Tag: The Malaysian Insider

Categories
Economics

[2135] Of GLCs are not quite part of the private sector

Second Finance Minister Ahmad Husni Hanadzlah recently made a speech that received a lot of attention. Early in it, he shared that the government is looking to increase the private sector’s contribution to the domestic economy. This particular point would have been exciting if it was not for three reasons. One, he is not the first person to say this. Two, the last time somebody important in the government expounded the idea, the size of government expanded considerably instead. Three, as the minister said, the government means to see this through via government-linked companies. The third point is noteworthy because government-linked companies hardly qualify as part of the private sector.

It is instructive how the definition of a word or a phrase changes over time. Invasion is termed as liberation. Loss of innocent human lives resulting from military action sanctioned by the state is called collateral damage. George Orwell probably drives home the point best with the statement ”war is peace, freedom is slavery and ignorance is strength.”

The term private sector is supposed to describe the sector within the economy that is not owned by the state, where private individuals make private choices with private resources for private gains or losses. Any enterprise owned by the government, and therefore largely utilizes public resources, is part of the public sector. While the break may not be clean because the link between the two sectors in some cases is inevitable, their difference in Malaysia now is far too blurry for it to be meaningful within the context of the speech. The cause of that is years of government intervention in the market.

These interventions come in many ways. Bailouts of failed enterprises by the government are one way where excessive presence of the state in the market can be introduced. Another is through the government’s expressed intention of participating in business that is mostly due to political and not business considerations.

During the Abdullah administration, multiple fully-owned government-linked companies were established as part of the government’s focus on the agricultural sector, as well as its love affair with centrally planned economic corridors. During the Mahathir administration, the focus on manufacturing brought upon the birth of — for example — the state-owned Proton. How the protection of Proton has prevented Malaysia from becoming a regional automotive hub driven by foreign but essentially private sector is well known and needs no further elaboration.

Even when import substitution policy was all the rage in the early history of Malaysia, the government helped create what eventually became favored oligopolies in multiple sectors. These oligopolies continue to exist until today. The creation of a monopoly is not exactly a healthy way to enhance the private sector’s contribution to the economy because most monopolies have the incentive to maintain the status quo. They do this by discouraging adoption of new technology that is crucial to improving productivity and ultimately challenging their dominance to the benefit of society at large. Without improved productivity, it is hard to see how the private sector could increase its contribution to the economy.

Due to those interventions, the understanding of the term private sector has gradually but surely shifted to assume its opposing definition. Observe how strongly linked the domestic economy, specifically the supposedly private sector, is to Khazanah Nasional Berhad, Perbadanan Nasional Berhad and even the Employees Provident Fund, among others. Entities linked to them are countless: UEM, CIMB, Maybank and Sime Darby. Many of supposedly privatized companies are not quite part of the private sector as well.

To label entities strongly linked to these organizations as part of the private sector is tenuous because, like it or not, the government has a strong say in the management of those entities. With that, the government essentially controls the direction of these companies. Given the vast resources available to the government despite its massive fiscal deficit, the government unfairly competes with the true private sector. This unfair competition itself discourages the creation of new entrepreneurs for the inculcation of competitive market, to limit space for the true private sector.

Considering all that, how exactly does the government plan to increase the true private sector’s contribution to the domestic economy through government-linked companies will be interesting.

Does the government intend to instruct its government-linked companies to increase activities in the market and then label such contributions to the economy as privately-driven?

Or does the government plan to increase activities of government-linked companies to increase opportunities for entities from the true private sector? This creates only a culture of dependency. In times when the government seems intent to reduce dependency on the state, this contradicts the effort.

The best way to increase the true private sector’s contribution is to embrace the original meaning of the term. To do that, the government or really, the state, needs to reduce its participation in the market. Bad regulations protecting monopolies and state-owned entities meanwhile require dismantling in order to give true private sector space to expand in a largely distortion-free environment.

