Tag: Najib Razak

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Politics & government

[2973] Harapan must not let Pakatan pussies speak for the coalition

We all understand why Pakatan Harapan needed to ally with Barisan Nasional. At the very end of the last political cycle, we were faced with stark choices: have an imperfect alliance between the reform-minded individuals and everything the grand old party presents, or live under an incompetent conservative regime that would rewrite what Malaysia would mean so completely. Given the world as it was at that particular point of that, the imperfect alliance was the preferred option.

Such imperfect alliance will always present Pakatan members and supporters with challenges. Compromises will have to be made and that is completely understandable and reasonable.

But not all things can be compromised, and compromises must involve both sides, not just one. If only one side compromises, and willing to compromise everything, then something is wrong.

That is where some Pakatan members and supporters are today.

Whenever new political appointments were made for the benefits of Umno, some Pakatan supporters would use the imperfect alliance as an excuse. “This is not a Pakatan government. It is a unity government.”

Now, there is movement to get Najib Razak, barely several months in prison, pardoned. Disappointingly, some Pakatan supporters now use the same template excuse without even thinking what it means. Too eager to defend the Pakatan government against any criticism, the template is used as get out of jail card for every single problem the government faces. They do not even bother to right the wrong. So fearful of any threat of instability to the government, they lose their backbone. They bend over without making any effort to push back.

Those are who I call Pakatan pussies. No backbone. No accountability.

These spineless pussies, when faced with difficult questions from Pakatan supporters, would go back to their list of lazy excuses and say “do you want a Pas government, or Pakatan? Choose.”

Betting chips down when they are not

The stark choices Malaysians collectively, and Pakatan supporters specifically, faced in November 2022 came to being when the chips were down. It was the nuclear option at the very end of the road.

We needed the nuclear option to sharpen the mind of many. “Pas or Pakatan” was a simple decision tree to let people discover for themselves the consequences of November choices. Veil of ignorance, so-to-speak. You present the many with the destinations, and make them work for themselves the roads towards the preferred destination. These allowed them to see the world as it was, and accept the decision made, however unpalatable the road was.

We are no longer in November 2022. The pressures are much less intense. The timeline is easier. In fact, attempts to get Najib Razak pardoned have not even started earnestly.

Yet, these Pakatan pussies are inappropriately using the nuclear option, betting the chips down too soon.

Red lines

Pardoning Najib Razak, in my mind, is a red line in any compromise between Pakatan and Barisan. I have at least three reasons why that is so.

One, he and his supporters have not expressed any remorse. In a society where corruption is still rampart, example must be set so we can begin to reset our morals. To free an unremorseful man is the wrong message to send in pursuit of a moral society.

Two, it opens Pakatan Harapan to partisan attacks from Pas and their allies. So far, Perikatan Nasional, Bersatu especially, appeared have been crippled. They are now in search of an issue to rejuvenate their political fortune. They have tried to make EPF withdrawals as a rallying point. They have not been successful there. Pakatan Harapan seemingly blessing the pardon—does not matter explicitly or implicitly—will be the one point Perikatan needs. Pas (and Umno) did that with ICERD and the death of  Muhammad Adib Mohd Kassim, and came back from the dead in 2019.

Three, the long run is not as static as many make it out to be. In November 2022 when decisions had to be made in a matter of days if not weeks, the decision tree in which the nuclear option was represented was static. This is especially so when election had been concluded. It is a mistake to think the same statics will work over longer time horizon. People… voters… adapt to situations. If you keep using the nuclear options too many times, then people will begin to dismiss it and become immune to any similar exhortation. Additionally, it is quite easy to imagine more and more parties entering the arena competing for Pakatan’s base as a sign of dissatisfaction. At the very least, non-voting will be an issue. This has happened before not too long ago. In other words, in the long term, there is a real risk of current Pakatan voters deserting the coalition.

The final point is not a mere theoretical musing. In 2009 until 2013 when Najib was busy promoting various liberalization that he appeared to be a liberal, his men and women dismissed concerns about Umno’s voting base. “They would have no where to go.” That was quickly proven untrue in 2013, which partially led Najib to turn around and embraced racist politics more rabidly.

Message: do not take your voting base for granted.

Get a backbone and push back

Compromises have to be made. But there have to be red lines. Pardoning Najib is one of those red lines. Pardoning Najib risks the long-term viability of Pakatan Harapan, and we need Pakatan Harapan to succeed in order to push back racist and fascist forces.

Pakatan needs to push back. We need to tell Umno we will not support any pardoning, and in fact, opposes it. We can make it difficult, and raise the cost of them doing so.

And please, no kop-out by saying it is a royal prerogative. In so many ways, the royals are accountable to the people too. Rakyat itu Raja.

