Tuesday, September 30, 2008

Who makes a better PM?

Malaysiakini carried a report on a survey done by the Merdeka Centre that points to 40% of Malaysians believing that Anwar Ibrahim would make a better Prime Minister than Najib Razak, who scored a 34% approval rating. About 25% of Malaysians were either undecided or unimpressed with either leader. According to the Merdeka Centre, total of 1,002 persons were randomly polled between over two weeks between Sept 11 and 22.

At the same time, Merdeka Centre found that more than 50% of Malay voters polled recently felt Bukit Bendera Umno division chief Ahmad Ismail's controversial remarks about the Chinese community were inappropriate.

Juxtaposing these two polls, one can surmise that the moribund state of the UMNO and BN leadership has not impressed Malaysians.

Add to this, the genuine concern over Malaysia's economic management or, the apparent lack of it, and we see the uphill task that faces UMNO and BN.

Do you feel better off today than you did 5 years ago?
Go to fullsize imageWhen Ronald Reagan challenged Jimmy Carter for the U.S. presidency in 1979, he posed this question in the course of a debate with Carter. It was rhetorical. But, it worked. Reagan won by a handsome margin.

There is a broad parallel that can be drawn between the Carter Administration and the Badawi-Najib Administration. Both are regarded as plodding and unimaginative.

This feeling and perception between and amongst voters is a powerful phenomenon that is difficult to dislodge. And, the truth of the matter is that the average Malaysian feels that he or she is worse off than they were 5 years ago.

In 2003, the Malaysian economy had, by most accounts, recovered to reasonable health. And, when the torch was passed by an authoritarian Dr M to a kinder and gentler Pak Lah, Malaysians felt a relief. That feeling and perception was translated into one of the largest landslide victories in Malaysia's electoral history. The Badawi-Najib Administration's inability to parlay that groundswell of goodwill into genuine political and governmental reforms and, more importantly, economic management, came home to roost in the March 8 general elections.

Najib's albatross
This record now hangs as the albatross on Najib's neck. Like it or not, he was at all material times the loyal Deputy. He can hardly deny being privy to the decisions made or, unmade.

Go to fullsize imageThis is Najib's dilemma. To remove the albatross, Najib has to eventually attack the flip-flop policies and, find a way to distance himself from it. But that is only one aspect.

Second, Najib has to attend to the judicial reforms and police commission reforms. He has to revamp the manner in which the government dishes out contracts and licences and permits; from an opaque structure to a more transparent structure. But, will he do it? Is he capable to that level of leadership? Does he have the spine that was well-hidden during the entire tenure that he was and, still is, Deputy to Pak Lah?

Anwar's plight
Having galvanised the vociferous support and, having captured the imagination of vast swatches of multiracial Malaysia to the historic outcome in the March 8 general elections, Anwar kept upping the ante with crossover scenarios and deadlines. But there is only so much adrenaline that can be pumped out in the Malaysian organism. And so, we witness a pause, a pause pregnant with possibilities. But, no less a pause. This is a test of true faith for PKR and Pakatan supporters.

Leaving aside the tactical issues in the shadow-play that typifies Malaysian politics, Anwar can still claim to enjoy a high level of goodwill among Malaysians. The Merdeka Centre survey results point to this.

Unlike Najib, who is still grappling with his new Finance portfolio, Anwar can claim that he's been there and, he's done it, as an economic manager. In his numerous speeches, Anwar is obviously very, very clear that the part of his message that was so resonant with voters was on economics. By focusing on harga minyak and calling BN, barang naik, his warnings were proven to be prophetic when the fuel hike took place and, inflation ensued.

But, the route to high office requires crossovers. Then, there's the nuisance of the sodomy trial.

But, at the rate things are moving along, Najib is the odds-on favourite to reach the post of Prime Minister. As with all things Malaysian, nothing is as it seems. Bets must be hedged heavily on Anwar's ascent too. He's got some interesting odds, too.

Back to the question, who makes the better PM? If Malaysians like excitement and significant changes, then Anwar is the man. With Najib, the status quo ante will be the order, it is likely to be more of the same. Under Najib there is likely to be changes, but how deep and profound changes will be is the major question. Najib, being a patrician born with a silver-spoon in his mouth is a political leader who has steered a careful path in the public eye (if you don't count his rah-rah days as an ultra UMNO Youth leader in 1987). Najib is likely to be a gradualist and incrementalist. For quantum leap possibilities you have to dial Anwar's number.

Monday, September 29, 2008

Could vs Should

In the current Malaysian political ethos leadership and competitive advantage is being derived not only from pragmatic values such as quality and blind obedience, as UMNO and some BN component parties will have us believe. Rather, the reality is that political parties must also organise themselves around humanistic, social, and environmental values such as integrity, transparency, sustainability, and trust. This may explain why the Pakatan alliance had a message that resonated so well with the Malaysian electorate.

I believe that to really thrive today, political parties need to operate more in the language of "should" and less in the language of "could."

The language of could involves asking questions like, "What can we do?", which encourages decisions and actions that are guided by rules. But there is little in rules that inspire..

Rules are to be complied with, and they tend to breed a culture in which people find ways to live with the rules or to circumvent them. Sound familiar?

In contrast, asking "What should we do?" is entirely different. This question encourages decisions and actions that are consistent with individual and organizational values within the political parties and, to translate these values into government policies.

Should transcends rules and inspires individuals to do more than merely comply. Yet, should appears to be the core inspiration for Pakatan supporters to comply with the rules because doing so is consistent with the humanistic, social, and environmental values mentioned earlier, such as integrity, transparency, sustainability, and trust.

In this way, should achieves a double effect: The mindset inspires them to do than merely follow the rules while preventing them from doing any less than complying with the rules. Why? Because to betray the rules is to betray the core values. This may explain, to some extent, the tightness with which the Pakatan alliance operated in the run-up to March 8 and its immediate aftermath.

A should mindset qualifies as a competitive advantage in the current Malaysian political landscape for two reasons. First, organizations and individuals are judged as much by the process of how they behave as by the result their behaviors deliver. This is the case thanks to hypertransparency: Malaysians can see deeper into the inner workings of political parties. This is something that the Pakatan state governments are finding out. This is something that was drummed home to UMNO and BN in the March 8 general elections.

