Thursday, September 15, 2016

Moderates must speak up — Mohd Sheriff bin Mohd Kassim

Malaysia has non-leaders leading it nowadays. That is the root of the problem.

Whatever said and done, race relations and religion must be heavily policed in Malaysia. This is because it is so easy for incendiary talk to ignite misunderstanding.

This is where we are after decades of poor leadership, especially since 1981.

G25 is endemic of the current sick reality. It comprises Muslim Malaysians that hold sensible views. It is exclusive in its moderation. Read the report here.

It appears that if any such groupings have mixed ethnicity, their voice will be diluted.

Beggars cannot be choosers, I guess.

So, here I am. A non-Muslim Malaysian who finds peculiar and perplexed but positive ambivalence about being drawn to the category of "moderate". I guess it means that I am not "extreme" or "indifferent". But, who knows what the other categories are?

How the hell did we arrive here?

When did being "Malaysian" transform into the necessity of being a "Moderate Malaysian"?

It appears more so than ever that 1981 was a very bad year for Malaysia.

The only problem is that we didn't know it at the time.

Tuesday, September 13, 2016

Umno has ‘option’ to work with foes, but chose BN parties, Nazri tells MIC chief

Nazri Aziz is calling it as he sees it. Unvarnished. Brutal. What he said are facts. This is the current reality.

Other than UMNO none of the other BN components can get votes anymore. There is no ballast for the non-UMNO BN components.

UMNO is very confident that most of the Malay voters will vote UMNO regardless of all the news and information on 1MDB etc. UMNO is confident that most of the Malay voters are very clear that without UMNO the Malay race will perish from the face of this earth.

Therefore, UMNO's strategy benefits only UMNO.

The bovine motley crew of MCA, MIC, Gerakan, etc. is dead in the water. They are headed to the waterfall of ignominy without a paddle.

This is the time for timorous leaders to step aside and for leaders of courage and vision to stand up....if there are any.

A long time ago, UMNO was weak. The Independence of Malaya Party was strong under Dato' Onn Jaafar. The MCA was wealthy under Tan Cheng Lock. And, Cheng Lock and Dato' Onn had very good rapport.

But it was Ong Yoke Ling and Yahya bin Abdul Razak who decided that MCA and UMNO could work together for the first real elections in 1951. Thus, the precursor to BN, the Alliance, was born.

But, that was then. 

Times change. Circumstances change. Players change.

It is time for the non-UMNO parties to re-attach their balls of courage and set a new non-BN course.

Friday, September 9, 2016

Undermining Bank Negara's policies - Allowing developers to become moneylenders is a HUGE mistake

The move by the Malaysian Government to allow property developers to obtain moneylending licences is a HUGE mistake. There is no way to sugar coat this.

Many of us are aware of the long, long time it took for Bank Negara Malaysia to bring the non-bank financial institutions such as Bank Rakyat and the Malaysia Building Society Berhad (MBSB) into its regulatory purview. This effort was to allow the monetary authority to more efficiently manage the monetary aspects of Malaysia's economy.

The likes of Bank Rakyat and MBSB were able to implement fairly liberal and generous financial products below the radar of Bank Negara previously. 

With the onset of the Financial Services Act 2013, Bank Negara's reach over Malaysian financial-type institutions was almost complete.

This new move by the Urban Well-being, Housing and Local Government Ministry to issue moneylending licences to property developers threatens to undermine Bank Negara's monetary management.

We thought it was clear as the light of day that Bank Negara instituted measures over the recent 2 years to cool down the overheated property market and prevent property bubbles from forming. Property bubbles that burst can have very serious implications for the country's economy.

And, moneylending, being a financial transaction has a direct causal link to the overall monetary health of the Malaysian economy. A fragmented moneylending market that is outside Bank Negara supervision is a bad thing. Worse, this fragmented moneylending market will have ZERO SUPERVISION because the Urban Well-being, Housing and Local Government Ministry does not have any competency in understanding the impact of possible aggressive lending methods by desperate property developers.

This is where the nightmare scenario may happen and property bubbles start to form.

I am already so terribly annoyed with the fragmented property development sector. That is largely under the purview of local councils and state governments.

Judging from the volatility of the property sector, it is clear that there really is no national property development policy. 

Property developers appear to be no different from farmers. The supply and demand of the property market exhibits all the bad traits warned by the Cobweb Theory in economics. One basic definition can be found here and I reproduce it for you-

The cobweb theorem is an economic model used to explain how small economic shocks can become amplified by the behaviour of producers. The amplification is, essentially, the result of information failure, where producers base their current output on the average price they obtain in the market during the previous year. This is, to some extent, a non-rational decision, given that a supply side shock between planting and harvesting (such as an unexpectedly good or bad harvest) can lead to an unexpectedly lower or higher price. This results in either a higher output or a lower output in subsequent years, and moves the market into a long-term disequilibrium position.

Wednesday, August 31, 2016

Flying the flag

Malaysians should always raise the national flag, the Jalur Gemilang, at every opportunity. More so during the season that straddles 31st August and 16th September in every year.

Although there will be times when the mood is sombre due to political or economic challenges, raising the flag should be a matter of routine. It just shows our love of Malaysia, the country that we were born in; the country we live in; the country that we will die in.

We shouldn't NOT fly the flag just because we are angry of any transient politicians. That would be giving these people who are temporarily in the limelight too much recognition.

These nasty personalities are transitory. They will fade away and disappear. 

But, Malaysia will be around beyond our lifetime. 

We should fly the flag because of our love for Malaysia. We should fly the flag because we believe that things will turn around for the better.

