Category: Politics & government

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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 Politics & government Society

[3017] One day in Babel

As a member of the generation who grew up and still believes in the multicultural project under the aegis of liberal democratic order, the 2020s is a decade of constant disappointment at home and abroad. The disappointment stems from betrayal of various parties that used to express liberal sentiments but now has turned against it for whatever reason.

Criticisms of the current state of affairs are everywhere, including in contemporary literature. Two books from my recent readings rise to the top of my mind. Omar El Akkad’s non-fiction One Day Everybody Will Have Always Been Against This and RF Kuang’s fantasy-scifi-historical fiction Babel or The Necessity of Violence.

One of those betraying parties are many liberals in the West.

El Akkad’s thesis is clear from the book title itself, with ‘this’ being the genocide in Gaza and apartheid across occupied Palestine. He points out the hypocrisy of Western liberals, especially US liberals, where human rights are held up only for some but not others. That has been a constant criticism of the US and Western Europe (the centers of such liberalism) for a long time but the idea has gained its greater purchase in the past several years, especially with the wildly different approaches taken by then with respect to Ukraine and Palestine.

El Akkad’s criticism goes deeper than simply highlighting the hypocrisy. He believes many western liberals are really interested in messaging and virtue signalling all to make themselves look good. When push comes to shoves, they would create a caveat to wriggle their way through the issues while pretending there is no hypocrisy involved after all.

This, I believe, is one of several reasons why Western liberals no longer hold the prestige they once had in the eyes of many Asian liberals. I have summarized my thoughts on the matter on Kam Raslan’s A Bit of Culture over radio some weeks back. In the same show, I recommended El Akkad’s work as a book to be read.

That hypocrisy is one of several themes explored in Babel. But more than that is another relevant but more damning fatalist criticism developed from that hypocrisy. It is that people of different culture, or more specifically, minorities in a white world would never be considered as equal. Set during the European industrial revolution on the eve of the Opium War, the novel traces the life of the hero and his small cohort at Oxford, some who are radicalized over the injustices of British colonialism.

Babel is an excellent novel and I enjoy Kuang’s writings. In fact, Babel is my second Kuang’s work I have read, with the first being Yellowface. Even so, I won’t yet be as pessimistically fatalistic about multiculturalism as Babel is, even in this current decade of disappointment. Babel takes place during a time of severe power imbalance between the Western world and everything else, where the subscription to the idea of equality can easily be corrupted by hypocrisy that those in power.

With the ongoing multidecades-long rise of Asian economies, the gap representing power imbalance is shrinking and for some, has been reversed. This, I hope, would make that same hypocrisy harder to sustain and a more genuine inclusivity more achievable.

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Books, essays and others Economics Politics & government Society

[3010] Reviewing Abundance and thinking about the abundance agenda

One of the central themes of The End of the Nineteen-Nineties (by yours truly) is that a robust and widely shared economic growth is a prerequisite to Malaysia’s civic nationalism that comes in the form of Bangsa Malaysia. I argue that the loss of growth momentum caused by the late 1990s Asian Financial Crisis is the primary reason behind why civic nationalism is struggling to have itself centered in Malaysian politics. If you sympathize with the argument, then it is natural to buy into the overall abundance agenda.

Ezra Klein and Derek Thompson are two champions that have popularized the idea of abundance through their recent 2025 book Abundance.

However, Abundance is a US-centric work. Some parts of the book sound like a boosterism for the Biden agenda: build, build, build. The support for the CHIPS Act is apparent throughout the book.

If you are living and working in Asia, problems raised by Klein and Thompson such as reluctance to build more housing, slow renewable energy progress and the general weakness in infrastructure spending might sound like an alien concept. In this part of the world, infrastructure spending is something we have learned to take for granted. Oversupply and overcapacity are more the buzzwords than scarcity is.

Nothing highlights this more by the differing reactions to a recent clip of the US President convoy driving along a Malaysian highway during the recently concluded Asean Summit in Kuala Lumpur: some US audience were amazed by various aspects of the highway while the Malaysian reactions included pride (thank you for noticing!), indifference (what’s the so special about the stretch road?) and smugness (welcome to the first world…). And this is just Malaysia, not China with its ultramodern out-of-this-world infrastructure and industrial might that is just hitting the ball out of the park.

Yet, the implications of Abundance have relevance to this part of the world too.

For one, policy priorities do change but change does not come easy. In fact, policy momentum often come in the way of new challenges. The authors go some length to explain why it is hard to build in the US: there was a time during the 1960s-1980s when development went too far that other concerns such as pollution, health and road safety were ignored. Since then, public pressures and court cases have put in place various legislations and bureaucracies to address these issues. These restrictions were relevant then, but they are now in the way of addressing new challenges. Example includes laws that used to restrict pollutions and preserve the environment are now preventing progress towards clean energy deployment that is necessary to combat climate change.

This can be true for Malaysia too in multiple areas. One area I can think of is Malaysia’s set of incentives, which a majority of them are geared towards the industries of the 1990s but not of the 2020s. Many of these incentives are now irrelevant but continued to be given by the government for various reasons, which is now taking resources for emerging concerns. Another policy is simply the petrol subsidy: we would like to push the country towards greater electrification but the subsidy is clearly in the way.

