Emigration as Liberation


September 25, 2017

Emigration as Liberation

by Dr. M. Bakri Musa, Morgan-Hill, California

http://www.bakrimusa.com

Image result for Bakri Musa

Dr. M Bakri Musa–A Prolific Author, Essayist and Public Intellectual

Many attribute America’s dynamism and openness to its tradition of accepting new immigrants, current Trump-stirred anti-immigrant hysteria notwithstanding. The hitch in that presumption is whether the very process of emigrating–the uprooting of oneself from one’s familiar surroundings to seek an uncertain future elsewhere–contributes to the opening up of one’s mind or whether it is the reverse? That is, only those who are already open-minded would consider immigration. In short, what is cause and what is effect?

This issue is complicated by the dynamics of immigration today being so much different from what they were a century ago. Ease of travel and communication has much to do with the change. Today someone from China immigrating to America does not face the same emotionally-wrenching decision as those “shanghaied” to work on American railroads of a century ago. Today’s immigrants could Skype or Facetime their relatives back in the village upon landing at San Francisco airport. They could also return for visits during the New Year and other holidays. Even those who had been forced to leave their native country, as with the Vietnamese refugees, are now able to return freely to their land of birth.

Image result for Liberation

This age of globalization is also referred to as the Age of Migration because of the unprecedented number of people moving across borders either individually or in groups as refugees.

There is angst in Malaysia today (and elsewhere in the developing world) over the “brain drain,” the emigration of its talented citizens. The mainstream media and blogosphere are filled with stories of individuals having to make supposedly heart-wrenching decisions to leave the country of their birth. Those personal dramas and emotions are contrived, and a bit of a stretch.

The experiences of today’s immigrants are in no way comparable to what their earlier counterparts had to endure. Unlike them, present-day immigrants are able to make many trips home or have face-to-face chats via Web camera, not to mention frequent phone calls. Many still hold on to their old passports and retain their properties in the old country. In short, the emotional trauma of immigration, if there is any, is nowhere on the same scale as what those who came before them had to endure. The experiences of the Vietnamese and Somalians should give comfort to current refugees from places like Syria and Afghanistan.

Image result for Mahathir, Badawi and Najib

Both Malaysian Prime Ministers–Abdullah Badawi and Najib Razak–were chosen by Dr. Mahathir to screw Malaysia to the ground so that he can look good. In doing so, Mahathir destroyed his own legacy. The lesson to learn is : Never be selfish. –Din Merican

This is especially true of immigrants under the “brain drain” category. Their relocation is akin to an extended sojourn abroad and an opportunity to earn a better income, as well as to widen their experiences and perspectives. Because today’s émigrés return home many times, those visits home become occasions for them to relate their new experiences. That in turn helps those at home to have similar “foreign” experiences, albeit vicariously. That too can be mind-liberating on both parties.

Again, modern technology comes to the rescue; it softens if not eliminates the trauma of migration.

The virtual reality that digital technology delivers may lack the sensory and physical components but it still delivers the essence. The images of the carnage perpetrated by a suicide bomber in London carried on your cellphone in the comfort and safety of your palm may not have the smell of burnt flesh, nonetheless the sight of blood, maimed bodies, and screaming victims captures the brute reality close enough.

Image result for Kerismuddin

The Prime Minister and his Deputy Zahid Hamidi –Quality of Leadership?

Digital technology is the transforming invention of our times. As such, access to it should be a basic public service, made free or affordable. It should be considered a public good in the same manner as highways, healthcare, and utilities.

Take for instance highways; it would be hard to consider a country developed without cars and roads. At the same time, both are major killers and destroyers of human life, as well as deleterious to the environment, but those are not reasons not to have cars and roads. Likewise, the digital highway; there are recognized dangers, the obvious being fraud, gambling, and pornography. Again, those are not reasons to ban or limit the Internet. Instead the focus should be on educating citizens on the dangers, just as we do with cars and highway users.

I venture that the broad-mindedness and increasing assertiveness of Malaysians in recent years, especially among the young, is attributable to the fact that Malaysia is an open society and its cyber world remains uncensored. That is one of the few enduring legacies of Mahathir despite his second thoughts lately on Internet freedom. Now that we have tasted freedom albeit only in the cyber world, there is no turning back.

