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.

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

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

Enter Najib, with baggage

Nov 6th 2008 | BANGKOK

From The Economist print edition

A new leader mired in accusations

ONE could certainly say that Najib Razak was born to be Malaysian prime minister. He is the son of Abdul Razak, the second man to hold that job following independence from Britain, and the nephew of his successor, Hussein Onn. Elected to parliament aged 23, on his father’s death, he rose to become deputy to the present prime minister, Abdullah Badawi. However, Mr Najib, expected within months to become the country’s sixth post-independence leader, will enter under a cloud of allegations, including ones linking him to a murder case, all of which he categorically denies. But some Malaysians will be wondering if he is a fit person to lead them.

Facing a revitalised opposition, in an election earlier this year the governing coalition, led by the United Malays National Organisation (UMNO), lost the two-thirds majority it needs to change the constitution. Since then, the knives have been out for Mr Badawi. Despite his efforts to cling on he is being forced to quit next March. The contest to succeed him as party president, and thus prime minister, at first promised to be lively. But party officials, fearful of the challenge from the opposition leader, Anwar Ibrahim (a former UMNO deputy leader), chose to hang together rather than hang separately. By November 2nd Mr Najib had won enough nominations to block his only rival, Razaleigh Hamzah, a former finance minister, from getting on the ballot-paper. The quizzical Mr Najib (left)

Like Mr Badawi before him, Mr Najib comes to the job promising reforms, including of the system of preference for members of the ethnic-Malay majority for state contracts and jobs. Mr Badawi achieved little, though he allowed a bit more freedom of expression than had his predecessor, Mahathir Mohamad. Expectations for Mr Najib are lower still. It is possible, notes Edmund Gomez, a political scientist, that he will use the worsening economic outlook as a pretext for reverting to Mahathir-style repression.

Mr Anwar has failed to carry out his threat to topple the government through a mass defection of parliamentarians. Even so, there is a palpable fin de régime air around UMNO. Mr Badawi, Mr Mahathir and other leaders are publicly lamenting how corruption and cronyism are rife in the party. But his opponents say Mr Najib is hardly the man to restore confidence. In the latest scandal to which they are linking him, the defence ministry (which he oversaw until recently) has deferred a big order for helicopters following questions about their high price. A parliamentary committee this week cleared the government of wrongdoing, but admitted not investigating whether “commissions” were paid.

In an earlier case, a company the opposition claimed was linked to Razak Baginda, an adviser to Mr Najib, was paid juicy fees for services provided over a contract for the purchase of French submarines. A Mongolian woman, said to have worked as a translator in the negotiations, was shot dead and her corpse destroyed with explosives in 2006. Mr Razak was put on trial over her killing, along with two policemen. The case has dragged on for months and seen various odd goings-on, including changes of judge, prosecutors and defence lawyers at the start of the trial. A private detective signed a statutory declaration implicating Mr Najib, retracted it the next day, saying it had been made under duress. Calls by the victim’s family for Mr Najib to testify were rejected. On October 31st the judge ruled that the prosecution had failed to make a prima facie case against Mr Razak.

The policemen’s trial will continue. A blogger who linked Mr Najib's wife to the case is on trial for criminal libel. None of this, however, seems likely to interfere with Mr Najib’s accession to the prime minister’s job. A bigger threat may yet emerge from the resurgent opposition and Mr Anwar, who nurtures a long-thwarted ambition to take the job himself.

Merry Christmas and Happy New Year 2009

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To All Readers, Visitors and Friends all over the world, I wish all of you and your family a Merry and Blessed Christmas, and Happy New year 2009.

For some 2008 will have been their best year and for others not so good. Either way you need to take a break every now and then and this is a great time to do it.

Thank you for all your support this year. I appreciate every comment and all the feedback that I get. Without you there would be no blog.

May 2009 be your best year ever.

Chinese executive guilty of fraud

Big News Network.com
Thursday 18th December, 2008

A former executive with China World Trade has pleaded guilty in a US federal court on fraud charges, resulting from an e-mail stock manipulation scheme.

How Wai John Hui has pleaded guilty to sending tens of millions of e-mails that promoted obscure stocks, in an effort to inflate the value of stocks he owned.

The spam-for-profits scheme was instigated by How on behalf of Chinese companies

How is a resident of Hong Kong and Canada.

Lack of honesty at root of financial crisis

Editorial - Arab News
Thursday 18th December, 2008

The $50 billion investment fraud to which the respected New York financier and former NASDAQ Chairman Bernard L. Madoff has allegedly confessed, may prove to be the paradigm for all that has gone wrong with the international financial system.

It points up the greed, incompetence and woeful wishful thinking that have all combined to produce economic meltdown and plunge the world into recession.

Most staggering is the stupidity of both regulators and professional investors in failing to spot that for at least a decade, at the heart of his hedge fund operations, Madoff was running a pyramid scheme. This relied on new investment funds to pay out market-beating returns to existing investors. Madoff’s refusal to explain his fund management strategy and his dubious employment of an out-of-town hick accountant ought to have rung loud alarm bells. The Securities and Exchange Commission ought to have checked out the business as a matter of course, especially after a few wise individuals had reported their concerns to it. But they did not.