I debated whether to hoist the flag this year as I have done for many, many years now. In the end, I decided to hoist the flag and see it flutter in full glory in the windy compound of my home.

I am glad I flew the flag.

It will continue to fly through to 16th September.

And, it flutters in my home compound not because I support the current crop of politicians who are in power; it flutters not because I don't support these politicians - for these people are irrelevant to my flying the flag; it flutters in my home compound because I am Malaysian.

Friday, May 13, 2016

Iconoclasm - Malaysia's Constitution, Institutions and Procedures

Just so you know, it's mostly Dr Mahathir's fault that Malaysia's constitutional system of checks and balances has gone askew. I'm being bland and circumspect. This civility is not in deference to Dr M. It is out of respect of the subject matter of discussion here.

The Federal Constitution of Malaysia must be respected by everyone. It is the supreme law of Malaysia. It has a higher place even than DYMM Yang Di Pertuan Agong. In fact, the Federal Constitution begat the position of the Agong.

The Federal Constitution created the legislative branch of the Dewan Rakyat and the Dewan Negara and the paraphernalia of membership in those august chambers.

It also created the Judiciary which is intended to be the fount from which springs justice and fairness to all; Malaysian and non-Malaysian for so long as you are stepping on Malaysian soil.

And, unfortunately, it also created the Executive branch of government.

In a corporate context, the legislature is like the meeting place for shareholders representatives; all citizens being the shareholders.

The judiciary is like the statutory auditors that all corporate entities are required to engage.

The executive branch is the management.

This triangulation is the modern idea that carries the presumption so famously summed up by Lord Acton, that power corrupts; absolute power corrupts absolutely.

By a miracle, one might say, Malaysia managed to maintain the tension of constitutional audit during its many years of nationhood and, thus avoided Lord Acton's axiom.

Once, in Tun Razak's era, the precipice of tyranny was avoided when Emergency Rule of 1969 was retired and the constitutional triumvirate restored in 1971.

Then, after Tun Hussein Onn's era, came Dr M.

This fella pretty much screwed the Federal Constitution and all its institutions.

He took down the monarchy's constitutional position in the legislative process in 1983.

He screwed the Judiciary in 1987.

Throughout his interregnum, 1981 to 2003, he emasculated the Legislature by disrespecting the importance of Parliamentary Debates and Question Time. 

He enlarged the the writ and power of the Executive by stacking the Judiciary, appointing sycophantic personalities in all key positions; be it the monetary authority, the attorney-general's post and the law enforcement agencies.

From the point of view of economic development and national pride, he did reasonably well and presided over two decades of reasonable significance. I am glossing over a helluva lot of flotsam and jetsam, I know, but, let's stick to the agenda, shall we?

It is generally accepted that when one refers to a generation, it means a period of anywhere between 20 to 25 years.

So, going by that wisdom, Dr M's interregnum spanned a whole generation.

Think about it. 

An entire generation of Malaysians grew up and grew old under a regime and regimen where everything is fair game ... for the greater good ... which "greater good" is seen from the perspective of Dr M.

This generation grew up accepting that if someone stands in your way, and if you are the Prime Minister, you just neutralise and neuter that person and his personage.

And, so, a potentially difficult monarch is in process of being elevated in 1983. Poof! Emasculate the legislative procedure.

And, so, a Lord President seemed to be getting in the way in 1987. Poof! Remove him. He's gone.

And, so, a restive Legislature and Opposition is coalescing in 1987. Poof! Preventively detain them.

And, so, a conscientious Fourth Estate of print media provides firmer reportage than before in 1987. Poof! Suspend their printing privileges.

This is what a whole generation of Malaysians were entreated to.

This form of constitutional iconoclasm has now embedded itself into the value system of Dr M's successors in title.

What we witness today is the embodiment and practises that Lord Acton's axiom warned against when people in power has the ability to amass and concentrate power.

When Arthur Schlesinger wrote The Imperial Presidency he fretted over the U.S. President's self-aggrandising process of giving the office of the U.S. President increasing power to authorise military action in Vietnam and Laos in the 1970s.

In Malaysia, we have been witnessing the growth of the Imperial Prime Minister's position since 1981.

This constitutional iconoclasm will be Dr M's greatest legacy.

When Dr M's hands were at the wheel, he was an able Nakhoda. Within his own psyche he bore his own peculiar set of values which in its own peculiar way held him back from doing certain things that he had the power to do but resisted doing.

He had a set of values. It could be upbringing. It could be education. It could be the fear of the audit in his Afterlife. Whether it was Nurture or Nature, Dr M had his own internal system of checks and balances.

The same can be said with much greater strength for Pak Lah. History will look kindly on Pak Lah. I look very kindly on Pak Lah's time at the helm of Malaysia.

The question that Tun Razak failed to ask and, the same question that Dr M failed to ask was, "What if this power that I have amassed in the Office of the Prime Minister is embodied in someone with less values and scruples than I?"

But, in the absence of any constitutional checks and balances, the Ship of State that is the current constitutional ethos is moving in any which way without any restraint. There are no longer any checks and balances.

Mind you, to an untrained eye and mind, the Federal Constitution is still here. The constitutional institutions are still here. Even the constitutional procedures are still writ.

But, with persons who grew up and were fed with Mahathirist authoritarianism and his constitutional iconoclasm, can Malaysia depend on an individual leaders sense of personal values, upbringing and innate fear of the Afterlife? What if a leader has no such values or filter?

"So", asks the Minister in Malaysia's 2016 Federal Cabinet who grew up and was fed on Mahathirism, "what's the problem?"

This is why some of us are crying out for the restoration of the spirit and soul of the Federal Constitution, constitutional institutions and constitutional processes.

And, what is Dr M doing now?

