Categories
Politics & government

[2463] We don’t need a big government voting bloc

In our modern Malaysia, one can hope that government policy comes about through the general will of the people peacefully through democratic means. One can further hope that this mean not merely crass majoritarianism but that which is respectful of individual rights. After all, the government and the state derive its legitimacy from the people, the citizens — an idea that is clichéd but time-tested and the prevailing idea of government in our time. It took us humanity hundreds if not thousands of years to finally subscribe to it either willingly or grudgingly.

The ideal democratic government and state translate the general will into policy and ideally, they must always accede to the general will.

What is ideal is not necessarily true on the ground however. How many self-proclaimed democratic states have turned against its citizens?

History has witnessed many of those examples, which should be enough to convince the democrats among us of the need to establish some mechanism to limit the opportunity for government to shirk from their responsibility to the people and more importantly, to prevent it from developing means to promote its own separate interest at the expense of citizens.

Since we really live in a largely majoritarian reality, herein lies the importance of a small government.

To understand the need to control the size of government, it is crucial to note that government employees themselves are voters and all voters are self-interested. They will vote for those who will promote their welfare and interest more often than not. They are exemptions, of course, but the assumption of self-interest remains the most robust assumption of human behavior. It expects the least and thus less susceptible to disappointment, unlike other more benevolent but naïve assumptions that exist on the economic left that have failed more frequently than the financial markets have crashed.

A large government employing a large fraction of citizenry will invest this group of voters with excessive political power. The larger the government, the more votes will go toward enhancing the welfare of its employees.

This creates a conflict of interest where the employees of the government can promote their interest collectively instead that of the wider voting population. With a power voting bloc, the institution that is supposed to execute the general will of the people takes a life of its own. How many times have large rewards been to government servants just before the election in Malaysia?

Essentially, that large voting bloc enables government servants to raise their own wages and grant themselves other benefits, a conflict of interest so brilliantly portrayed in an episode of the BBC’sYes Minister.

That conflict of interest is even more worrying when the taxpayers are mostly those who are employed in the private sector. What pain do the benefactors of the voting bloc suffers when someone else is financing the punch party?

With a majoritarian reality and an influential voting bloc, officeholders and the aspirants will not dare promote a responsible public finance. So not only it exacerbates the status quo, it reduces the likelihood of putting the party to a stop before it is too late to switch the tracks.

At the very extreme, such bloc makes the liberal rationale for the state irrelevant. The state now becomes overly sensitive to government servants, and less so to the citizens at large.

The 19th century American author Edward Bellamy somewhat circumvented the problem by making everybody the employees of the state. He detailed his views in his work of fiction, Looking Backward.

Ingenious, except he dreamed of a very different society. He dreamed of a utopian communist society where all wants and desires are fulfilled, and men and women work not for monetary reward but merely for recognition that scout boys proudly wear. Men and women of Looking Backward believe the government does everything for the benefits of the masses, ever so efficiently.

Where Bellamy spotted a utopia, Orwell saw a dystopia.

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 November 25 2011.

Categories
Politics & government

[2458] PEMANDU needs an expiry date

A friend asked me once what I thought of PEMANDU. He expected me to praise it since he knew where my economic bias lies. Here was PEMANDU advocating liberalization in a number of ways. There I was, a person who has been accused of being a neo-liberal at one time or another… there was a match in preferred policy. Despite that, I gave the friend a non-committal answer because I was unsure how things would turn out in the end.

Things have become clear since and I have rationalized my thoughts, I think, quite comprehensively. This is what I think of the unit under the Prime Minister’s Department.

Many of these initiatives can be done without PEMANDU at the helm. A number of initiatives are Proton-like, with Proton being more or less a rebadged Mitsubishi. Many projects merely received a nod from PEMANDU and that alone allows those projects to be listed as PEMANDU-related projects.

To be fair, there are actual initiatives like the Government Transformation Program with all of its indicators. Many initiatives offer real measurements of progress in some areas. In the past, progression and regression were purely a matter of opinion. These measurements provide an anchor for a more objective discussion. That is laudable. The work on the mass rapid transit is two, save some problems like how contracts are being awarded. One can have a list of the good stuff done and planned. Its push for a more responsible approach in public finance is another praiseworthy effort, although contradictions raise skepticism.

