Category: Society

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Politics & government Society

[2939] A unity government is a chance to rebuild trust among Malaysians

I prefer Pakatan Harapan to be the federal government. The 2018 general election gave the coalition the democratic mandate to be so, and there are plenty of reforms left to the completed. I know many are disappointed with the pace of reforms under the previous Pakatan government, as well as the incessant infighting. But as far as reforms are concerned, it is a long term project. It definitely cannot be done within less than two years. To expect so is naïve and unrealistic.

But my preference is an ideal, which must face the unattractive options in the real world. Realistically, only an election would reshuffle the deck, and allow Malaysia to start afresh. But a general election is out of the question for now. We have to live with our bad hands, instead of insisting of holding the cards that we do not have.

The red line

The likeliest of all options on the table seems to suggest Umno back at the driving seat. Meanwhile, Pakatan lacks the seats to form the government, and an earlier option of that happening one involving working with the criminals of 1MDB. Both options push up the possibilities of 1MDB criminals and their collaborators escaping justice. That is the red line for me.

Yet, Umno’s road to the Prime Minister’s Office is not as smooth as initially expected, with Bersatu imposing conditions, which dissatisfied the Agong. That happened today or yesterday. The condition Bersatu imposes is the same red line I have: no Najib and his merrymen.

Given the political impasse (and before it gets solved with Najib as part of the power broker), the anti-1MDB force from Pakatan and all other sides should come together as a unity government. That unity government would have access to the best talent among the 220 Members of Parliament (there are few despite the big number) while locking out 1MDB men from power.

The additional benefit of unity government is a chance to rebuild trust among Malaysians, which is the reason I am writing this post.

Political elites, groups and values

When we discuss contemporary Malaysian politics, inevitably there will be a charge, with a resignation tone, that the political elites are serving their interest alone.

That is hard to deny, but it is an incomplete assessment of the situation. The truth is, the political elites do represent groups holding on to certain values. We live in a representative democracy, however imperfect it is.

These values differ across groups: upper middle-class urbanites in general hold on to certain values (and interests) they do not share with low-income Malaysians. There are other dimensions to consider: religion, ethnicity, geography, class, etc.

So, political elites are manifestation of the masses.

Distrust among us

We are at the point where trust between these groups is low. It has been low for a long time, and it interacts with other factors like our trsut in our institutions. The trust deficit in our institutions, I would argue, is partly due to lack of trust among us (I would like to add that I am writing a book and a chapter of the book explains this is greater detail).

There is a metric we could use to understand the state of trust in our society. The World Values Survey has a set of questions assessing trust level in a society, and it has been measuring Malaysian level since the 2000s. Well, three times: 2006, 2012 and 2018.

One out of several relevant questions has it, “would you say most people can be trusted?”

The question approximates trust level in Malaysia. In 2006 and 2012, about 9% of Malaysian respondents answered yes in both years. In 2018, it rose to 20% but there is every reason to believe post-election euphoria had a role in pushing the rate up. Regardless, the suddent jump, that is a pretty low percentage. In other countries as recorded in the 2018 edition, the rates typically fell in the 30%-60% range. In Thailand, 29%. In Singapore, 34%. In Japan, 34% too. In the United States, 37%. In Sweden, 63%.

There are of course other countries with even lower trust than Malaysia, but that should not be our goal.

An avenue to rebuild trust

With that in mind, and that the political elites (more specifically, Members of Parliament) representing groups of different values, a unity government here is chance to bridge the gap between different Malaysian groups.

Theoretically, a unity government should bring about a more cooperative environment to groups at loggerheads.

Yet, I am under no illusion such unity government would work in such a way. The gap seems wide that it that building a bridge sounds like a hopeless exercise. Yet, we have to at least try to rebuild that trust. And a unity government provides such opportunity under a democratic system, however low the odds are.

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Economics Education Society

[2931] If affirmative action is to end in Malaysia, spending on public service has to increase

Discussions on affirmative action in Malaysia have never gone away but interest in it has increased in recent weeks. The first exciting interest in the topic was Hwok-Aun Lee’s book Affirmative Action in Malaysia and South Africa: Preference for Parity. I have not got my hands on the book (I hope to buy it soon), but I listened in to one of Lee’s webinar on the book and the subject earlier this year. Most recently, is Nazir Razak stating the New Economic Policy—Malaysia’s affirmative action—no longer works.

My thinking of affirmative action has softened over the year. Softened in the sense that while in the past I think I could be labeled as anti-NEP, I have adopted a show-me-the-result position. In fact, I have concluded there has to be a balance between economic and social imperatives. As a relevant side note, I am writing a book (a never-ending project) and in a segment of it, I outlined why I thought NEP might have a role in created a shared identity in Malaysia (perhaps Bangsa Malaysia as a shorthand for this) for a short while in the 1990s. It was a decade or two-long process coupled with rapid industrialization and globalization, that was unraveled during the late-1990s Asian Financial Crisis and later, China’s entrance into the global marketplace. My current thinking is that, though NEP-styled affirmative action worked in the 1970s and the 1980s (dare I say the 1990s despite its official expiry?) situation in the 2020s have changed dramatically that the way Malaysia does it affirmative action need to be rethought. It requires a rethinking because NEP did not work in isolation during the years and the factors (high growth and absence of China) that made NEP work are no longer present today.

