Maran Matters

2022 Budget Racially Configured, Election Targeted

2021-11-06T21:10:00.005+08:00

Racial Configuration

Perhaps the most depressing takeaway from the budget presented in Parliament is that it is the most racially configured of budgets in the nation’s history. Former de facto law minister Zaid Ibrahim has tweeted: “Nice to be Bumiputeras… billions set aside,” noted Zaid in a tweet. “(This) must be the only country in the world where (the) Budget is race-specific”. He also added that it was also “nice” to be a civil servant since they were “always getting cash handouts”

According to official estimates, budget 2022’s allocation for the Bumiputera community comes up to RM11.4 billion, while the amount for the non-Bumiputera communities is about RM300 million.

It is possible that even this lopsided Bumiputera figure may be an under-estimate. Does it, for example, include the allocations of RM1.5b for Islamic Affairs, RM140 million for Islamic amd ‘pondok’ school maintenance, and various other Bumiputera allocations ‘accidentally’ missed out, hidden or disguised?

We know how official data is manipulated to provide the impression of even-handedness and fairness on racial issues. The current budget statistics may be no exception to the racial sleight of hand practiced by our policy makers to give the impression of an inclusive and non-discriminatory society.

Also unjustifiable and unconscionable is the so-called one-off RM700 for civil servants. 1.3 million civil servants are to receive this besides being also given 5 extra days of unrecorded leave. Amounting to over RM1 billion, this in fact is not the first handout to civil servants during the pandemic period. ‘More money for less work’ seems to be the new motto that the Perikatan government is advocating for the nation’s civil servants.

Election Targeting

There are other reasons to be concerned about the budget. Development expenditure of RM 76.6 is the largest amount ever budgeted under this heading in Malaysian history and as noted it will be financed broadly from borrowings. The claimed rationale offered is that “pump priming” on this scale is needed to jump start the economy and accelerate growth. In brief, the multiplier effects from public sector investment are needed to get the economic recovery. These expectations are simplistic and flawed.

In the first place not all of the projected development expenditure will go into real(physical) investment as a sizable chunk will be monetary transfers to loss making GLCs and other entities. Furthermore, the implementation capacity in place is inadequate to take on and deliver projects. The historical record bears testimony to this contention.

Additionally, the desired multiplier effects are unlikely to be available in full as a sizable portion of the development expenditure will be devoted to procurements from abroad e.g. aircraft, weaponry, heavy equipment etc.

The Government takes an over optimistic view regarding private investment. Many of the SMEs that have suffered egregiously as result of the pandemic are unlikely to be able to get into a recovery mode rapidly; new enterprises are unlikely to emerge at a slow pace; and there are uncertainties about FDI flows.

The macro- economic picture painted to show GDP growth rising 5.5%-6.5% in 2022, up from 3%-4% in 2021. This optimistic growth rate needs to be interpreted with caution as it incorporates the statistical effects of a low base. The issue is: where is the growth going to come from?

The feel good Budget was purely and simply crafted with an eye on an election in the first half of 2022. Other concerns include:

● For the private sector, it represents business as usual with big projects to keep the cronies and the current elite fed with projects

● The budget has focused on spending but ignored any effort to try and fix the revenue side

● No new policies were announced e.g, rationalization of loss making GLCs; labor market reforms; fixing the problems linked with household debt; addressing the looming challenges associated with an aging population.,

● Inadequate attention to the needs of SMEs in revival

This budget, as with RM12, has missed opportunities to restructure the economy, make it more competitive, reform education, etc. Instead, it is funding a system that needs revamping, and restructuring the revenue side of government fundraising. More tragically, this budget has failed to deliver relief packages for those in dire need from the Covid crisis.

Looking at the responses across the media by numerous commentators, this first Ismail Sabri budget has failed to satisfy most sections of Malaysian society. The budget is just more of the same.

Substance disappointing, formulation process found wanting

It is also time to take a close look at how the budget is formulated each year. Ministries send in their funding estimates each year, just increasing their requests in expectation, the MOF will approve. There needs to be a more holistic and rigorous scrutiny of spending by a core overviewing team that could utilize ‘zero based budgeting’ scrutiny of ministry and agency requests.

The borrowing needed to formulate this budget will not be repaid by this generation of politicians and civil servant leaders. They are leaving the future generation of Malaysians with the burden of repaying debt.

The budget is also rewarding the unworthy and making the wrong people pay. Those who have been working within a bloated bureaucracy with security have been rewarded, while citizens who have felt the brunt of the Covid crisis are basically left to fend for themselves. Successful corporations that have made profits from innovation are punished.

The budget fails to address the looming challenges the nation faces. It avoids taking on much needed reforms. No thought has been given to addressing how the nation is to cope under stark circumstances when 97 percent of ageing citizens will face a dire future without savings to sustain themselves. Nor was there a hint in the budget or its surrounding ministerial hoop-la that the government intends to reform the fifty year old failed NEP.

In brief, the budget serves neither the short term nor the long term needs of the nation. It is disappointing that the Pakatan opposition has condoned the crafting of the budget.

Ramesh Chander, Lim Teck Ghee and Murray Hunter

Malaysia introducing Harsh New Equity Restrictions - No rescue plan for SMEs suffering from the Covid-19 pandemic

2021-10-05T10:22:00.001+08:00

Malaysian prime minister Ismail Sabri Yaakob announced in parliament, while launching of the 12th Malaysia Plan (MP12), that measures will be put in place to restrict the sale of sales in Bumiputera companies only to Bumiputeras. This effectively reduces the ability of Bumiputera shareholders to make potential capital gains on the sales of shares in their companies, due to the inability to make equity sales to non-Bumiputeras and foreign entities. Bumiputra companies will also be seriously hampered in raising capital through equity sales, due to the restricted market they can sell equity. If implemented, Bumiputra entrepreneurs will also find it difficult to sell their businesses, due to the new equity restrictions.

According to former Pakatan Harapan health minister Dzuilefly Ahmad, who is the MP for Kuala Selangor, many Malay business people are angry over this measure, describing it as “suicidal”, which will kill off the Bumi economy. This latest equity announcement potentially risks creating a two-tiered economy, where Bumiputera companies have draconian equity restrictions placed upon them by the government.

There is no other economy in the world that has such provisions in company law.

There was even more startling news the week before the launch of MP12, where the Ministry of Finance (MOF) announced local freight forwarding firms will be required to have 51 Bumiputra percent equity to renew their customs licenses from the end of next year. This will force many family-built freight forwarding companies to sell out control of their firms, or shut down, draining the international freight forwarding industry of experienced players. This announcement has caused deep rumblings and protests within non-Bumiputra business communities. Those who can exit and relocate, are considering pursuing business opportunities elsewhere. Singapore and Jakarta, as well as foreign companies that are exempted will be the beneficiaries of these racially restrictive measures.

These disruptive government equity announcements come at a time when the economy is on the decline due to the Covid-19 pandemic and corresponding public health restrictions. There have been more than 10,000 bankruptcies to date, since the start of the pandemic. This is on the rise. Both official and informal sector unemployment is increasing. Many SMEs are voluntarily closing, even though the government introduced a debt moratorium. According to World Bank Figures, GDP has declined 4.9 percent over the last 12 months. Pain and suffering is evident across the community, with volunteer food kitchens feeding people without income, and many now relying on charity to survive.

Is the government trying to pick winners again?

There was some expectation the MP12 would address the plight of businesses due to the Covid-19 pandemic. In contrast, the document was full of Industry 4.0 rhetoric, digital solutions, picking industry winners, and expanding government influence over the business sector. The policies espoused within the MP12 document are totally oblivious to the effect of the pandemic on business, only mentioning the devastation in passing. There is little acknowledgement of the desperation many firms face during this time. The plan provides no recovery strategies for the crippled ones.

Chapter three of MP12 is dedicated to industry, micro, small and medium industry (MSMEs), and entrepreneurship. Once again, the government has selected specific industries it considers will be the growth drivers of the economy. These are the electrical and electronics industry, global services, the aerospace industry, creative industries, tourism, the halal industry, smart farming and biomass products.

Historically, the government has been very poor at selecting industry winners. Malaysia’s biotechnology push during the Badawi administration only led to a number of government corporations that did nothing, except spent money with little value-added return to the economy.

Looking at the latest list, the electrical and electronics industry is primarily made of up big corporations which make their location decisions based upon strategic issues like country cost base, employee pool and quality, supplier availability, and logistics issues. These are variables that take a long time to change. The issues are similar with global services. Multinational corporations will domicile their research, logistics, production, and regional offices based upon similar factors. Increasing the number of global services corporations in Malaysia by 10 percent, based on the statistical figures provided by MP12, would only add RM 2 billion in domestic business spending. It just too difficult to see a four-fold increase in domiciled multinationals over the next four years, as MP12 forecasted.

The aerospace industry is already facing tough times from the pandemic and has been in decline. Forecasts indicate that passenger traffic is not likely to go back to 2019 levels until 2024. Air fleets have been mothballed in storage, and existing players in the industry have drastically cut down their costs to survive financially. It is difficult to see how the Malaysian industry can achieve a three-fold increase over the next five years. Only the air-cargo sub-sector is growing, which was not even mentioned in MP12. The cost, resources to be allocated, and effort needed to create an aerospace cluster, might best be focused upon another industry, until the aerospace industry shows signs of recovery.

Proposed aerospace cluster and development strategy

The measures the MP12 outlines for the creative industry maybe too little to assist the industry to grow, especially with the long-term effects of the pandemic still unknown. The creative industry, as defined in the MP12 is very fragmented and different sub-segments will require specific measures, rather than the generic range of measures the report suggests. The feature film market is completely depressed, due to restricted audiences in public venues, and the whole entertainment business model is currently undergoing flux and transformation into something no one is as yet too sure of. The growing importance of platforms and distribution channels like Netflix and Peacock were not mentioned. Even if growth takes place, the multiplier effects will be limited as compared to the recovery of the SME sector.

The MP12 prescription for the tourism industry, in almost total collapse with the pandemic restrictions, needs much more than a generic revitalization of branding. There is no mention about assisting SMEs that are totally dependent on tourism to survive, and those made unemployed. More than 120 hotels have shut their doors permanently due to the pandemic. There is no assistance offered to these businesses in dire straits from the pandemic, and finding alternative means of income for those directly affected by the drastic decline in tourism. This omission in the MP12 plan will place a major additional burden on the nation’s economic recovery.

The halal industry is rapidly growing internationally and Malaysia isn’t getting a big enough share of this growth. The growth of the halal industry in Malaysia will be directly related to market development, which has been ignored by MP12. Smart farming and biomass industries are very specialized and those companies that are already involved or are likely to enter, are technology-based and highly capitalized companies that don’t need government assistance. The effort could be put into existing farmers who urgently need assistance to survive. They need assistance in production and market development, where more extension is needed and the role of FAMA expanded.

Little to assist ailing small business

MP12 has little to assist the hundred of thousands of existing SMEs, financially stressed from the pandemic. Most of what MP12 lays out for the sector has already been done over a number of years, by multiple agencies. There are numerous mentions of the triple helix, collaboration between institutions of higher education, government and business, without explaining how this concept will be used to assist existing and new businesses. Incubator programs already exist around the country at universities, technical colleges, ministries, and other government agencies. Expanding them will require not just the physical infrastructure, more building, but experienced entrepreneurship teachers and mentors, who are already in drastic short supply. Nothing has been mentioned about how the trainers can be trained.

MP12 calls for encouraging SMEs to adopt innovation. However, it doesn’t explain how. The recommendation that more entrepreneurs should take up research from public universities and research institutes opens up a pandoras box of issues that aren’t easy to resolve. For example, university and research institute intellectual property (IP) policies are restrictive and bureaucracy currently not SME friendly. Secondly, the actual researchers are usually full-time lecturers who have little time to assist SMEs take any piece of research from the R&D stage to the prototype and commercialization stage. In addition, getting funding to do this type of scaling up is extremely limited through agencies like the Malaysian Technology and Development Corporation (MTDC), which is already working at capacity. Finally, although most universities now have an extensive range of registered patents with the Malaysian Intellectual Property Organization (MIPO), not many patents solve real commercial problems.

MP12 talks about widening market access for entrepreneurs, but is silent on how this is to be undertaken. These are the important issues for SMEs that have not been addressed in any detail. The same thing has been said in previous Malaysian Plans, only to be resaid in the next plan.

One has to wonder how much artificial intelligence (AI) and Industry 4.0 are really going to assist under-capitalized SMEs, which can’t make ends meet financially. The majority of Malaysia’s 900,000 SMEs are finding it difficult to pay salaries, let along invest in the future. Perhaps more short-term initiatives like salary assistance to keep people employed would spur more immediate economy activity at present. Most business activities that Malaysia’s set of SMEs undertake at present are not suitable for such concepts as AI and Industry 4.0. The majority of Malaysian SMEs are focused on service, small manufacturing, repair and maintenance, and the food and beverage industries.

Using local materials is a great ideal set out by MP12. Most SMEs already buy local is material quality is suitable, price is competitive and there is a stable supply. To buy raw materials locally, the industries that create them must be set up locally first. This should be market rather than government driven.

MP12 within the industry section talks about negotiating to reduce barriers for cross border trade. This is confusing, as MP12 states in the introduction that the ASEAN Economic Community (AEC) environment is already operating and a series of new Free Trade Agreements (FTA) have already been negotiated. Here it appears the authors of the chapter on industry haven’t read the introduction to the report, making the whole document disjointed.

An example of incoherence in the MP12 document

Above Chapter 3, below introduction

Straight contradictions in the MP12 document

MP12 is extremely disappointing for SMEs. Not only have restrictive new equity laws been introduced, but MP12 is advocating a massive increase of government influence through increased bureaucracy in the economy. This is likely to lead to higher costs of doing business. This will further hinder a market-friendly environment business needs to operate within. Many sunrise industries like smart farming and downstream biomass product production just don’t need government assistance. The wisdom of setting up an aerospace cluster, runs the risk of having the same fate as Malaysia’s steel, automotive, and biotechnology clusters. Billions spent and nothing to show.

MP12 is not Rakyat or people centric, its bureaucratic-centric, bringing more government interference into the business-environment. Bumiputera businesses are now seriously hampered in their ability to raise capital through equity sales. This will weaken them and put them at a disadvantage to SMEs in other ASEAN countries. Non-Malays now have a disincentive to build companies that they will be forced to sell off at some future date, with retrospective regulation threatening ownership and control. This could potentially cause another bout of brain drain and capital flight. Finally, the government has abandoned Malaysia’s 900,000 SMEs to fend for themselves in an economic crisis much worse than the Asian Financial crisis back in 1997.

12th Malaysia Plan: Three Backward Steps

2021-10-05T09:29:00.000+08:00

The 12th Malaysia Five Year Plan tabled in the Dewan Rakyat by the Prime Minister is replete with claims of its policies and programs being “game changers”, “catalysts for….”, “enablers” ,etc However, our scrutiny of the document together with the speech by Dato Seri Ismail Sabri, leaves us deeply disappointed as we fail to discern specific policies that qualify that description.

We call the attention of the Government, policy makers and other stake players and holders to the following 3 key longstanding stalled issues that necessitate rethinking and an entirely different set of policy initiatives if the Plan is to meet its goals of a high income country with inclusive and sustainable growth. Our concerns are echoed in part by the Leader of the Opposition, Dato Seri Anwar Ibrahim, and a host of other respected commentators.

To compound matters, the disclosure by the Federation of Freight Forwarders (FMFF) of the Government’s attempt to enforce a drastic restructuring of the freight forwarding industry has been a distraction that has met strong opposition. The proposal to require existing non – Bumiputera firms in the industry to divest 51 percent of equity has been described as tantamount to a robbery and classic “UMNO-ism”. Yet other observers have pointed out the negative vibes this announcement sends to firms in other sectors. If implemented, most if not all independent and credible quarters agree that this will be a contributing factor to further damage the investment climate as well as disrupt the supply chain’s efficiency and productivity which the economy can ill afford.

In our judgement, the Government proposal overturns the solemn undertaking given by Tun Razak that the 30 percent target would not entail takeover of existing assets but would be achieved via growth when he presented the New Economy Policy (NEP) in Parliament. It must also be recalled that the BN Cabinet rejected the initial version of the Industrial Coordination Act which attempted to put in place a regime in which 30 percent of equity in each limited company be made available to Bumiputera investors. We believe the MOF proposal is not only a regressive policy change but also that it is contrary to Article 153 of the Federal Constitution and is likely to be litigated.

We next take up the contentious issue of how the 30 percent equity ownership target is measured. We do so in order to highlight how deeply flawed numbers have come to determine policies that are not in the best interests of the nation. The resulting policy distortions have created a number of negative outcomes that include rent seeking, crony capitalism, widening income disparities in the Bumiputera community and ethnic tensions.

Corporate equity

The 12th Plan errs by suggesting that the 30% target has yet to be attained. This is a debatable contention as the Plan fails to elaborate on how the calculations were done. No reference has been made to research studies that report findings that contradict the official estimates; no credible statistics provided.

It is appropriate to begin with a focus on the nature of this target and the manner in which it is calculated. To set the record straight and once and for all, it is important that we go back to the origins of this target and the manner in which the baseline estimates were calculated.

The baseline numbers of corporate equity used in the formulation of the NEP were calculated by classifying share ownership in both publicly listed and privately owned limited companies. Ethnicity was used as a determining factor; no entities were excluded.

The use of the totality of corporations was in line with the recommended approach advocated in the United Nations ” System of National Accounts” (SNA). The ownership structure of each corporate entity was compiled by taking account of the ethnicity of shareholders. This identification was determined by using the name of each shareholder to assign ethnicity. In brief, the resulting count was that of the number of shares as no ringgit share values were determined.

One reason for this was the non-standard nature of the accounting returns that had been filed by the registered corporations. This was the best that could be done given the nature of the available data and the time constraints under which the Department of Statistics was then operating.

It was further understood that the baseline numbers would be further refined at a later date via a primary collection of data. Indeed, the Department of Statistics did launch the Ownership Survey of Companies with that objective in mind; the survey incorporated a section containing a standardized balance sheet.

The comprehensive data collected provided a basis for using balance sheet values to determine equity, which in turn could be subdivided by ethnicity. The tragedy was that the Economic Planning Unit chose not to tread that path and stuck to the older base numbers. The data from the Ownership Survey of Companies was classified as “sensitive” and not released. This is an omission that can be easily rectified to provide a truer, less politically exploited, picture and understanding of company ownership in Malaysia

The current methodology employed by the government produces a result indicating a shortfall in what has been achieved. The absence of actions to correct the basis for calculating the value of equity holdings has reduced the credibility of the statistics released. These deeply flawed numbers should not under any circumstances underpin important policy making.

Professionally researched empirical studies yield an outcome showing that Bumiputera holdings of corporate equity appropriately valued exceed 30%. This previously was confirmed by an analysis of traded shares in the stock exchange.

It is this aspect of the NEP that needs correction via an adoption of valuations based on a more defensible set of principles. Asset values need to be calculated based on concepts that take account of commercial accounting concepts that happen to be aligned to the SNA.

The re-evaluation can be easily accomplished at a minimum cost as the needed data exists in the files of the Companies Commission of Malaysia. Furthermore, the data is available on an annual basis and can thus be used to track progress or lack thereof at regular intervals. A transparent and timely availability of ownership data would remove a key contributor to policy manipulation and ethnic tensions.

Credible data is a fundamental requirement to support evidence-based policies. Greater transparency in the collection and dissemination of data on equity holdings will contribute to an improved investment climate vitally needed in the aftermath of the Covid-19 pandemic.

Failure to introduce the reforms listed above will continue to impact on race relations and policy distortions. These distortions are likely to potentially lower growth and would run counter to the twin goals of achieving a restructuring of the economy and promoting sustainable growth.

Finally, and perhaps most importantly, there is one reality for any economy that our policy makers and legislators must not forget. The Plan speaks of a decline in the equity held by Bumiputeras resulting from a disposal of shares allocated to them. No account however is taken of the fact that trading of shares is a normal activity. Proceeds from such sales are often invested in other assets e.g. real estate, financial instruments etc. Additionally, many of the elite appear to have transferred their new found wealth off-shore. This is confirmed by the large outward flows recorded in the Balance of Payments together with the consistently large errors and omissions item. If further affirmation is needed, one has only to look at the estimates of capital flight which places Malaysia as the second largest source of capital flowing out of an economy. The time has come to measure wealth in its totality rather than place a component represented by equity capital on a pedestal.

GLCs and Re-energizing the Private Sector

Our initial draft had identified GLCs as a key sector to reform. Not only is the role that government linked companies (GLCs) play in the Malaysian economy widespread and pervasive but among countries in the world, we rank with the highest in terms of SOE presence among largest firms. The negative economic impacts of such a dominant and dominating presence of GLC in the Malaysian economy are well known and need little elaboration.

Since then, we are encouraged that former PM Tan Sri Muhyiddin in his recent address to Parliament has called for a review of GLCs (and GLICs) and voiced the view that they should not be competing with the private sector.

However this opinion is nothing new. In fact it is too little too late. Initially established to facilitate Bumiputera participation in the modern economy, GLCs have over the past 30 years proliferated to take over and control not only the commanding heights of the economy but also to encroach into the mid and lower tiers. GLCs today constitute over 40% of the share market capitalization of all

publicly listed companies and can be considered to be the elephant in the room that has stifled growth, crowded out private enterprise including Bumiputras, and contributed to poor governance practices. Moreover, there is every indication that they are among the main sources, if not the main source, responsible for the growing income disparity in the country, in particular that pertaining to the Bumiputera community.

With its influence over, and links to, the national and state bureaucracy, quite apart from its role in facilitating clientelism, collusion and nepotism of the political elite, GLCs have introduced severe distortions to the market in the products and services provided and have generally raised the costs of doing business whilst not improving economic efficiency at national, state and even local levels.

Earlier Plans had failed to address the out-of-control proliferation of GLCs as well as its other pernicious economic and governance impacts. The most recent round of political appointees to GLC high positions, despite public dismay and widespread condemnation of the practice, gives little confidence that any review will be taken seriously or will result in any reforms.

Hence it is crucial for Parliament in its deliberations on the 12 Plan to not delay any further with implementing policy reform proposals, in particular, the dismantling of rent-seeking and patronage components, that can restore GLCs to an appropriate position and place in the economy as commercial and competitive entities shorn of unnecessary and inflated government privilege or other functions that provide openings for politically driven patronage and misuse of public funds. Such a reform agenda contained in the 12 Plan should include an appropriate divestment programme of the numerous GLCs that have little or no justification for their existence and stand in the way of the private sector’s development.

Revitalizing our Private Sector and SMEs

In tandem with a GLC reform programme, there needs to be put in place a revitalization programme for the private sector, especially directed at small and medium sized enterprises.

It is clear now that Malaysia has lost its competitive edge in attracting multinational corporations. The exodus of many established corporations to Bangladesh, Indonesia, Vietnam, the Philippines and other countries is indicative of this trend. New FDI flows into the country have slowed even in terms of feel good dubious figures touted by MITI. According to the latest data, foreign direct investment (FDI) in Malaysia registered a net inflow of RM14. 6 billion in 2020 as compared to RM32. 4 billion in the previous year. This contraction by 54.8 percent is only partly a result of global economic uncertainties due to the pandemic situation. These corporations as well as the local businesses have also found the price of doing business rising given the negative impact of the regulatory environment. The regulatory regime in place has grown, is stifling and is at the same time subject to uncertainties generated by frequent policy changes as has happened, for example, with the MM2H program for foreigners.

Meanwhile there is every likelihood that a significant proportion of the present number of 900,000 SMEs – if stronger corrective measures are not taken by the Government – will close shop or cut back on operations as a result of the ongoing pandemic crisis which the Plan has failed to adequately address. That this prospect will considerably worsen the poverty and unemployment problems for the country is clear from this profile data

SMEs

– make up one million or 98.5% of all business establishments
– provide two-thirds of all employment
– contribute 40% to the national GDP, and
– are located in all states, all sectors and range in size from micro-enterprises to small and medium.

SMEs are not just a pillar of the economy. They also play a key role in social stability and social cohesion. This vital contribution of SMEs to national unity and harmony has either been ignored or has not been properly acknowledged in Plan documents.

Here it is necessary to remind policy makers and legislators that SMEs are the main source of multiracial partnerships and inter-ethnic linkages, relationships and interaction at many levels, including ownership, labour force and in other spheres. Also not generally known is that 20% of SMEs are owned by women thus contributing to gender equality.

Reviving the SME segment of the economy in the short and medium-term future should be amongst the highest policy priorities of the government in the 12th Plan.

The above difficulties facing the private sector, together with the monopolistic policies favoring the GLCs and the GLICs, and the resultant rising price of doing business needs to be addressed in any clear-sighted and pragmatic plan. Unfortunately despite these stark past and new policy failures, the Plan document is largely silent or evasive. Should the Government fail to take corrective measures in the new Plan we fear that this heavy baggage will be carried forward.

Urgent game changer reforms

The third backward step we have discerned applies not just to a single sector. It relates to a wide range of sectors in which earlier policy reform measures were clearly identified and agreed to by a previous government and where these reform measures have either been ignored, stalled or discontinued.

To recall, thirty years ago at the National Economic Consultative Council (NECC) deliberations to propose the successor to the NEP, no quantitative targets were set in the final report as it was the consensus of the 150 members drawn from political, economic and social sectors and all communities that what was important was not the contentious numerical targets but the necessary capacity building to build and sustain businesses. The 9th Malaysia Plan 1991 to 1995 in fact did not specify such ownership targets.

Likewise ten years ago in 2010 the New Economic Model drawn up for the 10th Plan by one of the most credible and qualified economic teams recruited to chart the country’s socio-economic future eschewed the continuation of a regressive NEP policy which was originally intended to be discontinued after 1990.

Further it identified the following urgent policy imperatives to ensure the nation’s ability to meet the multiple challenges from internal and external factors. These included

– Refocusing from quantity to quality-driven growth. Mere accumulation of capital and labor quantities in the past has been insufficient for sustained long-term growth. To boost productivity, Malaysia needed to refocus on quality investment in physical and human capital.

– Relying more on private sector initiative as the primary engine of growth. This involves rolling back the government’s role in some areas, promoting competition and exposing all commercial entities and activities (including GLCs) without exception to the same rules of the game.

– Making decisions bottom-up rather than top-down. Bottom-up approaches involving decentralized and participative processes that rest on local autonomy and accountability would lead to more accountable and less rent-seeking and crony-driven outcomes

– Redressing unbalanced regional growth. Growth accelerates if economic activity is geographically concentrated rather than spread out. Ripple effects would also come from more effective poverty alleviation and equitable income distribution outcomes and more inclusive and sustainable growth.

– Welcoming foreign talent including from the Malaysian diaspora whilst retaining local talent. As Malaysia improves the pool of talent domestically, foreign skilled labor can fill the gap in the meantime and can generate positive spill-over effects

– Prioritizing the education sector which is a key laggard in the economic transformation of the country. In particular the public higher education sector has not been able to produce the skilled human capital despite being provided with consistently large budget allocations during the past 20 years

– Rightsizing the bloated public sector and rectifying its siloed and ineffective sectors that have impeded investment and productivity

What was unprecedented about the NEM is not only its acknowledgement that falling FDIs and competitiveness, compounded by the brain drain and decline in standards of governance as evidenced by pervasive corruption, rent-seeking and patronage, have put Malaysia behind many of our neighbours in the region. It was also the recognition that the NEP had become a time warp and millstone holding back the development of the country. Hence the need to not simply shift to a higher skilled, more competitive and private sector driven economic ideology but also of the necessity and urgency of deep structural reforms for the country to move out of the middle income trap and reach its true potential.

