What Would Keynes Have Done?

The New York Times 28 November, carried this opinion piece by Greg Mankiw that stands out for its reasonably accessible economic analysis and his reason for wondering whether all the hullabaloo over John Maynard Keynes and his economic theory may be misplaced in the current economic turmoil.

Writes Mankiw, a professor of economics at Harvard and erstwhile economic adviser to President Bush and, who had advised Mitt Romney in his campaign for the Republican presidential nomination, According to Keynes, the root cause of economic downturns is insufficient aggregate demand. When the total demand for goods and services declines, businesses throughout the economy see their sales fall off. Lower sales induce firms to cut back production and to lay off workers. Rising unemployment and declining profits further depress demand, leading to a feedback loop with a very unhappy ending.

The situation reverses, Keynesian theory says, only when some event or policy increases aggregate demand. 

The problem right now is that it is hard to see where that demand might come from.

Mankiw has an interesting line that Keynesian economists tend to dismiss long run concerns when the economy has short run problems. He quoted the quip from Keynes that In the long run we are all dead. I had thought that it was my old lecturer that said that. The mind plays tricks on us over time, I guess. 

He ends the piece this way, In 1936, Keynes wrote, “Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slave of some defunct economist.” In 2008, no defunct economist is more prominent than Keynes himself.

I must thank etheorist for having drawn my attention to Greg Mankiw's blog which is apparently designed to impart knowledge of economics by small spoonfuls as if the reader is in Econs 101 class. These days, all honest Malaysians who are not suffering from The Nile disease must accept that we need to go back to Econs 101 class.

Read Mankiw's piece in full here. It's akin attending a special lecture by the cool academic himself except instead of Harvard, you're sitting in the comfort of your home or wherever. He has a style and clarity that makes for a good read.

Spending other peoples' money

When I first heard about the new bunch of barracudas called private equity some years back, I had the worst possible feeling. It's a group of investment bankers and stockbrokers who decided that they needed to move away from the straitjacket of regulations that licensed investment bankers and stockbrokers are subjected to constantly.

You may say that given the financial markets turmoil, even regulations failed. Fair enough. But, private equity firms were also contributory.

If ever there was an new embodiment of reckless greed it would have to be the high net worth individuals who put substantial amounts of their wealth into private equity funds.

The difference between private equity funds and funds operated by investment banks and financial institutions is that the former is completely unregulated. It is governed purely by private contracts signed between the private equity firm and the high net worth individuals.

I haven't seen any such contracts but I would imagine that the wily private equity people must have templated the standard contracts filled with exclusion clauses used by the licensed investment banks and financial institutions except that the private equity investment contracts probably had more trapdoors.

Now the investors of private equity funds have to hang on for their dear financial lives. You can't sue, you can't sell. I feel like a financial version of Simon Cowell berating the investors.
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The unkindest cut may be the mark-to-market rule that I have blogged about innumerably. No more true and fair bullcrap. The new accounting rules will force the private equity funds to state it like it is, serious diminution of value of investments all around.

But, as F. Scott Fitzgerald said, Let me tell you about the rich. They are different from you and me. So, there's no need for any concern about them. One less jar of caviar. One less Ferrari. Oh, well, back to using the Rolls, then.

Wonderful device, private equity. In every decade, there are new ways for spending other peoples' money. In this decade, private equity is it.

For a slightly different take on this, read this Economist piece.

Moral hazard

If the expression moral hazard refers to the prospect that a party insulated from risk may behave differently from the way he, she or it would behave if he, she or it were fully exposed to the risk, then, Malaysia's economic management has had embedded features of moral hazard for the past several decades.

It is said that moral hazard arises because an individual or institution does not bear the full consequences of its actions, and therefore has a tendency to act less carefully than it otherwise would, leaving another party to bear some responsibility for the consequences of those actions.

In case the above is found to be too wordy or conceptually too far-reaching, here are three stark examples of moral hazard:

Bailouts

Subsidies

Economic policies that eschew merit in favour of ethnicity.

Get the picture?

Reduce income tax

One of the best stimulus that the Malaysian government can give the economy is to institute an income tax cut.

It's better than reducing EPF contributions.

It's better than having Valuecap borrow RM5 billion from EPF.

It's better than infrastructure spending.

An income tax cut is an enlightened fiscal policy.

The biggest single group of Malaysians that spends quite freely is the middle-class. This class of Malaysians has the greatest propensity to spend. Their consumption goes beyond basic necessities.
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They are the ones who fill up the shopping centres and buy anything and everything, especially for their children.

To the government, I say reduce income tax as soon as possible and stand back to witness the rise of aggregate demand at a rate that will bring a warm glow to the face of the ruddy, Panda-eyed Second Finance Minister.

It will make the First Finance Minister's cheeks rosy red.

It will light up the tired eyes of the Bank Negara governor.

Try it. You'll like it.

TNB paid RM43 Billion to IPPs

It was disclosed in Parliament, yesterday that between 2004 and May, 2008 Tenaga Nasional Berhad paid RM43 billion to the Independent Power Producers (IPP).

Apparently TNB has been paying a lot of money for standby power. But, get this, the international norm for standby capacity is 15% to 20%. What we have in Malaysia is a 40% standby capacity.

It has been reported that YTL Group has a cash hoard of RM11 billion.

It has also been reported that most of the RM11 billion cash hoard resides in YTL Power, an IPP that is 53%  owned by the YTL Group. 

When YTL Group and its Great Helmsman, Francis Yeoh crows about having bargains galore to acquire during the economic turmoil, I'm not sure whether to wave the Malaysian flag in a fit of patriotic fervour or, utter silent curses that while all Malaysians are born equal, some Malaysians are more equal than others. Francis Yeoh certainly counts as one of the primus inter pares (first among equals). 

George Orwell may have been right after all although I must apologise for giving his seminal work on abuse of power by the state a capitalist twist.

This is the peril of privatisation and negotiated tenders.

Mumbai to Obama

I have been rather reticent about discussing geo-politics in this blog. But, in the wake of the nightmare in Mumbai, I will reveal some thoughts that I had hitherto preferred to keep to myself. Here are some questions to consider:

What can we interpret from the Mumbai bombings?

Is it a coincidence that it takes place just as Obama is transitioning into the US Presidency?

Why would terrorists want to push Obama into a position where he may have to order stronger military action in the Indian sub-continent?

Why Mumbai?

Is it a pure terrorist action or, may there be a furtive hand of an Eisenhower-type allusion of a military-industrial complex that seeks to tie Obama's hand in continuing an aggressive military posture against Afghanistan, Iraq, possibly Iran and, some active engagement with the politics of Pakistan and India?

Is it a show of frustration and, a reaction to Obama having confirmed that Defence Secretary Robert Gates will be retained in the Obama Administration in what the New York Times has noted as a show of bipartisan continuity in a time of war that will be the first time a Pentagon chief has been carried over from a president of a different party.

In many respects, Obama has made the right moves like coming out almost daily with his take on the US economic turmoil and a strong albeit very insider-like crew of financial managers.

But, in other respects, Obama has been surprisingly status quo ante with his decision to re-nominate Gates as the Defence Secretary and proposing Hillary Clinton as State Secretary.

Is Obama a Manchurian Candidate for the military-industrial-financial-one-world-order-complex?

