Mental masturbation on the socio-economic Catch-22

I'm writing about something that has bothered me for a long time. I've actually blogged about it intermittently when I started blogging, particularly in 2008 when the U.S. sub-prime crisis unfolded.

It's about the Catch-22 of modern capitalism.

As with all things, there's a Yin and Yang view (how wise the ancient sages were).

From the perspective of the leaders of modern large corporations, the KPI is the mantra of "shareholder value".

Shareholder value

What is shareholder value? It's about generating profits. Not just profits, mind you. The target is profit growth year-on-year.

Just read the financial news. Just watch the financial media. Just read analyst reports. 

If a large corporation made a billion last year and made another billion this year, the watchers and analysts and, yes, shareholders start decrying the zero profit growth year-on-year. This makes the company boring. The only consolation is if the company declares some higher dividend payout than from the year before.

Hell, unlisted companies have serious orgiastic parties if they record good profits every year. But, no, it's just not good enough for the shareholders of modern large corporations.

Flat is bad?

Flat growth is decried...even if it is still a highly profitable enterprise.

And, who are these shareholders?

Well, it's you and me.

Even if you hold up your hands to sanctimoniously cry aloud that you have never bought a single share of a publicly-listed company in your entire life, you would still be wrong.

We've all got money stashed away in pension funds, superannuation, or whatever one call it. So, indirectly, we're all complicit.

We bitch about poor returns, poor yields.

Where does that yield come from? Why, from the modern large corporations, of course.

Whether we like it or, not, we're in a carousel that is spinning out of control.

I have no idea how to stop the carousel. Do you?

Changed social values

All I know is that the correct social values as it existed in a village or kampung has disappeared in the era of modern capitalism.

Countries like our own Malaysia are caught in this awful carousel.

Our government is told that we need to reduce taxes in order to attract FDIs. FDIs are typically in the form of modern large corporations looking for cost-effective venues to produce goods and services at competitive prices. Competitively-priced products are attractive to consumers. Consumption of these products generate revenue and profits to the modern large corporations whose KPI is to generate growing year-on-year profits. And, the cycle is complete and, it repeats itself, year-on-year.

If only there was a better way to harness these great surpluses to plough into public amenities like more parks, community centres, welfare, public health, education, and so on.

We know that public finance comes in the form of tax revenues. But, wait a minute, aren't governments being told that taxes must be reduced in order to ensure competitiveness to attract FDIs?

If we peer across the Pacific Ocean to the U.S., we will see President Obama struggling to convince the American public that a tax regime that attempts to extract greater public revenue from modern large corporations and high net worth individuals is a good thing. Many believe that he is committing political suicide, because the U.S. is the citadel of modern capitalism.

Voluntary tax

Another equally ironic situation is when a bunch of tycoons in Malaysia buys out a lottery company owned by another tycoon in order to distribute welfare to non-Muslim Malaysians.

A lottery is what economists call a "voluntary tax". 

I've blogged about this before. 

The irony is that the Malaysian government was very enlightened up until the 1980s when Islamism and privatisation policies became the rage.

That spelled the death knell for the Social Welfare Lottery (remember that?) and Toto (remember that?).

As I said, it's ironic.

So, where does all this meandering lead to?

It leads to the one key takeaway that is good to mentally masturbate over.

The futile hope

A significant portion of the surplus of modern large corporations should be extracted for the public good.

If there were better social amenities, like public parks, sports complexes, sports programmes, academic instituions, vocational training institutions, better roads and pavements, better maintenance of public facilities all around ... and better public institutions to help farmers grow better fruits, vegetables, grains, dairy, meat (which is an excellent way to control food inflation)... then, we may not need to fret so much about savings and investment returns.

Then, we may leave the leave the modern large corporations to do more R&D on products and services that improves the human condition instead of generating the desire to consume at an irrational rate.

Maybe....

As I declared earlier, it's mental masturbation. But it does have some pleasurable side effects...

Govt revenue from taxes unch over 3-4 yrs

It's always useful to capture vital statistics. Sourced from here-

The government's revenue from taxes has not been increasing for the past three to four years, Deputy Finance Minister Senator Datuk Donald Lim Siang Chai said.

He said on Tuesday, Sept 20 the amount was around RM160 billion a year even though expenditure was on an increasing trend.

He said one third of the government's revenue came from oil and gas, one third from taxes from companies and individuals while the remaining one third from indirect taxes such as stamp duties and Customs duties.

"There is a need to increase the number of skilled labour so that the government would be able to collect more taxes and increase its revenue," he said at the launch of a new Malaysian Financial Planning Council (MFPC) secretariat office and signing of a memorandum of agreement between MFPC with UCSI University and UMSLink Sdn Bhd on registered financial planner (RFP) programmes here.

In Malaysia, Lim said, out of the 12.8 million workers, only 29% were skilled labour as compared to developed countries where 40% of their workers were skilled labour.

"Out of the 12.8 million workers in Malaysia, only 1.65 million pay taxes," he said.

The finance sector, he said, was one sector which has a lot of potential to create skilled professionals with its certification standards.

He said the government was looking at ways how Form 5 school leavers could gain certain skills such as to be a mechanic.

Federalism in Malaysia

Tomorrow, we celebrate the 47th Anniversary of the formation of Malaysia. All Malaysians know that Malaysia is a federation of 13 states and the Federal territories. But, what is a "federation"? What does it mean?

Daniel Elazar has described it as follows-

“The contractual sharing of public responsibilities by all governments in the system appears to be a central characteristic of federalism. Sharing, broadly conceived, includes common involvement in policymaking, financing, and administration of government activities. 