Technology–The Liberator and Great Equalizer, says Dr. Bakri Musa


September 19, 2017

Technology–The Liberator and Great Equalizer

by Dr. M. Bakri Musa, Morgan-Hill, California

Image result for M. Bakri Musa

The challenge for Malays and non-Malays in this global era is to cultivate an open mind because the alternative means depriving yourself of new opportunities.–Dr. M Bakri Musa

Modern technology, specifically digital, brings us to the outside world, and it to us. Today what happens in the isolated caves high in the mountains of Kabul can be recorded on a cell phone and then posted on the Web for the whole world to see. Even a repressive regime like China could not control the dissemination of images of its tanks bulldozing innocent citizens back at Tiananmen Square in 1989, though not for lack of trying.

The success of the Arab Jasmine Revolution owes much to this digital revolution. Through social networks like Facebook and Twitter, ordinary citizens communicated with each other in real time to organize massive demonstrations that brought down powerful leaders like Egypt’s Hosni Mubarak.

I assert that the digital technology is a much more powerful and consequential instrument of liberation than the AK47, hitherto (still is) the favorite with not-so-bright revolutionaries worldwide.

Eygpt’s Hosni Mubarak was derailed not by a gunman, like his predecessor Anwar Sadat, but by a social revolution made possible by the online social network. If there were to be a leader of that movement, it would be Google executive Wael Ghonim. Unlike earlier Arab revolutionaries who were military officers, this guy was, for lack of better word, a geek. What an incredible achievement what he had done! No one could have predicted that Hosni Mubarak, who only a few months previously was the most powerful man in the Arab world, would face charges of premeditated murder for the deaths of those protestors.

Image result for klaus schwab quotes

Digital technology is not the only modern agent of liberation. Modern transportation has reduced if not removed the barrier of geography. Today I can fly from San Francisco to Kuala Lumpur in less time than it took my sister to get from Kuala Pilah to Teachers’ College in Kota Baru via Malayan Railway back in the 1950s.

Travel, in so far as it affords one the opportunity to experience different cultures and realities, can be liberating. While the digital revolution might afford a virtual reality on the convenience and safety of your sofa, travel lets you experience reality in its raw, unfiltered physical form.

The liberating effect of travel works both on the traveler as well as the host. This liberating result, however, is not guaranteed. Seeing how the rest of the world operates may not necessarily open up minds; in some it would result in the exact opposite.

Image result for klaus schwab quotes

The Chinese Emperor of the 15th Century sent out explorers out to the vast Pacific and Indian Oceans. Far from opening up Chinese minds, those exotics foreign expeditions merely reaffirmed their smug superiority that they had nothing to learn from the barbarians outside, a manifestation of a collective “confirmation bias” at the societal level.

The Chinese were so confident of their superiority that they eschewed the need for further foreign explorations. They went further. They ordered the dismantling of their advanced and massive maritime infrastructures and banned the building of boats, declaring that to be frivolous and resource-wasting exercises.

Meanwhile the Europeans continued with theirs. The scale was considerably much less, their ships pale imitations of the Chinese. The length of Columbus’s flagship Santa Maria was less than half the width of Cheng Ho’s.

Unlike the ancient Chinese, the medieval Europeans had no pretensions of grandeur; they explored the world with an open mind. They had no delusions about their ways being the best; instead they observed in those foreign lands things they could take home, like tea and spices. It did not take them long to recognize the enormous potential in trading those commodities by introducing new culinary experiences to European palates. The Europeans also soon discovered that the Chinese had a voracious appetite for opium, which the Brits could secure with ease from India. Lucrative commercial domination soon led to the political variety, and thus colonialism was born.

Image result for M. Bakri Musa

Why one culture reacted a certain way and another, the very opposite, is intriguing. In the final analysis, it boils down to a culture’s openness to new ideas and experiences, its collective open mindedness. The ancient Chinese had closed minds; the medieval Europeans, open.

Today some foreigners arrive in a new country, and on encountering an alien culture would retreat, fearing it would “contaminate” their pristine values. They would close ranks and congregate in their own little ghettoes, refusing to integrate with the native majority. We see this in America as well as Malaysia.

Related image

“…the Fourth Industrial Revolution (Technology and Digitization) is empowering the empowering the economically disadvantaged by giving them access to digital networks, increasing the efficiency of organisations, improving medical care with personalised drugs and providing a technological solution to climate change”.–Dr. Kao Kim Hourn, President, The University of Cambodia, Phnom Penh.

 

Others view their new experiences as open opportunities and endless learning. Some are simply grateful to be given a new lease on life after escaping the wretchedness of their native land. Eastern Europeans who came to America early in the last century were grateful and thus more than eager to join the American mainstream. They readily gave up their old ways to integrate as quickly as possible into their new society. They learned English quickly and changed their names to make them sound more Anglo-Saxon, with Pawlinsky morphing into the less jaw-breaking Paul.