The Great Slump of 1930

Listen to Nobel Prize winner Paul Krugman enthuse about the essay written by John Maynard Keynes:

This essay comes from Keynes pre-General Theory; he was groping toward an integrated framework for thinking about depressed economies, and not quite there yet. But its observations on the crisis at hand remain stunningly insightful, and fit current events all too well.

This is a nightmare, which will pass away with the morning. For the resources of nature and men’s devices are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life—high, I mean, compared with, say, twenty years ago—and will soon learn to afford a standard higher still. We were not previously deceived. But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time—perhaps for a long time.

Now read the full essay, The Great Slump of 1930.

A wild thought in the wake of E&E export decline

The Electrical and Electronics (E&E) sector in Malaysia may be the first wave of challenges to face the Malaysian economy. The Bloomberg report describes a grim picture of the unfolding economic turmoil that is now lapping at Malaysian shores.

The government has announced plans for retraining of Malaysians that may be laid-off in the wake of contracting export demand.

The other challenge is how to soften the blow of reducing export demand by stimulating domestic consumption.

Perhaps it is time to consider a phased reduction of the income tax rate from the current top rate of 29% to a top rate of 18%. This plan will really have a genuine stimulus effect by releasing disposable income back into the Malaysian economy.

Consider this. Lower tax rates will generate more economic activity and consumption within the domestic economy. From a qualitative standpoint, it will create a more sustainable domestic economic base. From a quantitative standpoint, there will be greater taxable revenue collected from individuals and corporations. This is a volume proposition.

While mulling over this radical proposal, read the economic horror story below:

Nov. 26 (Bloomberg) -- Sales by U.S. electronics makers in Malaysia will fall this year and next as a global recession saps demand for Dell Inc. computers and other devices, the head of an industry group said.

Electronics manufacturers in the Southeast Asian nation will probably have to cut jobs in 2009 after reducing overtime and letting workers take longer Christmas holidays this year to lower costs, said Wong Siew Hai, chairman of the Kuala Lumpur- based American Malaysian Chamber of Commerce’s electronics industry group.

“They are very uncertain and very concerned,” Wong said in a telephone interview yesterday from Penang, a manufacturing base for Dell, Intel Corp. and other U.S. companies. “Next year you will see the real impact. If there’s a world recession and the economic impact is going to be great, they have to do something, nobody will be spared.”

Malaysia cut interest rates for the first time since 2003 this week, seeking to bolster domestic demand as recessions in the U.S., Japan and Europe hurt exports and threaten factory jobs across Asia. Retrenchments in Malaysia’s manufacturing industry jumped almost five-fold to 10,182 in the third quarter, central bank data show.

“It’s inevitable when the operating environment slows down, you should expect a rise in retrenchments,” said Lee Heng Guie, chief economist at CIMB Investment Bank Bhd. in Kuala Lumpur. Malaysia’s unemployment rate may rise to as high as 4.2 percent from 3.6 percent currently as job cuts in 2008 will likely exceed the average of the past five years, he said.

Sales Forecasts
Export sales by the American Chamber’s 17 electronics companies may decline this year, instead of growing 0.4 percent as predicted in July, Wong said. Sales, which gained 7.1 percent to 73.8 billion ringgit ($20.4 billion) in 2007, may fall further next year, he said.

“I am concerned about how this situation will impact the growth of the manufacturing sector, particularly in the immediate and short term,” Malaysian Trade Minister Muhyiddin Yassin said in a speech to manufacturers in Kuala Lumpur today.

The government, which has announced a 7 billion-ringgit spending plan to spur growth, needs to help manufacturers by cutting utility costs, Wong said. Electronics companies are only able to forecast orders weeks ahead now, down from monthly and quarterly projections previously, he said.

‘Worst Crisis’
“The visibility is very short, things are changing very fast,” Wong said. “This seems like the worst crisis so far.”

Most if not all of the industry group’s members have reduced overtime work at their factories, and more than half plan to have longer-than-normal Christmas production shutdowns, he said. Some are considering shorter work weeks and have delayed their capital investment to “conserve costs,” he added.

“It will get worse before it gets better,” Satish Lele, director of industrial technologies for Frost and Sullivan Asia Pacific, said in Kuala Lumpur today. In the worst-case scenario, the global recession could stretch “well into 2010,” he said.

Malaysia’s industrial production fell for the first time in 18 months in September. The government this month slashed its growth forecast for 2009 to an eight-year low of 3.5 percent and predicted a decline in exports next year as the worst financial crisis since the Great Depression pushed economies from Singapore to New Zealand into recession.

Intel, Motorola Inc. and other U.S. electronics makers account for about 12 percent of Malaysia’s total exports, and more than a quarter of the country’s electronics shipments.

Oracular nuances

The Star Online reports that, The full effects of the global economic crisis could be felt on emerging economies in the first half of next year, Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz said.

“We are monitoring growth in the fourth quarter very closely and the first half of next year when probably, the full effects of the crisis taking place in the developed countries will have an effect on the emerging economies,” she said.

“Right now, even in the third quarter, we have already seen the effects on our export sector, she said.

Whether deliberate or, not, I often find our Bank Negara governor very oracular. It's rather like sifting through the remains of an unfiltered cup of Darjeeling to peer into one's fortunes.
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But, unlike the more crass remarks made by politicians with finance portfolios, Zeti comes across like a nervous, cautious, circumspect scholar with some claim to monetary economics. Her halting and slightly staccato pattern of speech that is impregnated with strange pauses always jars me.

I often find myself leaning forwards towards the television screen with a silent, urgent call to her electronic image with a furtive mental call to her, "Come on, Zeti! Say it. Say what's on your mind. Say what's TRULY on your mind."

Without any telekinetic powers and, the television broadcast being just a recording, I find my effort to be in vain.

So, bereft of any hope of Zeti sharing her true thoughts and insights with me, I end up hearing things like these:

“What has been driving our economy so far, for quite an extended period of time, is domestic demand. That is why we want to see most of the measures support domestic demand. “That is the opportunity to sustain our economy, through the promotion of domestic demand in this very challenging external environment,”

”We assessed the environment and our interest rates were already low and supportive of economic activity. This adjustment is intended to give further support.”

Zeti said the central bank would review the conditions and make assessments, moving forward. “We have the flexibility to undertake further measures,” she said.

As I said, it's oracular, suitably nebulous.

Cautiously committal and yet, not.

A hint of a warning and yet, not quite.

A sense of caution and yet, strangely calming.

Too much nuance.

Not enough in-your-face dishing out the bitter stuff.

Then again, even I would freak out if Zeti loses her cool.

Monarchs at the batting crease

If there was any doubt about the value of the monarchy in Malaysia, recent events should put paid to such doubts.

The Raja Muda of Perak, Raja Nazrin, has been a consistent voice of rational reason in recent years. His Harvard-trained intellect and his commentary on the modern role of the monarchy and Malaysian constitutional matters have been received by all sections of Malaysia's polyglot community.

More recently, the Sultan of Selangor has exhibited a sensible mind in relation to the fatwa on yoga.

It would appear that in this new era that is engendering a two-party system in Malaysia, politicians, especially from Barisan Nasional are responding to the loss of dominance by resorting to ethnic issues and other nonsensical matters. Pakatan Rakyat politicians are also of the same ilk.

This vacuum of increasingly uncommon common sense is being filled by the monarchs of Malaysia.