In contemporary federal systems, it is characterized by extensive intergovernmental collaboration. Sharing can be based on highly formal arrangements or informal agreements. 

In federal systems, it is usually contractual in nature. The contract – politically a limited expression of the compact principle – is used in formal arrangements as a legal device to enable governments responsible to separate polities to engage in joint action while remaining independent entities. 

Even where government agencies cooperate without formally contracting to do so, the spirit of federalism that pervades an ongoing federal system tends to infuse the participating parties with a sense of contractual obligation."

This view permeates the Cobbold Report (1962) and the Inter-Governmental Committee Report (1962) which formed the basis for the formalisation of the Federation of Malaysia in the Malaysia Agreement 1963, the Malaysia Act 1963 and the 1963 amendments to our Federal Constitution.

Going back to Elazar's description, we are reminded, from time to time, by various communities and groups in both Sarawak and Sabah that the central government has short-delivered its end of the contractual bargain.

Is this sentiment a fair appraisal of the federal experience of Sarawak and Sabah?

This question is a most difficult one.

In the past decades, there has been substantial vocalisation on federalism by the likes of the late Datuk Amar James Wong of Sarawak (one of the founders of the now defunct Sarawak National Party or SNAP) and  Datuk Jeffrey Kitingan of Sabah.

Fairness in allocation of economic resources

Many of my Sarawak and Sabah friends privately express cynicism about the fairness in allocation of economic resources by the central government to their states.

This sentiment is precisely the matter that dogs the federal centre. This sentiment is also a source of frustration for the federal centre.

There is a perception, rightly or wrongly, on the part of many Sarawakians and Sabahans that their state governments have been under, what Gordon P. Means called, "federal tutelage" from the inception of Malaysia.

Is this a true and fair view? The jury is still out.

What cannot be denied is that such a perception colours the sentiment of Sarawakians and Sabahans.

This is especially true when the topic of petroleum resources comes about.

The perception is that the petroleum largesse is transferred to the federal centre and trickles back to the states of Sarawak and Sabah in the form of capitation grants and road grants.

Is this a true and fair view? The jury is still out. But, the perception is strong.

Race and community relations

All my Sarawakian and Sabahan friends are aghast at how separate the communities are in Peninsular Malaysia. They are fearful that such a way of life will infect the happy inter-ethnic and inter-communal ambience that still exists in Sarawak and Sabah (though signs of invisible walls being built are growing).

This is not the federal influence they want.

The challenge for the federal centre

Apart from the acculturation issue (which all Sarawakians and Sabahans should rightly reject), the core issue must surely be whether Sarawak and Sabah can lay claim to a fair share of the economic resources generated from within their states.

I recall being told by a Sabahan friend some time ago that when they watch the tv and see the images of sparkling skyscrapers of glass and steel and well-lit multi-tiered highways in KL, they cannot feel any sense of excitement or share the pride that such images were intended to inspire. Such images actually engender an opposite emotion.

So, beyond the temporal politics of today, the federal centre must renew and redouble its efforts to win the hearts and minds of the people of Sarawak and Sabah that their forebears did the right thing when they signed on to the Malaysian adventure; not a nightmare.

The importance of consultation

I have written extensively (in an academic context) about the importance of consultation as a feature of federalism. Consultation is, in fact, the MAIN feature of federalism.

Our Federal Constitution has many references to the need for consultation. Some of it are formal on issues such as-

• Appointment of judges
• Land
• Local Government

Others are informal but, still, constitutionally necessary. These include the issue of natural resources such as water and minerals.

The importance of federalism for Malaysia's democracy

Malaysians have a narrow view of the democratic process as something that we eat kuaci and sip teh tarik over when any political elections loom.

We also should be aware and be constantly reminded that each of the thirteen states, particularly the states of Sarawak and Sabah, are sovereign in their own right and, they chose to form the Federation of Malaysia. In any way that we may wish to look at it, the undeniable fact is that we have a set of contractual relationships between the federal centre and its 13 partners.

This is as it should be.

For the states of Sarawak and Sabah, they signed onto the federation with stronger conditions than the other 11 states. It gives Sarawak and Sabah greater say over many aspects of the affairs of their states.

But all 13 states have residual sovereign rights. These sovereign rights may be limited by the Federal Constitution; but they still exist.

This is what Malaysia is. 

British Malaya: Balik ke pangkal jalan

Better hit the iron on the anvil while the metal is still hot. In this instance, the hot topic is our history involving the role of the British. As with all things historical, one must approach the matter with full objectivity and free oneself as far as reasonably possible from the taint of bias.

We are fortunate to have reprints of the source documents from which the British sought and obtained a legitimate legal presence in Peninsular Malaysia. 

