Category: Conflict & disaster

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Conflict & disaster Economics Politics & government

[3019] Tracing the Middle East energy flows disruption throughout the Malaysian economy

I am worried at the way the Malaysian government is handling the supply crisis emanating from the latest war in the Middle East.

Complacency

While neighboring economies have quickly engaged in some kind of mitigating measures, Malaysia appears to be carrying on with business as usual. The latest business-as-usual approach the government has taken is to provide and finance highway toll discounts for the upcoming Eid holidays, which will work to raise petrol and diesel consumption above what it would have been without discount. The subsidy regime has also left unchanged, taking any possible adaptive saving measure out of the equation. Decision on work-from-home arrangement would only be taken after Eid.

It seems the government is complacent. After all, the official communication designed to comfort Malaysians is that Malaysia is a net energy exporter and that the country has two-month’s worth of supply of petroleum products at home. Adding to this is the fact that Malaysia is one of the better prepared economies to weather the supply disruption storm.

Negative effects are unavoidable

Yet, the negative effects are a matter of when, not if.

This is so because many of the industrial (indeed petroleum) products used within Malaysia are exposed to international trade. At the very least, domestic prices are affected by global prices, even if the country is self-sufficient in one specific sector or the other. That is one of the fundamental facts for a small open economy such as Malaysia. Within context of the latest supply disruption, it means domestic prices should go up tracking global prices. This has not taken into account the problem with smuggling, which is really a feature (and not a bug as some would think) of the way Malaysia set prices for its petroleum products.

Qualitatively tracing the disruption ripples with an IO table

To understand the seriousness of the supply disruption, the ripples throughout the domestic economy could be traced through the input-output table. The table links every sector with each other by accounting for all output for all sectors as well as its input from domestic and foreign sources. The latest IO table Malaysia has is from 2021, with the next one due to be published likely this year.

O&G disruption

The clearest channel to trace that disruption is to trace the industrial linkage between oil and gas to chemicals and from there on, to other downstream sectors that use energy and chemical inputs. The chart below is a graphical representation of that linkage within the context of domestic output use (with international trade taken into account).

Here, the output of oil and gas has been traced down by five levels, i.e. from oil and gas, to refined petroleum, to basic chemicals, to special chemicals and then to the next stream user sectors that among others include pharmaceuticals (as listed in the chart).[1]

While five levels may appear deep, it is possible to drill down deeper and trace all the IO table and hence, the whole economy. For instance, a sector located downstream of pharmaceuticals includes the healthcare sector and healthcare output would be used by other services, like banking or even electricity manufacturing. Or for electricity, it could go down to land transport and then to other activities dependent on land transport.

I do only five because these five levels to me appear to be the among the sectors likely to feel the heat early on, either by the consumers, the producers or the government that may subsidize either consumption or production of certain goods. The numbers even tracing it only 5 levels already suggest a huge portion of of the economy should be affected.

That is not at all comforting.

Fertilizer disruption

O&G and is not the only source of the disruption. Fertilizer manufacturing, which uses natural gas as input, is also a major point of trouble in its own right. The chart below traces fertilizer’s immediate users.

Quantitative tracing

These charts are drawn to scale. For laypersons, that means it is more than possible to trace the expected quantitative effects on all industries using the underlying data. How would one ringgit change in output price of oil and gas affect the change in prices of other downstream sectors? How would one unit of volume change in oil and gas affect change in other sectors?

That will be some further calculations I will do in private.