We have to give thanks that the modern monarchy of Malaysia is truly rising to the occasion or, to use cricket terminology, stepping up to the batting crease, to give voice to the sensibilities of a multi-racial, multi-cultural and multi-religious nation. Politicians and Malaysians who keep harping on race, religion and culture should end up in the hottest places that Hell can offer, whatever their religion.

Daulat Tuanku.

True and fair

You can't blame the accountants for tearing their hair out in the coming months or, maybe year or two. Like genuine real economy investors, accountants are completely averse to volatile market conditions and uncertainty.

The phrase true and fair governs the accounting fraternity's evaluation of the assets of corporations. If prices of assets keep changing without rational rhyme or reason, accountants have a heavy responsibility to shoulder.

I would imagine that financial reports will carry very detailed exclusion clauses to cover all possible imponderables and acts of any conceivable nature very soon, if not already in place.

Blue Ocean distortion

Dr Azly Rahman's academic and intellectual credentials are beyond reproach. He is a Malaysian academic based in an Ivy League campus in the United States. His written pieces are usually ponderous and thought-laden. It takes quite a while to read, let alone consider his pieces which are mini-theses in and, of themselves.

This Malaysiakini piece, entitled Blue Ocean distortion by Dr Azly is, by his standards, quite accessible. More importantly, he slices and dices with such a high level of precision, the recent Blue Ocean speech by the Deputy Prime Minister and, by so doing, completely devastate the central thrust of that speech.

It's a lazy, hazy Sunday. I am not mentally nimble enough to even dare to summarise Dr Azly's analysis. So, I'm taking the trite route of reproducing his piece in Malaysiakini for your edification. As I said, it is a devastating response to you-know-who's speech:

"... Because blue and red oceans have always coexisted however, practical reality demands that companies succeed in both oceans and master the strategies for both. But because companies already understand how to compete in red oceans, what they need to learn is how to make the competition irrelevant."

MCPX

- Kim and Mauborgne, Blue Ocean Strategy, pg. 190

You must be the change you wish to see in the world.

- Mahathma Gandhi

Leaders are fond of discussing management concepts and theories of social change and next, apply them to political paradigms.

They do this within the framework of Structural-Functionalism in which society is seen as a stable entity such as in the case of ‘power transfers’ and the ‘transitions of hegemony’.

Oftentimes political leaders and their opinion leaders, technocrats, intelligentsia, speech-writers, perception managers, and other members of the regime will embrace new ideas to help fine-tune the political economic structure of the old regime and help sustain the base and superstructure of the power arrangements.

These days, a popular concept of change in Malaysia and Asia perhaps is the blue ocean strategy in which the idea of cooperation takes over competition, and that novel opportunities are to be created to contribute to an environment in a future that promises more peaceful coexistence between producers and consumers, and providers and clients.

This idea is taken from the work of W. Chan Kim and Renee Mauborgne, Blue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant, published in 2006 by The Harvard Business School Press.

In a yet to be charted territory of the blue ocean, competition is said to be irrelevant.

Innovative companies thrive without having to compete for saturated markets. ‘Red oceans’ of chaos and competition is abandoned for ‘blue oceans’ of conflict resolution and collaboration, as this new idea goes.

Again, limited findings from the study of a few business entities is used as a model to be applied to public service.

Is Malaysia a blue ocean?

To answer this one must consider what state she is currently in.

Malaysia is wading through the (dark and dismal) River Styx in which her McCarthyism is keeping dissenting voices in jail, hunting down students and faculty, arresting peaceful protesters, battling with new media, making its politics of race and religion is evolve into a Balkan and a Bosnia.

The postmodern condition of this open sky neo-capitalistic country is debilitating and its citizen are in utter confusion of where the national leaders are bringing them to, at time when the central and ethnic-based leadership is rotting to its core, creating a hideous form of a human being infected with a Human Papilliomavirus.

Especially at the time of the December party elections the level of corruption within the ruling parties is at a critical stage that even those vying for top leadership have admitted that one needs many millions of ringgit to get elected.

This is happening at a time when the poor of all races are struggling to survive by the day, maintaining a roof over their head, and making sure that their children have food on the table.

Malaysians are in a bipolar condition in a unipolar form of governance in which there is the belief that only race-based politics is the one best system.

Dissenting views are to be crushed and destroyed by any means necessary, and the hegemony of the previous regime need to be maintained either through force or false consciousness inflicted upon the masses.

The red ocean of Malaysian politics

Malaysians are charting into an unknown territory brought about by the yellow wave of the recent March 8 revolution and the red Makkal Sakthi cries of repression, anger, and frustration.

There is also the ever ‘green’ ideology of Islamic-based parties and the light blue radical multiculturalism of PKR adding to the Kandinsky and Jackson-Pollock type-of political landscape painting of this country's future.

There is chaos and complexity in the pattern of political scenario, unlike the ‘blue ocean’ strategy feel-good ideology embraced by Barisan Nasional leaders who probably have not done an internal and external reading an critical analysis of what actually blue ocean strategy means in which the country is now trying to choose between depression and the deep blue sea.

In short, Malaysia is in a bloody red ocean that has been plagued with cut-throat shark-eat-shark world of racial politics.

In all these, Malaysians are in need of a leader that will not only embrace all these colors of change and turn them into a ‘rainbow coalition’.

Use that as a symbol to navigate through the blue ocean to arrive at a destiny that will promise a land of opportunities for all, less annoyance of race and religious politics, and onwards to march of participatory democracy and further on towards the reconstruction of a republic of virtue grounded in ethics of philosophical, economic, and political sustainability.

Replace paradigm and people

The theme in the book Blue Ocean Strategy, is hope for the creation of a future of peace and prosperity.

In Malaysia, who has the licence to give that hope? Who has the ability to be the captain of new consciousness and steer away from a Vision 2020 that has become a Myopia of 2012 as Malaysia's await the next General Election?

Is the present government, ailing with social cancer that started from the head and now heading to the soul, able to help create a blue ocean?

Can it do so with the happenings in the Judiciary, Executive, and Legislative?

This is a question Malaysians have to answer fast, while "hitting the ground running" as an American saying goes.

Paradigms and people need to be replaced. Democrats in America cannot rehire 'Bush-men of Texas' to navigate through the American Kalahari desert of Casino Capitalism in order to enter a new world of the unknown.

Can Malaysians do that too -- continue en masse supporting a regime that has betrayed its people?

Can Malaysians afford another 50 years of race-based politics albeit fine-tuned?

Making incremental changes are like fixing a machine that has interchangeable parts whereas that machine need to be reassembled or disposed in a junkyard of history together with its operators and owner of the means of economic and ideological production.

New games need brand new players.

In a game of strategies played in the deep blue sea, we need a clear blue sky above us with a rainbow right above so that we may learn to think elegantly like dolphins - rather than think brutishly like piranhas that will turn the ocean bloodier.

Teaching of Science, Maths in English should continue

Dr M has reiterated his support for the teaching of Mathematics and Science in the English language. I know that many Malaysians have been finding Dr M's pontifications quite hard to swallow, especially on the ketuanan business and his views on racial politics.

But, I feel like a beggar in the matter of the importance of using English as a medium of instruction in Malaysian schools.

And, beggars can't be choosers. Besides, politics and lobbying permits stranger bedfellows. I can picture your mind going crazy with this idiotic idiom. Mindgames are fun.

So, I am grateful that Dr M has come out in his customary directness in support of the policy that he put in place during his time as Prime Minister.