The first step to take is for the government of the day to stop overestimating its capability in managing the economy. Humbleness is the key in getting the private sector to improve its contribution to the local economy, especially in a sustainable manner. Rather than trying to expand the role of government-linked companies, the government should focus on building credible institutions capable of accommodating expansion of private sector.

In other words, the government must refocus on its original purpose. That original purpose of a government, without being ideological about it, is governing, not doing business.

Let the true private sector do its work properly without excessive government interference either directly from the government itself, or via government-linked companies.

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 December 17 2009.

Categories
Society

[2127] Of Chin Peng, sympathy, injustice and sanctity of contract

The day I had a lunch appointment with a friend at the central business district in Sydney was one of those pleasant summer days. With blue sky and time aplenty, I walked the distance, which was about a mile or two from my home. As I approached the restaurant, my cell phone beeped. It was a message from the friend. She requested for an hour worth of postponement. With me already among streams of people crisscrossing the city centre minding their own business, I switched direction and headed toward Hyde Park to visit a prominent war memorial. Inside, on the wall carved the word Malaysia, along with other places where Australian forces had fought long ago. My mind immediately raced toward a period when communist insurgency was running high in Malaysia. Years have gone and sympathy for communism should be dead by now but it is has not.

The dishonorable path the Malaysian government takes with respect to former communist militants may unnecessarily fuel the fire of communism and the general political left in the country.

Communism is a disagreeable idea that restricts liberty. Its goals are arguably dreamingly nobly utopian. Its means are not however; its opposition to private property right is enough to demonstrate how communism is anti-liberty. Furthermore, good intentions and goals are never enough. History has shown how communism failed in all four corners of the world.

Wherever it still exists, it is a façade supported by capitalism, it exists side by side a ruined economy, its promises unfulfilled, or it only exists within the framework of democracy that communists in the real world — not mere theoreticians who failed to account for reality — long ago considered as an anathema. Communism simply fails to confront real world problems.

In great contrast, capitalism in one form or another continues to be the best system to ensure prosperity despite all criticism that have been lobbed at it and despite painful crashes that we see every now and then. It has been performing better at delivering prosperity than any form of communist solutions that any communist can realistically hoped for, so far. A stronger statement is possible: it has been performing better at delivering prosperity than any other system, so far. In the face of this observation, those who still cling to the promises of communism are being hopelessly romantic, bathed in stubborn denial and doomed for ideological failure.

The truth is self-evident yet, former communist militants — more so its former head Chin Peng who is unrepentant of past transgressions and his failed ideology — continue to receive sympathy from far too many individuals in the country.

For all the pain communism had caused all around the world and especially in Malaysia, only those on the political margin should be expressing sympathy to either communism or former communist militants, and not those near the centre. Yet, many close to the political centre do so. When those near the centre do that, then something is definitely amiss. It is worrisome for such sympathy to blossom in the mainstreams section of our society because such sympathy can sow the seed for future growth of communism.

At the very least, it creates a groundswell for strong support for the general political left in the country. Communism may be a weak movement here in Malaysia but in the future, especially with the proliferation of greater democratic culture, that statement does not have to be true, even if we are living in the age of Fukuyama’s end of history.

It can be the seed because a short-term factor may override dire long-term consequences of communism when individuals consider the issue. That factor is a linchpin for the sympathy former communist militants currently enjoy. That linchpin is injustice. A sense of injustice is the reason why there is sympathy for Chin Peng and other former communist militants.

It is a short-term factor because some time in the near future, the issue will be academic since nobody lives forever. Nevertheless, the refusal of Malaysian government to allow for the former leader of a defunct militant — some would say terrorist — movement to return to the land of his youth will no doubt be an example of injustices communists and communist sympathizers may highlight as part of their populist rhetoric to attract new acolytes for the hive.

It is an injustice because by refusing Chin Peng the right to return, the government is reneging on its obligations arising from the peace treaty signed between it and the communist. That treaty specifically calls upon the government to allow former communist militants to return to the country if the application is made before a deadline, which Chin Peng met.

