Categories
Liberty Society

[1868] Of they want to divide us, rule over us and steal from us

It is common for advocates of a greater role for Islam in the public sphere in Malaysia to hold the position that any such expansion concerns only Muslims and no one else. Since it concerns only Muslims and hence internal matters, others identified as outsiders need not be concerned or participate in any discussion about the expansion.

While it is an attractive take on the issue — especially in a country like Malaysia where racial and religious issues are a powder keg — because it minimizes the potential for inter-communal exchange, it insidiously threatens individual liberty.

When the religious edicts on tomboys and yoga were issued, ABIM expressed its dissatisfaction against adherents of other beliefs criticizing the rulings. In the matter of implementation of hudud, PAS tried to coax the non-Muslims from opposing the party by stating only Muslims would come under the jurisdiction of such a law. Others who share a religious conservative outlook but have little or no association with ABIM or PAS have aired similar views.

The underlying rationale that outsiders need not worry is the idea that a community is presumed to be homogenous and specific rules apply to the community. Those outside of the community have no locus standi in expressing their opinion on the internal matters of the community.

In the case of those sympathizing with the argument of ABIM and PAS, the homogeneity is based on being Muslims. Or rather, more accurately, the prerequisite for membership into the community is for one to be recorded as a Muslim by the state. Actual personal belief itself is mostly irrelevant since the Constitution of Malaysia establishes Malays as automatically Muslims. Sincere conscience is only a childish concern belonging to the Wonderland where Alice lives.

Upon the clear demarcation of this imaginary boundary, it sets the stage for them to impose religious rules over the community. What the limitation does is that it shuts out considerable opposition to the agenda of expansion from participating in the debate on the roles of religion in the public sphere. In doing so, it weakens the group of individuals deemed as insiders opposing the expansion, which erodes individual liberty through legitimization of coercion to create uniformity. It separates the liberty-conscious individuals from their allies, forcing those who guard their liberty jealously to stand alone against tyranny. After all, the best way to transgress individual rights is to use majority power to bully the minority.

The creation of an insider-outsider dichotomy and exclusion of outsiders from participating in the supposedly internal discussion is also a sign of intolerance of criticism. Rather than deal with the criticism through frank discussion, voices other than theirs are suppressed.

This division is a classic case of divide and rule. It was applied by the colonial administrators of the 19th- and 20th-century Malaya in order to keep the locals easier to manage. Barisan Nasional with its racial-based political parties continued to practice the same policy to much success until recently. Now, here we are witnessing yet another group trying to do the same thing all over again.

It is through divide and rule that those pushing for greater roles of religion in public space insist that a community — the Muslim community in Malaysia — has a right to manage its own affairs without intervention from outsiders. Following the same track, these advocates would like to have the community be regulated by a standard which they would like to see imposed on all individuals unlucky enough to be deemed by them as members of the community.

These advocates may seem to fight for their community’s interest. There is nothing wrong in promoting the interest of a community in itself however but the danger here is when that interest flagrantly infringes on individual rights. It is worse when the promoters claim to fight for the community when a significant fraction within the community itself vehemently disagrees with the agenda of the promoters.

When the interest of any group seeks to submit individuals to the group’s desire, the interest has just turned into a form of oppression.

Oppression is not an exclusive concern of those labeled as Muslims and it certainly is not a concept exclusive to this issue. It could happen anywhere and anytime. It could happen in any community.

There are various diverse communities in this country but when there is threat against individual liberty in any community, then there is only one big community and that community is Malaysian society. Niemöller’s “First They Came”¦” poem succinctly describes why that is true.

Besides, those recognized as Muslims by the state undoubtedly make up the majority of the population. How is it possible for anybody to honestly believe that the minority groups would be left unaffected when something happens to the majority? Have we forgotten the controversy revolving around religious conversion or morals?

Most disappointingly, the argument set forth by the advocates is trapped in a communal worldview. Everything must be viewed in terms of community. This narrow worldview generalizes the individuals as drones, incapable of individuality. This is perhaps the legacy of years of the implementation of the divide and rule policy either by the British colonialist or Barisan Nasional.

The greatest victims are the individuals, and individuals must transcend the self-limiting communal thinking. The so-called internal matter ceases to be internal when it threatens individual liberty.

The transcendence, if it has not begun yet, begins by rejecting the rationale that outsiders have no standing to comment on the supposedly internally matters of the local Muslim community. It is imperative for the argument be rejected for its naive flaws, thrown out of the window for its frightening implications and into the fire for its insidious intents, especially when it adversely affects individual liberty.