When drawn up and approved by the Government of Prime Minister Najib Razak, the NEM with its paradigm changing principles and change strategies had the strong support of not only business and professional elites and the country’s movers and shakers but also legislators in Parliament. However it needed to be accompanied by actionable policies and a multi-year commitment to implement them. This has not happened.

Today as the current Parliament sits to deliberate and finetune the 12th Plan package presented, we urge legislators from both sides of the policy divide – and this includes legislators from the period of the adoption of the NEM – not to return to a NEP clone mindset but to use the NEM instead as a reference text to select, support and not marginalize the real game changers that the nation needs or we will risk a further falling back in our economic prosperity and standing among nations.

Conclusion

We believe that the Plan, if implemented as currently presented, is likely to act as a self-inflicted wound that will adversely alter the trajectory for Malaysia’s socio- economic growth and heighten the likelihood of our country becoming further entrapped as a middle-income economy, with a clear risk of going backward in our development and prosperity.

* Datuk Ramesh Chander is a former Chief Statistician of Malaysia and a retired Senior Statistical Adviser at the World Bank in Washington D.C.
* Dr. Lim Teck Ghee is a former senior official with the United Nations and World Bank.

Islamic Assault on Malaysia’s Higher Education

2020-01-16T19:30:00.000+08:00

When Maszlee Malik handed back Malaysia’s education portfolio after Prime Minister Mahathir Mohamed fired him abruptly on January 2, he left behind a fifth column of Islamist activists embedded in the top echelons of the ministry and public universities, sources have told Asia Sentinel.

University Malaysia Sabah: Vice Chancellor Taufiq Yap Hin, Malaysian Chinese Muslim Association president, July 23, 2019
University Tun Hussein Onn: Deputy Vice Chancellor Student Affairs AP Afandi Ahmad, Aug. 15, 2019
University Sultan Zainal Abidin: Vice Chancellor Hassan Basri Mat Dahan, Feb. 7, 2019 | Deputy Vice Chancellor Academic Affairs Kamal Shukri Mat, Feb. 12, 2019 | Deputy Vice Chancellor Research and Innovation Mohd Afandi Salleh, Dec. 1, 2018
University Science Malaysia: Deputy Vice Chancellor Research and Innovation Faisal Rofiq Mohd Abdikan, Oct. 4, 2019 | Deputy Vice Chancellor Academic Affairs, Aldrin Abdullah, March 1, 2019
Universiti Teknology MARA: Vice Chancellor Azraii Kassim, Feb. 15, 2019 | Deputy Vice Chancellor Academic Affairs Azizan Abdullah, March 6, 2019 | Deputy Vice Chancellor Research and Innovation, Nazir Suratman 15 November 2018
National University Malaysia: Vice Chancellor, Mohd Hamdi Abd Shukor, Jan. 1, 2019 | Deputy Vice Chancellor Research and Innovation, Mohd Ekhwan Toriman, Aug. 18, 2018 | Deputy Vice Chancellor Community Industry Relations, Imran Ho Abdullah Sept. 5, 2018
University Technology Malaysia: Vice Chancellor Wahid Omar Aug. 31, 2018 | Deputy Vice Chancellor Academic Affairs Zainudin Abd Manan, Mar. 18, 2019 | Deputy Vice Chancellor Development, Azlan Abdul Rahman, Feb. 15, 2019
University Malaysia Perlis: Vice Chancellor R. Badlishah, May 16, 2019
University Malaysia Kelantan: Deputy Vice Chancellor Research and Innovation, Arham Abdullah, June 15 | Deputy Vice Chancellor Academic Affairs, Mohd Rafi Yaacob, Jun 20, 2018
University Malaysia Pahang Vice Chancellor Wan Azhar Wan Yusof, May 14, 2019 | Deputy Vice Chancellor Research, Kamal Zuhri Apr 8, 2019
Innovation University Technical Malacca: Deputy Vice Chancellor Research and Innovation Zulkifli Ibrahim, Nov. 15, 2018 | Deputy Vice Chancellor Academic Affairs Nurulfajar Abd Manap, Oct. 23, 2018
University Science Islam Malaysia: Vice Chancellor Mohamed Ridza Wahiddin, Sept. 12, 2019 | Deputy Vice Chancellor Student Affairs Abd Rahim Abd Rahman, Jun 25, 2018
International Islamic University of Malaysia: Deputy Vice Chancellor Academic Affairs Zulkifli Hassan, Oct. 3, 2018

According to a former vice-chancellor who pointed out a list of at least 26 newly appointed vice chancellors and deputy vice chancellors, these appointments were not made on merit but rather on the basis of loyalty to Maszlee and Salafi preacher and Perlis Mufti – Muslim legal expert – Mohd Asri Zainul Abidin. The Salafi movement is a revivalist crusade within Sunni Islam that developed in Egypt in the late 19th century as a response to Western European imperialism.

If Maszlee had more time as minister of education, according to the source, both the ministry and almost every top position in Malaysia’s public universities would have been filled with members of an Islamic NGO dedicated to enhancing Islamic teachings and practices in daily life. The NGO is Pertubuhan Ikram Malaysia, which is committed to promoting the interests of Islam through all aspects of society. Other organizations affiliated with Ikram are said to assist in this cause. Although Ikram has a respectable reputation within the Malaysian community, the leadership has been infiltrated by Salafi sympathizers pushing fringe ideas of Islam.

Ikram strongly opposes Shia Islam, seeing it as deviant. The NGO was also strongly opposed to the participation of two Israeli para-athletes in an international swimming competition last year in Sarawak, forcing the competition to be moved to another country, and objected strongly to the staging of a play, “Sex in Georgetown City” last year at the Performing Arts Center in Penang.

As a result, according to several sources in the country’s public higher education system, the ministry became insular in its outlook to education and dedicated to implementing an agenda that would hinder any diverse outlook from educational perspectives. A recent example was a Universiti Malaysia Perlis Vice Chancellor, Dr Ahmad Badlishah, who said there was nothing wrong with controversial exam questions that caused outrage and calls for his resignation across the nation. The multiple-choice question in the university’s Ethnic Relations paper claimed Zakir Naik, a controversial Islamic preacher and fugitive from India on charges of money laundering, is an Islamic icon and spreading true Islam.

Klang Federal MP Charles Santiago complained that other questions were offensive to the Indian community, including one that reportedly read: “These people are dark-skinned people and they are found in Asian countries such as Malaysia and Indonesia: What nation is this?” The multiple-choice answers were given as “1) Negroid; 2) Red Indian; 3) Indians; 4) Bushman.”

The exposure of these exam questions led to a widespread belief that public universities in Malaysia had become platforms for propaganda and indoctrination, giving the young biased ideas about Islam and society.

Members of Ikram that Maszlee appointed to Malaysian public universities in his short time as minister and the dates of their appointment are:

Maszlee also appointed Mohd Saleh Jaafar deputy director general of Higher Education (Private Institution) and Gauth Jasmon as chairman of the Universiti Putra Malaysia Board of Directors.

All are described as loyal to the Ikram leadership, which also appears to be strongly aligned with the Pakatan Harapan government. Consequently, decisions on matters such as Putrajaya’s failure to sign the United Nations International Convention on the Elimination of all Forms of Racial Discrimination (ICERD) in 2018, should be seen in the light that members of Ikram are spread across all aspects of government.

The concern is the reform of the Malaysian education system, not its Islamification. To ensure reform, the sources say, Maszlee’s appointments must be re-vetted as to the suitability to pursue reform within their respective institutions. Otherwise, this Salafist legacy will remain embedded within Malaysian public universities.

Murray Hunter is a Southeast Asia-based development specialist and a frequent contributor to Asia Sentinel.
https://www.asiasentinel.com/society/islamic-assault-malaysia-higher-education

Curing Malaysia’s National Psychosis

2020-01-16T19:21:00.000+08:00

Rewiring the kampung

With the Year of the Rat approaching on January 25 to be celebrated not by just Malaysia’s Chinese but traditionally the whole country, the vice-principal of SMK Pusat Bandar Puchong 1 school recently demanded that Lunar New Year decorations be removed from the school.

That is an ominous sign in a polyglot country whose races traditionally have celebrated each other’s holidays. Although in the quite recent past Malays, Chinese, Indians and the other peoples of Malaysia celebrated Hari Raya, Chinese New Year, Christmas and Deepavali together as a symbol of unity, this is now forbidden.

It fits, however, with other growing attacks on minority religions and cultures. Despite the fact that freedom of worship is enshrined in Article 11 of the Malaysian constitution, that freedom is under threat along with a larger threat against non-Malays.

Although these pressures have been increasing, they are becoming disturbing. A high-ranking Islamic official is arguing Malaysia should be exclusively for the Malays, contrary to the constitution and principles of Islam. The education system is increasingly being used as a propaganda tool to spread racism and distorted views of Islam. The rule of law is not the same for all, where designated people are treated differently by police.

The themes and arguments within social discussion and outcomes of governance in Malaysia today set the country apart from much of the rest of the world community. Putrajaya’s failure to sign the United Nation’s International Convention on the Elimination of all Forms of Racial Discrimination (ICERD) in 2018 put it in the company of Dominica, South Sudan, Myanmar and North Korea. Concern is growing that institutionalized racism has put the country in a category with the old South African Apartheid regime, which it once vigorously opposed.

Today, government policy, decision-making, leadership and institutional development are all influenced by forces controlling political outcomes that appear more irrational and dysfunctional as time goes on. The divisive ketuanan Melayu (Malay supremacy) narratives are now implanted deeply into the assumptions and beliefs of the ruling elite’s psyche. Police are using the court system to suppress alternative points of view by banning closed-door meetings of legally registered societies, members of a governing coalition party are arrested on alleged terrorist links to a defunct organization, and the prime minister uses innuendo to threaten sectarian retaliation against a community group.

These beliefs are heavily skewing political decision making. This cognitive dissonance has been destructive upon community relations, nation-building, national culture, and even the Malaysian concept of nationhood itself.

Thus there is a growing national psychosis that has taken reform off the national agenda, as reform challenges the ruling elites’ view of reality. The reform promised by Pakatan Harapan when it took power in May of 2018 now is feared as an attack on authority, status, prestige, and the very security of those in power, as it was prior to the election on the part of the United Malays National Organization. Those fears are currently projected onto the Democratic Action Party, an ethnic Chinese-dominated member of the ruling coalition.

Symptoms of this psychosis are strewn around the national narrative, which has become an instrument of exclusion, where the roles of groups working towards independence have been largely rewritten to serve the perceptions of the leaders of today. The aspirations of Sabahans, Sarawakians, and Orang Asli (the true indigenous people), have been excluded.

This was seen in one of the final directives given by the ex-education minister Maszlee Malik before he was sacked for appointing a non-Sarawakian, Kamal Mat Salih, as chairman of the board of directors of Universiti Malaysia Sarawak, which has led to criticism and outrage.

As the demand to remove the Lunar New Year decorations shows, today’s narratives are focused on severing empathetic ties between ethnic groups, replacing them with a biased single narrative. Given emphasis on “true Islam” in government schools, more than two generations of Malays now behave according to the beliefs and values incorporated within these narrow vistas of reality. The current national narratives completely fail to encompass any evolving aspirations that promote any semblance of national unity.

What is missing are any aspirations about the dreams on which the nation was founded. An alternative sense of identity has crept in – divisiveness, exclusion and hate. The country now lives within a psychic prison that is full of illusions about enemies that don’t exist. People are suffering from hallucinations of Jewish plots, Christian plots and Chinese plots.

In government, the centralization of decision making, often within secretive circumstances indicates fear of scrutiny. This paranoia is displayed in the way ministers attack those who expose their shortcomings. This depressive display of force has been nurtured on the assumption that ‘we are the law’. Within Malay society, ‘Malay unity’ means that all must agree to the views and ideas of the elite. Dissent is considered disloyalty. Challenging the teaching khat, or Muslim calligraphy and Jawi – Arabic script – in schools is akin to an attack on the national language. Those who have alternative views are the enemy.

Racism and cultural imperialism have become embedded within Malaysian culture to the extent of delusion. It is now ingrained into the psyche. Racism, however, has also become cover for deep corruption arising from discriminatory policies like the New Economic Policy (NEP). The anxiety generated by the ‘lazy Malay’ being raped and plundered by other groups fallacy revived by Mahathir from British colonial times was its justification.

The ruling elite has always been projected as Malaysia’s savior although this projection is more about resolving intra-Malay political and power rivalries, than inter-racial conflict. It’s all been a convenient fabrication for maintaining power, severely impairing Malaysia maturing as a nation.

Ketuanan Melayu must be seen for what it really is; a defense mechanism against change. The irony is that it is not protecting and enhancing a rich Malay culture, but rather gutting it to the mercy of some alien tribal desert culture. The imposition of Arabism has destroyed much of the richness in a Malay culture that was once fondly treasured, even by non-Malays. Many traditional Malay traditions and artforms have been discouraged and even banned, under the arbitrary declaration that they are un-Islamic.

These hardline Islamic policies are taking root throughout government institutions, leading to the belief that the more one takes on the artifacts of Arabism, the better a Muslim he or she will be. Reciting Rukun Negara – Malay national principles – would be much more appropriate than reciting prayers before government events and meetings.

Curing Malaysia’s national psychosis can only come from reverting to the assumptions, beliefs and values that were around when the nation of Malaysia was created. This means breaking up the fallacies that are hindering the pursuit of nationhood, including that public enterprise can do what private enterprise can’t. This is where the elite have gained their ill-gotten wealth and most state economic development corporations, and their subsidiaries are bedrocks of corruption.

Malay and other indigenous cultures originated from three distinct sources. Those indigenous to Tanah Melayu (the Malay Peninsula), Sabah and Sarawak, those who migrated to Malaysia from the Nusantara archipelago, and those who migrated to Malaysia while the Sultanates were riverine rather than territorially defined.

Some of the migrants from outside of Nusantara over the centuries from China and South Asia formed a unique Baba culture that has co-existed with Malay culture for centuries. The new Arabized cultural traits and inwardly politically defined Islamic view of the world have become a fence of exclusion. This is pushing younger Chinese into a China admiration syndrome which holds China’s accomplishments in awe, which China is now clandestinely exploiting for its own advantage. Expect this to become much more pronounced over the next few years.

Malay culture started to change when the cikgu (teachers) and civil servants were replaced within UMNO by an opportunistic rent-seeking Malay class and when Mahathir and his then-ally, Anwar Ibrahim, Islamized the government and civil service. This was also the time of the birth of crony capitalism which guaranteed the gentry would rule over the rest. The rule of law became we are the law, where police need special permission to interview anyone seen as being a member of the gentry in any investigation.

However, the constructed truths created and manipulated by those in power have always depended upon economic prosperity. The government handed out millions of ringgit to the people, gave out privileges and extended credit. Affluence bought silence, it kept the opposition weak, and enhanced the image of the government as being benevolent.

Government budgetary and fiscal problems, economic downturn, and rising cost of living are making it much harder for any government to placate the people, as has been done traditionally for decades. It’s going to be much more difficult to buy into power in the future.

None of the present political parties, either alone or in any combination can remedy this national psychosis. Bersatu cabinet members have shown their disdain for transparency, in honoring their pledges, and have been implementing their own agendas. PKR ministers have been enjoying the trappings of office. They are changed people from the days they were in opposition.

The Malaysian Malaysia dream of Tunku Abdul Rahman is fading away into a Wahabi state with all the tribal trimmings, pushed by the Malay-centric parties on the people.

The only hope for a cure is for intellectuals, activists, writers, lawyers and other professional people, members of royal families, along with ordinary citizens, led by those who once experienced a Malaysian Malaysia to come together to initiate change.

This doesn’t have to immediately become a political movement, but a diversity of social and cultural organizations that refocus the narratives back to the old Nusantara values, society once cherished. This movement could advocate de-Arabizing the Malay language and returning to Islam Hadhari (today) with its wider universal values. Kampongs need revitalization, where mosques become centers of vocational and community education. Cottage industry can be revitalized to develop local sustainable economies. This would also mean dissolving state economic development corporations and their subsidiary companies that are full of corruption and taking market space away from local entrepreneurs.

The states need their sovereignty back. They need to campaign for local government and Citizen Development Committee elections, so that as many people as possible can participate in some level of governance. History needs to be taught as it really was. A country without a deep sense of history is a country without a soul.

If such a movement could ever gain momentum, some of the old political partisans from the PKR, DAP, and political forces in Sabah would come onboard. This is not an impossibility. Thanathorn Juangroongruangkit’s Future Forward Party made a successful debut in Thailand’s general election last year, and is very quickly becoming a mass social movement aimed at changing Thailand’s current political paradigm.

Murray Hunter is a Southeast Asia-based development specialist and a frequent contributor to Asia Sentinel.

2019 Environmental Review: Southeast Asia

2019-12-04T17:21:00.001+08:00

The year—and the decade—in environmental terms, is coming to its end, with some species and entire ecosystems in their death throes. For starters, Malaysia recently lost its last Sumatran rhino, the poaching of Sabah’s pygmy elephants is rapidly increasing, Australia’s koala bears are being incinerated in wildfires, dugongs are dying in Thailand, Laos has lost all of its tigers, orangutans are being shot up and blinded by bullets, and the Mekong River is being strangled by hydroelectric dams in Laos and China.

A smorgasbord of rare and spectacular species—and the habitats in which they live—are being erased. Nowhere on Earth can the effects of man’s dominance over the planet be seen with greater clarity than in Southeast Asia.

There are so many disturbing news reports popping up on so many outlets that it can be overwhelming to try to keep tabs on everything that is happening when it comes to environmental issues. Nonetheless, I have attempted to create linked-soaked summaries on a country-by-country basis consisting largely of small press releases that could have easily slipped by in hopes that a more complete picture could emerge from the dark room of dismal news. We’ll open with one of the countries with some of the most disturbing recent reports, Malaysia.

Malaysia

Perhaps one of the most symbolic reports concerning wildlife in the 21st Century comes from Malaysia in the death of Imu, the last Sumatran rhinoceros of the country. She died in captivity after having been taken from the jungle for safety from poachers. A long health struggle ensued, with news outlets around the world covering her recent demise.

But it’s worth asking how we got here. Chinese demand for rhino horn stretches back millennia, with Southeast Asia becoming an easy source after China wiped out its own rhinos. In other words, Sumatran rhinoceros, which are now only found in a few pockets in Sumatra and perhaps in Kalimantan, were hunted out of their jungle redoubts to satisfy superstitious Chinese demand long before wildlife conservation NGOs ever existed. These smallest, hairiest and gentlest of rhinos had been mercilessly persecuted for a long time, and November 2019 was the end of the road for the species in Malaysia.

Elsewhere in the country, the government voted against protecting sharks in the waters off its coast, baby sharks are being caught and sold en masse in Miri, and pygmy elephant poaching is escalating and in gruesome style with head, feet, and skin being hacked off an animal in Sabah. A Critically Endangered Malayan tiger dizzily wandered into a village, apparently suffering from canine distemper disorder, which is often spread by domestic hunting dogs entering forests with poachers.

Poachers have their sights set on Sabah’s bantengs, an indigenous Orang Asli was arrested with elephant tusks in Kelantan, and yet authorities are fighting hard to protect Sabah’s Tabin Wildlife Reserve, and the government recently gazetted one million hectares of Sarawak’s ever-dwindling forests as a protected area; however, the ongoing construction of a Pan Borneo Highway across Malaysian Borneo will undo some of this. Finally, the majestic Helmeted Hornbill continues to be relentlessly poached out of existence in the country.

Indonesia

While the Amazon fires grabbed global headlines, Indonesia’s forest fires have been raging as well, turning key elephant and tiger habitats into plumes of smoke in Sumatra. A journalist who wrote critically of palm oil was found dead in Medan in what was almost certainly murder.

Elsewhere on the island, the insidious trade in songbirds is making the forests become increasingly silent, while down in South Sumatra province a farmer was attacked and killed by a Critically Endangered Sumatran tiger. The same tiger is said to have stormed into a tourist tent and attacked them in an earlier incident. Up in Aceh in November, a blind orangutan, still alive, was riddled with two dozen bullets, while earlier in the year an orangutan named Hope was found to have 74 bullets in her body.

Five sea turtles were found dead within two weeks of the opening of a coal-fired power plant in Bengkulu, and Indonesia appears to be backing away from its tough stance against illegal trawlers and foreign poaching vessels. However, a new toad was identified in the Barisan Mountains of Sumatra, and it appears that Kerinci National Park—home to tigers, tapirs and allegedly, the orang pendek or tropical yeti, is getting a reprieve from a spate of road-building.

A gorgeous new species of honeyeater has been named in Alor Island, while in other good news a dam project has been cancelled in Gunung Leuser National Park in Aceh. Nonetheless, the plan to relocate the Indonesian capital from Java to Borneo will almost certainly result in large-scale environmental destruction.

Cambodia

Over 60 percent of Cambodians rely on fish for their daily protein, with much of it caught freely in the Mekong River and Tonle Sap Lake, but both of these water sources are in serious trouble, with Tonle Sap fisheries down 50 percent in 2019 and the Mekong at its lowest level in 100 years thanks to a drought and an upriver dam-building bonanza.

But on a positive note, the Irrawaddy River dolphins on Cambodia’s stretch of the Mekong in Kratie are faring better these days, and wild bantengs—with the help of Wildlife Alliance and a nearby local community—are hanging tough in an isolated patch of forest in Kampong Speu province. However, Kep residents are complaining about the destruction of a nearby mountain that has turned into a stone quarry, triggering a slew of environmental problems.

Chinese gold miners are poisoning a river in Kratie, and China’s Shenzen Institute has been tasked with creating a development “masterplan” for Sihanoukville, a province has seen an utterly transformative onslaught of Chinese investment. It is difficult to imagine that the strategic position of Sihanoukville on the Cambodian coast was not carefully considered by Beijing, and so rabidly has China shredded the charm of this beach town that the popular travel web site Travelfish as downgraded it to a half-star destination.

Back in January, I saw a dead slow loris splayed out on a motorbike in Virachey National Park, and a friend of mine recently saw more dead lorises openly for sale in the Ban Lung Market in Ratanakiri.

Prey Lang forest—Indochina’s largest lowland forest—continues to be hammered by illegal logging, and overall, the Kingdom’s forest cover has shrunk to 47 percent (it was 73 percent in 1975).

Thailand

Way down south near Koh Libong island in Trang province an endangered and orphaned dugong became an internet sensation among the Thais after a video was released showing the four-month old pup hugging a local vet in the water. The baby dugong later died, having a stomach filled with plastic. Plastic waste in Thai seas and beyond is increasingly turning the oceans into minefields for marine life, and a Thai marine expert put forth proposals for dealing with the plight of the dugongs, which number around 250 in Thai waters. The government hopes to increase that number by 50 in the coming years. Thai fishermen admitted to killing 30 dolphins in Malaysia waters, but over 10 black-tipped reef sharks were recently recorded in Maya Bay of Koh Phi Phi in a sign that efforts to restore the ecosystem in this scenic national park are bearing fruit.

In other positive news, rare helmet urchins were found in the Similan Islands for the first time in years, while not far away, another rare sea creature—the giant ray—was spotted gliding through the crystal blue waters. Not far from the ray a huge leatherback turtle was spotted laying a clutch of 104 eggs on a Phang Nga beach. On land, Sa Kaeo police busted an illicit wildlife trader attempting to drive a large haul of wild animals—what some are calling a “feast of wildlife”—including turtles, tortoises, and monitor lizards, to Cambodia.

Vietnam

The rediscovery of the silver-backed chevrotain or “mouse deer” sent excitement through the conservation community, though some wonder whether or not the ancient and critically endangered saola still roams the Annamite Mountains or if it has silently been hunted to extinction; it was last camera-trapped in Vietnam in 2013, and is or was found in Laos as well. On the avian front, Asian openbill storks, black-headed ibises, and other rare birds have been flocking to Back Lieu Bird Garden, while fishermen released a rare turtle back into the sea despite offers from locals to buy and cook it. Back on land, the Vietnam delta is sinking into the sea and action needs to be taken quickly to stop it.

Laos

The poverty-stricken, landlocked nation lost all its tigers in recent years, while gold mining and dam-building continue to erode the country’s once-rich natural heritage. Tiger farms are still operating in the once-reclusive country, and the Chinese are well on their way to bulldozing a path all the way to Thailand for their high-speed trains, which the majority of Lao people will never use.

At the very top of Southeast Asia, what remains of the forests of China’s Yunnan province are being hammered for the paper and pulp industry, while over in Myanmar palm oil plantations are encroaching on protected areas in a story all too familiar to the region. Along the eastern border of Burma, the Karen people are working hard towards making the Salween Peace Park a permanent ecological haven for rare species like tigers, leopards, bears. A China-backed dam will flood a Philippine protected area in Luzon, and a snake that hadn’t been seen in Singapore 172 years was recently sighted in Bukit Timah Nature Reserve.

The causes of it all

What is the driving force behind all this? Rising incomes and traditional (unscientific) beliefs in all Southeast Asian countries contribute massively to these issues, as does infrastructure development, which often sees new roads bulldozed into final wildlife frontiers. Having China as a neighbor does not help, as a recent haul of live wildlife shows, and online Chinese message boards facilitate the sales of dead tigers, leopards, helmeted hornbills, elephant skins, and a sad array of other wildlife products.

There can be no doubt that 2020 will be just about the last chance to try and reverse the gloomy trends mentioned here, and to build on the few bright spots that remain. After all, just as I typed this up, it was reported that yet another rare leatherback sea turtle crawled out of the Andaman Sea at Phang Nga in Thailand and laid another large clutch of eggs. Thai authorities roped off her nesting site and it will be protected. And the koala bears that some news outlets said are “functionally extinct” throughout the entirety of Australia? Not just yet, though their numbers are in decline. Wildlife can bounce back if we let it, jungles can grow back if we let them, the oceans can start to be cleared of plastic if we stop polluting and start cleaning them up. It’s got to happen starting right away, in the new decade.

Gregory McCann writes on environmental topics in Southeast Asia and is the author of the book Called Away by a Mountain Spirit: Journeys to the Green Corridor.

AsiaSentinel.com

Malaysia’s Lagging Agriculture Sector

2019-12-04T17:17:00.001+08:00

Malaysia, whose agriculture sector led the economy for decades into the 1970s, is falling behind Indonesia, Thailand, Vietnam, and other regional players like China, Taiwan, and Korea in terms of innovation, technology, know-how and methodology and product and value chain development.

The country’s long neglect of the sector and narrow focus on plantation crops at the cost of encouraging crop diversity has left the country with serious issues and challenges. Despite the fact that the sector contributes 7.3 percent to national GDP, it employs 1.5 million workers, fully 10 percent of the workforce.

Agriculture’s dominance of the economy ended in 1981, when then-Prime Minister Mahathir Mohamed’s massive push towards industrialization left the Ministry of Agriculture without sufficient budget to operate the office air-conditioning system fulltime during working hours. While the sector was rejuvenated somewhat by Mahathir’s successor, Abdullah Ahmad Badawi, through massive fund increases, it has never really recovered.