Well, I can tell you that whatever it is that he is doing, he ain't hectoring for the restoration of the spirit and soul of the Federal Constitution, constitutional institutions and constitutional processes.

He's just asking for a change of personnel.

Go figure......

Friday, April 22, 2016

Foreign Workers Permits, Triple-D jobs and Market-based System

I don't really want to get into the semantics and polemics of the Triple-D jobs in Malaysia that the people in power insists, Malaysians do not want to do. The 3 "D"s in Triple-D are DIRTY, DANGEROUS and DULL.

This blog has 2 parts.

Here's Part 1. This widely held view that Malaysians eschew Triple-D jobs is too simplistic. Those of us who have traveled to more advanced economies in the Western world and East Asia will testify to have seen Caucasians, Japanese and South Koreans do Triple-D jobs in their own countries. And, you can watch a popular show hosted by Mike Rowe called Dirty Jobs to see for yourself that people in advanced economies are quite happy to do Triple-D jobs.

So, the more appropriate question would be to ask why is it that Malaysians appear not to want to do Triple-D jobs? 

When I wanted to earn some extra cash during my university student days I applied for a Triple-D job in a woodyard. This was in a Western country. Dirty jobs are dirty jobs wherever you are! I was quite happy to do the jobs for a few reasons-
  • Yes, ok, I needed the cash-la.
  • There were lots of safety equipment given. Ear plugs to protect your hearing. Safety glasses to protect your eyes. Breathing mask to protect your nose and lungs. Safety boots to protect your feet. Safety harness to protect yourself from falling. The list goes on. AND .... the boss briefed me on the do's and don't's of the work.
  • The pay was very decent.
Malaysians are not bodoh. We look at the people doing Triple-D jobs all over our country and we have all been exposed to all sorts of information and images of what people who do Triple-D jobs do in advanced economies. More often than not, we don't see similar equipment being used by people doing Triple-D jobs in Malaysia.

Even with the Department of Occupational Safety and Health (DOSH), many Malaysian employers involved in Triple-D enterprises are lax and stingy. 

And the pay is usually too crappy.

These are structural issues that the people in power should be addressing in order to engender a virtuous cycle for Triple-D jobs that will attract Malaysians. 

There is no need for people in power to talk about institutionalising the importation of 1.5 million foreign workers and, then, to childishly do a volte-face when there is some push back from various segments of the Malaysian polity. People in power within a purported democratic framework should be mindful that Malaysia is an open, international and competitive economy. Arbitrariness in policies is one of the greatest sins in global competitiveness.

People in power must be big hearted and mature enough to go beyond the complacent assurance that their rural and Sabah and Sarawak vote bank will keep them in power and, that, therefore whoever is unhappy with the policies can just go and choke on their nasi lemak.

Now for Part 2.

There is a swirl of earnest discussion in the United States for the past 5 years or so, on the issue of migrant workers with low skills and those with high skills. This blog post, of course, focuses on the low-skills aspect of the matter.

The discussion focuses on the need for the U.S. to introduce a market-based system that operates like an auction system. Employers who need low-skilled foreign workers will each put in price bids based on their respective budgets. The highest bidder will secure their quota of foreign workers.

You can find one scenario for the proposed market-based system here.

Here's Adam Minter of Bloomberg's observation- A better system for Malaysia -- and other immigrant-dependent economies -- is to replace quotas altogether in favor of a market-based system in which employers in specific industries bid on permits to hire foreign workers. Permits would naturally flow to employers who need workers most, and the government could adjust the number made available based on economic circumstances. Done right, such a system would ultimately help local workers and boost wages, while demonstrating why economic immigration is so important. For now, Malaysia looks unlikely to take this path. But if its officials hope to justify their foreign-labor policies, they'd best consider letting the market do the talking for them.

Yes, the people in power should do the right thing and implement a foreign worker programme that lets the market do the talking!

As for the matter of looking into the structural issues involving getting more Malaysian involvement in the Triple-D jobs, can the people in power, especially those responsible for Human Resources, look into this a bit more.

I would like to do more studies into this matter but my day job obligations beckon and, so I have to leave it here.

Thursday, April 14, 2016

"First they came ..."

"First they came ..." is a famous statement and provocative poem written by Pastor Martin Niemöller (1892–1984) about the cowardice of German intellectuals following the Nazi's rise to power and the subsequent purging of their chosen targets, group after group. Sourced from here.

First they came for the Socialists, and I did not speak out—
Because I was not a Socialist.

Then they came for the Trade Unionists, and I did not speak out—
Because I was not a Trade Unionist.

Then they came for the Jews, and I did not speak out—
Because I was not a Jew.

Then they came for me—and there was no one left to speak for me.
 -Martin Niemöller-

Friday, February 26, 2016

Singapore introduces daily cleaning duties for students

It appears that Singapore has decided to adopt the methodology similar to the Japanese educationists that will require students to be empowered with responsibilities to look after their own school environment.

I had felt that this would have been a good thing for the Khidmat Negara programme when my son was involved in it. The toilet and showers in their barracks were in a poor state and the canteen was in shambles after meal times. Each time, it was left to the contractors or administrators to deal with the matter. I felt that it would have been excellent if Khidmat Negara had modules similar to the Kemahiran Hidup or Living Skills subject taught in Malaysian schools but, this time, involving basic and useful matters such as plumbing, painting of walls, doors and windows and assorted cleaning and maintenance skills. This will foster civic mindedness and good citizenship.

Here's the BBC report for your edification.

Friday, February 12, 2016

We can do it too, if we try

Visitors to Japan are almost always amazed at the civic mindedness of the Japanese. This video documentary gives us a glimpse of how that mindset might be created.

