The evolution of crisis

By
George Friedman

Aug 11, 2011 | Asia Times

Classical political economists like Adam Smith or David Ricardo never used the term ”economy” by itself. They always used the term ”political economy.” For classical economists, it was impossible to understand politics without economics or economics without politics. The two fields are certainly different but they are also intimately linked.

The use of the term ”economy” by itself did not begin until the late 19th century. Smith understood that while an efficient market would emerge from individual choices, those choices were framed by the political system in which they were made, just as the political system was shaped by economic realities. For classical economists, the political and economic systems were intertwined, each dependent on the other for its existence.

The current economic crisis is best understood as a crisis of political economy. Moreover, it has to be understood as a global crisis enveloping the United States, Europe and China that has different details but one overriding theme: the relationship between the political order and economic life. On a global scale, or at least for most of the world’s major economies, there is a crisis of political economy. Let’s consider how it evolved.

Origin of the crisis

As we all know, the origin of the current financial crisis was the subprime mortgage meltdown in the United States. To be more precise, it originated in a financial system generating paper assets whose value depended on the price of housing. It assumed that the price of homes would always rise and, at the very least, if the price fluctuated the value of the paper could still be determined. Neither proved to be true. The price of housing declined and, worse, the value of the paper assets became indeterminate. This placed the entire American financial system in a state of gridlock and the crisis spilled over into Europe, where many financial institutions had purchased the paper as well.

From the standpoint of economics, this was essentially a financial crisis: who made or lost money and how much. From the standpoint of political economy it raised a different question: the legitimacy of the financial elite. Think of a national system as a series of subsystems – political, economic, military and so on. Then think of the economic system as being divisible into subsystems – various corporate verticals with their own elites, with one of the verticals being the financial system. Obviously, this oversimplifies the situation, but I’m doing that to make a point.

One of the systems, the financial system, failed, and this failure was due to decisions made by the financial elite. This created a massive political problem centered not so much on confidence in any particular financial instrument but on the competence and honesty of the financial elite itself. A sense emerged that the financial elite was either stupid or dishonest or both. The idea was that the financial elite had violated all principles of fiduciary, social and moral responsibility in seeking its own personal gain at the expense of society as a whole.

Fair or not, this perception created a massive political crisis. This was the true systemic crisis, compared to which the crisis of the financial institutions was trivial. The question was whether the political system was capable not merely of fixing the crisis but also of holding the perpetrators responsible. Alternatively, if the financial crisis did not involve criminality, how could the political system not have created laws to render such actions criminal? Was the political elite in collusion with the financial elite?

There was a crisis of confidence in the financial system and a crisis of confidence in the political system. The US government’s actions in September 2008 were designed first to deal with the failures of the financial system. Many expected this would be followed by dealing with the failures of the financial elite, but this is perceived not to have happened. Indeed, the perception is that having spent large sums of money to stabilize the financial system, the political elite allowed the financial elite to manage the system to its benefit.

This generated the second crisis – the crisis of the political elite. The Tea Party movement emerged in part as critics of the political elite, focusing on the measures taken to stabilize the system and arguing that it had created a new financial crisis, this time in excessive sovereign debt.

The Tea Party’s perception was extreme, but the idea was that the political elite had solved the financial problem both by generating massive debt and by accumulating excessive state power. Its argument was that the political elite used the financial crisis to dramatically increase the power of the state (health care reform was the poster child for this) while mismanaging the financial system through excessive sovereign debt.

The crisis in Europe

The sovereign debt question also created both a financial crisis and then a political crisis in Europe. While the American financial crisis certainly affected Europe, the European political crisis was deepened by the resulting recession. There had long been a minority in Europe who felt that the European Union had been constructed either to support the financial elite at the expense of the broader population or to strengthen Northern Europe, particularly France and Germany, at the expense of the periphery – or both. What had been a minority view was strengthened by the recession.

The European crisis paralleled the American crisis in that financial institutions were bailed out. But the deeper crisis was that Europe did not act as a single unit to deal with all European banks but instead worked on a national basis, with each nation focused on its own banks and the European Central Bank seeming to favor Northern Europe in general and Germany in particular. This became the theme particularly when the recession generated disproportionate crises in peripheral countries like Greece.

There are two narratives to the story. One is the German version, which has become the common explanation. It holds that Greece wound up in a sovereign debt crisis because of the irresponsibility of the Greek government in maintaining social welfare programs in excess of what it could fund, and now the Greeks were expecting others, particularly the Germans, to bail them out.

The Greek narrative, which is less noted, was that the Germans rigged the European Union in their favor. Germany is the world’s third-largest exporter, after China and the United States (and closing rapidly on the number two spot). By forming a free trade zone, the Germans created captive markets for their goods. During the prosperity of the first 20 years or so, this was hidden beneath general growth. But once a crisis hit, the inability of Greece to devalue its money – which, as the euro, was controlled by the European Central Bank – and the ability of Germany to continue exporting without any ability of Greece to control those exports exacerbated Greece’s recession, leading to a sovereign debt crisis. Moreover, the regulations generated by Brussels so enhanced the German position that Greece was helpless.

Which narrative is true is not the point. The point is that Europe is facing two political crises generated by economics. One crisis is similar to the American one, which is the belief that Europe’s political elite protected the financial elite. The other is a distinctly European one, a regional crisis in which parts of Europe have come to distrust each other rather vocally. This could become an existential crisis for the European Union.

The crisis in China

The American and European crises struck hard at China, which, as the world’s largest export economy, is a hostage to external demand, particularly from the United States and Europe. When the United States and Europe went into recession, the Chinese government faced an unemployment crisis. If factories closed, workers would be unemployed, and unemployment in China could lead to massive social instability.

The Chinese government had two responses. The first was to keep factories going by encouraging price reductions to the point where profit margins on exports evaporated. The second was to provide unprecedented amounts of credit to enterprises facing default on debts in order to keep them in business.

The strategy worked, of course, but only at the cost of substantial inflation. This led to a second crisis, where workers faced the contraction of already small incomes. The response was to increase incomes, which in turn increased the cost of goods exported once again, making China’s wage rates less competitive, for example, than Mexico’s.

China had previously encouraged entrepreneurs. This was easy when Europe and the United States were booming. Now, the rational move by entrepreneurs was to go offshore or lay off workers, or both. The Chinese government couldn’t afford this, so it began to intrude more and more into the economy. The political elite sought to stabilize the situation – and their own positions – by increasing controls on the financial and other corporate elites.

In different ways, that is what happened in all three places – the United States, Europe and China – at least as first steps. In the United States, the first impulse was to regulate the financial sector, stimulate the economy and increase control over sectors of the economy. In Europe, where there were already substantial controls over the economy, the political elite started to parse how those controls would work and who would benefit more. In China, where the political elite always retained implicit power over the economy, that power was increased. In all three cases, the first impulse was to use political controls.

In all three, this generated resistance. In the United States, the Tea Party was simply the most active and effective manifestation of that resistance. It went beyond them. In Europe, the resistance came from anti-Europeanists (and anti-immigration forces that blamed the European Union’s open border policies for uncontrolled immigration). It also came from political elites of countries like Ireland who were confronting the political elites of other countries. In China, the resistance has come from those being hurt by inflation, both consumers and business interests whose exports are less competitive and profitable.

Not every significant economy is caught in this crisis. Russia went through this crisis years ago and had already tilted toward the political elite’s control over the economy. Brazil and India have not experienced the extremes of China, but then they haven’t had the extreme growth rates of China. But when the United States, Europe and China go into a crisis of this sort, it can reasonably be said that the center of gravity of the world’s economy and most of its military power is in crisis. It is not a trivial moment.

Crisis does not mean collapse. The United States has substantial political legitimacy to draw on. Europe has less but its constituent nations are strong. China’s Communist Party is a formidable entity but it is no longer dealing with a financial crisis. It is dealing with a political crisis over the manner in which the political elite has managed the financial crisis. It is this political crisis that is most dangerous, because as the political elite weakens it loses the ability to manage and control other elites.

It is vital to understand that this is not an ideological challenge. Left-wingers opposing globalization and right-wingers opposing immigration are engaged in the same process – challenging the legitimacy of the elites. Nor is it simply a class issue. The challenge emanates from many areas. The challengers are not yet the majority, but they are not so far away from it as to be discounted. The real problem is that, while the challenge to the elites goes on, the profound differences in the challengers make an alternative political elite difficult to imagine.

The crisis of legitimacy

This, then, is the third crisis that can emerge: that the elites become delegitimized and all that there is to replace them is a deeply divided and hostile force, united in hostility to the elites but without any coherent ideology of its own. In the United States this would lead to paralysis. In Europe it would lead to a devolution to the nation-state. In China it would lead to regional fragmentation and conflict.

These are all extreme outcomes and there are many arrestors. But we cannot understand what is going on without understanding two things. The first is that the political economic crisis, if not global, is at least widespread, and uprisings elsewhere have their own roots but are linked in some ways to this crisis. The second is that the crisis is an economic problem that has triggered a political problem, which in turn is making the economic problem worse.

The followers of Adam Smith may believe in an autonomous economic sphere disengaged from politics, but Adam Smith was far more subtle. That’s why he called his greatest book the Wealth of Nations. It was about wealth, but it was also about nations. It was a work of political economy that teaches us a great deal about the moment we are in.