The plantation sector is operated by primarily government-linked companies (GLCs) and large publicly listed estate companies. Utilizing around 5 million hectares, palm oil production contributed RM40.2 billion to GDP in 2018. The high profitability of palm oil as a crop over the years has deterred the development of alternative crops.

However, palm oil production in 2018 declined by about 2.5 percent over the year before. In March this year, the European Commission dealt the industry another blow, concluding that palm oil cultivation has caused deforestation and decided that palm oil as a feedstock in European biodiesel will be phased out by 2030. Malaysian plantations are working towards achieving Malaysian Sustainable Palm Oil (MSPO) certification, which requires estates to meet a list of specific environmental standards and workers’ rights before January 1 in an attempt to alleviate EU concerns.

In addition, there are concerns over health issues with consuming palm oil, which will take a lot of resources on the part of the palm oil lobby to counter. Malaysian palm oil trade to India is also in jeopardy due to Prime Minister Mahathir Mohamad’s refusal to allow the extradition of the firebrand fugitive Islamist preacher Zakir Naik back to India, where he faces money laundering charges.

With the expected decline in world demand for palm oil, Malaysia, Thailand, and Indonesia are trying to consume more domestically as biodiesel. However, Malaysia with its diesel subsidies is struggling due to the relatively high cost of palm oil, vs subsidized diesel. Malaysia cannot afford to be complacent over palm oil any longer. It’s a mature market where production is set to decline over the coming years, where alternatives are needed.

Malaysia is still the world’s 5th largest producer of rubber behind Thailand, Indonesia, Vietnam, and China. Rubber production is almost totally in the hands of 600,000 smallholders. However, with prices drastically depressed due to severely weakened demand from China, reports claim that more than half of Malaysia’s rubber holdings have been abandoned. Even with the Malaysian Rubber Board providing incentive payments to cover lower prices, rubber production has dropped by almost 20 percent in the last year. The rubber industry is set to shrink until demand outstrips supply once again.

Historically, Malaysia’s rice production has only produced 60-70 percent of the country’s consumption. Approximately 200,000 aging paddy farmers on plots ranging between 1 and 5 hectares cultivate paddy in the country. Paddy farming only produces marginal income, even with the subsidies provided by the government to farmers. Unlike paddy farmers of the past, farmers today usually don’t multi-crop paddy, vegetables, fruits, coconuts, and raise fish, poultry, and livestock.

Paddy production lacks standardization and doesn’t have Good Agricultural Practice (GAP) or HACCP certification. Often unregistered pesticides are used, leaving chemical residuals. Thus, food safety and traceability are issues. Although Malaysian paddy yields are on a par with Thailand, they are behind Philippine, Indonesian, and Vietnamese yields.

Farmers mostly don’t own mechanical equipment, so must hire an array of contractors through the production process. Due to Shariah law on inheritance, land holdings continue to be broken up between families, making paddy farming even more difficult. Large belts of idle land, estimated at 119, 273 hectares, can be seen across the country partly due to family land disputes. Farmers have no involvement through the supply chain, so opportunities to add value to rice are non-existent. Under the present paddy farming system, there is no way farmers will be able to improve their incomes.

The only future for paddy farming to benefit farmers is to develop cooperatives that manage economically viable estates made up of a group of farmers holdings. These cooperatives should be for the benefit of the farmers, run by the farmers, and owned by the farmers. These cooperatives could plant, cultivate, harvest, brand and package value-added products like red and brown rice varieties that have higher market end opportunities. Contract farming initiatives creating paddy estates have shown to reduce costs by 50 percent and increase yields up to 30 percent.

Other agricultural activities include cocoa production, which in the 1980s looked promising before most plantings were wiped out through disease. Although production is still dwindling, some entrepreneurs are producing boutique beans and developing downstream niche chocolate production. Vegetable and fruit production produce 40 percent and 66 percent of the nation’s needs respectively. Production is gradually increasing with an impetus of new younger farmers, who are trying to make businesses out of their farms.

However, knowledge, experience, know-how, are still being built up. Soil and environmental conditions are poor in many areas, with nutrient lacking soils, polluted water sources, with chemical contaminants present. The disease has almost wiped out potentially promising niche industries like dragon fruit. Many producers are still nascent to certifications and supply chain management.

Malaysia currently only produces around 20-25 percent of its beef, goat and mutton requirements. Despite many previous government initiatives to bolster meat production, there is a chronic shortage of grazing land on the peninsula, and in some cases, public abattoir facilities are not certified. Likewise, dairies supply only a fraction of local demand. In contrast, the privately developed and operated poultry industry has been developed as a successful state of the art, fully integrated industry, not only producing all of Malaysia’s poultry needs, but Singapore’s as well.

Smallholders have tended to be minimally educated and are now well into their 60s. Paddy fields, rubber plantations, and dusuns (fruit orchards) have been left idle with no one to take over. This is in contrast to farmers in other countries who take over from their fathers with technical and business degrees and vision.

Local Malaysian farmers have been indoctrinated by the agricultural backgrounds of their localities and that their land holds limited crop opportunities. They have been scared by scammers who tell them to plant bananas, lemongrass, chili fertigation, agarwood, and teak, only to fail technically or have no buyer once the crop is ready to harvest. Young people don’t want to take over the family farm holding because they want to find better opportunities.

This is one of the weaknesses of the Ministry of Agriculture and subordinate agencies. These organizations lack the ability to empower the youth of rural communities through outreach and extension. There is also no vision of how integrated communities should be created and developed into multiactivity local-sustainable micro-economies. Malaysia, unlike Thailand, doesn’t have model integrated farms that demonstrate and teach communities how to farm and create cottage industries.

While Malaysian academics write academic papers with an eye to promotion, their Thai counterparts are in the community helping the people create products, processes, brands, and markets. They enrich community sustainability. This is a prerequisite to develop and expand coconut production and create multiple downstream industries using coconut materials to produce coconut oil, virgin coconut oil, coconut milk, activated carbon, copra, processed coconut products, and even animal feeds.

The Ministry of Agriculture’s research priorities have been developed by bureaucrats rather than industry. Research priorities need to be focused on the problems and opportunities of today, for current stakeholders. Research has been left to small units at the Malaysia Agricultural Research and Development Institute (MARDI). This would include products like ginger, chili, onion, garlic, cabbage, sweet corn, eggplant, okra, long beans, avocado, asam jawa – tamarind – figs, grapes, mangoes, cashew nuts, and macadamia nuts, etc.

The successful food processing firm Adabi Consumer Industries is unable to purchase all its needs locally and is forced to import raw materials. Unlike Thailand and Taiwan, little has been done to help communities develop downstream products like dried and canned fruits, processed foods, dairy foods, snacks, ice cream, sausages, pies, and burger patties, etc. Institutes like MARDI may show the minister and media some of these products in exhibitions, but rural communities rarely get to see them, let alone learn how to produce them.

Little is done to create branding paradigms other than the slogan “Malaysia Best.” Sabah and Cameron Tea companies have successfully used geographical branding, halal farming is largely ignored even though the global halal market is growing by double digits. Organic and ethical products hardly exist.

The Pakatan Harapan government has decided that rather than put effort into meeting the country’s current agricultural challenges the rural community depends on, it will invest time and resources into smart farming. This is an opportunity for consulting and technology companies to make a lot of money, and bureaucrats travel overseas on junkets to smart farming exhibitions at taxpayer expense.

But smart farming will not revitalize existing farming in the country. It will assist new entrepreneurs with access to expertise and capital to pick up grants and incentives. Smart farming is set to be the next white elephant, just as the biotech initiative was.

Malaysian agriculture is at a crossroads. The whole sector needs rethinking. People with experience and knowledge of the issues are in the country. Before committing to smart farming, which does have a place in some niches, the potential future directions of the sector need to be discussed openly, so a new thought out direction can be set in Malaysian agriculture. The government needs to work on transforming what already is, help rural communities that are in need, rather than look after its own with one more white elephant.

UMNO’s Corporate Cornucopia

2019-12-04T17:15:00.001+08:00

In the 1980s and 1990s, Halim Saad and Tajudin Ramli were two of Malaysia’s brightest stars, picked by former Prime Minister Mahathir Mohamad to lead the country’s ethnic Malays onto the national stage as exemplars of a new Bumiputera business culture that would catch up with the ethnic Chinese who had dominated commerce as long as Malaysia had been in existence.

When Mahathir took office, insiders say, his plan was to create a cadre of 100 super-rich bumis who in turn would help rural Malays into prosperity under a konsep payung, or umbrella concept routed through the United Malays National Organization, much the way he envisioned driving the country into industrialization through massive projects.

But greed intervened. Once the privileged got rich, there was little incentive to share it with the kampungs, the Malay rural villages. Many of the companies eventually collapsed and are being supported by government institutions such as Kazanah Nasional, the country’s sovereign investment fund, or the Employee Provident Fund.

Rise of the Umnoputeras

Although the Umno connection was widely assumed during Mahathir’s 22 year reign as prime minister, today a flock of explosive court documents filed in different Kuala Lumpur courts appear to be breaking open conclusively the open secret that Tajudin and Halim and others were essentially front men for Umno, the country’s biggest ethnic political party and part of a class of rentier businessmen who became known as Umnoputeras, a play on the word Bumiputera, or native Malaysians, predominantly ethnic Malays.

Nor were they alone. Others included Syed Mokhtar Al Bukhary, one of Malaysia’s richest men, as well as Yahaya Ahmad, who headed Mahathir’s national car project and who tragically was killed with his wife in a helicopter crash, and Samsuddin Abu Hassan, introduced by Mahathir to the government of Nelson Mandela but who had to flee South Africa after being accused of misappropriating millions and evading South African debts totaling about R50 million (US$7.233 million at current exchange rates). Samsuddin left behind his glamorous wife, Melleney Venessa Samsudin, along with a failed Durban bank, and returned to Malaysia.

Samsudin ultimately ended up on the board of directors of Mitrajaya Holdings Bhd., another Umno-linked company that has played a significant role in major national projects including the Kuala Lumpur International Airport, KL’s Light Rail Transit System, the CyberJaya Flagship Zone and numerous other projects.

23 companies vehicles for Umno

At least 23 of Malaysia’s biggest companies (see list below) appear to have been vehicles for Umno to siphon off vast amounts of money in government contracts as Mahathir’s plans went awry. The companies and the people who run them are so hard-wired into Umno, the government and its investment arms that de-linking them would probably destroy the party. That in effect makes a mockery of Prime Minister Najib Tun Razak’s widely publicized speech in July in which he promised to root corruption out of his party.

Much of the ownership appears to have been channeled through a mysterious company, Realmild, that emerged in 1993 to stage an RM800 million management buyout of a major chunk of Malaysia’s media including the New Straits Times Press (M) Bhd and TV3. Realmild already owned a controlling interest in Malaysian Resources Corporation Bhd, which got the contract to develop the massive Kuala Lumpur Sentral transport hub. It also acquired ownership of the Labuan and Sabah Shipyards, which supply the Malaysian Navy, as well as Redicare and Medivest, which were awarded lucrative contracts to supply medical supplies to government hospitals.

Thieves fall out, details emerge in court

In September, Syed Anwar Jamalullail, the brother to the Sultan of Perlis, and others testified in a tangled court battle in a Kuala Lumpur High Court that Daim Zainuddin, the prime minister’s close associate, often told Malay businessmen to act as nominees in the management of Malaysia’s top companies. The long-running suit was launched five years ago in2005 by Khalid Ahmad, a former Realmild director, who alleged he had been cheated out of a RM10 million payment for five percent of Realmild’s shares by Abdul Rahman, thought to be the beneficial owner.

According to the testimony, Abdul Rahman paid out the RM10 million but later reneged after he learned from Mahathir that the shares actually belonged to Umno. The trustees for Realmild in fact were Mahathir himself as well as former Berita Harian Group Editor Ahmad Nazri Abdullah, New Straits Times Group Editor Abdul Kadir Jasin and Mohd Noor Mutalib. Another witness, Ahmad Nazri, said in a deposition that he held the majority share of 80 percent in Realmild, although 70 percent of the shares were actually in trust for Mahathir.

The companies others ran included Faber Group Bhd, a member of the UEM Group, now involved in integrated facilities management and property solutions sectors; KUB Malaysia Bhd. A holding company dealing in information, communications & technology, property, engineering & construction and food related industries.

Companies mismanaged into state ownership

The companies have been involved a wide variety of activities including media, property development, construction, toll roads, hospital equipment, logistics and distribution, cellular telephony and other businesses. What they had in common was that most of them benefited from government contracts doled out by the Barisan Nasional, the ruling coalition that has controlled Malaysia since its inception as a country. The other thing they had in common was that at some point most of them were mismanaged into financial trouble of one kind or another and had to be bailed out or bought out by the government.

Realmild unloaded Malaysian Resources Corporation Bhd onto the Employee Provident Fund in late 2005 as part settlement for an outstanding Rm500 million loan. Putera Capital Bhd, is threatened with bankruptcy. It formerly owned the Putra World Trade Center, Umno’s headquarters, which rents out office space to businesses. UEM Builders Bhd, an offshoot of United Engineers Malaysia (UEM), along with UEM World Bhd, was dumped onto Kazanah Nasional, the investment holding arm of the government and the government’s strategic investment vehicle.

Kazanah Nasional now also owns PLUS, which held the tollway contract for the national north-south highway, as well as Pharmaniaga, a former UEM subsidiary dealing in hospital supply and other services. Court documents show that MAS, then the state-owned flag carrier, was taken over and privatized by Tajudin Ramli only to lose an estimated RM8 billion (US$2.77 billion at current exchange rate), with a major part of that being funneled into a Frankfurt, Germany cargo logistics company whose directors were closely connected to Tajudin.

According to the website Malaysia Today, Tajudin’s lawyers revealed that Tajudin had only been a front man for Umno and that Umno “not only has to protect him from prosecution but that they also had to ensure that the government bought back the shares at the same price that they were sold to him although the shares were only worth a portion of the real value.”

Overpriced government contracts provide a lifeline

Other depositions made available in recent weeks have listed a long series of documents detailing misdoings in UEM/Renong, once headed by Halim Saad, which has long been accused of looting the government treasury through vastly overpriced construction contracts. Halim told the press in September that he had left the UEM/Renong board in 2001, saying authorities wanted Kazanah to take it over “to prevent a systemic risk to the banking system in Malaysia and to enable a sustained restructuring of the group.”

UEM itself is still at it. The government-linked company was given the contract to build a second bridge from the mainland to the northern city of Penang at a price estimated in 2007 at Rm2.7 billion. It has since climbed to RM4.3 billion without figuring in a variety of ancillary costs including compensation for fishermen and project development costs of RM285 million, with the total now nearing RM5 billion.

Other documents show how completely the country’s press was in the thrall of UMNO. Media Prima Bhd, a listed company, apparently took over the ownership from Realmild of TV3, 8TV, ntv7 and TV9 as well as 90 percent of the equity in The New Straits Times Press (Malaysia) Bhd, which publishes three national newspapers; the New Straits Times, Berita Harian and Harian Metro. It also owns three radio networks, Fly FM, Hot FM and One FM. Other cross media interests of Media Prima include content creation; event and talent management.

It also owns outdoor advertising companies Big Tree Outdoor Sdn Bhd, UPD Sdn Bhd, Right Channel Sdn Bhd, Kurnia Outdoor Sdn Bhd and Jupiter Outdoor Network Sdn Bhd. It is online through a digital communications and broadcasting subsidiary, Alt Media, with the Lifestyle Portal gua.com.my and the newly launched TonTon, a cutting-edge video portal with HD-ready quality viewing experience that offers the individualism of customized content and interactivity of social networking.

The companies:

· Faber Group Bhd

· KUB Malaysia Bhd

· Malaysian Resources Corp. Bhd

· Media Prima Bhd

· New Straits Times Press (M) Bhd

· Putera Capital Bhd

· UEM Builders Bhd

· UEM World Bhd

· PLUS

· Pharmaniaga

· Utusan Melayu (M) Bhd (partly owned by Syed Mokhtar Albukhary, another Mahathir crony and one of Malaysia’s 10 richest men according to the Forbes List

· Renong Bhd

· Realmild Sdn Bhd

· Mahkota Technologies (Also a partnership with Syed Mokhtar Al Bukhary)

· Malaysian Airlines

· Celcom

· Malaysian Helicopter Service

· Temasek Padu Sdh Bhd

· Sabah Shipyard

· Labuan Shipyard

· Redicare

· Medivest

Return of the Cronies

2019-12-02T03:26:00.002+08:00

On October 17, Halim Saad, the executive chairman of Renong Group, bid RM5.2 billion (US$1.24 billion) in an attempt to acquire the government investment company Khazanah International’s majority interest in PLUS Malaysia Bhd., the country’s biggest highway concessionaire.

Although Halim’s bid was said to be the highest, apparently Prime Minister Mahathir Mohamad would like to steer the ownership to another Tan Sri, Abu Sahid Mohamad of the Maju Holdings Group, a close friend and lunch partner of the premier. In the meantime, Lim Guan Eng, who heads the Finance Ministry, which controls Kazanah and thus the 51 percent PLUS stake, is fighting “tooth and nail,” in the words of one source, to keep it in the government.

If there is anything that exemplifies the paralysis that has seized the putative reform government that Malaysia’s voters put in place in May of 2018 – more than 500 days ago – it is the fight over PLUS, which could have come directly out of a 1980s playbook, a distressing indication that little has changed despite the electoral earthquake.

“The problem is that these guys can’t get their act together,” said a highly placed business source. “Every single problem they have, they turn back to practices put in place by the old regime. Mahathir, Daim, and Anwar were part of the old regime. Now they are running the new one.”

Strangely, the reformers who formed the backbone of the resistance to the old regime have gone utterly silent. Rafizi Ramli, the articulate chartered accountant who embarrassed the old regime with his exposes of affairs like the “Cowgate” scandal, has disappeared from view. Tony Pua, the technocrat who joined the Democratic Action Party and exposed much of the misdoings in the 1MDB scandal, is little heard from. Nurul Izzah, Anwar’s daughter and a major voice for reform, has also basically disappeared. Azmin Ali, a Mahathir ally who previously had outmaneuvered his rivals in the Parti Keadilan Rakyat headed by Anwar Ibrahim, has been sidelined by allegations of sexual deviancy.

Voters have become disillusioned with a government in which very little has changed except that it has ceased to even function as well as the corrupt coalition that preceded it, critics say. Many of those critics are within the Pakatan Harapan coalition itself.

Instead of the generation of young reformers who helped to drive the Barisan from power, the country looks to the 94-year old Mahathir, who again took up the prime ministership 18 months ago. He is being challenged for the country’s leadership by his erstwhile ally Anwar Ibrahim, 72, who was the finance minister and a Mahathir acolyte three decades ago. Mahathir is being advised by Daim Zainuddin, 81, his finance minister from the 1980s.

It was these government-linked companies, or GLCs, that stultified the Barisan Nasional and were in part responsible for Malaysia slipping behind other countries in the region. They included more than 30 such crony-driven operations as Malaysian Resources, UEM, PLUS, Renong, Malaysian Airlines, and Realmild. Abu Sahid, seeking to take over PLUS, is now the owner of Perwaja Steel, a failed white elephant that cost the government an estimated US$2.4 billion. MAS mismanagement is believed to have cost US$2 billion, UEM more than US$1 billion. A complete list of the companies that had to be taken over by the government can be found here.

The political situation is “tense,” according to a political analyst, with everybody waiting to see how long Mahathir will remain. Although he had promised prior to the election to be gone in two years, with seven months or so left to go, he shows little inclination that he might actually give up. His party, Parti Pribumi Bersatu Malaysia, and his policies are increasingly appearing to be throwbacks to his previous prime ministership.

The economy is reacting to the situation. While manufacturing foreign direct investment is on the increase as foreign multinationals look for other bolt-holes for their supply chains because of the US trade war with China, domestic investment has declined sharply, by 21 percent, with palm oil prices weakening.

Mahathir then jolted the country recently by publicly backing Pakistan over India’s takeover of the autonomous region of Jammu & Kashmir, causing India to threaten a boycott of Malaysian palm oil. He also jolted Malaysia’s Chinese community by saying Hong Kong Chief Executive Carrie Lam should step down in the face of months-long protests, adding that eventually, China would crush the protests. In a majority Muslim country, he has argued that China is “too powerful” to censure over the issue of Beijing’s treatment of Muslim Uyghurs, leading to concerns that Malaysia is engaging in selective humanitarian criticism. Growing segments of the country are concerned that these statements are unnecessary and causing controversy that Malaysia doesn’t need – and raising questions over Mahathir’s fitness at age 94.

One investment bank report suggested that political bickering has paralyzed reform. The private sector remains confused as to the rules of engagement, with ministers unsure of their roles, and holdover businessmen fearing both tax arears and possible criminal charges.

The civil service, as Asia Sentinel reported on October 23, remains basically hostile to the government, with Mukhriz Mahathir, the prime minister’s son and chief minister of Kedah state, charging a veritable “fifth column” with allegiance to the previous government remains in place.

Leaders from decades ago remain in charge, following the policies that got the country off the rails in the first place. Halim Saad, the executive chairman of Renong Group and Abu Sahid Mohamad are fighting for an entity that was invented as a state-backed creation tasked with pouring a cornucopia of money into the United Malays National Organization, then the dominant political party in the Barisan Nasional, the national ruling coalition, then headed by Mahathir.

“Mahathir’s allies don’t want him to give up, they don’t want to give up their perks, the cronies are circling,” a source said. “UMNO and PAS have aligned together and they look to take advantage of a government that is looking paralyzed. Lots of people want to tell Mahathir to hang up his boots. But the majority don’t trust Anwar.”

Khairy Jamaluddin, the former youth minister in UMNO looked on as the party’s hope, has been silenced because he was looked upon as arrogant and far too ambitious. There “will be no comeback for 10 years even if he plays his cards right. The reformers are underground,” a political analyst said. “It looks like Anwar is the last man standing.”

Asia Sentinel.com

Malaysia’s Reformers Stumble

2019-03-05T17:43:00.003+08:00

The democratic revolution born in Malaysia with such promise on May 9, 2018 – wiping out a corrupt coalition that had ruled the country for 62 years — is in increasing danger, as demonstrated Sunday with the defeat of a ruling Pakatan Harapan candidate in a state constituency it had won just 10 months ago.

There has been some concrete progress. Former leaders including Premier Najib Razak, his wife Rosmah Mansor and the lawyer Mohammad Shafie Abdullah have been arrested. The Malaysian Anti-Corruption Commission has been removed from the prime minister’s jurisdiction along with the Election Commission. Judicial reform is moving slowly forward and the independent press has been unleashed.

But generally the Pakatan Harapan coalition has presented a picture of stumbling from issue to issue, with infighting among the leaders as economic issues bite and with the ousted Barisan Nasional coalition doing its best to hamstring reform. The coalition has been blocked in parliament with doing away with a “fake news” bill pushed through at the last minute by Najib. Nor has it revoked the colonial-era sedition act – land in fact recently used against a former minister for questioning the appointment of non-Malays to top government positions, earning criticism from Amnesty International.

Voters hold their noses

Voter dissatisfaction was clear in the loss of the Selangor state constituency just a few kilometers from Kuala Lumpur, which fell to Zakaria Hanafi, a candidate for the United Malays National Organization by a 19,780 -17,866 margin, a swing of 11,000 votes away from the government in less than a year. The disgraced Najib campaigned energetically for Zakaria, excoriating the coalition on social media despite the fact that the former prime minister is under indictment in the massive US$4.8 billion 1Malaysia Development Bhd scandal.

It was the second loss to be suffered by the Pakatan Harapan coalition in recent weeks. On Jan. 26, again with Najib campaigning vigorously, a Barisan Nasional candidate, Ramli Mohd Nor, was elected to the national parliament, where the government coalition holds 125 of the 222 seats.

It is likely to not be the last loss. Another by-election is to be held next month in the rural constituency of Rantau, an UMNO stronghold southeast of the capital, and it will almost certainly be won by a Barisan Nasional candidate, which despite the composition of the district is likely to be psychologically damaging.

The 93-year-old Mahathir Mohamad appears to be having a difficult time holding his fractious coalition together. He and Anwar Ibrahim, who served as opposition leader during years of oppression including two extensive jail terms – one engineered by Mahathir – are plainly not getting along despite public shows of amity. Anwar, who had pledged to take a two-year sabbatical from politics, shortly after the May election induced an allied Parti Keadilan Rakyat member of parliament to quit so that he could run for the seat, raising complaints that he was overly ambitious and impatient to take over.

Mahathir, having named Democratic Action Party Secretary General Lim Guan Eng finance minister, also named former Selangor chief minister Azmin Ali “minister of economic affairs,” setting up tensions over who is actually running the economics portfolio. Nor does Azmin, now more closely aligned with Mahathir, get along with Anwar despite being a member of Anwar’s own party. Azmin is also at odds with Rafizi Ramli, the PKR secretary-general. Anwar’s daughter, Nurul Izzah, gave up her leadership position in the party over the slowing speed of reform. Both she and Rafizi have largely been sidelined.

Unfilled pledges

The administration has run into heavy going over an unfulfilled pledge to reduce the cost of living as the economy slows. There have been policy missteps, with the government first announcing a RM1,150 (US$282.10) monthly minimum wage, then dropping the figure to RM1,000.

Pakatan Harapan had made the economy a major campaign issue and is paying for it. The World Bank projects slowing gross domestic product growth at 4.7 percent in 2019. Bank Islam Malaysia chief economist Mohd Afzanizam Abdul Rashid is warning that the economy could go into recession this year.

Finance Minister Lim has belatedly lowered the cap on fuel prices and the administration is also seeking to replace the current high-cost highway toll regime – both campaign promises. A campaign pledge to do away with an unpopular 6 percent goods and services tax has left the government scrambling for revenue. The consumer price index has started to rise again in the wake of a sharp fall after the GST was dropped.

Palm oil, a major export commodity, has fallen in price by 16 percent in the past year. Crude prices have been trending down as well as US production has risen to more than 12 million bbl/day, taking a bigger share of the market and leaving small producers scrambling.

“The government, despite all of its promises, has failed to put food on the table for the majority of Malaysians,” said a local political analyst. “Not that things were improving under Najib, but that’s precisely the reason the voters threw out the Barisan, believing that Pakatan Harapan could change their lives.”

The Race CardThen there is the always-present concern over race and religion and Malay fear of loss of privilege. Ethnic Malays, all of whom are Muslims, and other indigenous peoples comprise 61.7 percent of the country’s 31 million people, the Chinese 20.8 percent with the remainder Indians and noncitizens. UMNO through its existence – egged on by the rural fundamentalist Parti Islam se-Malaysia – made its embrace of Islam and Malay welfare central to its governance, with government jobs and university positions all reserved for ethnic Malays.

The Chinese-dominated Democratic Action Party is now a major leg of the four-party ruling coalition in a way that the largely subservient Malaysian Chinese Association never was, raising Malay suspicions that the Chinese will dominate politics the way they dominate economics.

Then there are the appointments that have traditionally gone to Malays. Lim Guan Eng, the secretary-general of the DAP, is now finance minister. Tommy Thomas, the attorney general, is an ethnic Indian. Richard Malanjum, 65, a Christian member of the Kadazandusun tribe in Sabah, has been made chief justice of the Federal Court, the country’s highest tribunal.

Najib and the Barisan have sought to exploit those appointments to show that Malays are being sidelined. There also has been a spate of incidents in which non-Malays have been accused of insulting Islam. There are also changing norms in government, with the armed forces, almost totally Malay, being opened to at least 10 percent non-Malays.

