Tag: Malay Mail

Categories
ASEAN History & heritage Politics & government

[2766] 50 years outside of Malaysia

The number 50 is psychologically special to almost everybody. Notwithstanding the debate about the age of Malaysia, whether it was 50 years old or 44 in 2007, we too had a huge celebration for our golden anniversary. Down south this year, Singapore is approaching its 50th anniversary as an independent state.

The Singaporean anniversary is less ambiguous than Malaysia’s. There are fewer ominous existential questions being thrown around unlike in Malaysia when from time to time, we hear secessionist sentiments coming out from Sabah.

There is a myth in Malaysia that Singapore seceded from our federation. In truth, it was Tunku Abdul Rahman who pushed the island-city out with a vote in Parliament in Kuala Lumpur sealing the decision.

Unilateral secession is impossible legally. Furthermore, Singapore itself did not want to leave and this was very clear through Lee Kuan Yew’s writings. Jeffrey Kitingan, unfortunately, recently repeated the secessionist myth as he pandered to Sabahan nationalists for his own political fortune by saying secession is a state right, showing again and again that history can be forgotten and worse, twisted to fit the preferred narrative.

That is not the only myth: some Malaysians still think there are 14 states in the federation somehow forgetting that Singapore is no more a member state. It is as if the vestiges of the Malaysian Singapore still linger and that these Malaysians have yet to come to terms with the 1965 separation.

The fourteenth stripe and the fourteenth point in the Federal Star of the Jalur Gemilang now have been redefined to represent the federal government and the three territories, instead of Singapore as was previously. Our coat of arms no longer has the Singaporean red and white crescent and star underneath the four colors of the old Federated Malay States. In its place is the red hibiscus, what seems to be the forgotten Malaysian national flower.

Regardless of the myths, Singapore and Malaysia did go separate ways and that has been the source of contention between the two. The issues range from water supply and train land in the heart of Singapore to ownership of rocky outcrops in the middle of the sea. Some have been resolved amicably but the general rivalry persists even as the Causeway ties have improved since the almost irrationally nationalistic days of Mahathir Mohamad and Lee Kuan Yew.

One can speculate what would have happened if Singapore had remained within the federation. This question has been raised as Singaporeans reflect on their 50 years of independence but I think the more interesting one is whether there would be a time when Singapore would rejoin Malaysia.

As much as I believe international borders with its passport and visa requirements are suffocating in this modern world, I think that is a very distant possibility. Malaysia is unprepared for Singapore just as we were not prepared for a Malaysian Malaysia in 1963. I do not believe the pro-Bumiputra policy will go away even if power does change from Barisan Nasional to Pakatan Rakyat in Putrajaya. The Bumiputras are the majority in Malaysia and there will always be pressure to appease them. It is the uncomfortable truth of electoral politics that makes idealists sigh.

Just look at the squabbling in Pakatan between PAS and DAP that has degenerated to race and religion. You can also read Datuk Seri Anwar Ibrahim’s speeches and wonder what exactly he is saying about hudud, for instance, out of fears angering either the liberals or the more conservative Muslim majority.

Meanwhile in Barisan, the slightest hint of liberalization is being fiercely opposed by the conservative sides in Umno. When discussing the Transpacific Partnership agreement, one of the top objections to the negotiation is how it would affect the Bumiputra, and really, the Malay, business community. Prime Minister Najib Razak is already facing a civil war within his party for the liberalization he did and other less admirable factors that include the mismanagement of the country.

Ultimately, there is a common theme across Barisan and Pakatan and that means it is more of a systemic Malaysian issue. Adding Singapore into the equation would not help and could even make it worse.

Singaporean diplomat Bilahari Kausikan recently said in a speech, it is ”impossible for us to ever be part of Malaysia again unless Malaysia abandons its basic organizing principle.” That principle will not go away any time soon.

But we have Asean and in many ways both Malaysia and Singapore are already integrating. Both citizens can travel across the border without much hassle, if you discount the congestion at the Causeway. Some Singaporeans are already living in Malaysia as the government is promoting Nusajaya and Johor Baru, to put it bluntly, as the suburbs of the world-city Singapore.

And the Asean Economic Community due for implementation this year would deepen integration between the two, which is already one of the most ”• I would think it is the most ”• integrated national economies in the region.

