Categories
Photography

[1811] Of the photographer returns!

Enough economics and politics because now is a time to take a break.

Some rights reserved. By Mohd Hafiz Noor Shams.

This was on a tea farm in Cameron Highlands. This is the reason why this blog was quiet for three full days.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

p/s — since Boris (not Boris the mayor. It’s this Boris instead) commented on my Flikr site and said he wanted to check my blog to find out more about the picture, I am only compelled to offer more description.

These are firewoods for the furnace. Waiting to be sacrificed to transform tea leaves into tea powder, this is just outside of the tea processing plant. Our tour began from the beginning of the process where fresh leaves are left to be dried before further processing. As we moved farther along the processes, the smell of fresh tea leaves began to succumb the smell of real tea.

Tea powder was everywhere inside and I was kind of concerned how that might affect my camera. The heat was also slightly unconfortable, despite the fact that Cameron Highlands has a cool environment and that it had rained just earlier.

You liked that Boris?

Man, you have to visit Malaysia while I am still here. And time is running out!

Categories
Economics

[1810] Of more government intervention

What?

KUALA LUMPUR: The government will invest an additional RM5 billion into Valuecap Sdn Bhd to double the latter’s funds to RM10 billion, Deputy Prime Minister Datuk Seri Najib Razak said today.

[…]

Established in 2002, Valuecap is a fund management company created to invest specifically in the Malaysia equities market. Jointly owned by Khazanah Nasional Bhd, Permodalan Nasional Bhd and Kumpulan Wang Persaraan Diperbadankan (or better known as KWAP), Valuecap’s key mandate is to undertake investments in equities listed on Bursa Malaysia on a portfolio basis. [Govt to pump extra RM5b into Valuecap. Surin Murugiah. The Edge Daily. October 20 2008]

Why?

KUALA LUMPUR, Oct 20 (Bernama) — The government will provide RM5 billion in additional funds to double the size of Valuecap Sdn Bhd to RM10 billion and to invest in undervalued stocks and protect investments in government-owned companies, Deputy Prime Minister Datuk Seri Najib Tun Razak said Monday. [Government Provides RM5 Billion In Additional Funds To Invest In Undervalued Stocks. Bernama. October 20 2008]

I am sure even honest Keynesians would raise their eyebrows upon reading this.

Categories
Economics

[1809] Of Anna Schwartz talks

Federal Reserve Chairman Ben Bernanke has called the 888-page “Monetary History” “the leading and most persuasive explanation of the worst economic disaster in American history.” Ms. Schwartz thinks that our central bankers and our Treasury Department are getting it wrong again.

To understand why, one first has to understand the nature of the current “credit market disturbance,” as Ms. Schwartz delicately calls it. We now hear almost every day that banks will not lend to each other, or will do so only at punitive interest rates. Credit spreads — the difference between what it costs the government to borrow and what private-sector borrowers must pay — are at historic highs.

This is not due to a lack of money available to lend, Ms. Schwartz says, but to a lack of faith in the ability of borrowers to repay their debts. “The Fed,” she argues, “has gone about as if the problem is a shortage of liquidity. That is not the basic problem. The basic problem for the markets is that [uncertainty] that the balance sheets of financial firms are credible.” [Bernanke Is Fighting the Last War. Brian M. Carney. The Wall Street Journal. October 18 2008]

Categories
Politics & government

[1808] Of the continuing relevance of racial politics and its implication to Barisan Nasional

These days, it is presumed that racial politics in this country is dead. It is understandable why this conclusion is appealing but it is certainly wise to refrain from signing off racial politics as a factor in Malaysia politics.

This presumption has its basis in the outcome of the March 8 general election. Barisan Nasional lost considerable number of state and federal seats to the alliance of DAP, PAS and PKR on that historic day. With Barisan is seen as the symbol of racial politics and the three-party alliance — Pakatan Rakyat — is viewed as the antithesis, it is absolutely tempting to relate the electoral outcome to the dichotomy between racial and non-racial politics.

The competition between the two ideas does have a role in the outcome of the election but it is definitely not the sole factor.

Prior the general election, the Barisan-led government on almost daily basis continued to insult the intelligence of Malaysians through its control over the mainstream media. That insult later turned into a battle of credibility as many fought back on the internet and with other means. What happened afterwards was a very personal and public battle between the former Information Minister Zainudin Maidan and the local blogosphere.

