Category: Politics & government

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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
Politics & government Pop culture Society

[2666] From race and religion to Psy

For better or worse, quantity is important in a democratic contest. It is about gaining the majority. It is about popularity.

With that as the context, we have to remember we live in a young society. The Department of Statistics estimates that the median Malaysia age in 2010 was slightly above 26 years. In simpler terms, the age of one half of the population today is younger than the median just three years ago. The profile of the Malaysian electorate pretty much reflects the demographics of our society.

Thanks to their sheer size, those in their 20s and 30s are clearly the biggest and thus the most important group. If they had one mind, they collectively could decisively determine the path which the country would take.

But what makes these young people stand out further politically is that most of them will be voting in a national election for the first time in their lives. Their minds more flexible than those belonging to the older generation who more often than not are hung up on legacy issues. Ibrahim Ali, for instance, still has the May 13 incident as his talking point.

So, young adults are the cool kids on the block and the two nationally-relevant political factions are competing to be the friend of these cool kids. The Barisan Nasional-led federal government has launched several policies for that purpose and chief among them are affordable housing and other cash transfers. The federal opposition Pakatan Rakyat promises the same young adults free tertiary education, among others. Both sides are pulling out all stops to be the one special friend.

While I find many of those policies too populist, at least those policies are serious in the sense that they affect a person’s welfare. The existence of a real policy competition between two credible sides is heartening since previously, it was really all about the old, stale, suffocating issues of race and religion. That is not to say that race and religion are no longer factors but at the very least, we have something substantive to base our election on.

But I do have a feeling that the courting is starting to go a bit too far and starting to appear regressive. It is starting to go into the realm of the trivial that debases the very serious nature of our elections. In an effort to become ever more popular, political parties are starting to make entertainment the focal point of their political events, instead of what the parties stand for.

This happened in Penang recently. Barisan Nasional organized its Chinese New Year celebration with Psy, the Korean sensation — and not the Malaysian prime minister — as the star of the event. The hosts of That Effing Show — a sarcastic online talk show focusing on Malaysian affairs — were right on the money when they joked that in the United States, a singer would introduce the president to the crowd but in Malaysia, the prime minister introduced a singer. Such is the office of the prime minister which is obviously too engrossed in crass populism.

While I despise the debasement of the highest political office of the land, I think I understand the reasoning behind it. Young adults are seen wedded together with pop culture. They are the pop culture.

Maybe, just maybe, the politicians think, if they could harness the power of pop culture, if they could show that they have their finger on pop culture, then they could connect with these young adults. We could win their votes, so the politicians thought. At the end, these politicians hoped what happened in Penang stayed in Penang (Tourism Minister Ng Yen Yen had a different idea in Malacca, some weeks after).

But this line of thinking — of entertainment, young adults and politics — is potentially insulting to young adults. Is entertainment the thing that matters the most in attracting them to participate in a political process? Are young adults fluffy-headed, uncritical, naïve voters to be wooed with inconsequential gimmicks? Is the future worth a trivial song in an age where one-hit wonders happen almost every week, if not every day? I pray to the god in the mirror for the answer to be no.

I know it did not work in Penang but I do not know if it will never work. I hope that it will never work so that our elections have less possibility of becoming an exercise of triviality. The truth is Barisan Nasional is not the only one guilty of putting entertainment at the center stage or a big part of a political event or rally.

The danger is that if it works and pulls in the votes. When that happens, there goes the future as votes of substantial value are traded for a trivial piece of song popular with the cool kids.

If it does happen, that will be no progress from the days of race and religion. It is just as bad as the days of old.

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 February 28 2013.

Categories
Economics Politics & government

[2653] Politics should not be a taboo in the financial world

Malaysian private economists mostly find themselves in domestic banks. They typically provide macroeconomic outlook and commentaries on the Malaysian economy for the banks and its clients.

These economists are mostly interested in business cycles, which is a code word for short term economic fluctuation. After all, most professionals in the finance industry and especially the fund managers are mostly interested in making money. Money is made during a business cycle. Beyond the cycle, it is academic.

