Tuesday, February 8, 2011

Keeping the middle class happy

This is an excellent observation that I thought (tongue in cheek) may resonate with some quarters in Malaysia:

Keeping the middle class happy is also the party’s concern. Over the past decade, despite a rhetorical shift to the left, the party has tailored policies to avoid antagonising such a politically crucial group. It has been adept at isolating and containing protests by angry farmers or the urban underclass, using a mixture of intimidation and pay-offs. But it is less sure that it could deal so adroitly with grievances shared by swathes of the middle class.

The extract is sourced from this piece.

Minimum wage

Whether or not to implement a policy on minimum wages for workers in Malaysia. As the owner of services-based SMEs, I don't have a problem if the Malaysian government decides to implement a policy on minimum wages. In fact, I support the idea of minimum wages.

But, I am aware that the issue is not a simple one. The Malaysian economy still depends on fairly labour-intensive industries. The primary industries sector of oil palm plantations is particularly labour-intensive. The workers are unskilled.

On the other hand, Malaysia aspires to be a Knowledge-based and Services-based economy. Our macroeconomic indicators point to the growth of Services-based industries. Workers in these sectors are semi-skilled and skilled. Extensive training is required. Even hospitality and tourism industries require some degree of certification now. This is a good thing. It ensures that there are minimum standards of services.

There is indication that the Malaysian government is taking a sensible approach of segmentation of minimum wage policies based on the peculiar labour supply-demand matrices of each economic sector. This is the correct approach. One size can never fit all.

To engender a sensible discussion on this matter (as opposed to brainless hysterics), here's a pro and con view of the matter of whether a formal minimum wage policy should be instituted. It is sourced from here

The following table summarizes the arguments made by those for and against minimum wage laws:

Arguments in favor of Minimum Wage Laws
Supporters of the minimum wage claim it has these effects:
  • Increases the standard of living for the poorest and most vulnerable class in society and raises average.[1]
  • Motivates and encourages employees to work harder (unlike welfare programs and other transfer payments).[32]
  • Stimulates consumption, by putting more money in the hands of low-income people who spend their entire paychecks.[1]
  • Increases the work ethic of those who earn very little, as employers demand more return from the higher cost of hiring these employees.[1]
  • Decreases the cost of government social welfare programs by increasing incomes for the lowest-paid.[1]
  • Encourages the automation of industry.[33]
  • Encourages people to join the workforce rather than pursuing money through illegal means, e.g., selling illegal drugs [34][35]

Arguments against Minimum Wage Laws
Opponents of the minimum wage claim it has these effects:
  • As a labor market analogue of political-economic protectionism, it excludes low cost competitors from labor markets, hampers firms in reducing wage costs during trade downturns, generates various industrial-economic inefficiencies as well as unemployment, poverty, and price rises, and generally dysfunctions.[36]
  • Hurts small business more than large business.[37]
  • Reduces quantity demanded of workers, either through a reduction in the number of hours worked by individuals, or through a reduction in the number of jobs.[38][39]
  • May cause price inflation as businesses try to compensate by raising the prices of the goods being sold.[40][41]
  • Benefits some workers at the expense of the poorest and least productive.[42]
  • Can result in the exclusion of certain groups from the labor force.[43]
  • Is less effective than other methods (e.g. the Earned Income Tax Credit) at reducing poverty, and is more damaging to businesses than those other methods.[44]
  • Discourages further education among the poor by enticing people to enter the job market.[44

Monday, February 7, 2011

Interlok revisited

I have not been following the controversy over the usage of the Abdullah Hussain's book, Interlok, in Malaysian secondary schools. I was, however, aware that the peeve was over the usage of the "P" word that offended sections of the Malaysian community. 

I just read an opinion on the impugned book by Raman at his Silverfish blog

It appears that the "P" word was used only twice.

More importantly, here is Raman's take on Abdullah Hussain's book. It is a view that I subscribe to largely because I have the utmost respect for Raman who is a publisher of books and a very important facilitator for English-language writers in Malaysia. Without the likes of Raman, Malaysians who have an urge for literary expression in written English will suffer from interminable lexicographic constipation. Anyway, here's Raman@Silverfish's opinion:

I was going to write about something else, but two things happened that made me change my mind. First, was this gentleman I met who asked me what I did for a living? Then when he heard that I was a publisher, he immediately asked my opinion on the Interlok controversy. I started cautiously by saying that I had read the book, both the Malay and English versions, but before I could continue he asked:

“You mean you have read the book?”

