Cambodia, Laos, Myanmar, Thailand and Vietnam, who were all well represented at the meeting. Li acknowledged how the countries involved were all “family.”

The Lancang-Mekong Co-operation Framework was launched in November 2014 in Myanmar at the 17th China-ASEAN Summit. At the time US$20bil in loans had been offered for the construction of roads, ports and railways – all much needed particularly by the less developed ASEAN countries.

The Dachaoshan dam is a key hydropower source for China – and a major barrier on the Mekong for Thailand and other down-river countries on Mainland Southeast. (File photo by AP)

The occasion in Myanmar provided a measure of relief to China following suspension of the Myitsone dam project in 2011. Of course, underlying or overhanging all these substantial offers of financial largesse, are even the more massive promise of what is to come from the AIIB (Asian Infrastructure Investment Bank) and the Silk Road Fund, all of which would result in greater use of the yuan and a Co-Prosperity sphere centred on Beijing. This is not to mention huge bilateral contracts and loans with individual ASEAN countries, including Malaysia’s.

With the piling up of all this money, it is scarce wonder there is a gravitational pull of countries in the region towards China. The extent of it, however, varies depending on need and pride. There is thus a self-fulfilled divided ASEAN without China having to do anything overt about it.

Like individuals, some countries may sell their soul for money. Others may even trade territorial integrity.As in a family, the promise of money is sometimes linked with good behaviour and obeisance of the patriarch.

The diplomacy of relations with China among countries  on mainland Southeast Asia – despite the brave front of ASEAN unity and ASEAN centrality – is thus rather murky, with a lot of mutual suspicion. So it might be said China has it made. However, China is undermining its economic attraction through its statements and actions supporting its extravagant claims in the South China Sea.

Miscalculation

There seems to be a miscalculation on how far China can go but still have ASEAN countries eating out of its hands and gawking at its financial promise. Even if there are domestic political considerations for China’s harsh and inflexible stand, there equally is this self-belief now in China’s economic – and military – weight.

The difference between China in 2002, when it signed the Declaration on the Conduct of Parties in the South China Sea with the direction to negotiation of a Code of Conduct, with ASEAN as a whole, and China in 2012, when it hounded the Philippines from the Scarborough Shoal, is that China had become bigger and stronger in the 10 intervening years.

Suddenly China wants to negotiate only with claimant ASEAN states bilaterally, not ASEAN as a whole. Negotiation on the Code of Conduct has dragged on and on. The Code for Unplanned Encounters at Sea (CUES) is being impressed on China by Singapore, representing ASEAN, to cover both naval vessels and coast guards in territorial waters as well (The CUES as signed by 21 countries in 2014 including China and the US covered the high seas and the Exclusive Economic Zone).

Even this has so far not gained any traction with China.Meanwhile China has turned seven uninhabitable atolls in the disputed sea into artificial islands with proclaimed 12-mile territorial sea rights.

There is an expectation Scarborough Shoal would be next. American – or any – freedom of navigation operations (FON ops) are denounced as violating China’s territorial integrity, an advance on the already extensive historical and traditional rights to the South China Sea as defined by the nine-dash line.

The South China Sea is being militarised. Landing strips for fighter jets have been constructed and surface-air-missiles are in place. The US has responded with the deployment of an aircraft carrier strike group.

Territorial rights

We must defend our territorial rights, the Chinese masses demand. The Americans have increased tension by their aggressive actions, the Chinese Foreign Ministry proclaims.Have we got to believe all this? Just look at who took what actions and at their sequence. We cannot be blind to the facts and to become senseless because of repetition of untruths.

ASEAN must show it cannot be bought. That it is not without principles and is not spineless. That, exactly, it will defend its sovereignty and integrity – which it does so well with one another in the process of integration –- against all comers.China may be overplaying its hand.

An article in Khmer Times of Cambodia, widely seen as the most pro-China of ASEAN states, observed last Wednesday in an article entitled “Shared-River-Shared-Future” (perhaps in keeping with Chinese dialectics to obscure what it has to say): “China may need to readjust its foreign policy approach towards Southeast Asia, particularly in regard to the South China Sea disputes.