Even when they were actively discriminated against, and the early Jews, Irish and Italians in America definitely were, they continued to adopt American ways. They did not rush to build Italian or Jewish schools; instead they built their own English schools so their children would not be handicapped in integrating into mainstream American society. They did not consider such actions as repudiating or denigrating their own culture. Far from it! They realized that their own culture and ways of life would more likely survive if were to thrive and be successful in their adopted land.

Today St. Patrick Day and Octoberfest are celebrated more exuberantly in Chicago and Milwaukee respectively than in Dublin or Berlin.

It is tempting to attribute the contrasting reactions of early immigrants to America from Europe to later ones from Asia and Latin America to the differences in circumstances that prompted them to emigrate. The Europeans were forcibly thrown out of their native lands through pogroms or wars. In contrast, recent Asian and Latin American immigrants cross the border voluntarily, for the most part (the South Vietnamese being the most recent notable exception). The Europeans did not ever want to return to their homelands. By contrast, many recent Hispanics consider their stay in America temporary, remaining just long enough to accumulate some money so they could return and live comfortably back in their native land. As such, they do not feel compelled to learn English or in any way integrate into American society.

A similar “temporary abode” mentality occurred with immigrants from China and India into Malaysia early last century. Brought in by the colonials to work the tin mines and rubber plantations, their mindset was to work hard, accumulate enough savings, and then balik Tongsan (return to their motherland, China). Hence there was little need to learn the local language or adapt to local culture. They remained insular, xenophobic, and closed-minded.

They were completely different from the Chinese men and women who much earlier voluntarily settled in the Straits Settlement, the Peranakan. They absorbed many of the elements of Malay culture, including the language and attire. They were not obsessed with balik Tongsan. When the British were in charge, those Chinese learned English; in independent Malaysia, they worked with the majority Malays.

The challenge for Malays and non-Malays in this global era is to cultivate an open mind because the alternative means depriving yourself of new opportunities.

A New Course for Economic Liberalism


July 17, 2017

A New Course for Economic Liberalism

by Sebastian Buckup

Sebastian Buckup is Head of Programming at the World Economic Forum.

How policymakers can manage the opposing forces of economic diffusion and concentration.

Résultat de recherche d'images pour "Macron"

The New Man in France–President Emmanuel Macron

Since the Agrarian Revolution, technological progress has always fueled opposing forces of diffusion and concentration. Diffusion occurs as old powers and privileges corrode; concentration occurs as the power and reach of those who control new capabilities expands. The so-called Fourth Industrial Revolution will be no exception in this regard.

Already, the tension between diffusion and concentration is intensifying at all levels of the economy. Throughout the 1990s and early 2000s, trade grew twice as fast as GDP, lifting hundreds of millions out of poverty. Thanks to the globalization of capital and knowledge, countries were able to shift resources to more productive and higher-paying sectors. All of this contributed to the diffusion of market power.

Résultat de recherche d'images pour "Opposing forces of economic diffusion and concentration"

But this diffusion occurred in parallel with an equally stark concentration. At the sectoral level, a couple of key industries – most notably, finance and information technology – secured a growing share of profits. In the United States, for example, the financial sector generates just 4% of employment, but accounts for more than 25% of corporate profits. And half of US companies that generate profits of 25% or more are tech firms.

The same has occurred at the organizational level. The most profitable 10% of US businesses are eight times more profitable than the average firm. In the 1990s, the multiple was only three.

Such concentration effects go a long way toward explaining rising economic inequality. Research by Cesar Hidalgo and his colleagues at MIT reveals that, in countries where sectoral concentration has declined in recent decades, such as South Korea, income inequality has fallen. In those where sectoral concentration has intensified, such as Norway, inequality has risen.

A similar trend can be seen at the organizational level. A recent study by Erling Bath, Alex Bryson, James Davis, and Richard Freeman showed that the diffusion of individual pay since the 1970s is associated with pay differences between, not within, companies. The Stanford economists Nicholas Bloom and David Price confirmed this finding, and argue that virtually the entire increase in income inequality in the US is rooted in the growing gap in average wages paid by firms.

Such outcomes are the result not just of inevitable structural shifts, but also of decisions about how to handle those shifts. In the late 1970s, as neoliberalism took hold, policymakers became less concerned about big firms converting profits into political influence, and instead worried that governments were protecting uncompetitive companies.

With this in mind, policymakers began to dismantle the economic rules and regulations that had been implemented after the Great Depression, and encouraged vertical and horizontal mergers. These decisions played a major role in enabling a new wave of globalization, which increasingly diffused growth and wealth across countries, but also laid the groundwork for the concentration of income and wealth within countries.