Dr M's statement comes at a time when the phenomenon of Mahathir sycophancy aka sindrom Pak Turut is on the rise again. Therefore, Hishamuddin better listen and obey. Otherwise, Dr M will come after him together with many, many angry parents.

Here's the report:

KUALA LUMPUR, Nov 22 – The teaching of science and mathematics in English should be continued to ensure Malaysian students, especially the Malays, are not left behind, said former prime minister Tun Dr Mahathir Mohamad.

He said the change to teach the two subjects in English from Bahasa Malaysia was to ensure students could master them and at the same time become more proficient in English, the number one language in the world.

“It is not aimed at neglecting Bahasa Malaysia. Furthermore, most publications on science and mathematics are in English.

“Take for example the cellular phone. If foreigners manufacture them equipped with cameras and the short-messaging facility but the manual is in English, can we used our science which is in Bahasa Malaysia to make the same hand phone? By the time we are done with the translation we will be left far behind,” he said at the “Malay Dilemma” discourse organised by the National Writers Association (Gapena) here today.

He also cited the dark ages of the Arabs where they had to learn everything from the Greeks.

“Obviously they could not ask the Greeks to translate their knowledge into Arabic. The solution then was for them to learn Greek so that they could have access to the knowledge in their possession. By doing this, the Arabs became a progressive race,” he said, adding that the same applied in the current scenario in the country.

He also said being proficient in two languages was a great asset and cited himself as an example.

“I studied in a Malay school for two years before my father transferred me to an English school. Thereafter all my education was in English. Did I lose my ability to use Bahasa Malaysia?

“It will not signify the end of the Malay race if we are to learn in English as well,” he said.

Sim Kwang Yang unleashed

I have been enjoying Sim Kwang Yang's columns in Malaysiakini all this time. In all this time I have noticed his remarkable restraint and balanced analysis. Sim's considerable intellect and excellent penmanship is always a pleasure to read.

In his latest piece entitled, Changing the Head Hornbill in S'wak, the ex-DAP Sarawak pol has maintained his balanced analysis with a major difference. This time Sim leaves a sting. The quiescent lion has decided to roar louder now.

Sim's piece is revealing in suggesting that the mood has very palpably changed in Sarawak from the possibility of change to the probability of change. The difference lies in the mobilisation of the Dayak vote.

Once again, I take the liberty to reproduce the Malaysiakini in full so that as many Malaysians as possible (those who bother to visit this blog, anyway) can further understand the nuances of Sarawak politics and the significance it portends as a major tipping point for overall political change in Malaysia as a whole.
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Should Abdul Taib Mahmud - the chief minister of Sarawak - step down, after 27 years at the helm of near absolute power in the resource rich state?

MCPX

Does PBB - his party that holds half the number of seats in the Sarawak State Assembly - bully the other component parties of the Sarawak Barisan Nasional? The answer to both questions is a resounding yes!

But this kind of questions is only relevant to members and supporters of the Sarawak BN. Other Sarawakians know very well that Taib will not step down on his own accord.

He has to cling on to the throne in Sarawak, to protect the future of his gargantuan family conglomerate CMS (an acronym that could designate the company Cahaya Mata Sarawak or the title Chief Minister of Sarawak - an interesting coincidence).

Whenever conversations meander off onto the topic of the Sarawak CM in private circles, it is hard for people not to mention CMS in the same breath. Its dominant presence in the Sarawak's economy - especially in the public sector in the state - is well known.

Actually, the acronym for CMS has its origins in a precursor to the Sarawak Economic Development Corporation (SEDC): Cement Manufacturers Sarawak.

The report in The Edge

The repressed press of Malaysian media have seldom told the story of CMS. On the other hand, there have been a few reports by international media on Taib's family business. The following report by Michael Backman, entitled 'In Sarawak, politics and cash are all in the family', was published in The Edge on March 15 2001 in Melbourne, Australia:

"CMS Group was originally a joint venture between the state government's Sarawak Economic Development Corporation (SEDC) and the neighbouring state of Sabah.

The group started as a monopoly cement producer to feed the building boom in both states. In 1989, the Sabah government sold its stake and the Sarawak government decided the company should be listed on the Kuala Lumpur Stock Exchange. At the same time, the chief minister's brother, Onn bin Mahmud, and his two sons, Mahmud Abu Bekir Taib and Sulaiman Abdul Rahman Taib, were brought in.

The Taib family owns about half the company and the SEDC's equity has been diluted to about eight percent. Effectively, the chief minister had decided to privatise CMS - and it was his family that bought it.

CMS has since expanded to more than 40 subsidiaries that operate in infrastructure development, water supply, steel making, transport, manufacturing, property development, financial services and stock broking.

But CMS is not the Taib family's only business concern. Timber is the main source of Sarawak's wealth. Logging concessions, which the Sarawak government hands out, are are a license to print money. The chief minister's family happens to possess significant logging concessions.

Indeed, claims have been published that companies associated with Taib and his supporters hold about 1.6 million hectares in timber concessions with a combined logged value of up to US$12 billion.

Taib's time in politics has coincided with the apparent accumulation of enormous family wealth. He is known for his expensive tastes - he is rumoured to have paid almost US$2 million for the grand piano that belonged to late American showman Liberace."

There it is. The above report, published in 2001, is still relevant today. The question of whether Taib's discharge of his official duty as CM amidst the meteoric rise of CMS constitutes a conflict of interest or outright corruption is a purely academic one.

As long as he can deliver all or nearly all 31 parliamentary seats in Sarawak to keep the Umno prime minister in power, as has been proven during the March 8 general election, the PM and all the federal agencies under his jurisdiction will not touch the Sarawak CM with a ten-foot pole.

A dynasty in the making?

If you check into the traffic on Sarawak Internet, you will find the name of the CM, together with the name of Deputy Chief Minister Alfred Jabu, the most vilified and defiled names in the state. A referendum among Sarawak netizens will conclude that indeed the CM has overstayed his welcome.

But the CM will not go gently into the good night in more ways than one. His brother joined the Sarawak State Assembly as a member in the last state election in 2006.

In the May parliamentary election, his son Sulaiman was elected as MP, and was promptly co-opted into the federal government as a deputy minister, presumably to learn about the art of government. Do we see a dynasty in the making? Only time will tell.

Therefore, for Taib's detractors to fulfill their dream of changing the chief minister of Sarawak, there is only one way, and that is through the next state general election speculated to be held as early as next year.

Slightly more than a week ago, during a dinner in Sibu organised by "Friends of PKR", 4000 people of all races turned up to welcome Anwar Ibrahim and witness a public ceremony in which Gabriel Adit, the current independent state assemblyperson representing Ngemah and a former vice-president of the now defunct Parti Bansa Dayak Sarawak (PBDS) submit his application to join PKR, together with 12,000 others.

The choice of Sibu as the dinner venue is significant. Sibu is sited on the bank of the mighty Rejang River, and upstream, the Rejang basin is one of the most notable Iban heartlands in Sarawak. Adit's dramatic personal political make-over is symbolic for many disgruntled Dayaks in Sarawak. Some Dayaks have already predicted a new dawn for Sarawak, a revival of Dayak power on the political scene in the state.

Nothing is impossible in politics I suppose, having just witnessed the historic conclusion of the American presidential election. But Sarawak is no America, and Sarawakians are a far cry from Americans in many political aspects.

