Category: ASEAN

Categories
ASEAN Economics

[3025] Malaysia inches closer to high income status (but it is not the 2025 star…)

Yesterday, the World Bank updated its database to include the new 2025 datapoints. The updates also redefined the institution’s income classifications.

The data shows what is expected: Malaysia has indeed made further progress towards attaining high income status. In fact, Malaysia is now the closest it has been to being reclassified upward. In 2025, Malaysia’s GNI per capita (Atlas method) was recorded at 86.1% of high income threshold, which represents 2.5-percentage point improvement from 2024 (83.6%). The last peak was in 2019 when the ratio was 85.8%.

Judging by events this year so far, despite challenges, I am willing to bet that the upward momentum will continue in 2026. Still, there is some ways to go and the more interesting question is, when would Malaysia graduate up?

The easiest—but not the most realistic—way to estimate that is to assume a straight line trajectory: at 2.5-percentage point ratio increase per year means Malaysia would need about 6 years to get there, i.e. 2031.

Yet, that straight line assumption unlikely to hold. Recent strong growth rates, wide inflation differentials between Malaysia and the world as well as an ever strengthening ringgit would not be easy to replicate over that period.

So, it would likely take longer than 6 years. If I were to give a target, the earliest is by the middle of the next decade. The latest, 2040.

Racing against others

Malaysia is not the only one moving up in the world. Several economies have overtaken Malaysia over the past decade or so and this could be understood by looking at Malaysia’s ranking. In 2025, Malaysia was the 88th richest economy based on GNI per capita (Atlas) calculation. In 2010, Malaysia was the 80th richest (out of 200+ economies). Eight economies have shot past Malaysia within that timeframe.

None of these economies is more impressive than China. If Malaysia is on the cusp of reclassification into high income category, then China’s fate feels inevitable with its ratio at 99% in 2025. China surpassed Malaysia’s GNI per capita in 2020 during the the heights of Covid-19 pandemic and the Malaysian political crisis. Malaysia has been playing catch-up ever since and has recently got its act together.

More progress in the neighborhood

But in the latest data release, Malaysia and China are not the stars of the year.

The stars are the Philippines and Vietnam. In 2025, both for the first time have been reclassified upward from lower-middle income to upper-middle income.

With the graduation of the two, that means there are only Cambodia, East Timor, Laos and Myanmar left in the lower-middle income group. Of these four, Cambodia is the next candidate for graduation. Myanmar, of course, is at war with itself.

That said, Indonesia could lose its status as an upper-middle income economy if the trouble there persists. The steep fall of the rupiah is something to watch out. Even so, the country’s 2025 ratio increased, which shows a kind of resilience the financial markets tend to ignore.

The crazy actually rich Asians

On the other side, Singapore and Brunei are obviously up there.

But Brunei is another economy to look out for. For some years now, the economy has been struggling. In my mind, its excessive reliance on petroleum production (which is declining), limited progress on economic diversification and the pegging of the Brunei dollar to the Singaporean dollar are the primary sources of their economic pain.

 

Categories
ASEAN History & heritage Politics & government

[2766] 50 years outside of Malaysia

The number 50 is psychologically special to almost everybody. Notwithstanding the debate about the age of Malaysia, whether it was 50 years old or 44 in 2007, we too had a huge celebration for our golden anniversary. Down south this year, Singapore is approaching its 50th anniversary as an independent state.

The Singaporean anniversary is less ambiguous than Malaysia’s. There are fewer ominous existential questions being thrown around unlike in Malaysia when from time to time, we hear secessionist sentiments coming out from Sabah.

There is a myth in Malaysia that Singapore seceded from our federation. In truth, it was Tunku Abdul Rahman who pushed the island-city out with a vote in Parliament in Kuala Lumpur sealing the decision.

Unilateral secession is impossible legally. Furthermore, Singapore itself did not want to leave and this was very clear through Lee Kuan Yew’s writings. Jeffrey Kitingan, unfortunately, recently repeated the secessionist myth as he pandered to Sabahan nationalists for his own political fortune by saying secession is a state right, showing again and again that history can be forgotten and worse, twisted to fit the preferred narrative.

That is not the only myth: some Malaysians still think there are 14 states in the federation somehow forgetting that Singapore is no more a member state. It is as if the vestiges of the Malaysian Singapore still linger and that these Malaysians have yet to come to terms with the 1965 separation.

The fourteenth stripe and the fourteenth point in the Federal Star of the Jalur Gemilang now have been redefined to represent the federal government and the three territories, instead of Singapore as was previously. Our coat of arms no longer has the Singaporean red and white crescent and star underneath the four colors of the old Federated Malay States. In its place is the red hibiscus, what seems to be the forgotten Malaysian national flower.