                This entry was posted on Wednesday, 10 August 2011, 7:55 pm and is filed under
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Welcome to Indonesia’s 34th province

Mariam Mokhtar

Malaysiakini

Aug 8, 11

If Prime Minister Najib Abdul Razak’s ‘Project N’, the sequel to former premier Dr Mahathir Mohamad’s ‘Project M’ is realised, Tourism Malaysia will not need use the meaningless ‘Malaysia, Truly Asia’ as its slogan.

It will have to adopt the more apt ‘Malaysia, Truly Indonesia’.

With numerous allegations that 3 million Indonesians have become Malaysian citizens with full bumiputera rights, then perhaps Malaysia, with the exception of Sabah, will soon be known as the 34th Province of Indonesia.

There will be no armed conflict to regain territory. It will be a walkover, like a human-wave flowing across the Imjin River.

From 1999, Indonesia created seven more provinces; Aceh, governed by Syariah law, was one of five provinces which received special status.

Perhaps, Indonesia’s hypothetical 34th province, would also receive special status because the former independent nation, Malaysia, willingly absorbed Indonesians whilst ignoring its own citizens, who were then forced to migrate.

If that were to happen, it is Umno which should be considered responsible for laying our ‘Indonesian’ foundations – the end justifies the means.

Perhaps Umno leaders consider the Malaysian Malay useless. Hard-working Indonesian migrant workers, both legal and illegal ones, have been rewarded for their contributions to the economy with permanent residency and citizenship.

However, Umno leaders have ignored the consequences of cheating normal Malaysians.

The main losers will be the Malaysian Malays. For decades, they have been conditioned by Umno to accept handouts without valuing hard work and self-respect.

Umno leaders find the more industrious Indonesians worthy of their attention. Traces of the ‘Malay identity’ will be eradicated and the Ketuanan Melayu brigade will have nothing to crow about.

For the ‘original’ Malay Malaysians, benefits will now have to be shared between a bigger pool of people, and senior positions in government and the civil service will be fought over.

And why are the MCA and MIC silent on this issue? At allegedly 3 million Indonesians (and 1.75 million Filipinos in Sabah), the numbers of these pseudo-Malaysians outstrip the 1.9 million Indian Malaysians, many of whom have no birth certificates or a Mykad although they are third-generation Malaysians.

Indonesians have left their comfort zones and travelled thousands of kilometres to earn a living. They leave their families and their spouses for several years, to work for a pittance.

Despite the hardship and isolation, many have triumphed, so much so that one was made menteri besar. If anyone doubts the Indonesian work ethic, one need only observe how every other household has a maid. Eateries would be nowhere without Indonesians serving us.

At the provision shops or the pasar, Indonesians are thriving. Building sites, factories, plantations and petrol stations have Indonesians as their power-houses. What would we do without them? We are too proud to fill those jobs that we consider beneath our station. And yet, we treat the Indonesians with disdain.

Absence of obsession

Malaysian and western friends living in Indonesia say that there are comparatively fewer cases of religious intolerance in Indonesia, a land of over 238 million people. True, there are cases of extremism but every nation has these.

Although many Indonesians are staunch nationalists, they consider themselves Indonesians first, before their individual racial, religious or ethnic identity. The Indonesians and their media, are not obsessed with race as we are.

In an every day situation, the Indonesian Muslim will sit and have coffee in a non-halal outlet, whilst his non-Muslim countryman drinks his beer. Indonesian Muslims do not froth at the mouth when pork or non-halal products are sold in a shop. Muslims are commonly employed in businesses which sell pork or alcohol.

A friend observed that the Malaysian Muslim checkout staff will gingerly pick up a can of pork with a plastic bag and then dispose of the plastic bag afterwards. Some Muslim children are banned from owning ‘piggy’ banks or the Miss Piggy (of the Muppets) stuffed toy.

And yet these same Muslims admit that when they go to Europe, America and Australia, they have no qualms about buying food from a shop that sells non-halal and halal food side-by-side. Are Malaysian Malays/Muslims hypocrites or it is a culture that our Malay and religious leaders have cultivated, to control us?

Things have worsened in Malaysia. Many homosexual Muslim men have gone to live with their partners in relatively liberal Indonesia.

During his tenure, Mahathir realised that the only way he and his henchmen could continue ruling the country was to alter the demography of Sabah and hence the electoral voting patterns of the nation.

Fearful of losing the elections, Mahathir spearheaded a project dubbed ‘Project M’, also known as ‘Project IC’, in the early 1990s in which it is alleged that hundreds of thousands of Filipino illegal immigrants became naturalised citizens.

BN turned a major social issue to their favour, with phantom voters, to ensure victory. Umno leaders are still not concerned about illegal immigration.

Ironically, when the RM17.7 billion Iskandar Malaysia project was launched in Johor in 2006, Mahathir was angry.

He said: “After the land is sold, the Malays will be driven to live at the edge of the forest and even in the forest itself. In the end, the area in Iskandar Malaysia will be filled with Singaporeans and populated with only 15 percent Malays.”

Najib in his wisdom thinks he is doing the right thing in granting citizenship to Indonesian immigrants.

However, he forgets that many Indonesians will have experienced life under the authoritarian regime of Suharto. They will remember how the Indonesian society and economy floundered in the late 1990s. They will recall how Suharto filled Parliament and the cabinet with his own family members and his cronies.

This caused many politicians and the young, principally students, to organise nationwide protests against the despotic rule, cronyism and corruption.

Who knows? The new pseudo-Malaysians that Najib has created may lead the calls for reforms, just as their politically and democratic minded counterparts once did in Indonesia.

MARIAM MOKHTAR is a non-conformist traditionalist from Perak, a bucket chemist and an armchair eco-warrior. In ‘real-speak’, this translates into that she comes from Ipoh, values change but respects culture, is a petroleum chemist and also an environmental pollution-control scientist.

                This entry was posted on Wednesday, 10 August 2011, 7:30 pm and is filed under
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When charity becomes a crime

by Dr Chris Anthony

The ongoing controversy over the alleged raid of the Damansara Utama Methodist Church(DUMN) by Jais brings highlights a very strange phenomenon where doing charity becomes a crime that must be investigated and punished.

We all know that charity  is the act of giving money, food or help free to those who are in need because they are ill, poor or have no home. All religions encourage this virtue of charity and in fact it is a basic tenet of every faith.

Most of us regardless of the religion we belong too are at one time or another involved with some acts of charity which is considered noble. Ironically today the virtue that was exalted all these years is at times seen as something terribly wrong.It is distressing that chariry is increasing seen as a crime that must be punished.

Many years ago when I and my friends were actively involved in the Society for the Poor in our church we used to visit the estates, squatter areas and new villages to provide all sorts of help to the poor in those areas.

Although we were not rich to provide much funds, the poor families benefited from our little aid which was in the form of food rations, clothes, school books, educational vocational guidance and free healthcare, and other forms of assistance. There were also those who were given monthly allowance and special allowance to cope with tragedies in the family. Apart from this material assistance those who needed motivation were given moral support and counseling.

We were very careful not to talk about religion to these unfortunate people who will be vulnerable to conversion at times of desperation. Proselytizing was never our intention but helping poor humans regardless of race or religion was our only aim. We were strongly advised by our pastors against using material aid to the poor to entice them into our faith.

In the many years of working with them I have yet to come across one who converted to Christianity because of our assistance to them. We never went to Malay kampongs but must admit that there were some of them who were desperate and did approach us for aid which we could not deny just because of their faith. Visit to their homes revealed deplorable conditions under which they lived and denying any aid for them would be doing great injustice to fellow humans.

However the numbers of Muslims in our aid list dwindled with time as they were able to get assistance from government agencies in due course. It has to be stressed we did not talk about religion at any time during our acquaintance with these poor people. In fact I for one strongly believe that it is wrong to convert anyone from one religion to another as all faiths are the same in leading to the one same God.

When we were young we were taught that helping the poor is a noble act that should transcend race and creed. Today the basic teaching on charity has changed drastically. We are encouraged to help those from our own community as helping others would be seen with suspicion and intruding into their affairs. It is as though it is alright to neglect our own people but wrong for others to help them.It appears as though there is a right time and place to do good as doing good at the wrong time may lead us into trouble.

Charity with ulterior motives is not true charity. Charity to coax people to convert their religion especially, the poor and desperate, is one that must be condemned by all.Real charity is one that is done with a open heart without any ulterior motives or benefits and is one that transcends race and religion.There should never be a wrong time or place to do good just like there should never be a right time to do bad.

The alleged raid of the DUMC by Jais brings forth the issue of Christians proselytizing to Muslims in the country in the pretext of helping the latter.This is something hard to believe as it is a common knowledge that such a thing is impossible in this country where there are laws that prohibit spreading non-Islamic faiths to Muslims. Christians are all too familiar with those rulings and one must be insane to do so. However as in any religion there are overzealous people who could resort to such  things which is really regrettable.

This allegation of proselytizing is a serious one that needs proper investigation. It is either true of false. The onus of proof  is on Jais.If it is true action against those involved in the proselyting should be initiated in accordance with the laws. Whereas if there is no evidence of proselytizing then Jais owes Malaysians, in particular the Christians an apology and undertake a pledge to reprimand those overzealous officers responsible for the raid.

                This entry was posted on Wednesday, 10 August 2011, 5:41 pm and is filed under
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Why can Mara teach Maths and Science in English?