I stopped in my tracks. It was a bizarre question and a bizarre moment. Why was he asking for my opinion if he thought I hadn’t read the book? If he wanted a hysterical uninformed opinion, there was plenty going around. Perhaps, he thought I would abandon scholarship for tribal loyalty and salute the flag he was waving, without a second thought. Perhaps, he was surprised that I could read Malay and, worse still, admit it. Perhaps, he was shocked that, in these days of self-righteous chest-thumping, I dared to look at an issue from another angle.

Second, was this email from one person (whom I shall leave him unnamed): DOES A LOYAL MALAYSIAN INDIAN DESERVE THIS KIND OF INSULT IN A COUNTRY HE CALLS MOTHERLAND ?????????? (Yes, all in capitals, 18 point fonts and in red colour, to boot).

My opinion of the book in question is that, though wobbly in (many) parts and a little na├»ve, it is certainly one of the better Malaysian books I have read. It is, basically, a story of the human spirit. Abdullah Hussain’s empathy with his characters (whether it is Seman, Cing Huat or Maniam) is quite admirable. Read the following, for example:

Kadang-kadang dia masih lapar. Bau roti yang dibakar dan disapu serikaya menimbulkan rangsangan dalam kepalanya untuk makan, bau makanan yang di masak oleh penjual nasi di sudut kedai itu menimbulkan nafsu untuk makan dan kadang kadang dia melihat daging babi yang tergantung dengan lemaknya yang berminyak-minyak itu, menggoda dia untuk makan. (Interlok, page 156)

(Sometimes he (Cing Huat) remained hungry. The smell of bread being toasted and spread with serikaya would stimulate his brain to eat, the smell of rice being cooked by the food seller next door triggered his appetite and sometimes when he saw the  (roast) pork hanging with its fatty oil dripping, it would entice him.)

A Malay writer talking about the smell or lard from roast pork? No, Abdullah Hussain is not afraid to go where no one else dares, if it serves his art. I hugely admire his research, his craft and his courage. And he is, certainly, no racist.

As for the offending “p” word it appears twice in the book:

Satu perkara besar yang membuat mereka senang bergaul ialah mereka itu tergolong dalam satu kasta Paria. Mereka tidak takut mengotori sesiapa kalau bersentuhan dan mereka bebas lepas bergaul. (Interlok, page 251)

(One thing that made it easy for them to mix around was the fact that they were all from the same Pariah caste. They had no fear of polluting anyone they touched and were free to mingle.)

One feels for Maniam. Yes, this is how he would have felt, coming from a background of centuries of oppression and suppression. Abdullah Hussain got it right. (Mulk Raj Anand would have applauded, too.) Taking the “p” word out would be doing injustice to the Maniams of the world. It would have been precisely because of his caste that he would have been considered untouchable and unclean, and he would have had every reason to be nervous.

Di sini, Maniam dapati perbezaan perkerjaan menurut kasta, seperti yang masih berlaku di negerinya, tidak ada.

Pertama kali inilah yang ditanya oleh Maniam kapada Muthu, seorang kawan dari desanya yang sudah lama tinggal di Pulau Pinang. Muthu seorang dari kasta Paria, seperti Maniam juga, dia berkerja sebagai kerani di sebuah gudang orang putih dekat perlabuhan. (Interlok, page 257)

(Over here, Maniam noticed that working according to one’s caste was not in practice.
That was the first thing that Maniam asked Muthu, a friend from the same village who had lived in Penang for a long time. Muthu was from the Pariah caste, just like Maniam, and he was working as a clerk at the godowns belonging to the white people near the port.)

There is nothing negative about this section either. It is a statement of fact. To a person like Maniam, this would have been a big deal indeed. He could do any work he wanted, even become a clerk like his friend Muthu, his Malaysian Dream, his ticket out of hell.  According to an article in the Malay Mail on Monday 24th August, 2009, 65% of MIC members belong to this caste although they now refer to themselves as Namavars – our people. Again, Abdullah Hussain’s research cannot be faulted.

Interlok is the story of three people and their trials. Seman is devastated when he learns from his father on his deathbed that the land they have been tilling all these years does not belong to them but a Chinese towkay, Cina Panjang. Chin Huat leaves his mother to come to Malaya with his father to escape an impending famine in China. Maniam travels to Malaya, the land he keeps hearing about, leaving his wife behind to escape crippling poverty. And in the end, they all get together and live happily ever after (which, in hind-sight, is the actual fairy tale).

