Categories
Liberty Politics & government

[2389] Bersih finds itself in a quandary with the King speaking up

I give my support to Bersih. As far as the rally goes, that support is based on the idea of freedom of assembly. That however does not mean I fully agree with everything that Bersih does. Specifically, I disagree with its appeal to the King.

Bersih now finds itself in a quandary. The King has just spoken up against its planned protest in downtown Kuala Lumpur.[1]

For a libertarian like me, the King’s speech should not matter. For those in Bersih who makes the King their arbitrator, it does.

Bersih binds itself to the words of the King and not primarily to the principle of liberty. That binding makes the words of the King as an imperative that Bersih must follow, if these monarchists are true to their conviction. And the King’s words have not been favorable toward it. That is the peril of making the King the referee.

Because of the King, I would imagine that there is a conflict between monarchists and civil libertarians within Bersih.

I take comfort seeing Bersih finding itself in a quandry because, again, I disagree with its appeal to the King. I have been so from the very beginning, even back in 2007 in times when many believed that the monarchy was an important balancing mechanism, especially after they observed how the Thai King helped toned down the political conflict in Thailand.

I have argued that that appeal would only politicize the monarchy and bring the monarchy into politics in times when the status quo has a republican bias. At the time, however, my argument ran against the grain. I lost because they said, “look, the model works”.

Not after a while though. These believers of the monarchy as an arbitrator have been discouraged by the sultans of Perak and Selangor. Today, they have been discouraged by the King of Malaysia. The model does not work.

So, while I sympathize with the political fortune of Bersih in light of the King’s statement, but I shall enjoy my little cake nonetheless.

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

[1] — “The fact is, street demonstrations bring more bad than good although the original intention is good. Instead, we should focus on our main objective to develop this country, and not create problems that will cause the country to lag behind. [Statement by Agong on Bersih Illegal Rally. Bernama. July 3 2011]

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

p/s — have a happy fourth of July.

Categories
Economics

[2388] Nudge, nudge, wink, wink

It is the practice of some labor unions to produce one or several publications annually to inform their members of various activities and developments related to the unions.

As with many things in this world, it costs money to produce these publications. These unions finance the publications through a number of ways. Membership fee is one example. Another is selling advertising space to non-members, especially to the business community. This, however, can be an ethically grey area.

This kind of funding can be ethically iffy if the union members comprise employees of public regulators or law enforcement agencies, like the police, the Fire Department or Customs. This particular interaction between the unionized employees and the business community through the sale of advertising space creates perverse incentive.

It is a potential channel for corruption. It has the ability to affect adversely the traditional relationship between the public and the government.

Everybody deals with some of these regulators and enforcers in one way or another. The police maintain public order. The Fire Department apart from firefighting ensures public adherence to certain codes. City Hall and other local councils enforce even more codes. Many other regulators and enforcers exist out there to match the hundreds or thousands of laws that govern too many things.

Services provided by the enforcers and the regulators are funded by public money. To put it simply, the public pays for the services and these government arms render the services to the public. This is the traditional relationship. It is simple and clean.

This traditional relationship between the two must not be influenced by any other factor, lest the regulators and the enforcers filter their customers for their own benefit.

The sale of advertising space by unions especially to business establishments twists the traditional relationship by creating another channel for the public to interact with the regulators and the enforcers. That new channel runs through the unions to form a special relationship between the space purchasers and sellers, who are part of the government or its agencies.

There are at least three ways this is detrimental to the traditional relationship.

One, the sale and purchase of advertising space can be done by the business community to return a favor previously done or will be done by certain unionized employees. This is downright corruption.

Two, the sellers, who are employees of the government bodies and agencies, will feel indebted to the purchasers. It is a profitable relationship and one always keeps profitable relationship intact.

By doing so, the purchasers will have special relationship with the seller and, implicitly, to the regulators and enforcers. Those particular employees or any member of the union may systematically handle future requests or transgressions by the sellers leniently. This runs contrary to the ideal that prescribes everybody as equal before the law.

Three, even without such favors or the feeling of indebtedness, a mere request by the unions may create consternation among the solicited. A forward-looking person, and especially businesses, upon receiving the advertising request would ask, how would this affect us? For those who conclude that a negative reply would affect the likelihood of approval to future transactions, they might feel compelled to purchase the space from the unions. This can happen even if there is no intention by the union to abuse its influence. In other words, it creates a perception of corruption even though there is no actual corruption.

The way the incentives have been perversely structured inadvertently or otherwise may make it necessary for the relevant authority to look into this particular activity of these particular unions.

Despite all that, this is not to say that there is actual corruption in the system. This may sound like a cop-out but the whole structure is an opportunity for corruption nevertheless.

Individuals are not inherently good or bad, clean or corrupt. Many times, it is the institutions that provide the incentives for corrupt practice to flourish.

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 June 27 2011.

 

Categories
Earthly Strip Liberty Politics & government

[2387] The Earthly Strip: Bersih’s popularity

The establishment that is Barisan Nasional is pretty much clueless of what is going on. Not much has changed since the Abdullah administration I guess.

Here is a guide.

The more insulting accusations thrown,  more individuals will get angry and more will go down and protest. This Bersih protest is becoming larger than itself, thanks to the Barisan Nasional government.

That happened in 2007. I went down to the streets to protest not because I was enamored by Bersih, but because restriction to freedom of assembly.

On July 9 2011, it will likely be the same case for me. And reading stuff online, many will adopt similar attitude when protesting. Peacefully of course.

Categories
Photography

[2386] The cat man at the Opera

I took me awhile to decide whether I should post this photo up.