“The majority Malays feel that the new government hasn’t been sensitive to them,” said a source. “Like it or not, Muslims/Malays are the majority in the country and they guard their prerogatives jealously.”

Sham degrees

Then there is the issue of honesty in government. At least six Pakatan Harapan officials are under fire on allegations that they don’t possess real university degrees. Among them is Deputy Foreign Minister Marzuki Yahya, a member of Mahathir’s Parti Pribumi Bersatu, who claimed a Cambridge University degree. It turned out that the “degree” was from a diploma mill in the US called Cambridge international University.

Mahathir is bringing along his own baggage with defectors from UMNO, which has earned the ire of the coalition partners. They include, among others, Hamzah Zainudin, a onetime Anwar acolyte who became a Najib loyalist, as well as Shabudin Yahaya, a former Najib aide who jumped ship when his boss was no longer in power. They are members of an UMNO cadre who kept Najib in power allegedly through the force of outright bribes for years after he had been clearly identified by the US government as having allegedly stolen hundreds of millions of dollars from 1MDB.

But beyond that, reformers say, race-based policies remain in place. Mahathir’s Parti Pribumi Bersatu – the united indigenous people’s party – makes no effort to disguise the fact that non-Malays need not apply.

University Malaya Professor Terence Gomez, in a biting speech two weeks ago, charged that while Mahathir during the campaign, had promised to clean out rent-seeking, he was still allowing political appointments in government-linked companies. He called attention to Mahathir’s embrace of onetime finance minister Daim Zainuddin, who during his tenure was widely believed to have enriched himself. The prime minister’s “council of elders” also includes, decides Daim, Zeti Akhtar Aziz, the former central bank governor, Hassan Marican, the former CEO of the national oil company Petronas, and Robert Kuok, the head of the Kuok group conglomerate.

“Look at the political discourse,” Gomez was quoted in local media as saying. “Soon after they came to power, they said politicians will not be involved in business. But they reneged on that. They said no more race-based policies, but now we have the Bumiputera policy. It is a repeat of the discourse we have seen in the past.”

“I think the voters decided to give these guys a kick in the groin,” said the KL-based political analyst about Sunday’s election. “I don’t think this is the end for PH. It’s a wakeup call. But if they continue screwing up as they have done the last 10 months, then it’s a matter of time before its curtains up for them.”

by AsiaSentinel.com

Malaysia’s Sub Scandal Resurfaces

2019-03-05T14:58:00.001+08:00

What, until the US$4.5 billion 1MDB affair, had been Malaysia’s biggest scandal, has reappeared – the US$1.2 billion purchase of submarines under then-Defense Minister Najib Razak at the turn of the century, a lurid tangle of blackmail, bribery, murder, influence peddling, misuse of corporate assets and concealment.

Crusading French lawyer William Bourdon and his associate, Appoline Cagnat, are currently in Malaysia discussing the affair with Attorney General Tommy Thomas, according to local media. Bourdon and his associates compiled much of the evidence about the purchase at the turn of the decade for Suaram, the Malaysian good-government NGO, but he was kicked out of the country for attempting to follow up the case by Najib’s government.

The matter has remained in limbo since 2012 as the Najib government pulled out all the stops to keep it buried. Now, however, after the May 9, 2018 election that turned out the Barisan Nasional and brought the Pakatan Harapan coalition to power, the new government has shown considerable zeal in bringing long-buried scandals to the light.

The Scorpene submarines were purchased by Malaysia from subsidiaries of the state-owned weapons manufacturer DCN although there is no evidence that Malaysia ever needed submarines and in fact they had to be based in East Malaysia because the waters around Peninsular Malaysia were too shallow for them to operate efficiently.

According to evidence compiled by Asia Sentinel in a long series of articles that won the 2013 Award for Excellence in Investigative Reporting from the Society of Publishers in Asia – Asia’s version of the Pulitzer Prize – the transaction steered a €114.96 million (US$130.3 million at current exchange rates) kickback to the United Malays National Organization through a private company called Perimekar Sdn Bhd.

Perimekar was wholly owned by Abdul Razak Baginda and its principal shareholder was his wife, Mazlinda, a close friend of Najib’s wife Rosmah Mansor. He was then the head of a Malaysian think tank called Malaysian Strategic Research.

DCN officials hinted that Perimekar had come into existence only to facilitate the kickback transaction. Documents note that “Perimekar was a limited liability company with a capital of MR5 million (€1.4 million) of which 1 million is available. It was created in August 1999 … it has no record of sales during 2000. Its ownership is in the process of restructuring.”

Razak Baginda was a close friend of Najib Razak, who went on to be Malaysia’s prime minister and would be booted out of office in disgrace over the 1MDB scandal, which later supplanted the Scorpene scandal by far.

Another €36 million was directed to an obscure company in Hong Kong named Terasasi Hong Kong Ltd., whose principal officers were listed as Razak Baginda and his father and which appeared to be nothing more than a name on an accounting firm’s wall. According to an August, 2017 story, Razak Baginda was charged by French prosecutors with “active and passive complicity in corruption.”

According to the documents made available to Asia Sentinel, some of the misdeeds appear to have taken place with the knowledge of top French government officials including then-foreign Minister Alain Juppe and with the consent of former – and current — Malaysian Prime Minister Mahathir Mohamad.

Top Thales officials been named in news stories in Paris as having suborned bribes in the matter. Najib was also named as the recipient. However, given the involvement of such individuals as Juppe and others, it seems unlikely that the matter will be carried further in France despite a statement last July by French Ambassador to Malaysia Frédéric Laplanche that “Cooperation between France and Malaysia (on the investigation) is very good.”

As Asia Sentinel reported in 2012, the payment appears to have been in violation of the OECD Convention on Bribery, which France ratified on June 30, 2000. On Sep. 29, 2000, DCNI, a DCN subsidiary, “took corrective actions” after France joined the bribery convention. Contracts concluded after that date were to be routed to companies held by Jean-Marie Boivin, DCN’s former finance chief, headquartered in Luxembourg and Malta respectively.

Among the documents is one that shows Boivin paid to send Razak Baginda on a jaunt to Macau with his then-girlfriend, Altantuya Shaariibuu, a jet-setting Mongolian national who was later murdered by two of Najib’s bodyguards in gruesome fashion in October of 2006 and whose body was blown up with C4 explosives, possibly to destroy the fetus of the child she said she was carrying when she was killed.

In a handwritten note found in her hotel room after she had been murdered, Altantuya said she was blackmailing Razak Baginda for US$50,000, although she didn’t say why. However, according to the documents, she had considerable knowledge of the purchase of the submarines from her relationship with the defense analyst. And, although Najib has repeatedly denied it and sworn on the Quran that he had never met her, there is evidence that he had not only met her but had an affair with her before Razak Baginda.

Two of Najib’s bodyguards, Azilah Hadri and Sirul Azhar Umar, the latter of whom left the country when he was temporarily freed by an appeals court and remains in Australia, were tried and convicted of her murder in a long-running trial that appeared to be carefully orchestrated to make sure nobody above the two bodyguards was ever named despite the fact that one of them, in a sworn statement, said they were to be paid MYR50,000 to carry out the killing. Musa Safri, Najib’s aide de camp, was identified as the individual who designated Azilah and Sirul to pick up Altantuya. But there is no evidence he was ever questioned by the police about his involvement.

In June 2018, the then-newly appointed Inspector-General of Police Mohamad Fuzi Harun told reporters that an investigation into Altantuya’s death would be reopened, based on a new police report submitted by Altantuya’s father. So far there has been little public indication of progress

The story, which was considerably bigger than just the Scorpenes, in essence began when Najib was appointed defense minister in Mahathir’s cabinet in 1991 and embarked on a massive buildup of the country’s military, arranging for the purchase of tanks, Sukhoi jets, coastal patrol boats – and submarines, all of which appear to have been mired in corruption and kickbacks that enriched Najib and UMNO. French, German, Swedish, Russian and Dutch manufacturers in turn went looking for the most effective cronies of the Malaysian leadership to help them out.

“The major defense contracts in Malaysia as in other countries require substantial money transfers to individuals and/or [political] organizations,” according to documents taken from DCN’s files by French investigators. “In Malaysia, other than individuals, the ruling party [UMNO] is the largest beneficiary. Consultants [agents or companies] are often used as a political network to facilitate such transfers and receive commissions for their principals.”

by AsiaSentinel.com

In Malaysia, China Risks a Neocolonialist Tint

2018-09-06T17:09:00.003+08:00

At the end of his Aug. 17-21 China visit, Malaysian Prime Minister Mahathir Mohamad announced that US$22 billion of Chinese-backed infrastructure projects in his country would be temporarily or permanently cancelled. The world will be watching China’s subsequent actions to see whether they will take on a neocolonialist tint.

The Belt and Road Initiative is Chinese President Xi Jinping’s grandiose plan to connect China with South, Central and Southeast Asia, the Middle East, Russia, Africa, Latin America and Europe through infrastructure projects including roads, ports, airports and railways.

The broad geographic reach of the BRI, as it has come to be known, has raised questions whether China intends to use this project for imperial expansion. As Asia Sentinel has previously reported, Sri Lanka, Cambodia and Pakistan have found themselves so deep in debt to the Chinese that there are fears political domination will follow. The risk is that Malaysia is on the same course.

The postponed Malaysian projects include an East Coast Rail Link and two energy pipelines. Mahathir said told a Beijing press conference on Aug. 21 that the three would be “deferred until such time we can afford, and maybe we can reduce the cost also if we do it differently. It’s all about borrowing too much money which we can’t afford, can’t repay, and also we don’t need those projects for Malaysia at this moment.”

The vast majority of the funding for three — US$20 billion for the rail link and US$2 billion for the pipelines – has been supplied by the Export-Import Bank of China (Exim Bank), a state-owned policy lender. Chinese state-owned firms are the main contractors of these three projects, raising criticism that Malaysians are being denied jobs, as they have been in several countries where the belt and the road have reached.

At a press conference of China’s Ministry of Foreign Affairs on the same day, when asked about the cancellation of these projects, a Chinese foreign ministry spokesman said, “Of course, cooperation between any two countries may encounter some problems, and different views may emerge at different times. These problems should be properly resolved through friendly consultations without losing sight of the friendship enjoyed by the two countries and the long-term development of bilateral ties, which, I can assure you, is also an important consensus reached during Prime Minister Mahathir’s visit to China.”

Mahathir was tactful enough not to criticize China for these stalled projects, but to lay the blame on his predecessor Najib Razak, who had approved them projects while he was Malaysia’s premier. After being ousted in a shock defeat in the Malaysian elections on May 9, Najib is facing corruption charges over the hugely mismanaged and corrupt 1Malaysia Development Bhd, backed by the Ministry of Finance.

However, Mahathir warned China against being a neocolonialist. At a press conference in Beijing with Chinese Prime Minister Li Keqiang on Aug. 20, when asked by Li whether he supported free trade, Mahathir replied, “I agree free trade is the way to go, but, of course, free trade should also be fair trade. We do not want a situation where there is a new version of colonialism happening because poor countries are unable to compete with rich countries, therefore we need fair trade.”

Ironically, Chinese state propaganda expresses similar opposition to colonialism, in its messages conveyed in two Beijing museums, the National Museum and the China Railway Museum. As stated part of the reason for the Republican Revolution of 1911 was the Chinese people’s opposition to foreign domination of China’s railroads. By 1911, foreign powers, including Russia, Japan, Germany, Britain and France, controlled 93 percent of China’s railways, a display in the National Museum pointed out. The Qing government had to pay off huge debts to foreign banks which had bankrolled these railroads.

Around the turn of the 20th century, the Qing government nationalized railways owned by private Chinese businesses, then sold them to foreign interests. This sparked a rebellion, causing the Chinese imperial government to transfer troops from the Chinese city of Wuhan to quell a rail revolt in Sichuan province. As a result, the Wuhan garrison was undermanned, which enabled an uprising in Wuhan to succeed in October 1911, which in turn toppled the Qing dynasty.

Going forward, the Chinese government must avoid provoking resistance to Chinese-funded infrastructure projects in BRI countries whose governments and peoples fear dependency, just as China was reduced to a semi-colonial state by foreign dominance of its infrastructure. Currently, BRI projects are mostly financed by Chinese state-owned banks, just as foreign banks funded most of the railway in China during the Qing dynasty.

At the Aug. 20 press conference, Mahathir expressed his wish that Beijing will be sympathetic to Malaysia’s heavy debt and help resolve its fiscal problems. At the press conference on August 21, the 93-year old leader said, “I believe China itself does not want to see Malaysia become a bankrupt country.”

The Chinese government has a vested interest in ensuring Malaysia’s economy is not sunk by crushing debt if Beijing and Chinese state-owned firms wish to avoid a repeat of the derailment of a US$7.5 billion rail project in Venezuela.

On Apr. 11, 2013, the South China Morning Post reported that this 475 km railway, built by the state-owned China Railway Group, was delayed because the Venezuelan government was unable to pay the entire US$7.5 billion contract. The Venezuelan government owed China Railway US$400 million to US$500 million, Li Changjin, the chairman of China Railway, was quoted as saying. “The reason is the Venezuelan government has no money.”

Onsite media reports in 2016 showed China Railway’s facilities in its Venezuela project were apparently abandoned.

Since 2013, Venezuela’s economy has been in a dire state, with high inflation and difficulty repaying its debts. If Beijing wants the BRI to succeed in countries like Venezuela and Malaysia, it must ensure that costly infrastructure projects do not harm these countries’ economies. Otherwise, trade and investment between them and China will suffer.

During their Aug. 20 meeting, Xi told Mahathir their nations should have pragmatic cooperation, seeking innovative new models of cooperation. Xi must find viable models of cooperation over BRI if he wishes to avoid blowback against Chinese projects in Malaysia. Only then can Xi demonstrate that Belt and Road is not a Trojan Horse for Chinese imperialism, and convince nations to accept the vast infrastructure projects.

Toh Han Shih is a Singaporean writer in Hong Kong

This Chart Shows How Najib Drove The Country To RM1 Trillion In Debt

2018-06-26T03:21:00.001+08:00

We wish to say “I told you so” again. But to hear it from the horse mouth – Mahathir – is equally satisfying. Yes, Malaysia has already breached the RM1 trillion marks, for the wrong reason. Speaking for the first time to staff of the prime minister’s office, Mahathir revealed the troubling debts accumulated, thanks to 9 years of corrupt Najib administration.

When Mahathir resigned in 2003 after ruling for 22 years (1981 to 2003), the debt was only about RM190 billion. After he passed the baton to Abdullah Badawi, the sleeping head doubled the nation’s debt to about RM380 billion. But after Najib Razak took over the country, he tripled it to RM1 trillion in debts. In short, Najib doubled the debt in 4 years what Badawi would have done in 8 years.

During the 14th election campaign, Najib Razak conveniently used the national debt as a weapon to attack his opposition. He warned the people that a victory for the opponent coalition Pakatan Harapan’s would cause debt to skyrocket. He claimed that the opposition’s promise to abolish GST (goods and services tax) and road toll collection would increase national debt to RM1.1 trillion.

Najib, of course, didn’t want the people to know that his regime had already clocked the RM1 trillion figures. By first quarter of 2017, the country was already burdened with RM916.12 billion. Since Najib came to office in 2009, Malaysia’s debt has grown at an average of 10% a year. Hence, if you look at the government gross debt chart, the first number of debt figure will jump – every year (get the picture?).

The worst part is this – despite abolishing subsidies for petrol, diesel, sugar, cooking oil, electricity tariffs, water and whatnot, Najib regime somehow still couldn’t find the money to run the government efficiently. The son of Razak was practically stealing rice from a beggar’s bowl when he introduced 6% GST (goods and services tax) on 1 April 2015.

Do you need more proof that the despicable and corrupt Najib had been stealing from the people to live lavishly? The clearest proof of excessive spending, and even corruption for that matter, can be found in this chart – the yearly allocation for the Prime Minister Office (PMO). In his first year as prime minister, the budget for the PMO breached RM10 billion for the first time in the history.

The yearly budget for the PMO continued to climb and reached the climax when it hit the RM20 billion in 2016. Now we know why a small nation with 32-million populations need to pay RM20 billion for the operation of Najib’s office. After the stunning defeat of Barisan Nasional coalition government, it is discovered that a whopping 17,000 “political appointees” were hired by the previous government.

Prime Minister Mahathir Mohamad, shocked, said the contracts for the highly paid 17,000 “political appointees” will be axed. This will reduce the expenditure. Assuming each of them was paid a conservative RM5,000 every month, the annual expenses would hit RM1 billion already. When Mahathir resigned in 2003, the PMO was allocated merely RM3.5 billion.

However, paying top dollar for 17,000 “political appointees” to boost Najib’s image wasn’t the only wastage policy adopted by the former prime minister. His wife, Rosmah Mansor, was the biggest beneficiary from the massive yearly budget to the PMO. Auntie Rosie’s pet project – Permata Programme – was allocated RM100 million and RM111 million in 2010 and 2011 Budget respectively.

When Najib presented the 2013 Budget, the so-called pre-school education programme was allocated a whopping RM1.2 billion. The amazing part about the “Permata” programme is that nobody knows how the money was being used. In fact, the programme has been such a cash-cow to Rosmah that even after his husband has lost, she insisted the new government to retain the project.

Najib’s previous government operated without transparency. As the finance minister himself, he spent excessively and lavishly without thinking about the source of income. His answer to lack of funding was to borrow money. One of Najib’s tricks in hiding the RM1 trillion debts accumulated over the years – exclude the government-guaranteed debt.

Based on statistic from Bank Negara Malaysia (Central Bank), the debt guaranteed by the Federal Government is at eye-popping RM238 billion. And thanks to the declassification of 1MDB audit report after Najib was defeated in the 14th general election, it has been revealed that the state investment fund was drowning in debt. Now, where is that Arul “Anaconda” Kanda guy when you need him the most?

According to the audit report – assuming there are no new loans after October 2015 – it was estimated that RM42.26 billion was needed to pay the principal and interest that will be due between November 2015 and May 2039. 1MDB also needs a minimum of RM1.52 billion every year for 10 years from November 2015 to May 2024 just to pay back its loans.

In short, the declassified report said the scandal-tainted firm had debt commitments totalling RM74.6 billion, inclusive of interest and borrowing costs, from November 2015 to 2039. That’s about RM3 billion of debt commitment every year – for the next 25 years. This is what going to make the country in serious trouble, if billions of dollars plundered by Najib is not recovered.

Now, do you understand why newly sworn-in finance minister Lim Guan Eng is roped in to clean the shit left by the former Thief-in-Chief Najib Razak? Based on his track record in managing Penang finances, only Mr. Lim has the ability to fix the problem. Crooked Najib was essentially driving the country to the brink of bankruptcy, had he not stopped in time.

Copyright 2006-2018. FinanceTwitter. All rights reserved

Sending A Message To China – Here’s Why Mahathir’s Visit To Japan Is A Brilliant Strategy

2018-06-26T03:05:00.001+08:00

Had Najib Razak won the 14th general election on May 9th, his first foreign visit will most likely be China. He would go there and brag how his Barisan Nasional coalition government had used President Xi Jinping photo on campaign billboard. He would offer Xi to restart the stalled “Bandar Malaysia” project in exchange for kickbacks, and sell more national treasure to China.

Yes, as revealed by the new government, the Najib regime had “secretly” used taxpayers’ money to bail out 1MDB since April 2017 to the tune of RM6.98 billion, and counting. And he would certainly continue to sell more strategic assets to China. The revelation that Malaysia has breached the RM1 trillion in debts confirms the country was on the brink of bankruptcy.

Judging by how the defiant Najib continues to twist and deny about the RM1 trillion debt and 1MDB bailout, it’s safe to presume the mad son of Razak would most likely continue to borrow and hide the debts using creative accounting – had he won on May 9th. Unfortunately to the ex-prime minister, his lucky number didn’t work and his wife’s black magic had failed spectacularly.

While the new government is trying to fix the financial havoc left by the previous government, where the ex-PM Najib helped himself to the national coffers as if they were his personal piggie bank, there’s one problem that has gotten Mahathir cracking his 93-year-old head – China. Between the corrupted Najib and the no-nonsense Mahathir, the choice isn’t hard for Beijing.

As China aggressively grows its influence in its backyard and worldwide, a greedy and corrupt scumbag like Najib is what the Middle Kingdom desires. Najib can be controlled and become China’s puppet. But with Mahathir, a man who doesn’t fancy women, let alone hungry for money, Beijing will be having problem transforming Malaysia as its obedient puppet against the United States in the region.

However, at the same time, Mahathir – world’s oldest prime minister – cannot afford to offend China. What the world’s second largest economic powerhouse needs to do to give a hard time to the newly installed prime minister is to stop importing palm oil from Malaysia. When the palm oil prices plunge, the Felda settlers, mostly ethnic-Malay, would be sharpening their knives for Mahathir’s head.

That was why Malaysia’s richest man – Robert Kuok – was invited to be one of five members of a special advisory council, which Mahathir called the “council of the elders”. Kuok was chosen because of his special relationship with Beijing, including President Xi Jinping. It is hoped that Kuok could facilitate projects re-negotiation between Kuala Lumpur-Beijing.

Still, like other countries being trapped in the so-called China’s OBOR (One Belt One Road) flagship project, Malaysia owes huge debts thanks to Najib Razak. Based on data compiled by “This Week in Asia” from 11 high-profiles, controversial projects signed during the Najib administration was in the region of US$134 billion worth of Chinese investment.

Those projects, involving 13 Chinese companies and financial institutions, range from real estate development to infrastructure construction and large-scale industrial plants. Most of them were signed in the last 5 years and remain under construction. One of them includes the ongoing East Coast Railway Link (ECRL), a wasteful project where the cost has been inflated to RM55 billion.

About 85% of the ECRL railway project is financed by Chinese soft loans from China Exim Bank. Mahathir has clarified that while he’s not anti-China, his administration is indeed against the huge borrowing. Sure, Mahathir can, with helps from Robert Kuok, renegotiate the terms of projects such as ECRL. But it is unlikely to be terminated. China won’t allow it to happen, for obvious reason.

Costing RM55 billion at its initial first phase, the ECRL is expected to cost taxpayers RM92 billion by the time it paid off its due interest. The second phase would cost another RM11 billion. The contract for the ECRL was obviously “strange” – the terms state that the contractor must be from China while the borrowings of RM55 billion to fund the project must also come from the country.

Enter Japan – Mahathir Mohamad’s first foreign destination. Scheduled to take place on June 11-12, the Malaysian 7th prime minister will attend the annual Nikkei Conference and is expected to rub shoulders with Japan Prime Minister Shinzo Abe, whom called Mahathir on May 24 to specifically congratulate him on the formation of the new government.

The relationship between Mahathir and Japan went as far back as 1981 when the Malaysian premier promoted “Look East” policy. The policy was mooted to encourage Malaysian students in Japan to bring back knowledge and acquire Japanese cultural virtues such as work ethics, discipline and punctuality – in addition for Japan’s assistance in Malaysia’s development.

This time, Mahathir, making a comeback after ruled for 22 years (1981 to 2003), is expected to request for assistance not only to reduce the huge borrowings but also to seek investments to boost Malaysia’s economy and to instil investors’ confidence. And Japan will gladly help in whatever way possible as the Japanese is fast losing its shine among Southeast Asian countries.

Tokyo has suffered a series of foreign policy setbacks in the region as an increasing number of ASEAN (Association of Southeast Asian Nations) members began gravitating toward China’s enormous and fast growing economy. Besides former Singapore Prime Minister Lee Kuan Yew, Mahathir is the only leader who had refused to “kow-tow” to powerful nation such as China.

More importantly, Mahathir’s revisit of his “Look East” policy is a strategic move to send a message to China – that Malaysia has other wealthy friends such as Japan. And guess which country that China hates the most in the region. Yes, it’s none other than the Japanese. Most of ASEAN countries have been charmed by China’s deep pocket.

Despite his advanced age, Mahathir’s aura cannot and should not be underestimated. After all, not a single foreign country had predicted the stunning victory of the old man. Therefore, Mahathir’s visit and comments in Japan will be closely watched and scrutinized. He could share his critical view about China’s naval expansion in the South China Sea.

Mahathir could probably use the platform in Japan to tell China that unlike the disgraced Najib Razak, he is not ready to bend over in exchange for kickbacks. That Mahathir cannot be bribed and refused to be controlled will make China more than willing to re-negotiate the present lopsided projects not favourable to the Malaysian people.

In the same breath, PM Mahathir might drop the Singapore-Kuala Lumpur high-speed rail (HSR) project, although the 350-km rail deal between Singapore and Malaysia had been inked in 2016 under the previous PM Najib Razak. Already, the new Malaysian government is studying how much they need to pay in the event the RM100 billion “wasteful and unnecessary” HSR project is scrapped entirely.

However, one cannot underestimate whether this is one of Mahathir’s negotiation tactics to force Singapore and China to submit to his demands. Mahathir may threaten to drag Singapore to international court to arbitrate if the terms of the HSR project are too heavily weighted in one party’s favour, which in this case is Singapore, of course.

Despite scoring high marks on Corruption Perceptions Index, Singapore isn’t as clean as many think. It wasn’t until the F.B.I opened investigation papers and Switzerland dropped the bombshell that a criminal investigation into 1MDB had revealed that about US$4 billion appeared to have been misappropriated from Malaysian state companies, that Singapore was forced to act in early 2016.

Therefore, Mahathir could use HSR project to paint Singapore as a crook working together with Najib. One way or another, Singapore had aided Najib steal and stash billions in the island. That was why an hour after Singapore Prime Minister Lee Hsien Loong left Mahathir’s office, embarrassingly, it was announced that all bilateral deals signed by ex-PM Najib Razak has to be re-looked at.

Even if Mahathir cannot cancel the HSR project, bringing Japan to the table could send shivers down China’s spine. With over US$134 billion worth of investment, China will do anything to secure their investment and influence in the country. And the Chinese definitely do not want Malaysia to side with Singapore, let alone Japan, in any dispute with them.

Beijing considers Singapore as a proxy of the U.S., hence both countries doesn’t see eye to eye. Likewise, Singapore doesn’t want to see China hardware in their backyard. It becomes merrier when the Japanese are thrown into the party, either as new banker or new player. Mahathir will definitely squeeze something juicy from his visit to Japan.

Had Najib Razak won the 14th general election on May 9th, his first foreign visit will most likely be China. He would go there and brag how his Barisan Nasional coalition government had used President Xi Jinping photo on campaign billboard. He would offer Xi to restart the stalled “Bandar Malaysia” project in exchange for kickbacks, and sell more national treasure to China.

Yes, as revealed by the new government, the Najib regime had “secretly” used taxpayers’ money to bail out 1MDB since April 2017 to the tune of RM6.98 billion, and counting. And he would certainly continue to sell more strategic assets to China. The revelation that Malaysia has breached the RM1 trillion in debts confirms the country was on the brink of bankruptcy.

Judging by how the defiant Najib continues to twist and deny about the RM1 trillion debt and 1MDB bailout, it’s safe to presume the mad son of Razak would most likely continue to borrow and hide the debts using creative accounting – had he won on May 9th. Unfortunately to the ex-prime minister, his lucky number didn’t work and his wife’s black magic had failed spectacularly.