Academic matters are good to know but one cannot use it to make a killing in the market. Five years down the road? Structural issues? ”Cool story, bro.”

So, these private economists focus on projecting Malaysia’s economic growth, inflation, foreign exchange and interest rates as well as trade figures for the year and the next. These short-run forecast are the big five traditional things that private economists have their eyes on.

Those are not the only things on which economists maintain a close watch. They do monitor and comment other economic indicators and irregular issues, which include developments in other countries that may affect the Malaysian economy.

What is happening in the euro zone? Will the Greek government get the bailout money? Will the US Congress increase the debt limit? What is happening in China? Will the new Abe administration really interfere in the operations of the Bank of Japan?

In many cases, things that are being asked are not strictly economics. They can be political in nature. Do you think Obama will win in the US presidential election? What will happen to Monti? Will Merkel continue to lead Germany? What is Hollande doing? Will Japan and China go to war over those islands? All these questions and more affect the global economy even if they are firmly set in the realm of politics.

Sometimes, some people ask economists about the weather. How bad will Hurricane Sandy be? Regretfully, it seems that economists are the in-house political experts, gypsies with a crystal ball and meteorologists all at the same time. It is outrageous but it just comes with the job. It is demanded of them.

These questions on foreign politics can be answered by these private economists frankly. Not too many will be offended by the answers. The reason is that many in Malaysia do not invest their livelihood in the politics of other countries. They just need to know what is happening abroad so that, for instance, they can anticipate the exchange rate movement. So, foreign politics is not ”• in Malaysia-speak ”• sensitive to the Malaysian financial industry.

But Malaysian politics is.

Despite the fact that politics clearly affects the economy and, specifically, the financial market, frank political discussions are a bit of a taboo in the industry here in Malaysia.

When the conclusions do not place the government of the day in a good light, there is at least a need to rethink how to deliver the message, if there is a need to deliver that message at all.

While the research arm of a bank is theoretically independent, they are under some pressure to avoid direct political reference altogether, however potentially relevant it is to the economy and the performance of the financial market. The conventional wisdom is, do not offend anybody in politics, especially not the government of the day. Conservatism rules the day.

It does take a lot of tact to write something political. Not in the rhetorical or polemical way mind you but as in critical analysis and how it may affect policy, hence investment. To circumvent the problem, analysts and economists express political-related opinions behind closed doors. It either remains unwritten or coded in confusing sentences if it is written at all.

After all, the typical large clients of the banks are large, rich statutory bodies. One does not want to commit a faux pas and lose out on millions of ringgit worth of transactions and deals.

This is not to say that employees in these institutions are political hacks. No. Like the most economists in these private banks, they are professionals and most of them are completely reasonable. The issue is really the line of command; there are government appointees somewhere up there with a big stick who cannot take political analyses that do not favor their side.

And, yes, research publications by these banks are licensed and monitored by Ministry of Home Affairs. So, the issue of press freedom also affects these banks although to a much lesser extent compared to the media. After all, analysts and economists at these banks have very little reason to write something about race and religion, the powder keg of Malaysian society.

One example of how politics can be a taboo involves one of the biggest domestic investment banks in Malaysia and a prominent federal opposition member of parliament.

The research arm of the investment bank invited the MP to join them on a roadshow to talk to its clients in Singapore about the latest political development in Malaysia. The bank’s clients were interested to know because politics affects their returns on investment. They needed to decide and they needed information. This was a chance to get the information straight from the horse’s mouth.

The bank was later criticized for inviting the opposition MP to its program, by a major pro-Barisan Nasional newspaper. That was the end of it.

As an economist, I also had a report that was mildly political in nature for circulation. The management did not give the publication their green light, however, because they deemed it as too politically sensitive.

The publication was not political rhetoric, which is inappropriate for an investment bank. It was a summary of the finding of a closed door discussion held at the bank earlier, which was about the potential outcome of the next general election. Yes, many banks are concerned about uncertainty surrounding the outcome of the next election.

The management was skittish about organizing it because of the profile of the speaker. Still, the forum was held anyway because the bank thought the clients would appreciate it. They clients did appreciate it.