It is not rocket science. I very much believe that it can be done in Malaysia too. We just need to try and try harder to create better citizens. We have to believe that we can do it.

So, how about it, Malaysia's educators?

Thursday, December 31, 2015

When the great Truth is abandoned

When the great Truth is abandoned, the teachings of benevolence and righteousness become fashionable.

When wit and cunning are highly esteemed, the adepts in hypocrisy become fashionable.

When discord reigns in the family, the teachings of filial piety and fraternal love become fashionable. 

When chaos prevails in the country, the loyal ministers become fashionable. 

-Tao Te Ching Chapter 18, Cheng Lin translation (1995)

Tuesday, December 29, 2015

Crowdfunding - Some thoughts

Crowdfunding has morphed into many forms. Many crowdfunding initiatives have charitable or socio-political objectives. Such types of crowdfunding are not the focus here. It is the "investment-based crowdfunding" exercises that I wish to examine.

Malaysia is one of the jurisdictions that has established investment guidelines on crowdfunding. As such, the current swirls of discussion on the matter of crowdfunding is highly relevant.

On 21.12.2015 the International Organization of Securities Commissions (IOSCO) published a survey update on crowdfunding some key observations that I set out further down in this post.

Disclosure-Based Regulations (DBR) versus Merit-Based Regulations (MBR)

I have always maintained that Malaysia still needs a large degree of Merit-Based Regulations (MBR) largely due to the rustic mindset of many investors. The retail investor is still indolent and very susceptible to market noise. That is why Malaysia's regulators need to maintain guidelines and regulations that require regulatory scrutiny and some degree of regulatory prescription.

HKex has an excellent paper that critically examines DBR versus MBR and there is, therefore, no need for me to delve too much into it. Read the paper here if you are interested to understand these policy principles in greater detail. 

In the past decade we have witnessed the Securities Commission (SC) make attempts to institute the Disclosure-Based Regime (DBR). Officially, the SC has shifted from the MBR to the DBR as stated in a guidance note here.

But, with everything said and done, we have IOSCO reminding regulators and investors alike that while DBR still holds as the prevailing principle, I would submit that there is clearly a need for some degree of MBR-type prescription especially when the IOSCO has flagged the ever-present issue of "information asymmetry" which may be loosely defined as-

A situation in which one party in a transaction has more or superior information compared to another. This often happens in transactions where the seller knows more than the buyer, although the reverse can happen as well. Sourced here.

IOSCO's timely survey findings on Crowdfunding
Here are excerpts of what IOSCO's report says-

The goal (of the report) is to achieve a balance between promoting crowdfunding and ensuring investor protection and market integrity.  Some of the regulatory measures described in the Crowdfunding Report include-
  • Customizing entry, registration, or licensing requirements;
  • Setting disclosure requirements for issuers and funding portals;
  • Limiting the services  that may be provided  by  crowdfunding platforms;
  • Requiring the appointment of a third party custodian to hold investor assets;
  • Imposing measures to favour the channeling of resources into local businesses;
  • Addressing crossborder issues.
The report also seeks to raise investors’ understanding of crowdfunding, e.g., that crowdfunding may differ from investing in more traditional securities products. In addition to take note of risks common in traditional finance such as conflicts of risks, data protection and fraud, it suggests that investors pay attention to certain key aspects, including:
  •  Information asymmetry: Risk of default or high failures is often associated with start-up businesses. The risk of fraud may be high in case of internet offers. Investors should review disclosure and education materials to further their understanding of the essential features and main risks of the crowdfunding offer and see if third party custodians are being used.
  • Platform failure: There is risk of platform failure for crowdfunding portals. Portals should be evaluated based on their credibility and soundness, including if it has the proper IT systems, back-up facilities and procedures to ensure continued service.
  • Investing limits: Investors should consider if the investment amount is appropriate for their net worth.
  • Rescission, cancellation: Investors should be informed of and understand the investment terms including cancellation or rescission rights.
  • Illiquidity: As restrictions could be put on the resale of crowdfunding securities, investors should pay attention on warnings and information regarding liquidity and the availability of secondary market.
  • Suitability: Investors should consider that a crowdfunding offer may not be suitable and consistent with their investment objectives and risk profile.

Sunday, December 20, 2015

Crowdtasking: Disrupting conventional ways of earning a livelihood

Here's a great new business model that leverages on the principle of crowdtasking along the lines of Uber. The Age Melbourne carries the report here and here's a snippet-

Is your mouth watering at the thought of gelato? Just realised it's your mother's birthday?  One Sydney company will take care of that for you. With just the click of a button you'll have ice cream in your hands, and flowers in your mum's. 

Get acquainted with ASAP, the service that will deliver anything from food to forgotten wallets.  The premise is simple. Text your (legal) request to 0437 825 625, they will reply with a quote, then it's up to you to accept their offer. The wait is usually about half an hour per task. 

It's fascinating and highly encouraging to see another step in conventional concepts of earning a living. People no longer need to resign themselves to a career that requires them to be an employee and be enslaved to an employer. Or, for those who wish to run their own business, they no longer need massive capital to start-up or, incur huge franchise fees.

Crowdtasking business models are leveraging on the incredible pervasiveness of smartphones and apps. This connectedness, it turns out, has unlimited commercial possibilities.

The thing that really makes me happy for the our current generation is the great flattening of untethered income earning opportunities. What I mean is the great democratisation of opportunities to earn a living.

You could be a retiree, a university student, a stewardess, waiter, shop assistant or, executive who can just sign up to offer your time, your effort and, your motor vehicle. Immediately you are part of the network that offers a solution. And, you get paid for it.