G Vinod

Free Malaysia Today

August 10, 2011

The government wants to abolish the teaching of Maths and Science in English next year but Mara junior colleges will teach the subjects in English under the Cambridge programme.

PETALING JAYA: Even Mara understands the importance of English. Their junior colleges have decided to offer Cambridge programme, said Parent Action Group for Education Malaysia (Page).

Page chairperson Noor Azimah Abdul Rahim said in a statement this showed that even Mara, which largely caters for rural Malays, understood the importance of the English language.

On Saturday, Bernama reported that Mara would be offering the Cambridge International General Certificate of Secondary Education programme, equivalent to an O-Level certificate, at all 45 Mara Junior Science Colleges (MRSM) in Malaysia by 2016.

Currently, Mara director-general Ibrahim Ahmad said, the programme is being offered at the Tun Adbul Razak MRSM in Pekan, Pahang.

He added that the programme, which has 180 students currently, would provide additional certificates for students to pursue their education abroad.

Lauding Mara for being far-sighted, Azimah said this showed that even Mara, an agency under the Rural and Regional Development Ministry, did not agree with the abolishment of PPSMI (the teaching of Maths and Science in English).

“And they obviously bypassed the Education Minister’s (Muhyiddin Yassin) decision.Even rural Malay parents understand the importance of the English language as MRSM caters for rural students,” said Azimah.

While Mara was advancing itself with the Cambridge programme, Azimah said, the Education Ministry was taking a step backwards by abolishing PPSMI.

“And the reversal was decided without understanding the reason behind the poor command of English among our students. Muhyiddin himself admitted that he is clueless on it. So would the reversal help us to attain the desired standard of English proficiency?” asked Azimah.

She then called upon the government to reinstate PPSMI in national schools in order to create a level playing field among Malaysian students.

Whether she would call for the Cambridge programme to be offered in national schools, Azimah said it would be a dream come true if the government were to allow it.

“I believe they’re offering the programme in MRSM as it only involves 45 colleges which is easier to manage. The least the government could do for national schools is to reinstate PPSMI,” she said.

In 2009, Muhyiddin abolished PPSMI and announced Science and Maths would be taught in Malay effective 2012, in a move widely seen as to appease Malay language nationalists.

The PPSMI project, mooted by former prime minister Dr Mahathir Mohamad, was implemented in 2003 to address the declining proficiency of the English language among students.

                This entry was posted on Wednesday, 10 August 2011, 12:41 pm and is filed under
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Hindraf lawsuit to correct historical and recent wrongs

by Dr Lim Teck Ghee

11 August 2011

CPI

A UK-based solicitor and lawyer – appointed by Hindraf Makkal Sakthi – is scheduled to meet with members of the Malaysian public this Sunday (Aug 14).

His fact-finding mission is to help him better understand the situation on the ground and interview those participating in the Hindraf class action suit. This lawsuit against the British government seeks to correct historical injustices inflicted on Indians who were brought to the peninsula by the white colonialists.

The Hindraf move is almost certain to court a fresh storm of controversy and criticism from Umno, the party that will be most embarrassed when full details of the Indian marginalization emerge. The extent to which the local Indian community, particularly Hindus of Tamil stock, is excluded from the nation’s progress and wellbeing can only reflect badly on the Malaysian government.

Due to the stony deaf ears at home, Hindraf has had no choice but to petition abroad for redress, as outlandish as the amount of relief sought might sound. The case being heard in England will enable it coverage from the international press. The deliberate neglect of a minority that perceives itself as oppressed by a government acting in bad faith will soon be laid bare to the world.

Umno’s extremist supporters such as Perkasa and Utusan Malaysia persist in denying allegations of discrimination against Indians although the plight of the community’s underclass is evident to all. Just look at who are the homeless people who sleep along five-footways in the derelict parts of town.

More thoughtful Malaysians, however, are aware that the Indian community has come down, and continued falling a long way, in their socio-economic development and life prospects.

Accusing the Indian-based organization Hindraf of disloyalty and worse is merely closing the stable door after the horse has bolted.

During the past 50 years since Independence, only a small minority of Indians have benefitted from the political and economic largesse handed out by the government. The majority have seen little or no improvement despite the fact that the much of the economic prosperity and development of the country was built, almost literally, on their back and their hard labour.

Disclosure of the exact socio-economic status of the community is hampered by a system in which there is a lack of transparency in the collection and release of data that may relate to the plight of non-Malays – the apparent fudging excused on grounds of ethnic sensitivity but more likely due to other politically driven manipulation and agenda.

Although difficult to come by, all available data clearly point to the fact that the relative performance of the Indian community has deteriorated across a wide range of socio-economic indicators. The decline has been especially steep over the last four decades after 1970 with the commencement of the NEP.

Indian impoverishment can be traced to two major developments.

One is the displacement (and also the lack of replacement) of Indians in the civil service. In 1966, one third of all Indian workers were employed in government or quasi-government jobs. In 2006, only 2.8 percent of Malaysian Indians employed were still to be found working in the public sector.

The other development has been the displacement of Indian rural workers by the massive unchecked and officially sanctioned influx of over three million foreign workers, and the absence of any compensatory programmes, including access to state and federal land and rural development schemes.

The predominantly Muslim foreign workforce, largely from Indonesia, the Southern Philippines and Bangladesh, has displaced Indians from their traditional habitats and livelihoods so that Indians now form an urban and semi-rural underclass. The slums in which they live today are largely ignored by the government and racked by social and family breakdown and disorder.

Of course, ethnicity is not the only variable in determining access to social services, education, health benefits, land and other forms of development assistance provided by the government in Malaysia.

Politics, class, region, family background and other variables also come into play. But for many poor and lower middle-class Indians – especially those from the younger generation – the fact that they are not bumiputera or Muslim mark them out for special discrimination and marginalisation. Some will make it and escape poverty but the majority will remain severely disadvantaged unless there is a dramatic reversal in state policy.

Malaysians must raise their voices and oppose the state planned policy of exclusion and its unabashed execution by the authorities, all the way from national down to district level even if what amounts to a one-party state system has successfully managed to steamroll it through.

When the Hindraf class action suit is heard in London, then the morally repugnant practice of pushing the weakest segments of society to the brink will be made better known to all.

If we are to survive well as a nation and society, the government – and this includes the state governments presently controlled by the opposition – must not only pay attention to the needs of the politically dominant majority.

Those holding the reins of power (from whichever party) should ensure justice and fairness in the way they treat the minorities, especially the smaller non-Muslim minorities that lag behind the Malays and Chinese, and are lacking in political and economic clout.

How the government responds to the admirable campaign for inclusion, justice and equality for poor Indians will demonstrate to Malaysians whether 1Malaysia is all talk without any walk or whether the government may have finally found the political will and moral fibre to right this long-standing historical wrong.

                This entry was posted on Thursday, 11 August 2011, 4:35 pm and is filed under
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Mat Zain claims A-G interfered with forensic experts

By
Shannon Teoh
 | August 11, 2011

The Malaysian Insider

KUALA LUMPUR, Aug 11 — Datuk Mat Zain Ibrahim has continued his attacks on Tan Sri Abdul Gani Patail, claiming today that the Attorney-General has caused the public to lose faith in government inquests and inquiries due to his alleged interference in testimony made by forensic experts.

The former city criminal investigation chief said today that Dr Abdul Rahman Yusof, the forensic expert in former deputy prime minister Datuk Seri Anwar Ibrahim’s black-eye probe that Mat Zain had headed, “was willing to prepare three false reports according to orders by Gani Patail.”

“We cannot blame the public if they have lost confidence in government pathology and forensic experts… ridiculing and abusing their opinions in the Teoh Beng Hock inquest and royal commission of inquiry (RCI) and also the inquest of Ahmad Sarbaini Mohamad,” he wrote in an open letter to the Inspector-General of Police.

Doubts have been raised over testimony by experts from government hospitals and the Chemistry Department in the recent cases of Teoh and Ahmad Sarbaini, a former DAP aide and senior Customs officer respectively, who both plunged to their deaths at different Malaysian Anti-Corruption Commission (MACC) offices.

Early this year, a coroner’s inquest into Teoh’s death had returned an open verdict ruling out both suicide and homicide some 18 months after his fatal fall at the Selangor MACC office. The Najib administration was forced to form an RCI, which also found that Teoh had committed suicide.

Mat Zain said today that Dr Abdul Rahman had prepared three “expert reports”, all of which contradicted one other “without making any physical examination on the patient.”

“This means Dr Abdul Rahman prepared those reports using his imagination and based on just photos and reports of other experts, without any discussing with them or the investigating officer of the case,” he wrote.

He claimed the first and second reports had been presented to the RCI on Anwar’s assault, but that the first report later “disappeared” when the final report was presented to the Yang di-Pertuan Agong.

“Maybe Gani Patail or Dr Abdul Rahman themselves can explain this disappearance given that they both are interested parties in this report,” he said.

Mat Zain also called on police chief Tan Sri Ismail Omar to open investigations into this case since the police force has said it is investigating false reports of police brutality in the July 9 Bersih rally.

He added that “various parties (including himself), the loudest being the Bar Council, are also pressing for authorities to take action against MACC officers who gave false testimony” in the Teoh Beng Hock RCI.

In an earlier letter to the IGP, he had called on police to begin investigating the five MACC officers that the Teoh RCI found to have lied to the commission, three of whom he said should also be charged for abetment of suicide pursuant to the findings of the royal panel.