The growing “platform economy” is a case in point. In China, the e-commerce giant Alibaba is leading a massive effort to connect rural areas to national and global markets, including through its consumer-to-consumer platform Taobao. That effort entails substantial diffusion: in more than 1,000 rural Chinese communities – so-called “Taobao Villages” – over 10% of the population now makes a living by selling products on Taobao. But, as Alibaba helps to build an inclusive economy comprising millions of mini-multinationals, it is also expanding its own market power.

Policymakers now need a new approach that resists excessive concentration, which may create efficiency gains, but also allows firms to hoard profits and invest less. Of course, Joseph Schumpeter famously argued that one need not worry too much about monopoly rents, because competition would quickly erase the advantage. But corporate performance in recent decades paints a different picture: 80% of the firms that made a return of 25% or more in 2003 were still doing so ten years later. (In the 1990s, that share stood at about 50%.)

To counter such concentration, policymakers should, first, implement smarter competition laws that focus not only on market share or pricing power, but also on the many forms of rent extraction, from copyright and patent rules that allow incumbents to cash in on old discoveries to the misuse of network centrality. The question is not “how big is too big,” but how to differentiate between “good” and “bad” bigness. The answer hinges on the balance businesses strike between value capture and creation.

Moreover, policymakers need to make it easier for startups to scale up. A vibrant entrepreneurial ecosystem remains the most effective antidote to rent extraction. Digital ledger technologies, for instance, have the potential to curb the power of large oligopolies more effectively than heavy-handed policy interventions. Yet economies must not rely on markets alone to bring about the “churn” that capitalism so badly needs. Indeed, even as policymakers pay lip service to entrepreneurship, the number of startups has declined in many advanced economies.

Finally, policymakers must move beyond the neoliberal conceit that those who work hard and play by the rules are those who will rise. After all, the flipside of that perspective, which rests on a fundamental belief in the equalizing effect of the market, is what Michael Sandel calls our “meritocratic hubris”: the misguided idea that success (and failure) is up to us alone.

This implies that investments in education and skills training, while necessary, will not be sufficient to reduce inequality. Policies that tackle structural biases head-on – from minimum wages to, potentially, universal basic income schemes – are also needed.

Neoliberal economics has reached a breaking point, causing the traditional left-right political divide to be replaced by a different split: between those seeking forms of growth that are less inclined toward extreme concentration and those who want to end concentration by closing open markets and societies. Both sides challenge the old orthodoxies; but while one seeks to remove the “neo” from neoliberalism, the other seeks to dismantle liberalism altogether.

The neoliberal age had its day. It is time to define what comes next.

 

The Real Crisis in North Korea–A Perspective


May 21, 2017

The Real Crisis in North Korea–A Perspective

by Gianluca Spezza

PhD candidate at the International Institute of Korean Studies, University of Central Lancashire, and founding contributor at NK News

https://www.irinnews.org/opinion/2017/05/18/real-crisis-north-korea-not-one-you%E2%80%99ve-been-hearing-about

Image result for The KIMs of North Korea


The Democratic People’s Republic of Korea has been in the news a lot lately, with the DPRK testing new missiles and the United States moving a naval strike group off the Korean peninsula. The commentary almost always revolves around strategic issues, especially North Korea’s nuclear programme.

In focusing so narrowly on the country’s military and its leader, Kim Jong-un, however, the debate largely overlooks the North Korean people.

This has two major implications. First, it perpetuates an image of the country that is not in line with reality. In fact, the younger Kim does not enjoy the kind of monolithic influence held by his grandfather, Kim Il-sung, or his father, Kim Jong-il. Power structures in North Korea began to disintegrate under Kim Jong-il and are now widely ramified. Security apparatuses are no longer under one single point of command; neither are military corps. This is something that the administration of US President Donald Trump seems to be oblivious to, but it should take into account when formulating policy.

Second, and most important, the world’s myopic attention to Kim Jong-un precludes recognition of the nearly 26 million people that live in the country. They represent the true issue at stake, once the current regime – which is living on borrowed time – is gone.

What do we know about DPRK and its people?

Oddly enough, since the early 1990s the international community has accumulated a larger knowledge base on North Korean society than intelligence agencies have ever had on its military. Yet, most media insist on reporting obsessively on the latter. This is shortsighted.

Image result for The KIMs of North Korea

The Hermit Nation–Kim and his Military Men

The questions we ought to ask instead, if we are to understand where the country is headed, are: What is the current state of North Korea? What do we know about its society and economy? What kind of country will emerge once the regime is gone?

