Categories
History & heritage

[1678] Of Sailendra and Srivijaya

The relationship between Srivijaya and the Sailendras has always been problematic to me. Initially, I had believed that the two were separate but closely linked entities but the truth is, the relationship is far more complex than that.

Srivijaya of course was the confederation of Malay states or rather, cities with the principal center being Palembang on Sumatra. The principal city did move from time to time to Jambi but Palembang was the main center of power for most of the times. From Palembang, Srivijayan influence radiated outward toward the Isthmus of Kra, western Borneo and central Java. It also controlled several areas on the bank of the Mekong until Jayavarman II declared independence to establish the Khmer Empire.

The nature of the Sailendras is more mysterious to me. They ruled over western and central Java, considerably far from Palembang but yet, they played a huge role in Srivijayan politics. Now, the question is, did the Sailendras exist independently of Srivijaya? Was Sailendra part of Srivijaya or merely a faithful and reliable ally? Was the Sailendra a kingdom or a noble family typical of a feudal society?

The background of several maharajas of Srivijaya further does not make the situation any clearer. The 8th century maharaja Dharmasetu was not a member of the Sailendras but he was mentioned as the head of Sailendra. Succeeding Dharmasetu as the maharaja was his son-in-law, a Sailendra. Samarantungga, another maharaja in Palembang, was a member of the Sailendras whom married Dharmasetu’s daughter, Dewi Tara.

The son-in-law which became the maharaja, known as Vishnu, was the one that started the construction of the Borobudur. Here is yet another question: Srivijaya was known for its Buddhism while the Sailendras were Hindus. Why a Sailendran would build not only a Buddhist monument, but the largest Buddhist monument in the whole wide world at its time?

More question: what happened before Dharmasetu? What was the nature of Srivijaya-Sailendra relationship before Dharmasetu and during Dharmasetu’s reign? Why did the Sailendra hold a special place within Srivijaya?

By the time of Vishnu, the one thing that I know is that the Sailendras married into the existing Srivijayan royal blood and from there on, they took over the helm of Srivijaya. After Vishnu, the Srivijayan throne went to Samarantungga, yet another Sailendran. His son Balaputra also became the maharaja of Srivijaya.

Balaputra began as a weak head of the Sailendra. During this time, the Sailendras saw their influence being challenged by the Sanjayas. Now, the relationship between the Sailendras and the Sanjayas is another issue lost in history. That notwithstanding, The Sailendras were forced to leave Java by the Sanjayas during a power struggle in the 9th century. The Sailendra retreated and settle in Palembang, the home city of Balaputra’s mother, Dewi Tara. After the overthrow of the Sailendras by the Sanjayas in Java, Balaputra became the maharaja of Srivijaya.

After Balaputra, somehow, the Sailendras ceased to come up in my reading despite the fact the Srivijaya lasted for at least another 400 years. This could be explained by the expulsion of the Sailendras from Java by the Sanjayas but this that would treat the Sailendras as a kingdom, and not a family, which is another cause for confusion.

But in any case, the Sanjayas continued to build the Mataram kingdom. They ruled of western and central Java until Srivijaya eliminated them in the 11th century. As a side note, the fall of Mataram led to the formation of a Javanese royalty by the name of Airlangga to build the kingdom of Kahuripan. This kingdom is the precursor to the kingdom of Singhasari which later led to the Majapahit kingdom. The Srivijayan empire came to an end when Majapahit occupied Palembang and Jambi in the 13th century.

It is worth noting that the rivalry between the Sailendras and the Sanjayas may well be the beginning of the famed Malay-Javanese rivalry.

To make matter more confusing, the Sanjayas were actually part of the Sailendra dynasty.

While the home of the Sailendra was central Java, they were not of Javanese origin. So for from my reading, they might have come from Sumatra, Funan or India. The strongest possibly in my opinion on the moment is that they came from Sumatra. The reason is that Old Malay instead of Sanskrit were extensively used in matter related to the Sailendras. But I suppose, nobody knows for sure.

