Categories
Economics

[2278] Of capital control, expectations and policy irrelevance

There has been a low clamoring for capital control for a while now. The latest call was made by Member of Parliament Charles Santiago of DAP.[1] Regardless of the pros and cons of capital control, its imposition, if it is to be imposed, needs to be done relatively quickly without much warning. Slow imposition in form of heated debate among policymakers may reduce its effectiveness. Here is why.

Proponents of capital control fear hot money in a sense that when it is withdrawn, it would affect the local economy badly. While capital control is aimed typically at hot money, it also affects other flows that are more innocent in nature in the eyes of these proponents.

Liquidity is important. With the reduction of liquidity that what capital control causes, individuals, foreigners especially, will be less willing to bring in money into a country that imposes control. Those who already have money in a country where there is risk of capital control might want to take money out to preempt the control.

The greater the call for capital control, the greater the risk of actual implementation will be. Forward-looking owners of fund will do the necessary to reduce their risk of low liquidity. This means the impact of capital control can be as devastating as the impact of withdrawal of hot money under a system of no control. Money flows out either way. It is just a matter of when. That may make capital control as a tool as somewhat irrelevant.

Capital control can be relevant if the announcement and implementation are done in a sudden move. Sudden implementation preempts expectations build-up.

But there lies the catch-22. Talk about it and it becomes irrelevant. Not talk about it and there is no call for control, hence no control. For a secretive government that does not tolerate free speech however, this might not apply.

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

[1] — KUALA LUMPUR, Nov 23 — A DAP MP wants Putrajaya to impose capital controls like that which former prime minister Tun Dr Mahathir Mohamad enacted in 1997 to prevent what he called an impending surge of hot money into the local market would put Malaysia into a tailspin similar to the Asian Financial Crisis.

Klang MP Charles Santiago explained that this time the hot money would come from the US Federal Reserve’s move to spend a whopping US$600 million (RM1.8 trillion) to purchase US Treasuries over the next eight months under its quantitative easing programme. [DAP MP wants Malaysia to impose capital controls. Clara Chooi. The Malaysian Insider. November 23 2010]

Categories
Photography

[2277] Of Glebe Street Fair

I love street fairs. Ann Arbor has the Street Art Festival and the Top of the Park, as part of its annual summer festival. It makes the small town livelier and it makes the sweltering summer easier to live through. Too bad I do not have too many photos of my Ann Arbor days. The best I have of the summer festival is this pathetic photo. My old hard drive crashed, bringing down with it four years worth of recorded memories. Photos, writings, all of it.

But there are new memories to be made and Glebe has its own street fair. It is not as big as Ann Arbor but it is just as fun. And I had some chance to practice my photography skill. And these three are my favorite shots.

I like this picture because of the girl and the question of ethics.

I love shooting strangers but as a libertarian, the guilt of invading their privacy haunts me. This guilt has grown ever since I bought a lens capable of zooming up to 200mm. I have decided to address this problem by not posting any of it online.

This particular picture of course is a different story. The performance is part of public affair but it demonstrates something about guilt. The problem with a zoom lens sometimes is that it makes as if the person I am interested in is looking directly at me (which is unlikely here given the distance and the crowd I was in), looking askance. And with a stare like that, one would freeze, forcing one to ask, is this right?

As for the picture itself, the lighting could be better. Maybe I should have come closer to the stage and switched to a lens of greater aperture size.

This is just amusing. It is a common trick to pose like a statue. Painted in the appropriate colors, an unsuspecting visitor would be shocked to see a moving statue.

All I want to say further here is that I like the composure.

This has to be the most entertaining street performance in the whole fair. Witty lyrics. Hilarious strained, old wild wild west American accented voice. Howdy!

I had a good angle here. The lighting was great as well. Five minutes into the shooting, several other photographers sat beside me to shoot the singer-cum-guitarist-cum-harmonicists.

Categories
Liberty Politics & government Society

[2276] Of it requires an answer

At a recent public lecture in Sydney, Australia, Anwar Ibrahim said he avoids answering which he aspires to: a secular state or an Islamic state. He reasoned that the issue is contentious and unproductive to engage in. He believes what exists instead is a quasi-secular state, and a hypocritical one at that. He went on to state that the problem revolves around hypocrisy. I left the lecture dissatisfied with the message. Immediately after he ended his speech, I began to wonder about the kind of consistency he was looking for.

He argued that part of the reason why the issue is contentious is that both mean different things to different person. For instance, there are opponents of secularism who believe that secularism is anti-religion. That illiberal brand of secularism stifles religions in the public sphere, like what happened in Turkey before. And then there are proponents of secularism who assert that secularism is neutral of religion. Backed by liberal principles, a liberal secular state will treat all religions equally as long as those religions do not infringe on individual liberties. I myself subscribe to this idea.

Being the glue that holds Pakatan Rakyat together, it is completely understandable why he avoids the question. If anybody needs a reminder, DAP and the Islamist PAS are both the main component parties of Pakatan Rakyat. Both have rattled sabers over the matter within the Malaysian context. In Sydney, he stressed the need to build consensus. Fair enough.

The avoidance, however, is problematic when he is critical of the double standards in the implementation of Islamic law in Malaysia, where the rich and influential get away with what Islam frowns at while others get punished. That criticism relies on the idea of equality before the law. Such equality itself is a sound concept. Yet, not all equality ranks equally in terms of preference.

While the application of unequal weight of the law is distasteful, I shudder to think of a situation of equal implementation of Islamic law, especially in its current form in Malaysia. This is because it violates individual liberties — especially for those whom the state considers as Muslims — such as freedom of conscience. That translates into law that states whom a person can marry, what he or she can eat or drink, what a person can believe in, etc. It excessively dictates one’s personal life. An Islamic state that runs on Islamic law necessarily does that.

Religion has always been a personal, private matter for liberals. When religion is a private matter then the state has no say, freedom has more opportunities to flourish. This is why liberals prefer a secular state with respect to any religious state, while holding all other concerns constant. The opportunity for liberty to flourish doubles when there are guarantees for individual liberties within a liberal democratic framework, which addresses the problem of tyranny of the majority.

Criticism of hypocrisy and the existence of preferences in different kinds of equality essentially introduce back the question of secularism and Islamic state. The question does not need to be framed in such a stark contrast. Forget the labels. Ask instead, will religion, specifically Islam, be used to dictate a person’s lifestyle? More specifically, will it be used to dictate a Malay’s lifestyle?

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 Malaysian Insider on November 18 2010.

Categories
Photography This blog

[2275] Of wider template, with ivy

I said I was working on it. I finally decided to do it. I tweaked the code for this blog to make the template wider to accommodate larger pictures that I post. I originally posted pictures with the width of 500px only , partly because I was being paranoid about people stealing it, about bandwidth and mostly because of the template of this blog. The writing room was only 500px wide.

Not any more.

Also, my new banner is made out of this picture:

This picture in turn was taken during a warm summer day here:

Categories
Photography

[2274] Of Galluzzo’s, Glebe