While the new government is trying to fix the financial havoc left by the previous government, where the ex-PM Najib helped himself to the national coffers as if they were his personal piggie bank, there’s one problem that has gotten Mahathir cracking his 93-year-old head – China. Between the corrupted Najib and the no-nonsense Mahathir, the choice isn’t hard for Beijing.

As China aggressively grows its influence in its backyard and worldwide, a greedy and corrupt scumbag like Najib is what the Middle Kingdom desires. Najib can be controlled and become China’s puppet. But with Mahathir, a man who doesn’t fancy women, let alone hungry for money, Beijing will be having problem transforming Malaysia as its obedient puppet against the United States in the region.

However, at the same time, Mahathir – world’s oldest prime minister – cannot afford to offend China. What the world’s second largest economic powerhouse needs to do to give a hard time to the newly installed prime minister is to stop importing palm oil from Malaysia. When the palm oil prices plunge, the Felda settlers, mostly ethnic-Malay, would be sharpening their knives for Mahathir’s head.

That was why Malaysia’s richest man – Robert Kuok – was invited to be one of five members of a special advisory council, which Mahathir called the “council of the elders”. Kuok was chosen because of his special relationship with Beijing, including President Xi Jinping. It is hoped that Kuok could facilitate projects re-negotiation between Kuala Lumpur-Beijing.

Still, like other countries being trapped in the so-called China’s OBOR (One Belt One Road) flagship project, Malaysia owes huge debts thanks to Najib Razak. Based on data compiled by “This Week in Asia” from 11 high-profiles, controversial projects signed during the Najib administration was in the region of US$134 billion worth of Chinese investment.

Those projects, involving 13 Chinese companies and financial institutions, range from real estate development to infrastructure construction and large-scale industrial plants. Most of them were signed in the last 5 years and remain under construction. One of them includes the ongoing East Coast Railway Link (ECRL), a wasteful project where the cost has been inflated to RM55 billion.

About 85% of the ECRL railway project is financed by Chinese soft loans from China Exim Bank. Mahathir has clarified that while he’s not anti-China, his administration is indeed against the huge borrowing. Sure, Mahathir can, with helps from Robert Kuok, renegotiate the terms of projects such as ECRL. But it is unlikely to be terminated. China won’t allow it to happen, for obvious reason.

Costing RM55 billion at its initial first phase, the ECRL is expected to cost taxpayers RM92 billion by the time it paid off its due interest. The second phase would cost another RM11 billion. The contract for the ECRL was obviously “strange” – the terms state that the contractor must be from China while the borrowings of RM55 billion to fund the project must also come from the country.

Enter Japan – Mahathir Mohamad’s first foreign destination. Scheduled to take place on June 11-12, the Malaysian 7th prime minister will attend the annual Nikkei Conference and is expected to rub shoulders with Japan Prime Minister Shinzo Abe, whom called Mahathir on May 24 to specifically congratulate him on the formation of the new government.

The relationship between Mahathir and Japan went as far back as 1981 when the Malaysian premier promoted “Look East” policy. The policy was mooted to encourage Malaysian students in Japan to bring back knowledge and acquire Japanese cultural virtues such as work ethics, discipline and punctuality – in addition for Japan’s assistance in Malaysia’s development.

This time, Mahathir, making a comeback after ruled for 22 years (1981 to 2003), is expected to request for assistance not only to reduce the huge borrowings but also to seek investments to boost Malaysia’s economy and to instil investors’ confidence. And Japan will gladly help in whatever way possible as the Japanese is fast losing its shine among Southeast Asian countries.

Tokyo has suffered a series of foreign policy setbacks in the region as an increasing number of ASEAN (Association of Southeast Asian Nations) members began gravitating toward China’s enormous and fast growing economy. Besides former Singapore Prime Minister Lee Kuan Yew, Mahathir is the only leader who had refused to “kow-tow” to powerful nation such as China.

More importantly, Mahathir’s revisit of his “Look East” policy is a strategic move to send a message to China – that Malaysia has other wealthy friends such as Japan. And guess which country that China hates the most in the region. Yes, it’s none other than the Japanese. Most of ASEAN countries have been charmed by China’s deep pocket.

Despite his advanced age, Mahathir’s aura cannot and should not be underestimated. After all, not a single foreign country had predicted the stunning victory of the old man. Therefore, Mahathir’s visit and comments in Japan will be closely watched and scrutinized. He could share his critical view about China’s naval expansion in the South China Sea.

Mahathir could probably use the platform in Japan to tell China that unlike the disgraced Najib Razak, he is not ready to bend over in exchange for kickbacks. That Mahathir cannot be bribed and refused to be controlled will make China more than willing to re-negotiate the present lopsided projects not favourable to the Malaysian people.

In the same breath, PM Mahathir might drop the Singapore-Kuala Lumpur high-speed rail (HSR) project, although the 350-km rail deal between Singapore and Malaysia had been inked in 2016 under the previous PM Najib Razak. Already, the new Malaysian government is studying how much they need to pay in the event the RM100 billion “wasteful and unnecessary” HSR project is scrapped entirely.

However, one cannot underestimate whether this is one of Mahathir’s negotiation tactics to force Singapore and China to submit to his demands. Mahathir may threaten to drag Singapore to international court to arbitrate if the terms of the HSR project are too heavily weighted in one party’s favour, which in this case is Singapore, of course.

Despite scoring high marks on Corruption Perceptions Index, Singapore isn’t as clean as many think. It wasn’t until the F.B.I opened investigation papers and Switzerland dropped the bombshell that a criminal investigation into 1MDB had revealed that about US$4 billion appeared to have been misappropriated from Malaysian state companies, that Singapore was forced to act in early 2016.

Therefore, Mahathir could use HSR project to paint Singapore as a crook working together with Najib. One way or another, Singapore had aided Najib steal and stash billions in the island. That was why an hour after Singapore Prime Minister Lee Hsien Loong left Mahathir’s office, embarrassingly, it was announced that all bilateral deals signed by ex-PM Najib Razak has to be re-looked at.

Even if Mahathir cannot cancel the HSR project, bringing Japan to the table could send shivers down China’s spine. With over US$134 billion worth of investment, China will do anything to secure their investment and influence in the country. And the Chinese definitely do not want Malaysia to side with Singapore, let alone Japan, in any dispute with them.

Beijing considers Singapore as a proxy of the U.S., hence both countries doesn’t see eye to eye. Likewise, Singapore doesn’t want to see China hardware in their backyard. It becomes merrier when the Japanese are thrown into the party, either as new banker or new player. Mahathir will definitely squeeze something juicy from his visit to Japan.

Copyright 2006-2018. FinanceTwitter. All rights reserved

China Mouthpiece Threatens Malaysia? Relax, They’re Just Testing Water To See If Mahathir Can Be Bullied...

2018-06-26T02:52:00.001+08:00

Global Times, often considered as the mouthpiece of the Chinese Communist Party, has unleashed its first warning shot at the new government of Malaysia. After 93-year-old Prime Minister Mahathir Mohamad ditched a planned HSR (high-speed rail) between Kuala Lumpur and Singapore, the Chinese media seemed very upset.

The mouthpiece cried, whined and bitched that all the efforts have gone down the drain after Mahathir denied companies from China, Japan, South Korea, Europe, Singapore and Malaysia the opportunity to bid for the RM110 billion project. Global Times also questioned if this is the way the new government of Mahathir keeps its promises over contract.

What type of grass has Global Times been smoking? Perhaps the media can’t differentiate between a communist and a democracy country, for obvious reason. Mahathir is the new prime minister of a new Pakatan Harapan coalition government, NOT the old corrupted Barisan Nasional coalition government. That old regime led by Najib Razak had collapsed.

Therefore, it’s quite an idiotic statement to say Mahathir government has broken his promise. How could Mahathir promise to keep the HSR project when abolishing the high-speed rail has been Pakatan Harapan’s manifesto from the beginning? And how does China know that they will definitely win the project, unless of course, Global Times knew that Beijing had already bribed Najib.

The Chinese media insisted that Malaysia must pay compensation if the new government wants to review the HSR or ECRL projects. It also write – “The Chinese government will also take concrete measures to safeguard the interests and rights of Chinese enterprises.” Did Global Times just threatened to send its mighty military forces to invade Malaysia if the country refuses to pay?

Hmm, perhaps Mahathir should pretend to be panicked and invite the U.S. to setup a military base in Sabah so that U.S. Navy destroyers and aircraft carrier could sail near to China’s man-made islands in Spratly Islands whenever those American sailors have nothing better to do. The Global Times reporter might be clueless that Sabah and Sarawak are part of Malaysia.

The best part of the article, written by Hu Weijia, was when it said – “Chinese-funded projects are not a gift that Kuala Lumpur can refuse without compensation.” Seriously? A gift? Well, nobody in their right mind would refuse a 350-km HSR (RM110 billion) and a 688-km ECRL (RM55 billion) project if they were indeed free gifts from China. Unfortunately, they are not.

The ECRL (East Coast Rail Link) was inflated from an initial RM30 billion to RM55 billion. And that’s just the first phase. The second phase would cost another RM11 billion. By the time the whole project is fully paid off, the white elephant would cost an eye-popping RM92 billion. And it was Beijing who was working hand-in-glove with crook Najib to plunder the country’s national coffers.

The contract for the ECRL was obviously “strange” – the terms state that the contractor must be from China while the borrowings of RM55 billion to fund the project must also come from the country. In fact, the loan for the project is kept abroad, suggesting that the inflated cost was used to pay 1MDB debts and to pay kickbacks to Najib Razak. That is one heck of a hanky-panky deal.

Heck, the contract also included unusual practice such as that payments to China Communications Construction Co Ltd (CCCC) from Export-Import Bank of China are based on a predetermined timetable, and not on the basis of work done. This means even if the Chinese CCCC didn’t do any work at all, they would be paid because the schedule payment says so.

In essence, the RM55 billion loans from China never reached Malaysia banking system. The Chinese bank will pay a Chinese contractor in China. And Malaysia taxpayers would be slapped with the bill for the mega-project. So, which part of the terms looks or smells like a gift to Global Times? Perhaps Hu Xijin, the editor-in-chief of Global Times, should relook at the half-past-six article.

Amusingly, the article also said – “It’s very easy for Chinese companies to shift their focus to other countries, but Malaysia’s economy is the one that will suffer big losses.” Sure, go ahead and take your money elsewhere. Why do you think Mahathir’s first foreign trip is to Japan, and not China? But hey, relax. Global Times doesn’t necessary represent President Xi Jinping’s final policy.

The mouthpiece is just one of many poodles of Beijing. The media was unleashed specifically to test water – to threaten and scare the shit out of PM Mahathir and see if the old man would chicken out. The same media had bashed Mahathir before he became the world’s oldest prime minister, when he criticised the RM170 billion Forest City as a threat to national sovereignty.

Get real, China will not invade Malaysia over cancellation of HSR or renegotiation of ECRL project. Chinese Ambassador to Malaysia, Bai Tian, has announced that 3 Chinese enterprises have invested RM1.2 billion in Malaysia in the first week following the formation of the new government. They would not burn the bridge after 44 years of mutually-benefiting cooperation between both nations.

The ECRL project was not really about business decision. It was about geo-political needs for China. It just happen that the scumbag Najib was so corrupted that he was willing to sell anything to China, hence Beijing played along. The success of ECRL is of paramount important to China largely because about 80% of the world’s maritime trade between east and west passes through the Straits of Malacca.

The project will connect ports on the east and west coasts of Peninsular Malaysia and will essentially alter the present regional trade routes, which ply between the busy Straits of Malacca and the South China Sea via Singapore. However, Singapore, sitting in a strategic position along the east-west route, is no friend of China but a proxy of rival United States.

The ECRL acts as a land bridge between Port Klang and Kuantan Port, and will enable China-bound goods from Port Klang, inland and the north to be moved to Kuantan Port, without having to go south to Singapore. In fact, the state is reclaiming land along the Straits of Malacca to build a port to offer oil storage, repair and refuelling services for huge tankers.

More importantly, there’s one secret reason why China desperately needs ECRL project to be successful. Thanks to Americans’ consistent intimidation in the South China Sea, China realized that a simple blockade of the Strait of Malacca by the U.S. and its alliance will cut China off from Middle East oil supplies and from its “Second Continent” Africa.

Just like China’s first permanent overseas military in Djibouti, China needs Port Klang and Kuantan Port to serve as its logistics centre for whatever purpose. Therefore, it’s bullshit when Global Times said China is more than happy to shift its focus to other countries. China needs ECRL as much as Mahathir needs to re-negotiate the “very damaging” terms signed by Najib Razak.

Mahathir knew how important ECRL project is to China from the geo-political perspective. He also knew government to government contracts usually had a mechanism to resolve dispute such as the current one. Besides, Mahathir can always refer the matter to international arbitration because such contract will usually have a clause to allow one party to do so.

The question is this – is China willing to re-negotiate terms of contract or risk having the project terminated early with Malaysia willing to pay the compensation? China has to decide if money is more important than its OBOR (One Belt One Road) initiative in the region. Mahathir can always get soft-loan from Japan to help lift the burden of debts.

Copyright 2006-2018. FinanceTwitter. All rights reserved

Now Do You Understand Why Daim Said It’s Foolish For Anwar To Be Made PM Immediately?

2018-06-25T19:59:00.001+08:00

On May 15, just five days after the inauguration of Mahathir Mohamad as the world’s oldest prime minister, Daim Zainuddin fired a warning shot. He said it would be foolish for Anwar Ibrahim to be made prime minister immediately upon returning to parliament. The warning shot was aimed at Anwar, and not his boys, as Daim would like the public to believe.

Coming from the head of Mahathir’s influential “Council of Elders”, such statement was actually very disturbing. It simply means Anwar was absolutely impatient to be crowned as the next prime minister, so much so that he was prepared to break the agreement among the four component parties making up the Pakatan Harapan coalition.

Interestingly, Anwar revealed how the ousted former premier Najib Razak was “totally shattered” the night he lost the general election and called his jailed rival – Anwar Ibrahim – twice for advice on what he should do. Anwar claimed – “When he called on the night of the election, I advised him as a friend to concede and move on.”

Was Anwar the secret lover of Najib? Was Anwar the long lost biological brother of Najib? If not, does it make any sense that of all the people in the world, ex-PM Najib had chosen to call his enemy seeking advice or looking for a shoulder to cry on? You don’t need a rocket scientist to tell that Mr. Najib had called Mr. Anwar and offered him a deal to jump ship.

Mr. Anwar actually didn’t have to divulge the secret calls he received from the despicable Najib Razak. Nobody would know about the calls anyway. Since the revelation, Najib had neither acknowledged nor denied making such calls. So, those calls on May 9th must be genuine. But why did Anwar reveal the calls? Was he trying to brag about it?

There are two possibilities. First, PM-in-waiting Anwar Ibrahim wanted to send a message to Mahathir Mohamad that his PKR (People’s Justice Party) could jump ship and form the federal government with Najib’s Barisan Nasional (BN) coalition. Second, Anwar was worried that the secret calls could eventually leak hence it would be smarter to disclose it beforehand.

So, why didn’t BN (then 79 seats) and PKR (48 seats) joined forces on the night of May 9? Together, they have 128 parliamentary seats, more than enough to form the federal government. The problem was Najib could not allow Anwar to become the 7th prime minister for obvious reason. But if Anwar cannot be crowned, why should he join BN to begin with?

Clearly, Mahathir and Daim knew about the possibility that Anwar Ibrahim may throw tantrum if his desire to become prime minister soonest possible wasn’t entertained. That was why Mr. Daim warned that it would be foolish for Anwar Ibrahim to be made prime minister immediately. He told Mr. Anwar not to break the promise about the mid-term transition.

Daim also reportedly lectured Anwar – “You all tried how many elections and failed. Whether you like it or not, Mahathir succeeded.” However, armed with 49 parliamentary seats, Anwar has become arrogant and couldn’t accept that PM Mahathir, despite his party winning only 13 seats, continues to call the shot. Anwar told his boys to make “noises” about PKR being the biggest winner.

When PKR was at its weakest point, they cried, whined and bitched about equal partnership. So, they were given the Selangor state.
Now that they have won the most number of seats, they demanded to be given the most ministries. Having ruled the country for 22 years, Mahathir, however, has decisively made the bold decision to reward all the 3 component parties with important ministries – except PKR.

Perhaps the 93-year-old prime minister could smell a rebellion and UMNO DNA in Anwar’s party miles away. He rewarded Mat Sabu of Amanah with Defence Minister. He appointed Muhyiddin of PPBM as Minister of Home Affairs. And he strategically pampered Lim Guan Eng of DAP with the Finance Ministry portfolio. That made Anwar Ibrahim fantastically furious.

It was an insult that a component party of Pakatan Harapan with the most number of parliamentary seats didn’t get any of the important portfolios. Besides requiring Lim Guan Eng’s track record, there was a political reason to appoint him for the prestigious finance minister post. Mahathir wanted to secure DAP’s loyalty in preparation for any eventuality.

As the first Malaysian Chinese in 44 years to hold the powerful position of finance minister, the ethnic Chinese community was exhilarating and extremely grateful. DAP’s strong 42 parliamentary seats suddenly became Mahathir’s fixed-deposit. Together with Amanah’s 11 seats, Mahathir has in his pocket 66 seats against Anwar’s PKR 48 seats.

We had written why Mahathir couldn’t care less about campaigning in Sabah and Sarawak. Sabah-based Warisan party, an ally of Pakatan Harapan, was part of Mahathir’s chess piece which ultimately contributed 8 seats. Sarawak’s former chief minister Taib Mahmud, popularly known as “Pek Moh (白毛 or white-haired uncle)”, was also part of Mahathir’s men.

Taib Mahmud was supposed to switch side in the event Pakatan Harapan couldn’t win substantial seats. But that is water under the bridge now. Why do you think Taib Mahmud met with Mahathir and Daim on May 11? Sorry folks, the 82-year-old Governor of Sarawak was more useful a free man than a prisoner as far as Mahathir’s political manoeuvre is concerned.

Now that the Taib Mahmud’s PBB party had architected the death of BN Sarawak and together with other parties have pledged its support for Mahathir administration, the prime minister’s strength has grown. Sabah (8 seats) and Sarawak (19 seats) are now Mahathir’s fixed-deposit. Altogether, Mahathir commands a strong force of 93 parliamentary seats.

Even if Anwar Ibrahim declares his PKR will quit Pakatan Harapan, not all the 48 MPs will blindly follow him. Only 27 of the 48 PKR MPs are Malays. Now that UMNO is reduced to 54 MPs and assuming Anwar agrees to form a PKR-UMNO-PAS alliance under the pretext of protecting Malays and Islam, their numbers are only 99, still short of 13 seats to form a simple majority.

But even then, not all Malay-Muslims within UMNO or PKR have a death wish of transforming the country into a full-blown Afghanistan. At least UMNO warlord Nazri Aziz has declared that UMNO would rather work with Chinese-DAP than PAS (Pan-Malaysian Islamic Party). Therefore, it’s a wishful thinking that Anwar could become a prime minister in the PKR-UMNO-PAS alliance.

Anwar wanted the powerful finance minister, on top of prime minister, exclusively for himself. This prime minister-in-waiting could be another Najib Razak, if he has it his way. He needs to be controlled and guided. This is another reason why Daim Zainuddin warned that it would be foolish for Anwar Ibrahim to be made prime minister immediately.

It appears that Anwar Ibrahim is another narcissist like Najib Razak. Mahathir’s popularity has hit the roof, and Anwar isn’t impressed. He is trying everything to stay relevant, and get noticed. When Mahathir was trying to get the Agong (King) to accept Tommy Thomas without delay as Attorney General, Anwar rushed to the palace to get the credit.

When the Perak state government tried to get rid of BN appointees from GLCs (government linked companies), Anwar interfered and told the chief minister and excos not to be hasty in taking action on GLCs. Not satisfied with stealing thunder domestically, Anwar flew to London and announced Malaysia will investigate the Battersea Power Station deal.

Still bloody mad after losing the finance ministry post to Lim Guan Eng, Anwar decided to lecture the minister, telling him to be cautious when issuing statements so that foreign rating agencies such as Moody’s will not get offended. Acting like a real prime minister, Anwar said Lim should leave the exposes of misconducts of the previous government to other ministries.

Amusingly Lim Guan Eng told Anwar that his actions of revealing the previous regime’s financial scandals were done on the instruction of Prime Minister Mahathir Mohamad. Mr. Lim also lectured Anwar that as the person in charge of the Finance Ministry, he was not in a position to instruct other ministers to reveal scandals which happened in his own ministry.

Anwar is trying too hard to boost his popularity that he didn’t realise he looks quite idiotic. You can bet your last penny that when he takes over from Mahathir in 2 years time, Lim Guan Eng would be booted from the finance ministry. Anwar Ibrahim believes he’s the best man for the job. And this is why Daim said it would be foolish for Anwar Ibrahim to be made PM immediately.

Copyright 2006-2018. FinanceTwitter. All rights reserved

A new coalition politics? Harapan gov’t one month on....

2018-06-20T04:20:00.000+08:00

June 9 marked one month after the historic GE14. It is early days yet for the new Pakatan Harapan government with only a core minimalist cabinet in place. Yet, in the past month, there have been important messages that illustrate a commitment to a genuinely different form of governance.

At the same time, the cautious and more constrained manner Prime Minister Dr Mahathir Mohamad has gone about making important decisions showcases the different style of coalition politics that now operates in an arguably more challenging political environment than that faced by BN in the past.

Despite serious obstacles, Malaysia is embracing a ‘new politics’.

Meeting promises

To date, Harapan can point to four important areas where it has fulfilled its campaign promises.

The first is the zero rating for the GST, reducing the tax burden of ordinary Malaysians. This is the first step needed to remove the tax altogether when Parliament meets in July. This policy change has been carried out with minimal impact on financial markets, thanks in part to higher oil prices and an open recognition of the need for alternative revenue sources.

Second is securing the release and pardon of Harapan de facto leader Anwar Ibrahim. This took place in record time. While one might interpret the speed of the release on the part of authorities as an effort to fuel division and competition within Harapan, this move on the part of Mahathir showed a strong commitment to reform and the partnership within Harapan itself.

Third is the increased transparency of the new government, with many ministers regularly meeting the press and engaging the public and stakeholders. This has indicated greater responsiveness and accountability on the part of the new government from the starting gate. It is especially promising given the inward orientation for fact-finding and learning that is going on.

The greater transparency has revealed some of the problems the government has inherited and can be seen as a needed corrective action to reduce expectations. Key will be whether this pattern of engagement is maintained and how the government offers solutions to the exposed problems.

Fourth are the measures introduced to tackle corruption and abuse of power of the past. From the new attorney-general and police raids to the questioning sessions of a more active MACC, these measures highlight a commitment to dealing with the excesses of the previous government.

Malaysians are awaiting the arrest of Najib Razak and his wife, as revelations post GE14 a.k.a. Pavilion Residences have shown even more abuse to ordinary Malaysians than had been believed before the election. Sadly, more is likely to come as the investigations appear to show that the former prime minister betrayed not only his country but his own party as well.

Making appeals

Harapan has combined these actions by building on four important political narratives.

The first is the continued use of nationalism post-election, as the government has appealed to national pride and reached out directly to citizens. The most obvious example of this is the creation of the Tabung Harapan Malaysia – the crowd-funded initiative to address the public debt. It has reached over RM50 million in less than two weeks. This has tapped into the deep patriotism of Malaysians and has reinforced the view that the government is addressing the serious problems it inherited from the previous government.

A second important narrative is that of inclusiveness. Harapan has repeatedly sent the message that it is a ‘Malaysian’ government. From remarks about a minister’s ethnic identity to the appointments across races, Harapan has aimed for greater representation. This has extended to the inclusion of perceived Islamists within the government in key appointments in education.

There have simultaneously been repeated reassurances that Malay interests will be protected as the aim appears to move the discussion away from division and displacement. Many are awaiting the further 15 cabinet appointments, in particular with regard to East Malaysia, which to date has not adequately been included in the national government, especially given its numerical importance in the composition of the Harapan government.

Building on the anti-corruption measures noted above, Harapan has repeatedly emphasised that it will operate with the rule of law. The perceived lawlessness of the previous government and the arbitrariness of decisions of the past make this a stark difference in governance. It is not easy to change practices and norms, but proper processes and procedures have been given more of a place. The rule of law is now moving away from the practice of using the law to rule.

Perhaps the least touted narrative pre-GE14 is the introduction of greater austerity. Mahathir appears to be introducing more fiscally prudent practices, whether it in salaries or in international trips. This is in keeping with the revelations of serious and significant government debts, but also suggests a more measured approach to governance. There has been less patronage distributed through the use of positions so far.

The message has been sent that the cuts in spending are necessary, not to cover up for lavish spending and scandals such as 1MDB but to address them.

Resistance and resignations

Collectively, these changes in governance speak to a different form of governance. Public expectations remain high and vary sharply, with many of these expectations in contradiction to one another. Choices and priorities are being contested, with some understandably expressing dissatisfaction with the pace of change.

Unlike the BN government, Harapan is operating in an environment where it does not control the mainstream media outlets. It has yet to have a clear media strategy to deliver its messages, opting for less centralisation than the past and more diversity. It has inherited a climate of considerable political polarisation and routinised practices of disinformation.

Harapan also is facing considerable resistance inside, from elites who oppose appointees to more entrenched conservative forces in the system. While it is important to acknowledge considerable goodwill in the public at large, many are suspicious and some are outright hostile and defiant inside the system as they protect their own interests and welfare. Given that this norm of self-interest has been deeply socialised, it is hard to change attitudes overnight.

Many uncooperative senior officials will need to go, with the resignations to date only the tip of what is likely needed. A key challenge will involve winning needed allies and implementing policies, given that the previous government relied on consultants to a greater extent than the civil service. This will require wisdom and balance. The choices of bringing back those with experience in government, such as the former auditor-general, speaks to a recognition of the urgency of gaining control of government inside the government itself.

Some of the resistance is coming from rivalries within the Harapan coalition itself, as the differences over reform, personal positioning and policy priorities have stymied cooperation and slowed decisions. On the whole, these conflicts have been kept out of the public limelight, given the public pressure on Harapan to meet the expectations of its supporters and fulfil the responsibility it has been given.

The realities of Malaysia’s new politics are coalition politics never seen before. This model is based on equality, mutual respect and mutual dependence. This political model will continually need compromise and confidence in each other, not always viable given political histories.

Addressing trust deficits

Building trust is not easy. The trust deficit for the new government is on multiple fronts. It is with the general public socialised in suspicion of government and with half of the population that did not vote for Harapan are watching it carefully. It also extends to the coalition actors themselves within Harapan that are finding their way to work together.

Given the ideological and personality differences within the Harapan government, the outcomes and common narratives so far show that, even with rivalries and uncertainties, the coalition is coming together and a new form of coalition politics is emerging.

Taken from malaysiakini.com

Malaysia’s political transformation(s): Preliminary reflections

2018-06-20T04:08:00.002+08:00

Labels abound to describe what is happening to Malaysian politics since the 9 May 14th General Election (GE14), ranging from “democratic transition” to more ambiguous “change”. Equally varied are the prospects for the country, with scholars touting greater “democracy” and others pessimistically highlighting a return to the worst of the Mahathir Mohamad years, run by a “motley crew” with less-than-favourable assessments of Mahathir and/or Anwar Ibrahim based on views of their pasts.