Regardless of the myths, Singapore and Malaysia did go separate ways and that has been the source of contention between the two. The issues range from water supply and train land in the heart of Singapore to ownership of rocky outcrops in the middle of the sea. Some have been resolved amicably but the general rivalry persists even as the Causeway ties have improved since the almost irrationally nationalistic days of Mahathir Mohamad and Lee Kuan Yew.

One can speculate what would have happened if Singapore had remained within the federation. This question has been raised as Singaporeans reflect on their 50 years of independence but I think the more interesting one is whether there would be a time when Singapore would rejoin Malaysia.

As much as I believe international borders with its passport and visa requirements are suffocating in this modern world, I think that is a very distant possibility. Malaysia is unprepared for Singapore just as we were not prepared for a Malaysian Malaysia in 1963. I do not believe the pro-Bumiputra policy will go away even if power does change from Barisan Nasional to Pakatan Rakyat in Putrajaya. The Bumiputras are the majority in Malaysia and there will always be pressure to appease them. It is the uncomfortable truth of electoral politics that makes idealists sigh.

Just look at the squabbling in Pakatan between PAS and DAP that has degenerated to race and religion. You can also read Datuk Seri Anwar Ibrahim’s speeches and wonder what exactly he is saying about hudud, for instance, out of fears angering either the liberals or the more conservative Muslim majority.

Meanwhile in Barisan, the slightest hint of liberalization is being fiercely opposed by the conservative sides in Umno. When discussing the Transpacific Partnership agreement, one of the top objections to the negotiation is how it would affect the Bumiputra, and really, the Malay, business community. Prime Minister Najib Razak is already facing a civil war within his party for the liberalization he did and other less admirable factors that include the mismanagement of the country.

Ultimately, there is a common theme across Barisan and Pakatan and that means it is more of a systemic Malaysian issue. Adding Singapore into the equation would not help and could even make it worse.

Singaporean diplomat Bilahari Kausikan recently said in a speech, it is ”impossible for us to ever be part of Malaysia again unless Malaysia abandons its basic organizing principle.” That principle will not go away any time soon.

But we have Asean and in many ways both Malaysia and Singapore are already integrating. Both citizens can travel across the border without much hassle, if you discount the congestion at the Causeway. Some Singaporeans are already living in Malaysia as the government is promoting Nusajaya and Johor Baru, to put it bluntly, as the suburbs of the world-city Singapore.

And the Asean Economic Community due for implementation this year would deepen integration between the two, which is already one of the most ”• I would think it is the most ”• integrated national economies in the region.

Realistically the AEC would take time but the trajectory is clear. That I think is a reasonable future for both Malaysia and Singapore: a closer confederation of South-east Asian states.

So, we do not need Singapore in Malaysia. We just need to have both countries to be active in Asean.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
First published in The Malay Mail on February 14 2015.

Categories
ASEAN Economics Politics & government

[2742] Good luck Mr. Jokowi

I have not been following the Indonesian presidential election closely in the sense that I am unfamiliar with detailed policy proposals from both candidates, Jokowi and Prabowo. I remember from some time back that Jokowi specifically offered little detail, leading to the criticism that he has no idea what he is doing and betting on his clean, humble image to win. But I think I have heard or read some proposals along the way. But what I do know is that there is a difference between the two candidates and Prabowo comes out as nationalistic, protectionist candidate, which I think is bad for Malaysia and for Asean integration.

Malaysia and Indonesia are having it relatively good in the past year or so. There have not been too many ugly and petty spats around the accusation of cultural theft. Others are more serious, like the abuse of Indonesian workers in Malaysia and the haze. I should not mention the haze because looking outside right now in Kuala Lumpur, it is pretty bad. Normally I can spot the Petronas Twin Towers from here but right now, it is all white. Walking outside is unpleasant. It is hot, humid and acrid. It is impossible to tolerate the condition. In the past,  Malaysians (and Singaporeans) had been quick to blame their largest neighbor but I think both have to come suspect and possibly realize that the perpetrators of the opening burning in Sumatra and elsewhere (including in some parts of Malaysia) are Malaysian and Singaporean-held plantation companies. And besides, we consume the very products produced by the plantations there. I do not mean that Indonesia is blameless, but solving it requires regional cooperation to address it.

Still, apart from the unpleasant smell, we are not at each other’s throat and I think that is partly because of the reconciliatory tone, or rather, non-aggressive approach taken by the political leadership of both countries, Malaysia and Singapore. I suppose, it is also because the current President Susilo Bambang Yudhoyono has no incentive to appease the more populist crowd who love a chance to slam Malaysia. He is approaching his term limit after all. But even earlier in his term, I think he preferred discussion rather than Sukarno-style rhetoric when dealing with Malaysia.

