Categories
Economics Society

[2807] Break-up the Bumiputra category into finer details

Race politics dominates Malaysia and our deplorable politics have us Malaysians as Bumiputras, Chinese, Indians and others.

At the center of it all is Malay politics. Yet, public statistics on Malay welfare are imprecise. This is true for household income and expenditure surveys conducted and published by the Department of Statistics. The surveys are the most comprehensive snapshots we have on the welfare of Malaysian households.

It is imprecise because the best we have to describe Malay welfare are not Malay statistics, but Bumiputra statistics.

The way the statistics is presented (or even measured) strengthens the flawed notion that the Bumiputras are Malays. Yet, we know the Bumiputras comprise not just the Malays but also the Orang Aslis in the Peninsula, and the Borneo natives.

Foreigners in particular are guilty of this but more unforgivably, so do the locals. When ethno-nationalist Malays want to back their point with hard data for instance, they would go to the household surveys and cite the Bumiputra figures as proofs, casually suggesting all Bumiputras are Malays with no hesitation as if there is nothing wrong with the statistics.

Our contemporary politics also means the recognition is not merely a pedantic concern. Sarawak parties especially are becoming increasingly important nationally, possibly convincing the federal government to spend more money there.

How can this be relevant? For example, I would like to know change in welfare of those Borneo native households as federal spending increases. It is not enough to claim they would do better because of the spending. We need data and it is certainly not enough with the Bumiputra net cast so widely.

So, as far as the category Bumiputra is concerned, I think it should be broken into its finer components to allow us to see exactly the state of various groups’ welfare.

After all, is it not ironic that for all the centrality of Malay politics, statistics on Malay welfare is not available on its own? We can know the income of the median Chinese and Indian households but we cannot know the median for Malay families. To belabor the point, what we know instead are Bumiputra statistics, which are at best a proxy to the state of the Malays. And we know it is a proxy because we know the Malays make-up the majority within the group. How big a majority? Interesting question, is it not?

And we also know how mean and median behave mathematically. Change in population will change both easily.

I have a lingering suspicion that the Malays are doing better than the reported Bumiputra average/median. My suspicion is based on the fact most Malays live in the Peninsula while the statistics show the Peninsula as a geographic group does better than the Malaysian Borneo (even when certain states such as Kelantan can do worse than Sarawak). The only way to conclusively address the suspicion is to look at the Bumiputra components cleverer than what we have been doing so far.

At the very least, regardless of my suspicion, improvement in reported welfare statistics with the Bumiputra category split into its constitutions can lead to better public debates and better policies. Without the split, we are forever condemned to debate from imprecise premises.

Categories
Conflict & disaster Photography Society

[2806] Do not blame the innocent refugees

This was back in 2011 in Paris. I was there at the height of the Arab Spring and also interestingly, during the emergence of French far-right parties in mainstream politics.

20110129Paris

I do not have much or anything new to say. It is late here in Kuala Lumpur, six or seven hours ahead of Paris. Yet, I still want to express my opinion that we should not discriminate or blame the innocent refugees for the horrible acts committed today in Paris by a group of Islamist terrorists.

I am angry at the attack and I am sure a lot of others do, especially in Paris. The senseless killing is outrageous whatever the excuse. But I am also angry at the mistrust the attack is creating everywhere.

I am disgusted reading responses from right-wingers who somehow think the refugees from Syria and elsewhere from the Arab world as causing of the Paris attack. The right-wing xenophobic policy recommendation is to stop the refugees from coming in.

But as many have highlighted, these refugees are running away from the same barbaric Islamic State which attacked the civilians in Paris today. These refugees are civilians too and they are as much a victim as Parisians.

The right way is to direct the anger towards the Islamic State, and not at the innocents who just happen to share, nominally if I might add, the same religion at the attackers.

Categories
Economics WDYT

[2805] Guess the Malaysian 3Q15 GDP growth

Growth in 2Q15 was bad but we know it due to the GST with all the front-loading spending.