[1] — for crude oil & natural gas, coke & refined petroleum, basic chemicals and specialty chemicals, the corresponding rectangles represent total output and imports of the respective sectors. For the rest sitting at the end nodes (to the most right of the chart), they instead represent sum of input from the supplying upstream sectors. For instance, while basic chemicals node represents all of its output and imports, plastic products node only represents the sum of inputs used from basic chemicals and specialty chemicals. For the end node (right most), only sectors using at least 1% of its supplier output are listed. Anything below that is aggregated under the label others. This is done for simplicity’s sake

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Books, essays and others Conflict & disaster History & heritage

[3011] Mornings in Jenin and Palestinian narrative in literature

There is a short author’s note near the end of Susan Abulhawa’s novel Mornings in Jenin. In the last paragraph, the author recounted the time she met Edward Said and how that influenced her. Abulhawa is a Palestinian American, just like Said. In that page, she mentioned that Said lamented how “the Palestinian narrative was lacking in literature.” After that conversation, she “incorporated his disappointment into [her] resolve.”

Reflecting on that, I think in some instances literature and art in general can be more effective in promoting a cause than academic or non-fiction pieces of work.

Over the past two years or so in response to the killings in Gaza as well as the constant illegal Israeli settlers’ violence in the West Bank, I have attempted to educate myself further about the Palestinian experience. Wikipedia has been a constant companion because it is the easiest access to a generally good source of information. But reading Wikipedia might be dissatisfying and it is easy to drown in a sea of dry hyperlinks and articles that are too long for the screen.

Rashid Khalidi’s The Hundred Years’ War on Palestine has been helpful in guiding me through the narrative and make sense of all the information on Wikipedia. The book is the best non-fiction work on Palestine I have read yet.

But non-fiction makes you work for it. This might not work for many who read for entertainment purposes instead of learning. And non-fiction can be dry. I think the reason The Hundred Years’ War on Palestine reads great is because Khalidi merges his personal stories to make sense of the facts, which makes the grand historical narrative spanning for more than a lifetime more human.

Here is where Mornings in Jenin excels. First published in 2006 under the more controversial original title The Scar of David, the novel for me is the most emotional book I have read in a long time. The characters are fictional but they live through real events described in The Hundred Years’ War on Palestine. There were multiple segments of the novel where I was on the verge of tearing up. Reading it was an emotional rollercoaster that makes one sympathizes with the Palestinian people even more. It adds an extra dimension that is hard for most non-fiction to tap into.

As it turns out, Mornings in Jenin is the first English literature that explores the Palestinian experience and so, fulfilling Abulhawa’s promise to herself to incorporate Palestine into modern literature. That makes Mornings in Jenin an important novel to read in order to understand the Palestinian sufferings better.

And so, I feel Edward Said is right about the importance of literature to the Palestinian experience.

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Books, essays and others Conflict & disaster History & heritage Politics & government

[3005] Reading Revolutionary Iran, or an appreciation for glossary

My readings could be driven by current affairs. That was the reason I picked up Rashid Khalidi’s The Hundred Years’ War on Palestine. And that was the reason I recently read Michael Axworthy’s Revolutionary Iran: the Twelve-Day War between Iran and Israel had just concluded. These books always remind us that there is almost always a long history behind contemporary events. Things very rarely just happened on a day.

Revolutionary Iran, first published in 2013, focuses on the 1979 Iranian Revolution. But it also covers a hundred years’ worth of history, starting from the early 20th century (with the fall of Qajar Iran and the rise of the Pahlavi dynasty) up to the controversial 2011 Iranian presidential election. The long sweep of history is written up all with the aim of setting the revolution in its proper context.

As with any kind of similar books (such as much thicker and expansive The End of Empire and the Making of Malaya), the breadth and depth of the discussion are a challenge to casual readers equipped with only general knowledge of the country: there are just too many names, too many years and too many events to remember and make relevant to the whole exercise. These names and events are all interrelated, making reading Revolutionary Iran complicated. One could get lost along the way. That could cause frustration and eventually DNF: ‘did not finish’. The phone is always ready to dumb us down with social media, ever jealous of any of us perusing long-form materials.

The complexity reminds me just how useful a glossary and an index could be. It kept the story in my head straight while going through the pages of Revolutionary Iran.

Referring the glossary and the index could be a pain. Flipping pages back and forth is disruptive to reading flow. It is almost like reading while consulting a dictionary or an encyclopedia at the same time. It almost feels like reading Wikipedia with all of its hyperlinks could have been a more enjoyable endeavor.