Among the more significant treaties entered into between the British and the Malay Rulers was the Treaty of Pangkor that was signed in 1874. The preamble to the Treaty is an interesting read-

Whereas, a state of anarchy exists in the Kingdom of Perak owing to the want of settled government in the Country, and no efficient power exists for the protection of the people and for securing to them the fruits of their industry, and,

Whereas, large numbers of Chinese are employed and large sums of money invested in Tin mining in Perak by British subjects and others residing in Her Majesty's Possessions, and the said mines and property are not adequately protected, and piracy, murder and arson are rife in the said country, whereby British trade and interests greatly suffer, and the peace and good order of the neighbouring British Settlements are sometimes menaced, and,

Whereas, certain Chiefs for the time being of the said Kingdom of Perak have stated their inability to cope with the present difficulties, and together with those interested in the industry of the country have requested assistance, and,

Whereas, Her Majesty's Government is bound by Treaty Stipulations to protect the said Kingdom and to assist its rulers, now,

His Excellency Sir Andrew Clarke, Governor of the Colony of the Straits Settlements, in compliance with the said request, and with a view of assisting the said rulers and of affecting a permanent settlement of affairs in Perak, has proposed the following Articles of arrangements as mutually beneficial to the Independent Rulers of Perak, their subjects, the subjects of Her Majesty, and others residing in or trading with Perak, that is to say:-

(I have just selected the pertinent Article for you)

VI. Sixth. - That the Sultan receive and provided a suitable residence for a British Officer to be called Resident, who shall be accredited to the Court, and whose advice must be asked and acted upon on all questions (emphasis mine) other than those touching Malay Religion and Custom.

The next extract that I offer you is the Treaty of Federation that was signed in 1895. This treaty created the Federated Malay States comprising Perak, Selangor, Pahang and Negeri Sembilan.

I reproduce two pertinent paragraphs of the Treaty-

1. In confirmation of various previous Agreements, the Sultan of Perak, the Sultan of Selangor, the Sultan of Pahang, and the Chiefs of the States which form the territory known as the Negri Sembilan, hereby severally place themselves and their States under the protection (emphasis mine) of the British Government.

4. The above-named Rulers agree to accept a British Officer, to be styled Resident-General, as the agent and representative of the British Government under the Governor of the Straits Settlements. They undertake to provide him with suitable accommodation, with such salary as is determined by Her Majesty's Government, and to follow his advice on all matters of administration (emphasis mine) other than those touching the Muhammadan religion.

Everything needs a proper context. The Treaties mentioned above and the background to which each of the Treaties were arrived at has been studied and, is being studied by historians as they should rightly be.

Does the language of the Treaties effectively make the role of the British that of a colonial master?  

What is the difference between a "Protectorate" and a "Colony"?

I have my views. But, some times it is more fun to leave rhetorical questions.

Body and Soul: Tony Bennett and Amy Winehouse

No need for intros...here's Tony and Amy...Amy's last recorded song. Sadly we have to wait for the full version in October:

How the hell did you get here? - Prof Khoo Kay Kim on Malaysian History

The level of dumbing down of Malaysia's education system is beginning to take its toll. Ignorance and indolence are now worn as badges of honour. 

So-called political leaders are confidently screaming out statements that are completely wrong when set against historical records.

In the wee hours that I am writing this blog entry I am unable to wax lyrical nor am I able or inclined to show indignance. 

I prefer to lead you to the video below where there the venerable Malaysian historian, Emeritus Professor Tan Sri Dato' Khoo Kay Kim, continues his noble quest to remind Malaysians about the wealth of our heritage, the meaning of our polyglot society, the danger of ignorance, the despair of indolent minds, the frustration of having lazy historians, and the list goes on...

I have had the immense pleasure in having met Prof Khoo some time ago. And, every time I have the opportunity to read his writings or listen to his lectures, I am reminded of how utterly ignorant I still am about so many aspects of Malaysia's history.

In a sense, this realisation gives me great motivation to dig a little deeper.

But, being an armchair history buff makes me reliant on the efforts of historians. And, if, like me, you browse the bookstores around Malaysia, you will find so few works on Malaysian history that provide any real depth of research or analysis. The sad truth is that there are more republished materials and works on Malaysian history done aeons ago by British scholars and historians than there are recent works that are of any significance or objectivity or depth.

I hope this situation will change. Otherwise, we will still have to depend on British scholars (or, *shock* *horror* *shudder* Singaporean scholars) to conduct research and write about us and how we are suffering from collective societal amnesia and how mockingly amusing it is for non-Malaysians to observe how we Malaysians look at each other and wonder how the hell the other guy got here... because whatever our level of amnesia, we are unanimous on the fact that it is the Orang Asli in Peninsular Malaysia and the numerous suku kaum in Sabah and Sarawak that were here before the rest of us.

So, unless we're happy to call ourselves bastards, we should pause before calling others that and, more importantly, start reading REAL works on Malaysian history.

Credit Growth v Asset Bubble

I am bothered by a report in Star Online containing this statement, "Analysts expect property loans to maintain their position as a key growth driver of credit expansion with some estimating them to grow between 10% and 12% this year due to the low interest rate environment and ample liquidity in the banking system.". 

Where does "credit growth" end and "asset bubble" begin?

This is something that should trouble Bank Negara Malaysia and Malaysia's economic planners. 

I have always believed that property-led credit growth implies asset-bubble formation since there are really no material salutary effect from property booms to the wider economy.

And, why do I say that?

If housing property booms are linked to genuine economic growth led by, say, manufacturing or commodities, then, we can safely assume that there is a growth in income to the nation's workforce who can then invest their surplus income to buy their dream home or invest in property. 

If there is loan growth from borrowings by businesses to fund expansion, then, there is some real economic action going on.

But, if loan growth or credit growth is led by property purchases, not led by business expansion, then, alarm bells should be ringing in the head of all rational people.

This phenomenon strongly suggests that Malaysians with savings are fed-up with low yields from fixed deposits. They are desperately looking for alternative things to park their savings with. 

These people seem to have found that buying properties in recent years gives them better financial returns in the form of capital appreciation.

Because of this series of transactions between and amongst these people, there is a perceived demand for properties above and beyond the norm.

People are buying properties, expensive properties, purely for investment in expectation of capital gains. They don't intend to live in these residential properties. They look down at the rental yields, which are paltry. They only want the capital gains. But, how long can this game go on for?

