Tag: Pakatan Harapan

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Economics Politics & government

[3023] Addressing the supply crisis requires a renewed democratic mandate

I am a proponent of an early general election for Malaysia.

A distracted ruling class with a damaged reputation is working in a lame duck period

There are several reasons why I am so. The factor that I would like to highlight today is that we are entering a lame duck period as those in power and everybody else are already having an eye on the next election. With the Johor assembly dissolved recently and with several state elections to follow in the matter of months if not weeks, it is only natural for the political class to worry what comes next and shift to electioneering mode instead of the tasks of governing. That means the crisis is not getting the full attention it deserves. The crisis mostly is an FYI instead of an FYA as apparent from policymaking and the behavior of the general public.

More than that, those in power are quickly losing influence over everybody else that includes the business community, foreign governments, individual Malaysians and even members of the civil service. Even members of the ruling side with its complex multi-coalitional equation might take the government’s words and actions with a pinch of salt. Why should they not? They question and second-guess what would come next. Would this initiative be taken up by the next government? Do we still need to engage the current government or wait? Would he still be the Prime Minister after the election? Who would head this or that ministry? Would I want to associate with the ruling side now? More often than not, the safest course of action for most is to wait until the dust gets settled

The distraction and loss of influence are compounded by the government’s fear of voters’ backlash. As I have opined earlier, there is a lack of political capital to address the crisis as that capital has been used for various unhelpful episodes damaging the PH brand. Addressing the supply crisis would involve some economic pain (specifically higher prices and general living costs, and possibly some rationing too). We need to lengthen the availability of supply as long as possible that that means saving some resources instead of enjoying it all now. Nobody likes pain, but that pain is necessary in order to avoid greater complications that would definitely come if Malaysia is to take on business-as-usual path (which is what happening at the moment). Addressing the crisis comprehensively would intensify the backlash, even if compensating policy like greater cash transfers is put in place. With all these things in mind, the ruling coalitions are frozen to death about what this would mean at the ballot box. So, instead doing the right thing, the government has instead decided to coddle the voters policy-wise from what is to come.

Policymaking and execution are in stasis at a time when we need courage with all hands on deck.

There is not one, but two imminent economic crises

But what are the crises?

The first is well-known by now even as most Malaysians act as nothing is happening due to the very mild supply policy we have at the moment. It is the energy supply crisis centered around the Persian Gulf that is directly caused by the Israel-US aggression against Iran. The disrupted petroleum supply is sending ripple effects to various sectors in Malaysia (and around the world), as can be observed through the input-output model. The government has been communicating this very well to the public. Sadly, that communication runs at odds with actual policy, especially when it comes to petrol and diesel subsidies (and also… tourism).

The second is the very possible return of a strong El Nino that would hurt, among others, water supply, which in turn affecting agricultural and food production adversely. Already, fertilizer supply is a concern. El Nino would exacerbate the problem and raise market prices.

The first crisis is not being handled properly despite warning from the government’s own economists. The second crisis is largely going under the radar and would exacerbate the effects of the first crisis.

Renewed mandate is the way to go

It seems to me that in order to address the two crises effectively, the democratic mandate must be refreshed. Here, the general election is the way to shorten the lame duck and do-nothing policy period. Having the election as soon as possible could return us to the state of serious policymaking as quickly as possible democratically. There are other ways to do this, but democratically is the operating word here.

We have seen how prolonged policy inaction affected our lives before. The late February 2020 Sheraton Move caused Malaysia to lose weeks if not months’ worth of reaction policy time during the Covid-19 pandemic. That led to unnecessary deaths, overly deep economic downturn and the deepest of pain for everybody. We should heed the lesson of recent history. We need to move quickly and proactively.

No doubt, there is a risk that the election would also lead to a do-nothing period due to the need for power sharing negotiation immediately after election. The outcome of the next election would likely require multiple coalitions to work together yet again. The uncertainty involves the way the puzzle would fit together. Yet on the balance, even that government (whether PH would be in it or not) would have greater political capital than the current one, due to renewed mandate.

We must put the country first, party second.

Electoral messaging: the truth will set you free

To reiterate, Pakatan Harapan is so petrified of elections that in response to the ruling Johor Umno and Barisan Nasional dissolving the state assembly, PH-friendly social media accounts and some PH personalities have only one coherent argument: it is irresponsible to have an election during a crisis. But that argument would only work if the ruling side has the political capital to handle the crisis, which it does not. It is even more irresponsible to sit on it in fear.