And here is where the irony sets in. While the advocates seek to shut what they consider as outsiders out from discussions, they themselves are busy trying to regulate the moral and beliefs of private individuals. These advocates need to take a hard look into the mirror before labeling others as outsiders. The reason is that the only insider is the individual and everything else is the outsider, especially the busybody.

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

This article was first published in The Malaysian Insider on December 29 2009.

Categories
Sports

[1867] Of Cvitanich!

I think Ajax is doing just fine without Huntelaar. Though it is sad to see him leaving for Real Madrid, we now have Cvitanich!

He is definitely up to the task. Here is his first hat trick for Ajax, just in time to leave 2008 with a bang!

The first two goals:

[youtube]tq8-WakiWCo[/youtube]

The final goal:

[youtube]7Tj8wHayeOk[/youtube]

End score: 3 to Ajax, 0 to ADO Den Haag.

With that, Ajax is now second in the Eredivisie, just 3 points below AZ Alkmaar.

What a beautiful week this is starting to be. Happy holidays all!

Categories
Events Liberty

[1866] Of Freedom Academy 2009

The libertarian Malaysia Think Tank is organizing its second Freedom Academy this coming January.

Globalisation and the free market are taking a bashing. The global economic turmoil has resulted in claims that we are looking at the end of capitalism. And, for many years we have been told that globalization, trade liberalization, and capitalism are bad for the poor and for developing countries generally. But what does free market capitalism really entail? Are the criticisms justified?

University students, graduates, and young professionals from Malaysia, Singapore, Indonesia and Brunei are invited to attend Malaysia Think Tank’s second Freedom Academy which will be held on 16 — 18 January 2009 (Friday — Sunday) at Residence Hotel, UNITEN, Bangi, Selangor, Malaysia.

At this Freedom Academy participants will study in depth the true meaning and morality of capitalism, how globalisation has brought prosperity to developing economies, and why free market capitalism is still the way for forward.

Speakers from India, Pakistan, China and the United Kingdom will provide thorough and detailed analysis of how free market capitalism has benefited developing countries.

We are particularly looking for those sympathetic to, or are curious about, libertarian and classical liberal ideas.

Come and enjoy the Freedom Academy! You will be challenged intellectually and you will get an invaluable opportunity to network with like-minded friends. [Freedom Academy January 2009. 2008]

Deadline for application falls on Monday, January 5 2009.

If you are interested, kindly visit WauBebas.org.

Categories
Economics

[1865] Of Malaysia should capitalize on others’ spending

President-elect Barack Obama promises greater government spending to ward off the ongoing economic crisis in the United States. More than 1,000 miles to the southwest of the Aleutian Islands, the Japanese government proposes its largest ever budget. In it, Prime Minister Taro Aro incorporates record breaking government spending to ease the faltering Japanese economy. On the Asian mainland, China prepares to spend close to US$600 billion on public works to prevent its economy from cooling too fast.

These countries are important export destinations for Malaysian goods. In 2007, the US, Japan and China were the first, third and fourth most important export partners of Malaysia respectively. Combined, approximately 35.1% of Malaysian goods went directly to these three countries. This does not include items which find its way to third-party countries before reaching the three countries.

In discussing the global economic downturn, it is fashionable to cite the interconnectedness of the world where recession is contagious. Reduced economic activities in some foreign countries, especially in these three countries, adversely affects demand for Malaysian goods. In fact, Malaysian exports have been negatively impacted. As the cliché goes, when the US sneezes, the world catches cold. Malaysia, as proven, is no exception.

Less discussed is the reverse relationship, which is also true. Improved economic conditions of the major consumers of Malaysian goods will encourage exports. This realization is yet another important argument against greater government spending as fiscal stimulus in Malaysia.

It is important because the slowdown of the Malaysian economy is likely principally caused by the softening of external demand. The Malaysian economy only began to take a hit when the health of our trading partners went down south. With exports contributing to almost half of our gross domestic product, it is hard to imagine how the Malaysian economy could escape unscathed. Nevertheless, our internal demand remains resilient, as proven by the local retail and the automotive sector. Therefore, the problem plaguing our economy as with many export-oriented countries revolves around external factors and not domestic demand.