Clearly, China’s approach towards the Mekong countries is more effective than its approach towards the South China Sea.” The incident this week, reportedly well within Indonesian territorial waters in Natuna, shows that China’s claims are expansive and threatening – and are not confined to potential clashes between the US and China alone.

They seriously affect ASEAN states, in this case even a non-claimant state.After an Indonesian patrol boat had detained eight Chinese fishermen and their trawler found fishing in Indonesian territory, at least one Chinese coast guard vessel rammed the Chinese boat to try and free it.

A similar incident happened three years ago. An Indonesian patrol boat was forced to release detained Chinese crew fishing in its waters when confronted by China’s armed maritime law enforcement vessel.

This time Indonesia is not taking it lying down. Despite China’s request that the clash be kept quiet (“Don’t tell the media, we are friends after all…”), there was a strong and very public Indonesian reaction. China’s Charge d’affaires was summoned to the Foreign Ministry in Jakarta to receive a stiff protest. Instead of apologising China’s Foreign Ministry loudly claimed that the trawler was operating in “traditional Chinese fishing grounds” when attacked and harassed by the Indonesian patrol boat.

Provocative

This only raised the temperature with Indonesian observation that “…China’s actions were especially provocative and fitted a pattern of becoming more assertive in the waters.”

Indeed a senior Indonesian official was particularly irked by China’s claims to “traditional Chinese fishing grounds” and made this strong observation: “It’s very fake, ambiguous, in terms of since when, since what year does it become historical, traditional.”

Of course with 5,000 years of Chinese history, it is a bottomless pit everyone else could fall into.Every country, especially ASEAN member states, should rise to the breathtaking magnitude of China’s claims. Indonesia, not a South China Sea claimant state (something ASEAN non-claimant states sometimes carry as a badge of honour), was ensnared by the nine-dash line.

There could be other ramifications of China’s reach into history and traditions.What ASEAN must do is to confront together the real issues of China’s claims, and not to pussy-foot around them. It should not be blinded by China’s promise of riches, as they will come at a cost, and unless they are willing to pay that cost.

ASEAN should also not try to pretend the South China Sea problems are problems of the claimant states alone, much less a matter between just the US and China. ASEAN is very much in the mix.

Thayaparan interviews DAP’s Lim Kit Siang


March 31, 2016

Thayaparan interviews DAP’s Lim Kit  Siang–Embracing a long time adversary

PART ONE

Our chief want is someone who will inspire us to be what we know we could be.”– Ralph Waldo Emerson

INTERVIEW: Very few Malaysians can say they have they lived up to the second part of the famous John F Kennedy quote “ask not what your country can do for you, ask what you can do for your country” as DAP supremo Lim Kit Siang has.

After decades of wrestling with his political adversary, former Prime Minister Dr Mahathir Mohamad, for the soul of Malaysians after years of being on the receiving end of the all-encompassing power of the Umno state, the honourable gentleman from Gelang Patah, found himself part of a joint declaration along with Mahathir, calling for the ouster of Prime Minister Najib Abdul Razak.

While the DAP has enjoyed a political resurgence with a newly awakened electorate, the long struggle against the UMNO state has not diminished the enthusiasm and vigour of one the few people who can credibly claim title to elder statesmanship.

Here in two parts, Lim Kit Siang, explains what is at stake when it comes to the machinations of the Najib state, boldly answers questions from a sceptic (the writer) and reminds Malaysians that while we must never excuse the sins of the past, we can move beyond them.

Does “saving Malaysia” mean “saving UMNO”, because Mahathir has made it clear that his agenda is to save UMNO from Najib?

Interestingly, I issued a statement in Abu Dhabi on April 19, 2015 en route back to Malaysia after a DAP MPs fact-finding visit to Jordan and Egypt, where I differentiated between the “Save Malaysia”, “Save UMNO” and “Save Najib” concepts.