But reading Wikipedia has its own pitfalls. Those hyperlinks are rabbit holes to be explored. With an undisciplined mind, one could easily end up reading about Kurdish nationalism or the history of Azerbaijan all of which may have some relevance to the events of 1979, but does not assist us in understanding the nuances of the Iranian revolution any better. Wikipedia’s hyperlinks could provide context, but an overload of information could also drown out of the context. Some who wander are lost.

So, a book, unlike Wikipedia, is a guided tour. It keeps the fluff out by focusing and contextualising the essentials. It is the model-building tool. And the glossary and the index, often forgotten, are little manuals useful if the reader needs help along the way.

Categories
Books, essays and others Conflict & disaster Politics & government

[3002] Reading George Orwell’s Homage to Catalonia or… “Nak PN ke?”

I suppose if we are intent on finding similarities between two events however different they are, we would find it one way or another. Some of us are wired to find patterns or connections, even where none exists. A cat in the clouds that sort of things. Apophenia.

I kept telling myself that while reading George Orwell’s Homage to Catalonia recently. However I tried adjusting down my pattern-finding bias, my mind kept on returning to contemporary Malaysian politics each time Orwell describes the republican politics of the late 1930s Spanish Civil War. As I opened Wikipedia to understand the war through a wider lens, I thought, indeed, there was a lesson, or two, from Spain for Malaysia.By Hafiz Noor Shams. Some rights reserved.

The differences between the 1920s/1930s Spain and the 2010/2020s Malaysia are aplenty. Spain experienced multiple military coups during those decades that makes Thailand a more appropriate comparison instead of Malaysia. And the Spanish conflict was bloodier than what Malaysia underwent in the 2010s and 2020s: our currently political conflicts are more boring when compared to the Spanish passion of the interwar period.

But if the Spanish Civil war was to be stripped of its details and the conflict made general, there are parallels to the today’s Malaysian reality. And the parallel is this: by the 1920s, support for the traditional powers—that is the monarchy along with the religious Christian class—was in rapid decline (within Malaysian context, throughout the 2000s and the 2010s, traditional power holders in the form of Umno suffered sustained severe erosion of support). So much so that by 1931, the king fled country over rising republican influence. Soon, the Second Spanish Republic was established (again here within Malaysian context, that runs parallel to the election of Pakatan Harapan as the federal government in 2018).

The Republic went through some difficulties right from the beginning. The traditionalists were feeling the heat of radical reforms. Land redistribution and restrictions imposed on the Church from owning properties were proceeding rapidly and pushing the traditionalists out of power further. Meanwhile, weak official responses to certain events that favored the traditionalists left republican supporters thinking the government was betraying them. All this took place with the Great Depression happening in the background. Times were just tough for almost everybody. This feels all too familiar for the 2020 Malaysia.

For the 1930s Spain, the political tensions eventually boxed everybody into an armed conflict. One on side was the republican government supported by the communists, the anarchists and the liberals, who are largely urban dwellers supported by the Soviet Union and Mexico. On the other side were the nationalist rebels comprising the monarchists, Christian conservatives and a group of fascists. By and large, the nationalists were rural folks backed by Nazi Germany and Fascist Italy.

Of interest is here the divisions within the republican ranks, which is one of two main subjects of Homage to Catalonia (the other being war conditions experienced by Orwell). By 1937, a year after the civil war officially began, republican politics was becoming immensely complex but it could be generalized as a competition between the anarchists and the communists. While there was a republican government at the national level, various institutions and cities were controlled by different factions of the republican supporters, with the anarchists and the communists being the more influential factions.

The anarchists wanted a revolution in the sense that workers would control the means of production. The communists wanted those means controlled by the state. The rivalry created a civil war within a civil war, which the communists won and purged the anarchists from government (while I am in no way stating that Rafizi Ramli is an anarchist, the leading-PH party PKR did push Rafizi aside). That communist victory was irrelevant however. So weak was the government from infighting that they eventually succumbed to the fascist rebellion led by Francisco Franco, who would hold on to power for the next 40 years.

