Monday, January 26, 2009

UMNO’s Reform Must Begin With Najib Razak


by M.Bakri Musa
January 25th, 2009

It is not enough for Najib Razak and other UMNO leaders to lament the loss of their party’s “wow” factor, or for them to endlessly exhort the party faithful to “re-invent” or “re-brand” their organization. Reform is like sex; merely talking about it is not enough, for without the necessary accompanying actions it will only increase your frustration.

To regain voters’ confidence, the change in UMNO must begin with its top leaders, specifically Najib. He has to demonstrate it through his actions; anything less and he risks frustrating voters and replicating the electoral disasters of Permatang Pauh and Kuala Trengganu nationally.

First and foremost Najib must legitimize his rise to the party’s top position. Being “promoted” by Abdullah Badawi is no endorsement, being that he is a discredited leader. Likewise, being nominated unopposed is no ratification either, especially when the process is hopelessly riddled with “money politics,” otherwise known as corruption.

Second, Najib must display a sense of enlightened leadership. For example, expending his precious time and political capital by intensively campaigning in a by-election that in his own words “would not alter the nation’s political landscape” was neither necessary nor prudent. With the nation facing many critical crises, he should focus on more substantive matters.

Last, Najib must demonstrate that he has the personal qualities and moral integrity to lead the nation. Merely denying that he had nothing to do with Saiful Bukhari, that college dropout who alleged that he had been sodomized by the opposition leader, or that Najib knew nothing of the brutal murder of that Mongolian model Altantuya and the attendant involvement of his hitherto closest advisor Razak Baginda, is not enough. The public deserves better; we demand a more thorough accounting.

Until then, any utterance by Najib Razak about reforming UMNO will ring hollow; do not frustrate voters by unnecessarily raising their expectations. That is dangerous.

Legitimizing Najib’s Leadership

Najib’s only claim to his party’s leadership is that he is currently unopposed for that position. Where the process is open and transparent, being unopposed signifies unanimous approval. That is certainly any leader’s dream and rightful claim of legitimacy.

UMNO’s nominating process however, is deeply flawed, apart from being corrupt. The “unanimous” choice of Najib is anything but. The process is hollow and meaningless. With “money politics” rampant, Najib’s nomination “victory” is irredeemably tainted.

The current nominating process is designed specifically to discourage or more correctly, prevent challengers. It is not a genuine contest. Requiring candidates be nominated by at least 30 percent of the party’s 191 divisions effectively means that at most there can only be three nominees. That is an unnecessary barrier, meant not to get the best talent but to protect the incumbent.

This requirement was put in place only 20 years ago, following the bitter and divisive Mahathir-Tengku Razaleigh rivalry. Before that, and for the first 40 years of UMNO’s existence, its leaders including Bapak Merdeka Tunku Abdul Rahman and the much-revered Tun Razak (Najib’s father) were routinely challenged at the party’s leadership convention.

The party can do without this burdensome nomination “quota rule” as well the equally damaging no-challenge “tradition” for its two top positions. The party’s Supreme Council however, could override both. While many of its senior members are in favor of dumping this onerous rule, Najib remains “neutral.” That is not the mark of someone confident of his leadership ability.

If Najib were to introduce a motion at the next Supreme Council meeting to remove this “quota rule,” that would greatly enhance his legitimacy even if the Council were to vote against it. If the Council were to vote for it, then the party would benefit by opening up the process and the delegates getting to preview many more potential candidates.

Such an open process would also effectively blunt the current corrosive influence of “money politics” as there would be no need to bribe divisional leaders in order to secure your nomination. And at the party’s elections, with over 2,000 delegates, it would be difficult if not impossible to bribe them all. You could influence them only with your ideas and talent, as it should be.

Removing the quota would of course invite challengers to Najib. Tengku Razaleigh would definitely be one; there may be others. There would also be additional candidates for all the other positions.

If Najib were to survive a challenge from Tengku Razaleigh for example, Najib’s stature and legitimacy would be greatly enhanced. That would effectively shut up his many critics.

Of course Najib could lose, and with that, his political career. That may explain his reluctance to tamper with the current quota rules which work in his favor. While such a maneuver would secure his immediate political survival, he would critically jeopardize his party’s chance in the next national elections. Presently many, and not just those outside of UMNO and Barisan, question his ability and legitimacy. Najib would be sacrificing his party’s future just to ensure his short-term political survival.

Articulating His Vision

Even if Najib were to prevail in an open contest, he still needs to articulate his vision for the future of our nation. He has to convince us that he has “the right stuff.” He has to give us his personal manifesto, as it were. And he has to do that now before his party’s convention in March, for at that time he would be more concerned with rallying his troops.

The prevailing perception is that Najib owes his current position merely by being the son of a famous father. To non-Malays specifically, Najib has yet to erase the ugly image of the keris-taunting antics of his UMNO Youth’s days. Additionally his career, while long, is very narrow; he spent his entire adult life in government, getting his paycheck from taxpayers.

Like his immediate predecessor Abdullah Badawi, there is nothing substantial to Najib’s career in politics despite his overflowing resume. His tenure as Defense Minister was marked by the collapse of the Pularek Naval Base just before its official opening, the gross breach of security by the Al Muanah gang at the Grik Army base in Perak, and the now evolving scandal with the French submarine purchase. As for his legacy as Education Minister, good luck in discerning that.

Now as Finance Minister, he remains disturbingly quiet; he has nothing to offer on how to solve the grave economic challenges facing us except to issue bland, meaningless reassurances.

In contrast, Tengku Razaleigh bravely outlined his views of the current economic crisis and his bold strategies to deal with it. Compared to the towering leadership of the Tengku, Najib looks like a novice Boy Scout troop leader constantly looking to his manual on how to lead.

Demonstrating His Integrity

Lastly, Najib must clarify the many sordid allegations and rumors implicating him. Bland denials alone are not enough.

The most damaging, and which requires the most detailed explanation, is his role in (if any) or knowledge of the murder of the Mongolian model and the involvement of his confidant Razak Baginda. That Razak Baginda was acquitted does not clear the matter.

The accusations leveled at Najib are too specific and detailed (including specific SMS texts and cell phone numbers) that they demand a more complete explanation from him. Hiding behind client-attorney privilege as Najib did in trying to dismiss the many SMS between him and Shafie Abdullah, the attorney who was at the time representing Razak Baginda, is inappropriate. For one, Najib was not Shafie’s client, then or now. Indeed at that time Shafie was representing Razak Baginda, until he (Razak) dismissed Shafie. For another, such a “cover” would not sell in the court of public opinion.

Those details of the Altantuya murder, as well as the sordid mess of the Saiful Bukhari sodomy allegation, will eventually be revealed bit by bit in their respective criminal trials. A full disclosure now by Najib would help preempt the inevitable excruciating and embarrassing details.

Najib Razak may become the leader of UMNO and thus Malaysia’s next Prime Minister come this March without bothering to address these three issues. However, the next General Elections will be less than 48 months away after he becomes Prime Minister. If not addressed frontally and openly now, these questions about his ability, integrity and legitimacy would only get worse. Yes, Najib may get his wish, but he could also end up being the nation’s shortest-serving leader, for come the next national election, Najib and UMNO will be buried.

That would be quite a legacy for the son of a great patriot. Perversely then, Najib’s political demise would of necessity trigger and be instrumental in UMNO’s reform. By that time it may be too late to alter UMNO’s fate, but at least you would have fun knowing that you are doing something productive.