BERSIH, meanwhile, took to the streets to demand democratic reforms. This not only attracted sympathizers of DAP, PAS and PKR but also those that truly believe in the need for better democratic system. Others just simply wanted to express their general discontent with the BN-led federal government.

Corruption, meanwhile, was perceived as rampant thanks to several cases such as the ones involving Zakaria Mat Deros, ECM-Libra and even the procurement of weapons. The 2007 Auditor-General’s report, which lists down the excesses of various ministries, made the situation even worse for the BN.

Crime also was on the list. The tragic story of Sharlinie remained unsolved unresolved while the Altantuya murder case with its links to the upper echelon of government very much unsettled ordinary voters.

There are more but while these issues are racially neutral, they do not fit into the racial-non-racial dichotomy. One can definitely be a believer in racial politics but at the same time be concerned with issues of crime, corruption and democratic reforms.

One could even fight against Barisan while believing in racial politics and in Barisan. The anti-Abdullah fraction is one group falling in this category. The former Prime Minister Mahathir Mohamed went as far as encouraging UMNO members to vote against Barisan.

In short, people on both sides were angry at Barisan. All things considered, protest votes rather than believe in non-racial politics may have played a larger role in the result of the March 8 general election.

Not only the role played by racial politics is pushing votes away from Barisan may be overemphasized, the role of racial politics in attracting votes to Pakatan has also been underemphasized.

This can be proven through how PKR place itself in front of a less liberal Malay audience with regard to matter concerning the New Economic Policy. While PKR as well as Pakatan indeed promote an inclusive merit-based affirmative action dubbed the New Economic Agenda as an alternative, the argument against the NEP — the one policy with great association with the racial politics of Barisan — is not position diametrically.

On the contrary, PKR continues to persuade the average Malays to abandon the NEP or its legacy by impressing on the idea that the implementation of the NEP has been corrupted over the years by the corrupt UMNO. PKR is happy to point out that the implementation of the NEP nowadays is flawed while acknowledging the past success of the NEP which improved in the Malay lot. One will be hard-pressed to find a statement which PKR officially stated the NEP is conceptually flawed. PKR simply will not do that, much to the dismay of its sympathizers of libertarian leaning.

Furthermore, PKR does endeavor to convince the average Malays that the welfare of a lot of Malays would continue to be guaranteed under the NEA since the Malays, as it is generally believed, make up a majority of the Malaysian underclass.

The point with the position of the PKR with respect to the NEP and the Malays is that the average Malays are still concerned with the well-being of their race. PKR recognize this and with this cognizance, have frequently pointed out that the party will defend Article 153 of the Constitution of Malaysia, which safeguards the special position of the Malays in the country. If PKR is to outright reject Article 153, it would be interesting to see how the average Malays, even those supportive of PKR, would react.

While there is a hint of racial politics in the way PKR handle the NEP in front of average Malay audience, the tactics leads to a strategic end of a non-racial outcome, i.e. the end justifies the mean. After all, the creation of a right egalitarian society is dependent on convincing the average Malays the needs and benefits of an egalitarian society.

Even stronger case of racial politics in Pakatan can be observed within PAS. The existence of PAS itself is closely predicated upon racial politics. Within the Malaysia context, religion is a component of racial politics, as with language and education among others. This is especially so when Article 160 of the Constitution defines a Malay as a Muslim.

If that is an unconvincing point, then consider the existence of factions within PAS which wish to cooperate with Umno in order to secure Malay-Muslim influence in local politics. The prospect of non-Malays, non-Muslims dominating Pakatan is enough of an incentive for some in PAS to work with UMNO.

And surely, Pakatan has been the great beneficiary of racial politics as demonstrated by the support the coalition receives from Hindraf and the sympathizers of the movement. While it is possible to see Hindraf as a civil liberty movement which seeks equality, the movement undeniably positioned itself well within the scope of racial politics.

Perhaps, the greatest proof of the continuous relevance of racial politics is the oft-overlooked fact that Barisan actually won the general election in terms of popular votes and seats won.

Nevertheless, just as the success of Pakatan cannot be fully attributed to the appeal of non-racial politics, the victory of Barisan cannot be fully attributed to racial politics either. Yet, it is likely that after controlling for other factors, racial politics would still play a large factor.