Pakatan Harapan should take a different tack instead. Take the bull by the horns. They (or any coalition with national ambition) should be truthful of what lies ahead to the public going into the general election. Say it up front: the current government setup is untenable and fraying and that is preventing more effective solutions from being taken. They will be pain but it we will do the necessary to mitigate it. Tell the voters that Malaysia needs to come out of the crisis stronger and based on that, request a new mandate to take the necessary actions for the greater good.

That would be the manifesto: how would we deal with the crisis and how would we mitigate the pain. This would immediately avoid the kitchen sink manifesto that had caused Pakatan Harapan trouble in the past.

Pakatan Harapan can do this. The current government has a great record navigating global trends. Use this as a testimonial of competence. Tell voters Pakatan Harapan has the necessary plan to address the crisis but insufficient mandate to carry on. We have have the way forward and we would like you to approve the plan.

Further, doing this would allow Pakatan Harapan to regain the initiative instead of forever being reactive to its rivals. To carry on reactive as Pakatan Harapan is now would erode further the reputation of all parties in the coalition.

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Economics Politics & government

[3022] Fuel subsidies, Pakatan Harapan, spending cuts and political capital exhausted wastefully

When the government in Putrajaya highlighted its policy of warmer air-conditioned office temperature as part of the drive to save energy, Malaysiakini exaggeratedly called it an austerity drive.[1]

It is not at all but several weeks later, the government is carrying out a larger spending adjustment exercise by cutting what the Finance Ministry calls non-critical expenditure across all ministries in order to accommodate for the ballooning fuel subsidy cost, which in turn is created by military conflicts in the Middle East.

I still would not call it austerity for the same reasons I rejected the charge levelled at the 2018-2020 Pakatan Harapan government: at that time, total spending and the economy itself actually grew. For 2026, total government spending and the economy would very likely expand too. It is just not the Malaysian mainstream view to expect a recession and an aggregated government spending cuts in the next 12 months. (Still, it does not help that the Anwar Ibrahim-led government itself uses the language of austerity…)

I find the cuts disagreeable though understandable.

Disagreeable because, for instance, to have RM3 billion worth of non-critical spending within the Ministry of Health that suffers from all kinds of manpower and facility shortage sounds incredible. So outrageous that even the Ministry of Health is contesting the cuts. One would think that if there were indeed that size of non-essential spending, it should be redistributed to essential services within the ministry instead of being redirected towards fuel subsidies that are not just unsustainable financially, but wasteful in terms of opportunity cost at a time when economies are competing at the technological level that could redefine future growth in a big way.

Ideally, what should be cut instead is the fuel subsidy spending, which the latest policy has failed its purpose. The regime was designed to save money but the truth is, it was designed to do minimal work during a time of low petroleum prices.

Just imagine the kind of policy we could run based on the amount used and to be used for fuel subsidies this year alone. We could turbocharge electrification throughout Malaysia and address the energy prices more sustainably. Fortify our health and education system to meet ongoing and future challenges. Build larger and stronger public transport network, which also reduces out dependency on petroleum. Provide very large cash transfer programs, which is a superior form of assistance versus subsidies. We could even pay Sabah and Sarawak large petroleum payments and address the cause of that one episode of national divisions.

Nonetheless, the cuts are understandable from various aspects. The war could end soon, somehow. Trump always chickens out. Alternative source of crude oil could be found soon, a betting man could say.

But the most important of them is the national election, which could happen as early as this year. In fact, some state elections are slated for this year, which shows Anwar Ibrahim is running out of options. Inflation negatively affects voters’ satisfaction with the government of the day. And after the electoral disaster for Pakatan Harapan in Sabah along the general discontent faced by the coalition within its own camp (with Umno sharpening some long knives in the passenger seat), anybody in PH seeking reelection would think twice before committing to an energy price hike.

For Anwar Ibrahim, it is doubly so because he and his allies have spent their political capital on self-serving items that include Azam Baki, the Sabah corruption and corporate scandals. These actions easily wash out actual (though limited) reforms done by the government. Not to mention, PH (and PKR especially) have spent an outrageous amount of time fighting its own base instead of its opponents.