I do not believe the relatively good period of Malaysia-Indonesia relations will last very long if Prabowo becomes the new Indonesian President. Prabowo appears very nationalistic and I think he would be easy for him to ride on those anti-Malaysian sentiments, especially if things do not go according to his plan in Indonesia. It will always easy to shift the blame to foreigners than focus on the actual problems at hand.

Prabowo also appears to be a protectionist. Having a nationalistic and protectionist President is probably bad news for Malaysia and for Asean integration. It is bad news for Malaysia because there is a lot of Malaysian investment in Indonesia, from plantation to banking. Indonesia is already trying to limit exports of raw material, hoping to develop its own industries. Prabowo looks like the person who would go further for a more comprehensive protectionism across industries. Indonesia is also behind in Asean Open Skies initiative, while most others have agreed and even done opening up.

Also, having Prabowo campaigning with fascist theme is not all too hot for a libertarian like me. Having a fascist Indonesia will take pressure off Malaysia to liberal further. As in right now, I think Indonesia has some democratic and liberal credential to nudge Malaysia in the right way, in a small way. I suppose it is like the one of those Newton’s laws: bodies of mass attract each other and Indonesia is a very large body compared to Malaysia. Having a big, bad fascist right next door is like having a big, bad, black hole across the narrow sea.

Asean wants to integrate closer by 2015. It does not appear that all the goals set will be achieved within target but having its largest members dragging its feet or even regressing will make integration harder than it already is.

This is not to say Jokowi is all free-trade liberal. But I think Jokowi is more even-minded when it comes to Indonesia’s role in making the AEC a success.

I am a regionalist and I am so because I see global effect at closer integration is going nowhere. So, I would like to see the Asean initiative moves forward. Also, as a Malaysia, it is really tiring arguing about petty stuff. I think only Jokowi can do good on both fronts.

So, good luck Mr. Jokowi. I hope you will win the Indonesian election.

Categories
ASEAN Conflict & disaster Politics & government

[2671] The last refuge of scoundrels

The United States was entrenched deeply in two major wars throughout most of the first decade of the 21st century. Just after the shocking September 11, 2001 attacks organized by al Qaeda, the US responded strongly by invading Afghanistan and removed the Taliban from power.

After a quick initial success in the landlocked country, the US went to war against Iraq on less convincing grounds. The world, which was solidly behind the US for the Afghanistan War, stood divided on the eve of the Iraq War. While the rationale for the Iraq war was shaky, the might of the US military was not. The Saddam Hussein regime was toppled soon after.

By 2003, the anti-war movement was in full swing in the US. War was firmly in the mind of the politically conscious. By now, there were wars abroad and at home. Supporters of the war presented their case and the anti-war side presented theirs everywhere. At times, it was not a debate. It was a shouting match.

It would take some years before temperatures cooled. The anti-war side eventually gained the upper hand. Barack Obama campaigned as an anti-war candidate in the 2008 presidential election. He won that election. The appetite for war was gone by the end of the decade. The US began to withdraw its troops from both Afghanistan and Iraq to focus more on its economy.

I remember the war rhetoric employed then by the pro-war groups. I remember exactly the phrase war supporters used to put down criticism of the war. The thought-terminating cliché was this: Support our troops.

Underneath the cliché was a stark case of false dichotomy. One has to either wholly support the war or oppose it unpatriotically. It is either you are with us or you are against us. There was no room for criticism. There was no in between. As George W. Bush infamously put it then, ”Either you are with us, or you are with the terrorists.”

And here we are in Malaysia at a stand-off with an armed Sulu group in Lahad Datu, Sabah which has turned into an armed conflict. There is a possibility that it may turn into a wider conflict still but I am sure we all hope that it will end as quickly as possible without further escalation.

It is unfortunate that the conflict has cost lives on both sides. It is regrettable that the Sulu group refused to negotiate the matter peacefully. Ample opportunities for a peaceful outcome were placed on the table but the peaceful option was rejected by the armed Sulu group.

The armed Sulu group had themselves to be blamed and a bloody outcome was inevitable. In that sense, many Malaysians support the current action of the Malaysian government and its military.

That, however, does not mean there are no criticisms mounted against the Malaysian side. There are signs of incompetence in the handling of the crisis. The fact that a large group of armed men entered Malaysia so easily without early detection in the first place speaks volumes of the failure of those in charge of border security.

As the crisis progressed, various ministers were still politicking with eyes inappropriately set on the upcoming but as yet undeclared general election. One of the relatively trivial top stories highlighted by RTM, Bernama and TV3 during the crisis was the expansion of the ”transformation centre” by the prime minister.

