Author: Hafiz Noor Shams

For more about me, please read this.

Categories
Economics Politics & government

[981] Of Anwar Ibrahim calls for more subsidy

Anwar Ibrahim calls for a reduction of retail prices of gasoline. I’d imagine such call would introduce greater subsidy to already heavily subsidized prices in Malaysia:

Kerajaan sepatutnya merendahkan harga runcit petrol di Malaysia berikutan penurunan harga minyak mentah sedunia, keuntungan Petronas yang meningkat dan kadar inflasi yang tinggi.

It roughly translates to:

With respect to global price drop of crude oil, rising profitability of Petronas and high inflation rate, the government should lower the retail price of gasoline in Malaysia.

There goes half of the support I had for him.

Categories
Politics & government

[980] Of sowing the next May 13

Did anybody read what Khairy Jamaluddin wrote in the NST today?

For the first time ever, Malaysians who previously only read reports in newspapers or saw excerpts on the news were exposed to Umno uncut, unplugged.

For the first time, they followed every syllable, every word and every gesticulation from each speaker.

The ensuing “culture shock” is understandable. Never before have those on the outside had the opportunity to see what only delegates, observers and official media have seen in the past.

But what must be understood here is that, as far as Umno members are concerned, there was nothing unusual about this year’s debate.

Now that logically begs the question: If the rhetoric in Umno has always been like this, then shouldn’t non-Malays be even more worried since this is the norm?

The answer is an emphatic “no”.

I won’t guess how would the non-Malays or even the Malays answer that question. But what do you mean by no, Khairy?

To me, if the people in UMNO see such rhetoric as norm, then everything should be a whole lot more worrying. If we as a nation see such racist rhetoric as norm, then I fear the ground is already fertile for May 13, part two.

Categories
Liberty

[979] Of to the Dutch: stay true to liberal tradition

I’m disappointed to see that the Dutch society has decided to turn their back on liberal tradition of tolerance. I used to envy the Dutch society as the most liberal there is the world. Not so after the ban on burqa:

AMSTERDAM (Reuters) – The Dutch government agreed on Friday a total ban on the wearing of burqas and other Muslim face veils in public, justifying the move on security grounds.

The ban as a necessary violation of liberty and therefore, I disagree with the ban. I’d like to make it clear that I’m against the ban not because I’m a Muslim, but rather, because the ban violates liberty. I’d like to identify myself with a value that rises above petty differences.

The Dutch model used to seek to build an open multiracial society. It was a society that celebrated differences rather than a society that succumbed to xenophobia every time new social challenges arose. The ban turns an once open society to a society hostile to differences. To me, the ban is an effort to forcefully assimilate minority Muslim group into the mainstream culture. To me, the ban threatens to make the Dutch society more like what the Indonesian society used to be, where assimilation is a must, where distinct cultures have to rigidly conform to a state-sanctioned way of life.

A forced assimilation makes the Dutch society one step closer to conservative ideas that are ever so hostile to liberal values.

I do however understand why the majority within the Dutch society is eager to encourage its Muslim minority to assimilate – an assimilation that at least demands everybody to adhere to an implicit social contract of liberty, where basic rights such as free speech are guaranteed – into the Dutch culture. I also fully appreciate the difficulty the minority faces in accommodating to that social contract.

Interaction between the two groups has been hard and that contributes to the current tension seen within the Dutch society. The killing of Van Gogh certainly doesn’t aid to tone down the conflict. In a larger scale, what seems to be a clash of civilizations between the West and the Muslim worlds creates and strengthens mistrust between members of the Dutch societies.

Regardless, I offer no solution and I sincerely regret that. But I fail to see how the ban could solve the problem of mistrust. In fact, I’m in the opinion that the ban only amplifies the mistrust. Worse, as I’m made clear earlier, it violates liberty. Two wrongs don’t make a right.

The Dutch society — and the EU at large — should roll back on its support for the ban if it plans to stay true to liberal value and also have the moral authority to advocate liberalism. Or at least, whenever such liberalism concerns civil liberties.

Categories
Economics

[978] Of Golden Sime Guthrie

One word: whoa!

Nov. 23 (Bloomberg) — Malaysia’s government may combine Sime Darby Bhd., Kumpulan Guthrie Bhd. and Golden Hope Plantations Bhd. into the world’s top palm-oil producer, analysts said after the companies received notice of an approach.

But if it had involved real private entities, it would’ve been this: WHOA!

Categories
Economics

[977] Of the Malaysian economy in 2007

How would the Malaysian economy perform in 2007?

It would most likely depend on several major issues.

First, in no particular order, is the spur of government spending due to the Ninth Malaysia Plan.

Second, the Visit Malaysia Year.

Third, a slowdown of demand for electronics.

I can’t think of a fourth factor but I’d be grateful for reasonable suggestions.

Here, I’d like to make a connection between government spending and the reduction in demand for electronics good.

The Malaysian government spending, which includes the second Penang bridge, a number of highways as well as a new city nearby Port Tanjung Pelepas, should provide students of economics some interesting natural experiment. Why?

It will test the Mundell-Fleming model.

According to the model, an increase in government spending has a negative effect on the net export component of the GDP. Let me explain.

A government spending increase will temporarily increase the GDP. This makes sense because government expenditure is one of the four components of GDP and as such, it directly affects the GDP. That increase however will cause the local interest rate to go above the world interest rate. Higher local interest rate vis-a-vis global interest rate will cause capital to flow into the local economy. That inflow will make the local currency, the Malaysian Ringgit in this case, to appreciate. Such appreciation will encourage import and discourage export. In other word, net export should see a reduction once the economy reaches some sort of equilibrium.

Earlier this week, the New Straits Times talk about the possibility of a bull run. In its reports, several analysts predict that the Kuala Lumpur Stock Exchange would hit 1,300 in 2007:

The KL Composite Index is expected to hit 1,300 points next year — a high last reached in 1994. Analysts say the stock market can sustain its rally on the back of a positive economic outlook, implementation of the 9MP projects and a stable interest rate…

What do I think of that?

I haven’t made up my mind yet but I’m more interested to see how the Malaysian net export component would behave in 2007 and 2008. According to Mundell-Fleming and keeping in mind that there’s a demand slowdown for electronics — Malaysia is a big export of electronics — we are set to see a reduction in Malaysian trade balance. Ceteris paribus, of course.

p/s – somebody pointed out to me that instead of just testing Mundell-Fleming, it would also test a variety of other things. True. But here, I’m interested in this particular subject.