Realistically the AEC would take time but the trajectory is clear. That I think is a reasonable future for both Malaysia and Singapore: a closer confederation of South-east Asian states.

So, we do not need Singapore in Malaysia. We just need to have both countries to be active in Asean.

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 Malay Mail on February 14 2015.

Categories
Conflict & disaster Economics

[2760] The deficit can wait

I have been supportive of the government’s attempt at closing the deficit. I do celebrate the significant fiscal progress made over the past five or six years.

In retrospect, it was easy to back the cuts because the times were generally good. After a recession in 2009, the Malaysian economy grew quite well almost every quarter and that made tough policies easier to swallow.

But times are changing and what was swallowed easily yesterday will be tough today. Those tough policies will be hard on almost everybody now if executed too religiously.

The situation has changed so fast that I feel almost nobody ”• at least as far as I can see in the financial market ”• still believes the original deficit target of 3.0 per cent to GDP for 2015 is credible anymore. It will be challenging to meet the target and if the government insists on meeting it anyway, something has to give and that something will be overall economic growth.

Growth here is not merely an economic figure appearing in someone’s spreadsheet. It is people’s livelihood which is at stake.

Partly in my effort to be pragmatic and partly from observing from afar the horrible European experience arising from the wrong timing of its austerity program, I have come to believe in having a counter-cyclical policy. We commit to tough reforms making the economy more efficient during the good times and then we give it a slack when things are not so sunny and cheery.

What I am saying here is that the government here in Malaysia should be flexible with its deficit target for the time being.

I sincerely believe we can afford to do so because we have done serious fiscal reforms recently. Petrol and diesel subsidies are no more after years of gradual cuts and we are finally implementing the goods and services tax after years of contemplating it. I think the long term trajectory from the initiatives has already set the right direction.

My only disappointment is that these reforms were not done sooner due to political concerns. Everybody was so concerned about their political prospect that they forgot or even ignored the country’s future. For months, the government went on autopilot and the subsidy cuts themselves were put on hold for quite some time as the government prepared for the 2013 general election. We lost valuable policy time and now the window is closing.

But what is done is done and perhaps, that is just the cost of maintaining a democracy, however flawed ours is. If we believe in countercyclical policy, we should now switch our focus from fiscal tightening to some kind of relaxation.

In fact, with this framework in mind we should target the deficit within an economic cycle instead of the Gregorian calendar and I think, again, with the reforms done, we should be able to close the gap in the long run.

And we ”• when I use the pronoun we here particularly, I mean the government; after all, we elected the government regardless whether we like those sitting in Putrajaya spending our money ”• do honestly have a legitimate requirement to spend this time around, which runs contrary to keeping the what seems to be an impossible deficit target to meet.

No, it is not about saving 1Malaysia Development Berhad ”• a beast which we will have to address ”• or paying thousands of ringgit for a set of screwdrivers, or even giving more free money to suspicious grantpreneurs and selecting winners in the economy. It is about helping fellow Malaysians.

Pictures of devastation from the recent floods are heartbreaking. As fellow citizens, it is our duty to lighten their burden and the government is our primary agent to do so. Not some political parties, not some NGOs, not some volunteers. It is good to see people helping out but our agent is the government. We pay taxes and we expect the government to provide the basic infrastructure that the country needs to go forward. It is the basic role of a government.

These infrastructures from water to bridges to schools in the east coast need repairs. We need to spend for the repairs and in many cases, for reconstruction altogether.

That spending would probably hit the deficit figures but it is for a good cause. The deficit can wait for another day.

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 Malay Mail on January 17 2015.

Categories
Politics & government

[2758] Where is our Jokowi?

I think Malaysia needs Jokowi. When I write so, I do not mean Malaysia needs Joko Widodo the man per se as our prime minister. Instead, I am thinking about the idea of him the outsider. It is about having a Malaysian prime minister who comes from outside of the feudal circle.

Most of our national leaders over the years have come from mostly the same pool of elites with close ties to the old Malay feudal structure. Malaysia’s first prime minister Tunku Abdul Rahman was a prince from Kedah. His successor Tun Razak came from a noble Pahang family. The third prime minister, Tun Hussein Onn, came from a family of Mentri Besars from Johore at the time when democracy was unheard of in matters of state administration.