The tumultuous political events call out for explanation and analysis. Rather than embedding analyses with superlatives or pejoratives, the focus of this piece is to disaggregate the interrelated developments occurring and to point to the factors that are shaping their outcomes. At this juncture, given the uncertainties surrounding Malaysia’s political future, it is important to lay out the factors and conditions that are shaping political trajectories. It is also important to acknowledge that the scope of issues involved indicate significant political changes ahead.

There are five different important interrelated developments happening in Malaysia.

1. Malaysia’s GE14 Election

The 9 May results calls out for explanation, given the large electoral swings, victory for Pakatan Harapan (PH or Harapan) and devastating defeat for the Barisan Nasional (BN), especially for PM Najib Razak and his party, the United Malays National Organisation (UMNO).

To date, there are three different frameworks to understand the results.

The first focuses on agency, namely the role of leaders in shaping the outcome. Here attention focuses on the liabilities caused by Najib (and his wife Rosmah Mansor), the “game changer” role of Mahathir and the foundational role of Anwar in shaping the reform movement and opposition.

The second highlights more structural socio-political forces. These include the centrality of nationalism in the election, deterioration of political institutions within the BN, notably UMNO, the expansion of the reform movement through organisations such as Bersih, the reconfiguration of the former political opposition (Harapan) through learning and compromise, the impact of taxation and economic conditions of inequality and precarity, as well as effects of globalisation and contraction of social mobility.

The third frame concentrates on the dynamics in the campaign—the interaction of factors that created the momentum of the “perfect” political storm of 9 May. Here we witnessed the use of emotion, the control of political narratives, viral use of WhatsApp by ordinary citizens, and strategic entry into the campaign of former civil servants, which served to inspire defections of UMNO loyalists and the showcase of the ineffectiveness of the BN’s electoral tactics. Campaign developments also highlight the limits of polling to predict results, and the central role that the behaviour of ordinary citizens had in determining the outcome.

These frameworks speak to how differently Malaysian elections are understood and point to varied assumptions about future trends—whether it involves the behaviour of leaders, socio-political conditions, or public narratives.

As analyses continue, there are likely to be further expansion of these frames and intensive debate on the causes of the electoral outcome(s). Key to this will be more in-depth analysis of the results themselves. My own preliminary analysis shows, for example, considerable erosion of support within the UMNO grassroots (with movement to both Pakatan Harapan and PAS, Malaysia’s Islamic party), as well as the critical role of swings in Sabah and Sarawak in the final outcomes—highlighting the need to look at UMNO and campaign dynamics in East Malaysia. This is likely to be one part of a more complex picture.

2. Malaysia’s Electoral Turnover

The day after the election was arguably one of the most important in the country’s history, when a turnover of government occurred after nearly 61 years. The immediate post-election period is less known, as much of the developments happened behind closed doors.

What is public is that the day-long delay in the swearing in of Dr Mahathir as prime minister, statements and tweets by political actors, changes at the state level of the Sabah government, and subsequent revelations of offers to the premiership to Dr. Wan Azizah Wan Ismail point to resistance inside the system to acceptance of the political mandate of Dr Mahathir. Najib’s unbecoming post-election claim that he “gave” up power, given the realities of his loss and the requirements of the Constitution, suggests that he was considering alternatives.

History will likely reveal more of this critical juncture, but here too we can look at the role of individuals, structures, and interactive processes in understanding this outcome, especially compared to other important political junctures of 1969 and 2008.

Among the individuals that will stand out in 2018 are members of the royalty, leadership of the police and civil service, and members of UMNO—insiders who opted for the turnover. My own view is that economic conditions placed greater constraints on the system, as the impact of further political turmoil and potential violence would have had a decisive impact on Malaysia. Research on critical junctures of power point to the role of pacts and cooperation, and what is striking about Malaysia’s turnover is that the pact has apparently not included Najib as he is to (rightly) face the “rule of law” for his reported abuses of power.

The electoral turnover raises issues that will shape the political path ahead—the importance of the royalty as an arbiter, the potential instability that comes with a small margin of victory in terms of seat numbers (at both the federal and in some states), and the central role that trust inside PH will play in its viability as government.

3. Reconfigured Political Actors

This segue highlights that there is now a new government and opposition. This is not just a matter of changed roles, but significantly different coalitions and relationships from the past.

Harapan may have taken over the mantle of national leadership but it is based on a different formula inside the coalition than BN. Rather than dominance of one party, there is greater equality of the different parties. How much power they will have is likely to be challenged and compromises will have to be made. Complicating this further is the pact that has shaped the future of national PH leadership: that of Mahathir’s promised transfer of leadership to Anwar.

Harapan is primarily comprised of familiar political figures, but in quite different relationships with each other. It is a relatively new coalition (together less than a year), brought together primarily for the shared goal of ousting Najib from power and secondarily to bring about further economic and political reforms. Unlike BN, there is considerable ideological difference inside the coalition, with stark differences over economic and political policies. These differences extend to different views of economic reform, affirmative action, the role of race and religion more broadly, and the scope of political reform. This is compounded by the personal tensions that have been played out publicly in the past and are likely to shape the future. How cohesive and directed Harapan will be is uncertain, but what is certain is that these relationships will be tested (and retested) in the months ahead.

Harapan faces the challenge of building trust inside itself, which is being pressured by trust it has been given by the public at large in the election. There are forces that will work to build on potential divisions, as the conservative resistance to reform in Malaysia coexists with more progressive forces.

We can again see this development tied to individuals—their ability to lead, to compromise, to get along and move forward—and their personal narratives of sacrifice and statesmanship. We can also see these developments tied to political forces and pressures in society that are likely to continue to actualise their power and put pressure on the new government from inside and in the public at large. Lessons show that greater inclusion can mitigate instability but at the same time this inclusion will require patience and hard work to resolve differences. The compromises made at the early stages of government will likely set the parameters of any reforms.

A crucial part of the new political context involves the reconfiguration of the opposition itself. As Harapan faces the pressure to become like the BN, the coalition that Tun Razak formed has died—killed by his son. The parties involved are choosing their exit strategies, seeking relevance in irrelevance for some (such as the MCA and MIC), seeking safety in place (such as many of the BN component parties in East Malaysia) or seeking a new formula for political survival. The death blow for BN in GE14 has come as a shock to many, and the BN component parties are slowly coming to terms with the reality that they are no longer in power, and no longer with the same level of access to power and state coffers.

Choices ahead will likely be contested, as each of the parties will fight over spoils and exit/future strategies. None of them have escaped severe wounds. UMNO in particular has been politically decimated, losing half of its seats—which now number 54, only 24% of the parliament. MCA has one man standing, and even this is being challenged in an election petition—MCA is essentially over as a party, with its sellout to China rather than representation of Chinese Malaysians a crucial part of its death knell.

The only real survivor will be UMNO, but the battle ahead within it will be fierce as there is contestation between “old” and “new” forces—those wanting to focus on race and religion and those wanting to move away from this model. The shadow of being declared illegal is ever-present, as Najib’s mismanagement of the party extended to putting the party’s legal future in jeopardy. UMNO will have a hard time thriving without access to state resources. Scholars are already coming together to analyse UMNO’s future—with a new revised End of UMNO? in the works—but questions of leadership, ideology and the party machinery are already being played out in public. What is clear, however, is that Najib’s leadership of the party—where he made the party his own vehicle and in effect destroyed the connection of the party to responsible national governance—will be a difficult legacy to step away from, especially given the previous acquiescence of current leadership contenders to Najib’s political excesses.

Not to be left out is the prominent role of PAS, now holding onto 18 parliamentary seats and two state governments, one of which (and arguably two) they hold due to the facilitating role of Najib’s cooperation with the party. PAS adopted a two-prong strategy in GE14: to be “open” to UMNO (thus receiving considerable support and benefitting from the erosion from this party) and to embrace an exclusionary conservative religious/racist agenda under the leadership of Ustaz Hadi Awang.

These decisions will have their own reverberations as PAS faces pressure inside its own party, especially over the alliance with UMNO. Few in PAS fully appreciate that the decisions surrounding GE14 cost them a role in the federal government and the chance to genuinely become a national party, as Hadi has relegated its political centre to its traditional base of the East Coast heartland. Perhaps even more significant will be the potential impact the change in government will have on the PAS conservative agenda, as Pakatan is arguably more secular than BN had become under Najib. How PAS moves ahead—in terms of its leadership and alliances, and its mobilisation of conservative forces in Malaysian society—are responses to the GE14 campaign itself and will set the course of the debate.

Both UMNO and PAS have been weakened by GE14, and will likely to be internally focused for some time, but the tactics they adopt ahead set the parameters for political discourse. There are considerably darker forces in Malaysia’s political life that will need to be controlled and dampened. Malaysia needs a strong constructive opposition. The battle is on for whether the new opposition will in fact be destabilising or positive for Malaysia’s future.

4. Reassessing Najibnomics and Economic Reform

Amidst these political machinations are serious demands for reform, as the GE14 has opened up long-contained cauldrons. The new government has prioritised the economy, and this is long in coming. While growth numbers have appeared positive, the fundamentals in the economy have been less favourable—as is evident in the election result against Najib. The need for substantive economic reform has been clear since the 1997 Asian financial crisis and has been exacerbated by Najib’s mismanagement of the government-linked companies and recklessness in handling national debt.

The issues go well beyond the scope of this short piece but worth highlighting given that it is essential to understand that Malaysia is now facing broad changes. Given the close ties between the economy and political life in Malaysia, changes in the economy will inevitable affect the former and vice versa.

Attention has centred on the multi-billion dollar 1MDB debacle, and Malaysia is likely to set an important international example in the implementation of the rule of law with this scandal, as Malaysians count the minute to Najib’s incarceration (as well as the disgraceful number of handbags).

There are three broad areas that are worth drawing attention to as Malaysia moves ahead—a) the future driver(s) of economic growth, b) the introduction of a needs-based social policy to address the class, racial, regional and gender inequalities and problem of contracting social mobility and c) the management of the state sector and its relationships in the political economy. All of these areas are being reassessed as the new government comes on board, highlighting that there are both opportunities and constraints in bringing about economic reform. Not least of these are different international conditions.

There is little consensus on Malaysia’s economic reform trajectory and given the lack of understanding outside of Malaysia of the appreciation for the need for greater transparency, and likely readjustment of the numbers underlying economic conditions (as the Najib administration played loose in the assumptions of its financial projections), this will be a challenging path ahead.

5. Reversal of Democratic Decay

Similar factors shape the debate over political reform. A wide-agenda has been incorporated into the Harapan manifesto, from the role of the prime minister to changes in the electoral commission. There are different priorities, further complicated by the reality that the current prime minister is responsible for deepening democratic decay. Public debate in the wake of the election has showcased the breadth of concerns—from corruption allegations against Taib Mahmud in Sarawak, to the murder of Kevin Morais and trafficking victims in Wang Kelian, as just a few examples—with different positions taken on the role of the police, civil servants and businessmen (or cronies).

Among the long list of political changes are legal reform and justice in cases, changes to political institutions to strengthen checks and balances, institutional integrity, efficiency and governance, reducing corruption, electoral reform, improving race relations and religious administration in areas such as Islamisation, protecting human rights and rebuilding of the education system—and this is not an exhaustive list. There are debates over these areas and over which should take priority, and, significantly, there is resistance to reform both inside and outside of the political system. Studies have shown repeatedly that Malaysians have different visions of democracy and their political future, with many more conservative forces for example seeing Islam as political empowerment. It would be a mistake to assume that the political polarisation of the past is not in the present, as fewer than 50% of Malaysians voted for Harapan.

Beyond different outlooks is the challenge of implementation of reform, given resistance inside the system to change and the decay of the civil service over time, in large part exacerbated by Najib’s deep spending cuts and politicisation of governance. The new government will need to remove Najib loyalists while simultaneously building on the goodwill in the system and making allies with those in the second tier of the bureaucracy.

As Malaysia moves forward, there will be steps back, sideways and delays ahead. Leadership, socio-political conditions and interactive processes will combine to set the direction(s) ahead, which at times will likely appear contradictory and inevitably fail to meet the varied expectations of Malaysians and outsiders alike. The last two weeks, however, are promising and speak to the bold and profound path of change that the country is embarking on. Harapan—hope—has lived up to its name—so far.

Taken from New Mandala. This article is based on the following public lecture given at the Australian National University

The GE14 aftermath: Hope and healing

2018-06-20T03:47:00.002+08:00

Dr Mahathir Mohamad is once again Malaysia’s prime minister. Pakatan Harapan under the strategic leadership of Mahathir was able to create the perfect electoral storm to win over large shares of Umno’s base, maintain the support of the opposition and bring about Malaysia’s first change of government at the federal level in the nation’s history.

Democracy won out – the people’s votes were counted and a responsible peaceful transition of power took place. Najib Razak’s governance – the greed, the kleptocracy and the sense that he and his wife, Rosmah Mansor, were willing to sell out the country for their own interests, no matter how egregious – served to deeply alienate Malaysians across races and backgrounds and was strongly repudiated.

Millions of Malaysians took the ballot box and follow BN’s advice – ‘Make Malaysia Great Again’.

While I did see an opposition win as a viable scenario in the GE14 political storm and could feel the strong sentiments on the ground, especially as the campaign gained momentum, I was too cautious in assessing the overwhelming outpouring, weighing in on the powerholders holding on. I should have had more faith. I have long recognised the wisdom of ordinary Malaysians, and let despair, past disappointment and cynicism – in part shaped by global trends – overshadow hope.

In the wake of the Harapan victory, I begin my post-election analyses with focus on how hope can be actualised and an important healing process can begin.

Harnessing nationalism

Nationalism was a main driving force of this election as people from all walks of life voted to ‘Save Malaysia’. Most citizens put the love of their country over self-interest, following Mahathir’s own example. The BN’s emphatic loss was in large part due to its failure to look out for the interests of the country – from 1MDB to worrying investments with China.

Malaysians have long come together in crises such as the tragedies of MH370 and MH17. GE14 represented yet another coming together to address a crisis and provides a positive opportunity for Malaysians to focus on national interest, a reset button.

It is important to capitalise on this spirit of working together, as the challenges of much-needed political and economic reforms extend well beyond one man (and his wife).

Building multi-ethnic bridges

Focus has been on the multi-ethnic and national dimensions of the results. Caution is necessary in interpreting the results along these lines. While Malaysians from all walks of life voted for Harapan, the campaign was very much shaped along ethnic lines on both sides of the political divide. Even the post-election discussions of crossovers and such speak to the issue of Malay representation as opposed to others.

Ethnic mobilisation – engaging Malays – was at the heart of GE14. Umno was abandoned in large numbers with some going to Harapan, but others went to PAS. Arguably the Islamist party took more from Umno support because it was a more comfortable racialised alternative for many Malays. While Harapan took away the mantle as the protector the nation, PAS has assumed the mantle for the Malays, with religious identity at the core.

Similar strong ethnic sentiments were expressed in Sabah and Sarawak. Acknowledging the persistence of race and religion is essential for any efforts to build a stronger society.

This said, arguably at no other time in Malaysia’s history, with the exception than that of Merdeka, has there been space to reduce racism and build mutual respect across communities, to realise that Malaysians embrace multiple identities of nation, community and religion and these identities do not have to be played off against one another.

This involves an understanding that Malaysia’s strength is in fact this diversity and difference. To move away from the “us” and “them” is not easy, to try to have trust, faith, tolerance and be respectful can be even more challenging when these practices have been eroded.

Meaningful reform needs to happen to the education system where the values of division are being perpetuated. As a young nation with so much talent, creativity, capacity and hope, the decay and distortions of Malaysia’s education system (often with the frustration and anger of many hardworking teachers) is, for me as an educator, one of the worst legacies of BN governance.

Special attention needs to centre on the curriculum in religious education and revitalising arts and culture. Efforts to work toward mutual understanding have to go beyond the classroom, to build on the extensive respectful quotidian exchanges that happen across races and faiths every day.

Finding moral compass

In analysing developments in Malaysia (and elsewhere), I have regularly written about the loss of moral compass in the contemporary era. This was clearly the case among the Umno elites, some of whom wrongly still think that they did not do anything wrong. Those in leadership positions should rightly be held accountable. Moving forward, there is, however, a need for a judicious search for justice.

Practices of corruption are endemic and part of a survival mode inside the system. Some in the Harapan government are also tainted with perceptions of these practices as the ‘Umno’ culture of economic entitlement from holding office runs deep. This does not excuse them but helps us understand that the rot is systemic.

One important step could be to offer an amnesty to those who come forward, especially at the lower ranks, as a way of reaching across the system and starting fresh. This should be coupled with strengthening enforcement and incentives for good practices, a genuine commitment to anti-corruption.

Some of the crimes of the previous administration however cannot be overlooked. Not only do people like Altantuya Shaariibuu, Teoh Beng Hock, Ahmad Sarbani Mohamed, Kevin Morais, Raymond Koh, Amri Che Mat deserve the truth in their deaths and disappearances, as do countless others who died in police custody, were buried in death camps and caught up in perilous trafficking rings.

Malaysia’s illegal economy needs to be curbed, and a culture of accountability reinforced. It will be difficult to open old and sensitive wounds but learning the lessons from these experiences and building on the knowledge of the reality of the seriousness of these problems is an integral part of a new beginning, of healing.

Tackling institutional reform

It is a given that Najib did serious damage to Malaysia’s political institutions, from the judiciary and parliament to the media environment and his own party. Mahathir at the helm provides an excellent (albeit ironic) opportunity for reform, given his national and broad mandate. He can indeed correct many of the mistakes he started and has acknowledged.

Lessons show this will take time, prioritisation, trust building, patience and a serious political commitment. Simple measures to repeal draconian laws on fake news, symbolic removal of senior staff who failed in their duties in areas such as the Electoral Commission and positive reinforcement of good practices and those who supported the turnover of power, such as the inspector-general of police, can go a long way. Attention will be paid on developments in the first 100 days.

A crucial part of this institutional rebuilding involves the 1.6 million in the civil service, many of whom voted for the opposition, but also many of whom remained loyal to Umno. Keep in mind that BN won 35.4% of the country, over a third. The need for outreach to those in the system to dampen the inevitable resistant and resentments tied to entrenched practices that will come is pressing.

As stakeholders and implementors, civil servants are crucial for any successful institutional reform. In moments of change, it is always prudent to look for potential allies and be cautious in rushing to judgement. This does not mean to ignore real threats. GE14 shows, however, that surprising allies can indeed lead to even more surprising outcomes.

Embracing social transformation

Equally substantive challenges remain in Malaysia’s economy, as acknowledged by Malaysia’s new leadership. Despite platitudes to the contrary, Malaysia is still caught in a middle-income trap. It does not yet have a clear strategy ahead to move out of it. The focus on infrastructure as a driver of growth needs to be complemented with more alternatives.

Serious thought needs to be placed on reforms in the agricultural sector to diversify from palm oil dominance. Equally valuable is consideration of how to strengthen services and ratchet up technology. There are seasoned experts inside the new leadership who understand that vision and long-term planning are better than short-term deals to pay off loans and address scandals. A thorough clean-up of 1MDB and the GLCs (government-linked companies) will go a long way to bringing investment into Malaysia.

The populist thrusts of the GE14 campaign messages tap into real needs in society. Broadly, growing inequality, declining social mobility and persistent precarity of large shares of Malaysians underscored the resentments toward the Najib government. The GST showcased these vulnerabilities.

Throwing money at these problems through cash transfers such as BR1M did not go to the core of these problems. The poverty and underdevelopment in places such as Sabah, Sarawak and Felda areas remains serious. Equally significant are conditions in northern Terengganu and Kelantan, who cannot be left out of any new sets of initiatives even though they are opposition states.

GE14 opens up the path for a social transformation, as did the critical juncture of 1969. If there was one positive from Najib’s decade in office, it is that he moved to embrace a more needs-based approach in social policy. This thinking can be foundational in the transformation, as an approach that focuses on one community at the expense of the other, for that race and not another, is part of the reason Malaysia is in the difficulties it now is.

This does not mean that policies cannot be sensitive to ethnic identities and social conditions, and policies will need to be adjusted to address the variation within Malaysia, whether it is rural Pensiangan or urban Kerinchi (not Bangsar South). Now, however, there is an opportunity to have a meaningful discussion about social problems and how they affect the economy and vice versa.

Healthcare, gender relations, family structure and religion are an integral part of robust discussions of policy reform. GE14 may have been essentially devoid of policy debate, but its outcome opens up the possibility of moving political discussions in a new direction.

Harapan now has the support and goodwill of most Malaysians. Managing expectations and living up to the promise that GE14 has brought about will be a large responsibility. Healing the wounds inside the system and the country as a whole are essential to meet these responsibilities.

If there was one lesson I learned in GE14, it is to have more faith … and hope.

Taken from malaysiakini.com

Malaysia Calls On Authoritarian Regimes To Monitor Its Democratic Elections!

2018-04-29T00:13:00.004+08:00

The Malaysian Election Commission has just issued a staggering list of seven countries which they say have taken up its offer to come and monitor the up-coming elections to ensure they are free and fair – and free from fraud.

The list includes three of the world’s most authoritarian regimes; two countries described as ‘Hybrid’ (part-authoritarian) by The Economist Democracy Index and two ‘Flawed Democracies’ under the same index. One of the countries has just come out of a state of emergency following a blatant coup against the rule of law and is not even rated on the index.

Malaysians will be left wondering if this is an idea of a bad joke on the part of Najib and his flunkies at the EC or whether he has set out to humiliate his own country in a misguided attempt to rebuff the apparent insult by Britain, Europe and Australia, who have expressed concerns about the conduct of GE14?

As every Malaysian knows, Prime Minister Najib Razak has described Malaysia as a ‘perfect’ democracy and has in the past resisted the idea that the country should be insulted by the imposition of external election monitors, a measure urged by NGOs and the opposition.

Despite numerous reports and judicial complaints about bribery, coercion and blatant cheating at previous elections Najib stated in January, for example, that”the chances of cheating are non-existent”. Over the weekend his Foreign Minister retorted to the UK’s suggestion of election monitors by thundering:

Malaysian democracy is to be monitored by the Malaysian electorate, and the Malaysian electorate alone. To assume that anyone else has the right, ability and competence is an insult to each and every Malaysian voter. [Anifah Aman]

In fact, Malaysia is rated as a far from perfect democracy in the international independant rankings, and all denizens will know why. It comes 59th on the list of 168 countries in The Economist’s list, just above Mongolia, and it is placed in the category of a ‘Flawed Democracy”.

The message is therefore clear. If Malaysia was willing to bring standards of better practice to the monitoring of GE14, there are 58 countries above it in the rankings to which the Election Commission could turn for support.

These include 19 countries from around the world, which are described as ‘Full Democracies’ in the rankings. However, instead, Najib and his Election Commission cronies have, in this semi-Uturn, resorted to some of the world’s most repressive governments to profer their monitoring support.

These include authoritarian regimes, whose expertise lies more in the stage management of pretend elections, rather than the holding of genuine elections. Is that the sort of advice and supervision that Najib is actually looking for?

If so, Malaysians have even more reason to be worried about the conduct of GE14 than before.

Malaysia’s Chosen ‘Democracy’ Oberservers So Far

So, let’s look at the list of countries that the Election Commission has invited to observe GE14, according to today’s reports.

Firstly, you have Azerbaijan and Cambodia, which come 148 and 124 out of the 168 countries on the Democracy Index respectively and are described as Authoritarian Regimes.

Next, you have Thailand, which suffered an army coup in 2014 and remains under martial law. The army have been signalling they will hold elections again at some point, but they have kept arbitrarily delaying that date – a planned election last year has been postponed till this year, with no guarantees.

On that basis the country comes 107 on the index and is described as a ‘Hybrid Regime’.

The other Hybrid Regime is Kyrgyzstan. This deserves some plaudits for being the only country in post-Soviet Central Asia that has achieved any form of democracy, but this is by virtue of having held its first ever peaceful transfer of power involving elections (if suspect) just last year. Good on Kyrgyzstan, but has it got guidance on democracy to support Malaysia?

We then have two so-called ‘Flawed Democracies’, including nearby Indonesia, which these days looks near to beating Malaysia on the Democracy Index (it was a much reversed situation a decade or so ago), standing at number 68.

Following that, an relatively impressively placed, if tiny, Timor Leste, which has put to one side former years of dreadful fighting and repression to stand at number 43 on the list, well above Malaysia.

What tips Najib and the Election Commission may be hoping to gain from the emissaries of these countries; how many observers each will send or how these folk will be deployed and managed remains a mystery. One thing is certain there isn’t much time to organise them.

However, it is perhaps the final country on the list that is most baffling, but perhaps most telling.

The Maldives have been in a State of Emergency since the start of the year as, beset by corruption allegations, President Abdulla Yameen pitched himself into an outright confrontation with his own justice system and Supreme Court.

January 29, 2018 the Supreme Court received a petition from the opposition alliance in the Maldives to temporarily remove President Abdulla Yameen Abdul Gayoom and appoint investigators to look into allegations of corruption and misrule.

Following on from this, on February 1st, the Court ruled that the trial against the former President Nasheed, which began in 2012, was unconstitutional and also ordered the release of nine opposition MPs, resulting in an opposition majority in the Maldives.

Nasheed responded with a 45 day State of Emergency in February (that was then extended for another 30 days) and not only that, he ordered the arrest of two Supreme Court judges, including the Chief Justice, as heavily armed troops stormed the country’s top court.

He also arrested his half-brother the former president Maumoon Abdul Gayoom.

According to Amnesty International Yameen has also outlawed peaceful protests, and has been imprisoning people solely for exercising their rights to freedom of expression and peaceful assembly.“While some protestors have since been released, many of those arrested during the state of emergency remain under detention.” [Amnesty]

Why, one wonders, did Najib’s Election Commission think it was appropriate to ring up the Government of President Yameen, under such circumstances, to ask if he could help with supplying observers for the upcoming election?

After all, Yameen must be pretty preoccupied.

GE14 unknowns: Malaysia’s highly competitive polls

2018-04-28T22:06:00.002+08:00

Most analysts will tell you that BN will emphatically win the coming May 9 election. I am not most analysts. While I agree with the dominant argument that BN goes into GE14 with significant structural advantages and the ruling coalition is a strong favourite to win, the campaign is fluid and riddled with uncertainties.

Compared to 2013, this election has more competitive seats and more unknowns. No one can predict the outcome with certainty. Below I outline five issue areas that make GE14 arguably one of Malaysia’s most competitive, suggesting that much of what is happening in the election to date is evolving in the last few weeks of the campaign, and as such GE14’s outcome and that of Malaysia’s political future is very much in the balance.

1. Tighter contests

In 2013, nearly 50% of the seats (111 of 222) were competitive, with 32% of the seats won by less than 10%. Most of these close seats were fierce battles, some of which came down to blackouts, postal votes and multi-cornered splitting of the opposition vote. Polling agents were often unsung heroes. Recall that in four parliamentary seats in Sabah, opposition differences resulted in BN winning them - Keningau, Kota Marudu, Pensiangan and Tenom.

In 2018, around 65% of the seats (144) are estimated to be competitive, meaning that these seats can be won by less than a 10% margin. This increase is the product of three issues: 1) three-cornered fights, 2) the entrance of Bersatu, and 3) greater convergence of local opposition in Sabah. Three-cornered fights (a topic that will be developed in more detail in a later piece), disproportionately advantage the BN, but in the process, they make the margins of victory lower.