As a result, in the PH tank there is no more political capital to be spent on tough policy for the common good at the non-instant gratification horizon. That is a tragedy for a coalition that ran reformasi as a slogan. PH has always needed to use its political capital for tough decisions. Close at the end of the line, it is plain to see that capital has been misspent on political machination that would never inspire confidence among the public, or fire the imagination of the PH base.

[1] — The government has decided to raise air-conditioning temperatures in all its offices as part of austerity measures and to cut down on energy spending. [Austerity: Govt turns up the heat, raises aircond temps, to relax dress code. Malaysiakini. Zarrah Morden. Zikri Kamarulzaman. April 2 2026]

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Books, essays and others Conflict & disaster Politics & government

[3002] Reading George Orwell’s Homage to Catalonia or… “Nak PN ke?”

I suppose if we are intent on finding similarities between two events however different they are, we would find it one way or another. Some of us are wired to find patterns or connections, even where none exists. A cat in the clouds that sort of things. Apophenia.

I kept telling myself that while reading George Orwell’s Homage to Catalonia recently. However I tried adjusting down my pattern-finding bias, my mind kept on returning to contemporary Malaysian politics each time Orwell describes the republican politics of the late 1930s Spanish Civil War. As I opened Wikipedia to understand the war through a wider lens, I thought, indeed, there was a lesson, or two, from Spain for Malaysia.By Hafiz Noor Shams. Some rights reserved.

The differences between the 1920s/1930s Spain and the 2010/2020s Malaysia are aplenty. Spain experienced multiple military coups during those decades that makes Thailand a more appropriate comparison instead of Malaysia. And the Spanish conflict was bloodier than what Malaysia underwent in the 2010s and 2020s: our currently political conflicts are more boring when compared to the Spanish passion of the interwar period.

But if the Spanish Civil war was to be stripped of its details and the conflict made general, there are parallels to the today’s Malaysian reality. And the parallel is this: by the 1920s, support for the traditional powers—that is the monarchy along with the religious Christian class—was in rapid decline (within Malaysian context, throughout the 2000s and the 2010s, traditional power holders in the form of Umno suffered sustained severe erosion of support). So much so that by 1931, the king fled country over rising republican influence. Soon, the Second Spanish Republic was established (again here within Malaysian context, that runs parallel to the election of Pakatan Harapan as the federal government in 2018).

The Republic went through some difficulties right from the beginning. The traditionalists were feeling the heat of radical reforms. Land redistribution and restrictions imposed on the Church from owning properties were proceeding rapidly and pushing the traditionalists out of power further. Meanwhile, weak official responses to certain events that favored the traditionalists left republican supporters thinking the government was betraying them. All this took place with the Great Depression happening in the background. Times were just tough for almost everybody. This feels all too familiar for the 2020 Malaysia.

For the 1930s Spain, the political tensions eventually boxed everybody into an armed conflict. One on side was the republican government supported by the communists, the anarchists and the liberals, who are largely urban dwellers supported by the Soviet Union and Mexico. On the other side were the nationalist rebels comprising the monarchists, Christian conservatives and a group of fascists. By and large, the nationalists were rural folks backed by Nazi Germany and Fascist Italy.

Of interest is here the divisions within the republican ranks, which is one of two main subjects of Homage to Catalonia (the other being war conditions experienced by Orwell). By 1937, a year after the civil war officially began, republican politics was becoming immensely complex but it could be generalized as a competition between the anarchists and the communists. While there was a republican government at the national level, various institutions and cities were controlled by different factions of the republican supporters, with the anarchists and the communists being the more influential factions.

The anarchists wanted a revolution in the sense that workers would control the means of production. The communists wanted those means controlled by the state. The rivalry created a civil war within a civil war, which the communists won and purged the anarchists from government (while I am in no way stating that Rafizi Ramli is an anarchist, the leading-PH party PKR did push Rafizi aside). That communist victory was irrelevant however. So weak was the government from infighting that they eventually succumbed to the fascist rebellion led by Francisco Franco, who would hold on to power for the next 40 years.

Orwell, who was fighting for the Spanish republic with the anarchists, saw the purging as a betrayal, which is perhaps the same feeling many Pakatan Harapan supporters currently feel of the current government. In fact, Orwell writes several pages about being disillusioned, which again, a feeling that appears to be widespread about Pakatan Harapan supporters.