He has also repeatedly attacked Abdul Gani, most recently calling on Prime Minister Datuk Seri Najib Razak to sack the A-G for failing to initiate charges in high-profile cases such as the death of Teoh Beng Hock.

He has also called for a royal panel to investigate Abdul Gani’s role in destroying public confidence in the police.

                This entry was posted on Thursday, 11 August 2011, 5:16 pm and is filed under
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Why let Tajuddin go scot-free?

The Malaysian Insider
 |August 11, 2011

AUG 11 — Why?

Why let Tan Sri Tajuddin Ramli get off the hook by ordering all government-linked companies, including Malaysia Airlines and the national debt restructuring company Danaharta, to cease all civil suits against the one-time corporate high-flyer?

That’s a question that Putrajaya has to answer.

After all, Danaharta has a judgment against the one-time telecommunications, tourism and transport czar and as at December 31, 2005, the amount outstanding was RM589.14 million.

On May 11, 2006, which also happened to be the original Umno’s 60th year, Danaharta and the subsidiaries commenced action to recover the money from the man trusted by Umno to helm Malaysia’s flag carrier.

So why this volte-face in Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz’s letter to the GLCs and Danaharta that the Finance Ministry will settle all outstanding civil suits against Tajuddin, a poster boy of Tun Dr Mahathir Mohamad’s plan to groom Bumiputera entrepreneurs.

“This is to inform you that the government of Malaysia and the Finance Ministry have agreed to settle all civil claims against Tan Sri Dato Tajuddin Ramli and others to be withdrawn immediately in view of the fact that the government and the Finance Ministry have agreed that the said cases will be settled out of court.

“For your information the government has given me the mandate to act for the government in this matter,” Nazri said in the letter sighted by The Malaysian Insider.

To add the incredulous nature of this flip-flop, Nazri’s letter also directs the lawyers acting for the GLCs and Danaharta to hand over their cases to the firm of Hasfarizam Wan and Aisha Mubarak, a known Umno lawyer.

Why an Umno lawyer? Is there any more blatant show of the nexus between business and politics in Malaysia?

Doesn’t it raise further suspicions about how this country is managed?

MAS was a profitable company when it was flogged off to Tajuddin in 1994 but by the time he left at the end of 2001, the state airline was in debt for RM9.5 billion. It has never recovered since then, despite going through an asset-stripping exercise and two business turnaround plans.

Just this week, the men who engineered MAS’s wide asset unbundling (WAU) in 2002 had to finally resort to getting the men behind Asia’s largest budget carrier AirAsia to help steer the loss-making state airline back to profitability.

But those who presided over MAS’s decline from one of Asia’s best airlines to an also-ran are not brought to account for their deeds. Fact is, MAS has lodged a police report against Tajuddin. Is that report now considered false?

For those outside the corridors of power in Putrajaya, there must be a need for accountability. If the likes of Tajuddin can go scot-free, then the politicians who absolved him will have to be accountable. Perhaps, in the next general election.

                This entry was posted on Thursday, 11 August 2011, 5:43 pm and is filed under
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You probe me, I probe you

Written by Francis Siah

Wednesday, 10 August 2011

CPI

I was ‘honoured’ to be welcomed back at the Kuching airport on Monday (Aug 8) by five police officers.

Immediately after I crossed the immigration counter at 6.15pm, one of them who introduced herself as ASP Angela ak Ladie, approached me and she and her colleagues then ushered me into a room. Another introduced himself as Sub-Inspector Simon Low. The others said they were stationed at the airport.

I was given a letter stating that I was required to be at the Sarawak police headquarters on Aug 10 at 10am for the purpose of recording my statement under Section 112 Criminal Procedure Code.

If I fail to do so, the police will report such refusal to a magistrate to issue a warrant to secure my attendance. I duly signed an acknowledgement of receipt and was given a copy of the notice.

To be fair, they were friendly and courteous to me. I even managed to joke whether they need five people to arrest a weak senior citizen like me who can’t even run. What a waste of police resources!

I told them the same thing and stuck to my guts. If they really want a proper statement from me, then the police must also call in the chief minister. Otherwise, they will never get one from me. This is a matter of principle.

I have already decided to do this. After meeting the police commissioner [CPI note: Siah is presently at the police headquarters], I will write the followingg in my statement:

“I have nothing to say until I’ve been informed that the police has also recorded a statement from Taib Mahmud following the police report I lodged against him for corruption, money laundering and abuse of power on March 13, 2011. Period!”

In my meeting with the CP, I may also tell him that MoCS has set up a civil service committee to check into the background of senior police officers. Once we have evidence, we will report the ‘tainted’ officers to MACC.

Already, I’ve been informed of the background of one senior police officer who is sitting pretty high at the Badruddin police headquarters. That is also our job – we must have a clean civil service. Police, Immigration, Customs and the Road Transport Department are government departments notorious for involvement in graft and abuse of power.

Remember people, the police have the right to investigate and interrogate civilians. We too have that right to probe them. Every year, some 300 police officers are sacked by PDRM. Something must be very wrong in the police force.

**************

Francis Siah heads the Movement of Change Sarawak (MoCS) and is organising the MoCS ‘Walk for Democracy’ event scheduled for this Saturday, Aug 13

                This entry was posted on Thursday, 11 August 2011, 7:59 am and is filed under
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Anwar has the right to face his accusers and question them is an inalienable right in a court of law

By Dr Chen Man Hin, DAP life advisor

It is common knowledge that the accused person in a criminal case has the right to face his accusers and to question them in a court of law.

However laudable it is that Anwar Ibrahim has been given permission to face his accusers/witnesses in a court of law, it is disappointing that Anwar was not allowed to question the witnesses and must remain silent in court.

This is unusual and runs contrary to established practice, where the accused is permitted to confront his accusers/witnesses and to ask them questions.

In most countries, the law  has a Confrontation Clause where in all criminal prosecutions, the accused shall enjoy the right to be confronted with the witnesses against him, and the defendant usually has a right to cross examine the witnesses.

It was reported that the witnesses harboured a sense of uneasiness in his presence, as he had an aura of power to influence their thinking. This impression is well known as Anwar was reported to possess charisma when he addresses a public gathering. The audience appeared to be hypnotised by Anwar’s oratory.

Word also has spread among the people that Anwar has a knack to read people’s mind and also an ability to influence their thinking. Some even say that Anwar has psychic powers. All these sentiments have inspired fear with the witnesses.

However, in the court it is the law that matters and all must abide by the rules, including the witnesses.

Anwar Ibrahim should be allowed to question the witnesses.

                This entry was posted on Friday, 12 August 2011, 4:30 pm and is filed under
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Getting back its mojo

Malaysia’s Penang state

Getting back its mojo

After a slump, an early engine of globalisation is thriving again

Aug 13th 2011 | The Economist

IF YOU are going to have a heart attack, have it in Penang. So one might think, to the see the hospitals in George Town, the capital of this north-western Malaysian state. Patients are flocking in. Ted Mohr, the head of the venerable Penang Adventist Hospital says that he will admit 70,000 medical tourists this year. The hospital specialises in heart procedures and it will perform roughly 23,000 of them this year, including 550 open-heart operations. Such is the demand that the hospital is doubling its number of beds.

Mr Mohr gives two main reasons for Penang’s success with the coronary crowd. First, it is relatively cheap. Open-heart surgery that would set you back $100,000 in America costs only about $10,000 in Penang. Second, Penang’s hospitals are as well-equipped as many in the West.

The combination of low cost and high technology is the main reason why industries across the state of Penang, made up of the original island and a larger bit of the mainland, are prospering again after more than a decade of decline. Their revival is important to Malaysia’s economy—Penang and the surrounding region account for 21% of the country’s GDP. But the renaissance could also have important political consequences for the country. Since 2008 Penang has been one of only four states (out of 13) run by an opposition party. If its politicians can claim the credit for the recent success, that should greatly help the opposition in the next general election, expected within the year.

Penang was founded as a free port by the British in 1786. Occupying a position between India and East Asia, the island drew merchants and middlemen keen to make their fortunes. Chinese, Indians, Armenians, Arabs and more all traded alongside each other. With its racial and religious mix, and dedication to the pursuit of free trade, Penang was in many ways the first custom-made city of globalisation.

The island’s fortunes sank as it lost business to its arch-rival, Singapore. In the post-colonial period Penang fell victim to the rise of nationalism. The region’s freshly minted republics chose to develop their own ports. Penang enjoyed a revival during the 1970s with the setting-up of Malaysia’s first free-trade zone (a “free port” by another name); this attracted big names in electronics, like Intel and Bosch, which built some of the first offshore assembly lines. But this boom was founded on cheap labour, and as Malaysia became richer other emerging economies, such as China and Vietnam, drew the assembly work away.

To recover its prosperity, Penang has sought to reinvent itself. With the rise of India and China, Penang’s location again looks very handy to foreign companies as a place to invest, as in the 18th century. It is relatively close to both big markets—yet offers advantages that trump Asia’s giants’.

Penang’s own “Silicon Valley” companies know that the rule of law in Malaysia gives them the sort of protection for patents and intellectual property they would not enjoy in China, and an ease of doing business that they could not find in India. Wages are higher than they were, but no more so nowadays than on the Chinese seaboard. The federal government has also spent liberally on bridges and the airport, making Penang better connected to the rest of Asia. And old George Town has been smartened up, which helps to bring in foreigners to live, work—and have surgery.