Mahathir Mohamad and Abdullah Ahmad Badawi are the only prime ministers that we have had who come from more modest backgrounds. But with Abdullah’s grandfather formerly the state mufti for Penang and with the father being a prominent ulama himself, I would think it is arguable that the fifth prime minister belongs to the same feudalist system.

Penang does not have a sultan but religion and the Malay monarchy are so intertwined: both play a large role in creating the old Malay feudal society and sustaining its vestiges in this modern Malaysia. Today, while the Malays of Malacca and Penang as well as those in the Federal Territories and Borneo have no sultan, they have their Agong, who incidentally is the head of Islam for the whole of Malaysia. So, it is hard to think the mufti office as separate and independent from the feudalist circle. It is part of it.

As for the current prime minister Najib Razak, he is son of the second prime minister and he inherits his father’s nobility.

To strengthen the idea that our prime ministers have come mostly from the feudalist pool, one of the next prime ministerial candidates is the current office bearer’s cousin, Hishammuddin Hussein, who is also the son of the third PM. So not only does our leadership mostly come from the same feudalist pool, we risk turning a democratically-elected office ”• the highest in the land no less ”• effectively into a dynasty.

As far as I can remember and I am happy to be corrected, only Mahathir has the courage to challenge the past by confronting the men at the top of the feudalist pyramid. In 1993, his government removed legal immunity formerly granted to all of the royal Malay houses. The move eroded the feudalist power in our society and more importantly, it set the tone that the monarchy needed to change. It set the way for a more equal society. Mahathir of course damaged other Malaysian institutions like the judiciary and the press while trying to preserve his power. I am under no illusion that he is an angel but as far as bringing modernity to Malaysia by beating feudalism into the background, he deserves credit.

The rest of the office bearers did little to keep the old feudalists in check. I think that was so because they were and are part of the old feudalist elites. They have little interest to fight it because they benefit from it. After all, notwithstanding the Mahathir era, Umno itself clings to a feudalist heritage to give the grand old party its purpose: Malays must have their sultan (and his religion) and without it, it would be the end of the Malays, or so they argue. Already in the current political climate, any criticism against the sultan is taken as seditious by the state and that sets the stage for the further rise of feudalist forces. Whatever progress Mahathir made, I feel it is being undone.

I fear that if we continue to have the same pool of elites running our country, our democracy would be weakened ”• and it is already imperfect ”• to enhance the feudalist aspect of our society.

My ideal Malaysia is one where we strive towards equality for all. The feudalist structure does exactly the opposite by elevating certain groups.

Jokowi, to me, represents a break from Indonesia’s past. The break is not as clean as it should be with former President Megawati Sukarnoputri standing behind the curtains ”• I am sure other vestiges of the old regime would challenge him soon enough ”• but Indonesia has made significant progress in the last 10-15 years, rising up from a dictatorship to becoming a beacon of democracy in the region. Each step Indonesia takes is yet another break from the chain of history, leaving it freer to move ahead without too much baggage.

I am envious of Indonesia because of that.

It is in that sense that I think Malaysia needs a Jokowi. The Indonesian Jokowi breaks our southern neighbor from its ugly military past. We need a Malaysian Jokowi to break our excessive link to our feudal past.

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 Malay Mail on November 21 2014.

Categories
Economics

[2756] Press on with economic reforms

I do have complaints about various government policies but I do see improvement on this front at the federal level in the past few years. Two policies I am largely in agreement with and am advocating are the subsidy cuts and in its place, the cash transfer program.

After all the progress made however, my fear is that the government is losing its focus and it is taking a step backward. I will take such reversal as a betrayal to the earlier promise of economic reforms.

I write so because the government plans to introduce a complicated quota system for subsidized petrol and diesel in place of the current blanket subsidy regime, which given the current global crude oil prices, is at the brink of elimination. The prospect of elimination is good news but now the government wants to maintain the subsidy instead. It just cannot make up its mind.

Under the new convoluted system, each person would get some quota of subsidized fuel based on his or her income in the name of targeted policy: the higher your income, the fewer quotas you would get. Any consumption above the quota would be charged at market price. Full details have not been released yet but during the tabling of the federal government’s budget, the Prime Minister said he would announce the mechanism soon.