As much as I hate to say this, government spending may help in cushioning the impact of reduced exports in Malaysia. Given the current condition of the Malaysian fiscal deficit as well as the inherent policy lag of government spending as fiscal stimulus though, it may not be the best path to tread on. I continue to prefer long term tax cuts and tweaking the monetary policy as the way forward over government spending. The effects from these two policies could be felt relatively quicker than increased government spending. More importantly, it avoids the long term repercussions of Keynesianism, or, in all likelihoods, half-hearted countercyclical policies.

The Malaysian context notwithstanding, government spending may help the economy of China, Japan and the US. While these countries would suffer the side-effects of government spending as fiscal stimulus, they could experience shallower downturn and quicker recovery. This could prove to be beneficial to Malaysia.

This is where government spending of the three countries, the importance of the three countries to Malaysian exports and the cause of weakening Malaysian economic growth converge to petition against greater government spending as fiscal stimulus in Malaysia.

Malaysia could and should capitalize from increased government spending of its major exports trading partners while refraining from doing the same thing. It allows Malaysia to enjoy the benefits of the policy while evading the cost associated with the expensive solution. It circumvents the question of trade-off associated with greater government spending altogether.

Admittedly, this proposal is slightly guilty of free riding on others’ policies. Being a small economy compared to the three however, it is unlikely how a Malaysian policy to free ride would affect their policies. How can a matchbox toy car significantly affect a speeding prime mover is beyond the imagination of the sane. It is unlikely for these countries to complain about a Malaysian policy based on refrain and prudence.

The World Bank probably would not like this after issuing a statement to encourage governments all around the world to spend and spend till they drop. Ever since Paul Krugman won the Nobel Prize in economics not too long ago, almost everybody is a Keynesian nowadays.

Well, Keynesians love to flaunt the multiplier effect of government spending. What better time to test the magnitude of the multiplier effects other than right now? What better way to test the multiplier effect other than free riding?

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

This article was first published in The Malaysian Insider.

Categories
Economics

[1864] Of time to invest in junk bonds

The Economic Council is contemplating the establishment of an entity to guarantee bonds with low ratings.

The Economic Council, a high-level advisory body chaired by the Prime Minister, has proposed to set up an entity to guarantee bond issues with lower ratings.

Economic advisers to the government said the entity can help bolster the domestic bond market, which is expected to shrink 10 per cent to RM25 billion next year from an estimated RM28 billion this year.

It can also eventually help stimulate the local economy by guaranteeing debts raised by companies in key sectors like infrastructure and services to finance viable projects. [Bond guarantee plan. Zuraimi Abdullah. Business Times. December 25 2008]

Suppose that the plan goes through and lowly rated bonds are now guaranteed.

Consider the fact that lowly rated bonds — it could be junk bonds for all we know — offer high yield rates to compensate the inherent default risk any purchaser of the bonds face. Therefore, the issuers’ cost of borrowing is high.

Consider the fact that highly rated bonds offer low yield rates due to high repayment certainty it offers. The cost of borrow for highly rated issuers are low.

Now, if the junk bonds are guaranteed, which between the lowly rated bonds and the AAA-type would you choose, with all else being equal?

It should be the junk bonds. You get higher yield compared to the AAA while enjoying the guarantee, assuming the yield does not incorporate the guarantee.

Yup. It would turn the world upside-down.

The bonds with high default risk become the safest bonds in the local market by virtue of sovereign guarantee. With sovereign backing, the risk of default is practically zero, making badly rated bonds to be better than the AAA-type. The AAA then would have to seriously compete with the junk bonds for funds despite the obvious difference in risk profile.

Worse, the AAA would have an incentive to lower their ratings to qualify for the guarantee so that people buy their bonds. In fact, the AAA would have to offer higher yield rates to compete with the junks which are supposed to be crawling at the bottom of the table.

In other words, the guarantee would punish those with good records while rewarding those with bad or unproven standings.

If the yields are adjusted to incorporate the guarantee, risk-adverse purchasers would still prefer badly rated bonds to goods ones by the virtue that it is safer than the better rated ones. Meanwhile, the cost of borrowing for the highly rated ones become more expensive than that of the junks’.

Either case, eventually, it would open encourage many to undertaken risky investments because the state would reward bad behavior and punish good behavior.

Blow up the bubble, please. And when it finally burst to cause untold damage, please blame it on free market philosophy.

And yes, do it with our retirement funds collected by forced saving too:

Shareholders of the proposed entity could include Bank Negara Malaysia and large institutional investors like the Employees Provident Fund, he said. [Bond guarantee plan. Zuraimi Abdullah. Business Times. December 25 2008]