Author: Hafiz Noor Shams

For more about me, please read this.

Categories
Society

[2472] Douthat on Hitchens

Whereas they feel entirely authentic when they’re couched as “aux armes, citoyens” rallying cries in the struggle against tyranny. Hitchens is never more himself (for better or worse) than when he’s railing against the supposed cruelties of Benedict XVI, or comparing God to Kim Jong-Il. In this sense, he’s really less of an atheist than an anti-theist: Whereas Dawkins and co. are appalled by the belief in God, Hitchens is far more appalled by the idea that anyone would want to obey Him. Every true romantic needs a great foe, a worthy adversary, a villain to whose destruction he can consecrate himself. Never one for half measures, Hitchens just decided to go all the way to the top. [Evaluations. God and the Political Romantic. Ross Douthat. June 17 2010]

Categories
Economics

[2471] Decoupling, finally?

The 2008-2009 financial crisis laid to rest the idea that Asia is isolated from the troubles in the US and Europe. The idea was that the fundamentals in Asia were strong enough to support growth. Proponents of decoupling were silenced and embarrassed but the celebration on the other side did not last long. There was a recession at hand and the debate swiftly switched to how best to address the recession.

The dead is walking.

It is 2011 and the idea of decoupling is reemerging again. It has been criticized, just it has been criticized before but statistics in the past few quarters and months have been surprising. The final GDP growth for Malaysia is very likely to be healthy despite all the skepticism and bad news from abroad. The industrial production index figures came out strong for October, beating forecasts by a long shot; it beat even the highest forecast among those polled by Bloomberg. Exports meanwhile has been amazing despite Europe tumbling up and down on a roller coaster ride. The only thing that is not as great as these things is the leading indicator, which by the way, is not negative. After all that has been said and done, it is likely Malaysia will grow at least 5% for the whole year of 2011.

Contrasting these numbers and those in Europe, there appears to be a strong case for decoupling.

Decoupling does make sense, since domestic demand is strong. Just observe the GDP growth figures. It is really hard to say there is a threat of a recession by looking at the GDP numbers so far. Still, the trade exposure is still high, and it is also really hard to say Malaysia will escape whatever really bad happening in Europe unscathed. I will not stick my neck out just yet, unlike the author of Economics Malaysia who writes that Malaysian exposure to European woe is not as big as a brouhaha some has made it out to be.[1]

Standard Chartered thinks 2012 will be a two-speed world, implicitly supporting the decoupling idea in its report. Financial Times’ Beyond BRIC sarcastically, maybe, writes, “just don’t call it decoupling” while reviewing the two-speed world report.[2]

As for myself, I think I prefer to be on the safer side. I subscribed strongly to the decoupling idea because I looked at the so-called real economy and concluded, Malaysia would go through the global crisis rather smoothly. I was wrong. There was a shallow recession. So, I will sit out and watch as an observer than a proponent this time around, for now.

Still, if the European crisis materializes, if the worst materializes, it will be worse than that experienced in 2008 and 2009.

Add that to the fact that the Chinese economy is slowing down (slowing down is relative because the growth rate is still high), I at least am expecting 2012 to be a rougher ride than 2011. But it does not take a genius to say that; I dare say it is the general feeling within the profession.

The more important thing is that we will see whether the decoupling hypothesis will survive 2012.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
[1] — [Malaysia’s European Sensitivity. Economics Malaysia. December 12 2011]

[2] — [Standard Chartered sees a resilient Asia, Mideast and Africa in 2012. Standard Chartered. December 12 2011]

Categories
Politics & government

[2470] Progress brought by better actors

The war drums are being sounded again. The drummers are telling us the election is around the corner yet again. Looking back, I am not so sure much tangible things have been achieved since the last time the drums were sounded.

It has been awhile since the last one. I remember I was angry at many things that it would take a book to list down those sources of anger. I thought I took some initiatives then to channel my anger appropriately. And I voted for the first time in my life in a national election. Now, it is almost four years later and I am disappointed at which things have gone so far.

I am unsure what I had hoped out of that election. I know I did not expect anything out of this world. I did not expect things would change all the sudden into my liking. I knew real, structural, permanent change would take a lot of time and work. Maybe, it would even take a whole generation. It would be naïve of me to think that the immediate years after the 2008 election would reinvent Malaysia into something better.

I do not really know what better means really, but it is out there and I know Malaysia is not there yet. It is just one of those Goldilocks things. It is a trial-and-error exercise. When it is right, one just know that it is right. When at first you do not succeed, you try and try again.

As I inspect my hopes for the country, or rather the community that I live in and interact with, I am starting to suspect that this hope is unattainable. It keeps shifting forward and it does not stay still. It is ever out of my reach. I suppose it is progress and there is progress since 2008.

