Categories
Economics Politics & government

[1817] Of the best time to kill off the fuel subsidy

With global crude oil prices having more than halved since it peaked at about USD150 per barrel just months ago, this is definitely one of those rare opportunities to make a permanent structural change to our economy by effectively eliminating the fuel subsidy for once and for all.

The growth rate of subsidy size at the current prices must be relatively small compared to months ago. Back in June, Malaysians saw retail prices for gasoline jumped by approximately 40%. Since then, somewhat in tandem with falling global prices of crude oil, the Malaysian government has decided to significantly reduce the retail prices though we have yet to see the levels seen prior to the hike in June.

Why does the current environment offer the best time to execute this?

With decreasing subsidy quantum, the government could just maintain the current prices until the quantum of subsidy becomes zero. This happens when market prices equalize with the current subsidized prices. In doing so, elimination of subsidy does not require a hike in retail prices. When that happens, the government could immediately float it.

This strategy significantly reduces political opposition to the idea of subsidy removal. I suspect what was protested in the past was prices hike, not subsidy removal per se.

So, this is the political sustainability required for economic sustainability.

Unfortunately, there is little chance for this little maneuvering to see daylight. The government has already hinted for further reduction of RM0.15 by the end of this month.[1]

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

[1] — JOHOR BARU, MALAYSIA: The petrol price may fall by up to 15 sen when it is reviewed at the end of the month. [Petrol cheaper by 15 sen?. Satiman Jamin. New Straits Times. October 26 2008]

Categories
Politics & government

[1808] Of the continuing relevance of racial politics and its implication to Barisan Nasional

These days, it is presumed that racial politics in this country is dead. It is understandable why this conclusion is appealing but it is certainly wise to refrain from signing off racial politics as a factor in Malaysia politics.

This presumption has its basis in the outcome of the March 8 general election. Barisan Nasional lost considerable number of state and federal seats to the alliance of DAP, PAS and PKR on that historic day. With Barisan is seen as the symbol of racial politics and the three-party alliance — Pakatan Rakyat — is viewed as the antithesis, it is absolutely tempting to relate the electoral outcome to the dichotomy between racial and non-racial politics.

The competition between the two ideas does have a role in the outcome of the election but it is definitely not the sole factor.

Prior the general election, the Barisan-led government on almost daily basis continued to insult the intelligence of Malaysians through its control over the mainstream media. That insult later turned into a battle of credibility as many fought back on the internet and with other means. What happened afterwards was a very personal and public battle between the former Information Minister Zainudin Maidan and the local blogosphere.

BERSIH, meanwhile, took to the streets to demand democratic reforms. This not only attracted sympathizers of DAP, PAS and PKR but also those that truly believe in the need for better democratic system. Others just simply wanted to express their general discontent with the BN-led federal government.

Corruption, meanwhile, was perceived as rampant thanks to several cases such as the ones involving Zakaria Mat Deros, ECM-Libra and even the procurement of weapons. The 2007 Auditor-General’s report, which lists down the excesses of various ministries, made the situation even worse for the BN.

Crime also was on the list. The tragic story of Sharlinie remained unsolved unresolved while the Altantuya murder case with its links to the upper echelon of government very much unsettled ordinary voters.

There are more but while these issues are racially neutral, they do not fit into the racial-non-racial dichotomy. One can definitely be a believer in racial politics but at the same time be concerned with issues of crime, corruption and democratic reforms.

One could even fight against Barisan while believing in racial politics and in Barisan. The anti-Abdullah fraction is one group falling in this category. The former Prime Minister Mahathir Mohamed went as far as encouraging UMNO members to vote against Barisan.

In short, people on both sides were angry at Barisan. All things considered, protest votes rather than believe in non-racial politics may have played a larger role in the result of the March 8 general election.

Not only the role played by racial politics is pushing votes away from Barisan may be overemphasized, the role of racial politics in attracting votes to Pakatan has also been underemphasized.

This can be proven through how PKR place itself in front of a less liberal Malay audience with regard to matter concerning the New Economic Policy. While PKR as well as Pakatan indeed promote an inclusive merit-based affirmative action dubbed the New Economic Agenda as an alternative, the argument against the NEP — the one policy with great association with the racial politics of Barisan — is not position diametrically.

On the contrary, PKR continues to persuade the average Malays to abandon the NEP or its legacy by impressing on the idea that the implementation of the NEP has been corrupted over the years by the corrupt UMNO. PKR is happy to point out that the implementation of the NEP nowadays is flawed while acknowledging the past success of the NEP which improved in the Malay lot. One will be hard-pressed to find a statement which PKR officially stated the NEP is conceptually flawed. PKR simply will not do that, much to the dismay of its sympathizers of libertarian leaning.