An enlightened economist once told me that being employed is a modern form of slavery. My corollary to that insight would be that crowdtasking is a form of emancipation.

Saturday, October 31, 2015

The structural regression of Malaysian manufacturing

The economists at the ADB has given a cogent analysis of the structural economic challenge now being faced by Malaysia. This has been bothering me for the longest possible time. Perhaps the part of the analysis set out below that annoys me the most is the view that the present structural deformities could have been avoided if Malaysia's economic planning had been more objective and less dogmatic. This may be one of the matters haunting the likes of Dr M and, if it isn't, it should. Not the least reason being the fact that he had a good 22 years of dominance to get it right. Structural economic deformities are not things that happened overnight. It is a slow and debilitating accretive process that could have been treated.

Malaysia’s manufacturing sector is reversing to a state reminiscent of its post-colonial stage of development. Regrettably this situation was avoidable.

When the Federation of Malaya gained independence from Britain in 1957, economic conditions were ripe for rapid and sustained growth. Its primary export sector was showing immense potential for expansion. Primary commodities — particularly tin ore and natural rubber — accounted for a third of Malaysia’s GDP and over 75 per cent of exports by 1970, a legacy of its colonial past.

But manufactured exports accounted for less than 10 per cent, raising concerns that heavy reliance on a few commodities left Malaysia vulnerable to terms-of-trade shocks from swings in commodity prices. There was little economic diversification up to the 1980s, with already undersized manufacturing focused on little more than processing agricultural and mining output.

Several terms-of-trade shocks in the early 1980s — followed by global recession a few years later — did ultimately balloon fiscal and current account deficits, setting the stage for radical reform. A new National Development Policy was introduced in 1990, easing the affirmative action strictures of the pro-ethnic Malay New Economic Policy (NEP) and placing wealth creation ahead of wealth redistribution. The Promotion of Investment Act of 1986 extended generous incentives for private investors and relaxed regulations on foreign direct investment (FDI), allowing for full foreign ownership of export-oriented companies. Massive FDI inflows ensued.

These reforms opened Malaysia’s gates to the global production network and it succeeded in developing a vibrant and competitive electronics sector. Manufacturing grew sharply from about 12 per cent of GDP in 1970 to over 30 per cent by the mid-1990s. The share of electronics in manufactured exports soared from below 50 per cent in 1980 to peak at more than 70 per cent in 2000. But its share has fallen to below 50 per cent again in 2015.

While Malaysia had an early start in electronics, it could not build on this technological advantage. As wages started to rise, skills remained weak. After the Asian financial crisis (AFC) struck in 1997, FDI in Malaysia never recovered and domestic investment slumped as well. Since 2006, Malaysia has been a net exporter of capital, a process many suspect is driven more by capital flight than outward FDI.

Although a net labour importer, Malaysia remains a net skills exporter, with growing numbers of professionals migrating to Singapore and other welcoming industrialised countries. With these developments, Malaysia’s good fortunes have reversed in recent years, both in manufacturing and across the economy.

Like its early post-colonial phase, Malaysia is moving back to processing its agricultural and mineral resources. The only difference now is that the commodities themselves have changed. Rubber and tin have shifted to palm oil and petroleum. Petroleum refining and palm oil processing accounted for almost 19 and 12 per cent of manufacturing output in 2012, respectively — with both of these industries now bigger than electronics.

While developing countries are often encouraged to process agricultural or mineral outputs before exporting to increase their value, Malaysia appears a rare example of an upper-middle-income country — aspiring to high-income status — that is stunting or even reversing its previous successes in manufacturing.

This manufacturing retrenchment has been demonstrated by the overall contraction of this sector’s share of GDP, which fell gradually to 24 per cent in 2008 to remain roughly at that level ever since.
Why should we care about Malaysia’s manufacturing contraction? The main concern about petroleum refining and palm oil processing is that they are capital-intensive and generate few jobs. Despite their importance in overall output, just 14,400 workers are employed in petroleum refining, compared to the nearly 200,000 workers employed in electronics. Furthermore, agro- and petrol-processing industries generate relatively low-productive, low-skilled jobs and so wages are also low. The largest share of manufacturing workers are plant and machine operators who have an average annual salary of around US$4000 when per capita incomes average US$11,000.

Malaysia may be experiencing ‘premature deindustrialisation’, having transitioned to a service led economy before it has fully reaped the benefits of industrialisation. But unlike many other countries with similar experience, Malaysia’s case appears to be driven more by policy than technological disruption, trade or globalisation. There is growing recognition that many of the country’s problems — including the slump in private investment — are rooted in the distortions resulting from the design and implementation of the NEP and its subsequent incarnations. The government-linked corporations spawned to serve racial economic redistribution now crowd-out private investment in most sectors of the economy, including manufacturing.

If Malaysia is to realise its aspirations and enjoy living standards associated with high-income countries, it must arrest this structural regression and revive private investment in manufacturing. But regenerating manufacturing is unlikely without an overhaul of current policies. And while Malaysia may still reach the technical threshold of high-income status in a few years — assuming an economic crisis can be averted till then — this will still mean little to the welfare of workers in manufacturing if it continues its journey backwards.

Tuesday, September 8, 2015

16 September 2015

This time around, Malaysians should celebrate our diversity.

Bersekutu bertambah mutu. The English translation has always been published as, "Unity in diversity".

This is Malaysia's motto.

To give it meaning on 16th September 2015 and beyond we, Malaysians, will be mindful that we share a common past, a common destiny and a common future.

Malaysians are many things. We are, all at once, Malays, Chinese, Indians, Kadazans, Ibans and all suku kaums. We are at once, Sabahans, Sarawakians and people from each of the other 11 states and territories in Semenanjung Malaysia. And, yet, we are Malaysians.