This is what I said in my statement last April :

“When I said in my speech to Malaysian students in Alexandria on Friday that I am prepared to work with Mahathir on the ‘Save Malaysia’ agenda, I was not thinking of ‘Save UMNO’ or ‘Save Najib’.

“In fact, there is nothing for me to work with Mahathir or anyone else as far as ‘Save UMNO’ or ‘Save Najib’ is concerned, as UMNO is an incorrigible party set in the ways of money politics and abuses of power, and the greatest contribution UMNO can make to the healthy development of democratic politics and Malaysian nation-building is for UMNO to go into the opposition benches to allow Malaysia to become a normal democratic country where the transition of power from one political coalition to another is not regarded as a national catastrophe but a necessary rite of passage from a country to graduate to become a normal democracy.

“I believe the First and Third Prime Ministers of Malaysia, Tunku Abdul Rahman and Hussein Onn would agree with me and this was why both of them refused to join UMNO Baru which was formed by Mahathir in 1988 and both remained outside UMNO Baru till their last breath…

“I stand by what I said to Malaysian students in Alexandria that the focus of the present must be unwaveringly to ‘Save Malaysia’ from the present roller-coaster policies which threaten to plunge Malaysia down the slippery slope, whether in nation-building, politics, economics, education or other aspects of national life, to that of a ‘failed state’.

“I have said that for this formidable task, we must be prepared to put our differences in the past to one side and concentrate all our energies on one common agenda, to save Malaysia from all centrifugal forces to tear the country asunder.”

As far as I am concerned, “Save Malaysia” means saving the country, and not an individual, be he Prime Minister Najib Razak or a particular party, be it UMNO.

How can meaningful reforms be carried out by anyone who has Mahathir’s imprimatur?

When Mahathir suggested that political and civil society leaders gather to sign and proclaim the Citizens’ Declaration to Save Malaysia, his first draft focused on concerns over the deteriorating political, economic and social conditions in the country and the damage done to the country under Najib’s premiership, in particular by the RM55 billion 1MDB and RM2.6 billion “donation” twin mega scandals.

However, as the problem is not just about the man but also the system, Mahathir agreed that apart from Najib’s resignation there would also be “much-needed democratic and institutional reforms” to restore the important principle of the separation of powers among the executive, legislature and judiciary and ensure the independence, credibility, professionalism and integrity of our national institutions.

This was highlighted in the last paragraph of the 37-paragraph Citizens’ Declaration, which has to be elaborated in the second step of a national consensus.

The original 42 signatories to the Save Malaysia Citizens’ Declaration, as well as all citizens I hope will endorse the Citizens’ Declaration, have our separate political and national agendas – but the salvation of Malaysia lies in our ability to agree on a core common agenda to save Malaysia, and to enlarge this core common agenda.

Could you describe the processes which led to the declaration and what was your reaction to potentially working with your long-time political adversary?

The country has reached a historic watershed where Malaysians must rise above racial, religious, regional and political differences to take a united stand on a common national agenda – to save Malaysia from hurtling down the slippery slope of a failed and a rogue state.

There have been historic examples, both international and in our country – from Mao Zedong and Chiang Kai Shek forming a common front to fight a bigger common enemy in China, to the United States President Franklin Roosevelt, British Prime Minister Winston Churchill and Russian dictator Stalin uniting to fight Germany’s Hitler in the Second World War, or the British colonialists teaming up with the Malayan communists under Chin Peng in the Malayan jungles through Force 136 during the Japanese Occupation.

What the Citizens’ Declaration to Save Malaysia sought to do is to spark off a national movement involving the unity all Malaysians, regardless of race, religion, region or politics to save Malaysia – the highest form of patriotism at this time.

You have said that we can’t undo the past. But how do we secure a future with someone who has been the cause of much of the damage of in the past, who has refused to even acknowledge the role he played, in destabilising our public institutions?

The March 4, 2016 Citizens’ Declaration is not Mahathir or Lim Kit Siang’s declaration – it is a declaration by citizens of Malaysia, regardless of race, religion, region or politics to save Malaysia.