And, because Malaysians can see deeper, they care about the political personalities and the process through which policies are created - or, at least, the negative effect of such policies. Is it any wonder that there is such immediacy in the general public's response to the flip-flop policies of UMNO and BN within the federal government?

Second, despite the Malaysian conventional wisdom that suggests conservatism, politics craves creativity and innovation, and should thinking frees political leaders and parties from the constraints of rules-based thought by unleashing new pathways of exploration and possibility. This was evident in Barack Obama's Democratic primaries campaign. It was evident in the Pakatan alliance's campaign in the March 8 general elections. This is something UMNO and BN needs to look at.

The way forward
We will see—because we can see and we want to see—which political parties live up to their assertions. Regardless, a few things are becoming clear.

Political parties are, in essence, communities of people. Greater connectedness will drive Malaysian politics to become more humanistic in nature. Should is the language that will enable Malaysian politicians to look through a human lens. This is something Pakatan alliance leaders are aware of. This is something Malaysians want to see in UMNO and BN politicians.

Selamat Hari Raya


Kepada semua rakyat Malaysia yang beragama Islam, khususnya kepada pelayar laman blog ini saya ucapkan Selamat Hari Raya Aidilfitri, Maaf Zahir Batin.

Sunday, September 28, 2008

Handover perils

The feudal mindset that typifies UMNO remains embedded very deeply in the leaders who are presently clinging on to the reins of power. This mindset had, in the past, been a source of UMNO's strength and its much-vaunted stability, at least, until 1987.

It is classified as a feudal mindset because there appeared to be a belief that power was vested in the leader. The leader was the embodiment of power. He was bestowed with wisdom and, he was given the implicit trust to annoint his successor. The indolent membership never raised excessive ruckus although there was, like all feudal systems, plots and subplots. But, inevitably, the veneer of legitimation was completed at the close of the General Assembly.

Times change. With greater education comes greater powers of thought and introspection. With greater wealth comes self-confidence and arrrogance. Indolent obedience is supplanted by restiveness and audible voices that question the wisdom of the leaders.

Information that used to be passed in hushed whispers, nuanced talk and surat layang are now freely captured in cyberspace. From cyberspace information can be processed and passed in virtually any medium; print, mobile telephony, facsimile, you name it. Thomas Friedman famously called this phenomenon The World is Flat, meaning a level playing field and equal access to knowledge and information. 

Given this backdrop, the idea of one leader is anointing another to take over is anathema to the wider base of UMNO members. This act of handover is disempowering to UMNO members. A handover excludes the views and voices of the membership. The issue is legitimation. Will the successor be seen as someone acceptable?

"Shock and awe" as a response to legitimation issues
Judging by UMNO's own history, all is not lost on the successor. Legitimation issues dogged Hussein Onn. It also dogged the initial months of Dr M's leadership. The powers that are vested in an UMNO President and, by extension, Prime Minister, both real and perceived, are enormous. There are dark powers of brute force and, there are entire suites and menu of economic powers and largesse that can be used to win over hearts and minds. 

UMNO's lesser leaders and members have historically demonstrated that in the face of strong leadership they will quickly be cowed into indolence. Stability is restored, alliances put back in place as allegiances are sworn and fiefdoms restored. The same level of indolence will be evident in the wider Malaysian polity. 

Have things significantly changed? Has there been a fundamental shift in mindset since March 8? 

A betting person would not bet against the powers of incumbency. But that should not deter a spiritual and idealistic person from saying a prayer while charging forward for change. 

Friday, September 26, 2008

BN and racism

Race-based parties perpetuate racism. Some may prefer to call this phenomenon racialism. But, what is the difference?

It is, therefore, the height of irony that the Barisan Nasional government should now choose to be a proponent of a Race Relations Act. If such a piece of legislation is truly intended to eliminate racism from the Malaysian community, it should outlaw any race-based political parties and organisations. Only then can we see the Malaysian community that is sensitised to racism.

Within the BN coalition the dominant parties are race-based. UMNO, MCA and MIC only permit membership based on race. When these parties hold their meetings it is attended by members of one race. The discussions can only be framed in racial terms. Is it any wonder, then, that party policies are race-based?

Thus, when these race-based parties meet at the BN coalition level, the discussions center on the allocation of political power and economic resources based on race. After the bargaining ends the resulting policies are termed social contracts. 

In truth, as many political analysts have concluded time and again, these so-called social contracts benefit only the governing elites within the race-based parties and their members. 

It is ironic that the BN ruling elite continuously dish out lessons in history by criticising the colonial divide and rule policies as the root of the evil that still haunts Malaysia. The BN, dominated by UMNO and its willing partners, MCA and MIC, has had 51 long years to attend to the eradication of racism. That they didn't do anything about it; that they encouraged it - merely confirms that racism is the main reason for their continued existence.

The damage done over the past 51 years include policies on staffing of the civil service and the education of young Malaysians. 

It is not impossible to reduce and remove the racism that is embedded in government policies. But it will take time. Sadly, the Race Relations Bill is only a small step albeit in the right direction. 

Wednesday, September 24, 2008

Market turmoil: Assailing the "true and fair view" doctrine

As with most market turmoils, the accounting profession and, more particularly, accounting standards that deal with valuation, has been put in the spotlight again. 3 issues have been cited.

The first of these concerns “procyclicality”. Bankers say that in a downturn fair-value accounting forces them all to recognise losses at the same time, impairing their capital and triggering firesales of assets, which in turn drives prices and valuations down even more. Under traditional accounting, losses hit the books far more slowly. Some admire Spain’s system, which requires banks to make extra provision for losses in good times, so that when loans turn sour their profits and thus capital fall by less.

The second—and immediate—question is how to value illiquid (and sometimes unique) assets. A common solution is to use banks’ own models. But some investors are concerned that this gives banks’ managers too much discretion—and no wonder, because highly illiquid (or “Level 3”) assets are worryingly large relative to many banks’ shrunken market values. Such is the complexity of many such assets that it may not be possible to find a generally acceptable method. The best answer is to disclose enough to allow investors to form their own views.