PAS is reportedly slating candidates in 126 seats, which will make multi-cornered contests a nationwide phenomenon. Slimmer margins make for more competitiveness and surprises. At the same time, traditional seats like Pagoh and Langkawi – while also favour BN despite the fielding of Bersatu heavyweights– now join the competitive seat list. We also see more competitive seats in Kedah and Johor.

Finally, while Sabah politics continues to be multi-party, the localisation of the opposition increases the political salience of ethnic and personal loyalties and, combined with the wave toward Borneo empowerment, makes for closer contests.

2. Leadership legacies

In 2013, the election was about caretaker prime minister Najib Razak. This time around it is the same, except rather than serving as a strength for BN, he is a liability with record levels of antipathy against him and his wife, Rosmah Mansor. If Najib really wanted his coalition to win positively, he would have stepped down. As such, the election appears to be about his survival, not the interests of his party or the country.

Opposition leader Dr Mahathir Mohamad is also a divisive figure, similarly evoking strong emotions from critics. The sense of relief when Mahathir stepped down from office in 2003 was palpable. While corruption levels were not as high as Najib’s tenure, Mahathir did similarly undermine the democratic fabric of Malaysia.

His return at 92, evoking a sense of statesmanship for the country, appears less about personal interest than that of Najib. It is deeply ironic that one of the leaders who did the most damage to political institutions is now the defender of democracy in Malaysia.

The stark Najib-Mahathir face-off focuses heavily on different perceptions of the legacies of their past tenures, forcing voters to opt for the least-opposed candidate. This inevitably has led to resistance among some voters to either choice. The challenge for both leaders is to convince voters that they offer something meaningful for the country’s future. This is playing out in the campaign.

3. Undecided voters, reduced turnout

Less than one month away from GE14, credible polls suggest that over a third of registered voters are estimated to be still undecided. In 2013, only 15% went into the election campaign without a clear choice. The 2018 campaign will matter, as it will determine which party will tip the balance in voting.

A crucial part of the decision will be whether to vote at all. Voter turnout reached a record high of 85% in 2013. All indications are that turnout will drop this time around, as shown in the Sarawak 2016 polls which saw a turnout of 66%. The decision to put the election on a Wednesday aims to reduce turnout further, and this is enhanced by indecision among the electorate itself.

Whichever party brings voters to the polls will have the advantage. The BN’s machinery is stronger, fuelled by its resource advantage. It traditionally has the stronger record on bringing its base out to vote. Given the antipathy towards Najib among many in the BN base itself, the higher turnout for the BN is not guaranteed.

At the same time, the opposition has greater obstacles getting its voters out compared to 2013, given the loss of PAS which served as the machinery backbone for Pakatan Rakyat. All of Pakatan Harapan parties by contrast have comparatively weak machinery. With less money in the 2018 campaign compared to 2013 to date for the opposition, this potentially weakens turnout for the opposition further – adding to the competitiveness.

4. Prominent identity politics

The sensitive issues of race and religion lurk closely below the surface in this campaign. In the past five years, the Najib government has pitted Chinese against Malays openly with its zero-sum characterisation of the 2013 vote as a “Chinese tsunami”.

The labelling of the opposition of 2018 as a “Malay tsunami” follows the same ethnic framing, putting the question of Malay unity and the role of non-Malays centre stage in the current political contest. While interpersonal race relations remain largely cordial, the politicisation of race and power creates undercurrents that cannot be fully controlled or predicted.

To further complicate this dynamic, PAS is articulating its own “pure” Islamic agenda, having nothing meaningful to offer in other areas of governance. While Umno tacitly supports this agenda – contributing to the narrative of ratcheting up religious differences as a reason to vote in GE14 – religion has moved from a question of religious freedoms to religious dominance and displacement.

Rather than building bridges across the faiths, the campaigns by PAS and to some extent Umno, are more about exclusion and the primacy of one community’s rights over others. This also taps into highly emotive and unpredictable dimensions.

5. Post-election questions

Najib is also no Abdullah Ahmad Badawi, whose gentlemanly sense of fairness accepted the results of the 2008 campaign.

With charges of kleptocracy shadowing Najib, legitimate questions are being asked whether he would accept the results. The same can be said for the opposition as well, which has witnessed the Najib government introduce even more structural unfairness in the electoral process in areas such as the delineation. This excessive unfairness has sadly delegitimised the elections among many and fuelled anger, creating greater risks for acceptance of electoral outcomes.

Nevertheless, both BN and the opposition are living in their own political echo chambers, both sides are confident of winning. They have drunk their own rose syrup, not fully appreciating that many Malaysians stand on the sidelines, watching and deciding which electoral party to attend. The mood is not yet one dominated by celebration and hope, rather one permeating with uncertainty and indecision.

The campaign will matter more than is realised, and as such, every vote will matter.

Tales of a resilient Umno, jaded voters, and a boring opposition

2018-01-19T04:21:00.001+08:00

Regime Resilience cover

Regime Resilience in Malaysia and Singapore (SIRD and Rowman Littlefield) Co-edited by Greg Lopez and Bridget Welsh. This collection of eighteen essays was launched in Kuala Lumpur. It will be in bookstores early next year. Contributors include: John Funston, Clive Kessler, Amanda Whiting, A.B. Shamsul, Lily Zubiadah Rahim, Greg Lopez, Ross Tapsell, Mohammad Ariff, Meredith Weiss, Gaik Cheng Khoo, Chong Hui Wee, Bilveer Singh, Steven Wong, R. Reuben Balasubramaniam, Lee Soo Ann, Terence Lee, David Martin Jones and Bridget Welsh.

The following is an excerpt from an interview by Emmanuel Surendra of theother.my at the book launch of Regime Resilience in Malaysia and Singapore

I’ll kick this off with the coming general election, and as it’s around the corner and you have been studying and observing Malaysia for a very long time, what has changed since GE13 and what’s unique this time round?

Let’s start with some of the basics first. Of course, we have a different opposition where we have a split opposition between PAS and Pakatan Harapan, and PAS has seen to be closely allied with Umno although officially independent.

I think PAS has a bit of an identity crisis in that type of situation, but this opposition dynamic makes more for a very messy contest especially in close three-corner races. Disproportionally, the three-corner dynamic advantages the incumbent Barisan Nasional (BN), although not in all seats.

Some seats in fact it would work to the advantage of the opposition such as a seat like Seremban where three-corners will strengthen DAP’s hand. But I think for the most part, what we see is a situation where we have a more divided opposition.

The second thing that has shifted is BN or Umno itself. This election is about political weakness on the part of both the opposition and the government. Najib Razak is the most unpopular prime minister in history and he is trying to carry an election not with his own persona but on his use of the office that he holds, and the use of the resources that he controls.

In the context of the governing coalition, it has good reason not to have confidence because of this sense of weakness, the weight that the coalition is carrying. In 2013, Najib carried Umno and the BN; now Umno and the BN are carrying Najib, and although the media portrays this differently, that is the reality.

This election is also not about reform on either side. The opposition is very much being led by Dr Mahathir Mohamad and Mahathir is representing a version of the past and Najib is again also representing the past. He has been in office for almost ten years.

It’s a question of which versions of history will dominate and whether or not people will see their future in those respective histories. This is an election is about different versions of the past as opposed to fundamental shifts and changes.

The perception is also different in that the people are missing in this election. Not only there is a sense of apathy or disengagement or a lack of choice among some sections of society, especially in the urban electorate and among young people, but its seems more so than other elections, very much about a contest of personal power as opposed to fundamentally coming up with policies and programmes to address the concerns of the electorate.

And politicians will say, “We are better. They are not.” But they are focused on each other and there is that missing element and you can feel that – there is no real excitement.

A lot of minds have been made up already and the big issue is: how many people will stay home? So, in contrast to the protest votes in 2008 or even in 2013, there may be more silent protests.

Despite what everybody is saying that this is in the bag, I argue that this election is one of the most uncertain, disproportionate and most competitive elections in the country’s history.

In part because new seats have become competitive as a result of the three-corner races and, of course, by the contestation of Mahathir. So we have states like Kedah and Johor that are much more competitive than they might be.

Kelantan remains competitive, again, in part, if we go back to this issue of weakness, PAS is weak. It’s split and has continued divisions within it. They all talk as if they are psychopathically behind the leader, and it’s the same thing in Umno.

But those divisions are very quietly percolating and you know people feel a sense of not anger – which we saw in 2008 nor hope as we saw in 2013 – but I would say discontent. And that’s a different type of emotion.

Also, in this election, emotions will be the decisive factor, and that the use of identity politics is becoming pervasive and the playing of ethnic groups. Old tactics, but they have taken on a different parameter as my new book points to.

But I would say that identity politics will be something all sides will try to use, and in a very calculated way, to galvanise support. Because they are not offering anything much different in terms of platforms. So due to this disconnect among the electorate, they are going to depend on identity politics to galvanise people.

For example, I project that Najib’s close relationship with Donald Trump will be used by some people to say they shouldn’t vote for him. The use of Islam and religion will be played by Umno, PAS and also the opposition. These sort of identity politics are going to be quite important, in that kind of diversions from the status quo.

The final thing that is quite important in understanding this election is, despite it being very competitive, many people don’t see this as an election that is going to yield outcomes. In part because the contest itself is highly rigged and in part because a lot of people don’t see political parties as being able to find solutions to their problems. So it’s in that context, these uncertainties will play out in very interesting sets of ways.

And anybody who tells you they know they are going to know the results, is either a fool or a liar and I would try not to put myself among those. We can see those trends but whether or not we see those results, is a very different thing.

So will this discontent and disconnect we are talking about be realised by way of a lower voter turnout?

Absolutely. Voter turnout will be decisive in the results but disconnect has actually led to many different types of things that are not being recognised. We see the dominance of “right politics”, or the narrative of the right.

If we look on social media, we have very pronounced echo chambers in Malaysia. We also see on social media, among some parts of the Malay community, very powerful ultra conservative messages being exchanged..

Some of it with fake news. Some of it with identity politics that are very conservative – anti-Chinese, “don’t elect a Chinese person” – vis a vis the politics of racism and the politics of intolerance that we can see in parts of the right. And that narrative is sometimes played out in the media and it seems to predominate.

Then we also have very interesting narratives that this disconnect is hiding. We see identity politics among Malaysian Indians and there is a lot of dissatisfaction about the treatment of the community and the lack of and this is a product of the weakness of the BN.

There is no meaningful Indian leaders in the system and so is it a makkal sakti (Tamil phrase for people power)? Not yet. But is there disconnect? Yes. Is there discontent? Absolutely. Is there discussion? Yes.

And, again, we don’t see this, right? Because what we see is being told to us in a narrative which is predominantly the narrative of the right or the narrative of the government, which is heavily using its propaganda and its cybertrolls and others.

But that doesn’t take away from that there is a narrative of vulnerability and let’s be real, despite what government says, living in Malaysia is the most expensive it has ever been. Incomes are not making ends meet. Everyone – especially the lower and middle classes – are feeling those differences in the past.

For goodness sake, who pays RM40 at a public hospital for parking and this is just for a night? When certain families don’t want to get sick because they can’t afford it, that’s telling you something: that wasn’t the Malaysia of the past, but this is the Malaysia of today.

Yet despite all these issues, Umno is still here. It has survived economic crises, dissent, scandals. Why is it so resilient?

We can point to a few very important changes. In my previous book, The End of Umno, the central argument of that book is the Umno of the past is dead and that a new party is emerging.

I am assuming you are not referring to Umno Baru?

Not an Umno Baru in the sense of the Mahathir, but an Umno that is not based on certain principles and necessarily a party tied to long established machinery.

It has become more centralised. It has become much more about interests of becoming privatised. It has become much more corrupt and it has become much more – for a lack of a better word – conservative and insular as a result of the transformation that it has and that also has become a part of its weakness.

What we’ve seen in the last few years is that Umno has become Najib’s party: it’s full of sycophants. And why is that? Well the dominant issue is about economic interests in the party.

Umno has always been a vehicle of Malay political and social advancement from its origins. That has not shifted. But the way that it has gone about and the mechanisms and the measures and the tools have somewhat shifted.

And Najib has been effective in using the office from his position and the levers of the other parts of the executive, from the MACC and his control over appointments, to secure those interests.

That there is limited debate and discussion and even challenge within the party, doesn’t mean there isn’t discontent. There is. But that discontent is not voiced in such a manner because they know that there is positioning and interests that are dominant and people are in a kind of wait-and-see mode.

Also I think leaders of or from Umno, be it Anwar or Mahathir and I would say be it Najib, should learn from the past: in that loyalty is not personal, loyalty is to the position.

So its resilient because it controls those levers and it has become a self-fulfilling prophecy because the levers themselves insure the resilience but the mechanisms that the party has adopted have shifted and changed and that is what the book discusses.

It talks about the shifting natures of patronage and electoral manipulation and how that has evolved in different ways. The use of ideology and the use of ethnic politics in different mechanisations as well as Najib’s ability to use crises as a way to bring people together inside the party.

Najib was very effective in making 1MDB the ship that sank the government and in fact it nearly did, but the burden that Malaysians will have to pay for this kleptocracy is very high.

So what are the traditional explanations? Economic legitimacy and economic performance. Now, it is not really about how much the government moves, but where you fit within the inequality scale and those factors.

Traditionally it is about ethnic relations and being able to accommodate different views. Now it is using polarisation to your advantage. Traditionally it is been about leadership, now it’s about position.

Traditionally it has been about engagement, in terms of the sense of responsiveness in the system, now there’s much less of that, because the system and the civil service are overburned because of the budget cuts they have had to make in the institutions themselves, and that the corruption within the civil service is at a much higher level than before.

And services have been affected in real sense, in terms of meaningful areas. Najib’s rural support doesn’t come from just education and media. It comes from the fact that Umno helped bring about a different quality of life in these rural areas, but some of that is now eroding in very meaningful ways.

You could just see some of the roads, especially in certain areas. God bless, Sarawak and the Sarawakians who drive on the roads that they suffer.

So, I am giving you a long answer to these questions to point out that these traditional factors have to be conceptualised somewhat differently. Umno is resilient not just because it controls them, but because it adapts and because Najib has chosen to make these choices.

But these choices come at costs and that contributes to what I was saying earlier, to the politics of weakness, because these choices are undercutting the future for the country, not strengthening it.

Now, I am looking at the opposition and it has been promising a lot of stuff. But how successful will it be, should it come to power?

One has to look at the records of Selangor and Penang, and voters need to ask themselves is the government better now than what it was beforehand? People have different opinions on that, but all I can say is, as someone who lives in Selangor, that the trash is picked up, and there have been some noticeable improvements in governments that I can point to.

There have been some debates and issues about questions of managing parks and roads among others that would perhaps not have happened in the past. Does it mean that things are ideal in terms of questions of corruption or questions associated with where it should be? Far from it.

So you have to begin by asking what type of governance is there and what’s your standard and where you want to be in that context. I’m not a voter but a resident some of the time and I would say this is not so easy questions to answer.

But going back to this broader question of whether or not the opposition is or has been able to move in a very different sets of ways and will they fulfil their sets of promises, one has to understand that the problems of Malaysia are not rooted only in politics, but they extend into the education system, they extend into media socialisation, that corruption is much a responsibility of the business community as it is of the politicians.

Racism is much a responsibility of ordinary citizens as it is of the system itself, and how do you get beyond those things when you have been socialised for such a long time into these sets of norms and practices? A part of it is you need to have leaders that are not corrupt and are leaders that are not racist, but when you have leaders that are both, then it doesn’t help the situation.

And not all of the opposition people send a consistent message in this regard but the underlying drivers have to shift in this country and have to involve education, a reform and a strengthening of institutions to make them more inclusive, and this will only come with good leadership and a recognition of wanting to have some sort of cooperation to put the country and people first.

If I look throughout the year about things where I felt positive about what people were doing, one of those were the reactions of the Penang floods, where you actually saw opposition and government people actually sitting down and you saw a mobilisation of civil society to help.

This is a moment you say, “Wow, Malaysia boleh. Betul boleh.” And you feel heartened by these types of outreach initiatives because people put away their blinders for that. Are people capable of it? Yes. But the environment needs to be conducive to that, so this is where questions arises where the electorate will have to make those types of choices.

What hopes and aspirations they want in that context? Do they want to accept the status quo or do they want to realise something different even if it’s not necessarily exactly what they think it is going to be?

And Malaysians – in contrast to many other places – are very patient but they are also very accepting. There is a sense of the silent majority wanting one thing: a better Malaysia, a better future for their children, a better future for their grandchildren, and you know that goes back to what I said, the weakness and the disconnect and the dissatisfaction – we need to be conscious of that.

I mean people are talking about policies from both sides and assessing them. But generally do voters have policy preferences?

Some do. There is a sophistication among a lot of the Malaysian electorate and they are becoming increasingly sophisticated.

Although in the campaigns themselves people aren’t thinking about tax policy and the like, because the reality is there is very little difference between Pakatan and BN, in terms of economic policy. The only big difference is PAS doesn’t have an economic policy.

So it comes down to what is the different between Pakatan and BN. And Pakatan tries to portray itself like, “Look, we’ll give you more”. That’s not necessarily a constructive policy; it’s just a sense of trying to outbid and you are outbidding someone who has the money when you don’t have the money.

So people look at you and say, “Well, I’d rather bid with someone who has the money.” It’s a bad tactic.

But there are some issues that do connect with certain electorate such as the policy towards education, towards their children, and importantly the issues of shariah and Islamic law are connecting with different parts of the electorate in varying, salient ways.

People are concerned about these issues and unfortunately these issues are not necessarily treated with a degree of nuance that is meaningful. But I think to say that people are not concerned with what these will do and how they will be implemented – it’s a misnomer.

One example, is the management of the environment. This is an issue that resonates in places like Kuantan for obvious reasons and generally people are conscious of that – the managing of the hills and local communities and landslides. These did have impact in 2008 and 2013, and would have impact in the next election in 2018.

So we are looking at Penang, Selangor and Pahang and let’s not forget, these flooding problems in Kelantan can also be traced to the mismanagement of the environment and the deforestation that has happened.

In Machang, we have still has a problem in terms of communities not being built and houses not being built. Parts of Kelantan are still recovering from the flooding disaster few years ago and frankly it’s a disgrace – it’s a disgrace to the state and the federal governments that you have this level of mismanagement of these things to this day.

And this in part is due to Kelantan being so far away that people don’t see how ordinary Kelantanese are still suffering.

So how do choices get formed, or opinions get framed under a resilient regime?

One of the things that Najib has been very successful from 2008 to now, is to dominate the social media and the digital space. We have about 80% internet penetration in Malaysia and depending on how you look at the mechanisms, social media usage, look at who controls those narratives. The narratives, especially in the Malay community, are controlled by the BN.

And that’s part of an adaptation strategy and controlling those sets of discourses. PAS also has quite a significant following but, again, you have to look at how that’s evolving and who is speaking to whom and how.

And English speakers don’t follow the Malay social media and Chinese speakers just treat it as a different world and for them it is a different world. So until you cross into the different chambers of different discourses, you are not recognising how the world’s perceiving it.

I mean all the opposition supporters think that there’s nothing else and all the government supporters think there’s nothing else. So you are living in different twilight zones. But there are people who crossover because of family connections and others. These crossovers are in the minority.

Do we need a stronger or different party system then to correct some of the systemic issues in the country at the moment? Are we in need of something radically different if we want to – for lack of a better phrase – dismantle the regime?

You need different narratives, and you need leadership to portray and to focus on those narratives, and you need people to stand out for some of the things that are right and to put the people first.

For good or bad, all the politicians across the divide are perceived to putting themselves first. And there everybody is so righteous and they all think they are right when in fact this in itself is very alienating.

Look, mistakes get made, some of them are substantive and some of them are less substantive. The question is accountability for those mistakes and learning the right lessons and having solutions to address them.

The mode is fake news, propaganda and it’s feeding a lot of cynicism that is existing within society. So, the party system itself is not the solution. Some people say should there be a new party?

We have a big change in the run up to the next election. We see a different sets of political alliances and the opposition or Pakatan Harapan for the first time is arguably one of the most secular alternatives the country has ever had in terms of an opposition coalition.

That doesn’t mean it’s not representing the communities and looking at issues of ethnic and religious faith, but it is very different than with PAS there. So that is a different alternative.

The question is people don’t yet fully understand what is different about them because they seem to be hesitant to speak out for a different set of narratives, so as a consequence the government narrative dominates.

I think civil society here serves as a check and balance but is it doing its job? I’m looking at people like Bersih 2.0, Lawyers for Liberty and all the other activist groups. Because, from my observation at least, they come off as partisan.

First of all, we have civil and uncivil society in Malaysia. We have a very robust civil society and non-governmental organisations. Some of them are partisan, either pro-government or opposition.

One of the biggest developments in the last five years has been an expansion of uncivil society and those kind of organisations, of which many of them have received some government funding, but not exclusively. And they represent very different visions of the future.

But we have to be cautious to treat civil society as all pro-opposition or others. A second big development is civil society has now become, more or less, disenchanted with partisan politics, given the fact that they are not so clear and do not see the change that come about at the polls.

So many parts of civil society have chosen to engage in alternative types of activities, philanthropy, working directly with the poor, or through social services such as teaching. I think one has to appreciate there is still considerable citizenship within civil society.

And even in parts of uncivil society, they also engage in philanthropy and others, but just different groups. But there is a sophistication and transformation of civil society groups in terms of how they engage politically and what they conceptualise as politics is actually very different.

That said, I think in between these two groups is a third group consisting of people doing important things. I hope to have a piece out soon having traced the impact of Bersih’s movement going from the streets to the courtroom.

And I think Bersih has done a big service to the country by taking all these legal cases to challenge the delineation process, and that in itself is important because this involves the fundamental representation of ordinary Malaysians.

And being part of protesting or being part of articulating parts of a different community has become the norm, so much so people don’t see this as something as unique, but in fact for those of us who have been in Malaysia and connected to Malaysia for a long time, this is very different.

Ten years ago you wouldn’t talk about being part of a movement but civil society today are in large numbers and does that speak to civil society doing its job? I don’t think about it as a job per se but more of a passion, a commitment in terms of being able to transform society and to make it in itself more civil and that is happening.

But if there are weakness in civil society, they can be twofold. One, they succumb to the weaknesses in the system itself by personalising things. And these things become very petty in terms of the discussions and very narrowly focused.

Two, they live in their own echo chambers. When we always think we are right, we are always right and therefore everybody else is wrong. We learn more from our mistakes than from the things we do right and I think the challenge for civil society is to understand what those lessons are, and to evolve and figure out how to apply those lessons.

Some groups do it better than others, but keep in mind without civil society we would not have important discussions about women’s rights, accountability, corruption, and many of these individuals have been on the frontlines of an increasingly, more oppressive response by the government to those groups.

Bridget Welsh is Associate Professor at John Cabot University, a Senior Research Associate at NTU, a Senior Associate Fellow THC and a University Fellow of CDU. She analyzes Southeast Asian politics, especially Malaysia, Myanmar, Singapore and Indonesia. She is committed to engagement, fostering mutual understanding and empowerment.

Malaysia’s Coming 14th General Election: Issue in Doubt

2018-01-19T03:43:00.000+08:00

This is adapted from a speech by a veteran journalist-turned businessman to a regional forum put on by the Institute of Southeast Asian Studies in Singapore on Jan. 9.

Malaysia’s next general election must be called by June by a government that over the past five years has been wracked with financial scandals, an inability to curb rising living costs and income inequality and has seemingly lost a clear vision for the future.

After more than a decade of steadily losing its rural lifeline, common sense would dictate that Prime Minister Najib Razak’s government faces an uphill task in retaining a comfortable majority. In fact, as an observer of Malaysian politics and having seen the last eight general elections either as a journalist or an insider, this is one election I will not be comfortable in predicting. There are too many new parts to the equation and any prediction would be, at best, an educated guess.

Long, futile wait for political change

However, although Malaysia’s urban and civil society have long rooted for political change, their views have not prevailed over a vast rural electorate – mostly ethnic Malay and Muslim — that traditionally has supported the ruling Barisan Nasional and its leading political party, the United Malays National Organization.

Still, since the dramatic 2008 general election when the BN lost its two-thirds majority, and 2013 when it actually lost the popular vote but still maintained its grip on power viua gerrymandering and the first-past-the-post system, its share of rural votes has been declining.

The Barisan’s popularity peaked in 1995 with 65 percent of the popular votes, although in 2004 it won 90 percent of the parliamentary seats on 63.9 percent of the popular vote. Since that time, its sway via both the popular vote and parliamentary majorities have been declining. Its worst result was in 2013 when it won 59 percent of the parliamentary seats with only 46 per cent of the popular votes.

Since 1955 and the first general elections in what was then the Federation of Malaya, and since 1963, after the formation of Malaysia, save for a blip in 1969, the rural areas have traditionally been the vote bank for the Barisan Nasional and its predecessor, the Alliance.

Fixed Deposit in the east

And since 1963, the relatively under-developed states of Sabah and Sarawak, which today account for 57 parliamentary seats or about 26 percent of the seats in Parliament – have almost overwhelmingly voted for the BN; so much so that they are referred to as the BN’s fixed deposit.

Similarly, the rural heartland in the peninsula – where Felda rural land development schemes account for almost another quarter of the parliamentary seats – have also traditionally supported the BN. But today, save for Sarawak, it appears that it will be down to the wire in the Felda-seats and in Sabah.

There is no question that the traditional BN vote bank is hurting. Job opportunities are scarcer, the cost of living has risen, subsidies on many essential items such as petrol have been removed, college education no longer guarantees a good job, the ringgit has weakened against other currencies so much so that even once cheap havens like Thailand and India are now expensive.

Does that mean that the traditional vote bank is going to go against a government beset with corruption scandals and a bungling political leadership? That’s what many of the intellectuals and political pundits want to believe.

Could Go Either Way

But after seeing the Brexit vote and the election of US President Donald Trump, and in the absence of reliable polling, I am not so sure. My gut feel tells me that it could go either way. The trends over the last decade tell me that it could go either way. Anecdotal evidence in my travels through the country tell me it could go either way.

Yet, as all of us know, when you are about to mark the ballot, many other considerations come into play, considerations that do defy logic.

I take myself as an example. I am a businessman, well-travelled and I think, though some of my friends may dispute that, well-read. In 2013, I resolved that I could not, in all conscience, vote for the Barisan Nasional and I went to vote to fulfil that resolve. Yet, as I looked at the ballot paper, I realized that all my life, I had voted for the Barisan and I was not sure whether if the opposition alliance then won, they could rule any better.

I have been proven right to a certain extent because while the ruling party has continued to disappoint, the opposition alliance – a hodgepodge of differing dreams and ideologies, which a journalist friend of mine once described as the gang that couldn’t shoot straight, has broken up with its strongest ally, the theocratic Parti Islam, which is now seemingly supportive of the Barisan Nasional.

But I was already in the booth and I had to vote: I split my vote – for Parliament, I voted the BN candidate whom I believed was sure to lose and for state, I voted the opposition candidate, who I was convinced would definitely win. I appeased my conscience and as so happened, the BN candidate did lose by a huge margin and the opposition candidate did win by a huge margin.

Barisan’s Toughest Fight

I am not sure that how I voted would be how a smart man votes. Therefore, as I have said earlier, I will not predict as I could be wrong but one thing I am sure – this is probably the ruling coalition’s toughest fight in my country’s six-decade polling history.

