Tag: The Malaysian Insider

Categories
Activism Society

[2185] Of it begins with a conversation

It was a day in May some five years ago that I hopped on an airplane alone from Detroit to San Francisco. I rarely go anyway alone. That is partly due to the distress I experience each time I find myself in a new neighborhood. I like the comfort of familiar surroundings. Whenever I am away from wherever I call home, I find comfort in familiar faces instead. I had to make an exception for the trip to the Golden State this time around. The agenda was one that not many of my friends in Ann Arbor shared.

A group of Malaysians consisting of students and professionals in the Bay Area had met consistently for some time then discussing all things Malaysian over lunch, dinner or supper full of Malaysian delight.
They called themselves the Malaysia Forum.

In that May, they organized a meet up to do exactly the same thing at Stanford, only with more people in a slightly more formal approach. I was curious about them. I no longer remember where I first read about the group but what I remember is how their commitment to free speech impressed me.

It is easy to believe and practice free speech too openly nowadays. The same was not true five years ago in Malaysia. There was a culture of fear then. The Mahathir administration spread the presence of the State to almost everywhere. Even under a new administration that promised to be different, the shadow of the State was intimidating. To talk about certain issues so openly was most unwise.

With that as the background, for them to discuss issues that some considered as sensitive an off limit is a courageous thing to do. There is something almost romantic about the whole enterprise. Whereas freedom saw curtailment at home, here across the Pacific in a foreign land, in defiance, they practiced freedom.

I hold fast to the idea of liberty, even then. I told myself, if they have the courage to do so, I want to study them up close. I boarded the plane.

I learned that Malaysia Forum believes that the first step towards anything is a frank conversation between individuals. Through conservations and sharing of perspectives, it is possible for a person to understand of issues relevant to Malaysia better.

Malaysia Forum functions beyond an exchange of perspectives. It is also about realizing that you are not alone. Nothing is more reassuring than the fact that you are not alone in this world. Confidence from that knowledge encourages individuals to speak freely. Without that confidence, the State could bully individuals all the way through. To me, that is the value of Malaysia Forum.
Malaysia Forum has since expanded. Initially, it was more or less a discussion group limited to the Bay Area in California.

Five years on, it is a name that is not so foreign among Malaysian community — student especially — in the United States any more. This is apparent from inquiries the group received about itself as it prepares to organize a conference in the coming week at Columbia in New York.

The expansion does go beyond the shores of the New World. Groups like these are always driven by idealism, and the most idealistic of the lot are often students, although the group itself is not student-centric. As they graduate, some return to Malaysia and spread the same ”Malaysia Forum way”. That directly helps in deepening the culture of liberty in Malaysian society.

Others find themselves in other parts of the world. London is one of few other places where the discussion group has made its presence felt by holding small discussions every now and then.

The stress on sharing is not mere rhetoric. The group broadcasts many of its activities online so that others with respectable internet connection can at least observe the discussions. The upcoming conference for instance, which will include economist Jomo K.S and politician Khairy Jamaluddin among others, will be streamed live. To outsiders unfamiliar with Malaysia Forum, the tendency to stream everything live over the internet is probably the hallmark of the group.

It is this act of sharing that enriches frank and informed conversations within Malaysia Forum.

As group expands further, perhaps to Singapore and Sydney, something exciting and wonderful will definitely occur for those who enjoy good conversations about Malaysia.

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 April 1 2010.

Categories
Economics Politics & government

[2183] Of opposition to reforms

Malaysia requires multiple reforms. Development in recent years proves that moving away from the status quo is incredibly hard, however. This is due to opposition mounted by beneficiaries of the current system, as well as beneficiaries of circumstances.

As the Najib administration puts in effort to address criticism directed against the flawed affirmative action, it faces fierce opposition from its own base in UMNO. There are at least two proofs to back this assertion.

First, while Perkasa is officially independent, the majority of Perkasa members ”are ordinary UMNO members”, as reported by The Nut Graph. Secondly, the editorial of Utusan Malaysia, which traditionally has been a very eager promoter of UMNO, supports Perkasa openly. Perkasa is an unrelenting critic of liberalization with respect to the affirmative action.