These questions matter, because with each crisis, the possibility of regime change or collapse becomes more real. With that, the risk of a humanitarian catastrophe increases, and neither South Korea nor China are well prepared to respond.

North Korea represents an anomaly, for both aid organisations and experts of international politics. But things are changing.

Image result for The North Koreans

For a long time, the country may have deserved its moniker of the hermit kingdom. But today, after 22 years of humanitarian assistance and development, the DPRK is an aid-dependent country, stuck in a paradoxical situation. Its economy crashed in the mid-1990s and never recovered, while its social indicators went from good, to terrible, to decent over the last two decades.

The North Korean development indicators for children’s welfare, as well as immunisation and education, are well above countries with a much higher GDP, but the economy does not reflect this relatively healthy development status. The DPRK produces very little of value, and its people find survival in the black market rather than state-provided jobs.

North Korea, in other words, has the economy of an underdeveloped country, with levels of social development of a middle-to-high income country. It is time to take a look at the country beyond military parades.

How did North Korea get so poor?

Upon the demise of its first leader, Kim Il-sung, in 1994, the DPRK faced a combination of domestic and international factors that negatively affected all sectors of society and state institutions. External circumstances included the loss between 1991 and 1993 of its main allies and economic partners, the Soviet Union and China. In addition, in 1993, China started to demand payments at regular market rates for oil and fuel, which had until then been provided at very low prices and constituted the main source of energy for the DPRK.

Image result for North Korean and China

In this rapidly changing international scenario, the DPRK, which had become heavily dependent on subsided trade with its former communist partners during the Cold War, found itself with no economic safety net. At the same time, the country was hit by a series of droughts and floods, along with a sudden shortage of energy sources. This devastated an agriculture system almost entirely dependent on chemical fertilisers and mechanised irrigation.

With diminishing amounts of food, the effectiveness of the Public Distribution System that regulated the allocation of basic goods decreased gradually, forcing the population to seek alternative means of subsistence. Housewives, factory workers, doctors, nurses, teachers and students alike had to fend for themselves in order to secure food and heating material during winter.

The crisis caught many North Koreans by surprise, and it was aggravated by economic mismanagement. It should be noted that the Public Distribution System did not collapse altogether, but the degree of functioning of the system varied between different provincesBetween 1994 and 1998, GDP declined by almost half. This, in combination with the progressive dysfunction of the PDS, severely reduced access to food, medications, and primary goods, leading to a famine and to the general deterioration of the population’s ability to withstand further calamities.

The economy: China dominates

Today, it is safe to say that, in effect, China runs North Korea’s economy. Chinese currency is widely used in the unofficial markets that have mushroomed around the country since the crisis of the mid-1990s.

China gets the lion’s share of trade with North Korea and provides the bulk of its food and energy. Luxury items, if and when they manage to come into the DPRK, do so from across the border region of Yanbian or Chinese ports.

To be sure, North Korea does have a few economic niches, but these too are largely influenced by China’s presence. The DPRK’s significant mineral resources are almost exclusively exploited by Chinese companies, and Chinese visitors make for the majority of customers in North Korea’s trade fairs and Special Economic Zones.

In other words, simply by looking at the economy of North Korea, one could surmise that as long as China is there to support it, the country could muddle along with no substantial changes for a very long time. A look at North Korean social indicators, however, offers a different perspective.

Demography is destiny

The key indicators of a country’s state of health and future prospects are its social statistics, particularly those on demographics. According to combined data from the Central Bureau of Statistics in Pyongyang, the World Bank Institute, and the UN gathered in 2008, and data by UNICEF gathered in 2014, the DPRK’s average population growth rate for 1990-2004 was 0.9 percent, or equivalent to that of upper middle-income countries. The same data provide trends for 2004-2020 that place growth at 0.4 percent, or equivalent to that of high-income countries.

At the same time, North Korea’s birth rate dropped to 16 per 1,000 people in the late 2000s – the level of middle-income countries – whilst the fertility rate is slowly approaching the levels of most Western countries. It sits between parity – two children, which is the minimum requirement for a population to continue replacing itself over time – and one child or none per couple, which is deemed not enough to avoid extinction in the long run. The latter is where Germany, Italy, and most EU countries are at present.

What does this mean for the future of North Korea?

If we read population increase as an indication of economic and social stability, the DPRK looks further removed from the so-called “failed states” it is often compared to – like Somalia, Yemen, or South Sudan – which are all on the verge of famine (or, in the case of parts of South Sudan, already experiencing it). North Korea is in fact undergoing the same “cradle crisis” that characterises advanced countries, from Japan to Germany.