The third problem is a longer-term one: the inconsistency of fair-value rules. Today the treatment of a financial asset is determined by the intention of the company. If it is to be traded actively, its market value must be used. If it is only “available for sale” it is marked to market on the balance sheet, but losses are not recognised in the income statement. If it is to be “held to maturity”, or is a traditional loan, it can be carried at cost, subject to impairment. This is a dog’s breakfast. Different banks can hold the same asset at different values.

Rather than indulge in a deadly analysis of the fascinating area of what constitutes "true and fair" value, which may actually be a cure for insomnia and, create new precedents in medical science by introducing gas-less anasthesiology, I would much rather that you read The Economist piece yourself here.

Tuesday, September 23, 2008

Wide Angle

It hadn't been a fun day. 23rd September is a day that Anwar Ibrahim set for another milestone event. I had my bag of kuaci ready to witness some stirring stuff. But, nothing so far.

Instead, like many, I was in despair at the news of RPK being chaffeur-driven to Hotel Kamunting to reside at the Minister's pleasure.

Then, via Anil Netto's blog I discovered Huzir Sulaiman's new blogspot, Wide Angle. It is a brilliant, witty and satirical spot for us lesser bloggers to go to when we feel uninspired. His first post, The Malaysian Political Oscars is a real winner. Go on and have a read.

5 qualities of a good leader

Go to fullsize imageThis is the season for change. Many Malaysian political parties are getting ready for general assemblies to elect or, re-elect new leaders. In places like the U.S., financial crisis has also brought into stark relief leadership qualities of political and economic leadership.

It is, therefore, pertinent to renew the inquiry into the elements that make a good and, effective leader. The key qualities that a leader must have, have been debated time and again. The list can be rather long. My short-list are:
.Go to fullsize image.
1. Vision
A leader must have a vision. That means having a reasonably clear idea of where you want to take the country or company. It is best to be able to put on paper exactly what that vision is. If you can't put your vision in writing, then it is likely that you don't have one.

2. Communication
A leader needs to have the skill to communicate his or her vision. Without communication skills your followers and the rest of the stakeholders whose lives and careers you affect, will have no clue about the direction you are taking the party or company. This will create dysfunction and, likely discord.

Go to fullsize image3. Passion
A leader must have passion. As a leader, you have to show your team that you want to accomplish the goal badly. Your passion will drive them towards the goal and achieve your vision.

4. Decision-making
A leader must be a great decision maker. Often, leaders face times of crisis or great pressure where they are forced to make quick decisions. A leader must have this skill. This quality includes team building skills. The ability to delegate responsibility to team members is important. But be careful not to abdicate control. A leader needs to project trust. But, the trust is conditional upon the need for feedback and follow-up action. This means maintaining the action as an agenda for the next meetings until the task is completed. Otherwise, dysfunction and discord will set in.

Go to fullsize image5. Character
A leader must have character. This means being able to project not only strength but, virtue. If the leader is corrupt and crony-laden (this applies to politics and business), followers will mirror these qualities. A selfish leader cannot inspire virtue. He can project strength, of course, through fear and intimidation. But the values will be negative ones. Loyalty will be at a premium.

In the real world that we live in we see many leaders having some of these qualities but the absence of others. No one is perfect. Perhaps the idea is to identify a leader or, be a leader with the least imperfection.

Monday, September 22, 2008

Raymond Tan: 'I stopped PM from ordering Yong's arrest'

raymond tanTony Thien's report in Malaysiakini, 'I stopped PM from ordering Yong's arrest' raises serious questions about the ACA's independence. Ex-SAPP deputy president, Raymond Tan is reported to have said that he had been instrumental in preventing the arrest of party president Yong Teck Lee in June in relation to allegations of corruption.

abdullah ahmad badawi bn and yong teck lee and sappHe said he had pleaded with the Prime Minister not to arrest Yong as it would be a bad move, and had even gone on television with a plea to allow the latter to speak up.

SAPP's newly-appointed Information Chief Chong Pit Fah is quoted as having described Raymond Tan's revelation as a a shocking revelation.

Indeed, this is a stunning disclosure which points to the question that has dogged the ACA; is the ACA truly independent? This requires a response from the Director-General of the ACA, for all it's worth.

As if he hasn't got enough issues on his plate, BN loyalist Raymond Tan has inadvertently dealt Pak Lah and the BN with another major blow by this disclosure. Now the Prime Minister has to respond to this issue.

For truly, with friends like these, who needs enemies?

Is The Ringgit Better Off On Its Own?

Go to fullsize imageMany of us will recall the circumstances under which the currency controls were put in place. during the Economic Crisis of 1998. We now call the currency control policy the Ringgit Peg. There is now a call for the Ringgit to pegged again, in some form. Dr M has made this call. The Minister for International Trade and Industry has supported the call in some fashion.

To lend some context to the issue now raised, read this Businessweek piece that was written in February 2005 (just before the Ringgit was de-pegged). I have emphasised pertinent passages.

Capital is rushing into Malaysia on a bet that the peg to the dollar will end.

The time was September, 1998, the place Kuala Lumpur, Malaysia. The Asian financial crisis was in full throttle, and the Malaysian ringgit, along with most other regional currencies, was falling fast. Finally, after the ringgit had plunged 60%, Prime Minister Mahathir Mohamad made a radical decision. He imposed a full menu of capital controls that prevented investors from taking money out of the country. Then he pegged the ringgit at 3.8 to the U.S. dollar.

Mahathir's action infuriated foreign governments and investors; many of the latter declared they would never set foot in Malaysia again. Those threats have long since dissolved along with most of the capital controls. But one vestige of 1998 remains -- the ringgit's peg to the dollar. Now that, too, may be about to fall. On Jan. 19, Mahathir himself, now retired, said it might be time to let go of the peg. Analysts expect his successor, Abdullah Badawi, to either let the ringgit float freely or trade against a basket of Asian currencies sometime in the next few months. "The ringgit peg has outlived its utility," says Dominique Dwor-Frecaut, an economist at Barclays Capital in Singapore. "The question is not if it will go but when it will go. It has come to a point where letting go is clearly a political decision."