Orwell, who was fighting for the Spanish republic with the anarchists, saw the purging as a betrayal, which is perhaps the same feeling many Pakatan Harapan supporters currently feel of the current government. In fact, Orwell writes several pages about being disillusioned, which again, a feeling that appears to be widespread about Pakatan Harapan supporters.

Yes, he felt betrayed but the realist him wrote something for the disillusioned:

As for the newspaper talk about this being a ‘war for democracy’, it was plain eyewash. No one in his senses supposed that there was any hope for democracy, even as we understand it in England or France, in a country so divided and exhausted as Spain would be when the war was over. It would have to be a dictatorship, and it was clear that the chance of a working-class dictatorship had passed. That meant that the general movement would be in the direction of some kind of Fascism. Fascism called, no doubt, by some politer name, and—because this was Spain—more human and less efficient than the German or Italian varieties. The only alternatives were an infinitely worse dictatorship by Franco…

Whichever way you took it it was a depressing outlook. But it did not follow that the Government was not worth fighting for as against the more naked and developed Fascism of Franco and Hitler. Whatever faults the post-war Government might have, Franco’s regime would certainly be worse. [George Orwell. Homage to Catalonia. 1938]

In other words, “Nak PN ke?”

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Conflict & disaster

[2997] The broken city walls of Mandalay

All countries are beautiful in their own way and Myanmar is a beautiful country indeed.

When the country just emerged out of its isolationist cocoon and optimism was sweeping through its population in the early 2010s, I had the opportunity to witness the liberalization of Myanmar firsthand by travelling approximately 2,000km for about 3 weeks from Yangon to Mandalay by buses, trains, cars, motorbikes and boats. What surprised me at first back then was that Yangon did not strike me as a particularly poor city. It seemed the democratic dividend was paying off.

But as with most countries, the reality in the capital does not always reflect that of the whole country. Kuala Lumpur feels and looks like an advanced ultramodern economy when taken out of context of the whole of Malaysia.

There is beauty in urbanity but it was the slow progress of modernity in the 2010s that made the country beautiful. Beyond the limits of Yangon within its glittering Shwedagon Pagoda and a confusing mix of brand new right-hand and left-hand drive vehicles on the road all at once, life was slower. The old ways still held fort. When I reached the famed romanticized city of Mandalay after a long train ride sitting next to a Buddhist monk, I felt I was entering a different country.

Myanmar has since slided back. The Rohingya crisis has made the country less popular in the region. Democratic progress has been rolled back. Civil war has taken hold. When I found myself travelling in northern Thailand recently, driving along the Myanmar border, Thai troops maintained high alert, stopping everybody with no exception to ensure that the situation remained safe on this side of the world. On the back of the range that divides Thailand from Myanmar, I could spy deep into the Shan state. Things were quiet and they gave no clue of the raging civil war happening far across the mountains.

Somewhere in Sagaing across the Irrawaddy river from Mandalay (I cannot recall the location exactly now but I think it was in Sagaing), there was a large cuboid temple standing 40 to 50 meters tall. The temple had a large crack running from the top to the bottom caused by an earthquake during pre-colonial times. Back then as I stood in wonder of the crack, that earthquake was an academic curiosity.

A strong earthquake has struck Mandalay this week and pictures of devastation are coming out online. Bridges have collapsed. Pagodas cracked and crumbled. Houses gone. Parts of the old city walls now suffer from gashes. I have been to some of those places and it breaks my heart to see them in such devastation.

I hope we Malaysians will help Myanmar even in our current state of politics where racism, xenophobia and general meanness is on the rise. Malaysia is the chair of Asean this year and Asean has failed the people of Myanmar in so many ways. This is a chance to redeem ourselves from all those failures, even if the window is only for partial redemption.