However, the same statistics, viewed from the standpoint of overall death rates and infant mortality rates suggest the DPRK is right there with low-income countries. Its average death rate is as high as 11 per 1,000 people, and rates of infant mortality that have not yet fully recovered from the 1990s crisis.

This has a number of implications: North Korea doesn’t have the problems that South Korea has at the moment, with an increasingly aging population placing stress on the social welfare system. As a matter of fact, the DPRK welfare system has been simply downsized and slowed to a minimum since the 1990s. Today, North Koreans live on average six to eight years less than South Koreans and about nine years less than the Japanese.

In Malthusian terms, this means that the government has less to worry about in the short-term. Considering the chronic economic stagnation, most North Koreans alive today could well get old before they even have a chance to elevate their economic status.

https://i1.wp.com/www.openingupnorthkorea.com/wp-content/uploads/2011/07/image1.png

At the same time, with a slow but steady recovery from the famine and the crisis of the mid-1990s, the DPRK seems to have reached a level of relative social comfort at which most middle-to-high income countries stop having enough children for the maintenance of native population. At this stage, they will slowly begin to fade out unless they adopt open immigration policies – an option that is unpopular in South Korea and Japan, and next to impossible in the DPRK.

If the trend continues – and the figures from 2008 and 2014 suggest it will – North Korea may one day run out of people to maintain its workforce. That would be one more reason for the regime to push towards reunification. While its rival state south of the demilitarised zone is also growing older, it is still twice as populous, and immensely richer by comparison. Still, if nothing changes at the economic level, any effort of reunification will require the equivalent of a mini-Marshall Plan for the entire peninsula.

This is the real North Korean conundrum: The country has faced challenges it is hard to imagine any other regime surviving: famine, floods, droughts, economic collapse, energy shortages, sanctions, and leadership changes. This has left a North Korea that is a mass of contradictions.

Few consider that the country making headlines for its nuclear technology has a basket case economy, but also one of the highest literacy rates in the world. There is no other country with such low economic indicators that can at the same time build and at test nuclear devices and achieve universal literacy, while still being aid-dependent.

Is aid the answer?

To explain the North Korean anomaly, we have to look at the nature of aid itself with three key questions: What is aid? Why is aid provided? Is it accomplishing what it is supposed to?

From an economic perspective, we can think of aid as a measure of socioeconomic welfare, like the one used for families and individuals, but on a much bigger scale. Welfare policies are supposed to work as a safety net in times of emergency – fostering growth and preventing recession when families and individuals go through hardships. At any rate, welfare is conceived to be a temporary measure and aid doesn’t come for free.

Aid represents an extension of foreign policy from donor states to recipient nations. Donors and international organisations expect recipients to correct their course and adopt policies that move them towards a free market economy, and adherence to international treaties on human rights, environmental protection and sustainability.

North Korea has become chronically dependent on aid since the mid 1990s. Yet, it has remained impervious to outside pressure for change. When it shows any degree of compliance with international norms, it does so only in fields where its interests converge with those of international organisations. Education and environmental protection are two examples.

On the other hand, North Korea has no relationship with global economic bodies like the World Trade Organization and the International Monetary Fund. It makes no concessions on the issues of nuclear proliferation and allows no inspections from human rights organisations. But its population does require foreign assistance in order to survive.

The socioeconomic emergency that swept the country between 1995 and 1999 was rooted in a combination of political, climatic, structural, and geopolitical factors. By 2005, the government declared the food emergency to be over and asked a number of NGOs – but not UN agencies – to leave. Nevertheless, the country has continued to rely on foreign assistance, just as the UN agencies at work in the DPRK kept monitoring a situation that requires periodical emergency assistance, year in-year out, in combination with development programmes.

If North Korea were a family, or an individual who has been in need of aid for 22 consecutive years, would this be considered normal? It’s unlikely. Yet, aid needs to reach the people of the DPRK on a yearly basis or a new humanitarian emergency may break out, according to the UN.

There is a consensus among humanitarians that as the North Korean people have no say on their government policies, they should not be the ones suffering the consequences. Therefore, the international community has responded with aid. However, a look at what North Korea has become since 1995 reveals that aid has not made North Korea strong enough to stand on its own.

This is the most pressing problem with North Korea, aside from its periodically aggressive military posture. The country needs aid because what once was a functioning infrastructure for a command economy, in which the state plays the primary role, has ceased to exist. More than this, it needs important economic and political reforms. Currently however, North Korean politics withhold economic restructuring and growth. At the same time, aid agencies and donors tend to look at technical issues and do not tackle the lack of political decisions that could steer the country away from perpetually looming humanitarian disasters.