At the end of the day, Pakatan Harapan will have our urban fortresses. Right now, it is Umno that faces annihilation with Bersatu and Pas outside having the grand old party for lunch. It is Umno that faces existential crisis, not Pakatan. Remember, that crisis is Najib’s own doing. Too many in Umno are too blind to see what outsiders already know. Here, Pakatan needs to advise Umno the folly they are committing.

If the stubbornness continues, Pakatan needs to be careful so we do not sink with Umno.

This is why we need to push back.

And this is why Pakatan Harapan cannot let these Pakatan pussies speak for Pakatan. Not only they are spineless, they are myopic too.

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Personal Politics & government Society

[2956] Why does sending Najib to prison feel so empty so soon?

As an 18-year-old a lifetime ago, I thought Sijil Pelajaran Malaysia was the end of it. The ending. Not quite death of course, but the emphasis placed on the national examination was so great that it felt like a be-all and end-all. A terminal. Yes, there was life afterward, but that exam determined everything. Do well, and you would get to go to a good school (if you are really lucky, then you would get to go to a really great school across oceans) with some kind of scholarship. Do badly, you would be destined to mediocrity.

I did well, but I quickly learned SPM was not the last station. I went to a good school with scholarship and all, but it was not smooth sailing. University life was hard, even as I was privileged to have experienced it. I learned I was wrong, and I learned something new: life is a series of challenges. A celebration might be appropriate for surmounting each challenge, but there will always be another barrier, sooner or later.

I learned it the physical way when I unwisely went on a major hiking trip to Yosemite during my junior year. Ill-prepared, I came down the Tuolumne Canyon, all the way down to the river at the bottom to soak my feet in cool flowing mountain water. It was a long canyon 20, 30, 40 miles in length, with rugged terrain, high cliff on both sides, and the Milky Way bright up in the sky. No artificial light, no vehicle, no phone reception. The destination was upriver. Each climb to a local peak only revealed a steeper trail beyond. It was a cascade of falls that seemed to never end. If ever I entertained of idea of suicide seriously, it was there. I wanted to give up and jump down. The fatigue was too much. It felt hopeless. But somehow, I made it, with assistance of two strangers near the very top. After a hearty meal, I zoomed to Los Angeles and returned to Ann Arbor to spend my summer more banally by waking up late and play computer games all the time, inter-spaced with anime-watching and soccer games, while waiting download of large files to complete.

The jailing of Najib Razak feels a little bit like SPM, or one of those falls in that Tuolumne cascade. It was a journey of roughly 10 years, which, a huge chunk of it spent in despair and hopelessness. My little part in the whole saga seemed meaningless. The 2018 election came, and there was euphoria, but hopes were dashed soon enough. It was a miracle Najib was found guilty four years later, and his appeal dismissed. And let us not kid ourselves, he could have escaped his deserved fate if he had pushed the political button harder. Government fell twice, partly because of Najib, and Zahid, who were desperate to outsmart the system.

But the day after, life feels empty. There is a slight hopefulness, but that is it. I take it as a reminder that life is a series of cascades. A series of challenges.

The system works this time, but only because we worked to make it work, and then be let to work. There are too many times when the system has been made to succumb to corruption. Never forget that. Institutions are not automatic machines. It has to be manned (and womanned?) by good people. And Najib still has his avenues to escape his punishment.

And it is not just him who is corrupt. His collaborators are still out there, corrupting our society still.

The long struggle is the reason why, the victory yesterday, feels hollow so soon. There is still a long way to go, mountains to scale.

Categories
Politics & government

[2928] Rationalizing the camps in Umno

I had a conversation yesterday, where we tried to make sense of the political situation in Malaysia. It is a confusion situation all-around and the intricacies could only be understood by understanding the disputes in Umno, the one of the major sources of instability in Malaysia.

A systematic way to understand the troubles within the party is to ask two questions:

  • One, do they want Zahid to remain as the party president?
  • Two, do they want to remain part of Muhyiddin’s government?

The combination of the answers provides a clean division of the camps in Umno. See the graphics below:

Theoretically, there should be 4 camps.

But realistically, there are 3 camps only. This is because if a person prefers Zahid to remain as the party president, chances they would parrot his position. That means if they said yes to Zahid, it is likely they would also want out of Muhyiddin government. To signify that, I have struck one of the boxes out.

The 3 camps are:

  • Najib-Zahid camp (Yes to Zahid but no to Muhyiddin). This is the camp suffering from multiple corruption charges.
  • Hishammuddin camp (No-Yes). Hishammudin was one of the Sheraton Move architects.
  • Tengku Razaleigh camp (No-No). Possibly the weakest camp among the three.

The names listed might be inaccurate because it is based on my readings and possibly their sentiment as reported in the press.