The historic and unprecedented gathering on March 4 to sign and proclaim the Citizens’ Declaration is not about Mahathir or Lim Kit Siang, Muhyiddin Yassin or Mohamad Sabu or Ambiga Sreenivasan, but about 30 million Malaysians, their hopes, aspirations, dream and future.

How do you counter the perception that this declaration gives legitimacy to Mahathir and his decades long rule of Malaysia?

The declaration is a statement about the future as to how Malaysians can unite at present on a common platform to save Malaysia, not a judgement or verdict of the events of the past. The question of legitimatising or criminalising any individual or event in the past does not arise.

I am aware that questions have been asked as to how Lim Kit Siang and Mahathir can sit on the same table, considering the decades of differences and Mahathir’s responsibility in sending me and Guan Eng into incarceration, twice not once in Guan Eng’s case.

In my 50 years of politics, I have been accused of all sorts of things – of being a Chinese chauvinist; communist; cause of the May 13, 1969 riots; anti-Malay, anti-Islam, all completely baseless and pure defamation.

For my joint appearance with Mahathir for the March 4, 2016 Save Malaysia Citizens’ Declaration, I have been accused of being Mahahtir’s puppet and Mahathir accused of being my puppet.I am used to all these epithets and abuses, but it must be the first time that Mahathir is being accused of being my puppet.

I am no puppet of Mahathir, just as Mahathir is no puppet of mine. It was not easy for me to appear on the same table with him just as it was not easy for Mahathir to appear on the same table with me.

This is a testimony of the exceptional times we are in, where Malaysian patriots must rise above their differences to reach an accord in the higher national interest, which is why the March 4 Citizens’ Declaration marks a historic watershed in Malaysia’s political development.

Although there seems to be a cautious optimism amongst the general vote base of the opposition, what do you think of the scepticism from certain quarters of civil society with regards to this declaration?

I can understand such reservations and even skepticism.I can imagine similar debates before the Chinese Communist Party and the Chinese Kuomintang decided on a united front against the Japanese invaders in China, or in the capitals of Washington, London and Moscow before the conclusion of the “Grand Alliance” of the Big Three against Nazi Germany or by the British colonialists who had retreated to India during the Japanese Occupation and the Malayan Communist Party in the jungles before they cemented their operation and the infiltration of Force 136.

I believe many of the signatories also have doubts and reservations about whether what they had embarked upon will lead to success.For the sake of saving Malaysia, it is better to have tried and failed than never to try at all.

If Najib carries out another Operation Lallang, do you think that politically the opposition can survive?

I was detained under the Internal Security Act (ISA) twice, first time for 17 months in 1969 after my first election as member of parliament for Bandar Melaka and the May 13, 1969 riots in Kuala Lumpur and second time, under Operation Lallang for 18 months.

Although the iniquitous ISA has been repealed, the country appears to be heading to a new period of repression with new draconian legislative measures likely to be presented in the current meeting of Parliament, with new draconian provisions and increased penalties for offences under the Official Secrets Act, Sedition Act as well as giving the Prime Minister dictatorial powers to virtually declare emergency in the country without checks and balances from the Yang di-Pertuan Agong and Parliament.

While we must stay vigilant to safeguard our fundamental liberties entrenched in the Constitution and not allow these human rights to be diluted or taken away in any manner under any circumstances, we know that we are in situation where we must be prepared for the worst and hope for the best.

The acts of repression, oppression and persecution have been the game of Barisan Nasional in their effort to maintain power. And as I mentioned, I too am a victim of the vicious ISA, and even the Sedition Act. But whatever bad things done to the opposition, we have always come back stronger, with the people’ support. This is the magnitude of the task and challenge confronting Pakatan Harapan.

How does the DAP counter the perception that their efforts to reach out to the Malay community is not an attempt to subvert “Malay” political control and do you think that compromising on core secular values to court the Malay vote is in the long run detrimental to the progressive agenda of the DAP?