The opposition parties in Sarawak are now fragmented and weakened, divided by race, region, and personal feuds among their leaders. The hounds also run with the hares. The Sarawak political arena is quite a muddied pond full of all kinds of reptiles, swimming along with the real dragons.

Eventually, the Achilles' Heel of the opposition parties in Sarawak is their lack of funds, in sharp contrast to the seemingly inexhaustible source of funds lying in the Barisan Nasional war chest.

Unlike politics in the peninsula states, Sarawak politics, especially in the rural constituencies, is still mired in money politics. That is why the cash-rich Sarawak BN has been so successful in so many past parliamentary and state elections.

I have met many rural voters who actually would demand cash for their votes. Ugly as it may seem, it has become one of the less savoury features of Sarawak democracy.

To break this distasteful tradition, the opposition must not buy votes, or give all kinds of largesse during general elections, including building materials, personal gifts in kind, or standing feasts that can last throughout the duration of the campaign period. (Yes, this is how things are done in Sarawak.)

They must device more meaningful and innovative methods of campaigning, the likes of which Sarawak rural voters have never seen before.

Anwar's full attention

But then there is still the huddle of reaching the rural voters. There is still the question of funding, needed for large groups of canvassers and campaigners to travel long distances across difficult terrain to motivate and organise local grassroots leaders in every village and every longhouse throughout this vast and sparsely populated state where modern infrastructure for communication and transport is primitive at best.

We are talking about hundreds and thousands of ringgit for one rural constituency alone. Multiply that by the 50 or so rural and semi-rural constituencies and you get the rough estimate of how much money it takes to change the CM of Sarawak.

This is only one hurdle. I can write a book on the problems and experiences of contesting in Sarawak alone.

But the great dinner in Sibu is a good start towards solving those problems. Obviously Anwar was suitably impressed; he said that if the response from Sarawakians is so good, he should perhaps visit Sarawak more often.

I believe PKR is a suitable vehicle for positive change in Sarawak for various reasons, not least of which is the clout of the party in national politics and in the Pakatan Rakyat coalition.

For that change to happen, Anwar may have to turn his full attention to this vast eastern state of Sarawak - now.

He has to go there often, to heal wounds among the opposition camp, to build consensus and coalition, to work out a statewide strategy, coin mission statements, supervise organisation, to recruit new talents who will be free from negative political baggage, and above all, squeeze out the funds from whatever resources at his disposal for the big campaign. He has to do it, like yesterday.

The prize is worth his trouble. In Sarawak, state power determines the outcome of the parliamentary elections most of the time. A change of the chief minister will greatly improve Anwar's chance of becoming the prime minister of Malaysia in the next parliamentary general election.

For justice in the Land of the Hornbill in the emergence of a new Malaysia!

Aneurysm, Anwarism

This is what happens when I awaken at an absurd hour. My thought processes goes doozy. This is the result:

An aneurysm(or aneurism) is a localized, blood-filled dilation (balloon-like bulge) of a blood vessel caused by disease or weakening of the vessel wall.

An Anwarism is a localised, hope-filled dilation of Malaysian emotions caused by the disease of corruption or weakening of the wall of indifferent government.

Innovation targets?

I found Ahmad Ibrahim's piece in NST Online rather consistent with the point that I've been trying to make in this blog. Unlike my nondescript self, Ahmad Ibrahim is a Fellow of the Malaysian Academy of Sciences. So, while Malaysia's economic managers can haughtily dismiss views offered by bloggers as little more than light flatulence, they should not ignore someone like Ahmad Ibrahim, part of whose piece I offer here:

Diversification has always been Malaysia's strong point in strategising the country's economic pursuits. In the early years, it was diversification in agriculture. Oil palm and cocoa were introduced to complement rubber in the plantation sector.

Later, manufacturing was brought in to cushion the impact of the volatility of commodity prices. The plantation sector also ventured downstream for added value as part of the sector's diversification strategy. The rubber industry invested in rubber products; the palm oil industry in oleochemicals; and cocoa in chocolate products.

All such moves contributed to Malaysia's healthy economic growth in the last 50 years. Will the same recipe work for the next 50 years?

Not likely. Economists now agree that Malaysia can no longer compete on the basis of the country's traditional low labour and land cost advantage. Continuing with such a strategy may even spell doom for the economy. Instead, there is wide consensus that innovation is the only way forward if Malaysia is to repeat the country's economic success of the last 50 years.

But do we have what it takes to capitalise on innovation as a way to create wealth and promote socio-economic well-being? Can innovation work in Malaysia? The call to embrace innovation is not new, but we still do not have anything to really show for it, except perhaps some early achievements in rubber and palm oil.

You really have to read the entire piece here.

While reading this piece, I found out to my amusement that there is even a National Innovation Council. It is chaired by the Prime Minister. Did you know that?

And did you know that the National Innovation Council endorsed a National Innovation Model? What is a National Innovation Model? I have no fornicating sightless deer (no eye deer. Get it?).

Obama and JFK: Inaugural Address

Many people have been rather perplexed over many years by my strong affinity for John Fitzgerald Kennedy. They tend to look at my collection of JFK books and shake their heads and shrug their shoulders in a way that does not suggest in any manner that they understood what the collection is all about. Not that it bothers me in the least bit.

One of the truths about my apparent obsessive-compulsive behaviour towards the various written studies of JFK is rooted in his love of the English language and his awareness of the power of the spoken and written word.

In one of the seminal books on JFK entitled Kennedy, written posthumously by Theodore Sorensen JFK's Personal Assistant and speechwriter extraordinaire, Sorensen had a section that lent a glimpse of the process in which JFK's Presidential Inaugural Address was crafted. It also revealed the thought process that JFK and Sorensen went through in preparing one of the most important speeches an American President can make in his political career. Here's a swatch of Sorensen:

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He (JFK) had first mentioned it (drafting the Inaugural Address) to me in November (1960). He wanted suggestions from everyone. He wanted it short. He wanted it focused on foreign policy. He did not want it to sound partisan, pessimistic or critical of his predecessor. He wanted neither the customary cold war rhetoric about the Communist menace or weasel words that Kruschev (the Soviet leader at the time) might misinterpret. And he wanted it to set a tone for the era about to begin.
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He asked me to read all the past Inaugural Addresses (which I discovered to be a largely undistinguished lot, with some of the best eloquence emanating from some of our worst Presidents). He asked me to study the scret of Lincoln's Gettysburg Address (my conclusion, which his Inaugural Address applied, was that Lincoln never used a two- or three-syllable word where a one-syllable word would do).
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He was dissatisfied with each attempt to outline domestic goals. It sounded partisan, he said, divisive, too much like the campaign. Finally, he said, "Let's drop the domestic stuff altogether. It's too long anyway." He wanted it to be the shortest in the twentieth century, he said. "It's more effective that way and I don't want people to think I'm a windbag." He couldn't beat FDR's abbreviated wartime remarks in 1944, I said- and he settled for the shortest (less than nineteen hundred words) since 1905.
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The next morning, on the patio in sport clothes, he reworked it further. "Let's eliminate all the 'I's," he said. "just say what 'we' will do. You'll have to leave it in about the oath and responsbility, but let's cut everywhere else." The ending, he said, "sounds an awful lot like the ending of the Massachussetts legislature speech, but I guess it's OK." He worked and reworked the "ask not" sentence, with the three campaign speeches containing the same phrase spread out on a low glass table beside him.