Sunday, January 25, 2009

think


by Tengku Razaleigh Hamzah @http://razaleigh.com/
January 25, 2009 at 6:06 am

I have long said that UMNO and the BN must change fundamentally or become irrelevant. That change cannot wait, as one General Election and two bye-elections have shown us. The proposals I made last year to democratize and clean up the party were opposed by its leadership. I called for the Party to hold an EGM to reflect together upon the meaning of its losses at the Election and I proposed that we remove quotas for nomination, and scrap the delegate system in favour of direct election to key positions. I said that the party needs to be democratised, after which key party positions should be separated from government office.

Yesterday, we heard from the Prime Minister, all the way from Dubai, about when he thinks the process of change will begin:

“Umno would institute changes and a renewal to strengthen the party after its new leadership takes over following the party elections in March….we will go ahead with the elections and let the new leadership institute the necessary changes”

We are told that all that has been done so far to effect change is to “compile all the proposals on renewal measures from an Umno retreat and several discussion sessions," that is to say, not much. It’s nice to compile ideas, but change requires hard decisions and leadership.

So the entire hope of change in Umno is now laid at the feet of the leadership that the party elections will yield at the end of March.

They shall carry all hope of Umno’s renewal.

* * *

But what if the leadership is the problem?

Suppose the party elections that are supposed to elect the saviours of the party is part of the problem– a process that our members no longer even pretend to believe is open, fair or clean?

***

Think about what the voters rejected at Kuala Terengganu.

It wasn’t the candidate. This wasn’t a referendum on the Prime Minister or his Deputy. This wasn’t about individuals at all.

It was Umno they rejected, with its methods, its assumptions and habits and ingrained ways, and the entire leadership that brought Umno to this state.

Now think who these voters are.

The Malay voters who swung to the Opposition, the Chinese and Indian voters who waved PAS flags, the young who now reflexively reject Umno and BN, and whose swelling numbers will decide the election in 2013.

And think forward and ask if it is possible to imagine that the March elections will give us the leadership we need for these extraordinary times.

If we care about this country we should be asking fundamental questions. ---Tengku Razaleigh Hamzah

Friday, January 23, 2009

Four months later…


by Tengku Razaleigh Hamzah @http://razaleigh.com/
January 23, 2009 at 4:50 pm

“We are in the midst of a once-in-a-century credit tsunami” ---Alan Greenspan, October 23, 2008

After the Great Depression, economists thought they had banished economic crashes to the history books. We were said to be in a new economic era in which carefully calibrated management of interest rates and money supply by Central Banks would keep the system humming without major disruption. Today’s crisis, sparked by a reckless greed which implicates the entire US financial establishment, has rubbished that view. The policy thinking of John Maynard Keynes, who puzzled over the causes of the Great Depression and described the remedy that Franklin Delano Roosevelt applied, has been dusted off and brought back to life. Suddenly everybody is a Keynesian again.

Keynes diagnosed recessions as a failure of aggregate demand. Today’s recession is caused by a loss of confidence triggered by credit failure. A mass of worthless American mortgages, packaged and resold all over the world, wiped out trillions of dollars in the value of savings and investments and sparked a global collapse of credit, the oxygen of business. Consumers cut back on spending and businesses cut down on production and investment, reducing demand for materials and labour and leading to even lower confidence. If this self-reinforcing process is not arrested, the system goes into a tailspin.

The government is the only economic agent with the scale and freedom of action to turn things around. It does this either by increasing its own expenditure or lowering taxes, or some combination of both. Each of these measures stimulates demand. By increasing its own expenditure, the government creates demand directly. By reducing taxes, it leaves more money in the pockets of citizens so that they demand more goods and services. The latter can fail if citizens are so uncertain that instead of spending that extra money they save it away. Either way, such fiscal measures are temporary, targetted remedies aimed at reversing a destructive cycle of lowered demand, or at least to cushion its shock to the most vulnerable members of society. It is remedial, like reviving a patient, putting out a fire, or preventing a landslide.

Like all remedies, successful fiscal policy must have the right ingredients in the right dose applied at the right time.

Let me stress this again.

a) It must consist of the right spending. The right type of spending will aim for a combination of short term relief and stimulus, and long term improvement in the productive capacity of the economy via infrastructure investment, economic restructuring and institutional reform. Both the size of the expected multiplier and how quickly it can take effect in the economy need to be taken into account in selecting any particular project.

b) The stimulus must be large enough.

c) And it must be applied on time. Delay allows time for the down cycle to turn, enlarge its effects and cause long term damage. Stimulus measures can take months to take effect. Some of the right decisions have to have been made yesterday.

I am not sure that the two stimulus measures that the government has announced in the last four months fulfill any of the above criteria.

Valuecap

In October the government made EPF put RM5 Billion into Valuecap Sdn Bhd, a company formed in 2002 to buy stocks on the basis of loans, for Valuecap to buy “undervalued stocks.” But just what is an “undervalued” stock? Undervalued by whom? Given that the entire market is perpetually on the lookout for “undervalued stocks” to make a buck off, I’m not sure if this was a helpful instruction. It asks for Valuecap to be smarter than the market. And it’s not as if EPF itself didn’t have perfectly capable fund managers investing in the stock market. So we entrusted RM5 Bil from the retirement savings fund of our workers to a company with a proven track record of being unable to locate that value, a company that prior to this already owed creditors RM5.1Bil that it is unable to pay.

Valuecap’s merits aside, it was not clear how propping up the stock market was supposed to stimulate aggregate demand. But it was clear that RM5Bil, representing 1% of the capitalization of the KLCI, or the value of 3 days’ trading, was barely enough to cause a blip in the KLCI, after which it continued to decline along with other global markets.

If picking ‘undervalued stock’ is a hopeless vague instruction, the real criteria Valuecap uses for picking companies need to be scrutinised. The Valuecap deal was so opaque, so economically senseless, that EPF contributors and the investing public may be forgiven for wondering if the real intention was to cash out favoured parties, leaving the government and EPF contributors holding the bill.

One international fund manager described it as “daylight robbery” of the very people we were supposed to be helping through the recession.

This kind of perception of the Malaysian government’s capacity for governance and policymaking does little to improve confidence in the Malaysian economy. Right now we are in particular need of that confidence.

The 7 Billion stimulus package

It’s hard to comment on the RM7Billion stimulus package the government announced on November 4 because none of its details have been filled in, none of its projects has gotten off the ground, and none of its effects noticed yet. It appears to be a hodgepodge of projects driven by special interest with no economic plan behind it.

The most memorable element in it for me was the provision for RM200 million of this fiscal stimulus to go towards “re-engineering” all Malaysia’s toddlers into “holistic human capital” whatever that is, in nurseries run by an organization led by the wife of the Deputy Prime Minister. Permata curriculum will now be the national early-childhood curriculum and Permata’s teachers will be absorbed into the Ministry of Education’s payroll.

In this grave crisis, it is interesting to see the government support a private effort to the extent of absorbing it into the government and giving it RM200 million to spend. How will that money be spent? Has the Ministry of Finance taken over policymaking on early childhood education? What does this say about governance and transparency?

How this constitutes an economic stimulus in the sense I described above is a question I almost forgot to ask.

In a press statement in October last year, I underlined the urgent need for action. I said we must be vigilant, coordinated and bold in our response to the crisis. The government ignored that view. To date we have seen only denial, indirection and inaction. What measures have been announced have yet to be implemented.

What’s even more worrying is the thought these failures may arise from a failure of capacity, not of knowledge. Our current leadership, and the way it is organized and supported, may lack the very capacity to deal with major crises.