The question now is, was the GST largely the one exerting negative pressure on growth?

In a very superficial way, growth should rebound in 3Q15 if the answer to the question is in the affirmative because it suggests consumption would return to normal.

If not, we should see worse growth in the last quarter, and possibly bigger trouble ahead.

Things are quite confusing for me at the moment because of the GST as well as due to low energy prices. Inflation has stopped being a useful proxy to demand and is out of wack. It is driven by cost factor and not really demand. I have not figured out how to handle this yet but things might only stabilize April next year, assuming energy prices remain at about current levels.

There are signs something bigger than GST is at work. The service sector is not doing too well. We know this from official 3Q15 statistics. Service growth was mostly pulled down by the finance sector, but retail growth also moderated. I am also hearing many anecdotes of personal hardship with greater frequency than usual. Some of my friends run businesses and they are not doing great either. I usually would dismiss anecdotes but I dare not do it this time around. There are just too many of them.

But there are good news. Industrial production did well, and so did construction and exports.

Net exports should give a big boost to the GDP, cushioning any expected slowdown in the domestic economy. I do not know how long the export strength will last, but for 3Q15, it looks like we had the two engine-model back. The weak ringgit might have a contributing factor, but I think it is a bit too soon to pass judgment about currency and competitiveness despite the temptation to claim so.

But, yea, the only reason I write this post is to do this poll:

How fast did the Malaysian economy grow in 3Q15 from a year ago?

  • 3.0% or slower (17%, 2 Votes)
  • 3.1%-4.0% (8%, 1 Votes)
  • 4.1%-4.5% (42%, 5 Votes)
  • 4.6%-5.0% (33%, 4 Votes)
  • 5.1%-5.5% (0%, 0 Votes)
  • Faster than 5.5% (0%, 0 Votes)

Total Voters: 12

Loading ... Loading ...

The official GDP figures will be released midday tomorrow.

 

Categories
Economics Politics & government

[2804] TPP exit clause makes sovereignty concerns irrelevant

Text to the Transpacific Partnership came out today. I have yet to go through it fully. It is massive and it can be technical. It is worse than Sejarah Melayu. It will take time.

Nevertheless, I attended a briefing at the trade ministry earlier today and I think I understand the gist of the most important chapters. My somewhat initial impression: there are damn lots of exemptions.

All these exemptions — including the continued maintenance of the Bumiputra policy, flexibility to government procurement for up to 25 years after signing/ratification much to the benefits of local firms and even what appears to be status quo for a lot of GLICs and GLCs — should allay nationalists, protectionists and anti-globalization groups’ fears that Malaysia is surrendering our policy space to foreign governments and multinationals.

In fact, there are so many exemptions that I am unsure I should support the agreement as strongly as I did previously, notwithstanding progress made on market access and tariffs. I have always understood that any FTA is not a real free trade. We live in a imperfect world and I realize that much, but the exclusions Malaysia won exceed my expectations. Hence, my surprise.

But the one clause that blows those ”sovereignty” concerns out of the water is the exit option stated in the last chapter of the agreement. The TPP allows any country to quit the group unilaterally by giving a 6-month notice without incurring any penalty.

The easy exit clause means most of the requirements under TPP, like the extension of copyrights from 50 to 70 years and protections for biologics, are reversible by simply quitting the TPP. I reject the sovereignty argument but, if joining the TPP means losing national sovereignty, then the ability to quit and to reverse those policies must mean Malaysia is always be in control of its policy space.

(Not everything is reversible however. For instance, as I understand it the WTO disallows import tariffs to go up from any point of time and it does seem the TPP’s lower tariffs would be applicable even in the case of exit… I am unsure how post-TPP-exit discriminatory tariffs would work within WTO settings however. We need a trade law expert to answer that hypothetical.)

At the very least, the exit option lowers the cost and risk of joining the grouping.