The result is another boom. Last year more investment poured into the state than any other in Malaysia. Scores of new electronics firms have swooped in to join the pioneers, along with an expanding cluster of 20 or so medical-device manufacturers. Crucially, most of the new jobs are in research and development rather than assembly. An American chip-designer, Altera, has a new facility with 1,100 workers in Penang, 800 of them engineers. Its head says that almost all the engineers are locals—which is good for Malaysia.

Whom to thank?

When the Democratic Action Party won the state’s legislative assembly three years ago, it became the first opposition party to triumph in Penang in more than 40 years. The victory presented a direct challenge to the Barisan Nasional (BN) coalition that has ruled the country continuously since independence in 1957. Penang’s new leader, Lim Guan Eng, says that the federal government has an “ambivalent” attitude towards him, cutting off some funding but not undermining his authority. “They don’t want us to get any credit, but they can’t afford to see us fail”.

The revival of Penang was already under way in 2008, but Mr Eng’s new policies have helped it along. He has become the first governor in Malaysia to open up all state tenders to competition. This has entailed dismantling the special preferences for ethnic Malays that have underpinned the BN’s rule since the early 1970s. That was when the Malay majority institutionalised affirmative action for themselves, to the disadvantage of ethnic Chinese (a majority in Penang), who were perceived to have got unduly rich. Mr Eng claims that by reforming the system he has ended the cronyism and corruption that wasted money under previous regimes.

Adapted to the national stage, such policies could transform the way that the Malaysian federal government conducts business. Mr Eng says that the savings he has made by ending the “old systems of patronage” allow him to spend money on new social programmes instead, such as modest handouts for the elderly. These policies are popular, and the assault on corruption pleases foreign investors. Little wonder, then, that Penang has become a political weathervane as much as a lesson in economic development.

                This entry was posted on Friday, 12 August 2011, 12:52 pm and is filed under
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People Power in Malaysia: Bersih Rally and Its Aftermath

ANALYSIS

By Bridget Welsh

10 Aug 2011

Asia-Pacific Bulletin

East-West Centre

Malaysia captured international headlines with the July 9 Bersih rally for clean and fair elections. However, it was not so much the rally itself–estimated to have included as many as 50,000 people–as it was the woeful mishandling of the event by authorities, involving the indiscriminate use of tear gas and the arrest of nearly 2,000 people before and during the event. This rally has served to reveal the sharp fault lines that exist within Malaysian society and deepened the challenges that current Prime Minister Najib Tun Razak faces in winning his first mandate at the polls. Bersih 2.0 illustrates how Malaysia continues to call for political reforms and deeper democracy, despite an incumbent that remains at best ambivalent to substantive political reform.

The rally’s call was modest, aiming to bring about reform to the electoral process. Its eight demands included calling for standard international practices of electoral accountability such as the use of indelible ink to the adoption of overseas voting. Yet, Bersih became much more than calls for changes in elections. It showcased the insecurities of the ruling Barisan Nasional government, which adopted an over-the-top response to the rally from the start, outlawing the Bersih organization and even arresting those who wore yellow clothing, the color of the movement.
 The government’s failure to fulfill its promise of allowing the rally to take place in a stadium crossed the threshold of reasonableness for many Malaysians. This was a tipping point for many of the urban electorate as the credibility of the government was undermined. This lack of credibility in Malaysia’s government was compounded by bold denials of police actions that were witnessed by many and later posted on social media.

Bersih has brought to the surface deep-seated insecurities among Malaysia’s incumbent elite who have held onto power since 1957. The incompetent government response included arresting and labeling activists as “communists”–including prominent opposition MP Jeyakumar Devaraj–and the arbitrary use of the draconian Emergency Ordinance (detention without trial law) which dates back to British colonial rule. Mahathir-like conspiracy theories of outside powers and agents reemerged as civil society organizations were investigated and offices searched. The leaders of Bersih, notably its chairwoman Ambiga Sreenevasan, were threatened and harassed. Charges against those who participated are still pending. These reactionary moves conflicted sharply with the efforts by Prime Minister Najib to win public support, and in the process alienated Malaysians who found the incredulous charges and resort to the past not in keeping with the more modern and open reality of contemporary Malaysia. The government reaction included reportedly firing tear gas into the compound of a maternity hospital, an illustration that the police were not following their mandate to protect citizens. In this modern age of social media, the Malaysian government forgot that it too has to be accountable for its actions, and no amount of denial can stand up to YouTube footage and multiple witnesses.

Ironically, the events surrounding July 9 have acted to reenergize the reform agenda and Malaysia’s opposition. The focus has returned to the need for political reform–accountable institutions, professionalism, fairness, and anti-corruption. These issues favor the opposition, whose call for “change” still resonates with the electorate and has done so since the 1998-99 Reformasi movement. What distinguishes today’s reform drive is the centrality of human rights and civil liberty concerns, as Malaysians have increasingly taken power into their own hands, from voting to protest. There is an expectation, especially in urban areas and among the young, for increased consultation and inclusion, and rejection of curbs on freedom. Malaysians are increasingly among the global rise of the “freedom generation” that has broken down the barriers of fear against oppressive state authority and expanded people’s power nationally. Another important feature of the Bersih movement has been its multi-ethnicity, which has gone in the face of efforts in the past three years of racial politics, as Malaysians have shown solidarity across communities. While this reform drive is largely urban and middle class, it has transformed Malaysian politics and discourse, putting the current leadership on the defensive.

Prime Minister Najib has impressively won support during his two-plus years in office since April 2009 with his promises of economic reform. He has been seen to recognize problems and sought to address them. His popularity has steadily increased as he personally distanced himself from the more extreme side of racial politics. Najib appeared to be heading toward a solid majority electoral victory at the next Malaysian general election. Yet, in July around Bersih, something went radically wrong. By choosing to distance himself from the rally’s modest demands and the subsequent crackdown along with the failure to deliver on the promise of the rally in the stadium, he lost ground. He did not appear to be in charge, instead abdicating his leadership role. This brought a barrage of criticism from the electorate, but it also brought out challengers within his own party, many of whom opposed his economic reform agenda and are unhappy with their positions and rewards within the party.

As a result, Najib has become increasingly vulnerable on two fronts and faces an uphill battle to regain public support and maintain his standing within his own party. He now faces a stark choice: to move forward with political reforms or to pander to the rapacious interests of some actors within his own party who appear more interested in themselves than national development or reconciliation. In short, he can chose to follow the march of the people toward reform, or turn inward toward a party where the reactionary responses of many of its members are not in keeping with modern Malaysia. The choices Najib makes in the post-Bersih context will affect his political future.

Malaysia’s Bersih movement has its historical roots in demands for better governance, inclusion, and more accountability. Its form however is uniquely of today–with its embeddedness in social media, wide participation of civil society and sense of people empowerment along with its multi-ethnic composition that makes Bersih truly national in scope. This broad trend toward “People Power” is one that extends across the region, beginning in the Philippines and Indonesia, and spreading more recently to Thailand and Singapore. People in Southeast Asia expect more from their leaders including consultation, accountability and a focus on national welfare across social cleavages. Bersih and its aftermath reveals the underlying push for democracy driven by the people and the push back from entrenched incumbents holding onto power, a pattern that has had regional similarities.

In the months ahead in Malaysia the contest for political power will intensify, with the issue of political reform squarely at the core. It will culminate at the next general election, which will be the most competitive in the country’s history and a next big test of whether Malaysia will further democratize with Najib Tun Razak at its helm.

____

Bridget Welsh is Associate Professor of Political Science at the Singapore Management University.

                This entry was posted on Friday, 12 August 2011, 4:23 pm and is filed under
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Still dreaming of a Malaysia to call Home

By
Farish A. Noor
 | August 12, 2011

The Malaysian Insider

AUG 12 — A Malaysian ambassador once asked me if, after living and working abroad for more than 2½ decades, I still kept my Malaysian citizenship. And I answered yes. He was surprised somewhat and added: “Thank God, at least we haven’t lost you as well.” I replied: “Well, we have lost so many good academics and professionals by now I’m not sure if that makes any difference by this stage…”

Yet out of some naïveté on my part I would still state that I believe in the Malaysian project, for all its quirks and shortcomings. And now, as Malaysia looks ahead at a decade that will undoubtedly transform the face of Southeast Asia and will witness the gradual decline of American influence and the rise of China’s in Asean, we hold fast to the ship of state that is due for a severe battering as never before.

While the inflow and outflow of foreign capital investment FDI in and out of Asean will radically re-draw the political boundaries of the region and lead to the rise of new growth centres and the decline of old ones, our national politics is dominated by horror stories, amok stories, bomoh stories and of course the motley crew of communitarian heroes and ethnic champions who care only about their own respective ethno-religious communities.

Every ethno-racial demagogue talks about having to champion the cause of “his people”; regardless of the fact that “his people” may not have appointed him to that task. Oppositional dialectics rules the roost as identities are configured in exclusive oppositional terms time and again: us against them, in-group versus out-group. This has been the mottled landscape of our national consciousness since independence, and we still cannot get out of this narrow and blinkered mode of thinking.

During my long sojourn abroad, I constantly met Malaysians who could discard and/or transcend their limited ethnic confines while overseas, for there they are Malaysians. Yet it seems as if a spell has been cast upon all of us, for as soon as we step back into Malaysia the first question that comes to our lips is: What race are you?