That may explain why it continues to deny we are in a serious crisis, both economic and political. ---Tengku Razaleigh Hamzah

Monday, January 19, 2009

The six takeaways from Kuala Terengganu


Monday, 19 January 2009 11:34

Just so nobody comes away from Kuala Trengganu, here are some takeaways (or bungkus or ta-pou, if you prefer).

1) UNITY

Sabotage. Infighting. Politicking. Call it anything you want but as the outcome in Kuala Terengganu amply shows, money is no match for unity. Pas named their candidate for the contest 10 days after Datuk Wan Ahmad Farid Wan Salleh was introduced as Umno’s man for the parliamentary seat.

The reason: Pas leaders could not reach a consensus on either Dr Syed Azman Syed Nawawi or Datuk Mustafa Ali. They opted for a compromise candidate, Abdul Wahid Endut.

At the same time, there was speculation that the cool ties between Pas president Abdul Hadi Awang and PKR boss Datuk Seri Anwar Ibrahim would hurt Pakatan Rakyat’s campaign.

Guess what? It did not. Pas and its allies worked very well on the ground. Some Pas officials believed that Mohamed Sabu or Mustafa Ali would have made better candidates but they held their tongues for the common cause.

In contrast, reporters who flooded KT two weeks ago have been inundated with stories of how supporters of the late Datuk Razali Ismail were against Wan Ahmad Farid for presumably blocking the late MP’s rise in divisional politics.

Sandwiched in between were anecdotes of how supporters of former Terengganu Mentri Besar Idris Jusoh would abstain from voting to send a signal to Datuk Ahmad Said, the man who replaced him under acrimonious circumstances.

Umno/BN was hoping for a voter turnout of at least 85 per cent. They only managed under 80 per cent, lower than the 83 per cent who turned out in March 2008.

Pas officials believe that infighting in Umno helped deliver some Malay votes to their candidate. Or, at least, it persuaded some of them to stay at home on polling day.

2) A BELLWETHER

True, the loss of one Parliamentary seat does not alter the power balance in Malaysia. Barisan Nasional still holds a comfortable majority in Parliament. But don’t be duped by the move to downplay the significance of the KT defeat. BN wanted to win, and they wanted a win very badly.

Several weeks ago, Datuk Seri Najib Tun Razak met the editors of several newspapers and he made it clear that if BN lost the KT seat, it could be a harbinger of worse to come.

He speculated that the momentum could swing to Pakatan Rakyat and have an impact on the state elections in Sarawak. And if Pakatan Rakyat performed beyond expectations in Sarawak, it could energise the opposition alliance even more and put the Barisan Nasional on the back foot going into the next general elections, which has to be held by 2013.

Najib appreciated that a loss in KT could set off a domino effect for the rest of the country. Of course, this scenario depends on a bunch of assumptions, most notably that Pakatan Rakyat has a game plan to convince voters that it is not only a valuable Opposition but a better option to entrust the governing of Malaysia to.

3) WANTED: LEADERS WHO INSPIRE

Datuk Seri Abdullah Ahmad Badawi won the 2004 election with an overwhelming mandate because he offered Malaysians hope. He promised to tackle corruption, revive the country’s institutions, put a stronger accent on democratic rights, improve the public delivery system, allow Parliament to have a bigger say and wipe out the excesses of the Mahathir era.

He stole the Opposition’s platform. He would have been soundly punished if he had kept to the policies of his predecessor or tried to adopt the style of Dr Mahathir.

The public, especially the younger voters, had had enough of the old regime. They would not accept the same old policies or ideas being repackaged.

Abdullah knew that but he could not deliver on his promises. When he sought another mandate in 2008, he sounded old, tired and like Dr Mahathir in 1999.

He was forced to trot out BN’s record in bringing development to the country. He could not possibly talk about change again because he had performed miserably on that score in his first term.

In the eyes of many of the voters, especially the first-time voters, he had ceased to inspire or offer hope. He was just another BN leader struggling to connect with the aspirations of a better educated generation of Malaysians.

If there were leaders who were speaking the language of change and reform, it was Datuk Seri Anwar Ibrahim and his ilk. The Pakatan Rakyat wrested control of the change platform which they surrendered to Abdullah in 2004.

The by-election campaign just past showed that the BN are still trapped in a bubble.
Najib sounded old when he promised to bring development to the KT constituency.

Abdullah sounded old when he assured the voters of KT that the BN would not forsake them even though they rejected Datuk Wan Ahmad Farid Wan Salleh.

The voters of Malaysia want to be inspired. They want to believe in their leaders. They want to be led by men and women of ideas, integrity and those who inspire hope. Same old, same old will not cut it. That was the message in 1999, 2004 and 2008.

4) A REFERENDUM?

Tengku Razaleigh Hamzah is spot on. The KT by-election was more than just a referendum on Najib or other leaders in Umno/BN. It was just another indication that perhaps the old power-sharing model of the BN is not the powerful marketing tool it once was.

Reporters who covered the by-election could not help but notice the stark contrast in campaigning approaches. Pakatan Rakyat politicians went around together, as one team. In contrast, BN political parties seemed to operate in silos. In predominantly Chinese areas, MCA officials were in charge. In Malay areas, the Umno officials preferred to be left alone. To woo the 800 Indian voters, MIC officials were brought in.

It is ironic and sad that the coalition that coined the phrase Bangsa Malaysia and always offers it credentials as the champions of multiculturalism in the country, still persists in pigeonholing Malaysia and Malaysians.

How could it be that a loose coalition of diverse political partners – cobbled together a year ago – seemed keener to look beyond race than the coalition who watched Malaysia grow all these years.

The BN structure and philosophy needs a major shake-up and next month’s convention could be a good starting point.

5) NAJIB RAZAK

He is unshakeable in Umno, truly the master of the party’s universe. But the son of Malaysia’s second Prime Minister has some way to go before earning the respect and affection of those outside the party.

The Deputy Prime Minister had it relatively easy in KT, he was not hounded by allegations of the Altantuya case or defence contracts the way he was in Ijok and Permatang Pauh.

The main reason: Pas officials are generally less keen on making character assassination the main plank of an election campaign, preferring instead to paint Umno/BN as cruel and corrupt.

Sure, there were shouts of Altantuya at some political rallies but it was not like the situation in Permatang Pauh where the guns of attack were trained on him. Even in this more charitable environment, Najib had difficulty connecting with the voters.

The defeat in KT will have no impact on his position in Umno but party members only form less than a third of all voters in Malaysia.

6) HUDUD

Did the Chinese stay with BN because they were spooked by all this talk about hudud? This question will be answered in the days ahead. Did more Malays vote for Pas because they were comforted by Pas’s continued loyalty to Islamic criminal laws? Hard to say.

But what is clear is that Pakatan Rakyat cannot continue with its band-aid approach. It must have a common platform and stand on major issues in the country. Only then will the voters across Malaysia view it as a truly viable alternative, many months down the road when the political temperature will drop.

For now, the coalition is still running on the adrenaline of March 8. The KT victory will keep the oxygen levels high but as sure as there is day and night, Malaysians will tire of the public spat between Pas and DAP over hudud, Constitutional issues and the Malaysian Economic Agenda.

The KT victory has bought Pakatan Rakyat some more time. Nothing more. ---The Malaysian Insider

Sunday, January 18, 2009

RESTORING CONFIDENCE

ASLI Strategic Outlook Forum
January 15, 2009

YBM Tengku Razaleigh Hamzah

A problem of confidence

The present financial crisis started in a speculative housing bubble in the US, inflated on greed and irrational confidence. Shady practices went mainstream under the wing of weak financial governance. When the bubble burst, gold-plated names on Wall Street were implicated. A massive loss of confidence in the financial sector has crippled credit flow worldwide. Consumption has contracted as households put off expenditure out of uncertainty. Investment has retreated. There has been a massive loss of confidence.