Perkasa and its allies fear the dumping of the current affirmative action. They are inside and they are loud. The internal opposition has already forced the Najib administration to postpone the announcement of the so-called New Economic Model several times now. How much eventual reform will occur on this particular front is suspect after deputy minister and a prominent UMNO member Mukhriz Mahathir said the new policy would have the spirit of the old New Economic Policy.

The preceding federal government also faced opposition from the inside, with respect to its effort to ensure judicious use of police power. The Independent Police Complaints and Misconduct Commission (IPCMC) proposal did not go through.

While the Abdullah administration then was already treading the path of the tattered, it still enjoyed huge majority in the House. Yet, there was no political will to deal with the police force decisively. The Enforcement Agency Integrity Commission was instead born, but critics say it is an ersatz to the IPCMC.
The Abdullah administration is now gone partly due to resurgent democratic culture in Malaysia, among other things. It is crucial to capitalize on the resurgence to seal the future of a more democratic Malaysia.

The reinstatement of local election is one way to institutionalize democratic culture. Unfortunately, standing in the path of further democratization is the Najib administration. Given the prime minister’s exhortation of the need for Malaysia to change, it is utterly disappointing to have him to prefer the undemocratic status quo.

Regardless of the outcome of all three cases, outside forces, which more often than not come in form of Pakatan Rakyat, have been crucial in pushing the case for both. Unfortunately, a warning is in order. While it can be helpful, outside force, i.e. Pakatan Rakyat, is no less influential in affecting reforms adversely.

Take the liberalization of the fuel subsidy regime under the Abdullah administration, for instance. The subsidy regime has proven to be disastrous to government finance. Massive expenditure dedicated to it sapped and is sapping resources that can be better used for other more productive purposes.

Yet, Pakatan Rakyat opposed such liberalization. In riding populist sentiment, Anwar Ibrahim even announced that he would cut fuel prices and, in effect, increase subsidy if he was in power at a time when global crude oil prices were going through the roof.

Fortunately, the restructuring of the fuel subsidy went through. Fortunately, partly because the populist path would have brought great damage to the economy in the long run. The reform is not complete yet but at least, it is moving along. What is of note is that the Abdullah administration only managed to push through the liberalization after suffering huge political cost.

Another example involves the proposed goods and services tax (GST) pushed by the Najib administration. The GST modernizes the tax system by addressing tax evasion committed by free riders who want every benefit but refuse to pay for it, or rather have others to pay for them.

There is considerable apprehension against the GST, especially when it is pushed by a government that does not have a stellar reputation in fiscal discipline and is perceived as corrupt. Yet, that in no way negates the need to reform the way government collects revenue because the solutions to all these concerns on government size and corruption are not mutually exclusive issues. They can be solved together.

Yet, Pakatan Rakyat is developing into a party of ”no”. It states that while GST is a good concept, it still opposes it due to a number of reasons. Lim Guan Eng, in an anti-GST forum, said that GST would tax everybody and painted the idea that not everybody is paying consumption tax at the moment. He backed his statement by erroneously comparing the fact of a narrow tax base relevant to income tax to the tax base of a consumption tax, which is a completely different animal.

Furthermore, quite conveniently, he was pretty much silent on two points that do not fit his narrative. First, the existence of a consumption tax in form of sales and services tax; all of us face prices after that tax at the moment, and that in effect says that everybody pays consumption tax.

Second is that the GST is to replace that consumption tax at a lower standardized rate with possible replication of existing tax exemptions, making the GST potentially not inflationary. The Institute for Democracy and Economic Affairs has made a stronger claim that the GST at the proposed rate is disinflationary.

Another argument against the GST from Pakatan Rakyat revolves around wealth inequality of Malaysia. But if the GST is not inflationary, then it should not affect inequality; if it is disinflationary, then it should have an equalizing effect on wealth inequality.

Whatever the effect of GST on price levels, the truth is that the GST system can be tweaked to satisfy a lot of concerns. Income tax rates can be lowered if there is concern about excessive burden. Rebates can be designed for some purpose. Exemptions can be made. Really, discussions on how to make GST better or more palatable than its current form need to take place. That it is not happening, though. Instead, Pakatan Rakyat is giving a solid no and prefers to ride on anti-tax sentiments. That is, in effect, a preference for the status quo.

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 25 2010.