Few in Malaysia doubt that the hard peg is an anachronism. Mahathir fixed the peg to keep the ringgit from weakening further. Now, with Malaysia growing briskly, the ringgit is probably undervalued by 10% to 15%. The peg is hurting Malaysia's economy by making imports more expensive and stoking inflation. And rumors that the peg is history have triggered a rush of capital into the country by speculators hoping to profit from the rise. The benchmark Kuala Lumpur Composite Index is up 47% in the past 24 months and recently touched a seven-year high before falling back. Malaysia's foreign reserves, which hit a low of $18 billion in 1998, are now nearly $67 billion. Malaysian real estate is hot, too, with prices of high-end housing in Kuala Lumpur up 20% in the past year.

The relative weakness of the ringgit, which has been sinking in value in tandem with its sister currency, the dollar, is also causing pain for business. Economists expect inflation to pick up -- it's likely to hit 3% this year. Prices are jumping not just for imported goods but also for fuel since the government has been reducing subsidies to lower its budget deficit. "One way to deal with inflation is through exchange rates," says Sanjay Mathur, Southeast Asia economist for UBS in Singapore. "If Malaysia were to have a flexible exchange rate, it would be easier to pursue an independent monetary policy."

Analysts say that since Mahathir's surprise comment there is anecdotal evidence that companies have put off buying new equipment from overseas. Tenaga Nasional, the state-controlled utility, recently disclosed that it was delaying a decision to refinance its loans because it might save 7% to 10% on its interest payments if it seeks refinancing after the ringgit begins to float. "This is holding back the whole economy," says Chua Hak Bin, a regional economist at DBS Bank in Singapore.

Some say there is a case for keeping the peg. For one thing, Malaysia is a net exporter of oil and gas, which is priced in dollars, so Malaysia will lose revenues if it revalues the ringgit. Malaysia is also a big exporter of electronic goods, which will be more expensive to importers if the currency is revalued. Finally, Malaysia competes with low-cost China for foreign direct investment. A more expensive currency will make the country less attractive as a cheap production center.

Officials insist that any problems that arise from repegging or floating the ringgit can easily be dealt with. "There is no ideological love for the peg," Nor Mohamed Yakcop, Malaysia's Second Finance Minister, told reporters in January. "It's practical, it's pragmatic. If there is any change, we'll adjust." On Jan. 20, Prime Minister Badawi also insisted that "the peg is not cast in stone."

Read also this anti-repegging view. UPDATE: 22/9/08 2.00 p.m. Najib says no to re-peg proposal. Read the Bernama report here.

Sunday, September 21, 2008


Every time the stock market suffers a serious decline we hear the word confidence or, the lack of confidence.

Occasionally, when there is political instability, we see the word confidence being bandied about or, the lack thereof.

So, I looked it up in dear 'ol Wiki. Wiki says:

Confidence is generally described as a state of being certain, either that a hypothesis or prediction is correct, or that a chosen course of action is the best or most effective given the circumstances. Confidence can be described as a subjective, emotional state of mind, but is also represented statistically as a confidence level within which one may be certain that a hypothesis will either be rejected or deemed plausible.

Self-confidence is having confidence in oneself when considering a capability.

Overconfidence is having unmerited confidence--believing something or someone is capable when they are not. Scientifically, a situation can only be judged after the aim has been achieved or not. Confidence can be a self-fulfilling prophecy, as those without it may fail or not try because they lack it, and those with it may succeed because they have it, rather than because of an innate ability.

Choking refers to losing confidence, especially self-confidence, just at the moment when it is needed most and doing poorly as a result e.g. in sports. This is found as a common plot device in literature and film, and is usually devised to result in a total alteration of a character's life.

Loss of confidence in stock markets

Clearly where there is a degree of uncertainty in any matter that is seen to have an impact on the stock market, it triggers a loss of confidence.

But, here, I wish to digress a little. The stock market is a mirror-reflection of the basest of human instincts; greed and cowardice. To my mind all the text-book talk of the stock market being mechanism to provide a secondary market for equities and debt securities is a myth.

In my book, the stock market is a tool to create the idea of wealth. It's all in the mind. There is no real economic activity involved; as in no manufacturing of goods, no construction of homes, factories or roads; nothing. It's just a bunch of guys sitting in front of a computer pushing buy and sell buttons. If this is what the modern economy is all about, then we seriously need to hit the pause button. Listen to this extract from New York Times entitled, Bubblenomics:

Nonetheless, a significant portion of the finance boom also seems to have been unrelated to economic performance and thus unsustainable. Benjamin M. Friedman, author of “The Moral Consequences of Economic Growth,” recalled that when he worked at Morgan Stanley in the early 1970s, the firm’s annual reports were filled with photographs of factories and other tangible businesses. More recently, Wall Street’s annual reports tend to highlight not the businesses that firms were advising so much as finance for the sake of finance, showing upward-sloping graphs and photographs of traders.

I have the sense that in many of these firms,” Mr. Friedman said, “the activity has become further and further divorced from actual economic activity.

Does human society need this type of activity? Does this type of activity contain any redeeming social benefit?

Is it any wonder then, that given a mere whiff of a hint of adversity the stock market suffers a loss of confidence?

Of course, that is only my weekend, nothing-else-to-do-but-take-out-the-garbage epiphanic grousy working thesis....or, maybe not?

Loss of confidence in politics

Political loss of confidence is less cavalier and, more complex. Unlike the cruddy stock marketers, politicians are more personable and, often, more nuanced (especially in Malaysian politics). It is usually about one or more personalities in power.

Politics is about personalities; strong, weak, likeable, hated, etc. It is the ultimate reality show. It is seldom about issues, though people always dress it up as so. At its most basic level, politics is about likeability. If you don't believe me just look at the current U.S. presidential campaign. Ask yourself why is it that an unknown and relatively inexperienced Sarah Palin's entry into the picture can cause John McCain's popularity to surge? There was no policy shift. Obama didn't commit any gaffes. The only reason must be that many swatches of the U.S. electorate foundSarah Palin likeable (Why? For the life of me I have no clue. I merely agree with Tina Fey's Saturday Night Live's parody of her; goofy and ill-informed.)

I know there are many, many, many other factors such as fear, respect, charisma, etc. But let's keep it simple for now.

One of the best description of WHY there is a loss of confidence in the current leadership is contained in this analysis in Malaysian Insider. To me, this is one of the more insightful pieces on the cause of the unravelling of confidence in the current political leadership.

To quote Stan Lee (of Marvel), Nuff said.