Yes, he felt betrayed but the realist him wrote something for the disillusioned:

As for the newspaper talk about this being a ‘war for democracy’, it was plain eyewash. No one in his senses supposed that there was any hope for democracy, even as we understand it in England or France, in a country so divided and exhausted as Spain would be when the war was over. It would have to be a dictatorship, and it was clear that the chance of a working-class dictatorship had passed. That meant that the general movement would be in the direction of some kind of Fascism. Fascism called, no doubt, by some politer name, and—because this was Spain—more human and less efficient than the German or Italian varieties. The only alternatives were an infinitely worse dictatorship by Franco…

Whichever way you took it it was a depressing outlook. But it did not follow that the Government was not worth fighting for as against the more naked and developed Fascism of Franco and Hitler. Whatever faults the post-war Government might have, Franco’s regime would certainly be worse. [George Orwell. Homage to Catalonia. 1938]

In other words, “Nak PN ke?”

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Economics Politics & government

[2991] Malaysia’s 5G network: the search for the second-best solution has gone awry

Malaysia’s 5G policy is rife with unnecessary controversies. We could have a plain vanilla rollout plan but the power that be likes it complicated and here we are now. Perhaps, this is the hallmark of the Pakatan Harapan government: the more complicated it is, the better.

That vanilla rollout plan—very likely the best solution available—was this: auction the 5G spectrum to the highest telco bidders with the sufficient competencies and then let the winners carry out the necessary investment needed to roll out the 5G service. Malaysia has done this before with its 4G technology and that model worked reasonably well.

The ‘best’ here is qualified: it is from the government’s point of view. And the vanilla plan is a simple, transparent and a proven process. It provides the government with billions of additional revenue that Putrajaya needs for various pressing public purposes. While consumers will bear this cost in the form of high telecommunication fees, the market-based approach will allow the government to reallocate resources from high profitability private sector to the public sector (like healthcare, education and/or even defense that are in dire need of funding).

However, the market-based approach ignores a number of concerns that might be valid. Some concerns are redundant infrastructure/investment, slow rural rollout, vertical integration among the telcos, and higher cost to the consumers. Expanding these points briefly:

  • Redundant infrastructure: there is an argument that 5G and overall telco infrastructure are a natural monopoly: it is cheaper (and more efficient) to build a comprehensive infrastructure instead of multiple redundant networks with holes in the coverage (yes, there are cases when competition is inefficient). This argument goes hand-in-hand with economies of scale to be had with one giant infrastructure instead of having multiple networks.
  • Slow rural rollout: telcos had rolled out 4G technology slowly in the past by focusing on urban areas and delaying investment in the countryside. This is understandable because telcos have to get their returns fast and the cities are the gold mines. Investing on the countryside came much later because the returns here lower compared to the cities. I personally find this unconvincing because 5G technology (as far as I understand it… but I am happy to be corrected) is not meant for industrial and commercial uses. 4G should be able to cater to typical consumer usage.
  • Vertical integration: Here, the concern is telcos will enjoy vertical integration (the public is used to the idea of horizontal monopoly, but different kinds of monopoly exist), which is a control over a swath of telco value chain. This kind of control will allow telcos to enjoy much higher pricing/market power (basically, higher profit margin) versus a model without such integration.
  • Higher cost to end-consumers: The auction cost borne by telcos, their redundant investment cost and the effects of vertical integration will be passed to consumers. A telco price war could mitigate some of these problems but after controlling for that and other pricing regulations, telecommunication fees here will likely the highest compared to other models that exist out there.

I have summarized these points (and more) in a table below, taking into account how it affects 3 relevant parties: the government, the telcos and consumers.

Summary of 3 5G models in Malaysia with 3-party evaluation

These concerns are among the top reasons behind the search for the second-best solution in the late 2010s. That second-best solution in the end morphed into the single wholesale network that Digital Nasional Berhad is. Under the SWN setup, there are no auction while infrastructure investment cost are pooled by all (participating) telcos. Meanwhile, the government via DNB will regulate a 5G rollout plan more tightly so that rural locations do not get left behind. In summary, we have a single infrastructure, theoretically faster rural rollout and lower cost to consumers relative to the market-based option. Given this setup, it is appropriate to call this as a consumer welfare-maximizing model (line #2 in the table above).