The power of JFK's Inaugural Address has lasted for nearly half a century. As recently as 2004, Thurston Clarke wrote an entire book entitled Ask Not, an excellent and well-written work, on the makings of the Inaugural Address. Clarke's thesis was to debunk the myth that JFK did not author the Inaugural Address and, that it was actually written by Sorensen in toto. Clarke establishes that JFK's imprimatur was stamped fully and indelibly on the Inaugural Address.
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Come January 20, the date which is fixed for US Presidential Inaugurations, Obama's Inaugural Address will be delivered.

From the standpoint of oratory, there hasn't been a US President since JFK, quite like President-elect Obama, who can deliver soaring words without sounding silly. Ronald Reagan had a good sonoric voice that he used to good effect with large doses of Hollywood-style one-liner quips. But no one has matched JFK in speech or word, in my humble estimation. Until, Obama.

My only concern is that given the domestic economic maelstrom that now dogs the US, Obama will have to deal with the nuts and bolts issues. But, I suspect, Obama and his speechwriters will be smarter than that. During the best of times or the worst of times, people want to hear soothing words even if they are largely rhetorical.

That is why, in the Malaysian context, Raja Nazrin's speeches almost always bring cheer and inspiration and positive goodwill to the entire spectrum of the Malaysian community each and every time. Although he avoids rhetoric and couches his speech with great intellect and wisdom, Raja Nazrin touches the correct spot every time. He is a savvy public figure in Malaysia with a good reading of the true nature, pulse and aspirations of Malaysians.

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Which leaves us with the anticipation of Obama's forthcoming Inaugural Address. It is something to look forward to. Given his now-famous Acceptance Speech in Chicago, upon being confirmed as President-elect, Obama's Inaugural Address could turn out to be one to remember for the ages to come...at least, I hope so.
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By way of a postscript, I wish to add an image of a painting of President-elect Obama in the famous Kennedy pose above. It's an image done amazingly well by Dan Lacey the Artist (from whose blog I borrowed the image of the JFK painting).

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I want to thank Dan for sharing this Obama-in-Kennedy-repose image with me and, I want to suggest that you click here to visit his blog entitled, Dan Lacey, Painter of Pancakes to savour more of his great works of contemporary art.

Denial or the Nile?

I read this Malaysian Insider op-ed piece entitled, The economy: Government not in denial but... with a twinkle in the eye and a loud sigh. Such a contradiction in physiological response can only come from reading news reports about the Malaysian government.

Many Malaysians, even those who are not contemplative by nature, cannot avoid the sensation that something is about to give way. We're not sure what. The air can sometimes be so thick with tension that you can use a knife to cut through it. Behind the quietude of the happy and inscrutable mask that Malaysians wear the electrons are zooming around the connected synapses of Malaysian minds about things that may not be said.

There are things Malaysians can't say aloud for fear of offending of ethnic sensitivities.

There are things that Malaysians can't say aloud for fear of offending religious sensitivities.

There are things that Malaysians can't say aloud for fear of offending language sensitivies.

There are things that Malaysians can't say aloud for fear of economic sabotage.

These are things that Malaysians can't say aloud for fear of incarceration.

Just what exactly can Malaysians say?

There are even things that the Malaysian government can't say aloud for fear that Malaysians will suddenly lose their confidence.

So I say aloud here and now that many Malaysians should apply to emigrate to any part of the great nation of Egypt that is appurtenant to the Nile.
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Re-visiting Veblen

Some time ago I wrote about Thorsten Veblen and his thesis on conspicuous consumption. In almost all economic news of late, the overt intention of most governments is to implement stimulus packages that are intended to stimulate consumer demand.

What kind of consumption is are governments talking about?
Do governments want consumers to consume anything and everything that they can afford? Or, do they mean basic necessities? Basic necessities have to consumed anyway to provide humans with a comfortable living.

Do the governments also hope that consumers will also consume luxury goods also? That would appear to be the case. Consume. Consume. Consume.

Maslow's hierarchy of needs
Abraham Maslow was quite a guy. You can read about his theory on the hierarchy of needs here. This basic construct of the psychology of consumption has influenced generations of management and marketing people.


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Where are your needs within this hierarchy? In our modern society, unless you are poverty-ridden, we head straight for the top. We always perceive ourselves at the level of self-actualisation.

Beyond the brief language of the pictogram above, modern corporations have adopted a detailed understanding of the need for Esteem and Self-actualisation even more than we can imagine.

Advertising stimulates conspicuous consumption
Maslow's pyramid is the foundation upon which the entire advertising industry frames their marketing and promotional campaigns for corporations.

The idea is to tell the consumer that he or she will have better self-esteem if they are seen to own and consume certain luxury products. Thus, a Perodua Aviva is different from a Toyota Camry. Thus, a Poh Kong diamond is different from a Lazarre diamond.

The idea is to tell the consumer that he or she is seen to have arrived at the peak of the socio-economic ladder, self-actualisation, when they are are seen to own and consume even more expensive products. Thus, a Toyota Camry is different from a Mercedes S320. Thus, a Lazarre diamond is different from a Tiffany diamond.

The production trap
The role played by advertising to stimulate desire and, therefore consumption and demand is only one aspect. This is where I will try to get to what I believe to be the structural problem with modern capitalism, the production trap.

This expression, production trap is an expression that I hope to have just coined. And, if some great economist has coined it earlier I will immediately offer my apologies.

What do I mean by production trap? Briefly, I want to draw your attention to the ridiculous situation where almost every product undergoes model and design changes within very short periods of time.

Just staying with the car analogy. I seem to recall that prior to the 1980s, a new car model launched will stay the same for at least four to five years with some very minor modifications. Since the 1990s, car models are changing every two years.

Even if you don't have any inkling of production costing, you will know that when the shape of the car model changes, when the dashboard changes, when the headlights and rear lights change, all these mean that a lot more money is being spent on industrial design, production of new parts and even more advertising and promotion.

The basis for this trend of quickening model changes is competition.

This leads to ever more rapid consumption and discarding of old models. Multiply this phenomenon a billion-fold to every single product (other than meat and vegetables) and you will get the picture of the production trap i.e. the reckless and continuous production of similar goods and services in the name of capitalistic competition to meet the redundant wants of consumers whose needs have been more than fulfilled.

The RM64 billion question (it used to a RM64 question but, now got hyper-inflation) is, how does modern humankind get off this careening and bumpy wagon?

Now, THAT would be a thesis that is worthy of a Nobel prize.

Coffee with walla

It was a rare pleasure to have met with regular commentator walla recently. The coffee tasted better than normal since it was made more aromatic by a meeting with a formidable mind albeit dressed with huge doses of modesty.

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I enjoyed having the first of what I hope will be many chats with a like-minded person who has a deep an abiding interest in the well-being of this great country of ours.

The only downside was that we probably looked like the layabouts at Starbucks that Sakmongkol mentioned in his recent post!

Dayak re-awakening in Sarawak?

The latest report by Joe Fernandez in Malaysiakini on last Saturday's PKR event in Sibu provides a good account of the state of play of the re-awakening of the disenfranchised Dayak community in Sarawak. It would appear that there is a genuine groundswell of discontentment with the manner in which Sarawak's socio-economic development has been handled by Taib Mahmud and BN Sarawak.

In many cases, consultation on many development projects are conducted with Dayak politicians within BN Sarawak that fails to take into account the needs, aspirations and social cost of the affected Dayak communities at the ground level.