That turns the matter into an issue of sanctity of contract. As much as communism is an enemy of liberty, the idea of sanctity of contract is a cornerstone of liberal societies. Indeed, one of the reasons for the establishment of a state in liberal tradition is the need to enforce contracts entered voluntarily, as long as those contracts do not violate individual liberty. When the state goes back on its words with impunity, it inevitably raises a very serious question regarding the legitimacy of a state. In a more concrete term, it undermines public trust in the Barisan Nasional federal government, which does not have a sterling reputation to start with.

One does not need a lecture on the importance of sanctity of contract in liberal tradition. One does not need to be a liberal to understand the idea of sanctity of contract in wider traditions. Surely, at some point in time, our parents or our teachers have impressed on us on the importance of keeping to our promises. Being true to our words, generally, is good ethics.

Opponents to the act of honoring the agreement among others cite that Chin Peng deserves no forgiveness for all the heinous crimes he committed. Furthermore, Malaysia would have been a very different place if the communists had succeeded. We might as well have been another North Korea. For that and more, Chin Peng may indeed deserve no forgiveness and in fact, continuous denunciations.

Nonetheless, in the words of Tunku ”˜Abidin Muhriz of the Malaysia Think Tank in an email exchange regarding this very matter among several libertarians, ”the issue of forgiveness and honoring a contract are separate.” Our refusal to forgive a person should not be the basis of us refusing to fulfill our obligation to the other person as stated in a contract. Therefore, there is a liberal case for allowing Chin Peng to return, unless there is proof that he has violated the 1989 Hatyai Peace Accord.

More importantly, by allowing the former militant leader to return and hence, fulfilling the obligation imposed on the Malaysian government, it removes injustice from the equation. Without injustice as a factor, there is little reason for those close to the political centre to sympathize with Chin Peng and thus, killing the seed for greater support — however small the increase is — for communism and the general political left in 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 December 8 2009.

Categories
Liberty Society

[2121] Of refusing to agree to disagree

Is it not great to witness the culture of freedom spreading in Malaysia, no matter how painfully slow progress has been so far?

To observe individuals debating in the public sphere on issues that none was willing to ponder so openly in the past is an encouraging development for all freedom lovers. It opens up windows and doors of an old house to exchange stale air with fresh, belonging to that of delightfully fragrant summer days.

The bright light of summer now shines where darkness once reigned. With it, old perceptions succumb to more liberating views to present all with new possibilities to explore. The barrier to fulfilling individual potential is now less intimidating to overcome due to advancing freedom.

That barrier must continue to be chipped away. Challenges to greater freedom must be conclusively addressed, no inch must be surrendered.

With continual erosion of the fear of freedom, many Malaysians now are eager to practice their individual rights, especially free speech. They express their opinion in public space on issues ranging from the crucial to the comical. Along with liberty comes diversity of opinion, regardless of the validity of the opinion held.

There is a mechanism to sort out the issue of validity of opinion or ideas while respecting liberty. The mechanism is in the nature of spontaneous order and free competition, as each individual — or at least those who care enough — tries to convince the other of a position while others poke their fingers at that position, just as the invisible hand acts to allocate resources in a free, competitive market. It is the natural selection of ideas.

The act of convincing others through intelligent debate must continue to happen, if the process of natural selection is to separate the wheat from the chaff. If a society is interested in having the best ideas proliferate while phasing bad ones out to the margin, actions that prevent natural selection deserve rejection.

Most of the times, such actions detrimental to natural selection are easily identifiable because at its heart is coercion. A few common examples backed by coercion, as practiced by the governments all over the world — Malaysia definitely included — are banning of books, censorship on television and prohibition of public speaking. Others involving intolerant individuals include issuance of security threats, be it simply rhetorical or real.

Subtler is a situation when there is there is absence of coercion. Yes, challenges to the advances of liberty do not merely come in the form of coercion only. One way that it can exist is in form of thought-terminating clichés that try to end discussions held in the public sphere.