How does one react to PEMANDU’s call for subsidy and deficit reduction when the unit itself praises fiscal populism?

How does one react to a call for private-led economy when it is the public sector that is leading the charge?

How does one react to market-friendly affirmative action?

Beyond the superficiality and the contradiction lies one consistency. PEMANDU signifies the concentration of power. Roles once spread among various ministries — which can be a system of check and balance — have now been transferred to the Prime Minister’s Department. The fact that the prime minister and finance minister are the same person serves only to strengthen the point.

Pemandu is now the economic central planner, the construction contractor, judge and all. It is even your emailman, judging by its enthusiastic support for the 1Malaysia email project.

Power concentration can be useful when the government itself is debilitated, filled with deadwood, stuck with legacy issues and trapped in time. For example, PEMANDU’s public communication is slick. One can imagine how badly such communication would have been handled by the Ministry of Information. The ministry is still fighting the communists after all of these years.

Just as the concentration has its benefits, there is a cost. The cost is a weakened check and balance system.

There is such a thing as too much power and Pemandu is accumulating powers within the government. Given its wide-ranging influence, it is becoming a ministry by itself, headed by an unelected minister who reports to yet another unelected minister.

Meanwhile, other parts of government are becoming weaker as their roles diminish. Where is the Ministry of Works in the MRT equation? Where is the Ministry of Finance in the subsidy debate? PEMANDU appears to play the larger roles, implying its influence. This will adversely affect the democratic nature of governance in Malaysia, whatever much left there is. The continuous existence of PEMANDU will continue the trend of power accumulation.

For this reason, PEMANDU should not exist for eternity. There has to be an expiry date so that these concentrated powers will not accumulate to a point that it becomes a struggle between an authoritarian and the rest of Malaysia. There must be a point when those powers will be redistributed back across the government.

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 November 7 2011.

Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved Mohd Hafiz Noor Shams. Some rights reserved

erratum — In the original article at The Malaysian Insider, I misidentified Menara Warisan Merdeka as Menara Wawasan. Furthermore, I mistakenly associated it with PEMANDU. I have removed the reference here. Apologies for the mistakes. Here are the deleted sentences: “Take the Menara Wawasan proposal by PNB. PNB could easily go ahead with it without Pemandu stamping a GNI value to it.”

Categories
Economics Politics & government

[2454] Oh, Papandreou the socialist, the coward, the opportunist

If I were a European taxpayer seeing my money being used to bailout a near-bankrupt socialist government due to outrageous spending while I live responsibly, I would be angry. Why should I be the guarantor of a profligate? But if I wanted the Eurozone to stay intact, I would bite the bullet and angrily pay for the bailout.

If I were a European taxpayer funding the bailout, I would be fuming mad with the Greek Prime Minister Georgios Papandreou’s referendum plan. After all the hassles and the blows punched to get the money, however insufficient it is for the whole of Eurozone, Papandreou hides behind the angry masses, trying to deflect blame from the Greek government to the benefactors of the bailout facility.

The Greek government is a bunch of coward socialists, refusing to own up for its mistake, too insignificant to be bold and solve it. Papandreou may say it is done in the name of democracy, but he forgets the adjective representative. He could easily do it but no. He is afraid of the political cost and so he adopts direct democracy and gambles the whole structure for his own convenience. He wants to refresh his mandate but he has his mandate already. This is about passing the buck.

Oh, he is Papandreou the socialist, the coward, the opportunist.

But I am not a European. Yet, I am very angry at the Greek government.

I hope Greece burn. Let Papandreau fiddles while Greece burns, as Nero did when Rome did. Let us see how bad the austerity plan compares to a complete bankruptcy. Let Greece be demoted to the third world. On with the natural experiment on the socialists.

Categories
Politics & government

[2450] The Commonwealth, the irrelevant

Yet again, an international organization that does very little beats its chest, declaring its self-proclaimed importance to the world. Its members praise the organization for one thing or another. This is the Commonwealth of Nations and it is having its Commonwealth Heads of Government Meeting in Perth.

The truth is that like many other international organizations out there, the Commonwealth is increasingly irrelevant.

Really, what exactly does the Commonwealth do, apart from hosting the Commonwealth Games every four years? And oh, yes, CHOGM too?