 A new approach?

Aid has been invaluable in pulling the country out of the humanitarian catastrophe of the mid-1990s, and it has helped North Korea maintain decent levels in development indicators such as health and education since then on. But aid cannot help the country provide a decent standard of living on its own for its people. That can only be done through political reform.

The real political story about North Korea today is that the “Stalinist fortress” – the impenetrable polity devoted to hardline communism – is no longer Stalinist, nor a fortress. North Korea scholars and South Korean government experts concur in saying that Kim Jong-un holds a fraction of the power that his father and grandfather wielded.

The elites that have emerged from two decades of black market activity are aware that there are only a few obstacles to a reunification that could see them prosper, while lifting millions of North Koreans out of poverty. These factors are their “political guilt” (for they contributed to keeping the country in a state of repression over decades), and the risk of losing whatever wealth they have accumulated.

If the United States and South Korea could agree to leave some of these families in power, providing them amnesty, they could ask in return for a soft removal of the Kim family, and open the door for a gradual economic rebuilding of the country. Financial incentive, or the lack thereof, in North Korea is the key issue. The average annual income in North Korea is a little below $1,000. In the South, it is over $30,000. No amount of foreign aid can ever bridge this difference.

PROTON: The National Albatross


March 30, 2017

PROTON: How long more can Malaysian Taxpayers bear the Burden of this National Albatross

by P. Gunasegaram@www.malaysiakini.com

Proton is a clear case of how a wrong policy – producing our own national car – can cost the consumer hundreds of billions of ringgit over the decades of its implementation. Enough has been wasted with the government already giving out some RM15 billion in grants and the latest loan. If Proton can’t find a foreign partner, it is best to let it simply go under.–P. Gunasegaram

Image result for Mahathir and Proton

Mahathir masih belum terima realiti bahawa Projek PROTON idaman beliau itu gagal

PROTON, both car and company, have been a problem from day one. It should have been resolved three decades ago but has been allowed to snowball to epic proportions. Even the current search for a foreign strategic partner (FSP) appears bogged down.

That’s because till today, in the midst of negotiations to find a FSP, there is an ingrained reluctance to surrender control to bring in the technological expertise, business acumen and international standing to turn Proton around. If this transigence does not evaporate, then Proton will not have a deal.

That prolongs the suffering of Malaysians who since 1985, when the first Proton Saga rolled off the plant in Shah Alam, are paying much higher prices for cars, sometimes two or three times the price in other countries, because of protective barriers. According to my calculations, this could have amounted to as high as RM360 billion that car buyers have sacrificed in duties to the government and subsidies to manufacturers.

I have used estimated sales of some 12 million vehicles between 1985 and 2016 of which some four million vehicles sold were Protons. I have estimated, conservatively, that the average price per vehicle was RM30,000 higher because of protective barriers. Multiply this by 12 million vehicles for RM360 billion. You may disagree with the exact figure but there can be little doubt that the order of magnitude is in the hundreds of billions of ringgit.

If it was purely a question of business, Proton would have been sorted out a long time ago. But like many things in this country, it became an issue of national and even Malay pride, local capability and capacity, and one man’s plain old-fashioned stubbornness in the face of overwhelming evidence that it could not work.

Image result for Najib Razak and Proton

Najib is afraid to shut down PROTON

Proton, then controlled by sovereign fund Khazanah Nasional Bhd, was about to sign a deal with Germany’s Volkswagen in 2007 when the deal was jettisoned days before the signing by intense lobbying to then Prime Minister Abdullah Ahmad Badawi. Among the lobbyists were said to be then International Trade and Industry Minister Rafidah Aziz and those associated with former Prime Minister Dr Mahathir Mohamad, whose “brainchild” Proton is.

Then as now, Proton’s problems are well-known — lack of technical knowhow to produce reliable vehicles cheaply and insufficient production to benefit from economies of scale and develop new, viable models – two factors which feed off each other to make things progressively worse.

The only thing which helped to produce profit in the past were high tariff barriers and rebadged vehicles from manufacturers such as Mitsubishi in the early years and Honda in the later years with little more than assembly involved.

What has Proton to offer? Mainly two things. One, excess production capacity which means there is little lead time to production. Two, access to the 10-member 623-million-people Asean market whose member nations have largely dismantled discriminatory tax barriers for cars among themselves – except for Malaysia which imposes a thinly disguised discriminatory excise duty based on “local” content.