Last week, I somehow got pulled into a Clubhouse discussion about NEP where Nazir Razak stood on a soapbox. Near the end, riding on an acquittance’s train of thought, if I remember correctly, Malaysia needs to invest in its public services more. I would like to clarify and expand that idea further.

If affirmative action is to end, then I think it is imperative that public service be expanded further. This is not to say the public service expansion and affirmative action are mutually exclusive. But it is probably good to understand that most beneficiaries of affirmative action probably rely on public service more than others. Removing affirmative action would likely require expansion in other parts of government in order to maintain the beneficiaries’ general welfare.

Here, the maintenance of general welfare is importance for social stability, which in turn is crucial to creating the environment for long-term economic growth, which itself is important to the maintenance of welfare. It is a loop.

By public service, I refer specifically to public education and public health system. By expansion, I mean by making it more accessible cheaply at a higher quality and while this may sound fluffy, I think the best proxy to this is government spending in these areas.

And Malaysia lags in terms of public spending in these two areas when compared to other countries. I have written a short advocacy paper on this matter under REFSA earlier and you can access it here.

A brief look at the World Bank database containing data from most countries will show that Malaysia is a middling when it comes to government spending in education relative to its GDP, while under-spends in public health services.

Malaysia’s government spending on education and health relative to nominal GDP

Malaysia’s 2018 government spending on health was 1.9% of GDP and this compares badly with upper-middle income countries’ average of 3.2%.[1] Malaysia does better in public education, spending 4.7% of GDP in 2017, versus upper-middle income average of 4.1% in the same year (year 2017 and 2018 are chosen because those are the latest year available for year-to-year comparison between Malaysia and upper-middle income average).[2]

So, if ever affirmative action, or NEP in whatever form it persists now, is to be dismantled, I feel is it crucial to boost public spending in government services. Boost spending alone, of course, is not enough. How you spend it matters too.

Hafiz Noor Shams. Some rights reserved

[1] — Domestic general government health expenditure (% of GDP). Open Data. World Bank. Accessed April 7 2021.
[2] — Government expenditure on education, total (% of GDP). Open Data. World Bank. Accessed April 7 2021.

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Economics Society

[2930] The biggest losers in this recession: the young

All recessions have its losers and to claim so is to state the obvious. It is more interesting to know who the losers are. Data from the Department of Statistics shows that the biggest losers in this recession are the young.

From the chart below, it is quite clear the job market for 35 years old and younger is doing badly relative to the market for older cohorts:

The chart is drawn by comparing total employment by age for each quarter relative to a pre-pandemic benchmark. In this case the benchmark is the final quarter of 2019, the last quarter before the pandemic. To illustrate:

  • there were 31,800 fewer employed persons among 15-24 years olds in the first quarter of 2020, relative to the last quarter of 2019
  • there were 202,600 fewer employed persons among 15-24 years olds in the second quarter of 2020, relative to the last quarter of 2019

So, if the number goes down, then it is bad because it shows fewer people are employed relative to the benchmark. If the number goes up, then it is good because it shows more people employed.

The data is from the Quarterly Report of Labour Force Survey. The 2020 fourth quarter report, which is the latest report, was released on February 8 2020.

Increased underemployment among younger cohorts

The change in total employment does not indicate change in employment quality. Here, I am referring to underemployment. Once again, the young are the most badly affected:Unlike in the first chart, an increase here suggests more people working less than 30 hours per week, which could be considered as a definition of underemployment (there are other underemployment definitions). They work less than 30 hours because they are likely unable to work fulltime. Therefore, an increase in this chart points to a worsening situation.

This is relevant because a person is considered employed in official statistics if he or she works for at least an hour per week. As you can see, it is a loose definition. During normal times, it is alright to use it because it works. But the situation we are in are quite abnormal and it challenges our traditional definitions.

Categories
Politics & government Society

[2929] Malaysian democracy dies and we forgot to mourn it

In 2017, political scientist Thomas Pepinsky claimed that life in authoritarian states was mostly boring and tolerable (that is tolerated by the people). He cited Malaysia where life was quite normal, despite it being an undemocratic country and mildly authoritarian. But his audience were not Malaysians, but Americans, many of whom found themselves in opposition to Trump and his illiberalism.

Pepinsky argued authoritarian states did not necessarily mean “jackbooted thugs, all-powerful elites acting with impunity, poverty and desperate hardship for everyone else, strict controls on political expression and mobilization, and a dictator who spends his time ordering the murder or disappearance of his opponents using an effective and wholly compliant security apparatus.” Life on the ground in such a state could be indifferentiable from a democracy of comparable economic development.