As someone who has researched across South and Southeast Asia for more than 12 years, I am struck by this peculiar habit of ours: in India and Indonesia — two countries I love as much as Malaysia — no one has ever asked me that question. And indeed, in both countries I often pass as a local and the case is closed. Few attempts, if ever, are made to locate me in the ethnic landscape of the country. Nobody asks what race I am, which religion I belong to, etc. Why?

I refuse to believe that Malaysians are condemned by history or genetics to remain in the rut that we have built for ourselves. There is nothing biologically unique about us as to condemn us to such narrow solipsism for eternity. And if we Malaysians can transcend narrow ethnic and religious compartmentalisation abroad, why can’t we do it at home?

Which brings me to the subject of home, and homeliness. “Home” is where we are meant to be happy and content; safe and assured; comfortable and at ease with ourselves. Home is where we need not wear our identities on our sleeves, or as armour to protect ourselves from whatever hostile influences there may be without. And if Malaysia is home to us, then it ought to be the one place on this God’s earth where we can be ourselves without having to apologise for it.

Yet the divisive nature of our communitarian politics has robbed us all of this sense of comfort and homeliness, for it seems that comfort can no longer be shared among all Malaysians, our fellow citizens. The comfort zones of each community has become something sacrosanct, thanks to the politicking of the various parties and politicians of the country, who continue to harp on the need to first protect, and then to expand, the respective comfort zones of their exclusive communities.

As a result, the boundaries of these different comfort zones are bound to clash, and the result is the antagonism we see everywhere in the media today: Harassment of intellectuals and non-partisan articulators; scare-mongering campaigns about how the “Other” is about to undermine “Us”; rumours of plots and stratagems used by “Them” against “Us”, etc. Where, pray tell, is the national body then in the midst of this mutual apprehension and distrust? How can a nation be built when its components do not think as a nation in the first place?

I write this only as an academic who constantly reminds his students that national identities are constructs that have to be sustained in the imaginary of individual subjects. As I have said countless times before, the trees and hills, rivers and valleys, roads and malls we see around us are not Malaysian: They have no consciousness and no awareness of what they are or even where they are. “Malaysia” is a construct that exists in us, Malaysians — and it is we, Malaysians, who bear the identity of the nation over time.

WE are Malaysia, and WE are the nation. But that can only come true if we genuinely think of ourselves as Malaysians and we are prepared to step beyond our comfort zones in order to recognise, defend and uphold the common citizenship we share with each and every other Malaysian citizen around us. Every Malaysian is a brother or sister to his/her fellow Malaysian; and as such the qualms we have about the poverty and injustice we see meted to our fellow citizens is a concern to all of us. We cannot continue to racialise poverty as if it was an ethnic concern of one group only; any more than ownership of the nation can be claimed by one segment of the populace.

I do not think I will live to see the day when this sense of collective, common and equal nationhood will ever be internalised and normalised in the country, frankly. So to go back to the ambassador’s question as to why I never gave up my citizenship; I can only put it down to a naive, childish faith that may well be blind as well. (I am only thankful that I do not have any children and am unlikely to have any at my age now, for I genuinely fear for the future and where the future may take them.)

But faith, however feeble and irrational, is still required to give birth to nations that are born out of the collective aspirations of many. I do not know how much longer I can keep up my work, or doing what I do — for time seems to be running out for me and the end of the road is nowhere in sight. But as the storm clouds gather as the geopolitical winds build up across our region; and as talk of clashes between the great and emerging powers grow louder by the day, I fear not for myself but rather for Malaysia as a whole.

Our politicians seem to have an attention span that lasts only up to the next by-election or general election; our public figures play the racial or religious card whenever it suits them. Our nation is sorely in need of a reminder that we are all on the same boat, and whether it sinks or swims, it will carry all of us whether we like it or not.

For the first time in my life, I feel genuine fear for the future — made all the worse by the apparent absence of political wisdom and leadership of any meaningful kind. And in the face of fear, all I can hold on to is faith; faith in the Malaysian project.

____

Dr Farish A. Noor is a Senior Fellow at the Nanyang Technological University, Singapore.

                This entry was posted on Friday, 12 August 2011, 5:11 pm and is filed under
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Transforming Penang By Building A Future For Our Youths And Building Our Youths For The Future

By
Lim Guan Eng
 | 12 August, 2011

Speech at Foreign Correspondents Club, Singapore

Ladies and gentlemen thank you very much for inviting me here to speak. I come here as the Chief Minister of Penang, one of four states led by Pakatan Rakyat or the People’s Pact, the opposition coalition in Malaysia. I am from the Democratic Action Party, one of three coalition partners. I am extremely proud to be given the opportunity to govern the beautiful vibrant state of Penang and delighted to have the opportunity to speak to you. I hope by the end of my remarks you will consider coming to visit and invest in Penang, as it continues to be an attractive location for business and pleasure alike.

It is wonderful to be in Singapore. We have so much in common; shared history and people. Our bonds are deeply intertwined, culturally, politically and economically. I would like to highlight some of our common features. We are both small states that have punched above our weight economically through the hard work and creativity of our people. We have both been successes despite our size and obstacles we share. Today, more than 25% Malaysia’s exports in terms of value and volume come from Penang – more than half of the country’s electronics are produced there –
and we are among the top tourist destinations in Malaysia with a record numbers of visitors. Like Singapore, we appreciate the importance of planning, a favorable market environment for investors and fiscal responsibility. We both have worked hard to put ourselves on the map internationally, and done so successfully.

We both know that in order to progress, we need to adapt and transform. I have long admired Singapore’s adaptability, how it has managed to respond to financial crises such as those in 2003 and 2008 and continues to be a role model for promoting economic growth in Southeast Asia. I am also deeply interested in the reforms that Singapore will introduce to address the social concerns that were brought to light in the recent May election, as the challenges Singapore faces in addressing inequalities and promoting integration are common across the region. I am looking forward to learning more from Singapore and deepening ties here.

Penang has recently rebranded itself as a location of choice for investors and destination of choice for tourists. We are one of the top 3 tourist destinations in Malaysia. We are the top investment state in Malaysia in 2010 drawing investments from all over including Singapore. Penang contributes towards 36% of Malaysia’s FDI despite having only 6% of the country’s population.

There are 7 key factors that account for our success as a location of choice for investors:-

1. Ready availability of human talent;

2. Effective and efficient supply chain management

3. Competent and reliable logistics and communications hub

4. Strong Intellectual Property protection

5. Good, non-corrupt, governance and effective leadership

6. Building creativity and innovation in science and technology, and

7. Livable and safe city environment

For these reasons, in our quest to be the smartshop of the Software Valley knowledge-based economy, we are mindful of being a livable city and creating a vibrant urban environment. ECA International listed Penang as the most livable city in Malaysia on par with KL. Penang is world-famous for our street food and CNN recently placed our Penang asam laksa as the 7th best food in the world.  KPMG International listed us as one of 30 global Business Process Outsourcing Centre for the future. We are proudly a UNESCO World Heritage City for our outstanding universal value of cultural diversity and living heritage.

But what then for the future. As I thought about my trip to Singapore, I realized it was important to highlight the need for adaptation, to adjust to new circumstances. Events over the last week in the market place highlight how vulnerable we are to sudden changes in economic fortunes and developments in the global economy. To survive and thrive, we need to adapt. Singapore did this in 2003, more recently after the 2008 financial crisis and continues to do so in response to the uncertain evolving global economy.

We believe that in order to be sustainable and thrive it is necessary to balance economic growth with greater equitable development for all. We know Penang must find its own niche as an international and intelligent city. Branding for Penang is important that is synonymous with quality, reliability, safety, sustainability and integrity. Equally important is social cohesion and inclusion towards a shared society that allows democratic participation, respect for diversity and individual dignity, equal opportunity and prohibition of discrimination. But most crucial of all is equal opportunities for the young and talented to grow and fulfill their potential.

A Changed World:

Ladies and gentlemen, I would like to take the marker of 2003 as a shared one to begin the discussion, over eight years ago. For Singapore this was a difficult year, one in which SARS and the region slowdown acutely affected your economy and brought home some of the vulnerabilities of the closer global links with China and the slowdown of the US economy. This year was also significant in Malaysia, in that it marked the year which former premier Tun Dr. Mahathir Mohamed stepped down from office. New leaders have come into office since then, with new ideas. I am part of the new generation of leaders. We share an appreciation of the need to reform and adapt. Gone are the days when hardware – new HDB flats, new roads and clinics – can satisfactorily meet the needs of our people. We face the common task of bringing the more difficult software to our citizens, the tangible but intangible concerns with quality of life, while simultaneously strengthening institutions to bring about these changes.

This brings me to the first main point about today’s changing world – the advent of crisis. In our region we have now seen two major financial crises and a series of natural disasters, most recently illustrated by the tragic March 2011 earthquake and tsunami in Japan. We do not yet know the impact of the developments in the financial markets over the last week. It has now become normal to expect the unknown. None of us are fully ready for a crisis, but we have learnt that we have to put in place conditions to be prepared. We need to plan for uncertainty.