2. Expectations are a central factor in macroeconomic booms and busts. If a sharp loss of confidence is an endogenous part of the problem, a restoration of confidence must be the beginning of the solution. However, if we have learned anything at all from the crisis, this cannot be hollow confidence, but confidence based on a clear appreciation of our prospects. The lesson of the global economy is that false confidence based on irrational hope leads to collapse, disillusionment and pessimism.

3. We need a sound appreciation of our reality before we can dream of changing it. We need to face harsh truths before we can believe in ourselves and inspire others to believe in us. In coming to that sound appreciation here in Malaysia we have run out of time for politically manipulated messaging and sugar coated evasions.

4. Let us just begin by acknowledging that we will not be spared the effects of the global economic crisis.

5. Our leaders only undermine the government’s credibility when they paint an alternative reality for us. I understand we don’t want to frighten markets and voters unnecessarily, but we do not live in an information bubble. Only the most resolutely ignorant can now pretend that all shall be fine while the rest of the world deals with what Jeffrey Sachs has called “a world economy teetering on the brink of unprecedented catastrophe.” Leaders who deny the seriousness of the crisis only raise the suspicion that they have no ideas for coping with it. They undermine the government’s credibility when that very credibility, that confidence, is a key issue.

6. We are a trading and exporting nation. While we were relatively shielded from the first wave of financial failures there is no escape from the sharp demand slump in the global economy. The Government and Bank Negara maintain that our growth rate this year will be 3.5%. I fear it could be well under that. The latest numbers show a plunge in industrial activity, with manufacturing output in November, down 9.4 percent from a year ago. December may well be worse. Exports are down. There has been a dramatic swing in the balance of payments to a RM31 billion deficit in the third quarter, from a surplus of RM26 billion in the second. Anyone looking at the size of the downturn and at its swiftness can only wonder if we will be sailing through. This crisis really “went global” only in the final quarter of last year, but within that single quarter manufacturing both here and in Singapore contracted by more than 10 percent on the previous year. Policymakers in Singapore appear far more alarmed than our own. After having declared a recession, they found that the effects of the crisis were far worse than they thought. We are just at the beginning, and the bottom is not yet in sight.

7. Three and a half percent growth, even if we achieve it, will not create enough jobs to employ the large number who enter the workforce each year from our young population. Given our demographic profile and the fact that we are an oil exporter, our baseline do-nothing growth figure is not 0% but closer to 4%.

8. We do have a problem. Now we need to acknowledge that we are not in good shape to deal with it. After early decades of rapid progress, it looks like that economic growth has flattened, our public delivery system calcified and our economic leadership run out of ideas.

The financial crisis in the context of our developmental path

9. Malaysia is squeezed between being the low cost manufacturer we once excelled as, and the knowledge-intensive economy we are failing to become. Our years of sustained high growth ended in 1997 with the Asian Economic Crisis. With the subsequent rise of China and India as low cost producers with giant domestic markets, the manufacturing sector which propelled that growth is being hollowed out.

10. We are in the infamous “middle Income trap”. No longer cheap enough to compete with low cost producers and not advanced enough to compete with more innovative ones, we find ourselves squeezed in between with no economic story. Successful economies, like successful companies, need a compelling story, and we don’t have one. With falling communications and transport costs, the skilled engineers, managers and designers of the rich countries are pairing themselves to the cheaper labour of poor countries to extract productivity and cost benefits. The global integration of labour markets favours both rich and poor countries and stagnates the wages of those in the middle that are neither smarter nor cheaper. That means us. Our working people have suffered stagnant wages and a rising cost of living.

11. According to the World Bank, Malaysia’s share of GDP contributed by services was 46.2% in 1987. How much did you think it was twenty years later in 2007? 46.4%.

How much do you think the real wages of our workers grew between 1994 and 2007? By 2.6% in the domestic sector and by 2.8% in the export sector.

Unskilled migrant workers, documented and undocumented, make up 30-40% of our workforce. Meanwhile, alone in East Asia, the number of expatriate professionals here has decreased. Alone in East Asia, private sector wage increases follow government sector increases, not the other way around.

Did we have to learn about this from the World Bank? What has the EPU been doing? Has the cabinet pondered these numbers? Have we had a national discussion about what this?

12. The only long term path to prosperity is increased income through increased productivity. Sustained productivity growth is the engine of China’s unbroken run of high growth. Our failure to increase productivity and working incomes has been masked by an influx of cheap labour. That cheap labour has become another crutch for us.

13. Low growth

a) The other thing masking our underperformance over the last decade is the fact that in this time the world economy has experienced its biggest expansion in recorded history. We have averaged 4 to 5 percent growth throughout a historic boom over which world economic growth has averaged 4.5 percent. Meanwhile the two most populous nations in the world have been growing at or near double digit rates, multiplying per capita incomes and lifting hundreds of millions out of poverty in the greatest expansion of human welfare in history. That boom is over and we have missed it.

b) By analogy, when we view the report cards of our own children, we set our expectations against what they have been given and what they were capable of in the past. Turning to our own country, so richly endowed with natural and cultural resources, a stable society and good institutions, we see a failing report card. Instead of educating our young to be competitive we have turned out large numbers without the skills and attitudes suited for basic work, let alone for the global economy that is not out there somewhere but on our own shores.

Each decade we have discovered new ‘peer-countries’ against whom we might look decent because we have fallen out of the league of the last set of peers. We fail to notice we have been relegated. Remember that in the 60’s we were classified with Taiwan and Korea, in the eighties with Singapore and Hong Kong. Now we are less “relevant” than Vietnam as an investment destination. I remember receiving delegations from Taiwan and Hong Kong who came to learn from us.

14. Inequality
We cannot comfort ourselves that we have sacrificed growth for social equity. Despite the strong redistributive measures the government has pursued for decades, our Gini coefficient, the standard measure of inequality, has been ballooning. In this region only Papua New Guinea is more unequal. We have the most unequal income distribution in Southeast Asia. If there is supposed to be a trade-off between growth and equity, we have not made it. We are failing on both growth and equity.

15. What does it take to make the leap from middle to high income? The countries that have done it recently, Korea, Taiwan, Hong Kong and Singapore, have one feature in common: they were able to learn from previous crises. Without a buffer of natural resources, each of these economies was more exposed than we were. In relative terms, because they are even more trade oriented than we are, each may be harder hit by this downturn than we are. But we miss the picture if we stand by and comfort ourselves that we are ‘shielded’ because our capital markets have been less open. Our very problem may be that we have been shielding ourselves from learning, which requires systematic change in behaviour or knowledge informed by experience.

16. The criterion of success for making the developmental leap, the key differentiator between the leaders and the also-rans, is not immunity from economic crises (after all, if you have a Stone Age economy, you are completely immune) but the organizational capability of governments to learn and re-organize around new national economic strategies through these crises. Each major crisis is either an important opportunity to transform the economy or a major setback to our ambitions. The question is whether our policymaking and policy implementing apparatus is set up, motivated and led to learn from this crisis. It is a question of the capability of government and governance.

17. We must also retrain and re-skill those who lose their jobs because of this crisis. This cannot be done in the present ad hoc manner. It must be a coordinated program, with courses matched and tracked to learners according to a National Skills Plan which in turns supports a vision for the Economy. Those lost jobs, especially in the manufacturing sector, will not be coming back. We better have a plan and a vision.