Additionally, there are names I put in the unknown brackets, but if the questions are right, then they would eventually be pigeonholed into a camp once the time comes.

And clearly from the chart, it is not exhaustive. It is difficult to know beyond the top names who sits where. This is especially when some of these people like Noraini Ahmad and Zahida Zarik Khan seem awfully quiet, and in some ways irrelevant despite being part of the party leadership.

Finally, some people in DAP have told me it is all about power (who has what and those without are making noises). However when I look at the problem closely, it is a bit hard to systematically rationalize the division through “power.” “Power” does not reveal the camps as clearly as it should. Nevertheless, it is difficult to dismiss “power” as a factor. It might very well be an underlying dimension beneath the two questions I am proposing for benchmarking purposes.

Categories
Economics Politics & government

[2888] Clearing the air around FDI definitions

There is a kerfuffle about the definition of foreign direct investment, due to the former PM Najib Razak’s messaging and the general public’s unfamiliarity of it. I strongly believe Najib actually understands the nuances of FDI but he is navigating through the somewhat complex definition to score political points with half-truths. Truly, you need to know the actual definition to play around with skillfully. After all, he was the Finance Minister for about a decade and one ought to learn something while at it, including about government policy on fund transfers and its weaknesses.

Of interest today are 3 points, given the ongoing popular public discussion, which is quite ill-informed.

One is approved FDI published by Malaysian Investment Development Agency, or MIDA.

Two is actual FDI published in the Balance of Payments documents published by the Department of Statistics

Three is “asset sale.”

I will not very delve deeply into these because the manuals are thick, arcane and I doubt more than 1,000 people in the world have read the manual from cover to cover. In Malaysia, probably fewer than 10. For instance, the Balance of Payments manual published by the International Monetary Fund, (the mouthful title is the Sixth Edition of the IMF’s Balance of Payments and International Investment Position Manual) has 351 pages with discouraging font size and spacing.

But there is a surge in public interest it in. Which I suppose, is a good opportunity to educate.

Let us start.

Approved and actual FDI

To start we need to attack both point 1 and 2 because they are easily confused despite have been frequently published and easily accessible.

Approved FDI and actual FDI are two different sets of numbers. Yet more than once, the media and even trained economists have referred to both as simply FDI without hinting its differences. The media probably does not know any better while economists are being sloppy though they likely know the difference. This is a constant source of confusion for the public (and the media) and it becomes crazy when politics is injected into it.

Approved FDI is self-explanatory. A foreign investor applies for permission to invest in Malaysia and the Malaysian authority decides whether to approve. Not all investments get approved and for example, my former employer’s request to do so was rejected for unclear reason. If approved, it will go into the approved FDI statistics published by MIDA.

The important thing is approved FDI functions as a leading indicator to actual FDI. In less complicated English, approved FDI provides the maximum limit to actual FDI. Theoretically, approved FDI is always higher than actual FDI because sometimes, a company would get its approval but later change its mind in terms of investment of value, or even investing at all.

Theoretically because sometimes, approval to invest is given for a period of time and practically too, it is difficult to invest immediately upon approval. Accounts have to be set up, the money has to be transferred, people have to hired, etc. I have been told after approval, a lot of approved FDI get realized roughly about form 1 to 3 years. But the point is, approved FDI gives us an inkling what the actual FDI would be. Example: when approved FDI in 2017 was low, so was actual FDI in 2018. When approved FDI was high in 2018, actual FDI in 2019 was also high. It is not a clean correlation due to the problem of lags, but there is a noticeable one.

There is further complication to the public understanding of FDI. MIDA publicly published approved manufacturing FDI quarterly (all-sector data annually). So without basic understanding of the metadata, confusion is easy. Indeed, the relatively complicated definitions have been used by Najib to spread half-truth about FDI.

The purposeful switching of context

Before I move on to point 3, allow me to digress and comment about the ongoing political conversation about FDI.

When assessing Najib’s post, one has to realize when he is switching the definition and context. When the government talks about 2018 approved FDI, he will switch to 2018 actual FDI and accuse the government of lying by stating actual FDI is lower than approved FDI. When the government talks about actual FDI in 2018, he would veer somewhere else to again pain the picture that the government is being dishonest.

For those unfamiliar with the numbers and context, they would say Najib was arguing based on facts. But if only they knew how context could make facts as half-truth. The best of disinformation works as such.

FDI and “asset sales”

The last point I want to make is about FDI asset sale.

The definition of FDI is hard to master fully even for working economists. But in general, it is acquisition of long-term stake in local companies (plus several other things). In the IMF manual, if I recall correctly, a purchase of share at least 10% in local company would qualify as FDI.