He was not defending authoritarianism. Instead he was warning that authoritarianism arrived more subtly that most people realized. It does not come with a bang. He wrote:

It is possible to read what I’ve written here as a defense of authoritarianism, or as a dismissal of democracy. But my message is the exact opposite. The fantasy of authoritarianism distracts Americans from the mundane ways in which the mechanisms of political competition and checks and balances can erode. Democracy has not survived because the alternatives are acutely horrible, and if it ends, it will not end in a bang. [Thomas Pepinsky. Life in authoritarian states is mostly boring and tolerable. Vox. January 9 2017]

Forward 4 years later, Malaysia has lost its democracy and we are now ruled by a dictator.

When Prime Minister Muhyiddin Yassin and his allies in 2020 wrested power from the victors of the 2018 Malaysian General Election without going through any election, his action arguably was still done within the gray ambit of democratic practices. Gray because of the 2009 mistake that began in Perak legitimizes an obscure process of selecting a government over the usual transparent process of letting the contenders prove their support in the Dewan Rakyat. The same untransparent process contributes to or exacerbates the political instability that we suffer today.

Muhyiddin’s government was never stable from the get-go. Now when it became clear he did not have the majority needed to remain in government, he carried out a self-coup through the declaration of emergency. The excuse was the COVID-19 pandemic but we know he was just pulling the wool over our eyes. As if giving more power to a government that mismanaged the pandemic was a good idea. More will die sadly. In a better situation, we would be replacing this incompetent Cabinet with one of better caliber.

That self-coup has firmly placed this government into the realm of authoritarianism. The Prime Minister is the Dictator of Malaysia. There is no democratic mandate to speak of anymore. There is only the will of the Dictator Muhyiddin Yassin.

And that happens without loud protestation.

The pandemic is to blame no doubt. Perhaps the economic devastation worsened by this government’s complete incompetency is sapping energy away from the population. Perhaps they are tired of the failure of the Pakatan Harapan and their allies in opposition to do what was right back in November during the tabling of the 2021 Budget. The failure and disillusion breed ambivalence. Everybody is tired of the national political chaos.

All that leads to us tolerating authoritarianism. This is more so when the Dictator defends his self-coup by stating life will go on as normal, however disingenuous that sounds. The Dictator is telling us authoritarianism is tolerable.

Such a disappointment.

Categories
Economics Society

[2927] M40 classification mischaracterizes the middle class, weakens the middle class and in doing so, weakens democracy in Malaysia

Who are members of the middle class in Malaysia?

Theoretically, they consist of those in the middle income distribution. The middle class is a relative position between the poor and the elites, however both are defined.

But it is not that simple. On Wikipedia alone, there are plenty of dimensions to be considered beyond income. Among the factors are education, nature of employment, social status and even as fluffy a factor as lifestyle. Wealth is another marker, which is related to income but perhaps better except its data is not as easy to get.

In Malaysia, perhaps for over 10 years now, we have chosen a specific way to define it. We do it through income distribution. We have the bottom 40 percentile households in terms of income distribution defined as the poor (the B40), the next 40 percentile households are understood as the middle class (the M40), and the top 20% household income earners are taken as the rich (T20).

The classification is needed to operationalize certain policies like conditional cash transfer that Malaysia has. Household income, whatever its weakness, is an easy proxy of status. It is needed for targeting purposes. You lose something, but it does the job. Arbitrary, but convenient and it works.

Our problem is that the same convenient arbitrary classification that works is beginning to have an unintended negative effect on social discourse. Familiar to the definitions used by the government for implementation convenience, the public is beginning to associate the M40 as the middle class, and the middle class as M40, when in fact, there are middle class people falling outside of the M40 group. Additionally, there are people inside the M40 who are not really members of the middle class. The shorthand of B40-M40-T20 is dividing the middle class crudely and consider some members of the middle class as members of the elites.

It creates a class war against the middle class just through misattribution arising from arbitary statistical definition.

The middle class is special because they are largely the flagbearers of progressive values. With such values, they function as a check-and-balance mechanism in any society. Members of the middle class are not poor and that allows them to spend more time on matters other than livelihood issues. Things like corruption, environment or something that is well above something that is similar to the bottom of Maslow’s hierarchy of needs. At the same time, they individually are not rich enough to have outsized influence on society like few elites. Yet collectively, they check the power of the elites thanks to their education level. They are the bulwark preventing the elites from abusing power. They are the ones crucial in keeping a democracy from becoming crass majoritarianism.

When members of the middle class are considered as elites, middle class values would be condemned as elitist. Once identified as so, the same values would be rejected by the majority because they feel the values are meant for the few.

This is the danger of the M40 classification. The misattribution makes the middle class alien to the poor as the elites are, but without having the same influence the elites have. This weakens the roles of the middle class in protecting democracy from abuse by the elites, and from majoritarian excesses.

That is one of the costs of the B40-M40-T20 classification. It breaks the middle class, and then artificially and implicitly labels middle class values as elitist. With that, the roles of the middle class as the moderating force in our society gets weakened.

In short, the M40 classification mischaracterizes the middle class, and weakens the middle class’s role in moderating Malaysian democracy.