Whatever it is, I come from the perspective we should always strive to create a rules-based world and then makes the rules as transparent as possible. To say it differently, we should reduce the discretionary powers from the authority as much as possible whenever it makes sense. I suppose, this originates from my libertarian tendency to control powers, be it states, companies or individuals.

In any case, I am a bit disappointed with the concessions Malaysia won, especially in terms of government procurement, state-owned enterprises and Bumiputra policy. I had believed TPP could liberalize Malaysia further more than local politics would allow it. Politics won.

Yet, I think I can stomach that. All this is a process and there will be another time. And right now, the TPP as it is seems okay to me. As I told somebody earlier today, better in than out.

Or, better we set the rules from a position of strength instead of wanting to join later and having to accept the rules from a weaker position.

Touching on the exemptions again, perhaps in retrospect we had too much strength at the negotiating table.

Categories
Economics

[2803] Troubling tales from Uber drivers

Unlike cabbies whose occupation is mostly driving (save for the minority), most Uber drivers drive part-time. I have had engineers, civil servants, doctorate students and advertising people as my Uber driver.

That occupational diversity makes conversation during an Uber ride much more interesting than that during a typical taxi journey. I have heard fascinating tidbits across industries as Uber transports me around Kuala Lumpur. This makes Uber a gold mine for economic anecdotes, giving colour and warmth to hard cold data.

These conversations have turned depressing lately.

The economy is going through a rough patch and official data tells you just as much. No citing of how well Malaysia ranks in the WEF Global Competitiveness Index — an index that does not measure economic cycles — can overcome concerns over the economy at the moment.

We are not in a recession but recession as a concept can be a statistical abstract. I would suppose in personal terms, you are in a recession if you lose your job and then struggle to meet your financial obligations. It is within this context my Uber conversations took place.

The worst stories almost always come from oil and gas professionals. With low petroleum prices and spending cuts by Petronas, the whole Malaysian oil and gas sector is in a recession of their own.

This has led one geologist to drive Uber. He used to spend months at sea and all around the world on lucrative contracts looking for oil and gas for big companies. But he has not been out of Kuala Lumpur for a while now. There is no new contract to sign. Nobody is exploring anymore.

Petroleum professionals like him are used to big pay and those in the industry did appear to be among the best paid compared to the rest. And this geologist in particular was used to big spending. He bought a property in a good neighbourhood along with a car last year through bank borrowings. Then, the repayment seemed insignificant.

But the times are changing. With no job on the horizon and no money coming in, his personal finances are not in a great shape currently. He is not alone. ”My friends are trying to rent out their places. They did not need the money before but now every cent counts,” he insisted.

I fear what this portends. These are highly qualified and well-paid members of the middle class. Upper middle class perhaps but they are now at risk of losing that status.

There has always been somebody struggling with their finances even during good times. But the idea a person with a fine education such as the geologist could fall so far down so rudely because of something out of his control made me shrink in my seat as he drove me towards my destination.

There might be some comfort the petroleum industry employs just a small segment of the Malaysian labour force.

Yet, it is not the only one in trouble. Retail is not doing well too. It is unclear if the tough time there is temporarily caused by the GST or due to something bigger and more lasting. Meanwhile, euphemisms like downsizing, voluntary separation scheme and ”having to let you go” are making its rounds in the banking sector.

Another sector I have had anecdotes to share is advertising.

One person running a small production house told me he drove Uber because there were fewer and fewer advertising jobs available for grabs these days. ”In tough times,” he said when the lights were red, ”businesses would cut advertising spending first. It is the easiest thing to do for them.” Indeed advertising expenditure has fared badly so far, contracting 9 per cent in the first eight months this year compared to 2014.

Before we parted ways, he joked driving was his full-time job now judging by the hours he spent on the road instead of at the desk doing creative work.

I only hope these are mere anecdotes.

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 Malay Mail on October 29 2015.