Furthermore, PKR does endeavor to convince the average Malays that the welfare of a lot of Malays would continue to be guaranteed under the NEA since the Malays, as it is generally believed, make up a majority of the Malaysian underclass.

The point with the position of the PKR with respect to the NEP and the Malays is that the average Malays are still concerned with the well-being of their race. PKR recognize this and with this cognizance, have frequently pointed out that the party will defend Article 153 of the Constitution of Malaysia, which safeguards the special position of the Malays in the country. If PKR is to outright reject Article 153, it would be interesting to see how the average Malays, even those supportive of PKR, would react.

While there is a hint of racial politics in the way PKR handle the NEP in front of average Malay audience, the tactics leads to a strategic end of a non-racial outcome, i.e. the end justifies the mean. After all, the creation of a right egalitarian society is dependent on convincing the average Malays the needs and benefits of an egalitarian society.

Even stronger case of racial politics in Pakatan can be observed within PAS. The existence of PAS itself is closely predicated upon racial politics. Within the Malaysia context, religion is a component of racial politics, as with language and education among others. This is especially so when Article 160 of the Constitution defines a Malay as a Muslim.

If that is an unconvincing point, then consider the existence of factions within PAS which wish to cooperate with Umno in order to secure Malay-Muslim influence in local politics. The prospect of non-Malays, non-Muslims dominating Pakatan is enough of an incentive for some in PAS to work with UMNO.

And surely, Pakatan has been the great beneficiary of racial politics as demonstrated by the support the coalition receives from Hindraf and the sympathizers of the movement. While it is possible to see Hindraf as a civil liberty movement which seeks equality, the movement undeniably positioned itself well within the scope of racial politics.

Perhaps, the greatest proof of the continuous relevance of racial politics is the oft-overlooked fact that Barisan actually won the general election in terms of popular votes and seats won.

Nevertheless, just as the success of Pakatan cannot be fully attributed to the appeal of non-racial politics, the victory of Barisan cannot be fully attributed to racial politics either. Yet, it is likely that after controlling for other factors, racial politics would still play a large factor.

Even if racial politics has lost its appeal to a many Malaysians, racial politics still appeal to considerable number — if not the majority — of Malaysians.

The only way to ascertain the end of the racial politics as a major factor of Malaysian politics is to see how large a factor racial politics will play in the next general election or even the one after. Everybody should be wary of making one grand conclusion based on one observation, however reliable the observation is.

All that brings me to one question: what is the possible implication of continuing relevance of racial politics?

The most obvious is the possibility of heeding the call of Dato’ Onn: for Barisan Nasional to abandon racial politics in one way or another.

If indeed racial politics still has great relevance in Malaysian politics, the abandonment of racial politics by Barisan would see schism in its three great parties, namely UMNO, MCA and MIC. Though purely a conjecture, the prospect of ethno-nationalists — be it Malay, Chinese, Indian or the mysterious others — breaking away from a unitary multiracial Barisan is not an outlandish possibility.

Maneuvered unwisely, the new Barisan Nasional may find itself sandwiched between Pakatan on the left and a new ethno-nationalists entity on its immediate right. Hitler lost his war by fighting on two fronts simultaneously; a new Barisan, finding itself in between a rock and a hard place, may just share the same fate.

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

A version of this article was published in The Malaysian Insider. Two paragaphs (the question and the reference to Dato’ Onn) were removed from the TMI version.

Categories
Politics & government

[1805] Of the conservatives are bringing down the McCain campaign

The McCain campaign is going downhill. As much as I would like to see him doing good as he had just weeks ago, these are hard times for McCain in part no thanks to the conservative aspect of the Republican Party. Having Palin in the equation does not help either.

The accusations thrown against Barack Obama by the conservatives are becoming too disgusting that even Senator John McCain could not stomach. Upon hearing a supporter giving off a reek of racism against Barack Obama, McCain valiantly defended Obama.[1]

This is possibly not the way to run a campaign. McCain should really promote his agenda instead of defending Obama. Yet, the conservative supporters — the part of the Republican Party which I truly hate — are forcing McCain to defend Obama in order to have some sort of decorum in the presidential race. McCain is one of those people which honorable fight means something.

I am indeed reserve a lot of respect for John McCain. This respect originates from the days when I was an undergraduate at Michigan. I was simply impressed at the senator’s willingness to break rank to do what he thinks right. His positions on social issues in comparison to average Republicans, on the environment as well as on free market particularly appeal to me. Just tell me who is brave enough to tell to the farmers in the Idaho that ethanol subsidy is unhelpful for the economy? And tell me, who is brave enough to meet the automotive workers in Michigan that they need to compete without government aid?

Even Obama is unwilling tell these groups the truth.

His defense of Obama against his own vulgar supporters earns him even more respect from me. The more his supporters irrationally attack Obama personally and viciously at that instead of focusing on issues, the more McCain would be forced to stand up for Obama. Such action would crowd out time for McCain to use to promote his own agenda.