I have to be more concrete about this and I intend to do exactly that: how many times, when faced with difficult issues, has one heard the phrase ”agree to disagree”?

On the surface, a person who suggests for all to agree to disagree so politely sounds like a great liberal democrat. It signals willingness to tolerate diversity of opinion. The truth cannot be any farther however; the phrase somehow has wrongly gained reputation as the liberal thing to do.

Unable to convince others or unable to mount convincing rebuttals to a brilliantly presented point, and in a situation where all sides refuse to budge, such a suggestion when forwarded so politely immediately resolves tension. Case closed. Discussion ended. Criticism ceased.

Meanwhile, those who refuse to agree to disagree unfairly risk being accused as intolerant of diversity of opinion.

This is downright wrong.

The phrase and the spirit of ”agree to disagree” has nothing to do with free speech and the concept of liberty at large. Far from it, it seeks to end criticism without debating on points raised.

It does not promote free speech but in fact, it brings upon adverse effects to the agenda of freedom. This spirit masks itself as a liberal ideal but it is really an effort to cover a sign of weak intellect, by creating a force field to insulate the promoter of such illiberal spirit, from criticism.

Free speech does not come with freedom from criticism. Such insulation is the antithesis of the idea of freedom. At its worst, those who seek such insulation are intolerant of free speech. At the other end, at its best, they are either appealing to political expediency or running away from the issue.

The illiberal spirit of ”agree to disagree” is not the proper way of respecting diversity of opinion and liberty. The right way is by continually debating on the issues, no matter how sensitive they are — rationally and respectfully, without threats and force. It is the right way because the only factor that makes a point unassailable is its soundness.

All are entitled their own opinion but that does not mean every opinion is valid. The assertion that the Earth is flat is an opinion but we know that that is untrue. The spirit of ”agree to disagree” ignores the point on the validity of the idea. It treats all ideas as equally valid and sound when that is not the case. It is because not all opinions or ideas are valid that none should be beyond inspection and criticism. Hence, the invalidity of the appallingly inadequate spirit of ”agree to disagree”.

If that ersatz culture spreads and becomes the way of the majority, then that society, our society, is building its foundation on sand, incapable to supporting argument as good as we should because each time there are disagreements, we agree to disagree. Such weak foundation cannot support a liberal society in a convincing manner.

A free society will continually examine and re-examine any idea presented in the public space. Any action that discourages that, whether laced with coercion or not, is incongruous to the greater spirit of liberty and the goal of building a liberal society.

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 30 2009.

Categories
Liberty Society

[2108] Of a liberal separation between religion and state

An optimist may take the view that politics is unifying. A realist will understand that politics is divisive. It is possible that this realization is the reason why the Sultan of Selangor expressed his concern about the use of mosques for political purposes. For better or for worse, political activities in mosques are inevitable, if there is respect for freedom. Divisiveness is a symptom of difference in opinion and freedom of conscience. Any effort to eliminate such divide, in most cases, involves abolition of freedom. It is for this reason that I do not share his concern. Rather, I am more concerned with the roles of mosques in Malaysian society.

When I speak of mosques, I do not speak of them literally, buildings with calligraphy adorning minarets, walls or domes. I am referring to a more substantial issue that is relevant within the context of separation of mosque and state, or the separation of church and state, if you will. I am talking about the role of religion in state and, therefore, public space.

While this debate has been going on for a long time, the issue still suffers from misunderstanding of what the separation entails. For liberals, more than anything else, such separation exists to support freedom.

It is true that separation between religion and the state — call it secularism if you must — can exist on its own without the idea of liberty as a pillar, and subsequently, may be hostile to religion. This happened in the Soviet Union in the past, when the communist state was openly hostile to religion.