There are two dangerous fallacies played up by some UMNO leaders and their cybertroopers. Firstly, that the defeat of UMNO in the next general election will result in Malay losing political power in country, and secondly, the defeat of UMNO will result in the defeat of Islam in Malaysia.

Let me quote our national laureate A Samad Ismail, who is also a DAP member, who has asked UMNO many times: how would the Malays lose political power if UMNO is defeated in a general election? He also asked: “How are Malays under threat? How can religion (Islam) and Malays be threatened when those in power have been Malays for over five decades?”

Pakatan Harapan will ensure that the defeat of UMNO will not be a threat or disaster for Malays or Islam, or for that matter, for any race or religion in the country. Will UMNO’s electoral loss in the 14th General Election be such an unmitigated disaster than it will end in UMNO’s demise?

I do not believe UMNO is in such a terminal stage of political cancer that it will die and can never recover if it loses the 14th General Election. Both DAP and our Pakatan Harapan partners have been explaining the issue in all our ceramahs and forums, and our views are disseminated through our respective party publications.

On the question of compromise, let me reiterate the fact that people support DAP because they believe we can lead them to a better Malaysia. However, we cannot lead them to a better Malaysia unless we are a part of a coalition to be able to govern, formulate and implement policies for the whole country.

We are in need of change and we must dare to reach out, and to do that, we must dare to transform the DAP into a truly Malaysian party, with the support of all Malaysians, including Malays, Ibans and Kadazans as well as Chinese and Indians.

Nobody is suggesting that we betray or compromise or sell out our principles, ideals and objectives. What we need to change drastically is our modus operandi, and not our ideals and principles, to be more inclusive to appeal to all Malaysians. We have always been a constitutional secular social democratic party fighting for all Malaysians based on the fundamentals of freedom, justice and solidarity.

PART TWO

If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.”–– Antoine de Saint-Exupéry

INTERVIEW: This is the second part of an interview with DAP leader Lim Kit Siang on why he is willing to work with his nemesis, former Premier Tun Dr. Mahathir Mohamad, in the ‘Save Malaysia’ campaign.The first part appeared yesterday.

DAP has always struggled with the perception and UMNO propaganda that it is a “Chinese” entity. Do you think that the DAP has made some missteps that gives credence to this perception?

DAP had never aspired to be a Chinese or non-Malay party. Right from the beginning during DAP’s formation in 1966, DAP had pledged itself to pursue a Malaysian Dream, not a Chinese Dream, an Indian Dream or a Malay Dream.

This is why DAP is the first political party in the country to be Pan-Malaysian, establishing branches in Sarawak and Sabah before any other political party in the country.

All through the past five decades, DAP had been accused of being anti-Malay and anti-Islam by UMNO, because of UMNO fear that the DAP will be able to make inroads into UMNO spheres of influence with our Malaysian political appeal, transcending race, religion or region.

No political party seeking support from all Malaysians can be anti-Malay or anti-Islam, or for that matter, anti-Chinese, anti-Indian, anti-Dayak, anti-Kadazandusun or anti-Buddhism, anti-Christianity, anti-Hindiuism or anti-Sikhism.

The battle against such lies and falsehoods had been a particularly uphill battle for the DAP because we had to face the full onslaught of the UMNO juggernaut with its control and ownership of the mass media, particularly in the era before the advent of Internet, news portals and the social media.

However difficult the terrain, DAP had never wavered from our objectives and principles that the DAP had been formed not to fight for any one race but for all races and Malaysians in the country! This is why right from the beginning, starting from the first general election in 1969 contested by the DAP, the party had always put up a multi-racial and multi-religious slate of candidates.

In fact, in the 1969 general election, two Malay state assemblymen were elected, one in Perak and the other in Negri Sembilan. In the past 11 general elections, DAP had elected Malay members of parliament and state assembly representatives in peninsular Malaysia.

In the 2013 general election, we elected a Kadazan state assemblyman in Sabah and we look forward to the election of the first Dayak state assembly representative in the forthcoming Sarawak state general election.

As in the 1969 general election, DAP has now more Indian MPs than MIC. It is because of the DAP that there is an Indian Deputy Chief Minister in Penang and the first Indian speaker in the Perak state assembly after the 2008 general election.