Even if racial politics has lost its appeal to a many Malaysians, racial politics still appeal to considerable number — if not the majority — of Malaysians.

The only way to ascertain the end of the racial politics as a major factor of Malaysian politics is to see how large a factor racial politics will play in the next general election or even the one after. Everybody should be wary of making one grand conclusion based on one observation, however reliable the observation is.

All that brings me to one question: what is the possible implication of continuing relevance of racial politics?

The most obvious is the possibility of heeding the call of Dato’ Onn: for Barisan Nasional to abandon racial politics in one way or another.

If indeed racial politics still has great relevance in Malaysian politics, the abandonment of racial politics by Barisan would see schism in its three great parties, namely UMNO, MCA and MIC. Though purely a conjecture, the prospect of ethno-nationalists — be it Malay, Chinese, Indian or the mysterious others — breaking away from a unitary multiracial Barisan is not an outlandish possibility.

Maneuvered unwisely, the new Barisan Nasional may find itself sandwiched between Pakatan on the left and a new ethno-nationalists entity on its immediate right. Hitler lost his war by fighting on two fronts simultaneously; a new Barisan, finding itself in between a rock and a hard place, may just share the same fate.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

A version of this article was published in The Malaysian Insider. Two paragaphs (the question and the reference to Dato’ Onn) were removed from the TMI version.

Categories
Economics Environment

[1807] Of Beijing would do better with congestion pricing

Beijing is notorious for its dismal air quality. I have never been there myself but many news reports have convinced me that Beijing is not really a place I would want to live in. My experience in Kuala Lumpur during the one of those hazy periods was bad enough. I also hate Los Angeles because of its constant smoggy sky and I doubt I would love Beijing for the same reason. The authority there however is trying to do something about it and among it is a requirement for all cars to stay off the streets for a day out of a week.[1] This may work in the short term but in the long run, it could be ineffective.

The policy — in its six-month trial run — calls for car with registration ending with a particular digit to be barred from being driven on the road on a particular day. With this rule, the local authority expects to reduce traffic by 6.5%. The same authority also has an ambition to take half of the cars in Beijing off the road on a very bad day: that is equivalent to 3.4 million cars.[2]

It is not really rocket science to find a way to go around this restriction: buy or use another car with its registration number different from the existing one. Or buy or use other kind of vehicle. Or use public transportation which is probably the ideal path. In any case, one unintended consequence of this policy could be an increase in car ownership per capita while traffic remains to be high, or only see limited reduction, with all else being equal.

The scary part is that in the short run, this policy might work. Individuals probably need some time to acquire new car or vehicles. And it would probably take the most of the public some time to discover a way to beat the system. The bottom line is that adaptation requires time. Slowly however, the policy would be useless as more and more individuals move to capitalize over the weakness of the policy. How long would that be would be anybody’s guess, until the results from the test run are finalized.

Why is this scary?

The trial run will last only six months. The time length is probably insufficient for the authority to obtain the necessary empirical data to prove the ineffectiveness of the policy. The way the test run is being conducted has a temporal bias and may lead those conducting the experiment to a wrong conclusion.

But fret not Beijing for all is not lost in your quest for cleaner and clearer sky! There is a proven superior market-based alternative known as congestion pricing!

Congestion pricing policy suffers no such weakness as no vehicle, save those exempted, will escape the policy, assuming enforcement is carried out. This market-based policy also has the potential of eliminating negative externalities such as traffic congestion and pollution. Another is that the policy, unlike the currently tested in Beijing, fills the city’s coffers. That money could then be used to maintain or even improve the public transportation system!

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

[1] — Traffic restrictions have been re-introduced in China’s capital Beijing, in an attempt to bring back the clear skies seen during the Olympics.

Each car must spend one day a week off the road, in a scheme based on registration numbers. [Beijing reintroduces car rules. BBC. October 13 2008]

[2] — The new rules are expected to take some 800,000 cars off the road every day, according to the Beijing Municipal Committee of Communications.

“It’s expected to reduce Beijing’s average road traffic flow by 6.5%,” a committee official told the state news agency Xinhua.

During periods of exceptionally heavy pollution, the restrictions will be increased so that half of Beijing’s 3.4 million cars will be taken off the roads, state media reports. [Beijing reintroduces car rules. BBC. October 13 2008]