The first part about Seman is, probably, the best written. Cing Huat’s section is good, too, though Abdullah Hussain does not say how or why this personable Chinese lad transforms himself into the predator businessman, Cina Panjang. The Maniam section is the weakest part and is riddled with minor and major errors. It is as if the author, tired of research, resorted to watching a few Tamil movies for the right cliches -- complete with the long suffering hero, the unfaithful wife, the totally evil villain (Suppiah), the mandatory rape scene followed by the suicide of the victim, and the long lost son who discovers that the prisoner in his police lockup is really his father. Corny to the max.

Then, the final scene is all Malaysian TV during elections: sugared to the hilt to induce terminal diabetes in the entire population of a small country.

But, one thing remains unclear, though. By some accounts, the version to be used in school is an abridged one (and not the 503-page original). If that is the case then all my comments above could be completely off the mark, because I have no idea what has been taken out and what remains. Knowing the track record of our gomen pen-pushers over decades past, I am aware that they are capable of being quite jahat about it.

Anyway, the cabinet has appointed a committee to look into the matter. This, normally, means that nothing will happen. Some new crisis will emerge and we all forget about Interlok. We are, after all, Malaysians.

The one good thing to come out of this crisis is that many people are reading the book, and Interlok is sold out in most bookshops. Good on you, Abdullah Hussain.

Saturday, February 5, 2011

The Inequality Wildcard

To continue with the matter of the economic factors that is triggering off the socio-political unrest in Tunisia and Egypt, in addition to the issue of unemployment, we have to also be mindful of the issue of income inequality or, the growing gap between the rich and the poor.

The matter of the rich-poor gap is beyond the mandate of economic planners. This is a matter that falls squarely in the domain of political leaders.

Economic planners can merely point out the dangers of the rich-poor gap. But, greedy and avaricious political leaders who are interested in making themselves, their family and crony friends rich will ignore the warning of the hapless economists.

This rich-poor gap is increasing in Malaysia.

Of course, the rich-poor gap is not unique to Malaysia. In fast-developing economies like China and Vietnam the gap will increase very fast before narrowing over time. But, countries like China and Vietnam are unleashing years of languid development. There is a sense of being in a hurry.

In contrast, Malaysia is at an economic developmental crossroad. Too expensive to be in labour-intensive activities and, yet, not skilled enough to get into high value-added and innovative knowledge-based activities.

In Malaysia's current position, the rich-poor gap is discomfiting. Unless Malaysia's political leaders address this issue urgently, this rich-poor gap may cause socio-political tension over time.

My biggest fear is that such tension will be distorted by stupid Malaysian politicians who will frame the issue in terms of race when the issue is actually one of poor ethics and abusive governance.

Anyway, read what Kenneth Rogoff has written in the sidelines of the Davos summit here

Friday, February 4, 2011

The Youth Unemployment Bomb

The events in Tunisia and Egypt should rightly scare all governments throughout the world. There will be many different views on the catalytic factors that led to the groundswell of public emotions that are threatening to ignite various nations in the Northern African and Middle Eastern belt.

The obvious commonality between Tunisia, Egypt and, Yemen is that these nations have predominantly Muslim populations. I'm no so sure about the relevance of Islam as a common factor for these events. Nor do I think that authoritarianism and lack of freedoms are relevant catalytic factors.

To me the more interesting and relevant common denominator in these nations is the high level of unemployment. Unemployment is the main trigger cause of the unrest.

And, equally so, the preponderance of youths among the unemployed of these nations is another key factor.

My view is that it is the poor economic health of these nations that have created huge numbers of unemployed youth that, in turn, have channeled their considerable restless energies into political protests in these nations.

This is the lesson that we have to quickly learn in Malaysia.

I suggest that the first module be the piece from Bloomberg-Businessweek here.

I sincerely hope that our economic planners and political readers read it and start reviewing how our economy is planned and managed. Prevention is better than cure.

The moral is that if everyone has a fairly decent job that pays a decent wage that puts decent food on the table, there will peace and harmony.

Alternatively, no jobs, no food and plenty of idle time is a dangerous combination.

Tuesday, February 1, 2011

Gong Xi Fa Cai 2011

GONG XI FA CAI to all Malaysians celebrating the Chinese Lunar New Year and Happy Holidays to everyone else.

pix from here.

There is much that I wish to say. But, I am too busy living and enjoying my life. My thoughts and opinions will have to remain in my head until later.