This is why when Mitsui buys a minority stake in the Malaysia-based IHH Healthcare, it is FDI.

This is also the reason why when Petronas sold its 50% stake in its RAPID projects in Pengerang to Saudi Aramco of Saudi Arabia, that was considered FDI too. But of course, Najib will not mention that asset sale that happened under his watch. He would call that investment, and he would be right, just like how Mitsui’s purchase is investment. Najib wants to have his cake and eat it too.

Finally, for me personally, I am not hung up on asset sale. In the end, what is important is the returns to investment, not the investment per se. A fund should maximize returns, and if it diverges from that, it has to be for a very, very good reason.

But perhaps politics is more complicated than the Balance of Payments manual. You do not a good reason, just half-truth. We are, after all, live in the age of Trump.

And for the FDI conversation, know that Najib is switching the context and manipulating public ignorance to win the credibility game.

Categories
Economics Politics & government

[2844] Evolution of corporate ownership in Malaysia

Terence Gomez is embarking on a massive project investigating quantitatively the influence of government-linked companies in the Malaysian economy. The dominance of government in business and in the economy is no mystery. What is special here is that he is analyzing the numbers more comprehensively than many had done before. He is currently focusing his research at the federal level but if I remember correctly, he plans to delve into state level bodies, looking into bodies like Kumpulan Perangsang Selangor, which are much less known than those like Khazanah Nasional.

Together with Jomo Kwame Sundaram, Gomez in 1997 wrote the go-to book — Malaysia’s Political Economy: Politics, Patronage and Profits — exploring the ownership of corporate Malaysia in the 1990s and its links to politics, namely Umno. To understand political financing during the Mahathir era, this is the book to read.

The scale of Gomez’s latest project on ownership is larger than anything available before. There have been work done on corporate ownership in Malaysia after his 1997 book but they provided only partial view of the whole story while nibbling at the edge.

Gomez in his lecture, which I attended at the University of Malaya earlier this year (and later at an event organized by the Institute for Democracy and Economic Affairs; Ideas is funding of the project) made the connection between previous ownership literature and showed how the majority ownership changed from the 1950s to the 2010s, the present time.

He is continuing the work pioneered by James Puthucheary, who back in the 1950s went through official colonial and Malayan documents to understand who owned what in the economy. Through that, he corrected the idea that the Chinese had controlled the economy when in fact it were the Europeans. Gomez mentioned Lim Mui Hui’s work as the other important literature in the 1970s tracing capital ownership in the Malayan-Malaysian economy in the early days of the New Economic Policy period.

Gomez in his lecture showed just as Puthucheary demonstrated decades ago that the British and other European bodies controlled the majority of the top Malayan companies in the 1950s. This changed in the 1960s and the 1970s when Chinese tycoons rose up in the list. By the 1980s and the 1990s, due to the implementation of the New Economic Policy and Mahathir’s industrialization drive, the list was dominated by Malay industrialists. The ownership list was also more diverse than it ever was, with Genting, Berjaya and YTL were among the biggest then.

But in the aftermath of the Asian Financial Crisis, something fundamental happened. Most of top Malaysian companies were owned by the government and no longer belonged to private individuals or groups. There were bailed out or acquired by the government through the Government-Linked Investment Companies. Gomez listed the usual seven: the Employees Provident Fund, Kumpulan Wang Persaraan, Permodalan Nasional, Lembaga Tabung Haji, the Armed Forces Fund, Khanazah Nasional and the Ministry of Finance Incorporated. Many of the Malay industrialist companies like UEM were now owned by the government.

Not all of those seven government-linked investment companies are the same. The EPF, for instance, is not strictly a government company, in the same Khazanah is. But nevertheless, the EPF does have an extremely strong presence in the Malaysian economy, in both the equity and the debt markets.

In a different talk of a more casual style, historian Khoo Kay Kim claimed the Germans controlled the Malayan economy before the First World War. Their influence diminished after their lost the war and was replaced by the Japanese during the interwar period. I have not read a proper document to ascertain the claim but I have read from various sources that Japanese companies were active in Malaya prior to the Second World War.

Gomez’s work has implications beyond economics. Control over of these government-linked corporations and entities enables political control and enhances political power, just has the Umno’s ties to various the 1980s-1990s Malay industrialists had kept the party’s machinery going. But unlike then, when those funds were private money from private companies (public companies privatized), the government today does enforce spending or procurement requirement to benefit certain parties. While Gomez did not cover 1MDB, the 1MDB corruption scandal, provides the starkest example of public resources being used directly and illegally to finance Umno’s (and even its president’s personal) requirement. The connection is starker and more corrupt now than ever before.

The evolution of corporate ownership in Malaysia simply does not inspire confidence, and the completion of Gomez’s work will truly show how big the beast has become.