Categories
Politics & government

[2175] Of make way for local election

What a wonderful piece of news. That aptly describes my reaction upon learning the request of the Penang state government to the Election Commission to organize two local elections in the Pearl of the Orient this year. Selangor’s decision to follow suit makes it an all the more brilliant development.

There are obstacles to overcome and there is no guarantee that the return will happen for good. There will be challenges no doubt. The EC is already showing sign of reluctance to do as requested.

It is quite clear that not everybody is convinced of the necessity of local elections. Some fear losing their power. Others are caught up in legalese.

Let them lose their powers. It is not theirs to keep in the first place. Be gone with the legalese. We are in a new time where old threats have long past.

The actual push for it in Malaysia is long overdue. This right of ours has been robbed from us. It is only right to have it returned.

What I am most excited about the prospect of having local elections returned is the devolution of power. It is yet another tool to empower citizens at the expense of the state. For too long has power been concentrated in the hand of the state. The return of the third vote will chip away that focused power by distributing it more evenly across the landscape, as it should have been.

Do you remember how such power distribution felt?

The last time such significant redistribution happened was in March 2008.

Yes, it has been two years since that day. Since then, there have been many disappointments: the lies and hypocrisy regarding freedom of association, more slogans, disloyalty and generally broken promises. Yes, many of these disappointments have began to question the wisdom of many whom gave members or former members of what is now Pakatan Rakyat a chance.

That in no way changes the fact that the 2008 Malaysian general election demonstrated that individual citizens do have the power to change the course of the country. It is a reminder that the kind of confidence in individuals that seemed to exist only in Ayn Rand’s Atlas Shrugged does exist in the real world. It blew away the feeling of helplessness that nothing can be done. It proves that in the face of a titan, individuals can be as fearsome as the titan can.

My feeling as a first time voter in the early morning of March 9 was one of pure exhilaration. After all the disillusionment, the feeling that this country belonged only to the selected few forming a cabal, the election showed that I still do have stake in the country. More importantly, I can act on that ownership.

The devolution will further prove that I, along with many other Malaysians, do have ownership over not just the country, but also the street where I — we — live in. We are the ones that should take care of our own streets.

We pay for it after all.

With the third vote, we can stop pretending that those representatives we send to national and state assemblies are taking care of our local interests.

We do not need an MP or state assemblypersons to take care of our streets and everything else in our immediate neighborhood. We can do it ourselves.

Such absurd pretentions have caused Members of Parliament and state assemblies having to deal with local problems while they are supposed to debate on nation and statewide issues respectively. It is not the jobs of these representatives to worry about sewage and trash. Those are the responsibilities of local councilors.

Local elections will enhance the division of tasks and with the division of tasks comes the division of power. Less power in the hand of the few means less opportunity for abuse. If this is what those who oppose the reintroduction fear, then let them fear it.

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

This article was first published in The Malaysian Insider on March 9 2010.

Categories
Economics

[2168] Of no to the policy of One Price

Prices of the same tradable items in different places tend to converge in a perfectly efficient market. Theoretically, motivated by profits, individuals and entities act as arbitrageurs. They will continue to arbitrage until there are no more profits to be made. That is when prices equalized and that is the essence of the law of one price.

Prices may not actually converge to one price due to several factors however because market can be inefficient. Limited access to information crucial for the purpose of arbitrage may prevent convergence. Transportation cost as well as government intervention in terms of taxation and subsidization are two of several other important frictions. Instead of prices equalizing, a price spread exists to reflect those frictions even as market participants exhaust arbitrage opportunity.

This is essentially the reason why there is noticeable price differential for the same tradable goods sold in eastern and western part of Malaysia. With the South China Sea separating Malaysia into two parts, it is only natural for prices to differ between the two regions. Even under the price and supply control mechanism that exists in Malaysia, a kilogram of sugar for example, is sold 10 sen cheaper in Peninsular Malaysia than in Sabah and Sarawak. Transportation cost is a considerable barrier preventing actual convergence.

This is a source of discontent for some. Member of Parliament for Kalabakan, Abdul Ghapur Salleh of UMNO said in November 2009 said, “We’re talking about 1Malaysia, but we don’t even have one price” while alleging that the price differential is more insidious in nature — discrimination against Sabah and Sarawak — rather than simple economic friction.