It is just too bad that when McCain defended Obama, he was booed by his own supporters.[2] That demonstrates how unschooled the conservatives are.

Palin herself is not helpful. Apart from her disappointing uneducated remarks on various items — on Russia for instance which has been made fun by the SNL — her continuous personal and dirty attack on Obama makes McCain’s job harder. Furthermore, her recently publicized abuse of power in Alaska could only makes matter worse.[3]

At the rate things are going, unfortunately, the Republicans are likely to witness a disaster in November. If it continues like this, the Republicans would lose the centrist and independent — the groups which McCain had a hold on at the beginning of the campaign. If the Republicans lose and there is a backtrack in the advances made in the recent decades toward freer market, it would be because the conservatives handed the victory over the Democrats.

Even I, initially eager to be within the McCain’s camp, am being put off by the conservatives.

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

[1] — [Rage rising on the McCain campaign trail. Ed Henry. Ed Hornick. CNN. October 11 2008]

[2] — McCain’s response was met with boos from the crowd. [Rage rising on the McCain campaign trail. Ed Henry. Ed Hornick. CNN. October 11 2008]

[3] — Sarah Palin, the Republican vice-presidential candidate, unlawfully abused her position as Alaska governor to exert pressure for her former brother-in-law to be sacked as a state trooper, an independent investigator has concluded. [Sarah Palin acted ‘unlawfully’ in feud with state trooper, report says. Philip Sherwell . Telegraph. October 11 2008]

Categories
Liberty Politics & government

[1804] Of Koh is one of the fathers of doublespeak

In The Malaysian Insider:

KUALA LUMPUR, Oct 11 — Datuk Seri Abdullah Ahmad Badawi has been dubbed the “Father of Democratic Reforms” by Gerakan president Tan Sri Dr Koh Tsu Koon.

In his opening speech this morning at Gerakan’s national delegates conference, Koh said that “as the Prime Minister, Abdullah has initiated reforms for good governance and promoted commitment to integrity. As an advocate for democracy, he has opened up more space for expression to Malaysians.” [Koh dubs Pak Lah ‘Father of Democratic Reforms’. Shannon Teoh. The Malaysian Insider. October 11 2008]

I am wary of doing the same thing.

While it is during the Abdullah administration when the Malaysian society reclaims greater democratic space and effectively larger liberty stolen from it by the state, practically none of it is due to active action by Prime Minister Abdullah Ahmad Badawi. The greater democracy is made possible through effort of various individuals willing enough to stand up and stare back at the state when the state stares at them.

PM Abdullah has failed to reform anything. Each reform he initiated is going nowhere due to opposition from within his own party.

It took free individuals to push organic reform agendas by pushing the frontier of an illiberal state away from suffocating free individuals. To have PM Abdullah enjoying the appellation denies the real contributors who stand in the front line to contest against an arm of the state, the police which is more interested in suppressing freedom rather than fighting crime.

Having the PM as the “Father of Democratic Reforms” steals the honor from those who actually fought for greater democratic space, those that fought against the PM as well as the relentless machinery of Barisan Nasional. The victory is of individuals too many to list here and not of an ineffective personality as well as the machinery that maintains deep disdain for democratic space.

If there is anybody that deserves that honor, it should be the individuals who fought for it. We do not have a “Father of Democratic Reform”. We instead have “Fathers of Democratic Reform” and the PM is not one of them.

Dr. Koh is committing doublespeak for suggesting the sobriquet for the PM. Would we thank the Nazis for losing World War II? Would we thank PM Abdullah for losing the war in our backyard?

Categories
Economics Liberty Politics & government

[1791] Of popular capitalism is nothing less than a crusade

Margaret Thatcher speaking at the Conservative Party Conference in 1986:

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This Government has rolled back the frontiers of the State, and will roll them back still further.

So popular is our policy that it’s being taken up all over the world.

From France to the Phillipines, from Jamaica to Japan, from Malaysia to Mexico, from Sri Lanka to Singapore, privatisation is on the move, there’s even a special oriental version in China.

The policies we have pioneered are catching on in country after country.

We Conservatives believe in popular capitalism—believe in a property-owning democracy.

And it works!

In Scotland recently, I was present at the sale of the millionth council house: to a lovely family with two children, who can at last call their home their own.

Now let’s go for the second million!

And what’s more, millions have already become shareholders.

And soon there will be opportunities for millions more, in British Gas, British Airways, British Airports and Rolls-Royce.

Who says we’ve run out of steam.

We’re in our prime!

The great political reform of the last century was to enable more and more people to have a vote.

Now the great Tory reform of this century is to enable more and more people to own property.

Popular capitalism is nothing less than a crusade to enfranchise the many in the economic life of the nation.

We Conservatives are returning power to the people.

That is the way to one nation, one people.