Indeed, during the crisis, the prime minister launched his Instagram campaign. He did not care to comment substantively about the ongoing crisis until, again, very late in the game.

Thanks to this misplaced priority, the public was left in confusion. Both the Malaysian authorities and the mass media failed to provide timely and accurate information about the situation on the ground.

For some weeks, information provided by the authorities even proved to be false and it was contradicted by later developments. It raises the question of whether the authorities were on the ball at all. The home minister is especially guilty of this. In fact, I am honestly curious what the home minister did until the military stepped in.

Instead of relying on Malaysian institutions, the public had to rely on Philippine news outlets instead. I take this as an incredible failure of the Malaysian government and the media establishment, specifically those in television and radio.

And what do these individuals and institutions ”• which have failed us ”• want us to do now?

Support our troops.

Yes, let us hide behind our collective patriotism to hide our incompetence.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved
First published in The Malaysian Insider on March 6 2013.

Categories
ASEAN Liberty

[2668] The Sulu and the Philippine claims of Sabah are undemocratic and unlibertarian

I have a fundamental objection to the Sulu and the Philippine claims of Sabah. Calling it the claim of Sabah is somewhat inaccurate because if the Philippine claim is wholly based on the Sulu claim, then by right the claim only covers roughly the eastern half of Sabah. Nevertheless, the objection that I have is not based on nationalistic sentiment. It is based on democratic and libertarian values.

Know this. The claim by the two parties are undemocratic and certainly unlibertarian. It is both undemoractic and unlibertarian because it completely bypasses the will of the people in Sabah.

The Sulu claim especially is made by a pretender to the throne of the Sulu Sultanate, a monarchy which practically has been extinct for a long time now. The claim by the monarchy highlights how it is undemocratic and unlibertarian.

The term libertarian that I use here is almost democratic and almost committed to a liberal democracy.

Libertarians come from the tradition that the state derives its legitimacy from its people. After all, the most important component of any society is the individuals who form it. Libertarians seek to secure freedom of individuals and the best way to do so within the framework of the state is to make the state answerable to its citizens.

The Sulu claim certainly does not fit into the libertarian framework. If the claim is realized by the Sulu Sultanate, then it will be clear that it is the sultan who will be in power. The Sultan, after all, is running the show, ordering the doomed incursion into Sabah. Any political power will originate from him and that is unacceptable to any libertarian.

Of course, the new Sulu power in Sabah can institute democratic infrastructure to turn the direction of the origin of power more libertarian and that will solve the democratic and libertarian concern. But the fact remains the claim has its origin from a very autocratic nature.

If one compares the Sulu claim to Malaysia’s, it is clear that the Malaysian claim is more libertarian. This is not to mean that Malaysia is a libertarian utopia but relatively, Malaysia is far above the rung compared to the Sulu Sultanate.

The most libertarian argument for Malaysia is that the Malaysian claim is not really a Malaysian claim. It is a Sabahan claim. The people of Sabah decided to be part of the federation of Malaysia and as a federation, all states within Malaysia is responsible toward the security of Sabah. In the face of armed adventure embarked by the Sulu Sultanate, the self-defense action by the Malaysian security forces is legitimate from the libertarian perspective, especially from the libertarian concept of non-aggression axiom. The axiom can be problematic at times by in the case of Sabah, its application is straight forward.

And this brings us to the Philippines, which for all intents and purposes is the successor state to the extinct Sulu Sultanate. What makes the Philippine claim more legitimate from libertarian perspective when compared to the Sulu claim, is that the Philippines, like Malaysia, is a democracy. Both democracies may not be perfect and there are flaws in the system but principally, they are. There are democratic institutions and there are guarantees of individual rights although the guarantees do not go as far enough as a libertarian would like and there are deplorable violations of those rights.

Of course, comparing Malaysian and Philippine democratic institutions to Sulu’s, which do not exist, is unfair because they have not been given a chance to develop it. Nevertheless, the setup highlights the origin of power. For both states, the origin of the power comes from the people, not some autocrats like a sultan.

That however does not make the Philippine claim very much more agreeable from the Sulu claim. The Philippine claim still bypasses the people of Sabah. So, the only libertarian (and democratic) way of solving the claim is by going back to the people. Let us have three options. Malaysia, independence or the Philippines. I have a feeling that the first two options will be more popular to the last one.

And then finally, the Malaysian setup is far more likeable to libertarians than the Philippines. Malaysia is a federation and the Philippines is a unitary state. Sabah has considerable autonomy within Malaysia. Even then, there are accusations that Kuala Lumpur is meddling in the affairs of Sabah. Imagine the Philippines with its unitary state mentality. That would be ugly not just to libertarians, but more so to Sabahans and the Philippines.