In Penang I have adopted measures to help Penang be prepared for the unknown within the confines that a chief minister can implement. We have improved the state’s financial position with three years of consecutive record surpluses and rescuing a local town council, that lost RM230 million, from bankruptcy. I believe strongly in financial responsibility. A financial base is not enough, however. It is vital to strengthen the political institutions. Professionalising the civil service, establishing some of the institutions of civil society such as setting up the first Speaker’s Corner in Malaysia and enacting the Freedom of Information Act. This new model of governance – that is tied to a recognition of the need to think toward the future – is a vital step not only today, but for than rainy day when conditions change. If anything we have learnt in the past decade or so is that change is inevitable, and we must be as ready as we can to face the new horizon.

Part of today’s changing world involves a need to forge links and networks regionally including China. We must give recognition of our special relationship with these countries including Singapore where we are bonded by blood, tested by time and driven by shared values of excellence, competitiveness and integrity. From early on, as part of the Straits Settlements, Singapore and Penang have shared strong bonds. Many a Penangite has migrated to or works Singapore, and many a Singaporean visits Penang. The nearly 20 flights daily to and fro between our two islands are full.

Thirdly we should never put our eggs in one basket we need to diversify. Despite our close linkages with our traditional investors in electronic industry from Japan, Europe and US, we are deeply engaged in working with China and India as well as our regional neighbors Singapore, Indonesia and Thailand as well. The focus is not just on investment, but broadening tourism and cultural exchanges.

Our MYPenang campaign featured in June-July in Dhoby Ghaut illustrated graphically common historical and personal ties. It highlighted the many tourist attractions of our state. This initiative, along with our other outreach efforts, reflects a rebranding of our state, one in which we inspire those who have not visited Penang for many years to return or come for the first time. I cannot emphasize enough that we are indeed a new Penang, and aim to strengthen our international profile in this every changing global context.

The global changes in the world are not also taking place within in Asia. In the last six months we have seen what scholars are already labeling the fourth wave of democracy, the powerful political revolutions that others have labeled the Arab spring in the Middle East. From Tahril Square in Cairo to the more disturbing recent confrontations in Syria and Yemen, the demands for political change highlight the fact that people want fairer better political systems. Even in Singapore the call for change had greater resonance in May. This brings me to the fourth point; the need to anchor what we do in our people – to be people-centric. Everything we do as leaders should be driven by a desire to serve the people. In the Middle East and elsewhere, corruption, greed and self-interest have eroded public confidence and destroyed public faith in leadership. Political institutions from the judiciary to the police have been weakened by vested interests aiming to protect the few, the elite, rather than the people at large. The lessons from the Middle East are clear – that elites that do not serve the people and are more interested in power and their own pocket book will be opposed. Malaysia’s contemporary Bersih movement draws from many of the same concerns in today’s Middle East. We want stronger political institutions, fairer opportunities for all and clean government. Penang’s mantra from the day I took office has been the same – absolutely no corruption. None. The large investments in Penang for infrastructure is by open tender, committed to good governance, and open to all. Penang is proud to be the only state in Malaysian history to be praised  by Transparency International.  We must create opportunities for everyone. The people must be served by having a government that protects their interests, rather than one that is self-interested.

My final point though obvious is crucial for small states dependent on the world economy like Penang, the need to effectively manage globalization. Rising oil prices and rising incomes in China have contributed to inflationary pressures that are being felt throughout Asia. Partisan politicking in the US and an unwillingness to make tough decisions on the Euro debt crisis in Europe are now having their affects. It is thus our responsibility as leaders to minimize these negative effects on our people.

Changing the World:

I am a young leader in this new challenging and changing world. Our success as today’s leaders will be judged by how we transform our countries and use our most important resource to develop – our people.  To use an economic analogy, our success depends on our people moving up the value chain, a context where the needs – physical and psychological – our people are being met and maximized. This brings me to the second section of my remarks, the steps needed to change the world, our world here in Asia, but especially my world in Penang and Malaysia.

In this day and age where financial interest and materialism is a driver in the economy, and alas sadly sometimes for others in politics, I cannot emphasis enough the need to have a moral core and set of ideals that guide our action in government. Malaysia’s opposition of Pakatan Rakyat– whether it is my party the Democratic Action Party, the Islamic Party of Malaysia, PAS, or Anwar Ibrahim’s party Parti Keadilan Rakyat – is guided by a set of common ideals – broader democracy, fairness, human dignity, hard work and mutual respect.  We are bound together by a shared goal, to make Malaysia a stronger and fairer nation for all of our citizens of every community and background. I am very proud to be a Malaysian, and everything I do is directed at making our country stronger and better. I have personally witnessed the struggle of ordinary Malaysians to make ends meet in these difficult uncertain times and the hardship that some families endure. My own family comes from humble means and I understand daily challenges to find a uniform for your child, to provide the best education for your children, to know that you have enough income to provide for your loved ones, and importantly, to be able to live a life with dignity and security. When the politics in my country is full of personal attacks, many fabricated by newspapers that engage in storytelling of hatred, I draw strength from my knowledge that what I do is for Malaysia, for all Malaysians. I draw inspiration from the many people – across ethnic communities – who walked the streets last month in a call for Bersih, a cleaner electoral system and better Malaysia.

As a people-centric government, the most important goal is provide equal opportunities for all especially the opportunity for our children to realize their potential.  Nothing can be sadder than to destroy the confidence of a child with obsolete and dangerous racist ideology that one’s child is never good enough and must be forever dependant on the tongkat or the wheelchair, and they will never be rewarded for their good performances no matter how deserving they are.

To attain peace Malaysians must stand united and reject those who wish to divide us by preaching racial and religious hatred. If we want to benefit from equal opportunities and realize our human potential we must stop extremists from continually degrading others as inferiors so as to uplift ourselves.

We can only achieve harmony together. Despite our differences and diversity, Malaysians can make our common aspirations of freedom, justice, democracy and truth come true if we remember key values.

That it is not who we are that is important, but what we are that is important; not the colour of our skin that is important but the content of our character; and not our past ancestry that is important but how we connect with the present and with each other to face the future.

We cannot be locked in the past and allow the past to close off possibilities of a better future. Ladies and gentlemen, here in Singapore, when the 2003 SARS crisis happened, you embraced a new future together. No matter the political differences in the recent May general elections, Singaporeans were unified in wanting a better country and a better future for Singaporeans. In 2008, in Penang and other Pakatan Rakyat-run governments, we also embraced the future and we continue to do so. Change is an ongoing process, one in which as leaders we must nurture. To be honest, sometimes it can be quite frustrating, and often I am overtired in my dedication to making results happens as soon as possible. We know that the time has come to leave behind policies that are not working and adopt new initiatives. We know that we cannot let the anguish and hurt of the past blind us to a new future.  Our country is strong because of our ethnic and religious diversity, where all communities can practice their faith and know that they have a secure place in our nation’s future. We know that we have to embrace the young, and learn from the wisdom of the old.

Our Policy Direction

I wanted to take a moment to share with you some of the concrete policy frameworks we are adopting in Penang. This foreshadows some of the ideas in the forthcoming Penang Blueprint from 2011 to 2015. This blueprint was drafted by the state’s think tank Socio-Economic and Environmental Research Institute (to be renamed Penang Institute this year) and is the result of dialogues across the state. From the onset we have recognized the need to think of new innovative approaches and ideas to move Penang and Malaysia forward, and welcome further inputs. Allow me to share some of the core ideas in the forthcoming Penang Blueprint. We have grouped them under the “Rs”:

The first point I want to emphasize is “Reviving Penang’s Livability” by being sustainable. Penang is the first green state in Malaysia. In the past we have been known as the Pearl of the Orient, and our policies are framed around bringing back the luster of the past. We are a living heritage city, a UNESCO World Heritage site, and we have been working to promote and enhance our heritage monuments. We know that livability is not just about the buildings and new land developments – and we have quite a few exciting property and commercial developments coming – but also about the maintaining the quality of the physical environment and affordable housing. In Penang we led Malaysia in the introduction of green initiatives such as the “no plastic bag campaign” and we are actively exploring housing programs for lower income and middle class residents. One of our most challenging policy areas has been improving traffic and transportation. We have offered more public transportation options, such as a free bus from the mainland for factory workers, and are exploring plans to diversify road transportation options. We also appreciate the cultural and psychological dimensions of livability, and have actively worked to encourage the arts and create open spaces. Last month we held a very successful Georgetown Festival of the arts highlighting dancing, film and cuisine. Artists know that Penang is a place where creativity is valued and showcased.

A parallel “R” is “Revitalizing the state’s business environment.”We are streamlining the process for permits and licenses to reduce the red tape. We have removed the biggest obstacle of all, the alleged payoff. We have created a special unit to support small and medium enterprises and upgrading infrastructure. A marker of the infrastructural upgrades is Penang’s new airport, where the substantial renovations are expected by next year that will allow for more flow of tourists and investors. Reducing costs to business and creating a working environment that is conducive to success is essential for the brighter future for Penang and Malaysia as a whole. Part of the revitalization process has been to invest in the city core of Georgetown, knowing that the synergies between the city and other parts of Penang are strong and extend outwards. The 2009 World Bank Report on Glocalization stressed that the city is an economic unit and as such can serve as a lynchpin in promoting multifaceted growth and development. We in Penang believe that building cities not only serves national development, it has important positive spillovers for the state as a whole.