All these precedents and breakthroughs are testimony that DAP had never aspired to be a Chinese or non-Malay party.DAP does not apologise for its objective and commitment to be a party representing Malaysians regardless of race, religion or region – whether Chinese, Indians, Malays, Ibans, Kadazans or Orang Asli.It has not been an easy road in a country where the politics of race and the politics religion have played such a dominant role in the Malaysian politics.

Where does pragmatism end and political opportunism begin?

Can these Fat Cats be trusted?–The Malay First Types mentored by Tun Dr. Mahathir

There can be no room for opportunism as principles and ideals cannot be compromised, but the tactics and strategies to “Save Malaysia” from hurtling towards a failed and a rogue state must be pragmatic and flexible.

After the acrimonious split with PAS, is there a lesson to be learnt on the folly of engaging with an Islamic party and if so, how could this be applied with DAP’s political alliance with Parti Amanah?

Political Islam is a reality we must live with, whether in Malaysia or the world, and I do not agree that it is folly to engage with an Islamic party. The split with PAS and the rupture of Pakatan Rakyat is not because PAS is an Islamic party, but because it has failed to honour its compact on the Common Policy Framework and the consensus operational principle reached when Pakatan Rakyat was formed.

The political alliance with Parti Amanah Negara in Pakatan Harapan is fully justified if the component coalition parties can learn the lesson from the rupture of Pakatan Rakyat, that any political coalition is only viable and sustainable if the component parties of the coalition abide by the common policy programmes agreed among them, for there is no other basis for a genuine political coalition of equals to succeed.

Pro-establishment bloggers and news portals have demonised the DAP as a pro-Christian political force. Do you think that religion has a role to play in the political discourse and if so, how does one maintain the balance in pursuit of a secular society?

The majority of DAP leaders and members are not Christians. How can DAP become a pro-Christian political force? This is why the allegation of UMNO-BN propagandists and cybertroopers that DAP wants to create a Christian Malaysia is even more bizarre and ridiculous.

Right from the very beginning, the DAP stand is clear and unequivocal that we fully accept and respect the fundamental constitutional provision of Islam as the official religion while other religions can be practiced peacefully anywhere in the country.

The stand taken by the DAP, that Malaysia is a secular state with Islam as the official religion, is the same and consistent with the public positions taken by the first three Prime Ministers of Malaysia, Tunku Abdul Rahman, Razak Hussein and Hussein Onn.

The Pious Man destroyed the legacies of Tunku, Razak and Hussein by aping Mahathirism in extremis

Is it seriously suggested that the first three Prime Ministers of Malaysia were enemies of Islam because they uphold Malaysia as secular nation, which does not mean anti-Islam or anti any religion but respect for all religions?

When you said you would even work with Prime Minister Najib Razak if he was serious in reforms, you received much public opprobrium. I took that particular statement as a sign of that you were willing to work with anyone to save the country but more importantly as a sign of frustration. After decades in the forefront advocating change, how frustrated are you with the direction this country is headed in?

I had clarified in Padang Besar why I said in Sungai Petani on March 12 that I was prepared even to work with Najib to save Malaysia. I said in Sungai Petani that I believe that the overwhelming majority of Malaysians, regardless of race, religion, race or politics, love this country and can subordinate self-interest to national interests and support a Save Malaysia campaign to stop the country hurtling down the slippery slope towards a failed and a rogue state.

I listed some of the things which Najib should do if he is to come on board the “Save Malaysia” campaign, like freeing Anwar Ibrahim and restore to him all his political rights and civic enfranchisement so as to fully participate in a national consultative process on the democratic and institutional reforms necessary to restore national and international confidence in Malaysia; an independent and credible royal commission of inquiry to carry out comprehensive and far-reaching investigations into Najib’s twin mega scandals; halt the lurch towards dictatorial trends by withdrawing all draconian legislative proposals, including proposed amendments to the Official Secrets Act, the Sedition Act, the Penal Code and the Printing Presses and Publications Act, the withdrawal of the National Security Council Bill, and the withdrawal of all charges and investigations against opposition and civil society leaders under a variety of repressive and undemocratic laws; and the immediate suspension of the Goods and Services Tax (GST), and end wasteful government expenditures and corrupt practices.