Another important lesson is that scarcity, oftentimes, is a choice. Sure, the physical world can only serves us so much but policies in many cases are the cause behind scarcity. Bringing the idea closer to home in Malaysia, our collective reluctance to raise taxes is the reason behind capacity and quality challenges we face in the health and education sectors. We choose the scarcity, and then we fight among ourselves to win stupid prize in that stupid games we created.

The greatest lesson perhaps is this: growth is not the only thing that matters but do not take it for granted. In fact, to put it more strongly, degrowth is not the way. This should be obvious with the various social pressures caused by deindustrialization faced by not just the US, but especially Europe. In Malaysia, for those still holding on to the idea of Bangsa Malaysia, growth is a must.

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Books, essays and others History & heritage Politics & government Science & technology Society

[3009] Reviewing The Peasant Robbers of Kedah 1900-1929 and then a modern thought

Central to Cheah Boon Kheng’s 1988 book The Peasant Robbers of Kedah 1900-1929: Historical and Folk Perceptions is the idea of theft as an informal wealth redistribution mechanism during a time of distress in rural Kedah. The thefts are framed as a guarantee for some kind of minimum welfare standard for the rural folks in general and in important specific cases, as a response by the weak against those in authority.

The result of 12 years of research and writing actively influenced by James C. Scott (the author of Weapons of the Weak), Cheah (who died in 2015) painted a picture of petty crimes being a constant concern in the 20th century rural Kedah. The historian reconstructed the conditions of Kedahan kampongs through interviews where written records failed. Written records are wholly inadequate because the Kedah Sultanate, both under first Siamese and later British influence, had limited effective control beyond major towns: the state elites had worries other than recording the lived experience of peasants, at least until they began to exert greater control throughout the state.

In that reconstructed picture, I get the idea that almost everybody engaged in petty crimes. Chickens reared regularly disappeared without a trace. The prevalence of theft however did not mean the lack of shame. In one page, the author wrote that the offending party would quickly slaughter the birds they had stolen, had it cooked immediately and then consumed as soon as possible so to not get caught. Proving such crime was next to impossible while reporting it to the authority was such a hassle that it was not worth the effort to do so. In a rural setting where the jungle was nearby, everybody was a suspect, policing was absent, the state was non-existent and the border was porous, the criminals might as well be a snake or a ghost with an appetite for white meat. The spread and frequency of petty crime worsened during difficult economic periods as distressed households resorted to pilfering for survival. Or as Cheah put it, it was a system of self-help.

Crucially, all this was an intraclass conflict. The rich lived far away from the kampongs in towns and protected by law and order. But the rural normality of crime set the stage for organized banditry at the state level and soon, interclass conflict.

The rising banditry was fueled by a weak state capacity, a changing power structure (from distributed native power to colonial centralized control) and general corruption among rural leaders.

Kedah then was more a mandala than the state we know today: strongest at the capital center but its influence dropped disproportionately fast the farther away a person traveled into the jungles. But even in that weak state structure, Kedah still had representatives in the form of village heads or similar positions. As the British expanded its bureaucratic reach outward beyond towns and centralized all authorities in the state capital Alor Setar, these local rural actors lost power and wealth.

To preserve their influence amid a feudal society, they resorted to criminal activities. They fought the erosion of their power by recruiting local thugs who carried out theft in a bigger way. In this way, the rural elites amassed muscles and capital.

But the local elites needed the local thugs as much as the latter needed the former. The thugs needed the local elites as a shield from Alor Setar, or at least some kind of legitimacy within a feudalist framework.

Here, the idea of wealth redistribution from the rich to the poor becomes tenuous as the local rich preyed upon the poor even as the rural elites did this in rebellion against growing colonial authority (and it should be mentioned, against the sultan too).

As events would have it, the alliance between the rural elites and the thugs employed and protected would not last. Quarrels happened for whatever reasons and the latter turned against the former, stealing for rural and urban elites alike. The victimized peasants celebrated this and this is what Eric Hobsbawm called social banditry: actions taken as illegal by the law but carried out by the oppressed groups as a form of resistance. Some in fact shared their spoiled with poor, making them as Cheah Boon Kheng called them as the Robin Hood of Malaya. Such appears to be the case with the peasant robber Panglima Nayan (and several others) who was eventually killed by the British-Kedah authorities.

But not all cases (in fact most cases) could be labelled cleanly as Robin Hood kind. Stories about these individuals are contradictory and there are forgotten aspects about their cruelty to their own, with their benevolence exaggerated. It is a complicated truth, unlike popular folk tales told in Kedah.

Cheah the historian understood this but still came out to defend his thesis: it does not matter what the truth is. What matters is the perception of the peasants. That perception and stories from the peasants told are their way of rebelling against the authorities. These stories are the weapons of the weak.

Cheah’s defense of the thesis is acceptable and solid in fact. But I am troubled with the brushing off facts in favor of perceptions, if we transport this lens to analyze contemporary issues. Here, I am referring to social media which has inundated everybody with information (regardless of truth) so much that everything become perceptions with increasingly no bearing to facts. Would the employment of perceptions regardless of truth by fringe extremist groups (by definition non-mainstream and so… ignored/oppressed/suppressed/disenfranchised?) qualify as weapons of the weak?

I have not read Weapons of the Weak and I will try to read it soon with that specific question in mind.

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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.