The Soviet Union perhaps went to the extreme by adopting an atheistic outlook for the state, creating a nightmare state for both liberal and religious individuals. But then again, Soviet Union was not secular state. It was not a state that was neutral of religion. It was a state that was anti-religion and that is not the definition of a secular state. Thus, perhaps Soviet Union is an inappropriate example of a secular state.

A more appropriate example is likely to be Turkey, where secularism is embedded with hostility to religion is observable. In the country, especially in the past and perhaps less so nowadays, the state regulated religions to cement its own influence in the society.

Those states were and still are jealous beings, as with any authoritarian state.

Such separation is abhorrent to the concept of liberty and it deserves no contemplation at all. Adoption of such illiberal separation here in Malaysia will only witness migration from one unacceptable tyranny where religions breathe down the neck of individuals to another woeful type of tyranny where religious freedom comes under relentless attacks. That should never be the purpose of a person upholding the principle of liberty.

The function of the state is the protection of individual rights. It is the protection of individuals from coercion and fraud. Any further function that the state adopts, in most cases and within our context with respect to freedom of conscience, is excessive. And, too much excessiveness lays down the path towards tyranny.

Just as the institution of separation of powers of the executive, the legislative and the judiciary arms exists as an effort to ward off tyranny, the separation between the state and religion should be instituted to ensure the two forces would have less success in conspiring against free individuals. To have the mosques function as moral police stations, as proposed by Hasan Ali in Selangor, is surely good enough proof to demonstrate how such conspiracy is more than a product of someone’s wild imagination.

The separation may begin by having the state to not wield power to enforce religions and its rules on individuals. Religious laws should only be applied on the willing. Given that the religious laws themselves do not contradict individual liberty, the state has no role in their enforcement.

An individual is a sovereign and he or she alone is the final determinant of his or her conscience within the constraint of the physical world. It is not the business of a state to determine the religious belief — or lack of it, or even any kind of belief — of a free individual. It is not the business of the state to sanction any lifestyle that any religion deems acceptable for an individual to adopt.

That separation also means that no religion should receive funding from the state. Or if it must, the state can provide only limited funding to religious institutions, as the state may provide to various advocacy groups or non-governmental organizations.

Truly, religious institutions should only survive through donations which individuals or the faithful are willing to provide. After all, religious belief is about sincere belief. It follows that any money or resources for religion should come from the heart, not through coercion.

This separation prevents religions from being manipulated by the state and prevents individuals from being subjected to laws of conscience without his or her consent.

In this environment, parallel to the spirit of freedom of conscience, individuals can practice and express their religious belief. The proviso is that they can do so only without forcing others to live by the same ideals. These religious individuals may persuade others of their alleged morally superior lifestyle in line with freedom of speech but coercion is simply out of the question.

If there is coercion in that respect, then the liberal state will be there to meet the illegitimate coercion with legitimate force.

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 3 2009

Categories
Politics & government Sci-fi

[2098] Of one data point

I am unsure if I am recalling this accurately but at back in my mind, amid cobwebs of vague memories, I somehow remember reading an Asimov’s short story in a stuffy old library at the Malay College in Kuala Kangsar. You will forgive me if it is not even Asimov’s writing. It may well be a work of some other science fiction author. What I do have vivid recollection is the subplot of the story, however. Through the retelling of it, I hope that it may cause others to refrain from committing hasty generalization.

The story is set some time in the far future, maybe on Earth, maybe on Trantor or at some other place, I do not know. What is important is that the realm of human knowledge has expanded greatly. This includes in the field of statistics and in particular, sampling methods used to ascertain public opinion.

Sampling methods used today in real life suffer from certain errors arising from randomness and uncertainty. Notice how each time a respectable polling agency in reports result of a survey, it includes the margins of error of the findings, or more accurately, the standard errors, along with the averages. In the science fiction, statisticians of the future have developed a way to eliminate, fully, the errors associated with sampling.

In fact, the field of statistics in that fiction has reached a stage so advanced that the opinion of the public can be gauged accurately by simply sampling a person, who is a member of the public. In other words, all that is required to make general inference about the society is just one data point.