Saturday, September 20, 2008

Bar's EGM: Lawyers unanimously against the ISA

I have extracted parts of a report on the Extraordinary General Meeting of the Malaysian Bar from the Bar Council's website for your edification:

Proceedings began with the President of the Malaysian Bar, Ambiga Sreenevasan calling the meeting to order. Members were informed that the Bar Council had invited 3 persons to address the floor – S. Pushpaneela (the wife of M. Manoharan), Member of Parliament, Teresa Kok and Norlaila Othman.

Pushpa together with her son took to the podium and thanked the Bar Council and the Malaysian Bar for their support and assistance. She also highlighted the challenges faced by her, her children and all family members of the ISA detainees. Although she was visibly upset, she still managed to express her relief that Teresa had been released and was glad that at least one person’s prayers had been answered. Pushpa received a standing ovation from the floor when she completed her very touching speech.

Teresa Kok then took to the stage to a rousing welcome. She started by saying “I’m Back!” She briefly highlighted the circumstances of her arrest and the 3 areas of questioning she faced during her detention. She then described the conditions of her detention. She questioned the need to detain her to answer questions about the 3 issues when she could have easily answered such questions at the police station. She then highlighted the ramifications of her detention to her personally and to investment opportunities for the state of Selangor. She said that she had on the morning of her detention held a briefing for investors from China and she had told them that Malaysia was a peaceful nation.

"Can you believe it? A day after I told these investors that Malaysia was a peaceful nation, they read about my arrest", said Teresa who ended her speech by thanking the members of the Malaysian Bar for their support.

Norlaila Othman, fondly known by many members of the Bar as Kak Laila, then came forward to describe her plight as a wife of a detainee who has been held without trial for 6 years. She first said that her husband was very happy with the visits organised by the Malaysian Bar. She then expressed her gratitude to her personal friend, Edmund Bon, who had been assisting her ever since her husband was detained. She thanked Edmund and his team for all their assistance and support.

Ambiga then highlighted what the journalist, Tan Hoon Cheng, had said of her detention. She also articulated the words of Raja Petra’s wife regarding his detention.


Ravindra Kumar spoke of his experience visiting the detainees in Kamunting. He said it was very intimidating and could be described as a hell hole. He said the lawyers detained there were visibly affected and appeared to be under severe mental anguish. He said that not enough is being done for them.


Haji Sulaiman Abdullah pointed out that the ISA is of our own making and is not inherited from our colonial past. He highlighted the freedom of the press. He said that there is now constant discussion in the mainstream media about the ISA and we should protect this vigorously.


The motion was then put to a vote. It was carried unanimously. The meeting then ended about 12.10pm.




(a) Outraged that the Internal Security Act 1960 ('ISA') has recently been used to arrest Raja Petra Kamaruddin (a blogger), Tan Hoon Cheng (a journalist) and Teresa Kok (a member of Parliament);

(b) Deeply concerned that at present, there are more than 60 individuals detained under the ISA;

(c) Reiterating its earlier call, by its resolution of 15 March 2008, for the immediate and unconditional release of all persons presently detained without trial, including Manoharan a/l Malayalam, Uthayakumar a/l Ponnusamy, Kengadharan a/l Ramasamy, Ganabatirau a/l Veraman and Vasantha Kumar a/l Krishnan;

(d) Asserting the importance of upholding the Rule of Law, as enshrined in the Federal Constitution and the Rukunegara;

(e) Reaffirming the Bar's continued and unequivocal opposition to the ISA and all laws that allow for the detention of persons without trial, as they are unconstitutional, oppressive and undermine the Rule of Law;

(f) Taking note that, as a member of the United Nations Human Rights Council, the Government must fulfil the pledges it made, inter alia, to "promote and protect human rights and fundamental freedoms" and to promote "a free media, including in cyberspace"; and

(g) Deeply concerned that on 11 September 2008, the Government sent show-cause letters to three newspapers namely, Sin Chew Daily, The Sun and Suara Keadilan, regarding the reporting of certain issues.


1. The Malaysian Bar strongly condemns the arrests of Raja Petra Kamaruddin, Tan Hoon Cheng and Teresa Kok and strongly calls upon the Government to immediately and unconditionally release Raja Petra Kamaruddin, who is still being detained.

2. The Malaysian Bar strongly calls upon the Government to immediately and unconditionally release all persons presently detained without trial, including Manoharan a/l Malayalam, Uthayakumar a/l Ponnusamy, Kengadharan a/l Ramasamy, Ganabatirau a/l Veraman and Vasantha Kumar a/l Krishnan, who were ordered to be detained for two years from 13 December 2007.

3. The Malaysian Bar strongly calls upon the Government to immediately repeal the ISA and all other laws that allow for the detention of persons without trial such as the Emergency (Public Order and Prevention of Crime) Ordinance 1969 and Dangerous Drugs (Special Preventive Measures) Act 1985.

4. The Malaysian Bar strongly condemns the issuance of the three show-cause letters to Sin Chew Daily, The Sun and Suara Keadilan and strongly calls upon the Government to immediately withdraw the show-cause letters.

5. The Malaysian Bar calls upon the Government to uphold its pledges to the United Nations Human Rights Council to promote and protect human rights and fundamental freedoms and to promote a free media, including in cyberspace.

6. The Malaysian Bar calls upon the Government to demonstrate its commitment to, and to uphold, the Rule of Law as enshrined in the Federal Constitution and the Rukunegara.

Another constitutional perspective on power transfer

Rather than indulge in speculation and whoddunits, I recommend that you read and consider the analysis offered by Malik Imtiaz. The business of government needs to have a legitimate character. This requires compliance with the Federal Constitution.

Many aspects of the issues raised by Pakatan Rakyat (or, more specifically, PKR) in relation to the number of legislators aligned one way or, the other, requires us to scramble to read and understand the Federal Constitution.

Thankfully, there are kind souls like Professor Dr Aziz Bari and, now, Malik, who are prepared to offer their considered jurisprudential views on the constitution and its workings in relation to this business of power transition.

You will find that in ALL cases, the Yang di Pertuan Agong (Agong) plays a vital role as the constitutional pivot around which the procedure to determine WHO commands the confidence of the majority of legislators will be followed. The importance and relevance of the monarchy in Malaysia is underlined more so than ever. To my mind, this is a good thing.