18. What are the consequences of sailing into an economic storm in our present condition, after a decade of lacklustre performance and with no plan, no vision for sustained high growth? We can look at two scenarios: breakdown or relegation.

a) Breakdown
As a developmental state, the legitimacy of our government is based on its guarantee of social peace and economic development.

As Professor Clive Kessler has observed: “Social peace in Malaysia depends upon the continuation, and the continuing expectation, of economic growth and prosperity; while economic growth and prosperity depend upon the continuation and assurance of social peace.” This reciprocal relationship between peace and growth makes us prone to a vicious feedback cycle: if either engine were to fail, the other would fail with it, and take us down a spiral of failure with a painful end. Our margin for error is slimmer than we think. Our socio-political setup implies that we don’t have a smooth glide down to complete irrelevance. Like a bicycle or an airplane we need to be running at a certain speed to avoid falling off.

b) Relegation
On a second scenario we might just coast through the downturn. However we will emerge with an economy that has failed to gear up to the demands of the global economy, fallen yet further behind along our developmental path and locked ourselves tighter into a long term pattern of low growth. Sooner or later will come that painful reckoning described in the first scenario.

19. We should view the crisis in the context of our history as a young nation. The last time the world faced a contraction of this size Malaysia did not yet exist. The crisis is has broken out at a critical point in the development paths of our economy and our political system. Put these three factors together, and we have a perfect storm: an unprecedented need for leadership at just the moment when our system for selecting and legitimizing political leadership appears to be broken.

Where next

20. My reading of where we stand may seem harsh, but perhaps the world is harsher. I don’t wish to offend, but I believe we need to grasp the peril of our situation clearly before we know what to do next.

21. In the medium term we need to make a developmental leap. But a leap is not a straight-line projection of the present. It is not about doing more of what we have done. We are not going to get there putting up more highways, declaring more Growth Corridors or planting more oil palm. The way up is a complex achievement that in turn depends on transformative improvements in governance and a successful reform of our political system.

22. The world recession is a critical opportunity for us to re-gear and re-tool the Malaysian economy because it is a challenge to take bold, imaginative measures. It lights the fire under our feet to make transformative improvements in governance and politics. It also demands that the government spend boldly on the right things, in the right way, to stimulate demand.

23. Two criteria for ‘the right things” would be those public investments with the widest multiplier effects, over the short and the longer term. Over the short term, there are often tradeoffs between impact on demand and on improved economic capacity. Over the long term, the two are the same. The “long term multiplier” is nothing less than the improved capacity of the entire system.

24. So we must think carefully about what we spend the “fiscal stimulus” on. There is no such thing as a free lunch. We will be going into deficit to finance this stimulus, so it can’t be about just spreading money around. So far there has been no impact from the stimulus package announced in November, nor was it clear what the economic thinking was behind that measure.

25. We don’t need another stimulus “package” of spending here and there. What we need, and what the crisis gives us a chance to implement, is a set of bold projects with an economic story behind them to help Malaysia make the developmental leap we have been missing. We have a once in a lifetime economic challenge. We must meet this challenge with a historic sense of purpose. That means, not with a “stimulus” consisting of ad hoc pork barrel expenditures but a set of public investment projects guided by a vision, designed around a strategy and governed with bullet-proof integrity.

26. Let me suggest two programmes and an enabling set of reforms.

Oil and Gas Centre

27. Oil and Gas has served us well, but we have still not tapped our strategic strength in this sector despite our unmatched natural and strategic advantages:

a) Malaysia is the leading Oil and Gas producer in the region. Our proven reserves have been augmented by major discoveries in recent years.

b) More than half the world’s annual merchant fleet tonnage passes through the Straits of Malacca, with most of it continuing into the South China Sea. Oil flows through the Straits of Malacca are three times greater than that through the Suez Canal and fifteen times greater than flow through the Panama Canal. We live alongside the most important oil shipping route in the world. Our fifteenth century ancestors may have done more to tap that advantage than we.

c) We have in Petronas one of the leading oil companies in the world.

d) We have strong trade links to Middle Eastern oil producers.

28. We could do much better. Consider that despite having no oil resources, Singapore is among the top three global players in trading, refining and manufacture of oil and gas equipment.

29. Three years ago, while Malaysia still held the OIC chairmanship, I proposed a National Strategic Plan with the vision of developing Malaysia into Asia’s Oil and Gas centre, with leading capabilities in refining, shipping, distribution, storage and downstream production.

30. We should develop offshore storage facilities for other producer nations with high country risk. Oil and gas exploration, extraction and production are increasingly technology driven, high value operations in themselves as oil becomes scarcer. There will be large payoffs for having our own R&D capability in exploration, extraction and production. We should specialize in energy technology, including alternative energy sources for a carbon-constrained future.

31. We should form partnerships along the value chain. These could include a network of agreements with Gulf producers and with major consumers to improve oil security. We could form G-to-G partnerships in ASEAN, provide tax incentives and craft innovative Production Sharing Contracts,

32. Here’s the exciting thing. For all these ventures to work we need greatly improved capabilities to finance and trade oil and gas. Given our very special geographic and strategic advantages, we should build the first spot and futures Exchange for Oil and Gas in an OIC nation.

33. Whatever the government chooses to do, it should understand that for us to get on a higher growth plane we must specialize, and we must have a government capable of providing the direction, drive and executive capability to foster that specialization. Globalisation requires a relentless focus on competitive advantage. We need our own story.

Housing

34. Let’s start a program to bring home ownership to the whole country. The construction sector creates multiplier effects in more than a hundred other industries. It provides work in everything from insurance to advertising to materials supply. Of all the national projects we could undertake, few could have such a large social as well as an economic multiplier effect.

35. Housing builds powerful social capital and gives substance to citizenship. A national housing project allows us to design entire communities and townships with their transportation, communications, educational and recreational infrastructure with a strong set of standards and social objectives. It lets us plan the housing stock to cater to the lifecycle of home ownership, with a good mix of options for different localities and life-cycle requirements. It is a way to grow racial harmony, build integrated schools, and help the poor without creating a crutch.

36. Let’s commit ourselves to having each and every Malaysian family own their own home. This vision is a radical challenge to the nation to do better. It will require extraordinary improvements in our ability to design, construct and finance housing projects. It will require the setting up of a statutory board to oversee housing development, administration and management. As land governed by the State powers, the States will have to implement these projects. This will require, and hopefully force, improved coordination between the Federal and State governments, especially now that we might no longer expect that the same party is in power in both places.

37. Financing for this investment could come from modifications to EPF, with matched contributions from the government towards the value of the property. Because it comes out of savings, this spending would be non-inflationary. I can think of few better ways to get the economy humming again, give our citizens a focal point of hope and pride, and weave a safety net that also encourages savings and enterprise.

Public sector reform

38. We cannot wait till the crisis blows over to tackle the public delivery system head on. This is because we will need an upgraded public service just to implement such large public programs successfully.

39. The need for improved governance is greater, not less, in challenging economic times. When Franklin Delano Roosevelt implemented the New Deal to push America out of the Great Depression, many feared that this would present a huge opportunity for graft. Confounding these expectations, the New Deal programmes were implemented with unprecedented transparency. FDR did this by building oversight into the implementation of his rescue program.

40. Similarly, the two programmes I have suggested would come to nought if they were derailed by the corrupt practices that have become the norm in this country. Instead of rescuing our economy they would become millstones around our neck. As part of the project management of these programmes we should set up powerful, independent divisions devoted to investigating complaints of fraud.