This is evident in the manner in which Native Customary Lands (NCL) have been excised by the Sarawak government for the construction of major dams and establishment of oil palm plantations, not to mention the logging of timber.

Environmental destruction is another major issue that affects the lives of these affected communities. Fair compensation is another burning issue, not just in monetary terms but, the displacement and relocation effects on the social and cultural lives of the Dayak communities, many of whom have been associated with specific localities for aeons.

It is, therefore, no surprise that there is a Dayak re-awakening. Read the Malaysiakini report below which addresses the Sarawak political state of play:

Senior Pesaka Bumiputera Bersatu (PBB) leaders have dismissed charges of being solely responsible for the ‘political castration of the majority Dayak community’ as alleged by Ngemeh state assemblyman Gabriel Adit who joined opposition party PKR on Saturday.

MCPX

“The Dayak leaders themselves are to blame for their (the community’s) political castration. They are disunited out of personal greed and lack discipline,” said one senior Melanau party activist from the Bumiputera wing of PBB in a text message from Kuching.

“They would rather see their political parties break up and deregistered.”

Over the weekend, Adit (left) announced that 12,000 of his supporters have joined PKR and they were welcomed with open arms in Sibu by Opposition Leader Anwar Ibrahim.

But the ruling PPB in Sarawak is not particularly perturbed by Adit’s action, which has boosted PKR strength to two in the 71-seat state assembly.

“PKR is not going to solve their mistrust of each other and their self-destructive nature. At best, PKR is a temporary transit house for them,” added the PBB leader.

The PBB leader was responding to the following SMS text and query from Malaysiakini to a selection of leaders, activists and members from BN component parties, PKR, SNAP and the yet-to-be-registered Malaysian Dayak Congress (MDC).

“12,000 new members led by Adit joined PKR in Sibu tonight (Nov 15). He handed over the application forms at a dinner attended by nearly 4,000 people. Adit said that PKR is the best vehicle to solve the problem of the political castration of the Dayaks. What do you think?”

Another respondent, PKR Sabah chief Jeffrey Gimpoi Kitingan, had this to say in a longish text message at 1am on Nov 16 from Sibu where he attended a 4,000-strong dinner hosted by the ‘Friends of PKR’ where Adit headed the organising committee.

“I could see and feel the desire for change and the excitement over Anwar’s speech and that of others who spoke, including Adit,” said Jeffrey.

“I think the Dayak/Iban have no better alternative than PKR/PR (Pakatan Rakyat) to overcome their castration. Their problems involve injustices that can only be solved by an alternative national government. Local parties wouldn’t be in a position to take on the (Abdul) Taib (Mahmud)-led BN state government.

“The Dayaks need a good sympathetic national leader to get them out of the situation - one who is also interested in bringing about national political change. I believe that man is DSAI (Datuk Seri Anwar Ibrahim)...

“Anwar will make sure that the next generation of Dayak leaders will look after the interest of the people rather than their selfish interest.”

How Dayak parties were neutralised

Jeffrey witnessed the handover of the 12,000 application forms by Gabriel Adit, a nephew of Leo Moggie Irok - the first and last president of PBDS (Parti Bansa Dayak Sarawak) which went defunct after moneybags in PBB openly backed James Masing to take on party founder Daniel Tajem, a long-time nemesis of Taib Mahmud.

It has been alleged that Taib wanted PBDS deregistered and “finished off for good”.

One respondent to Malaysiakini’s SMS query wanted to know the meaning of castration, while others were of the view that Kuala Lumpur was behind the disunity of the Dayaks.

Many have also pinned the blame on ‘unclean’ leaders parachuted in and thrust on the Dayak community so that they (the leaders) could be easily manipulated by the powers-that-be.

Some suggested that Abdul Rahman Yaakub and his nephew, Taib Mahmud, could not have stayed in power for almost four decades without federal government backing and see them as proxies for the real rulers in Kuala Lumpur.

Poverty, money politics and timber politics have also been cited as among the reasons for the political castration of the Dayak community.

“The coming of PKR to Sarawak is just like the entry of Umno to Sabah. PKR can do for Dayak politics what Umno did for Muslim politics in Sabah,” said one text message from a member of the pro-tem committee of the Malaysian Dayak Congress.

“Most of these Dayak leaders at the moment are satisfied with their regular ‘angpow’ packets from the powers-that-be. The money from the spoils of office keeps them in line. They couldn’t care less about their people.

“Besides, many of them have skeletons in their closets and can be easily manipulated. For example, one state minister is a gambling addict and has so many bank loans to take care of. Is he going to worry about himself or the Dayaks?”

The response from a senior Snap leader was telling.

He suggested taking another look at the history of how the present power equation in Sarawak came about and resulted in the political castration of the Dayak community.

According to him, Snap provided the first and second chief ministers - Stephen Kalong Ningkan and Tawi Sli respectively - until the Special Branch and the federal government entered the picture to break up the party’s dominance and bring about a re-alignment of the power structure which worked against the interests of the Dayak community.

“All the good Dayak leaders were either chased out, sidelined or hounded out of political existence as timber politics under Rahman Yaakub and the politics of development under Taib entered the picture,” said the Snap leader.

The rise of Muslim parties

The present power equation apparently began with two small Muslim parties, Barjasa and Panas, merging to form Parti Bumiputera in the late 1960s.

Parti Bumiptera in turn merged with Pesaka, an Iban party, led by Temenggong Jugah, the paramount chief of the Ibans.

The merger in January 1973 was allegedly “forced” on Pesaka by Kuala Lumpur which hinted that any opposition would be met with detention under the Internal Security Act - a fate suffered by several Sarawak United People’s Party (Supp) leaders at that time.

Bumiputera and Pesaka still remain separate but within PBB, with bumiputera having a 2:1 majority over Pesaka, thus effectively preventing the Pesaka leader emerging as the leader of PBB.

With the entry of Supp and Snap into the coalition government, the Dayak seats outside the Pesaka fold were further divided between Supp and Snap, with the latter having the lion’s share in the ratio of 3:1.

Within the Chinese-based Supp itself, the Dayaks formed a third of the membership and the seats.

Dayak Supp members, like Pesaka, helped dilute the political strength of the Dayak community while adding political strength to Supp and PBB with nothing in return for their community.

By the time Taib became chief minister in 1981, replacing his maternal uncle Abdul Rahman, he was still not happy with Snap having such a large number of Dayak seats.

Apparently, he bankrolled Moggie and Tajem to take on James Wong, the Snap president.

The result was the formation of PBDS in mid-1983 after Taib had indicated that Moggie and his supporters were not welcome in PBB since their entry would tip the power balance in favour of the Dayaks.

Earlier, during their open rebellion against Wong’s politics of money power, Moggie (right) had been led to believe that they would be accepted as members of PBB if they were expelled from Snap by the Limbang-based timber tycoon and former deputy chief minister, who ran the party like one of his family businesses and treated members like his workers.

Wong himself had spent some time under ISA detention for “planning to sell Limbang” to Brunei which had longed claimed the territory which almost completely separates Brunei into two halves.

The authorities never explained how Wong could on his own sell Limbang to Brunei. Wong was only released after Moggie and Tajem persuaded him to take Snap into coalition with the state BN.