The worst case proving the existence of the taboo so far involves an economist at Bank Islam. He has been suspended by the management of the bank for predicting that Pakatan Rakyat will likely win the next general election and describing such scenario.

His presentation that landed him in hot water does not appear like campaign material. It was more of a mild, measured opinion of an economist instead of a raging, campaigning politician.

As has been reported in the news, the bank has distanced itself from the opinion of its chief economist. That only highlights how averse the bank is to politics.

To be fair, however, the chief economist at Bank Islam, Azrul Azwar Ahmad Tajudin, is not exactly a politically neutral person. He is associated with Parti Keadilan Rakyat and he does advise the party on economic matters. His active participation in politics may have worked against him.

While the fear of losing millions of ringgit and the publication permit is real (perhaps overstated maybe but one can never know), the sensitivity is counterproductive to the industry and those whom it serves. Owners of funds ultimately demand returns to their savings and investment. Having critical and frank analyses on business, the economy and politics are crucial to making the right financial decisions.

Since politics does affect policies and these policies do affect the economy and the financial market, having political discussion as taboo in the financial markets makes making the right decisions harder than it should be.

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 January 24 2013.

Categories
Politics & government Society

[2650] January 12 is just another rally and part of the new normal

A lot have been said about the opposition rally in Stadium Merdeka in Kuala Lumpur on January 12. Pro-Barisan Nasional individuals and groups are either downplaying it or claiming that it is a flop. That harks back to the pre-2008 era of denial that ultimately proved disastrous for Barisan Nasional. They can close their eyes at their own expense. On the other hands, many pro-Pakatan Rakyat are overemphasizing the importance of the rally.

The rally was big and pro-BN groups can say whatever they like. Overwhelming sources of independent origins will lead to the conclusion that the rally was big. The thousands who took similar photos cannot lie at the same time. These are the days of social media but BN-controlled and friendly media are still operating as if the masses do not have access to the internet.

Some spins work because its truth cannot be ascertained. Others do not because it can be decisively disproved. BN operatives tend to find themselves in the latter group.

I find these individuals and groups have zero credibility, much like Utusan Malaysia and TV3, which has been sued too many times and lost too many times. The proceeding of the cases is enough to damn Utusan, never mind the eventual judgment. How does one react to things like ”I don’t have enough time to proofread or fact checking”? I can only conclude that they maintain low standard of journalism or even decency.

On the other end of the spectrum in the camp of Pakatan Rakyat is one of self-aggrandizing. According to them, the rally is historic, a watershed, the opening of a new Malaysia, the retelling of Malaysian history (by virtue of having the rally in Stadium Merdeka where the independence of Malaya was first celebrated) and among many other outrageous claims, the rise of the people.

The rise of the people… maybe these people just watched Les Misérables and got carried away by it. I know, rally such as this can lift up the spirit. I remember during the 2012 Bersih sit-in, I sang “Do You Hear the People Sing?” to myself as I packed up my stuff to go into the city. It was exciting and I am sure the attendees of the January 12 rally felt the same as I did. Yet, the living in the moment and looking stuff from a macro perspective are two different matters.

Beyond songs, the word people is problematic since it is very likely that the electorate is split right in the middle. If the people describes only half of the whole, what does that make of the other half? I have been critical of this kind of rhetoric only in the past, it was BN that liked to use it. They still do it. These days, PR is committing it as well.

The main point of all this is that I think Malaysia has one too many rallies already. This is not saying that we should prevent rally from taking place. No. I personally am suffering from protest-fatigue because large opposition protest is the new normal these days.

The adjective historic should be used when something new and big happened, like when Bersih made its impacts initially. But big rallies are not new. What differ from rally to rally are only insignificant aspects.

And this is the not the first time a peaceful assembly has been held within a stadium. The stadium in Kelana Jaya had one although that was smaller than the one of January 12.

Like I said, the new normal. There is finally a compromise between the two camps, despite the heaty exchange. And that is not new anymore.

As for the retelling of history and the subversion of narrative that UMNO had dominated in the past, again, the January 12 crowd neither started it nor enhanced it. All Anwar Ibrahim did was that he shouted “Merdeka” at Stadium Merdeka. Mere symbolism and too many attach too much meaning into such mere gesture. And Anwar Ibrahim is a man of grand gimmicks. Have we not gone wiser over the years?