It is unclear how exactly he wants effort at standardization to proceed but the approach by the federal government is clear. In the same month, Minister Koh Tsu Koon supported the idea of standardized prices across Malaysia and proposed that transportation cost be shared by all; in other words, introduce subsidy. Nearly a year earlier, Domestic Trade and Consumer Affairs Ministry wanted to do the same: subsidize transportation cost. In Sarawak itself, perhaps a harbinger preceding a possibly wider similar nationwide policy, the same ministry plans to subsidize transportation cost with the intention of standardizing prices of essential items sold in urban and rural areas under its “One Sarawak, One Price” campaign.

They are turning the law of one price on its head. Rather than letting market forces find its equilibrium where a particular price fits a particular landscape through a narrow band, the government intends to impose unnatural standardized prices for all situations everywhere to force convergence. The government intends to introduce more inefficiency to standardize prices.

The discontent over price differential is overrated. Two economists — Lee Chin and Muzafar Shah Habibullah of Universiti Putra Malaysia — published a paper in 2008 showing that prices of tradable goods between Peninsular Malaysia, Sabah and Sarawak are converging. Furthermore, the recent liberalization of cabotage policy — a protectionist policy that contributed to persistent price differential between eastern and western part of Malaysia — will likely further strengthen the natural convergence trend.

Convergence aside, to iterate the idea of how the difference is natural, the price differential has nothing to do with discrimination between the two parts of Malaysia. It is a reality that there is a large body of water separating the two parts of Malaysia. It is likely that if the transportation cost is brought down either through liberalization or improvement in technology, prices are likely to equalize, all else being equal.

The price differential due to transportation cost or distance has nothing to do with the idea of unity as much as it has something to do with the idea of discrimination. In the United States for instance, gas prices in Michigan and in California are very different. Even in the same state, prices of gas in one town can be different from another town a mile away. That does not make the person who pays higher price as less American than the other person who pays lower price for gas.

This idea can be expanded to Peninsular Malaysia. The government should not standardize prices within Malaysia. This is not to say just prices between Peninsular Malaysia, Sabah and Sarawak, but within those regions as well. What a free Malaysia needs is not a Price Control Act, but a Competition Act or antitrust law to fight collusion among businesses in order to encourage competition — the most effective method at encouraging convergence and low prices — without suffocating entrepreneurial spirit.

On top of that, maybe, just maybe, the move of having manufacturers based in Sabah or Sarawak is a cheaper and a more profitable option compared to the option of transporting goods from Peninsular Malaysia or from abroad even after accounting for various other effects like clusterization.

If the subsidization program goes through, it removes that incentive and hence, the possibility of developing industries in eastern Malaysia. If a business owner could transport his or her goods free from western to eastern Malaysia, why would the business owner locate his or her factory in eastern Malaysia? There are better ports, roads, financial services — practically everything that matters in business — in Peninsular Malaysia than in Sabah and Sarawak. The subsidization program would continue to industrialize the Peninsula while leaving Sabah and Sarawak farther behind in terms of development.

Besides, the Prime Minister recently said that private initiates and market forces have to be given freer rein while subsidies be phased out. The standardization of prices across Malaysia through subsidization of transportation cost by the government clearly contradicts that. Is this a proof that there is no coordination within the government? Or does words mean nothing to the government?

For the answer to be no on both accounts, the policy of “One Price” must be rejected.

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 first published in The Malaysian Insider on February 22 2010.

Categories
Liberty

[2165] Of we need practice and a little bit of courage

Words may contribute to violent behavior.

This potential makes various individuals apprehensive of the ideal of freedom and in this case, free speech. They fear the capability of words to subvert peace and stability. For our society to mature however, we must overcome that fear and continue to practice freedom.

Out of this fear, some would readily accuse others of sedition for uttering offensive words in hope that the State punishes the accused. Advocates of State action would argue that preventive actions are crucial to avoid realization of that fear.

This is observable in mainstream politics. Members and sympathizers of both Barisan Nasional and Pakatan Rakyat and at times, even independents, are quick to charge the other side of sedition.

The latest case involves Nasir Safar, a former special officer to the Prime Minister who made disparaging remark about Chinese and Indian Malaysians. Some wanted him charged under the Sedition Act and some wanted his citizenship stripped.