I know it sounds corny and cliched. But, hey, when we commemorate key dates in out nation's history, all Malaysians should just let it out and celebrate our greatness at being a showcase of how diverse people can live under the same sky and the same land with a common past and a shared destiny.

We must shed our cynicism and leave aside, on 16th September 2015 and for some time after, our differences of opinion.

And, by the way, going by events in our local current affairs, Malaysia certainly has a robust democracy. 

We are transitioning. Even the most die hard cynic cannot deny that Malaysia's constitutional system has created a lot of space for civilised dissent. Let's, at least, celebrate Malaysia's federal constitutional system.

Friday, September 4, 2015

In the name of God, go!


Oliver Cromwell addressing the Rump Parliament. April 1653.

Wednesday, September 2, 2015

Foreign workers v Malaysian workers: The Importance of the Minimum Wage

Malaysia seriously needs to review the very liberal policy on the importation of low-skilled manual workers.

This is an economic policy issue. It's not an issue for the Immigration Department or Home Affairs to decide willy nilly.

Young Malaysians who are entering into the workforce are accused of being choosy and selective and spoilt. Is that true?

As with all other countries, anywhere in the world, many young Malaysian men hate studies and they find the need for further education appalling. Is that a bad thing? Do we abandon them?

Young Malaysians will make their own choices. No amount of legislation can change the decision of a young Malaysian to not pursue further education.

So, where do they go to make a living? They will invariably migrate from smaller towns and hamlets into larger towns and cities. 

After they arrive they discover that with their low skill sets, they can only get factory jobs and logistics work as drivers and delivery staff. They can also get jobs in food and beverage outlets.

The wages they receive in those jobs are in the RM5.00 to RM6.00 per hour band.

Work in "dirty jobs" sectors like construction and waste disposal is not much better than that wage band.

Young Malaysians can handle that kind of pay for the first 2 to 5 years of working life. Every Malaysian will have some relative or friend who can provide some room and board during these early years. 

What happens when the young Malaysian want to settle down and start a family?

How much does it cost to get married, start a family and start a home?

This is where the policy on Minimum Wage becomes important.

There are many critics of the Minimum Wage. All of these critics are, of course, employers. Most of them are in labour intensive sectors such as property development, manufacturing and plantations. These are "dirty jobs" sectors that choosy and selective and spoilt Malaysians are accused of avoiding.

Consider this; what if the Minimum Wage is imposed at, say, RM10.00 per hour instead of the current prevailing market rate of RM5.00, or less.

Of course, business owners will experience profit margin compression during the transition. And, there will be many reverberations and percolating implications.

But, this is where the Malaysian Government needs scenario planning and econometric simulations to consider these possibilities and come up with a slew of possible policy responses.

Regardless of the political convulsions that are taking place and issues of serious corruption and abuse of power at the highest levels of the Malaysian government, issues such as economic policy planning to address issues of concern to Malaysian workers and their livelihood must constantly be addressed.

I am against the liberal policy of importing foreign labour. There is adequate human capital at all levels of skills in Malaysia that can handle Malaysia's capacity and economic output.

I believe a sensible start to an inquiry into the matter of the Malaysian workforce must start with a putative position on a Minimum Wage that allows a young Malaysian to dream of a decent start to his or her working life.

A sensible Minimum Wage will give the average Malaysian a sense of dignity in living and it is a starting point for the average Malaysian to consider whether his or her current skill set is adequate or, needs improvement through further vocational training or tertiary education. It is merely a starting point in a Malaysian's journey as a good and citizen.

Wednesday, August 12, 2015

It's the economy, stupid...

To paraphrase Sir Humphrey Appleby of Yes, Minister: At the end of the day... in the fullness of time.... when the cows have come home... 

And, to reissue the phrase that so parenthesised Bill Clinton's 1991-1992 successful run for the Presidency of the U.S., a whiteboard writing attributed to James Carver: It's the economy, stupid.

It's the economy, stupid, that affects our perception.

It's the economy, stupid, that decides whether we be happy or suffer a feeling of malaise.

And, the economy is in terrible shape. Stupid.

Friday, July 17, 2015

Selamat Hari Raya Aidil Fitri

To all my Muslim friends I wish you Selamat Hari Raya Aidil Fitri. Maaf zahir dan batin.

Saturday, May 30, 2015

End race-based parties, says Ku Li

This call by Tengku Razaleigh Hamzah as reported by the Malaysian Insider may not see immediate progress. But, it is a necessary reminder to all Malaysians.

We seem to have forgotten that since 1957, the call has always been for national unity and community harmony.

We need for common space where Malaysians have a chance to interact with each other regardless of race or religion.

Having colour blind political parties is a necessary precondition.

Monday, May 18, 2015

Dr M wants PM powers to be reduced

I read the the Malaysian Insider's reported expiation by Dr M with a deep and resigned *sigh*. The man now says that the Prime Minister's position contains "too much power".

In our own Malaysian history, we have had anecdotal evidence from the late Professor Hugh Hickling about a conversation he had with Tun Abdul Razak on the Internal Security Act. Hickling, who was the person tasked with drafting the ISA, said that he had a moment to raise his concerns with Tun Razak about the sweeping powers of preventive detention to be written into the legislation. In response, Tun Razak purportedly told Hickling not to worry because he, Tun Razak, knew where the boundaries were.....

Preventive detention under the edifice of ISA was used with degrees of controversy by Tun Razak's successors.

This lesson is never learnt.

During his long and distinguished time as Prime Minister, Dr M had amassed tremendous powers in the Prime Minister's Office. During that time, Dr M was often more presidential than prime ministerial in his approach to public office. 