Banks are fueling this mania.

This is just my humble opinion. 

1963: Swatches of history

By now any reasonably regular visitor to this blog would know how much of a history buff I can be. This is especially so at this time of the year, every year. It is the most important fortnight for our nation.

Here's 2 articles on Malaysia written in 1963 for Time magazine. It has an immediacy that I find very appealing. And, it's interesting to bear in mind that in 1963 the Cold War was raging in its full frozen fury. The feeling that there were Commies under every blade of grass was very real.

Nations were being formed, including Malaysia.

There was much concern in the U.S. as to whether the enlarged Malaysian nation could withstand the domino-effect that Communism could catalyse from Beijing to Hanoi to Vientiane to Bangkok to Kuala Lumpur to Jakarta. This was the nightmare scenario. 

As an aside, writing the sentence above reminded me of the late Nordin Sopiee's Ph.D thesis on the formation of Malaysia, which, made pretty cogent arguments along the above lines as one of the primary motivations for U.S. and British support for the formation of Malaysia.

It is in this context that the 2 articles below should be read.

Malaysia: Tunku Yes, Sukarno No

Friday, Sept. 06, 1963

In steamy, palm-shaded Kuching, capital of Sarawak, the day's biggest excitement is the firing of the 8 p.m. cannon on the lawn of government house. "What a dull place," said a United Nations official. "I don't know how we're going to survive three weeks here." At the insistence of Indonesia's President Sukarno, an eight-member U.N. team is present to "ascertain" whether Sarawak and North Borneo really want to join the Federation of Malaysia, which Sukarno bitterly opposes. As the U.N. ascertainers began to sample opinions around Sarawak, they were nearly stoned, not bored, to death.

In the Chinese-dominated town of Sibu, the Red-infiltrated Sarawak United People's Party (SUPP) staged a demonstration that turned into a 90-minute, stone-throwing riot. Only after police fired warning shots to disperse the mob could the U.N. team sit down —amidst broken glass in a Methodist schoolhouse—to interview local councilors. In Miri, Sarawak's oil-refining center, 3,000 Chinese-SUPPorted youths, wielding stones and bottles, screamed anti-Malaysia slogans until the police opened fire, wounding two, and tear gas forced them to scatter.

Date Set. Such outbursts will slightly delay but not derail the formation of Malaysia, originally scheduled for Aug. 31. In last summer's general elections, voters in both Sarawak and North Borneo decisively defeated anti-federation parties. 

Although Indonesia's shadow looms large, the Borneo people know they have nothing to gain from Djakarta but economic chaos and demagoguery. Malayan Prime Minister Tunku Abdul Rahman and British Colonial Secretary Duncan Sandys, who hastily flew to the scene, last week set Sept. 16 as the new birth date for the federation —two days after the U.N. mission's findings will be made public. Both are sure that the U.N. will find a clear majority in favor of Malaysia, but they insist that the federation will come into being regardless of the report. The British last week also turned over internal self-government to Borneo and Sarawak.

In a wrangle over details with the British, Indonesia failed to send observers to the U.N. mission, thus giving Sukarno an excuse to question the U.N. findings later. But faced with British determination to defend Malaysia by force, if necessary, Sukarno said: "If the Borneo peoples agree to join Malaysia, we will have to bow our heads and obey." But, added Sukarno, in an unbowed postscript: "Indonesia maintains its opposition to Malaysia."

Book Learning. An Indonesian guerrilla campaign against Borneo and Sarawak may well continue, since Djakarta always needs a foreign diversion to draw attention from domestic difficulties. In Indonesian Borneo, which adjoins Sarawak, Sukarno has set up guerrilla camps along 200 miles of border, and is training 1,000 Red-lining Chinese from Sarawak, following the guidelines of Indonesian Defense Minister General Abdul Haris Nasution, an expert on guerrilla warfare who has written his own book on the subject. Bands of his guerrillas pushed across the border to raid Dyak villages, clashed with patrols of British-led Gurkhas and Sarawak police. In a fire fight ten miles inside Sarawak, the Indonesians killed a British lieutenant and wounded several Gurkhas before being routed with heavy losses. Meanwhile, British officers are studying Nasution's book for clues to stop further Indonesian incursions.

So far, Indonesian terrorist attacks have only served to create a surge of pro-Malaysia feeling in Borneo and Sarawak. Almost nightly, the Indonesian embassy in North Borneo is plastered with slogans reading "Tunku Yes, Sukarno No." Although his people stopped head-hunting years ago, one Dyak chief told the U.N. fact finders that "if any more Indonesian bandits come into our territory, they may lose their heads."

Malaysia: Hurray for Harry

Friday, Sept. 20, 1963

When pretty Catherine Loh was elected Miss Malaysia last April, the pert beauty from the oil-rich British protectorate of Brunei fully expected to preside over the independence ceremonies of the newly formed Federation of Malaysia. But that was before Brunei withdrew from the planned federation in a state of pique, leaving Malaya, Singapore, Sarawak and North Borneo to go it alone. Brunei's defection not only left this week's joyous celebrations without a beauty queen but it also took Malaysia out of the running for the Miss Universe contest.