A sample size of one and that is it.

One.

Only one.

1Malaysia!

Oh my, I do not know how that gets in there.

Anyway, unfortunately in real life, reliability of a sample and therefore, the ability to generalize its statistics for inferential purposes decrease as the sample size decreases, more so at some range closer to zero. We are still finding ourselves a long way from living a statistician’s wet dream.

Yet, all too often in Malaysia today, individuals are quick to generalize the result of a by-election to describe national mood. It is perhaps acceptable to make an inference out of a series of by-elections held within a certain timeframe but it is dangerous to make a claim that a by-election signals a countrywide trend. It is dangerous because it is misleading.

A by-election only gauges the opinion of a certain type of individuals and these individuals are certainly not representative of the whole country. The voters in Bagan Pinang, from instance, are quite different from voters of Manei Urai, Datok Keramat, Damansara Utama or Likas. Although the national issues that they care about may coincide, their attitude toward the same issues is not the same due to their worldviews. And then, there are local issues. It is definitely safe to say that local issues that they face are different enough that one-size-fits-all approach is doomed to failure.

These voters, taken as whole, may provide some concrete statistics on the direction of national politics but individually in isolation, they are not so helpful.

With respect to Bagan Pinang, there are many other differentiating factors that further make result of its by-election unique to itself. As an example, not many areas have an army camp resides within its boundary. Another is its status as resort town, or rather, a resort town full of abandoned projects. Suffice to say, Bagan Pinang is not Malaysia.

Therefore, I have to disagree to sweeping statements made by multiple persons after the election. In The Star, Isa Samad was quoted as saying “The people of all races have spoken and this is an endorsement of the Prime Minister’s 1Malaysia concept.”[1] Deputy UMNO President Muhyiddin Yassin meanwhile said, “This is a significant victory and more importantly the people’s endorsement of the Prime Minister’s policies.”[2]

Perhaps, the people they are referring to are restricted to the voters of Bagan Pinang only. If it refers to Malaysians as a whole, then these two politicians and others who share similar tendency to generalize in so grandly a manner will have a hard time rationalizing trends in other areas.

This is not to say information from Bagan Pinang is worthless. It is not to say information that Bagan Pinang provides with national politics in mind is worthless. Rather, information from this by-election should be contextualized by taking into account several past and future by-elections held at different places if it is to make national sense. Without such contextualization, the one data point of Bagan Pinang might as well be a noise, or an outlier.

In the meantime, save a national election itself, the best barometers of national mood are countrywide surveys done properly. Unless, of course, we are living in a world created by that science fiction.

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

[1] — Isa thanked the people of Bagan Pinang for the victory, saying it was a win for Prime Minister Datuk Seri Najib Tun Razak’s 1Malaysia concept.

“The people of all races have spoken and this is an endorsement of the Prime Minister’s 1Malaysia concept,” he told reporters.

Isa also thanked the Barisan machinery for working tirelessly during the by-election.

“I’m also happy that the Malays, Chinese and Indians are now with Barisan. I hope this will have a domino effect for Barisan in the future,” he said. [Polling Day Live Coverage: Isa wins with thumping majority. Sarban Singh. Zulkifli Abd Rahman. The Star. October 11 2009]

[2] — A beaming Deputy Prime Minister Tan Sri Muhyiddin Yassin, who was present when the official results were announced just after 8pm, said the people had endorsed Prime Minister Datuk Seri Najib Razak’s 1Malaysia concept.

“This is a significant victory and more importantly the people’s endorsement of the Prime Minister’s policies. I congratulate the people of Bagan Pinang, including the Indians and Chinese, who came out in full support of Barisan,” he said at the tallying centre at the Port Dickson Muncipal Council hall. [Thumping win for Isa. Wong Sai Wan Sarban Singh. Zulkifli Abd Rahman. A. Lechutmanan. The Star. October 12 2009]

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 12 2009.