What makes the situation worse is that the government also plans to limit the cash transfer program we all know as Bantuan Rakyat 1Malaysia (BR1M) by restricting items that can be purchased by the program’s beneficiaries. The government is supposedly concerned that the recipients would abuse the cash from the program by buying luxury goods, like an iPhone 6 that a certain Minister is using now. After all the speech about the-days-of-government-knows-best-is-over by the Prime Minister when he first took power, here, the minister Ahmad Maslan is showing the government’s paternalistic side by attempting to dictate a person’s consumption pattern right up to the minute details.

I disagree with both proposals because they are bad policy. I would prefer the government to stick with a superior pure subsidy cut-cash transfer mix instead.

Quotas and coupons are inferior policies

The only way I can think of to make such consumption control as preferred by the minister possible is by converting the cash under BR1M into some kind of coupons. I am struggling to think of any other way to make such paternalistic policy possible. Maybe that is my imagination failure, but I would think any other way would be unnecessarily more complicated than the coupon setup, which is already complicated, risking abuse.

Why? The recipients can sell the coupons at a discounted price to get cash instead of buying items meant to be bought by the coupons. And what prevents them from using that cash to buy luxury goods? As you can see, it is a complicated system that reduces the potential amount received by the targeted person through leakage and does nothing to address the minister’s paternalism, assuming his paternalism is right in the first place.

By leakage, I mean the benefits meant for specific groups get leaked to the unqualified others through the discount. The coupon purchasers who are not meant to get the coupons get to enjoy the benefits of the coupons. How about a concrete example? It has happened with the 1Malaysia Book Voucher program where students did exactly that: they sold their vouchers at a discount for cash to a third party.

The same argument is also applicable to the quota system for subsidized fuel. What prevents a quota holder for selling his or her fuel to others at some price higher than the subsidized price but lower than market price? There is nothing ”targeted” about it.

Monitoring might be the key to the success of such system but with the government trying to balance its budget, does it make sense to create a whole new bureaucracy to police the effectiveness of the complicated regime?

Furthermore, the coupon system would require distributors. Just who will distribute the coupons, one might ask? The government would likely outsource it to someone else in private sector given that there are millions of households already benefiting from the cash transfer program BR1M. And with all the complicated supply chain of vouchers, who knows what would happen. Something can go wrong. Why creates an opportunity for corruption in the first place?

If  you want a clean targeted policy, then you would only need to wire in the necessary cash directly into the recipient’s account. It is precise, easy and clean. If the person has no account, establish one for him or her. This way, no third party gets to handle the cash, leaving little room for abuse. And we already have that system in place. Why change things that work?

A regression of policy

Subsidy cut and cash transfer work charmingly and that is enough. The proposed quota-coupon policy will instead undo the successes of the subsidy cut-cash transfer policy by complicating everything.

If indeed the quota-coupon policy mix will be implemented, then I would see it as a regression. It is a policy U-turn. The maintenance of the subsidy system will preserve the very inefficient system that the government wanted to get rid in the first place while the introduction of a coupon system introduces other kinds of new inefficiency.

We are already on the path to a superior policy mix compared to the one we had before. I would go further by arguing that the logical end of the current mix is the best one given the objectives of creating a more efficient market, lowering the fiscal deficit and at least preserving — it can even be enhancing — the welfare of Malaysian most affected by the cuts and elimination of subsidies.

Remember the cash transfer rationale

It must be remembered that both subsidy cuts and cash transfer should be seen side by side. They are not independent of each other. The cash transfer is meant to address the negative impacts of subsidy cuts, making the cuts more palatable to the low-income households. The cuts meanwhile finance the cash transfer.

If the government reduces the efficacy of the cash transfer by taking the cash element away, then whatever remains of it will be unable to play its role as a cushion at its greatest potential for the financially weakest households. At the same time, if the subsidy is being maintained, then we should not increase the cash transfer. I would even say that the maintenance of subsidies calls into question the existence of the cash transfer program in the first place.

The Prime Minister during the budget suggested that the revenue raised from the goods and services tax will finance BR1M in 2015. That is a really a dangerous statement that upends the ties between the subsidy cuts and the cash transfer. Maybe this is a sign that the government is getting itself confused about the rationale for the cash transfer, which can explain why we are starting to see economic reforms losing steam as various inferior policies proposed at the expense of superior ones.