Takeover of PBDS and eventual split

Tajem’s takeover of PBDS was opposed by Taib through James Masing’s challenge and the ultimate result was the deregistration of PBDS and the formation of the breakaway PRS (Parti Rakyat Sarawak) which has suffered the fate of two presidents with assistant state minister Larry Sng claiming to be the real president in defiance of Masing.

Taib retains Larry Sng in the state cabinet despite Masing expelling him from PRS after the Registrar of Societies, on the directive of Prime Minister Abdullah Badawi, recognised him as the lawful president on the eve of the March 8 general elections.

Many of the Dayak state assemblymen and parliamentarians outside PBB and Supp are beholden to Alfred Jabu (right), the Pesaka leader, who has come up with a system of “loaning” his nominees as candidates to the other BN component parties.

These nominees are not even members of the political parties they are chosen to represent. This has led to charges of PBB bullying other BN component parties.

Meanwhile, Snap was deregistered and expelled from the BN but won a new lease of life through the courts. A Snap breakaway, SPDP (Sarawak Progressive Democratic Party), led by William Mawan, was accepted as a member of the Barisan Nasional.

Attempts by ex-PBDS members led by Tajem (left) to form the Malaysian Democratic Congress were rebuffed by the Registrar of Societies on “national security grounds”.

They are now turning to PKR as the only avenue for their political struggle although Tajem and Masing have since made up with each other.

Adit first won the Ngemeh seat on a PBDS ticket but was denied that seat in the 2006 state elections.

He stood as an independent and won and was refused entry into any BN component party on the grounds that he had “opposed the coalition and stolen a seat which belonged to PRS”.

Before Adit contested the election, he was a member of SPDP which had hoped to “swap” for the Ngemeh seat.

Adit had backed Tajem against Masing in the struggle for control of PBDS after Moggie suddenly resigned over “hurtful and ungrateful remarks” in public by Masing over his (Moggie’s) long stay in office.

Anwar: Sarawak holds key to PKR government

SIBU, Nov 16 — Parti Keadilan Rakyat (PKR) advisor Datuk Seri Anwar Ibrahim said Sarawak, which has 30 members of parliament, holds the key to the formation of the Pakatan Rakyat (PR) government in the country.

"When Sarawak changes its course, the Barisan Nasional government will collapse," he said at a dinner organised by "Friends of PKR" at the Sibu Trade and Exhibition centre here last night.

He said leaders in the PR coalition like Datuk Seri Abdul Hadi Awang of Pas, Lim Kit Siang and Lim Guan Eng of DAP and himself and his wife would continue to meet and hold discussions with BN MPS to get them to cross over.

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About 3,000 people were present at the dinner, the biggest so far for a PKR function here.

Those present included PKR vice-president Datuk Seri Dr Jeffery Kitingan, Sarawak DAP leader Wong Ho Leng, former Sri Aman MP Jimmy Donald and Baginda Minda, the former Parti Rakyat Sarawak Balleh branch publicity chief, who caused a furore with his statement accusing the state dominant BN party, the Pesaka Bumiputera Bersatu, of being a bully.

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At the function, Anwar received membership application forms from Gabriel Adit Demong, one of two independent state assemblymen, and from 11,752 individuals from throughout the state.

Anwar said Sarawakians were now ready for change, saying Adit had volunteered to lead a recruitment drive for more members for PR.

"Do not be surprise if what had happened in five peninsula states in the March general elections could happen here," he said, adding that PR was prepared to face the coming state election.

He also claimed that several people from the state had visited him to express their interests to join PKR.

Meanwhile, Adit said a lot of BN members were "waiting in the wing" to join him and that his decision in joining PKR was "the first of many instalments" over the next few months.

Source: Malaysian Insider

Party feud grips Umno

This a piece I extracted from Straits Times Singapore and AFP:		Mr Mukhriz says he is his own man and is looking to reform the youth movement, which along with the ruling party has lost much support and credibility over the years. -- ST PHOTO: JOYCE FANG

KUALA LUMPUR - A NEW generation of leaders in Malaysia is fighting for control of the ruling party - in disarray since heavy election losses - with the premier's son-in-law battling his predecessor's son.

The successors of current leader Abdullah Ahmad Badawi and former premier Mahathir Mohamad are shaping up to continue hostilities that have raged between the two veterans for the past few years.

After disastrous election results in March, Datuk Seri Abdullah has been forced to stand down early next year, unleashing an unprecedented contest for top posts in the United Malays National Organisation (Umno).

Drawing intense interest is the tussle for the influential role of youth wing chief - a nurturing ground for future leaders.

Mr Abdullah's son-in-law is pitted against Dr Mahathir's son, in a fight that could determine which of the rival clans will control Malaysia's future.

The two patriarchs have had a very public falling-out since the 2003 leadership handover, and Dr Mahathir's constant sniping is one of the major factors behind Mr Abdullah's impending departure.

'It is obvious that the person who wins will determine whether the party's future will be more aligned to Mr Abdullah or Dr Mahathir, as they have each got their favourite proxy in the race,' said Ms Tricia Yeoh from the Centre for Public Policy Studies.

Mr Mukhriz Mahathir, a sophisticated 44-year-old businessman, is the frontrunner for the youth chief job.

His father will forever be remembered as the man whose two-decade rule brought prosperity to Malaysia, transforming a tropical backwater into one of Southeast Asia's most prosperous nations.

But Mr Mukhriz says he is his own man and is looking to reform the youth movement, which along with the ruling party has lost much support and credibility over the years.

'One of the reasons we were rejected in the last general elections and recent by-elections was the perception that we misuse, worse still abuse, our positions in government for political purposes,' he told wires agencies.

'So I want an arm's-length relationship between the party and the government.'

The Umno-led coalition, which has run Malaysia since independence in 1957, suffered its worst-ever setback in March elections, losing five states and a third of parliamentary seats - effectively ending Mr Abdullah's career.

Mr Abdullah had been criticised as weak and ineffective, but many Malaysians believe a major factor in his downfall was the antics of his 32-year-old son-in-law Khairy Jamaluddin.

The Oxford-educated Khairy was an aide to Mr Abdullah before marrying the boss's daughter in 2001, sending him on a meteoric rise that landed him the deputy youth chief position in 2004.

Eloquent and expensively dressed, Mr Khairy cuts an impressive figure but his naked ambition and alleged influence with his father-in-law have seen him vilified on political websites and in water-cooler gossip.

Dr Mahathir has accused Mr Abdullah of pandering to the demands of Mr Khairy, whom he said was influencing government policy, contracts and appointments - charges he denies.

'I've gotten used to it. As far as I'm concerned, nobody has substantiated any of this innuendo with any facts or evidence, I have consistently denied it but people persist on perpetuating this perception,' Mr Khairy told AFP.

Mr Khairy, who also has big reform plans for Umno youth, says his reputation has been unfairly smeared.

'I'm not merely up against Mukhriz. There looms behind him someone, something, much larger. That is exactly what I'm up against,' he said.

'Mahathir has... openly campaigned for Mukhriz, has repeatedly criticised and denigrated me and who am I when compared to Mahathir? He is a statesman and a PM of 22 years and I'm just starting off in politics.'

With Mr Abdullah almost out of the picture, Mr Khairy's star may be fading but analysts say that in the arcane business of UMNO internal politics, Mr Mukhriz cannot yet count on victory.

'But whatever the outcome, it will finally determine whether Dr Mahathir or Abdullah has the last say,' said Ms Yeoh. -- Source: AFP