Categories
ASEAN Economics

[1677] Of greater trade with monetary union

It was one morning during one of those ugly winters in Ann Arbor when I found myself sitting close to the front row of an economics class. The professor sounded odd but then again, I am sure I sounded odd to my friends here.

Regardless, with me still half awake, I heard the professor say something about the amount of trade between Vancouver and Seattle corresponding to the distance between the Earth and the moon. Was the professor nuts or maybe I was dreaming?

That statement was so out of this world that it halted my descent to slumberland. It turned out that the professor was discussing the relationship between trade and currency. Yawning widely, I straightened my back to have another shot at staying awake.

On the screen up front, there was a table listing trade volume between various US cities and with cities in other countries. There was a typical regression model projected on the screen too. I do not particularly remember the exact equation but the conclusion was clear: monetary union encourages trade.

Trade volume between New York and Seattle was much higher than that between Seattle and Vancouver. This was despite the fact that New York is located on the East Coast while Vancouver is situated on the West Coast just a few hundred miles up north where the people speak rather strangely. New York and Seattle, of course ,use the US dollar while Vancouver uses something else entirely.

The whole class then mentally swam across the Atlantic to trace the evolution of the Euro. The conclusion was reinforced: trade substantially increased after the Eurozone countries adopted a single currency.

The virtue of a single currency was hammered home further by another graph indicating how fluctuation of exchange rates between countries within the Eurozone virtually disappeared: uncertainty eliminated. The professor with his New Zealand accent announced that the Europeans got tired of the exchange rate fluctuation so they decided to get rid of it altogether.

I was stranded somewhere in Minneapolis when the Euro was officially introduced to the public on Jan 1, 2002. Reactions to the introduction ranged from celebratory to bitterness at the loss of local currencies. Anecdotes by individuals having trouble adjusting to the new reality were amusing but I was merely a curious observer across the Atlantic.

Close to three years later, I found myself in a class undergoing official economic training in Ann Arbor. That particular class made me an Aseanist: I became a monetary unionist. I want to see Asean repeating the same experiment the Eurozone is undergoing, hoping this will bring on yet another halcyon period of prosperity for Southeast Asia.

The years leading to the late 1990s were great but those days are gone. Sure, we have learned one or two things from the Asian financial crisis but nothing beats the feeling of being on top of the world. When Deng Xiaoping visited Southeast Asia back in those days, he was expecting to see backwaters cities but boy, he had the shock of his life. Not only were the cities modern then, they out-rivalled those of China’s. Nowadays, the feeling is almost reversed.

The rise of Southeast Asia is a story of trade and it goes all the way back to the era of Srivijaya in the first millennium. The prosperity of this region has always been linked with trade. The prosperity of this country as a small open economy has always been linked to trade.

Asean already has a regional free trade agreement in place and progress so far has been encouraging, especially when compared to the disappointing Doha Round. We could probably see the full effect of the FTA by 2015 when all tariffs imposed on almost all Asean-based goods must be lowered to 0%. That should fuel inter-Asean trade but as demonstrated by the experience of the Eurozone, trade could be enhanced further with the introduction of a monetary union.

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

p/s — the article was first published by The Malaysian Insider.

Categories
Economics

[1676] Of are you bitching about higher fuel prices?

I have a suggestion: quit smoking.

I suspect that if you stop smoking, your may be able to maintain your expenditure to pre-June 5 level.

As for me, while I have some reservation at how the prices were raised, I cannot wait for August 2008 when local fuel retail prices are expected to achieve parity with world prices. Please raise your glass to a good economic policy.

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

p/s — this entry is meant for Malaysian audience. As pointed out in the comment section, this idea does not apply in other places.

Categories
Economics

[1675] Of a sustainable economic policy requires political sustainability

With the liberalization of the retail fuel market is making headlines on almost daily basis, the volume of liberal-friendly announcement has been dizzying. I am happy of the trend seen within the local retail fuel market of course but I fear the rate of change may be too fast for it to last for long.