The last time it played any significant role was its campaign against apartheid in South Africa. That was almost two decades ago. All other issues after that demonstrated the inefficacy of the organization. It holds no sway on Pakistan. Australia and New Zealand alone can exert pressure on the problematic Fiji and other small Pacific island-states. Corruption? Lip service. Climate change? It did not matter at Copenhagen. Development? The days of the Colombo Plan is long gone. If it has not yet, then it is definitely close to its expiry date. Individual rights? Human rights? Please do not make me laugh.

So, what will be the biggest topic discussed in the latest CHOGM meeting in Perth, Australia?

Numero uno: the line of succession of the British monarchy. Yes. Of all issues bedeviling the world right now, the Commonwealth’s main concern is the line of succession of the British monarchy.

Oh, it will also discuss how to celebrate the Queen’s diamond jubilee. God save the Queen.

Of course, these issues are perfect for the Commonwealth realm. These are issues of great importance to an irrelevant organization. How much more irrelevant can one get?

Manmohan Singh, the Prime Minister of the biggest democracy in the world, realizes this. He is skipping the CHOGM meeting in Perth, which opens today.

Even the British Prime Minister David Cameron is giving the opening a miss, knowing exactly what and where his priority is at the moment: Europe. This is telling.

Categories
Economics Politics & government

[2442] Hypocrisy hampers deficit reduction agenda

If one throws a dart randomly at those pieces of paper pinned on the wall, there is a good chance the dart will land on a handout provision. Those papers are the 2012 Budget.

The Budget, as tabled by the Najib administration, is an election budget. Civil servants, teachers, the police force, the armed forces, pensioners and others will get their share regardless of justifiability.

Meanwhile, the subsidy liberalization program that the Najib administration was so gung-ho about earlier has taken a back seat, half-baked and emitting a stench called hypocrisy. Idris Jala, a man who unproductively exaggerated that Malaysia would go bankrupt if the government expenditure continued to rise, now praises the Budget of goodies.

Such is the loyalty of some men to ideas and principles. The wind blows and the mind changes. There is no principle to stick to because only political convenience matters. Never mind the contradiction and hypocrisy. Voters have a short memory span. Give them money and they will go gaga. It is all about winning elections, not honesty and consistency.

The financial position of the federal government could be in a better shape if the administration had the necessary honesty and consistency instead of bending backwards to accommodate the populism monster.

Without the monster, the fiscal deficit for year 2012 — the Najib administration projects to be 4.7% of nominal gross domestic product (or RM33.8 billion in absolute terms) — could be lowered considerably. It could possibly go down as far as 3.7% of nominal GDP if all the subsidies, one-time cash transfers and other election-related handouts are flushed down the drain.

Admittedly, the drastic reduction will be a shock to the system that none might want to experience amid the present global economic uncertainty.

Yet, in times of uncertainty, it is only prudent to save for rainy days even within political needs. This is doubly true given that regardless what has been said and done about the importance of domestic demand, external demand is still wildly important to the domestic economy.

A number of analysts have already voiced out that the government’s revenue figures are too optimistic for a pessimistic world. That is all the more reason for observers to be conservative with the federal government’s finance.

The fiscal deficit can be brought down still lower even with political considerations in mind. Removing the RM3,000 one-off gift to 4,300 individuals, another RM500 one-off transfer to an expected 3.4 million persons and the KAR1SMA program that will cost RM1.2 billion off the Budget while keeping the bloated subsidy regime intact, the deficit for the year 2012 could stand at 4.4% out of nominal GDP instead of the higher projected 4.7%.

One could argue that these programs are welfare enhancing, hence they deserve to be written into the 2012 Budget. In order to forward that argument however, one has to believe in it first. Honesty is required.

Unfortunately, many of those within the government whom now say these are caring measures are exactly those whom accused these same measures of being irresponsibly populist. This suggests one thing. Their only moral compass involves one question: where did the idea come from?

If it is from across the aisle, it is destructively populist. If it comes from their side, the same measures are caring.

That is not a sincere moral system, for the currency is political convenience. The slogan is ”win the election and forget anything else.”

If honesty were of any value, these programs — regardless of whether they are labeled populist or caring — should have given way to a deficit reduction agenda. With honesty and consistency, the federal government would have a smaller deficit, so that there would be less taxation for all of us in the future.

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 October 10 2011.