The solution is simple and straightforward. Give a competent foreign partner majority stake and control of the manufacturing operations at a reasonable price. Try and maintain control of domestic sales and marketing. That is as much as one can hope for – the operation is losing money by the bucketloads and the outlook is ominous to say the least.

Image result for Perodua vs Proton

 The Clear Winner is Produa, thanks to Daihatsu Technology combined with savvy sales and marketing owned by local interests

Failed Proton’s arch rival Perodua, also a national car project, is succeeding. Why? Perodua has access to technology from Daihatsu which in turn is owned by Toyota – its cars are therefore much more reliable than Proton’s. Not many people know this but Perodua’s manufacturing is majority foreign-owned while sales and marketing is majority owned by local interests.

But even now, when it has its back against the wall and some RM1.5 billion in support loans from the federal government to keep it going meantime, Proton is balking.

Geely pulls out

According to an article in the South China Morning Post, China’s successful home-grown auto manufacturer Geely Automobile Holdings has withdrawn from a bid to acquire a controlling stake. It quoted Geely’s President An Conghui.

Image result for Geely Automobile Holdings

Geely Chairman  Billionaire Li Shufu

An did not elaborate on the reasons for the decision, but Li Shufu, its chairperson, had previously indicated the Malaysian firm had been “uncertain” about what it wanted from an overseas partner, in an interview with Bloomberg earlier this month, the report said.

Why the uncertainty?

However, listed DRB-Hicom, Proton’s shareholder and eventually majority owned by prominent businessman Syed Mokhtar AlBukhary, denied Friday that Geely has pulled out. Proton has reportedly lost RM2.5 billion since DRB-Hicom took it over in 2012.

That takeover represents a series of musical chairs when different companies were left holding the parcel as this article I wrote for The Star in 2012 explains. It passed from the government’s Heavy Industries Corp of Malaysia or Hicom to Diversified Resources Bhd or DRB, later renamed DRB-Hicom, to national oil corporation Petronas when DRB-Hicom was rescued and then to Khazanah Nasional which sold it back to DRB-Hicom, now controlled by Syed Mokhtar. DRB founder, Yahya Ahmad who was well-regarded by Mahathir – was killed in a helicopter crash in 1997 before Proton was sold to Petronas.

Geely, the owner of the Swedish Volvo brand, was considered the favourite to acquire a controlling stake in Proton although Europe’s second-largest carmaker Groupe PSA, which owns the Citroen, Peugeot, and DS brands was still in the running.

If indeed Geely has pulled out, and it seems rather likely it has, that will leave Groupe PSA as the sole contender for Proton, giving Proton very little room to bargain.

There is no choice but for Proton to get an FSP. That should have been done 10 years ago. As time passes on, there is less and less reason for companies to set up manufacturing here. They can simply go to Thailand which is already a manufacturing hub. Or Indonesia.

Once Proton is taken over, then all that’s left to do is to set a timetable to dismantle the high tariffs for cars and put everyone on a level-playing field. And finally enable Malaysians to benefit from reasonable car prices. Presumably, with the FSP, Proton will have no more need for protection because it will have scale and technological expertise, becoming a regional manufacturer for the FSP.

Proton is a clear case of how a wrong policy – producing our own national car – can cost the consumer hundreds of billions of ringgit over the decades of its implementation. Enough has been wasted with the government already giving out some RM15 billion in grants and the latest loan. If Proton can’t find a foreign partner, it is best to let it simply go under.

Over the decades, Malaysians have paid hundreds of billions more ringgit for cars. Our calculations indicate RM360 billion. How much more do we have to pay before this long, sorry, sad saga is finally brought to an end?


P GUNASEGARAM says: “The government never pays the price of protecting local industry, the consumer always does.” E-mail: t.p.guna@gmail.com.

APSIA Conference 2017 Keynote Address by Singapore’s DPM


March 5, 2017

Image result for DPM of Singapore

APSIA Conference 2017 Keynote Address by Singapore’s DPM Tharman Shanmugaratnam at LKY School of Public Policy

COMMENT:

Geo-Politics, Disruptive Social Developments and Technological Change: Has the Game Changed? Yes, that is easy part of the answer.  How we wish that life is simple and outcomes are predictable. But it is not. I  have been grappling a few questions. I asked myself questions like What has changed? How it has changed?  What is driving the change?What this change means to us in Asia.

China, North Korea, Islamic and Christian evangelism, terrorism and so on are making the headlines.I  also see increasing polarisation and the need for understanding and rebuilding trust. I expect our politicians to reconnect with people they are mandated to serve and  want leaders to lead with integrity, honesty and hope. Listen to DPM Tharman Shanmugaratnam for some insights.–Din Merican