41. Today the role of the public sector is a lot more complex than anyone could have imagined even a decade ago. A “public delivery system” that was designed for the challenges of the 1950’s cannot possibly cope with the complex demands of the globalised 21st. The current crisis propagated worldwide in internet time as regulators scrambled to catch up. Government now needs to be smarter, tougher and more responsive than before to engage on equal footing with business. We need leadership to change the operating model of the civil service from last century’s centralized planning approach, driven by budgetary plans, to a model of government as facilitator, aggregator and convener of business. Government that targets economic outcomes rather than accounting quotas.

42. We need to demand as much talent and organizational ability in our public service as the private sector does of its own people. Today the quality government is a core component of national competitiveness. However there is nothing strange about the expectation that the civil service should be a high performing organization led by an intellectual elite. It is how the Malayan Civil Service used to operate. Many of us remember it.

CONCLUSION

43. What I have outlined this afternoon are just my suggestions. I am sure there are many other ideas in this distinguished company.

44. Let me end where I began, with the question of confidence.

45. We need to restore confidence in our basic institutions, our leadership, the integrity of the Federation, the rule of law and our national Constitution. This is of a piece with the vital economic confidence needed to unleash credit, investment and consumption, and get everyone working. We need to restore confidence in Malaysia.

46. Real confidence is hope based on an apprehension of the truth. It is social capital and trust in society and its future. It is inspired by leaders willing to take us through an unflinching evaluation of where we are today to a vision of what we are capable of tomorrow. It means owning our own story and banking on it.

47. The country can no longer afford a political class out of touch with reality that trades on yesterday’s political insecurities and a government that has forgotten its purpose. We need a renewal of leadership as a first step to restoring true confidence.

48. The economic statistics are mere indicators of the activities and expectations of the unique national community we are trying to build, so that building an economy and building a nation, providing good governance and being truthful, are not things that can be achieved apart from one another. To reignite our confidence would be to revitalise the project of building Malaysia.

Wednesday, January 7, 2009

Speech by Datuk Zaid Ibrahim

Regional Outlook Forum organised by Institute of South East Asian Studies


DATUK ZAID IBRAHIM

Malaysia is the Blessed Country

1. I want to thank ISEAS and in particular Ambassador Kesavapany for this honour. Ambassador Kesavapany told me that I would have 30 minutes or so to talk about Malaysia, and since it’s a luncheon talk it would probably be light hearted and not too spirited. That will be difficult, like asking me to be on my best behaviour while in the company of Paris Hilton, but I will try.

2. Malaysia is a wonderful country and its people are among the most hospitable. If Australia is the Lucky Country, then Malaysia is the Blessed Country. Malaysia is also unique in another way. Not many countries have their Prime Minister, Deputy Prime Minister and Minister for Tourism welcoming tourists. Many of you have visited the country and will no doubt remember the giant billboards along the highway with the imposing picture of a smiling Prime Minister, Deputy Prime Minister and Minister for Tourism welcoming you to the country. Now of course, after March this year, you will see a new set of billboards replacing the expensive current ones. In March 2009, Malaysia will have a brand new Prime Minister, Deputy Prime Minister and, in all likelihood, a new Minister for Tourism as well. Hopefully they will not spend too much on the billboards for they might have to change them again.

3. In Malaysia, General Elections had been considered a formality or a ritual – something we had to do every 5 years or so as a matter of habit although it had no real impact on the status quo. That all changed on 8 March 2008. The result of the 2008 General Elections held on that day sent shockwaves through the country. It is probably also true to say that it also surprised the Malaysian electorate which created the result. Ordinary Malaysians suddenly found that they were capable of doing something dramatic and historic. Malaysia will no longer be the same after March 8th. The book published by ISEAS known as “Eclipsing May 13” is a good read about what happened. You will find a good analysis of the general election and the surrounding issues. What is clear is that Malaysia post-8 March 2008 is a different Malaysia.

4. But, really, should we have been so surprised? For years, our former Prime Minister Dr Mahathir Mohamad had told Malaysians that they could reach for the stars. You remember the catchphrase “Malaysia Boleh”? Long before US President-Elect Barrack Obama introduced the mantra “Yes We Can”, Dr Mahathir was urging Malaysian to think “Malaysia Boleh” – “Malaysia Can”.

5. Unfortunately for Malaysians, “Malaysia Boleh” has come to symbolize something very different. To Malaysians it is about the government or the bureaucracy doing things that could not and would not be done anywhere else. Faced with unjustifiable mega projects like the national car project, building the world’s tallest building, creating the splendour of a new city in Putrajaya, hitching a ride into space on a Russian spacecraft that has been paid for with tax dollars or revenue that should have been used for more pressing matters like better equipped schools and hospitals, or an effective transportation system, and all the things that have come with them, what else could the average Malaysian do than shrug and say with resignation, “Malaysia Boleh.”.

6. It seemed however, there was at least one thing that they could do.

“Malaysia Boleh” took on a different resonance during the last General Election. For the first time BN only got 49 % of the popular vote in Peninsula Malaysia. In terms of seats, BN only won 51% of those contested in Peninsular Malaysia. Only the seats from Sabah and Sarawak actually gave BN the solid majority it now enjoys. As for the Malays, a vote for the Opposition is no longer an act of treachery or betrayal to the Malay cause. PAS and Keadilan garnered more Malay votes than UMNO in Peninsular Malaysia. UMNO is no longer the dominant voice for the Malays.

7. Why the sudden change? In my view, it was not sudden at all. The results of the 2008 General Election were the culmination of the decline in support for the BN since the 1999 General Election. In that election UMNO lost a substantial portion of the Malay vote. It was this erosion of Malay electoral support for UMNO in 1999 that influenced the constituency re-delineation exercise in 2002. This move was to increase the number of Malay mixed constituencies and lessen the predominantly Malay seats. It was feared that PAS would be able to gain a stranglehold on such seats. This effort was to no avail in 2008 with PKR doing extremely well in the mixed Malay constituencies where Malay majority was between 50 to 65% and PAS doing well in the predominantly Malay constituencies. With DAP doing well in the predominantly Chinese majority seats, the writing was on the wall for the BN. The aberration was the result of the 2004 General Election. This aberration had nothing to do with BN. It had everything to do with the manifesto of change proposed by the then new Prime Minister Abdullah Ahmad Badawi. Change however did not happen despite his best efforts. I will come to that later.

8. BN lost their 2/3 majority in Parliament in March this year though only by 10 seats. It retained a majority and formed the Federal Government. Yet, shockingly, there was almost instant pressure on the Prime Minister to quit. Here you had an incumbent Prime Minister and leader of his party having led his coalition to an electoral victory being asked to leave. No other country except probably Thailand would purge a leader in that position. But then this is the same country which saw the leader of the Opposition being touted at the same time as the PM in waiting although he was still 32 seats short of a simple majority. Malaysia is truly a unique country.

9. So where did the results of the 2008 General Election put the country? In my view, the future looks good for Malaysia, current events notwithstanding. Of course we have a multitude of problems, but then which country is spared? What is important to note is that given our political history we are possibly in the best condition we could be to address and resolve those problems. As I stressed at the outset, Malaysia is no longer the country it was before 8 March 2008. For the first time we have a real prospect of a two party system in Parliament. Even if the Pakatan Rakyat opposition fails to form the federal government in the next election – in my view they have a 50% chance - we will have a stronger and more effective opposition. To me, this is the only safeguard against abuse of power, corruption and the preservation of the rule of Law, or at least whatever is left of it. Though those of you in Singapore may not need a strong opposition to ensure good governance and low corruption levels, the Malaysian experience requires the counterbalance a strong opposition allows for.