The beauty queen flap was low on the list of last-minute labor pains attending the long-awaited birth of Malaysia. At the insistence of Indonesia's belligerent President Sukarno, who bitterly opposes the federation, Malaysia's independence had been postponed two weeks beyond the original Aug. 31 starting date, while a United Nations team investigated whether or not North Borneo and Sarawak really wanted to join. Hoping to influence opinion against federation, Sukarno began moving paratroopers into Indonesian Borneo along his 900-mile-long border with the two territories. Some Indonesian guerrillas even sneaked through the jungles into Sarawak to stir up trouble; they were relentlessly hunted down by tough little British army Gurkhas, aided by half-naked Iban tribesmen, who hung up at least one Indonesian head in the rafters of their longhouses.

Fearful that Indonesia might extract further delays out of Malaya's easygoing Prime Minister Tunku Abdul Rahman, the architect of the federation, Singapore's brilliant, shifty Prime Minister Lee Kuan Yew, who regards Sukarno as "an international blackmailer," swung into action. Flying to Sarawak and North Borneo, "Harry" Lee picked up the chief ministers of both territories and brought them back to Kuala Lumpur to stiffen up the Tunku. Britain's Commonwealth Secretary Duncan Sandys was also on hand, working hard to get agreement. Threatening to declare Singapore an independent state, Lee pressured Abdul Rahman into holding firm for the federation's Sept. 16 deadline.

Last week the final obstacle to independence was cleared away when the U.N.'s Malaysia team reported that both North Borneo and Sarawak favored the federation. As the new nation prepared to unfurl its red-and-white-striped flag, Harry Lee was quick to capitalize on the occasion. With his popularity at its zenith for his major role in bringing the federation about, he scheduled immediate elections in Singapore.

Merdeka

To all Malaysians near and far, I wish you SELAMAT MENYAMBUT HARI KEMERDEKAAN.

Selamat Hari Raya

To all my Muslim brothers and sisters, especially Malaysians, I wish each of you-

SALAM AIDIL FITRI

MAAF ZAHIR DAN BATIN

And to all Malaysians, happy holiday week.

I am at my happiest when all my loved ones are with me and, this stretch is at the apex of happiness because everyone is home right here with me. These are the best times of my life. I wish for all Malaysians to feel the same level of happiness as I am feeling during this time.

(Updated) DPM: Teaching of Maths, Science in BM and English still under study

As always, I get a stir of positive energy when I hear the probable possibility of a reasonable likelihood of an inclination towards a circumspect consideration of the maintenance of the use of the English language as a medium of instruction in the subjects of Science and Mathematics.

So desperate am I that I am prepared to sacrifice the teaching of the English language in English. I am prepared to concede that the subject of English language can be taught in a non-English language if the teaching of Mathematics and Science can be taught in the English language.

In a nutshell, I am encouraged by this reported statement in The Star.

And, while we're on this subject please visit the PAGE website. PAGE is the acronym for the Parent Action Group for Education Malaysia.

PAGE is a group of concerned and responsible Malaysian parents who are trying to get the attention of the Government, Parliamentarians, other NGOs and, just about anyone who is prepared to listen, lend an ear, lend a hand or, lend anything - to support the basic proposition that parents and schools should be given a choice over whether the teaching of Science and Mathematics should be taught in the English language.
_________________________

I just read this at the Malaysian Insider-

Page accuses Putrajaya of ‘buying time’, wants English-language option restored

The Parent Action Group for Education Malaysia (Page) wants Putrajaya to restore ‘teaching science and maths in English’ option before it kicks off a new policy next year.

Its vice-chairman, Sulaiman Mahran, ticked off Deputy Prime Minister Tan Sri Muhyiddin Yassin for saying the Education Ministry will study further the possibility of using two languages to teach the two subjects in national schools, as reported by state news agency Bernama yesterday.

“It’s only buying time until 2012 when the MBMMBI will be fully implemented,” Sulaiman said in a statement, referring to the “Upholding the Malay Language and Strengthening Command of English” policy that is to take over the existing language policy for science and maths (PPSMI).

The English-language lobbyist pointed out that the long-term advantages of English had been identified during the Mahathir administration but that its implementation was miscarried during the Abdullah administration.

“Datuk Seri Najib’s administration should repair its implementation, not dismantle it,

“What should be studied deeper is MBMMBI, which is clearly defective because it reduces the students’ exposure to English by 50 per cent,” Sulaiman said.

Prior to the Sarawak polls on April 16, Prime Minister Datuk Seri Najib Razak had also announced he would consider using dual languages as the medium of instruction for Mathematics and Science in schools.

PPSMI was first introduced in 2003 but the Education Ministry decided last year to stop it by 2012 after consulting with teachers and parents around the country.

In the uproar that followed after PPSMI was abolished, Putrajaya introduced MBMMBI, which will see the teaching of Mathematics and Science revert to Bahasa Malaysia from 2012 while more contact hours for English would be offered in order to improve students’ skills in the language.

In May The Malaysian Insider reported that the Najib administration had not decided on switching back to English for Science and Mathematics (PPSMI) because several Cabinet ministers felt any change would be another embarrassing flip-flop.

The Education Ministry has also announced it would hire 10,000 teachers to teach English in local schools.

Najib has also got a promise from the United States to send Peace Corps volunteers to teach the language in the country.

Euro: The downside of common currency

I'm not sure if the architects of the Euro could have envisaged a widespread economic contagion that covers Portugal, Ireland, Italy, Greece and Spain (hence the porcine acronym of PIIGS).

Were it not for the Euro, I would imagine that if any nation goes into economic turmoil for whatever reason, say, the bursting of asset bubbles, the national currency will depreciate because that nation's debt will invariably increase. The conventional response to economic crisis is the printing of money to finance fiscal deficit.

Where a common currency is in play, which is the case of the PIIGS, there are many more variables. 