Most of us have this psychological block. Given that Malaysia has never been ruled by any party other than the Barisan, there is a mind-set that no matter what, the ruling coalition will not lose. As human beings, we are afraid of uncertainty. But since 2008, Malaysians have also come to accept that it is now a two-party state and that the current opposition can and might one day sit on the government benches.

Certainly, although the opposition parties seem to have had greater traction in working together in the last two general elections, still, they shoot themselves in the foot all the time.

Enter a Nonagenarian

Nevertheless, their decision to anoint the 92-year-old ex-Prime Minister Mahathir Mohamad as their prime minister-designate and their agreement in early January on seat allocations is certainly a major achievement. In reality, with their leader Anwar Ibrahim in prison, the opposition parties do not have any other person as yet who can hold them together other than Mahathir, for all his faults.

Some may view the opposition’s choice of Mahathir and Anwar’s wife Wan Azizah Aziz as the Prime Minister and Deputy Prime Minister designate as a band-aid solution. Indeed it is. But given that besides Anwar, there is no one else who can command enough respect to hold this loose coalition together, Mahathir is the best solution for them. In the past, he has shown that he is a formidable adversary.

I believe the opposition has made inroads but they are still not a cohesive force. They are not as united as they were in the 2008 general elections or even the 2013 polls. Parti Islam seMalaysia, the rural-based Islamist party, is almost totally estranged from them and they have two new partners – Amanah and Bersatu, headed by a new ally – Mahathir Mohamad.

Mahathir has opened many doors for the opposition – like in Malay-majority Kedah where he comes from and in Malay-dominated Felda schemes which were out of bounds to the opposition previously. But even Mahathir has failed to make inroads into the fixed-deposit states of Sabah and Sarawak, whose populace have a deep mistrust for those from the peninsula, in particular Mahathir himself who is associated – rightly or wrongly – with many of the ills facing the country such as granting citizenship to Filipinos in Sabah to enlarge the BN’s vote bank in the 1990s.

Barisan’s Deep Purse

Further, the propensity and ability of the ruling party, despite its mounting weaknesses and scandals, to dish out money and goods during the pre-election and election campaign will have some effect in many of the rural areas. How does the unhappiness with a scandal-riven government offset the benefits of handouts? Does it square itself off and the vote bank remains with the ruling party? Or will people take the handouts and vote for change because they are just so fed up?

If we go by voting trends in the 60 years since Malaysia has gained independence, it would seem that dishing out goodies has worked. So has the gerrymandering which political parties in the developed countries as well use effectively, as Republicans in many US states can attest. Similarly, while the Barisan Nasional is again very likely to lose the popular vote in the next general election, it is uncertain that it will lose its parliamentary majority.

My view is that the last two general elections have shown that people have moved to accepting a two-party system. Despite being the gang-that-cannot-shoot-straight, the opposition has positioned itself as a viable alternative, winning in key states like Penang and Selangor and dramatically reducing the majorities in previous Umno strongholds such as Johore, Kedah and Perak. These states are still under threat. And the opposition has made inroads into other staunch Barisan strongholds. Hence, it is unlikely for the Barisan to win back the two-thirds majority it lost in 2008 or to improve on the 2013 lost popular vote.

If I am proven wrong, then I daresay that a two-thirds majority for the BN would surprise even the vast majority of BN leaders themselves. Publicly they may say they can and will win back the two-thirds majority; but privately, they are fearful that they will only scrape through with a simple majority. The possibility of losing has not escaped them either.

Surprise for the Barisan?

My view, like many of these leaders in the BN, is that the ruling coalition will find it hard to replicate even the results of the 2013 elections where they won 134 of 222 parliamentary seats although their strategists predict that “big data” shows they can win anywhere between 140 to 170 of the seats.

The opposition leaders I have spoken to are confident of winning 115 seats. You need 112 to form a simple majority. Having said that, I must also add both the Barisan and opposition were equally confident in 2013.

The more likely scenario is that the BN might win again, with support from Sarawak and Sabah, but rule with a smaller majority than even 2013. Still, with a perfect storm, all bets are off. For example, because PAS has split with their former opposition allies, the DAP and Anwar’s Parti Keadilan Rakyat (PKR), there will be many three-cornered fights. In a scenario such as this, Barisan Nasional can again lose the popular votes, like David Cameron did in UK in the last elections, and still win comfortably.

But the more likely scenario is that the Islamist party will either be decimated or reduced to an inconsequential number of seats because the real fight is between the Barisan and the Pakatan Harapan. PAS has its pockets of support in the green belt of Terengganu, Kelantan and Kedah but that’s it.

The Path to the Future

Whatever the result in the Malaysian polls this year, the more interesting, and probably defining thing for the country will be the post-election scenario. What happens then will determine Malaysia’s path.

We are, as a nation, sliding fast down the slippery slope; and what we do post the 2018 General Elections after almost 10 years of being in a stupor because of the incessant politicking will decide whether we continue to slide or whether we make a serious attempt at re-taking our place as one of the leading economies in this part of the world.

A sad fact is that over the years, race, religion and politics have consumed Malaysians. As a fledgling nation, our founding fathers used to say that our diversity was our strength. In fact, one of the strongest taglines that made Malaysia well known throughout the world was its tourism promo “Malaysia Truly Asia.”

Racial, Religious Polarization

In the past decade, we have seen divisions over race, religion and politics worsen and we are a very polarised country today.

The education system we inherited from the colonialists has slowly but surely declined and those who can afford it prefer private education, which has seen private schools and colleges mushroom. This further adds to the inequality in income and the socio-economic divide.

The civil service and system of government, probably the one other thing we can thank the British colonialists for, has also declined considerably. Corruption has flourished and people don’t bat an eyelid when they hear of millions being misappropriated. Businessmen privately moan and groan about the corruption and leakages; but the truth is that it is many of these same businessmen who have corrupted the country by greasing palms and then raking in money by overcharging and overbilling in contracts or providing public services.

Civil servants and politicians have been found to live far beyond their means with in some cases more than a hundred million ringgit in cash and valuables, stashed in their bank accounts or hidden in their homes. Integrity is no longer that prized a virtue.

Independent Media Doesn’t Exist

Independent media virtually doesn’t exist in Malaysia; and the practitioners of social media, the so-called influencers, are generally as bad as the corrupt politicians they criticize selectively. Law enforcement agencies have lost so much credibility that even when they act against those breaking the law, the perception is that the perpetrator probably ran afoul of politics rather than running afoul of the law.

The custodians and the institutions which in the early years contributed to a strong Malaysia because of their integrity, their patriotism and their desire to see enhancement in the fortunes of their fellow countrymen – people such as senior public servants, politicians, heads of government agencies – are getting rarer today.

I am not saying that the majority of these custodians have gone to the dark side. There are still good people with good values. What I am saying is that the majority of these good people, these custodians and institutions, have been cowed into silence and look the other way more often than stand firm on principles of integrity. The more custodians that seal their lips and look the other way, the more Malaysia will slide down the abyss to the point of no return.

The famous Renaissance poet Dante is attributed with having said that the hottest places in Hell are reserved for those who in time of moral crisis preserve their neutrality.

It’s a nice quote; but when faced with a choice of being censured, losing their jobs and their perceived respectability, do people in that position worry about a hell they have not seen, a hell that only faith will make us believe in, or do they try to escape the living hell of a vindictive and oppressive regime? For many, it’s easier to look the other way because state and non-state actors can shell out retribution with impunity, stifling the dissenting voice into silence.

But if Dante is right, then I can safely say that there are many in Malaysia who occupy important posts in government and in commerce today, who will be seated next to each other in the hottest seats in hell.

Malaysia is not the only country to face such problems; but Malaysia did not have these problems on this scale in its early days. That’s why it was successful.

Eating the Seed Corn

If we look at the world’s most successful nations, we find that they succeeded because they invested in education, in building values, in strengthening the rule of law, in ensuring the sanctity of institutions, in fighting corruption and abuse of power, in allowing freedom of expression, freedom of practising religion while curbing extremism, a healthy environment for civil society to flourish, conditions for job creation and economic growth and improving the quality of life of their people.

In a post 2018 general election scenario, no matter which party comes to power, Malaysia’s future will depend on whether they abandon the practices which have become the norm and work on building up the values which made it successful in the past. The system is not totally broken; it can still be fixed. Malaysia is not a failed state yet and can still be rescued.

It is a daunting task but if we look at Singapore, which was almost a backwater just 50-odd years ago, or Hong Kong, which was riddled with corruption, and look at how they came out of it, then surely, I believe, Malaysia can also do it. But if it is business as usual post general election 2018, then I fear for the future of my country; for the future of my children; and the future of their children.

If nothing changes, then the cross we bear because of race, religion and politics in Malaysia will also be the cross that our future generations have to bear. And the scary part is that we may not come out of it for a long, long time; perhaps generations.

By: Kalimullah Hassan - Asia Sentinel

Focus of Malaysian Sub Scandal Surfaces

2018-01-19T03:14:00.003+08:00

Abdul Razak Baginda, the one-time adviser and close confidante of Malaysian Prime Minister Najib Razak, who was once romantically linked to the murdered jet-setting Mongolian translator and party girl Altantuya Shaariibuu, has popped up after years of discreet absence in the UK.

For someone who has been out of the public eye for the past decade, Razak Baginda has wasted no time, propelling himself onto the Malaysian lecture circuit over the past six months but at the same time inadvertently reminding the public he had been a key figure in what had been the biggest scandal in the country’s history until an even bigger one blew up over the state-backed investment company 1Malaysia Development Bhd., the subject of a US Justice Department investigation into the looting of public assets.

Razak Baginda is very different from the disheveled and frightened-looking man who emerged from jail on Oct. 31, 2006, acquitted without trial of abetting the murder of Altantuya, who was alleged to have once been Najib’s paramour. The 28-year-old mother, who was believed to have been pregnant at the time, was shot twice in the head by one of Najib’s bodyguards and her body was blown up with military explosives in a patch of jungle outside the suburban city of Shah Alam.

The allegation that Altantuya had been Najib’s mistress was revealed by the late private investigator P Balasubramaniam, engaged by Razak Baginda to stop Altantuya from creating a scene outside his house. According to a letter found after her death, she was demanding a cut of kickbacks from a multi-billion ringgit Malaysian government deal to purchase submarines from the French.

Razak Baginda once was one of the closest advisers to Najib, then the Defense Minister and Deputy PM (2000-2008), on government arms procurement projects. The political analyst was involved in the purchase of two Scorpene-class submarines and one Agosta-class submarine from the French naval dockyard unit DCN (Direction des Constructions Navales). The deal was worth around RM5 billion.

Hasty departure for the UK

On his release and acquittal, Razak Baginda was swamped by reporters who tried to interview him, but was guarded by a wall of policemen. A month later, at a press conference, he was guarded by a team of lawyers who monitored his answers. He immediately decamped to England, ostensibly to complete a doctorate at Oxford.

Seven years later, on Oct. 26, 2015, Razak Baginda emerged to deliver his first public talk in Kuala Lumpur at a “Special Forum” called “Reforming Malaysia: A Conversation with Razak Baginda.” The session was organized by a new think tank he had founded, called the Center for Global Affairs (ICON).

The former Malaysian PM, Mahathir Mohamad once said, “Melayu mudah lupa” (Malays easily forget) and Razak Baginda probably thought that Malaysians would have forgotten about him and the brutal murder.

Living abroad helped Razak Baginda avoid the glare of publicity and the anger of the Malaysian public who were furious at the High Court’s handling of the trial. The motive for the murder was never established although the murderers were said to have been offered RM50,000 for the killing.

Wife Implicates Najib

Few can forget the hysterical shout of Baginda’s wife, Mazlinda Makhzan, at the time of his arrest: “Why charge my husband, he does not want to be the prime minister?” an apparent reference to Balasubramaniam’s statement that Najib had passed Altantuya on to the political analyst because it wouldn’t look good to have a foreign mistress when he was elevated to become the country’s leader.

Importantly, there were also unexplained phone texts between Najib and Razak Baginda’s lawyer, Mohamad Shafee Abdullah, which alluded to Najib’s alleged interference in the case. One message read, “Pls do not say anything to the press today. i will explain later. RB (Razak Baginda) will have to face a tentative charge but all is not lost.”

Altantuya’s father, Setev Shaariibuu, has not received any justice for the murder of his daughter and has continued to demand that the Malaysian government give him answers about her death.

Two policemen, Chief Inspector Azilah Hadri and Corporal Sirul Azhar Umar, were found guilty of Altantuya’s murder in a trial that critics said was carefully orchestrated to keep from answering questions who had hired them to kill her. Sirul is now languishing in the Villawood Detention Center outside Sydney, vigorously wheeling and dealing for his release and asylum. Azilah remains in a Malaysian prison.

Razak Baginda probably thought that he could lead a quiet life by relocating to England but he didn’t reckon on the persistence of SUARAM, the Malaysian Human Rights NGO, which complained to the French authorities about the Scorpene deal in November 2009. That triggered a preliminary inquiry and a judicial investigation in Paris in 2012.

Investigative stories Tell Tale of Scandal

The investigation was the subject of a multiple series of investigative stories by Asia Sentinel that won the Society of Publishers in Asia award for excellence in investigative reporting – Asia’s version of the Pulitzer Prize.

Finally, years later, on July 18, 2017, Razak Baginda was indicted in France for “complicity of bribery, acceptance of bribes and concealment of misuse of company assets.” Two officials of a DCN subsidiary were also indicted on charges specifically of having bribed Najib Razak.

On Aug. 4, the SUARAM adviser, Dr Kua Kia Soong said, “The first indictment of the arms maker shows that SUARAM’s suspicion of commission paid to Malaysian officials in the Scorpene deal is well founded, and we have been vindicated.”

Asia Sentinel reported that the French investigation had revealed that Terasasi HK Ltd., a company owned by Razak Baginda and his father, received €30 million in “consultancy works,” the accepted terminology for kickbacks. Terasasi existed only as the name on the wall of a Hong Kong accounting company. As Asia Sentinel reported, French investigators also uncovered evidence that a Malaysia-based shell company, Perimekar, owned by Baginda’s wife, had received another €114 million in “consultancy services.”

The money was said to have been passed on to the United Malays National Organization with the full knowledge of then-Prime Minister Mahathir Mohamad and French Foreign Minister Alain Juppe, among others, according to evidence provided to Asia Sentinel.

Timely Rebranding

Baginda’s rebranding is timely, especially as Malaysia’s 14th General Election is due soon. He could have retired a rich man from his alleged kickbacks from Scorpene and lived a life of luxury in England. He could have avoided the scrutiny of the Malaysian public.

“He probably thinks that the Malaysian public have forgotten (and forgiven him),” said a social cynic who declined to be named. “He believes he has done nothing wrong, especially as the courts did not find him guilty of Altantuya’s murder.”

It is highly likely that Razak Baginda is repositioning himself in the Malaysian political world, according to a Kuala Lumpur-based political analyst. “Perhaps, Najib summoned him to return as his confidante,” he said. “Najib’s Washington trip was a wash-out. It was probably arranged on the advice of his foreign advisers. The Malays disapprove of Trump’s anti-Islam and anti-Muslim policies.”

A Malay, Muslim and Malaysian, the political analyst “will be in a better position to advise Najib on foreign matters. He is probably testing the waters and seeing how the Malaysian public react to him over a range of issues like education, religion and radicalization.”

However, it is more likely that the French indictment may have spurred Baginda’s return to Malaysia over a desire to remain free. Malaysia does not have an extradition treaty with France, unlike Britain. His stay in England would be risky.

Razak Baginda dismissed the French charge and said, “The French legal process is different from the Malaysian legal process. The term ‘charged’ in the context of the inquiry means placing the said individuals under ‘formal investigation’.”

We now see the comeback kid, Razak Baginda, re-engaging with Malaysian politics. He appears to be pushing the right buttons on many subjects. More importantly, as long as Najib is around, there is money to be made. ICON has held several forums and issued press releases with alarming regularity.

Pretensions as Oracle

This is proof that he wants to be heard on a range of subjects, upon most of which many Malaysians agree. On radicalization, he has urged the Home Ministry to monitor students, who studied in the middle-east, and warned that Malaysia was losing its reputation as a moderate nation. He has warned that the prominence of religion in schools will lower the quality of education. He questioned the failure of Malaysian leaders to confront the nationalists.

Razak Baginda has defended the bloated Malaysian civil service and blasted the journalist John Pennington for an article in “Asean Today” that unfavorably compared the Malaysian civil service with its Singaporean counterpart.

He also criticized Najib for his silence on the Rohingya issue at the 31st ASEAN Summit in Manila, saying it was a “missed opportunity” and then, on the following day, offered a groveling apology to Najib, saying “I got it wrong.” He praised Najib’s sincerity in helping the Rohingyas, raising the issue with the Myanmar state counselor, Aung San Suu Kyi, and with President Trump. Saying that Najib’s actions were unprecedented, Razak Baginda described him as bold and strong, willing to voice his displeasure over a matter he cared about.

“Never before has a fellow ASEAN leader brought out what could be regarded as a domestic issue of another member country,” he said. “Kudos to the prime minister, as it shows his commitment to help the Rohingya.”

Still Buddies?

So are Najib and Razak Baginda in constant contact? Or is he positioning himself and working towards a smooth transition to become Najib’s political analyst? On his re-emergence onto the Malaysian socio-political scene, Suaram’s Kua said: “He seems to have a knack of seeking publicity when he’d be better off staying out of media attention. He’s more of a liability for Najib by showing up all over the place and reminding us of Altantuya. But he seems pretty gung-ho about his ‘freedom from prosecution’. We shall see.”

Both men have to tread a cautious path, said a political analyst, “but do they care? There is only so much Razak Baginda can do to help Najib, because one wrong step could make the whole Altantuya and Scorpene scandal blow up in Najib’s face, and further reduce his chances in GE-14. Even if it were true that Najib and Razak Baginda have resumed their cozy ties, it is established that they need one another to keep their secrets safe. Remember the adage about keeping your friends close, but your enemies closer still.”

Perhaps Najib is willing to take that chance, especially after the warning issued by the American Attorney-General, Jeff Sessions, on Dec. 4, when he said that Malaysia’s 1MDB scandal was the worst example of kleptocracy he had ever seen. Razak Baginda may need Najib to prevent an attempt by the French to subpoena him to the Scorpene trial, but Najib has an equal need to prevent Razak Baginda from giving evidence.

Mariam Mokhtar is a Malaysia-based journalist and a regular contributor to Asia Sentinel

Mahathir Changes Malaysia’s Political Equation

2018-01-19T03:08:00.000+08:00

The battle lines for Malaysia’s 14th General Election have been laid, with the 92-year-old former Prime Minister, Mahathir Mohamad, teaming up with Malaysian opposition parties in a bid to oust the current premier, Najib Abdul Razak, and wrest power away from the United Malays National Organization, which has led the ruling Barisan Nasional coalition since independence in 1963.

Nor could Najib use the argument that the Chinese will take over the nation, which has been a hobgoblin to frighten the rural Malay electorate for decades. Mahathir, who dominated UMNO and Malaysian politics as head of UMNO for 23 years from 1981 to 2003, is legally a Malay Muslim.

According to UMNO insiders, Najib is extremely confident. He believes the Barisan, which also includes the Malaysian Chinese Association and the Malaysian Indian Congress, could – with the help of almost-brutal gerrymandering – win as 140 seats in the 222-member parliament and, if things break their way, even take back 148-vote two-thirds majority that the coalition had held for decades

Mahathir’s selection as potential premier, opposition leaders say, could dramatically change that equation and bring down a party and coalition rife with corruption and cronyism. Individuals close to Najib have been charged in the biggest kleptocracy case ever brought by the United States Justice Department, which has confiscated a vast array of Malaysian-owned assets in the United States.

At the center of Malaysia’s politics is a racial calculus in which Malays fear that the Chinese, who dominate the country’s business world, would come to dominate the political one as well.

With Mahathir at the helm, analysts say, Najib – picked as a protégé decades ago by Mahathir – can’t blame the Chinese-dominated Democratic Action Party for being the driving force for the opposition Pakatan Harapan coalition. During his years as prime minister, Mahathir was a Malay supremacist even though he is only half-Malay. His father came from the Indian subcontinent.

Mahathir is the undisputed come-back kid. The party he founded, Parti Pribumi Bersatu Malaysia (PPBM), has managed to unite the leaders of Parti Keadilan Rakyat (PKR), the Democratic Action Party (DAP), and Aminah, a splinter that split away from the rural-based, fundamentalist Parti Islam se-Malaysia, or PAS.

The much-awaited GE-14 is expected to be a viciously contested general election. It will also be Najib’s toughest. On Jan. 8, Pakatan Harapan announced that Mahathir would be their interim prime minister until Anwar Ibrahim, the charismatic opposition figure who has been imprisoned on what many consider to be spurious charges since 2015, would be freed. This was not the news that Najib wanted.

Social media has been abuzz with views about Mahathir’s nomination, including a report that Najib’s adviser, Habibur Rahman, had approached both DAP leader Lim Guan Eng and Anwar’s daughter Nurul separately to offer them “attractive incentives” to try and broker a deal. His request was simple. He did not want DAP or PKR to withdraw from the election, or to support BN in GE-14. He merely wanted them to reject the nomination of Mahathir as the interim candidate for the opposition coalition. The request was reportedly rejected outright.

Anti-Mahathir critics have issued stark warnings amid signs that they are ganging-up on the former premier, an authoritarian figure who ruled the country with an iron fist, at one point triggering a roundup called Operation Lalang that swept up journalists, civil libertarians and the opposition figures with whom he is now making common cause without habeas corpus and jailing them for months under the country’s colonial-era Internal Security Act.

One Perak based-political observer called Mahathir “damaged goods. His gambles and ego projects, such as attempting to corner the tin market, huge forex losses, (the Proton national car project) and the Petronas Twin Tower, have cost the nation too much.It is unknown if Mahathir has belatedly discovered, now that he is on the other side, the value of a free press and an independent parliament and judiciary and the other institutions that he neutered as the country’s leader.

“He caused irreparable damage to our judiciary; entrenched institutional racism in the country and started the slide in our educational standards. He cannot be trusted to run the country again – even for a day.”

Kua Kia Soong, the director of Suaram, a Human Rights NGO, who was jailed Operation Lalang, has continued to demand that Mahathir enumerate the sins he has committed and apologize for each of them.

Kua has been slammed for his intransigence and his refusal to see the bigger picture, which is to get rid of Najib and win GE-14.

One person said, “Can he not see that Mahathir can win over more Malay voters? Does he think that the opposition will allow themselves to be under Mahathir’s yoke, if they win GE-14?”

Another political observer from Singapore said, “Dr M can shift 5 percent of Malay votes, which no other leader could. That can be critical.”

Last December, when it was first mooted that Mahathir would become the interim PM, Minister in the Prime Minister’s Department, Abdul Rahman Dahlan, described it as a “sad day” for the opposition, and said, “…they have been in the political arena for so long, but they couldn’t find a younger candidate or fresh blood to become the leader of Malaysia. It’s sad and actually surprising, and I do not think it will go down well with the people.”

Khairy Jamaluddin, the Sports Minister, has waded into the debate about Mahathir’s nomination and said that the country will be plunged into chaos and political instability.

When Mahathir wrote his controversial book “The Malay Dilemma,” he was not afraid to list the Malays’ shortcomings, but he gave them a new sense of identity. The Ketuanan (Malays first) myth.

One political analyst said, “Although Ketuanan Melayu was detrimental to the young democracy, it provided the desired momentum to drive the Malays from their feudal mentality. With Mahathir’s affirmative action policies, the Malay middle class grew, but so did their ego and greed. They cast aside their moral values. For many, there was no going back.”

The upcoming general election will undisputedly be one of many firsts and ironies.

In GE-14, the PM and his former mentor will face one another from opposite sides of the political divide. Mahathir didn’t figure the “self-styled First Lady of Malaysia” (FLOM) into the mentoring equation. The equally power hungry and ambitious Rosmah Mansor is believed to be the driving force behind Najib, who redrew the political script.

The other irony is that Mahathir was rescued from the political wilderness by Razak Hussein, Najib’s father, when he was banned from UMNO in 1969 for insubordination towards Tunku Abdul Rahman, Malaysia’s first prime minister.

Today, Mahathir seeks to destroy the political future of his savior’s son.

The problems such as cronyism and Malay nationalism that plague Malaysia today had their roots during Mahathir’s tenure. The controls that the nation’s founding fathers formulated, such as the independence of the judiciary, were dismantled by Mahathir.

Mahathir clipped the wings of the country’s nine sultans, whom he felt were abusing their power, especially when it was alleged that he had to rescue at least one sultan from gambling debts and placate an angry public when another sultan was accused of inflicting grievous bodily harm on a subject.

If he were to win GE-14, would he continue to follow this path? Some members of the rakyat would like to think that he would.

Today, despite criticizing Mahathir for his past policies, Najib has honed them.

Najib has until August 2018 to call the elections, but he is aware that timing is everything. The indications are that he will call GE-14 after the Chinese New Year, which falls on 16 February. He will not wait till after June, because that is when Anwar Ibrahim is due to be released. With his release, a newly energized rakyat would demand that Anwar be pardoned and be made the PM. Najib cannot afford to have this happen.

Najib cannot hold GE-14 now, because the Selangor state’s redistricting exercise will not be complete until March. Selangor is the jewel in the economic crown. If he could wrest Selangor from the opposition, it would be a political coup.

Najib had hoped to put Pakatan Harapan on the spot, and to capitalize on the fact that the opposition coalition is currently leaderless. But the announcement of Mahathir’s opposition leadership put paid to that. Mahathir as interim PM does not auger well for Najib.

In the past, Najib and his political machinery focused their attacks on Anwar, then shifted the focus onto the DAP. Observers will have noticed the drip-drip effect of perceived “manufactured” threats against Islam, such as a baseless claim by a pro-UMNO lecturer that Selangor State Assembly speaker Hannah Yeoh, in her book, “Becoming Hannah” was advocating converting Malays to Christianity.

In recent months, the party apparatchiks have increased their attacks against Mahathir, tell-tale signs that they see him as a serious threat. That will explain the increasing criticisms of Mahathir, his past policies and his closest aides.

The internal revenue department has scrutinized both his business friends’ and sons’ income tax returns. Even family members have not been spared. Mukhriz, Mahathir’s son, was horrified to discover that his daughter’s jet-set lifestyle was exposed.

Mahathir as the interim PM is disastrous for Najib. This will stymie UMNO’s attempt to denounce a PH PM such as Lim Kit Siang or Lim Guan Eng, because he is Chinese. Najib cannot then say that the DAP or the Chinese are dictating the charge of the Opposition.

With Mahathir at the helm, the Malays, both urban and rural, are more confident to support the Opposition. Indoctrination is strongest amongst the Malays, unlike the non-Malay community. Malays are still fearful and wary of being dominated by the Chinese. Issues like 1MDB have little traction amongst them, but the rising cost of living, and the scandals surrounding FELDA, have hurt them most.

GE-14 means different things, to different people. The rakyat sees GE-14 as a means to remove an oppressive government and put Malaysia on the right track.

Najib and Umno see GE-14 as a struggle for political survival and physical freedom. And, while a few may see the election as a clash between a mentor and his pupil, or a clash between two warlords Mahathir himself sees it as a means to restore his tarnished reputation after the decline in the moral values of the Malays, that his policies have created.

Mariam Mokhtar is a regular correspondent for Asia Sentinel