Friday, September 19, 2008

Market turmoil: Lessons from U.S. government and regulators

Malaysia's new Finance Minister I, Finance Minister II, the Minister in the Prime Minister's Department responsible for the Economic Planning Unit, Bank Negara Governor and Securities Commission Chairman all need to take copious notes on the events leading to the Wall Street market turmoil and, more particularly, how the Federal Reserve (Fed) Chairman, Treasury Secretary, Securities and Exchange Commission (SEC) Chairman has coordinated things. They should also take notes on the following features:

1. In adversity, stick together
The Treasury Secretary, Fed Chairman and SEC Chairman have quickly agreed on the key diagnoses:

First, the s**t has hit the fan.

Second, short-selling is parasitic, opportunistic and destructive. Go after short-sellers and get them.

All the key players in the Executive and Legislature and regulatory bodies are rallying together. They are setting aside petty differences. They are leaving aside recriminations (for now). UPDATE: (7.45 p.m. 21/9/08) This New York Times piece describes in greater detail the dynamics of the Treasury Secretary and Fed Chairman working on the crisis.

2. Show very, very overwhelmingly strong financial muscle
They have prepared an USD800 BILLION (UPDATE (21/9/08): It's now USD700 BILLION) bailout fund package to cater to all possible contingencies emanating from Wall Street. This is the financial "Shock and Awe" designed to push the bears back into the caves and push the bulls to stampede in Wall Street (at least, that's the desired effect). Wall Street investors will be assured that the credit crunch will be superseded by massive doses of liquidity.

3. Get the media and public message clear and simple
All major media channels are singing in harmony on the following:

First, this is a FINANCIAL crisis, it is NOT and ECONOMIC crisis. The message is, don't worry (yet) the s**t is in Wall Street NOT Main Street, USA.

Second, in light of the humongous bailout package being rushed through Congress (USD800 BILLION (Now revised to USD 700 BILLION), I can't help repeating this figure) market sentiment will become confident again.

Third, repeat again and again that Asian markets (having got wind of the bailout package) has rebounded super-positively.

I noticed that the advisers weren't taking any chances; George W Bush had to read out his statement abut the bailout package. He did not take any questions from reporters. No chance that he was going to say something stupid that will send Wall Street into further turmoil.

Can Malaysia's government and regulators emulate such methods?
In the economic crisis of 1998 Malaysia wasn't prepared at all. The government and regulators were in sixes and sevens. No one had a clue what happened. To his credit Dr M rose to the occasion and assumed the mantle of Finance Minister. The thing that I give him full marks for is his ability to grasp the economic issues quickly and, being able to ask the correct question.

Most people fail to realise the absolute importance of asking the correct question. This means being able to define the issues at hand; being able to separate symptoms and causes; and, being able to seek solutions and remedies.

Of the current crop, only Finance Minister II was privy to the economic crisis management in 1998. Instead of having bloated advisory councils comprising a motley crew of ministers, civil servants, businessmen and others to advise on economic policy, the government needs to seriously identify key economic thinkers and retain their services to constantly generate economic models and simulate economic scenarios.

This economics team also needs to be combined on a regular basis with a team of strategic thinkers and planners to work out the plan of action on economic crisis scenarios along the lines that I have described above that the U.S. government and regulators are working on.

Do I think the financial bailout Shock and Awe will turn the tide of Wall Street jitters? Honestly, this is uncharted territory. Even with Cray supercomputers doing infinite permutations of scenarios no one can predict the outcome.

I tend to believe that in economic crises, the role of the government is very important. This is what the U.S. government has done. It has risen to take charge by effectively declaring that it is going to be the lender of last resort and, it is prepared to nationalise any U.S. financial institution to ensure that there is no systemic failure to the U.S. financial system. Now, that is a clear and unambiguous message that should assuage frayed nerves in Wall Street.

But, that doesn't mean that investors can rest easy now. There may be some more aftershocks...

MCA: Chua-Chua vs Ong-Ong?

http://www.spr.gov.my/index/logo_parti/MCA.jpgIn the upcoming MCA party polls the contest for the posts of President and Deputy President appears to have aligned party stalwarts, Chua Jui Meng and Dr Chua Soi Lek (both of whom are erstwhile Health Ministers) against Ong Tee Keat and Ong Ka Chuan.

This contest for the top 2 party posts comes in the wake of MCA's debacle in the March 8 General Elections that saw many of MCA's parliamentary candidates topple. It was likely a case of negative sentiments against the present BN leadership. More significantly, it also signalled that the Chinese community could not find any resonance with the crop of MCA leaders.

In his MCA career, Ong Tee Keat has come across as an independent who has deftly steered the choppy waters of MCA's factional politics. He has also been able to parlay his giant-killing reputation (if you call defeating an old, tired and controversial Datuk Harun Idris a giant) to reach across to non-Chinese constituents with his fluency in Bahasa Malaysia. He has been able to retain a loyal core of support within MCA. His independence is likely to have attracted the attention of supporters of the lacklustre Ong Ka Ting. Ironically, some may see Ong Ka Chuan endorsement of Ong Tee Keat as a signal that the latter has entered into a Faustian pact that goes against his independent streak. In other words, lately Ong Tee Keat has been placed in the unusual position of appearing to be part of the MCA Establishment. By the way, Ong Tee Keat's blog is here.
As for Ong Ka Chuan, his behind-the-scenes reach to core MCA grassroots support is generally credited with gaining the party presidency for his younger brother, Ka Ting. But, in the wake of the March 8 debacle, an overtly MCA Establishment figure like Ka Chuan will have to transform himself into a reformer; unless he does not believe that MCA needs any reforming. This is something many will be measuring him by. Again, the issue may well be, how can Tee Keat claim his independence when he is endorsed by an Establishment figure? Can they both reconcile this? Will MCA members buy it?

Chua Jui Meng retired from active MCA politics when his challenge against Ong Ka Ting for the MCA presidency in 20045 failed. But, as with all things circumstances change. Jui Meng may wish to project himself as a leader who can reposition MCA to send a clearer message to UMNO on the need to dial-down ethnic-based policies in favour of multiracialism on the premise that meritocracy and income-disparity are better measures in formulating government policies. UPDATE: (7.20 p.m. 21/9/08) Read the report and interview in Sin Chew Daily.