Not everybody is happy with the best solution (hence, the search for the second-best): consumers and politicians who regularly play the political of living costs do not like it because it is costly. And Pakatan Harapan tends to play the politics of living costs by too much, as I have argued before. That politics affected the government of the day.

And yes, not everybody is happy with the second-best solution: telcos do not like it because they do not get vertical integration—to put it differently, they do not get to control the infrastructure. Instead, they get is a shared infrastructure with the government having a stake in it. All this points to lower profitability relative to the market-based approach.

However, awkwardly, the government is unhappy with the best and the second-best solution (for reasons I will not go into but which highlights the fact that there are more than 3 parties involved). And they have decided to deviate away from the two models. But instead of instituting improvements, the government appears to be taking the worst aspects of the first two models (see line #3 in the table). For the government, they get no auction revenue and weaker control over 5G infrastructure. The only real winners in the deviated model are the telcos since they do not face auction cost, they get full control over their networks and eventually, consumers will have cough out money for all that. This is ironic given how close the politics of living cost is to Pakatan Harapan.

Another point behind the deviation is the undermining of the second-best approach. The current policy adopted by the government effectively is dismantling the SWN and encouraging telcos to do individual and redundant networks. Because of the way the SWN/DNB works, telcos can pull out of it and join the second network. There are even talks for the third network and it is not hard to imagine almost telcos will have their own network if things go as it is. The fragmentation will present a challenge to profitability (or even viability) of the SWN model: individual telcos will only invest in profitable (largely urban) areas while DNB will be forced to invest in non-profitable (largely rural) locations, which will guarantee the failure of the SWN model.

The logical end to the current policy is as outlined in the line #3 in the table: the negative effects of market-based approach but without its benefits for the government and consumers, together with the negative effects of the second-best solution without its benefits for the government and consumers. To reiterate, the winners will be the telcos.

Winners and losers of the current Malaysia 5G policy.

Looking back, the search for the second-best approach was unwise, especially when the best approach was simple, transparent and a proven successful process. Opening the door to the next best solution has now led us to the worst of solutions. That search has now gone awry, leaving a complicated inefficient set of telecommunication policies.

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Politics & government Society

[2975] Do not blame Muda by too much

Ralph Nader was a popular figure in some of the progressive parts of America. He gave speeches in Ann Arbor several times when I lived there, and once ahead of the 2004 presidential election, he had to defend himself from vote-splitting accusation. In 2000, Al Gore lost the presidential election to George Bush with the narrowest of margin, with the Naders’ Greens won substantial votes as the third party candidate. Given that Nader and the Democrats’ bases overlapped, it was easy for bitter Democrats to claim that Nader took votes away from Al Gore, and paved the way for Bush’s presidency. Nader defended himself by saying that if he did not put himself on the ballot, those who had voted him would likely have not gone out to vote anyway.

I see Pakatan Harapan supporters blaming Muda for vote-splitting, and for easing Perikatan Nasional’s advances in Selangor. For a number of seats PH lost, the loss margin was smaller than the votes Muda won, even as Muda lost all of their deposits.

And it is easy to dislike Muda this time around. The episode in Bukit Gasing was Muda’s act of self-sabotage. Their asset declaration exercise was less than truthful, and so, to me, insulting. More than several candidates were nothing more than rich kids with little understanding of society or policy. Their campaign messages were jumbled up badly, confusing local, state and national policies all at once. I came out of the 2 weeks campaigning period from a position of neutral-to-mild skepticism near the beginning, to that of a dismissal by voting day. The latest set of candidates undid some good work earlier ones like Lim Wei Jiet have done.

Yes, it is easy to dislike Muda but Nader’s defense applies here.

The low turnout suggests PH bases were uninspired this time around. PH’s pandering to the deep conservatives on the far side is one possible reason for these people not to go out and vote. And there are people, who voted for PH the last round, openly said their would vote for a third choice as a sign of protest.

So, if there was no Muda, it is hard to say whether those Muda votes would have gone to PH or BN.

But more than that, for every vote Muda got, there were more PH voters who did not go out and vote. Blaming Muda is an excuse to ignore the much bigger point: PH base is dissatisfied. PH is committing the same mistake PH 2018-2020 did: trying to get the votes they could never get on the far side of the spectrum, at the expense of the middle voters and PH bases. And these voters protested and did not bother to go out.

This dissatisfaction has to be addressed.