One such variable is the obvious differences in the economic health of member countries sharing the common currency.

Unlike the PIIGS, leading member countries like Germany and France are in relatively robust economic health. They would cherish a stable currency at a reasonable value relative to other currencies so that their cross-border trades within and outside of the European Community are predictable. 

But, the dilemma of the economically robust member countries is that they are now reluctant participants to bail out (or, to be politically correct, support) the PIIGS.

The common currency has become the unintended tether that threatens to pull down the healthy economies as they bailout the ailing ones. The awful metaphor is that of the mountaineers who have to deal with fallen colleagues whose lives are, literally, hanging by a thread.

Without the Euro, the PIIGS would have taken a depreciation of their currencies. Such depreciation would have made their exports cheaper. It would have made their tourist attractions cheaper relative to other destinations. Thus the natural ebb and flow of economics would have taken place.

With the Euro, the dilemma of the PIIGS is that their exports remain at a higher value than otherwise. And, visitors would still find the price of hotels, restaurants and trinkets still relatively expensive.

This scenario validates the stubborn resistance of the United Kingdom and many of the Scandinavian countries that resisted the pressure to join the Euro. 

Perhaps it is time to consider the dismantling of the Euro.

UK Riots: Crowdcrime

The spark may have been an unfortunate shooting incident involving the Police in Tottenham. But nothing, nothing can excuse the outbreak of lawlessness in London and other cities in England.

It's not about poverty or lack of opportunities. I just heard on the BBC that the first culprit that was brought before a Magistrate was a teaching assistant!

No, the outbreak is about the phenomenon of what I will term, "safety in numbers". Aided by modern mobile communications and social media, hundreds of energetic youth have been executing the criminal equivalent of "flash mobs", or rather, flashmobs gone awry - I call it "Crowdcrime".

There must have been a realisation in the wake of the initial Tottenham riot that where the number of participants exceeded, say, 50 to 100, the law enforcement adopts a playbook stance that plays right into the hands of the hooligans.

I was flabbergasted when I watched a BBC clip showing 3 pairs of policemen in riot gear (carrying "Captain America" type round shields instead of the head-to-toe height shields that the Malaysian FRU carry) approaching the hooligans tentatively. Needless to say, the hooligans won that round.

I am amazed that in the wake of the London bus bombing some 6 years ago, the law enforcement strategies in the UK is still so inept.

As a matter of interest, I recall a remark made by a Queen's Counsel with whom I was having a beer. The QC was in KL to deliver a paper at a symposium. He marvelled at how much effort us Malaysians put into these symposiums - with the banging of the gong - music - fanfare - I digress.

The QC was musing about how soft the UK Government was about many matters.

This round of random riots throughout the length and breadth of England is confirmation that, not just in the UK, but also places like Norway and throughout the West - a serious review of where Western notions of law enforcement and the rights of criminal suspects need to be made.

There is a need for law enforcement to ensure that we can have quiet enjoyment of our lives.

Anyone that crosses the line drawn by the Law must be brought to book.

In an exigent event such as a riot or acts of hooliganism, law enforcement officials must be allowed to inflict pain - in the form of tear gas, water cannons and, yes, even rubber bullets.

And, I should also suggest that the police use paint guns - oil-based or permanent dye not water-soluble -  to mark the culprits so that after the event, the police can conduct house-to-house searches. Or, conscientious parents and friends can report these "stigmatised" persons.

Worried about innocent bystanders being shot with paint? Don't be. I would not want to be present where a riot was happening. Would you? So, if you're in the wrong place at the wrong time your instinct would have been to run or walk away. If you have stayed as a busybody and got shot with paint, then, you've got some explaining to do. That's all.

If anyone feels that this view is extreme, just ask that poor chap whose 100-year old furniture store in  Croydon was burnt to cinders.

The UK riots are not about any socio-economic or socio-political matters.

The UK riots are a terrible new phenomenon - Crowdcrime.

Rating the U.S. and S&P

It is tempting to gloat. "Told ya!", our minds scream while we sip our caramelised teh tarik to wash down the roti canai at our favourite warung.

It is an ugly, awful spectacle that has unfolded in the U.S.

For those of us of a certain vintage, our minds may have wandered to the possible range of sarcastic remarks that our dear erstwhile leader, Dr M would have spewed at the frail, fratricide that is unfolding in the democratic political process that the U.S. has so earnestly and ideologically promoted over the past century.

Our minds would also have wandered back to the difficult, challenging insults and invective hurled against Malaysia in the despairing days of 1998.

Every orang utan has its day.

We have now witnessed a troubled giant continue an implosion that started in November 2008.

Flashback to 1998. They said that we, in Malaysia, were in denial.

Flash forward to 2008 and, again, to 2011. We see the U.S. printing money to support its government's pump-priming efforts since 2008. They don;t call it "pump-priming", of course. It's nebulously called "Quantitative Easing".

Mind you, I'm not gloating. I'm not gleeful.

These are troubling times.

The U.S. is finding that the pump-priming is not working at the level of Main Street. The pump-priming appears to have only favoured Wall Street and selected Fortune 500 corporations. The average U.S. worker is in economic danger. 

The U.S. Congress is practising partisanship politics in a leaking vessel. The U.S. President is floundering in a hamstrung attempt to lead on a populist line. They call it brinksmanship.

The unkindest blow came when Standard & Poor downrated the U.S. economy, ironically, because of the political chicanery that took the U.S. Government to the brink of bankruptcy (many say it is already bankrupt anyway...or, at least, technically insolvent).

This meandering post is meant to lead to one point. 