If this is the case, then Jui Meng may be able to find some additional commonality with Dr Chua Soi Lek. Dr Chua has positioned himself as a vocal proponent of multiracialism. Many MCA members have found his candour refreshing. Dr Chua's dignity in handling the video-tape scandal episode has found him a significant groundswell of sympathy and respect. Add to this the lurking suspicion that he was set-up by party opponents, it is not surprising that one of the MCA parliamentary candidates that survived March 8 was his son. This victory can be interpreted as public support for Dr Chua's leadership and integrity. Cynics may say that he made the public confession of being the man in the video in the hope that all would be forgiven quickly and, he could resume his ministerial and party posts, only that things went awry. But many others will point to the fact that he quickly read the public mood and did the right thing by resigning to widespread public acclaim. Dr Chua's blog is here.

Future portents
A cursory view suggests that Ong-Ong runs the risk of being tagged as the business as usual combination. If not addressed quickly, this tag will be the albatross on the neck for Ong-Ong. But Ka Chuan's control over the MCA party apparatus, as the current Secretary-General, gives him very distinct advantages of incumbency. That reach is very effective and powerful. It is not to be underestimated at all. In fact, it gives Ong-Ong a distinct edge.

Chua-Chua are in an interesting position for being rank outsiders in this contest despite their previously having been Establishment figures. Their challenge comes at a time when the MCA is in ebb tide. Members are in some degree of disarray. The party is finding no resonance with the Chinese community let alone the wider Malaysian community. Lim Guan Eng of DAP has become the Chinese community's superstar, deftly handling state issues and multiracial issues without losing touch with Chinese community issues. Guan Eng's positive and high profile as Chief Minister of Penang puts the leaders of MCA (and Gerakan) in a terrible light.

Is this a case of MCA leaders projecting their hubris replete with lighting and smoke special effects but within the sterile environment of the Chinese Malaysian community? This was the accusation made by Dr Chua against Ong Tee Keat recently. Are the MCA like crew members fighting for captaincy of a sinking ship? I don't think so. The MCA may be injured today. This has happened before (recall the General Election of 1969). That it will survive is not the issue.

The real issue may well be whether the successful candidates can truly engage UMNO in a mutually beneficial cross-fertilization of multiracialism. Indications from March 8 is that the Malaysian polity is shifting inexorably towards non-communal multiracialism where meritocracy and income-disparity are the core issues but, where extra attention is paid to the Malay community by virtue of their population size. But can MCA do so successfully? Read my views in an earlier post entitled, Belling the cat. If not, will MCA leaders have the courage to decouple? These may well be the future issues. UPDATED INSERT (3.50 pm, 21/9/08): For some further context to my point, read Sin Chew Daily's report, Where Should MCA Be Headed To?

Right now, the cynic in me tells me that it's all about cutting, thrusting and stabbing (front and back). Such is politics...anywhere.


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Good news! Kit Siang says Teresa is being released early afternoon. Read here.

Market turnaround?

Has the Wall Street turned the corner? Or, is this a dead cat bounce-type scenario? The Financial Times reported the scene in U.S. capital markets that, By the close, markets had rebounded. The S&P 500 was up 4.3 per cent at 1,206.51 and the Dow Jones Industrial Average up 3.9 per cent at 11,019.69. The Nasdaq Composite rose 4.8 per cent at 2199.10. 

The reasons appear to be, The prospect of the creation of a Resolution Trust Corporation-style plan to deal with the turmoil in financial markets led stocks to their biggest rally in nearly six years late in the session.

A violent swing in financials reversed the rout of the previous day as investors responded positively to the prospect of a Treasury plan similar to that which helped bring an end to the savings-and-loans crisis of the 1980s and early 1990s.

Earlier in the session, the market fell as much as 2 per cent, as concerns lingered over the short-term funding of financial institutions even after a liquidity boost from central banks.

Yet stocks later rebounded on the possibility that US authorities might follow their British counterparts by banning the short-selling of financial stocks. A second wave of buying came towards the end of the day.

Marc Pado, market strategist at Cantor Fitzgerald, said the move could help liquidity, without which several “firms are dead in the water”. He added “shorts would be really hung out to dry” ahead of quadruple witching tomorrow, the day on which contracts for stock index futures, stock index options, stock options and single stock futures expire. 

The situation is very fluid, of course. Many may recall that in 1998, Malaysia emulated the U.S. government strategy of the 1980s by setting up Danaharta. Danaharta was modelled after the Resolution Trust Corp, the vehicle created by the U.S. government to bailout the Savings and Loans institutions that were in serious crisis in the 1980s. The possibility of this move has reverberated positively in Wall Street. 

But should we jump back into the water in light of this positive Wall Street "recovery". In this case, the idiom that applies is, one swallow does not a spring make (or, something like that), meaning we should adopt a cautious wait-and-see attitude. The bovine bearish sentiment is easily spooked and, judging by the amount of news coming out on each of the financial giants, the possibility of negative sentiments returning to Wall Street recurring is still quite high. 

Thursday, September 18, 2008

Powershift? An opinion on constitutional power transfer

Professor Dr ABDUL AZIZ BARI is professor of law at the International Islamic University Malaysia. In this Malaysiakini opinion he has offered an envelope-pushing opinion on the constitutional issues that may arise as Anwar pushes for an unprecedented transfer of power. Since March 8 Malaysia's constitutional ethos has entered so far into the deep space of uncharted territories that many have suffered intellectual vertigo. In this context, Professor Dr. Abdul Aziz Bari's opinion is a constitutional life-raft of sorts.

But, of course, his is an academic perspective albeit based on sound jurisprudence. In the realpolitik of Malaysian politics, stranger and more sinister twists and turns may take place. The good Professor's opinion is a worthy view for all Malaysians to consider and reflect upon (and, act upon?).

By way of apology, I hope Malaysiakini will not hold this wholesale replication against me. If they do, I shall have to remove this entry.

The way Prime Minister Abdullah Ahmad Badawi responded to journalists' question on Anwar Ibrahim yesterday afternoon indicated that he actually treated the takeover threat posed by the opposition leader very seriously.