10. And what of the BN after the change in leadership in March?

Never mind March, what happens after Kuala Terengganu? BN will probably lose and if that happens, life will be tough for Dato Seri Najib. If BN wins then it’s only temporary reprieve. In my view, the BN will appear to be stronger, thanks to the hype and spin by the mainstream media. With a new leader in Dato Seri Najib Tun Razak, UMNO and BN will rally behind him as a show of solidarity. However, when you dump and push out a sitting Prime Minister, especially someone as nice as Pak Lah, there are bound to be some of his supporters who will retaliate, and Najib cannot as such be assured of unanimous or cohesive support. After all, his popularity is low in the country. He will probably tighten the screw on the press and the dissenters within the party. He will be tempted to emulate Dr M’s style of governance. The Prime Minister in waiting will probably assemble a younger and stronger Cabinet. To do so, he will have to disband half of the present crop of Ministers, who have in any event certainly passed their shelf life. There are many young leaders in UMNO and the BN who are capable technocrats but, more importantly, they are not the typical UMNO idealogues and are more moderate in their positions. Khairy Jamaluddin, is capable and has enough gumption to effect changes the new Government may need to effect. He could be a star in the future, if he is not buried or sidelined in March. And another young UMNO leader is Dato Saifuddin Abdullah -the present Deputy Minister of Entrepreneur Development- these are bright BN second liners and will make good Ministers. On the other hand, if as is likely, Dato Seri Najib persists with the so-called “UMNO tradition” of giving Cabinet posts to those who hold senior party positions, then the BN Government will be more of the same. I also believe that the MCA and the other component parties will continue to play the role they have developed after their calamitous showing in the last General Elections. In the wake of their defeat, they became more assertive and less afraid to highlight the plight of the minorities. The dominance of one party to the exclusion of others is over; although UMNO extremists will try hard to hang on to the advantage they have become accustomed through bullying. All these elements should allow the BN administration a small window for a new lease of life if it plays its cards right.

11. Pak Lah the outgoing Prime Minister has been the butt of many jokes and criticisms from all quarters. It should not be overlooked that it was his manifesto of change that got the BN its best result ever in 2004. He had also begun to move towards the reforms he had promised, showing earnestness in making transparency, integrity and good governance a reality. Sadly, he was impeded by extremist elements in UMNO and he was too weak to take them on. If UMNO had supported him with earnest, the March 2008 swing might not have happened. It will be a fatal mistake for UMNO and the BN if Dato Seri Najib reversed or paid mere lip-service to these initiatives.

12. Integrity, good governance and judicial reform, in any meaningful sense, had been missing from our political lexicon for a long time. It took courage for Pak Lah to not only reintroduce them but to take steps towards giving them substance. The establishing of the Institute of Integrity, the Judicial Appointments Commission and the Anti Corruption Commission, all of which could have been better tailored to their purpose and declared aims, signalled the need for a massive change of direction – a paradigm shift, if you will – in political governance. Will these efforts herald a new era in anti-corruption efforts as well as allow for more meaningful efforts to restore judicial independence and competence? Only Dato’ Seri Najib can answer this.

13. Though the Prime Minister will soon leave the scene he will leave behind an important legacy; a more open and critical society. He allowed for a greater level of public debate and, albeit somewhat haltingly, encouraged change towards more accountability in governance. Islam Hadhari was sorely misunderstood. A good idea, aimed at promoting moderation and progressiveness in Islamic discourse, it did not take off principally for the effort having been handicapped by its promotion having been undertaken by traditional stakeholders like JAKIM and other UMNO leaders. They were sadly more interested in pursuing political ambitions and aims than realizing the noble aspirations underlying the campaign. The League of Nations conceived by Harry Truman failed as an organization, but the idea was too good to die with the organization and today we have the United Nations. I hope the reforms Pak Lah gave life to will survive him.

14. But would things be any different under Pakatan Rakyat? The question is beginning to surface now that the euphoria of the 8 March 2008 election has waned. Anwar Ibrahim is a personality you are familiar with and is someone I admire immensely for his courage and tenacity. He has been the cement holding together the parties of the Pakatan Rakyat, with their diverse political philosophies and varying political agendas. I believe he’ll be Prime Minister one day. Certainly, he will continue to be the main player in Malaysian politics for many years to come. As you no doubt know, he is once again facing a charge for sodomy. Some are of the view that he will be incarcerated again, either through the courts or by executive detention order. I am not so sure. The public demands by some Cabinet ministers for Anwar to volunteer a DNA sample at the time he was arrested and subsequently when charged suggests that there are doubts. Without a conviction, he cannot be incarcerated. A detention under the Internal Security Act by a new Najib government would invite serious repercussions both domestically and internationally at a time when economic and social conditions are in a mess. I would like to think that Dato Seri Najib appreciates that he has other options to win the support of the people in the next general election. Detaining Anwar under the ISA is an unnecessary risk and may well turn the tide completely against the BN. Nonetheless, I cannot say with certainty that Anwar will not be detained. Such is the state of play in Malaysian politics.

15. The Pakatan Rakyat, on its part, cannot assume that they are safely on the road to Putrajaya come 2012. The honeymoon is over for the five Pakatan Rakyat State governments of Kelantan, Perak, Kedah, Penang and Selangor. The PR must ensure that it retains these states. One would have thought that given the results in March, this would be a given. This may however prove not to be the case. It is said that on March 8th last year, Malaysians went in search a viable alternative. The PR must show that it is that alternative. Public infighting is not the way to go about that, yet this is what the PR has come to be identified with in recent days. The coalition needs to build on its common identity and provide for a common platform on major issues. Member parties must go beyond issues like the implementation of Islamic criminal law and concentrate on delivering on their collective message of social justice and compassionate and fair governance. In this, PAS, with its Islam-centric philosophy has to work harder to fall in line with PKR and DAP whose ideologies are more closely aligned. Whether the ulamaks of PAS are able to make this concession will be a test not just of their own maturity but also of the cohesiveness of the PR.

16. In short, the PR must show itself to be a real alternative to the BN way of doing things. To be able to retain the states currently ruled by them, PR must offer more effective policies and initiatives when compared to those of the BN. It will not be sufficient for them to depend on the personality of their leaders. That may have been enough the first time round, but the voters expect more and rightly so. But I must emphasize here that Malaysians are a patient lot. They have been patient with Barisan Nasional for so many years and I am sure they will be patient with Pakatan Rakyat as well. But Pakatan should never take the people for granted. In this, it would also be enormously helpful for Anwar Ibrahim to change his grandstanding ways. Proclaiming dates of anticipated takeovers without the ability to follow through merely distract and detract. Powerplays like that have undermined the PR in a way that has been wholly unnecessary. Anwar should instead focus on getting PR together as an entity with one coherent vision for the country. He has after all, the support of the rank and file of all the parties in Pakatan Rakyat, although not necessarily some of its leaders.

17. PAS’ Islam-centric political posturing is particularly problematic, not because of the party’s identification with Islam but rather it’s posturing. PAS is a key member of the PR. For the coalition to stay viable coalition, PAS’ approach to the subject of governance and public policy determination where Islam is a factor must show sophistication and restraint. This is particularly true of interfaith issues. Though PAS ideology has all the elements for an inclusive and pluralist society built on a foundation of justice and fairness, it has sadly become more known for its opposition to alcohol and concerts, and its fixation on implementing Islamic criminal law. Recalling that a multi-racial voter base voted PAS in last March on the back of a manifesto that centered on shaping Malaysia into a welfare state, PAS’ energy would be better spent on fleshing out the economic policy underlying its concept of a welfare state to show that its vision is achievable. Additionally, to prove itself a viable Islamic alternative to UMNO, PAS has to distance itself from the UMNO-style of unilateral, ultra-legalistic, enforcement-minded approach to Islam. PAS must further accept that it has to consult not only its partners but also a broader segment of the public including progressive Islamic thinkers before making policy declarations.