Don’t fix it if it ain’t broken

My advice to the government is to press on with its earlier promised economic reforms. Ditch the inferior quota-coupon mix. Maintain the current policy. Press on by floating all fuel prices. We can move on to LPG subsidies once the business with petrol and diesel is done. Maintain and improve the cash transfer program. Do not change the cash nature of the program. Increase it whenever subsidy cuts save more.

Just no to quota. No to coupon. And no to Ahmad Maslan’s paternalism.

The government has all the political capital it needs to press on with the reforms. The general election is still so far away. All the political criticism against BR1M can easily be dismissed. And BR1M is a cheaper and better kind of populism backed by good economics compared to the old subsidies and all those complicated policies. What is not to like?

It would be a great shame if by 2017-2018, all the political capital the government has now is wasted on half-measures.

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 Malay Mail on October 21 2014.

Categories
Politics & government

[2750] Malaysia is bigger than Malaysia Airlines

Until AirAsia and the liberalization of the airline sector in the past decade or so, Malaysia Airlines was the only real option for most of us when it came to flying. It is easy to argue that for us Malaysians, flying meant Malaysia Airlines.

My first flight was with them. The feeling of sitting by the window floating among the clouds for the first time is unforgettable. The carrier was part of my growing up story as I found myself crossing the Pacific and back around the other side of the world, travelling to places that as a kid I thought would be impossible.

So, Malaysia Airlines does mean something to me. I feel there is a personal connection between me and the brand.

When disasters struck the airline, part of me felt lost. I was not alone in feeling so. I looked around and I saw an outpouring sympathy for the airline from many. On the internet, on television, over the radio and even at bus stops and shopping malls for weeks after the Ukraine crash, there were signs and images imploring us to keep Flight MH17 in mind.

But now that the rituals are mostly done and the intense emotional reactions have subsided, I think this is the best time to write what I have been thinking for some time: We are taking the sentimentality too far.

I feel so because I see people equating the well-being of Malaysia Airlines to Malaysia the country and expressing it so strongly. While this may suit the narrow intention of those who want to save the carrier, I think it demotes the idea of Malaysia the country to that of a petty commercial entity.

The equation sets a limit by necessarily defining Malaysia as a business, instead of an ideal society, whatever that may be. After a while, I no longer know what we Malaysians collectively want the country to be with all of our competing dreams and contradictions.

But I am certain the country would be a depressingly sad, meaningless place if the idea of Malaysia is confined to us measuring our worth with the profits we make, gauging our performance with self-limiting unimaginative indexes. Such culture would turn us into drones, ever chasing benchmarks which are meaningless outside of business. ”1 Malaysia” might be that, but Malaysia is more than that. There is much more to life than business.

An example of equating the airline to Malaysia comes from the prime minister himself when he delivered the Merdeka Day address. He used patriotism to justify the need to financially aid the troubled commercial airline, yet again. The platform he used is enough to prove the exploitation of patriotism as a persuasion device. He tried to build up a case to save the carrier. He said there was no other choice.

But he did not need to try very hard. On the ground, I feel the idea presents itself more blatantly and organically, implying that the carrier is a national icon, that it is Malaysia itself.

The crashes made it politically easy for the government to bail the airline out. There is little political opposition to the corporate exercise since to oppose meant irreverence to the victims of the crashes. Nobody with a heart wanted to be seen to be that insensitive. Those who did were shouted down.

So, Khazanah Nasional as the government’s agent gets all the support it needs to privatize Malaysia Airlines. The public is chattering about the details but the idea of saving the carrier itself is taken as necessary without much question. The majority seems to agree with the prime minister that there is no other choice.

Here is the other impact of the unfortunate equation. The idea that Malaysia Airlines is Malaysia automatically kills off the other choice: It is unthinkable not to save Malaysia Airlines, it is unthinkable not to save Malaysia. It limits the grasp of the mind. The loss of our faculties is the cost of the equation.

The equation is also an example of the merging of government and commercial interests. There have been other examples in the past but I find this one particularly disappointing because just several years ago, the prime minister promised to let the private sector drive the economy and reduce the government’s stake in various Malaysian corporations.

This is not the only broken promise around judging from the government’s recent enthusiastic use of the old Sedition Act.

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 Malay Mail on September 5 2014.