I believe there will be many Malaysians who will agree that with some of these initiatives, Najib will qualify to come on board the “Save Malaysia” campaign. I do not think I am the only one frustrated and even exasperated with the direction this country is headed to, which is why the Citizens’ Declaration to Save Malaysia deserves full public support to give it a chance to succeed.

Penang Chief Minister Lim Guan Eng is currently facing in my opinion a politically motivated witch-hunt regarding the purchase of his house. Do you see this as a prelude to more insidious manoeuvrings to cripple the opposition?

Yes, to distract public attention from Najib’s twin mega scandals, which are virtually making headlines all over the world and completely beyond the control of Najib’s minders and the impact of the Citizens’ Declaration to Save Malaysia.

From the television time and the newspaper space given to the issue of Guan Eng’s bungalow, the government and UMNO-BN media, without being able to show that there is any element of corruption, are creating the impression that the allegation about Guan Eng’s RM2.8 million bungalow issue is 1,000 times more serious than the worldwide allegations about Najib’s RM2.6 billion “donation” scandal.

There is a general perception that the DAP cannot accept legitimate criticism without deflecting or engaging in victimhood. Do you think this perception is justified?

I do not think DAP leaders have any objection to legitimate criticism. If there are DAP leaders who bristle over legitimate criticism, they have to learn to live with it as an integral part of a democratic society.Our problem is baseless and biased criticism stemming from dishonourable agendas, and this seems to be a season for them. I have been criticised for things I had not said, and this appeared in what was until recently a reputable media. What is one to make of such scurrilous attacks passing off as legitimate criticism?

How do we nurture a more productive form of discourse with BN supporters when UMNO is using the instruments of the state to neutralise the opposition?

Although UMNOO leaders are demonising DAP in their attempt to portray DAP as its “main enemy”, it doesn’t mean DAP and Pakatan Harapan will not respond in kind to such attacks. DAP does not regard those three million Umno members as “enemies” but only as Malaysians with different political inclinations.

We are always prepared to engage with them for the common purpose and objective to save the nation and all Malaysians comprising different races and religions. It was for that reason alone we agreed to the Citizens’ Declaration.

I know it is tough to even engage with UMNO leaders and members to discuss on such matter because their top leadership would never allow such meetings. Yet if we can promote the campaign on the declaration and efforts to save Malaysia, I believe that would be one of the many ways to engage with UMNO and Barisan supporters, even when Umno leadership is using the state apparatus.

We know that the top UMNO leadership is afraid of DAP because UMNO is losing support of Malays and Muslims as it is not prepared to stop the rampant corruption and injustices of its policies, like Najib’s RM2.6 billion and RM50 billion 1MDB twin mega scandals.

What do you think the consequences would be if the agenda to remove Najib fails?

The Citizens’ Declaration is work-in-progress to save Malaysia. Nobody is so naïve to believe that just because 42 political and civil society leaders can bridge the political divide to reach consensus on the Citizens’ Declaration on March 4, Najib will heed the call of the Citizens’ Declaration and will resign the very next day.

The journey to save Malaysia is going to be a long, arduous and most challenging one. There is no game plan. We have to take one step at a time. I favour the Chinese saying “mo zhe shi tou gua he” or “cross the river by groping the stone under foot” to describe the approach we have to take to carry out the challenging mission to “Save Malaysia”.

We must be prepared for the long haul. This sounds rather odd coming from a 75-year-old, who does not have many active years left. But the message and task of “Save Malaysia” must be borne particularly by the young generation of Malaysians because we are a youthful nation.

I, therefore, call on all young Malaysians to step forward to take over the baton to save Malaysia from becoming a failed and a rogue state.

Part 1: First time Dr M accused of being my puppet, laments Kit Siang