It is only everyday politics. The wider repercussion, well, here we are, in a new normal. The new normal maybe historic, but the rally itself is not. It is a speck of a wider trend. To describe the January 12 rally as historic is to debase the very meaning of the word historic. It is an exaggeration.

What was historic was the beginning of the new normal. We are already well into the new normal. The next historic moment may be the next general election, depending on the results.

Categories
Economics Politics & government

[2642] They should have auctioned it

The state — or in common parlance, the government — is the guardian of public resource. These resources are ones that we own collectively, like petroleum, or of interest in the past few weeks in Malaysia, telecommunication spectrum. It is the responsibility of the government to manage and use the resources efficiently. If it cannot, then there is a case to privatize those resources to those who can.

In privatizing these resources, one would expect the government to raise some money it can use to improve the general welfare of the public. One of the best ways to raise money from such privatization is by auctioning the public resource.

Economists typically love auctions because it is efficient. In everyday English, it means an auction can extract the most benefit out of a transaction for the seller. In an auction that focuses purely on maximizing sale prices, the government will benefit enormously from the outcomes of the auctions.

In the Netherlands recently, the government raised nearly EUR4 billion by auctioning the 4G spectrum to the private sector. Initially, the government had expected to raise half a billion euro only. The large difference came as a pleasant surprise to the government. In time when the Dutch government is tightening their belt as a reaction to the economic crisis that Europe as a whole is facing, the EUR4 billion will help in maintaining the quality of public service in the Netherlands.

If one is concerned whether such privatization and auctioning would create a monopoly, there are types of auction that can address exactly that. Restrictions can be imposed so that nobody can buy everything, or buys too much. While total receipts out of those auctions may suffer, the government will still enjoy considerable revenue out of it that can put to good use.

One example will bring us to the United States in 2008 when the Federal Communications Commission (FCC) conducted a controversial spectrum auction. Restrictions were imposed to prevent telecommunication firms from gaining too much market power. Google, worried that these telecommunication firms would restrict access to various content and applications on the internet, even decided to participate in the auction despite not being a telecommunication firm per se. After all had been said and done, the FCC still raised nearly USD20 billion from that particular auction while addressing the issue of market power.

In contrast in Malaysia, 4G spectrum was transferred from the public domain to private firms for free. There was no sale at all, and much less an auction.

For the public, the privatization is an outright welfare loss. An asset that could have been worth billions of ringgit of public money ended up as being nothing.  There is no new revenue for the government and so, the public cannot benefit from the privatization exercise as much as it should. And this comes at a time when the government recognizes that it needs to broaden its taxpayer base, which is narrow at the moment. So, the privatization will not be popular to discerning taxpayers.

Even libertarians, who would typically support privatization exercise, will find this particular Malaysian privatization as very disappointing.

Despite the fact that the privatization came at the expense of potential revenue for the public, some would no doubt defend the flawed privatization. Several defenses have been presented so far.

One argument suggests that with the free award, the recipients would be able to provide cheaper services with the same level of quality than they otherwise could. This is not a given unfortunately and right now, it is a mere speculation.

The reason is that these recipients can effectively form a cartel. This has happened in the past, even with the new Competition Act is in place. In fact, Maxis and Redtone International, two of the 4G spectrum recipients, are already collaborating in rolling out their 4G network. How far this particular collaboration will go is for all of us to see.

Worse, some could even essentially resell the spectrum to other more serious telecommunication companies instead of utilizing the spectrum for themselves. In doing so, they would realize the economic rent that should belong to the public in the first place. If there was an auction or even just a sale instead earlier, there would have been less opportunity for such rent-seeking activities. An auction especially would have squeezed the incentive for rent-seeking out into public pocket and force firms to try to create new wealth rather than engage in unproductive rent-seeking.

Unfortunately, now that everything is done, we are left with the possibility of collusion in the market and a whole lot of room for rent-seeking activities by private firms at the expense of the public. This is not an ideal market scenario.

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 Sun on December 25 2012.