I am impressed with how quickly the U.S. eco-system rallies around a perceived threat. This time the threat comes from within. It comes from the S&P downrating.

The amount of criticism heaped at S&P from the U.S. politicians, media commentators and intelligentsia is quite breathtaking.

This leads me to the second point.

Who's the conductor in this cacophonic symphony?

Is it a grouping of vested interests who have designed the greatest economic coup imaginable?

Might the coup be the sovereign default on U.S. Treasury Bills to the extreme detriment of China? (Japan, South Korea and the others will be collateral damage)

This would be one way to re-boot the downward spiralling U.S. economy.

The other would be war.

Think about it.

Al-Fatihah YM Raja Aziz Addruse

I read that Yang Mulia Raja Aziz Addruse, passed away peacefully earlier today at the age of 75.

The Malaysian Bar's website had this statement on Raja Aziz who was a Past President-

Allahyarham was called to the Malaysian Bar on 8 Jan 1966.  From Lincoln’s Inn, Allahyarham was the first President of the Malaysian Bar to serve three terms — 1976-1978, 1988-1989 and 1992-1993.  A leading advocate, Allahyarham continued to be active in Bar Council work, and appeared regularly in the Appellate Courts as a senior counsel.  He had led and argued many of the difficult and controversial cases for the Malaysian Bar.

I am wistfully reminded of this poem by Wordsworth which, in my humble view, does some justice to a life fully lived by one of Malaysia's great sons-

Character of the Happy Warrior

BY WILLIAM WORDSWORTH

Who is the happy Warrior? Who is he

That every man in arms should wish to be?

—It is the generous Spirit, who, when brought

Among the tasks of real life, hath wrought

Upon the plan that pleased his boyish thought:

Whose high endeavours are an inward light

That makes the path before him always bright;

Who, with a natural instinct to discern

What knowledge can perform, is diligent to learn;

Abides by this resolve, and stops not there,

But makes his moral being his prime care;

Who, doomed to go in company with Pain,

And Fear, and Bloodshed, miserable train!

Turns his necessity to glorious gain;

In face of these doth exercise a power

Which is our human nature's highest dower:

Controls them and subdues, transmutes, bereaves

Of their bad influence, and their good receives:

By objects, which might force the soul to abate

Her feeling, rendered more compassionate;

Is placable—because occasions rise

So often that demand such sacrifice;

More skilful in self-knowledge, even more pure,

As tempted more; more able to endure,

As more exposed to suffering and distress;

Thence, also, more alive to tenderness.

—'Tis he whose law is reason; who depends

Upon that law as on the best of friends;

Whence, in a state where men are tempted still

To evil for a guard against worse ill,

And what in quality or act is best

Doth seldom on a right foundation rest,

He labours good on good to fix, and owes

To virtue every triumph that he knows:

—Who, if he rise to station of command,

Rises by open means; and there will stand

On honourable terms, or else retire,

And in himself possess his own desire;

Who comprehends his trust, and to the same

Keeps faithful with a singleness of aim;

And therefore does not stoop, nor lie in wait

For wealth, or honours, or for worldly state;

Whom they must follow; on whose head must fall,

Like showers of manna, if they come at all:

Whose powers shed round him in the common strife,

Or mild concerns of ordinary life,

A constant influence, a peculiar grace;

But who, if he be called upon to face

Some awful moment to which Heaven has joined

Great issues, good or bad for human kind,

Is happy as a Lover; and attired

With sudden brightness, like a Man inspired;

And, through the heat of conflict, keeps the law

In calmness made, and sees what he foresaw;

Or if an unexpected call succeed,

Come when it will, is equal to the need:

—He who, though thus endued as with a sense

And faculty for storm and turbulence,

Is yet a Soul whose master-bias leans

To homefelt pleasures and to gentle scenes;

Sweet images! which, wheresoe'er he be,

Are at his heart; and such fidelity

It is his darling passion to approve;

More brave for this, that he hath much to love:—

'Tis, finally, the Man, who, lifted high,

Conspicuous object in a Nation's eye,

Or left unthought-of in obscurity,—

Who, with a toward or untoward lot,

Prosperous or adverse, to his wish or not—

Plays, in the many games of life, that one

Where what he most doth value must be won:

Whom neither shape or danger can dismay,

Nor thought of tender happiness betray;

Who, not content that former worth stand fast,

Looks forward, persevering to the last,

From well to better, daily self-surpast:

Who, whether praise of him must walk the earth

For ever, and to noble deeds give birth,

Or he must fall, to sleep without his fame,

And leave a dead unprofitable name—

Finds comfort in himself and in his cause;

And, while the mortal mist is gathering, draws

His breath in confidence of Heaven's applause:

This is the happy Warrior; this is he

That every man in arms should wish to be.

SMEs

In terms of its importance and market size, SMEs at the moment contributes about 32% of the country’s gross domestic product and makes up 59% of total employment. In totality, this segment accounts for 99% of business establishments and contributes 19% of Malaysia’s exports.

Sourced from here.

Biofuels

This is just a resource reference. Sourced from The Economist-

MAKE something people want to buy at a price they can afford. Hardly a revolutionary business strategy, but one that the American biofuels industry has, to date, eschewed. Now a new wave of companies think that they have the technology to change the game and make unsubsidised profits. If they can do so reliably, and on a large scale, biofuels may have a lot more success in freeing the world from fossil fuels than they have had until now.

Some perspectives

These are interesting times for Malaysia. For the many who trawl the cyberspace for alternative news the hunting must be deliriously good. There is no shortage of negative views.