18. The reality is that non-Muslims are also affected by declarations on so-called Islamic matters, particularly where these coincide with matters in the public sphere. As such, a culture of non-discrimination and consultation must be nurtured for the good of the country. As I have alluded to, the compassionate side of Islam can be PAS’ strong point. If it is able to harness the various dimension of this aspect and project them more inclusively, for example by championing the rights of stateless children with no papers and schools to attend, the issue of trafficking of women, the issue of refugees who have settled here for all intents and purposes, PAS will be viewed as a party for all Malaysians, Muslims and non-Muslims alike. To showcase its vision of an inclusive Islam, PAS could take the lead in forging solutions for those problematic so-called conflicts issues. The reality is that there will be persons who converted to Islam for marriage and whose marriages have broken down or ended by reason of death or divorce. Some of them will want to find comfort in their original faiths. Leaving them unaided by hiding behind jurisdictional issues, as we have seen, or by proclaiming the beauty of Islam does not address the situation and the pain of those concerned. Thus far, BN states have been unwilling to offer solutions. PAS could lead the PR in navigating forward to resolution. This, I feel, speaks more for PAS’ ideals than mere pronouncements of what is sinful and what is not. In doing this, they would have offered the rakyat the security they crave. I also believe they would have done more to restore the dignity of Islam than the Islamization campaigns of UMNO have done much to undermine.

19. Inter-racial cooperation in Malaysian politics has a short history.

We saw it in the years from 1946 as we came together in the quest for independence. Since the 80’s, Government policies appear to have increasingly polarized Malaysian society. Only in the last 5 years, have we again witnessed real camaraderie and solidarity, principally due to the efforts of NGOs, and, more recently, the PR. The last general election bore witness to a new dynamic. The rakyat came together, the young and old and the person on the street, to work with and for one another regardless of race and affiliation. They had a common cause; the betterment of Malaysia. The majority of Malaysians who have been told repeatedly that they are of different races, that they have different rights and privileges, and to continue to blindly trust government decisions have now said enough! They have now found comfort and unity amongst themselves; they have found a rejuvenating sense of a new identity as one people. This is the new Malaysia.

20. Malaysia is like many other countries where the young will ultimately determine the nature and course of politics. The people have shown their abhorrence for greed and abuse of power. The people have shown that they want to be together as one community. They have shown that they prefer pragmatic discourse. Half of Malaysia’s population is below 35. These youngsters are eager for change, for a politics of idealism and honour. They want public officials to be more accountable, or at least, for a political process that is less corrupt and dirty. They want their leaders to be in tune with their needs, they demand security, remedies to their problems and social justice. Though still relevant, ethnicity is no longer a critical factor. The young are less susceptible to the instigation of racial hatred and prejudice. They want change. This is something that both sides of the divide must take note of. At the next general election, there will be another 4 million young voters who will determine the titanic struggle.

21. Why am I so positive about Malaysia whilst continuously pointing to the deterioration in ethnic relations, and religious conflicts? Because the majority of Malaysian are sensible people. Ordinary people have more sense than their leaders sometimes. They know the value of cooperation, mutual respect and harmony. I believe the people have spoken out loudly and clearly. The future direction of the country is no longer going to be solely in the hands of the political masters. The people want to be involved. They have had enough of scandals, abuse of power, and poor administration. It is not true that they voted for the Opposition just out of frustration or in protest as some pro-BN analysts have said. The people voted for the Opposition as a manifestation of their desire for a better country; for themselves, their families, their children. The non-Malays ask that they be accorded the respect and recognition they deserve as equals. They believe, rightly so, that their future is inextricably linked with that of the Bumiputras. The Malays on their part have responded positively to the idea of a truly unified Malaysia. Despite UMNO fear-mongering about Malay rights being threatened by support for the Oppposition, the Keadilan and PAS share of Malay votes on the Peninsula exceeded that of UMNO. While at one time a Malay vote was an UMNO vote, today the Malays no longer see themselves as beholden to UMNO.

22. Sometimes I am asked what I intend to do next. I have only a limited political ambition; to see Malaysia prosper peacefully in a way that will benefit all including the Bumiputras who must have their fair share of the fruits of that prosperity; to see that the rights and the dignity of all are respected and protected; to see that the yearnings of the non-Malays to feel a sense of belonging and of being wanted as Malaysians in their own country is fully realized; to see that Compassion, which is the underlying teaching of my religion, becomes the central consideration in the formulating of public policies. Finally, as a lawyer, I want to see justice and the rule of law reestablished and flourishing. These are simple ambitions, I think. Given the results of the 8 March 2008 election, there is some hope that they will be fulfilled in my lifetime. The rakyat has shown that it wants democracy and all that it portends.

23. In the meantime I hope to do my part towards achieving this goal with a foundation I have set up called MyFuture Foundation. It is a vehicle that I hope will assist the young to articulate their Malaysian-ness through their support of the various community oriented projects that the foundation aims to undertake for the realization of a Bangsa Malaysia. It is a vehicle that will allow the people to express their rejection of narrow racist politics, and to show that the various races want to, and can be together as one people.

24. Countries in South East Asia have gone through tumultuous change over the years, each having to endure different sets of challenges. We each have our own stories. I have tried in the time made available to me to tell you ours in Malaysia. Thank you.

Zaid Ibrahim

Monday, January 5, 2009

Dr M: Wan Farid is just a proxy

Former premier Dr Mahathir Mohamad claims that the BN candidate for Kuala Terengganu by-election is someone who can be ‘used’ in time to come.

S Pathmawathy | Jan 5, 09 4:04pm

Former premier Dr Mahathir Mohamad expressed disappointment with the selection of Wan Ahmad Farid as the Barisan Nasional candidate in the Kuala Terengganu by-election.

Wan Ahmad will contest the parliamentary seat that had been held by deputy education minister Razali Ismail up to his death on Nov 28 last year.

“The choice of the candidate by BN is really very bad because everybody sees him just as a proxy... someone to be used later on if Najib becomes the prime minister,” Mahathir (left) claimed at a press conference in Putrajaya today.

Wan Ahmad had been appointed deputy home minister after the general election in March last year, and was reappointed a senator last month.

He resigned his ministerial post last Friday and his senatorial post today, in order to contest the by-election on Jan 17.

'PM’s particular choice'

Mahathir also dismissed claims that the by-election is an important battle for Deputy Prime Minister Najib Abdul Razak, who is leading the election campaign.

“They are trying to project it as Najib's test (because) if he becomes the prime minister then these are people (including Wan Ahmad, right) who will be surrounding Najib,” said Mahathir.

Asked whether he felt the opposition has a chance of bagging the seat, Mahathir said: “I don't know about the opposition having an upper hand but I think it is an even tide.”

He said the by-election would not bring about much difference for the BN as “it is not a major fight”.

“But of course the candidate (from) Umno was the prime minister's particular choice, because he is working with the prime minister,” he said.

Wan Farid will stand against Mohd Abdul Wahid of PAS and possibly Angkatan Keadilan Insan Malaysia vice-president Harun Moham. --- malaysiakini.com