DAP politicians meanwhile are quick to accuse Utusan Malaysia of sedition each time the conservative paper publishes provocative articles. In the case of the Perak crisis, Karpal Singh was charged for sedition for allegedly insulting the Sultan amid widespread discontent against the royal house.

In the aftermath of the Allah ruling and attacks on houses of worship, some wanted freedom of assembly be curbed, out of fear that it would repeat May 13 incident.

The apprehension of potential of words is understandable and even justifiable. From the point of liberty, if civil unrest does happen, a person’s right to life and his or her property, which typically is secured only during stable times, are at stake.

Still, freedom of expression, among other freedoms, is no less important than stability.

Trade-off between these concerns, between freedom and stability, is sometimes exist. When there is trade-off, more often than not, the one jettisoned into the blue ocean is freedom of expression. It becomes hard to convince others of the virtue of free speech when the society at large is confronted with actual threats to life and property.

In times of pure chaos for instance, which I should add is an extreme case, imposition of curfew is an important step in restoring the rule of law. This is a troubling thought.

Fortunately, only rarely does that erosion is justifiable. Absolute certainty is a requirement that must be fulfilled to make that erosion a necessary and acceptable sacrifice. That requirement is made with the recognition that that for every potential of disturbance, there is possibility for it not to occur. There is no certainty but rather, there is only suspicion and conjecture. Suspicion is not a sufficient condition for action; anybody can suspect anything. For one to advocate action is to assume that negative repercussions with absolute certainty, which is untrue.

Moreover, different individuals hold different things as offensive and perhaps, therefore potentially seditious. It is highly problematic to compromise somebody’s free speech in favor of stability because someone out there has trouble managing his or her emotion with respect to disagreeable words or ideas.

With the spirit of equality before the law, to have the State acting against every, or even any, individual for making statement that somebody out there deems as offensive with the assumption of certainty of words’ potential — with certainty that that somebody will go out and run amok —— in the background leads to a suffocating environment, where freedom cannot exist.

Therefore, if freedom is a concern at all, the mere potential of words —— fraud, explicit threat and orders to transgression of individual rights excluded —— does not justify forceful action by the State.

Those who prioritize stability —— in terms of security of life and property —— over liberty would argue for the adoption of precautionary principle to justify preventive action by the State. The adoption of the principle however rests upon what actually one seeks to preserve.

For freedom lovers, the least risky option is the preservation of not only life and property, but the preservation of freedom as well. Their precautionary principle is the requirement for certainty.

If the negative effects on life, property or both do happened and hence, its certainty ascertained, retribution by the State is necessary to remind all that any transgression of liberty has its price. This is the only way to deal with the negative potential of words without hurting freedom.

Consistent punishment, administered by the State, for all transgressions against individual liberty creates cost to the transgressors. That cost acts to discourage such transgression from happening, and thus lowering the probability of words translating into violent behavior.

This does not mean precaution cannot be taken. Precaution can be taken, and indeed it is wise to do so. Such precaution must come in terms of increased vigilance against violence, not against freedom, or in our context, words. There are always those who will attempt to cross the border. This must be addressed by having guards at the borders, not by making space within the boundary smaller.

This requirement of certainty crosses out items in the what-cannot-be-said list, transforming a society analogous to a room full of fragile vases, where everybody fears everything, into one of an open field. It provides members of the society opportunities to practice their freedom and discover by themselves the mature reactions to disagreeable words.

The mature reactions to disagreeable words always relate back to rational exhibition of why such words or ideas are wrong, if it is wrong at all, without resorting to forceful State action or personal coercive action. Immature reactions are ones that involves threats and violence. It is immature because the perpetrators are unable to deal with offensive ideas without resorting to violence.

That maturity mostly comes by learning how to restrain one’s action when faced with disagreeable words. It is about the negotiating the border without crossing it.

Such education of negotiation is crucial in inculcating the practice of restraint. The practice is crucial in embracing a free person’s personal responsibility: for a person to expect his or her individual rights secured, he or she must respect others. That respect comes through restraint in action.

Without free speech, with the State acts against supposedly offensive and seditious speeches out of fear, such training in freedom and education of the responsibility that entails with individual liberty cannot happen.

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 first published in The Malaysian Insider on February 11 2010.