This gives rise to an interesting question. Many people blame the media for propagating sensational and negative news. But, then, why do cyberspace trawlers, who have the power to decide what websites to click on, decide to visit sites and blogs that spew bad news and negative views?

We would think that people who abhor sensational news would actively avoid it. But it never happens.

Let's face it. There is a dark, voyeuristic tendency in all of us. If there is a hole in the fence cladding that has a sign, "Do not peep", most of us will not be able to resist the temptation of a peek.

This is where things stand.

Malaysians read the mainstream news and Malaysians read the alternative media.

Too much information (not necessarily knowledge) results in information overload. Those who have no perspective and who do not read books and rely chiefly on the internet for reading material will suffer from a form of vertigo.

It is not easy to remember good news. It is impossible to forget bad news.

So, it is likely that you will forget this posting because it's about good things.

I have been associated in an advisory capacity with a European multinational for some years. They've had a sales office outpost in Malaysia for several years. The brands and products they sell reaches the retail level. So, it is likely that you would have had contact with their range of brands and products. Since this is not a paid advertorial, I will not give you any names.

Two years ago, this MNC decided to acquire a Malaysian SME based in Johor. The gross annual revenue for the SME was about RM20 million a year. It had good manufacturing and production practices that impressed the MNC.

Post-acquisition and fastforward to today, this SME is no longer an SME by definition. It's gross annual revenue has ballooned to nearly RM100 million a year. The SME is now part of the MNC's global supply chain.

Mind you, the MNC's Asian footprint is very large with a natural gravitation centred in its production bases around the coastal manufacturing hubs of mainland China. 

But, after the successful experience of acquiring a Malaysian SME this MNC continued to scour Malaysia to look for more gems - more diamonds in the rough.

And, you know what?

They found not one, but two more SMEs that met with their high production and manufacturing criteria. One is in Selangor,the other in Malacca.

So, the acquisition process is in earnest progression.

The good news, my fellow Malaysians, is that there are many Malaysian SMEs that are capable of becoming world-class.

Having said that, our challenge as a nation is to nurture these SMEs to go beyond making products for international brands (OEM - original equipment manufacturing) to creating and establishing their own brands.

In this way, Malaysian SMEs will be able to sustain its Malaysian ownership.

Although I am proud to have seen three Malaysian SMEs being highly regarded by my MNC associates, I will be prouder still if it is our Malaysian SMEs that can hold their own and grow themselves into partners of equal standing with the MNCs.

Chua Soi Lek: Ruling M’sia is a racial balancing act

Below is the interview that MCA President Dr Chua Soi Lek gave to The Edge Financial Daily. 

TEFD: How has it been since you were elected as MCA president over a year ago?
Datuk Seri Dr Chua Soi Lek: It has been a busy one and a half years trying to ensure that the party is united and more stable with what we call Unity in Purpose and that we can then move forward.

Has it been easy to pull everyone back together?
I would say that I have managed to pull most of the people back but in any political party, there can never be 100%.

What is the single thing that has been most challenging in your tenure?
Uniting the various members and factions.

Chua: We want the goverment to transform as fast as what the rakyat wants.

Recently you tweeted that there are some unhappiness in the Kulai division.
All political parties, at every division, have its own internal conflicts. That’s what makes politics very challenging and interesting. To project a party to say it has no factions and no cliques, that is the biggest lie in the world.

At the central and state level, I would say MCA is very united. It is at the divisional level that we still see a lot of people problems where people cannot put aside their differences in opinion. They are at loggerheads over minor things.

But the divisions are crucial for the party, aren’t they?
Oh yes! It is at the division that things get done.

So you will have to settle the conflicts before the general election?
You can never settle all these internal conflicts. The important thing is to choose a candidate who is acceptable and winnable.

MCA: Malaysian Communities Association

In spite of being far removed from the rarefied air of politics in Malaysia, there is one clear view about the necessary direction that the Malaysian Chinese Association needs to take if it wishes to avoid the certainty of becoming less and less relevant to all but a select few well-heeled Chinese Malaysian businessmen.

The MCA has to be less about race and more about the Malaysian community.

The present tactic of the MCA in appearing the meet provocative views tossed out by the likes of Perkasa rings hollow.

Worse still, the views offered by the likes of Dr Chua Soi Lek are stymied by the parameters of race. 

I hope that there will be an urgent reassessment by the MCA leadership to earnestly and concertedly frame all issues within the framework of the needs of the Malaysian community as a whole instead of spewing points that are of supposed importance to the Chinese community in Malaysia.

Why deprive MCA of the ability to transcend the racial paradigm?

If the polemics are caught within the framework and agenda of race, it is ALWAYS going to give the appearance of a zero-sum game. If there are 10 units of resources and 4 racial groupings with an average ratio of Bumiputra 5, Chinese 3, Indians 1 and Others 1 the resources will be arguably distributed based on the 5:3:1:1 ratio.

But such a mindset is stupid, myopic, troglodytic and wrongheaded.

The correct perspective should be how to increase the units of resources from 10 to, say, 20 or, even 50?

Even my poorly educated grandfather knew this perspective way back in the 1950s. His metaphor was that of changing the size of the kuali or wok to an ever-increasing size and capacity in order to properly feed a growing family. 

Almost everyone knows that it is an easy and lazy and mischievious tactic to harp on race.

It is foolhardy for the MCA to fall into such a trap.

So, I call upon the MCA to reassess its political strategy and rework its paradigm in order to stay relevant and to win back support.

Otherwise, it will be giving more business to the undertakers.