I snapped it back in January this year when I was lingering in Paris for a number of weeks, possibly on a painful but necessary fool’s errand. I had to do it in order to move on.

So, this is five months later.

The issue has always been about privacy. I faced a similar problem with a picture of a dancer in Sydney once. That problem was easily solved once I realized that it had public performance in the equation: when it is a public event, the question of privacy vanishes. And so, I posted up the photo of the dancer with clear conscience.

There was no performance in front of the Opera in Paris. The man was looking for a job if I understood the sign properly. Or he was begging. I did not ask his permission to shoot his picture.

Maybe, because his face is unseen or reasonably unidentifiable, that somehow affects his privacy less.

I hope so.

I want to up this picture up because I like it. I like that message that I see in it. That however is not enough to shut my conscience up. I am planning to sleep over it and then forget about it until some complication arises in the future. I will deal with it there and then.

Until then, here is what I like about the picture: the edifice provides a contrast to the man, and the man is alone with his cat. Somehow, there is something deep about that juxtaposition. Somehow, hundreds of years of history led to the suffering of this man. To the man, somehow, history does not matter. Ominously, only today matters.

There is something tragic about it all.

Categories
Economics

[2385] A case of MPs subverting the independence of the Bank Negara?

The importance of central bank independence has a lot to do with inflationary concerns. By independence, it typically means independence from political pressure. That entails strict separation between the central bank and the government. The central bank is not answerable to the government in general and the government does not represent the central bank. These two different entities are of two different minds. If they ever agree with each other, then it is necessarily a coincidence, or a conclusion achieved independently of each other. In its strong form, it is not achieved through any kind of discussion between the two parties.

It is feared that without independence and with exposure to political pressure, the central bank would embark on a populist policy, just as a democratic government that is susceptible to popular sentiment would. In times of crisis and without independence, the bank could run a loose monetary policy to appease the masses, eventually causing unacceptably high inflation simply by the operation of expectations.

The relationship between inflation and the independence of the central bank is widely known and is largely accepted within the field of economics: independence is correlated is an environment of low inflation. There are ample evidence for this.[1]

This is probably not subscribed by some Members of Parliament in Malaysia. Or they are unaware of it. Or that they define it very differently from what it is unusually understood. Whatever it is, three MPs are heading in the direction of subverting the idea.

According to The Malaysian Insider, MP for Kuala Selangor, Dzulkefly Ahmad of PAS wanted the Prime Minister to justify the recent rate hike by the Bank Negara. MP for Lembah Pantai Nurul Izzah said in the same report, despite stating she “was not asking the government to intervene”, she effectively blamed the government for the rate hike.[2] In the Parliament today, MP for Rembau Khairy Jamaluddin asked the Finance Minister to explain whether the Bank Negara would change the base interest rate and the reserve requirement between now till the end of the year.[3]

Truly, the concern for the rate especially is not for the Prime Minister, the Finance Minister or any person of their choosing to explain. These questions should be directed to the Bank Negara itself.

If these elected officials do try to explain it, then it will create a perception that the government and the Bank Negara are in cahoot in managing monetary policy. A mere hint of relationship as far as monetary policy is concerned is damaging to the idea of independence. The relationship suggests that the central bank in some ways is responsive to popular demand; popular demand is a code word for loose monetary policy.

What will make it worse is the possibility of the government flip-flopping, which is not rare at all in Malaysia. For a central bank that is not independent, any u-turn is especially damaging to the the credibility of the bank. Without credibility, the bank can say goodbye to its ability to manage inflation expectations.

Because of the possible implications, the Prime Minister and his Cabinet members should be careful in answering any of such questions.

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

[1] — The degree of central bank independence varies considerably across countries. Several authors including Bade and Parkin (1982), Alesina (1988, 1989), and Grilli, Masciandaro, and Tabellini (1991) found that more independent central banks are associated with lower levels of inflation. This note investigates whether one can find a correlation between central bank independence and the level and variability of real economic variables such as growth, unemployment, and real interest rates. Our conclusion is that while central bank independence promotes price stability, it has no measureable impact on real economic performance. [Alberto Alesina. Lawrence H. Summers. Central Bank Independence and Macroeconomics Performance: Some Comparative Evidence. Journal of Money, Credit, and Banking. May 1993]

[2] — PAS MP for Kuala Selangor Dr Dzulkefly Ahmad said that the prime minister, who also holds the finance portfolio in cabinet, should explain the move, which surprised economists who were expecting Bank Negara to maintain the benchmark lending rate to preserve the country’s growth momentum in the face of dimming global economic prospects.

…

PKR MP Nurul Izzah Anwar also stressed that they are not asking the government to intervene in Bank Negara’s policies but said that it was important for the finance minister to clarify what she claimed were ”very inconsistent justifications.”

Nurul said that while the government could be trying to cool down the investment climate with an eye on keeping a lid on inflation, she was unconvinced that an interest rate hike could also drive the growth of the local domestic economy at the same time. [Melissa Chi. Justify May interest rate hike, PR MPs tell Najib. Journal of Money, Credit, and Banking. June 21 2001]

[3] — Tuan Khairy Jamaluddin [ Rembau ] minta MENTERI KEWANGAN menyatakan apakah Bank Negara Malaysia berhasrat untuk menyemak atau meminda Kadar Dasar Semalaman (Overnight Policy Rate) dan Keperluan Rizab Berkanun (Statutory Reserve Requirement) bagi bank-bank tempatan sehingga akhir tahun ini. Sila jelaskan sebab-sebabnya sekiranya ya mahupun tidak. [Order Paper. Dewan Rakyat. June 21 2001]