Subsidy, as always, suffers from deadweight loss and that is the crux of any objection to it from mainstream economics. Other factors include over-consumption and externality: rather than internalizing externality, certain subsidies only make the matter worse. Affordability has been cited as a reason too but trade-off is a far better reason to oppose subsidy. Nevertheless, both reasons call for at least a reduction of subsidy, if not elimination.

The most neutral argument against subsidy, at least within the current Malaysian context, is the distribution of subsidy. If subsidy is a must, then I think some liberals would be happy to see some improvement in the subsidy delivery system. Typical economic tools which are superior to blanket subsidy ranges from cash transfer to tradable coupons to tax cuts.

After countless criticism aimed at the badly designed subsidy policy, it is heartening to observe that the government has finally endeavored to undertake targeted mechanisms and has actually considered money transfer — the most efficient of all welfare policy as proven by the Second Fundamental Theorem of Welfare Economics[0] — rather than relying on blanket subsidy which is always a blunt tool to help the poor while ruining the economy. If appeal to liberalism fails, then appeal to economics should do fine.

The direction of policies regarding retail prices of fuel is a cause for all liberals — the original liberals, I must add — to jump up and down until the floor gives way and then hold an all night long party in the basement. The speed at the current administration pursuing the matter is something else altogether. The political sustainability of the policy is a matter of concern.

Yes, it is a great tragedy that politics is not necessarily aligned with economics. What good in politics is not necessarily good in economics and vice versa. A sudden elimination of subsidy has a high chance of creating a backlash which may be detrimental to liberal policies. It has been reported that retail fuel prices will be floated to market prices in one go[1]and it is definitely not hard to imagine the kind of opposition such abrupt policy could garner from the public.

What we need are sustainable policies, both economically and politically. A sustainable economic policy without political sustainability is perhaps as useless as an unsustainable economic policy. A policy has to survive considerable amount of time for it to offer noticeable change. A one-time policy which in many ways mimics unsustainable policy only provides a short-term euphoria and may as well suffer from something to the effect of Ricardian equivalent.

Shock therapy may cause revulsion and eventual rejection and we do not need that. The best way to promote liberal economic policy within a heavily welfare-based society is through incremental approach. Gradual liberalization offers liberal policies the political sustainable we need to achieve economic sustainability. I would personally prefer a scheduled gradual reduction of subsidy that will eventually achieve parity with the world market price. Such measured liberalization has a better chance of weathering destructive populism.

There may be something behind this sudden fad of liberalization within the current administration. The magnitude of change is too large to not to attract suspicion. Perhaps, this is an act of desperation. Perhaps, the economic sustainability of the flawed subsidy policy has become too great for the administration to shoulder that political sustainability of the policy is entirely ignored

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

[0] — In short, the Second Fundamental Theorem of Welfare Economics states that any efficient outcome could be achieved through lump sum transfer of wealth. See Fundamental theorems of welfare economics at Wikipedia for more explanation.

[1] — KUALA LUMPUR, June 3 (Reuters) – Malaysia will scrap fuel price controls in August and allow pump prices to rise in line with market rates under government plans to cut it’s burgeoning subsidy bill, the domestic trade minister said on Tuesday. [Malaysia to scrap fuel price curbs, use market rate. Reuters. June 3 2008]

Categories
ASEAN Conflict & disaster

[1674] Of Malaysia has a deal with the MILF

The Moro Islamic Liberation Front (MILF) has allegedly struck a deal with Malaysia over Sabah, and that’s why the rebel group is silent on the claim issue, a high-ranking Palace official said.

This is supposedly the reason why the MILF wants Malaysia to remain as the head of the international monitoring team overseeing the ceasefire agreement with the government, the official who requested anonymity said.

The source added that Malaysia has been pressuring the Philippine government into resuming the peace talks despite the ”unconstitutional” demands of the MILF for its future homeland in Mindanao, because of the alleged agreement on Sabah. [MILF, Malaysia have deal on Sabah—official. The Manila Times. June 2 2008]

The situation in the Philippines is rather worrying.