Let me highlight a third “R” –  Reclaiming Responsibilities. The state governments have been overshadowed in Malaysia by the federal government. There is a limited range of areas where I as a chief minister have jurisdiction. We are working to reclaim these responsibilities. We believe that decentralization of decisions and resources is absolutely necessary to effectively reach communities. As such, we are introducing social safety net policies such as our program for the elderly at the state level. We have also empowered and energized the local councils, and the results are obvious to any visitor. Penang is cleaner and safer. We know that as state leaders that the local is important, and that every citizen sees their government from their everyday experience. We are taking responsibility for what the constitution allows us to implement and building on our deeper knowledge of local conditions.

These ideas are part of a broader strategy of moving Malaysia out of what the World Bank has labeled the “middle-income” trap. Livability, economic revitalization and political decentralized with more efficient and fairer governance.

Steps toward Success

Yahoo Travel recently listed Penang as one of the 10 top islands in the world you must explore before you die. For those who have come to Penang we can all die happy.

“Ladies and gentlemen, I have shared with you some of contemporary Penang’s story, how we are going about transforming Penang in a changing world. We ask you to come to Penang, to see for yourself the success where we build the future for our youths as well as our youths for the future.”

                This entry was posted on Friday, 12 August 2011, 5:26 pm and is filed under
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When politicians plot, public gets shafted

By
Mariam Mokhtar
 | August 12, 2011

Free Malaysia Today

The fly-by-night people in charge of MAS are no better than a posse of cowboys. Why do we continue to tolerate the wasteful antics of our politicians who indulge in a game of real-life Monopoly and who use taxpayers’ money to bail out ailing companies?

In a perverse reversal of the saying “King Midas and his golden touch”, it appears that whatever BN-Umno politicians “touch” will always turn to dust and ashes.

This deal that is struck with MAS and AirAsia is another smack in the face for the public. What sort of responsible government allows such a merger to take place? By agreeing to this merger, the government has neglected to address healthy competition which in essence should benefit the airline customers, companies and the Malaysian economy.

What about fair trading practices? Or conflict of interest? Or share prices? Maybe the Securities Commission should start probing both AirAsia and MAS about insider trading or any other irregularities. What about the jets each carrier uses, the agreements and maintenance contracts signed with Boeing and Airbus? Who honours what?

However, the most scandalous revelation is that all government-linked companies, have been instructed by Nazri Aziz, Minister in the Prime Minister’s department, to cease all civil suits against Tajuddin Ramli, the former chairman of MAS and settle out of court.

Yet again, Tajuddin has been let off scot-free and the public, denied justice. Any court revelations now would not look good for Barisan Nasional, especially as the general election draws near.

With this latest defrauding of the public purse, how much of the taxpayers’ money has gone unaccounted for? This government is neither transparent nor accountable. It does not adhere to its own catch-phrase, “People First, Performance Now”. It doesn’t even match up to its own Key Performance Indicators.

In the late 1960s and 1970s, working for MAS was both a privilege and carried great prestige. Today, there is a different portrait of the MAS employees. Many are unhappy and morale is at an all-time low. Disaffection with MAS is felt by cabin, flight and ground crews including engineering and maintenance staff.

Jala’s forte

When Singapore Airlines (SIA) and MAS emerged from the ashes of the now-defunct Malaysia-Singapore Airlines (MSA), SIA went from strength to strength while MAS was left in the doldrums.

When former prime minister Dr Mahathir Mohamad gave his blessing to Tajuddin to be installed as the chairman of MAS, the airline started to go downhill. Tajuddin received the support and protection from his influential patron, the former finance minister, Daim Zainuddin, which spelt further doom for MAS.

In these days of rising fuel costs and tight profit margins, the airline industry is more competitive than ever. However, the Malaysian Cabinet denies putting government officials in charge of a global brand.

These officials are clueless about most things and have no experience of running an airline. The first thing to effect a turnaround should have been to disband the senior management, all of whom are mere government puppets.

If there was one brief moment of respite for MAS staff, it was when Idris Jala took over and was “praised” for turning the company around. But even simpletons realise that selling your best assets just to make the books look good, is not financial wizardry. Many in MAS are still angry with Jala.

Asset stripping was Jala’s forte. He also engaged in cost-cutting by reducing many of the privileges enjoyed by the staff without addressing the problems created by Umnoputras and BN politicians who treated the airline like it was their own private transport.

Jala, having collected his performance bonus, then entered the government’s bloated political élite club via the back door and became a senator and Minister in the Prime Minister’s Department.

So if Jala has turned MAS around, why is the MAS-AirAsia merger necessary? Was it to help MAS or AirAsia? No one really knows as this deal is shrouded in mystery.

Mahathir remarked that the MAS-AirAsia merger was a “very good idea” as “AirAsia can learn about the experience of MAS and MAS can learn how to reduce costs as done by AirAsia”.

How prophetic. Anyone with half a brain will know that MAS is run along government lines. “You do as we say” is the norm and the person who kowtows to the government will be rewarded with a title and other benefits. And if others want to haul you to the court for non-payment of debts, the government does a good service in whitewashing and “proving” your innocence.

Being held accountable

When will we have a head of MAS who is brave enough to say “No” to the government? MAS was a fine airline decades ago and many Malaysians were proud to fly with it. These days, MAS is overpriced and uncompetitive.

AirAsia is nothing to shout about. Customer service is non-existent and it is not cheap flying AirAsia on some long-haul flights. The merger will be another nail in the coffin with regard to competition.

Billions of ringgits of taxpayers’ money are unaccounted for. The scandals of Bumiputra Malaysia Finance, Bank Bumiputra Malaysia Berhad, Felda, Defence Ministry, Perwaja, PKFZ, Proton, Sime Bank/UMBC are a few from a long list.

Perhaps Islamic institutions like JAIS should start condemning and investigating these criminal acts against the rakyat rather than running around and meddling in charity dinners like a blue-arsed fly, in the recent allegation of proselytisation.

Tajuddin must be tried, and if found guilty, punished by the courts for his alleged corruption when he led MAS. His alleged accomplices – ministers, former prime ministers and the current PM – should also be held accountable.

Maybe pigs will fly before there is any sign of judicial retribution.

____

Mariam Mokhtar is a FMT columnist

                This entry was posted on Friday, 12 August 2011, 4:50 pm and is filed under
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A-G must still prosecute Tajuddin, says Mat Zain

By
Shannon Teoh

The Malaysian Insider

Aug 12, 2011

KUALA LUMPUR, Aug 12 — A former senior cop has called for charges to be brought against Tan Sri Tajuddin Ramlim saying the withdrawal of civil suits against the former Malaysian Airline (MAS) chairman does not indemnify him against criminal culpability.

Datuk Mat Zain Ibrahim told The Malaysian Insider today that Putrajaya’s decision to settle with Tajuddin out of court and directive to government-linked corporations to drop their cases against the latter did not mean that two police reports and another made to anti-graft enforcers were nullified.

“Even if MAS and other GLCs were to drop all civil claims against Tajuddin, they have no or power to indemnify Tajuddin from criminal liabilities. For that matter, no minister or even the Attorney-General has the authority.

“In fact, police have recommended that several criminal charges be preferred against Tajuddin and few others,” the former Kuala Lumpur criminal investigation chief said.

Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz told The Malaysian Insider yesterday that he had written to GLCs earlier this month seeking for them to withdraw their suits, worth at least RM2 billion, to buy time for all concerned parties to reach a “win-win” agreement and put an end to the prolonged financial saga involving Tajuddin.

He said the matter was referred to Second Finance Minister Datuk Seri Husni Hanadzlah, who then directed him to pen the letter, noting that Tajuddin’s case was scheduled for case management in court yesterday.

“Since it involved the law and I am the minister in charge of law, Husni told me, why don’t you look into this. It is not a cloak-and-dagger move… we knew this would come out somehow and there is nothing to hide. I wrote that letter using my letterhead,” said Nazri.

Mat Zain added today that MAS has lodged at least three reports against Tajuddin and the Malaysian Anti-Corruption Commission (MACC) has “made it known to public that their investigation on Tajuddin is still ongoing.”

“It is also within public knowledge that sometime in March 2007, the former Director of Commercial Crime Investigation Department Datuk Ramli Yusuf had briefed then prime minister Tun Abdullah  Badawi on police investigations based on MAS’s reports.

“The billion ringgit question is why our Attorney-General is still reluctant. I am sure Tan Sri Gani Patail is fully aware that he cannot indemnify Tajuddin’s criminal liabilities despite the fact that they are in some ways connected,” he said.

Mat Zain, who led the police probe into former deputy prime minister Datuk Seri Anwar Ibrahim’s black eye incident in 1998, said that as only the A-G could initiate criminal proceedings, it was up to Datuk Seri Najib Razak to step in and inquire into Gani’s conduct.

He has repeatedly attacked Gani for his failure to prosecute several high profile cases and called for the prime minister to axe the A-G.

The Malaysian Insider reported yesterday that Putrajaya, through Nazri’s letter, had directed all GLCs, including MAS and the national debt restructuring company Danaharta, to cease all civil suits against Tajuddin, the former chairman of the national carrier and protégé of Tun Daim Zainuddin.

Daim is a close friend of former prime minister Tun Dr Mahathir Mohamad and an ex-finance minister who was the architect of the now-discredited policy of nurturing a class of Malay corporate captains on government largesse.

MAS had first lodged a police report against Tajuddin in 2002 for allegedly causing the flag carrier to suffer losses in excess of RM8 billion. Tajuddin was the executive chairman of the airline from 1994 to 2001.

                This entry was posted on Saturday, 13 August 2011, 9:58 am and is filed under
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