There are bolder dreams now, swankier presentations and more executions. Yet, one does not need to do much to be better if the Abdullah administration is the benchmark.

Really, it is hard to see if progress we have seen in the last few years is of any real meaning in the grand scheme of things. Racial and religious issues are still flaring up purposefully by some groups. Pick up some of the local newspapers and the headlines are ever ready to prove agitprops are at work. I have learned to dismiss the fear mongering but many have not, and this is angering. Many have yet to learn what is real and what is imagined.

Corruption is still there. As new controversies emerged, old ones go unresolved.

And those in power still lie. The lies are more getting sophisticated with public relations companies as coaches and makeup artists, but lies are lies. In one hand, those in power show that they have something positive to offer, but in the other hand behind their back, mud and slime.

Maybe, after all those historic change and transformation, what we have now for the most part of it are better actors.

That is progress, I suppose.

Categories
Economics Politics & government

[2469] The United States of Europe, on the way

There are several stages of economic integration.

Free trade agreement is probably the lowest of all integrations. It seeks just free flow of capital and labor across borders.

The next step is either custom or monetary union together with a common market. Member states surrender monetary policy to a central authority while maintaining independent fiscal policy. Trade duties are harmonized across the union.

The next stage is fiscal union where individual governments cede their power over fiscal policy to a central authority.

The European Union is on the verge of becoming a fiscal union, making history less than just two decades after adopting a monetary union in all of its sense. Today at an important summit, a majority of European leaders voted for stricter fiscal deficit rules. They believed the best way to solve the debt crisis is to integrate further. Integration will eliminate the crisis of confidence Europe currently suffers from, much like how a troubled California will not trouble the United States by much.

This integrationist logic is persistent among Europeans. When Europe suffered from a serious currency crisis long ago, the then European leaders thought the best way to eliminate volatility between currencies that adversely affected trade in Europe was to have a monetary union.

This is really a big jump. Usually, debates on exchange rate mechanism gyrates between floating or fixed regime. Europe chose to not only have a fixed regime, they chose a fixed regime by marriage. You cannot get a more fixed regime than a monetary union.

Now, the thinking is that the best way to address the debt crisis to have a fiscal union.

Yes, it is an exaggeration to call the recent development in Europe as outright fiscal union. But the new agreement is a big push towards that direction, towards the United States of Europe.

Categories
Politics & government

[2468] They drive, they measure, they are tempted and they can

It does not inspire confidence when the same entity that is driving a program is the one that measures the success of the program as well. There is a conflict of interest there.

Imagine a soccer team up against another team and imagine the referee is a team member of the former team. It is safe to bet that the referee will rule in favor of his or her team. Similarly, if you are running a program to lower crime rate and you are also the one measuring the success of the program, there will be temptation to report your progress in an overly generous way, especially when your progress is not too good. More than temptation, you can actually give undeserved good marks to yourself if the temptation gets the best of you. In order words, you are the prosecutor, the judge and the jury all at the same time.

I see PEMANDU’s National Key Performance Indicators through the same lens. The NKPIs basically measure some areas where PEMANDU or the government wants to see improvement in. While I do appreciate that these tools do increase transparency and makes debates on some matters more objective than it was in the past, the measurements themselves are not entirely trustworthy. PEMANDU has the incentive to look good. What guarantees the indicators reported are not tempered with?

To compound the issue, PEMANDU is not exactly an independent or even an impartial party. It answers to a minister. I suppose it helps that Idris Jala is an unelected minister with probably an entirely professional background. That is an argument of him being isolated for the myopic politics. But then again, myopia is not a trait exclusive to politics. It is well documented in businesses, and everywhere else.

And the fact is that he ultimately answers to the Prime Minister, whose career is entirely dependent on politics. The success of PEMANDU will be one of the key factors in increasing the odds of reelection of  Barisan Nasional. So, it is in the Prime Minister and Barisan Nasional’s best interest to have PEMANDU succeed, or really, appear to be successful. PEMANDU wants to look good. The Prime Minister wants to look good. The government wants to look good. Well, everybody wins by looking good.

We have not even begin to consider the KPIs under the case of various ministries, which are even more suspicious. KPIs, at least the ones I have witnessed elsewhere, are always negotiated. The negotiation ensures that the KPI is not a kind of out of this world so that it is not impossible to achieve but at the same time, not too easy to make it meaningless. Now, consider a bunch of politicians that want to get reelected. It is in their collective interest to set easy KPI that can be achieved even without a mad dog chasing them behind.

So every time when somebody comes up to me and shows me some indicators to prove that PEMANDU has been successful in some area, I quietly note the conflict of interest at the back of my mind.