Of course, the man knew where the boundaries were.....

Recently, Dr M, who has taken the new guise of street fighter extraordinaire, has reminded us of Lord Acton's much maligned dictum that, "Power corrupts; absolute power corrupts absolutely".

I have been wondering whether this is some form of karma in Dr M's odyssey.

The shitty thing is that if this is, indeed, Dr M's odyssey, then, we idiot Malaysians are the unfortunate souls who happen to be in the rickety vessel; being tossed, turned and buffeted until we are blue in the face and nauseated. 

As the cotton farming slaves used to say in the pre-Civil War American South, "Ain't nothin' we can do about that".

Or, is there?

Monday, May 11, 2015

Tengku Razaleigh Hamzah

I wrote a blog post on 24 July 2009 that earned me a private chat with Tengku Razaleigh. In recent weeks events have taken a turn that many Malaysians hope, will lead to a near unanimous cry of support for Tengku Razaleigh Hamzah to restore Malaysia to its roots and ideals as envisioned by our Founding Fathers at the time of Merdeka. I set out below the blog post which was originally posted here-

I feel compelled to delve a little deeper into the motivations of Tengku Razaleigh Hamzah in the context of the current swirl of political and institutional turmoil in Malaysia. The political turmoil is obvious to all.

Less so, is the institutional turmoil.

Who will guard the guards themselves?
Before 1987 (a year I seem to re-visit constantly as the zeroth point from which the timeline of Malaysia's current political and institutional turmoil commences), the no-brainer principle was that Malaysia's Federal Constitution contained (I say it in the past tense in light of recent mind-numbing judicial pronouncements from the Federal Court) features of the separation of powers doctrine where the Executive branch of government would be audited by the Legislature and, if there is any legal action, by the Judiciary.

Tunku Abdul Rahman accepted this as did Tun Abdul Razak and Tun Hussein Onn. All three gentlemen read law in England (not that the jurisdiction nor geography is of any relevance in the context of this point but, that the knowledge and skills acquired are).

Their successors have taken a different view. Whether knowledge and understanding of the law should have any bearing on this attitudinal shift is moot. I just like to highlight this.

The issue of institutional turmoil is very real. The MACC's handling of Teoh Beng Hock is the most recent and, glaring example.

So, quis custodiet ipsos custodes? Who will guard the guards themselves?

If the Legislature can no longer audit the Executive and, if there is scepticism whether the Judiciary has the necessary independence on issues involving Executive action, then, what is left in the context of orderly constitutional government?

It is no wonder that new Malaysian political leaders have exhibited less and less respect for Malaysia's constitutional institutions in the past two decades.

Where do we go from here?

This is the issue that haunts Tengku Razaleigh Hamzah. It is an issue that haunts me. It is an issue that should haunt all Malaysians.

Trying to understand Ku Li
I have never met Tengku Razaleigh Hamzah. But, I believe his actions in forming Semangat '46; his subsequent return to UMNO; and, his refusal to accept Zaid Ibrahim's invitation, can be considered in other ways.

Many Malaysians, particularly those that are partisan with Pakatan Rakyat are exasperated with Tengku Razaleigh's decision to rebuff Zaid's invitation. Many have said that Tengku Razaleigh is not relevant anyway or, that he, too, carries political baggage. That, with the greatest of respect, is nonsense and, an unfair trivialisation of Tengku Razaleigh's continued importance within Malaysia's polity.

In the hotchpot of Malaysia the citizenry practises a Babel-like habit of talking at cross-purposes. This is not so much due to multi-lingualism but, more to do with endless politicking and political spin.

In such a milieu, many of us are thankful when a respected personage in the form of a Sultan, a political leader or, eminent Malaysian, makes a timely public statement that is sensible and wise and, has the effect of soothing ruffled feathers and, injecting a dose of wise perspective on a issue that threatens to tear the socio-political fabric.

For me, Tengku Razaleigh is one such person.

His political stance is always principled. But his motivations can be exasperatingly enigmatic to many.

After writing the previous post my mind wandered back to Adlai Stevenson whose political position in the raucous American political process, in this case the Democratic Presidential Primary of 1959, was at issue.

The Adlai Stevenson parallel
Stevenson was the Democratic Presidential Candidate in 1952 and 1956. In both attempts he lost to the Republican Party's Dwight Eisenhower.

Despite two debilitating defeats, Stevenson was a much-respected and popular leader within the Democratic Party. It also helped tremendously that the grande dame of the Democrats, Eleanor Roosevelt, the widow of Franklin D. Roosevelt, was an overt supporter of Stevenson's. This was the case in 1959, when the Democratic Primaries was in full swing and approaching its climax in the Los Angeles Democratic Convention.

Stevenson had hardly campaigned throughout the Primaries. But, party rules permitted members to draft a candidate who would be eligible for contention as a candidate of the party without having to undergo the bruising battles in the Primaries.

To borrow the phrase from my previous post, the eager politician in this story was John F Kennedy. Stevenson was the reluctant politician.

Kennedy's political machine was understandably alarmed at the prospect of a last-minute draft candidate in the form of Stevenson that threatened to undo and destroy more than four years of tremendous groundwork.

Everyone knows that Kennedy took the Democratic nomination and went on to defeat Richard Nixon in what was the slimmest majority ever for a presidential contest...until Bush versus Gore in 2000.