The night before Abdullah was reported to have said that Anwar's claim that the opposition had enough MPs to form the government was "mirage and dream" and that Anwar was just bluffing.

abdullah ahmad badawi anwar najib 180708But less than 24 hours later Abdullah changed his tone: Anwar is now a threat to both the national security and the economy; something which alluded to the possibility of using the Internal Security Act to detain the opposition leader.

The government is obviously under siege. Apart from the Anwar threat, the ruling party is now grappling with internal power struggle. Given the way ministers view the use of ISA, it is hardly convincing to say that Abdullah is in full control of the cabinet.

It is not incorrect to say that we are now approaching crisis stage and in times like this we need something that perhaps appears to be somewhat extra-constitutional to handle the situation.

It is rather naïve to expect the ordinary way of doing things here. For one thing, the government appears to be panicking and as such no longer in a position to say, advise the Yang di-Pertuan Agong which, in common parlance, includes also the routine running of the administration.

It was curious to find that two days ago Abdullah met up with senior public servants; the secretary-generals of the government ministries who, under the constitution, are supposed to be neutral and loyal to the country.

A week ago, the armed forces chief General Abdul Aziz Zainal ruffled feathers when he told the government to act against those involved in creating tension between races in the country.

Apart from the unusual nature of the call, one knows that the main culprits were certain elements during the ruling party Umno itself: one of its divisional leader has been suspended from the party.

The only option

In any case, the call was not the only occasion whereby the normally apolitical armed forces crossed the line. Some months ago there was a joint exercise between the army and the police to deal with public unrest which provoked public outcry.

Unlike our neighbours such as Thailand and Indonesia, we do not have a constitutional court to turn to. We have the Federal Court that virtually plays that role. But for the past 51 years, it has never been called upon to adjudicate constitutional impasse before.

And unlike the Supreme Court of the United States - essentially the American constitutional court which has been called upon to decide on highly controversial issues such as abortion and affirmative actions - our Federal Court was ignored during the constitutional crises of 1983, 1988 and 1993.

Perhaps this has got something to do with the confidence and faith the people have in the credibility and ability of our top judges.

That leaves us with one option: going the Yang di-Pertuan Agong, the king, or the Conference of Rulers where all the nine rules sit to discuss, among others, federal matters.

And actually the king has some specific role and powers that can be used in the current situation. He may get some help from his nine brother rulers in conference which, the constitution says, may discuss anything it thinks fit.

The problem that we have now essentially revolves around the appointment of government which in the constitutional term, the appointment of the prime minister.

agong power in the change of government 170908The constitution has put this duty on the king's shoulder: it is his discretion. In situations whereby it is clear-cut - that there is a majority with a clear leader - the king has no option but to appoint that leader as the prime minister and then take his advice on the formation of cabinet.

That situation can happen on several occasions. These include after the general elections, the death of the sitting prime minister and resignation.

Resignation can take place in various situations; such as the normal one like that of Dr Mahathir Mohamad in 2003 or when the House decided that it no longer support the head of government such as the one we saw in the resignation of Harun Idris as the mentri besar of Selangor in 1976 or that of Mohamed Nasir in Kelantan in 1977.

It is unfortunate that our constitution is silent on the matter. The only provision dealing with the issue is Article 43(4) which makes it mandatory for the prime minister, upon losing the support in the house, to resign.

What can the king do?

But the provision is silent on the question of censure, which is the normal way for the House to withdraw its support from the sitting premier. This has apparently been manipulated by the ruling Umno and Barisan Nasional.

Although they were behind the moves that took place in Sarawak in 1966 - ousting Chief Minister Stephen Kalong Ningkan - and Harun Idris in Selangor, they sing different tune this time around.

We have seen how the speaker of the present Dewan Rakyat - virtually appointed by Prime Minister Abdullah - did his best to thwart the attempt made by the Pakatan Rakyat to table the motion of confidence.

But law stands and whatever they have to say we need to follow the law as it is.

king and parliament official opening 12th parliament sessionHow does the king come to the picture in the present impasse? As a matter of law, the king has to act on the advice of the government. And thus, although the constitution does not say it, he must ensure that he has a government at all times.

And when there is a situation where there are questions and claims being about the fitness of the sitting government, the king should not just suit back and wait: he must move forward and take charge of the situation.

Apart from his constitutional duties, apparently, in our system now, there is no one else to do so. We cannot rely on the government for its legitimacy - some may say its legality - to stay in power is very much in question.

As a matter of protocol it might be improper for Anwar to go the palace now. As such, the king should send for him in order to furnish him with the list of MPs he has been claiming.

Of course, the king has every right to speak with MPs to ascertain the truth. This was indeed done by the Rulers of Selangor and Perlis in the aftermath of 12th general election last March.

Should the king find that the claim of Anwar - that he has got enough MPs to form the government - to be true then the king should tell Abdullah to tender his resignation.

As has been stated above, a prime minister who has lost the support of the House has a legal duty to resign together with his entire cabinet.

The original draft prepared by the Reid Commission contained a provision which empowered the king do dismiss such a premier but somehow was deleted in the final draft which now stands as our constitution.

But the king could still assert the power as it is obviously necessary to remove the clog that stands in the way of government appointment.

Suspending the constitution

In any case, the recalcitrant prime minister is no longer prime minister as he has lost the support: in other word, the king is just doing something to allow the constitution to function.

Article 43(4) of the Federal Constitution also talks about dissolution.

However one needs to read this provision in conjunction with Article 40(2)(b) which gives the king a discretion whether or not to grant a dissolution requested by the prime minister.

The Reid Commission recommended that there are reasons - given the experience of the Commonwealth - why the matter should be left for the king to decide.

One of the reasons was to prevent the country from being put on "dissolution diet" by a besieged government.

Coming back to present situation, it constitutionally incorrect for the king to grant a dissolution to pave the way for another round of elections: we have just had one in March and that now there is a likelihood to form a government without going through another elections.

The possibility of invoking Article 150 which empowers the federal government with vast powers - virtually suspending the constitution - has been raised in some quarters.

It must be said that only the king can do so.

Although he has to act on the advice, government there are good reasons to argue that the general provision under Article 40(1) of the Federal Constitution admits exceptions: advice must be constitutional and that it does not have the implication that run counter to the notions of democracy and constitutionalism which stand at the very heart of the constitution.