Tag: NEP

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Politics & government Society

[1349] Of The Economist on hypocritical Malay dilemma

One of the bibles of libertarianism says:

The social contract may once have seemed necessary to keep the peace but now it and the official racism that it is used to justify look indefensible: it is absurd and unjust to tell the children of families that have lived in Malaysia for generations that, in effect, they are lucky not to be deported and will have to put up with second-class treatment for the rest of their lives, in the name of “racial harmony”. When the mild-mannered Abdullah Badawi took over as prime minister from the fire-breathing Mahathir Mohamad in 2003, there were hopes of change for the better. Mr Badawi preached a moderate, “civilisational” Islam and pledged to crack down on corruption.

Four years on, corruption, facilitated by the pro-Malay policies, is unchecked. The state continues to use draconian internal-security laws, dating back to the colonial era, to silence and threaten critics. UMNO continues to portray itself to Malays as the defender of their privileges yet tries to convince everyone else that it is the guarantor of racial harmony. One commentator this week gently described this as a “paradox”. Hypocrisy would be a better word. [Tall buildings, narrow minds. The Economist. August 30 2007]

Indeed, the social contract is obsolete.

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Economics Politics & government

[1122] Of lefties’ unconvicing argument against FTA

Opponents to the possible Malaysia-US FTA come from various backgrounds and some they have expressed legitimate concerns against the FTA. When I met Ronnie Liu of DAP several months ago, he expressed transparency as a reason to object the FTA. I could accept transparency as as reason but yet, I am convinced that transparency is not the main reason behind DAP’s objection to FTA. This is because transparency was only mentioned after I demonstrated an inconsistency in DAP’s stance in a wider context.

There are many arguments against the FTA that are simply based on simple misunderstanding of economic concepts. I will not touch on that simply however. What I am interested in discussing is the inconsistent.

DAP opposes the Bumiputra policy, in particular the NEP, because it is discriminatory. I myself am against the Bumiputra policy due to how it prevents the market from working freely. But this is not about me.

Proponents of the policy cite that the Bumiputra and really, the Malays, need time to build up its capacity to compete against other economically superior ethnic groups. Hence, the protection and privileges given to the Malays. It is common for the other side, not necessarily DAP but the lefties in general, to come back and say such protection and privileges do not build up the competency the Bumiputa needs to compete against others; it only encourages complacency among the Bumiputra.

Despite not buying into the argument for Bumiputra policy as well as stating how the policy is not helping, many of the same lefties employ the same argument used by the proponent of Bumiputra policy to support protectionism and oppose the FTA. This group argues that Malaysia needs time to build up its capacity to compete against other economically superior countries. When proponents of the FTA cites that protectionism does not encourage Malaysia to become competitive but instead, sowing complacency, they shrug it off, seemingly implying that such inconsistency as a minor inconvenient.

In the case of Ronnie Liu, he ran away from the subject and cited transparency instead.

Lefties will need to sort that out if they are to convince others to oppose the Malaysia-US FTA. Else, lefties that oppose both the Bumiputra policy and the FTA are giving the supporters of Bumiputra policy a leeway. Perhaps, stripping the lefties that moral authority to talk about one issue or the other.

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Economics

[1085] Of the US is no match for the NEP

Under pressure to secure a free trade deal with Malaysia, the US is bowing to Malaysian demands:

MALAYSIA and the US have agreed to take contentious issues “off the table” in their ongoing (free trade agreement) FTA negotiations, International Trade and Industry Minister Datuk Seri Rafidah Aziz said.

What are those contentious issues?

“On areas like government procurement, New Economic Policy and our policies on restructuring, it is no go and they understand that.

I have blogged earlier on how Malaysia has time as a leverage. I do think Malaysia is utilizing that leverage to the fullest. Standing on higher ground while the US negotiators are running out of time, I could imagine Malaysia dictating the terms in a room somewhere in Sabah.

Nevertheless, I wish both sides would be more transparent and forthcoming to public questions. While I have an idea what the US is looking for, I could only speculate what Malaysia is demanding from the US without a way to verify it.

Even in the report, the US list is clear:

The Karambunai discussions had included elimination of tariffs, equity conditions in education and telecommunications and distributive trade.

The Malaysian list, on the other hand:

Rafidah said Malaysia made requests to the US in terms of market opening which would benefit the private sector.

It is so vague that it could mean anything under the sun.

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

p/s — perhaps, I have underestimated the leverage Malaysia has. On Saturday, February 10 at The Star:

KOTA KINABALU: The March deadline is likely to pass without Malaysia and the United States striking a deal for a Free Trade Agreement (FTA).

US Assistant Trade Representative Barbara Weisel said it would be “very difficult” to conclude the talks within the deadline that the United States had set.

I hope we could get the FTA signed before it is too late. It is going to be tough to get an FTA after the expiry of Trade Promotion Authority because the Democrats are expressing economic nationalism stance.