Where I'm leading to after the necessary contextual digression, is this insightful passage in a seminal book on American politics, The Making of the President 1960 by one of the best biographical-journalist-author that I have come across, Theodore H. White. White's passage describes the mindset of Stevenson in the context of American public life and its politics:

If this happy and placid man gave political calculators an impression of total schizophrenia, the reason was a simple one - Adlai Stevenson was and, I believe, remains torn in attitude to the two great systems of power that mesh in the unity of the American Presidency. Stevenson's attitude to public affairs approaches a nobility rarely encountered in the political system of any country; but his attitude to politics - the grubby, rooty politics of noise and deals and cruelties and chicaneries - is one of contempt. Yet public affairs and politics are linked as are love and sex. Stevenson's attitude to politics has always seemed that of a man who believes love is the most ennobling of human emotions while the mechanics of sex are dirty and squalid.

This seemed to be the quality of his reflections. "Deep down," said his closest friend during the winter months of 1959-1960, "he wants it. But he wants the Convention to come to him, he doesn't want to go to the Convention." 

It is my fervent hope that the stars will align themselves in favour of the ascendancy of Tengku Razaleigh to lead Malaysia.

If ever there was a need to transform Malaysia, now is the time. 

This feeling that many Malaysians have may best be expressed in an extract of Tennyson's epic poem, Ulysses-

Tho' much is taken, much abides; and tho' 
We are not now that strength which in old days 
Moved earth and heaven, that which we are, we are; 
One equal temper of heroic hearts, 
Made weak by time and fate, but strong in will 
To strive, to seek, to find, and not to yield.

Friday, May 8, 2015

IGP needs to dial it down

One of the wise words that came from a judge in a singing competition somewhere in East Asia to a contestant seems appropriate to be directed at Malaysia's Inspector-General of Police. The judge said simply, "Less is more".

I have always had a healthy respect for our men in blue. Although many may have different experiences, I have found the Royal Malaysian Police to be reasonably responsive when I made the occasional calls to report on vagrants and their furtive presence in my neighbourhood.

I also count a few men in officer rank as friends.

The IGP has been so combative in directly engaging all manner of issues with his detractors that he appears to be providing some form of distraction, often not positive, for the Malaysian public. 

In publicly responding to issues spat out by detractors or, any issue, I fear the IGP is falling into the trap of becoming a participant in Malaysia's raucous political space. This is not good.

Responses and pronouncements made by the IGP via social media tools may, at first blush, appear to project an image of a senior law enforcement officer having the dexterity of flowing with the times.

However, the IGP should pause and consider what damage of perception he is doing to Malaysia's highly stable and highly respected DUE PROCESS as enshrined in all our laws.

The IGP needs to realise that the Royal Malaysian Police, being a law enforcement agency, is part of the due process of law in Malaysia.

As such, the IGP should, MORE OFTEN THAN NOT, keep a dignified silence and allow a more orderly and, I emphasise, LESS PERSONAL response to criticism directed at his post or, at the Royal Malaysian Police or, any issues of public importance.

I am calling for the IGP to maintain the dignity of the position. 

Malaysians are tired of having to cringe every time our most senior law enforcement officer rolls up his sleeves and puts on verbal and written knuckle dusters in responding to negative comments.

And, I also wish to point out that there are very good and compelling reasons why there is a good market for well trained Publicity Officers, Public Relations Officers and Communications Officers. The IGP should discuss how to respond with fellow officers with such training before responding....and also do some counting Mississippi...two Mississippi....three Mississippi...four Mississippi....

Tuesday, March 24, 2015

A common destiny for Malaysians

This month saw the passing of Malcolm Fraser of Australia and Lee Kuan Yew of Singapore. Both men were giants in their time.

Events such as these must, of necessity, compel thinking Malaysians to reflect on the changing fortunes of countries like Australia and Singapore and compare them with our own changing fortunes in Malaysia.

Just as the great historians, Will and Ariel Durant liked to ask, we have to also ask the same question of ourselves, HOW HAVE WE PROGRESSED...AS A NATION?

What made Lee Kuan Yew tower above his contemporaries in the realm of political leadership was his ability to gather around him a cohort of like-minded colleagues to plan, strategise, visualise and exhort their countrymen to pull together and share a common vision and work towards a common destiny.

Of course, there was dissent. Such are the vagaries of human communities anywhere. That made the sheer willpower and charisma of Lee Kuan Yew and his cohort all the more impressive.

Actually, whenever I consider Lee Kuan Yew's political life, I am often drawn to that one pivotal moment in the PAP party assembly in the 1950s when Lee was pitted for PAP's leadership against the charismatic, Hokkien speaking orator, Ong Eng Guan. It was Toh Chin Chye who, as the Chairman, gave his casting vote in favour Lee that decided the course of contemporary Singapore history under Lee Kuan Yew's iron-willed leadership and relentless vision of material progress.

Did Toh Chin Chye ever rue his casting vote? 

But, as usual, I digress...

One of the common refrain of Lee Kuan Yew's during the torrid decades of the 1950s and 1960s, when Lee and his cohort had to fight the threat of Communists, racial unrest and political rivals was the need for law and order. Yes, it was to quell and hammer down dissent. He was consistent in declaring without apology, that law and order was needed in order for Singapore to develop and progress.

This hearkens to the time when we had a strong and charismatic leader in Dr M. Love him or hate him, Dr M gave us a direction in which we could chart our course as Malaysians. We could go with the flow or, we could go against it. Either way, there was direction.

In recent years what we have experienced as Malaysians is an exhausting drama that has no script.

Everyone is an anti-hero.

There is no sense of direction. No leadership.

There are plenty of swirls and eddies that makes us nauseated.

When we try to sit down and focus on our work, we are distracted by rubbish political nonsense that does nothing to help with our work.

There is plenty of religious strife, racial polemics and corrupt practises.

But. Where is the common destiny for all Malaysians?