Top flight international banks, as well as professional investment managers, including some of the most prestigious fellow hedge funds ought, as a very basic operational procedure, to have conducted elementary due diligence on the Madoff fund before giving it a cent. But they did not. What, therefore, does this say about the quality of regulators and highly-paid investment professionals to whom has been entrusted the oversight and care of trillions of dollars, which very often come from the agglomerated pensions of millions of little people? What indeed does this say about the culture and morality of the international financial markets and the people who have run them? The answer unfortunately is not very much.

Current economic problems may rightly be ascribed to a lack of liquidity and of market confidence, but the root cause has been a fundamental lack of honesty of which Madoff is just one, albeit outstanding example. Indeed what actually is market confidence? Until now it has not in reality been a confidence that the markets were well run with participants of the highest probity. Rather it was confidence that the whole merry-go-round of inflated values, frenzied trading in everything from commodities to spurious “Special Investment Vehicles” underpinned by ever-more ballooning credit, would carry on spinning.

That banks, companies and investment funds no longer trust each other with their remaining cash, perhaps evidences the fact that many of them know just how badly they themselves have behaved in the mad markets that crashed this summer. Madoff’s rotten pyramid of phony value could, therefore, be seen as not far removed from what has happened throughout the financial markets. There is no viable alternative to capitalism for the allocation of funds to produce increased value and prosperity. But there are certainly far better ways in which bankers, regulators and investment professionals can conduct themselves. Complaints that over-regulation will damage the markets should be ignored. We are where we are because what regulation that did exist failed to keep the markets honest.

Ripped off foreign clients ask why US allowed Madoff funds

Big News Network.com

Tuesday 16th December, 2008

US financial regulators have been castigated by foreign countries, whose financial experts have asked why they were unable to prevent an alleged 50-billion-dollar fraud scheme by Wall Street player Bernard Madoff (pic. left).

Spain's stock market regulator said investment funds in the country had nearly US$150 million exposure to funds from Madoff Investment Securities.

Spanish newspaper El Pais pointedly said the supposed meticulous supervision by the US financial watchdog had failed in the task of preventing massive fraud.

British investment consultants have referred to the financial scandal as the unacceptable face of capitalism.

Jean-Pierre Jouyet (pic. left), who this week became France's financial markets watchdog, cited three previous crises which the US had failed to see coming: the 1998 collapse of US hedge fund managers LTCM; the 2001 false-accounting scandal involving energy giant Enron; and the collapse in September of the Lehman Brothers bank.

On Monday, Dominique Strauss-Kahn (pic. right), director general of the International Monetary Fund, expressed concern over the failure of US regulators to spot warning signs at Madoff's firm.

Bernard Madoff, 70, was arrested last week after allegedly confessing to defrauding 50 billion dollars by secretly using money from new investors to pay interest to other investors.

The alleged fraud has been likened to a pyramid scheme.

Dr CHANDRA MUZAFFAR: Ways to understand the other

by Dr Chandra Muzaffar
NST - Sunday, 14 December 2008 14:31

What should be clearly understood by all is that as a result of the extraordinarily generous conferment of citizenship upon a million Chinese and Indians on the eve of Merdeka, the political landscape changed drastically.

IF the ethnic temperature in the country has increased in the last few months, it is partly because few of us bother to explain to our own community the concerns of the "ethnic other".

If the influential stratum in each community makes a sincere attempt to understand and empathise with the other, it may be possible to reduce mutual distrust and forge better inter-ethnic ties.

Chinese and Indian Malaysians who have some knowledge of the ethnic situation in the country and command some moral authority should try to convey the following seven-point message to their communities.

One, the Malaysia that we know today did not emerge suddenly from the ocean after the vast majority of Chinese, Indians and other non-Malays decided to settle down permanently in the country at the end of World War 2.

This nation has a history that has shaped the present as it will mould the future.
The Malay rulers who were at the apex of sultanates that existed in one form or another for hundreds of years embody that history.

So does the Malay language, the lingua franca of the archipelago since time immemorial, which endows the region -- the whole of Nusantara -- with its cultural identity.

Islam is not just the religion of the Malays but was also the basis of law and administration in the region's pre-colonial kingdoms.

The sultans, the Malay language and Islam, as many non-Malays know, are three vital pillars of the nation that are integral to the Malaysian Constitution. They are crucial ingredients in the collective consciousness of the Malays and help to define the character and identity of the nation.

Two, contrary to a view expressed in some circles, the formation of Malaysia in 1963 did not in any way nullify the simple historical truth that the nation had evolved from a Malay polity.

In fact, amendments to the 1957 Constitution provide the Yang di-Pertuan Agong with the authority to appoint governors to Sabah and Sarawak while Article 3(3) makes him the head of Islam in those two states.

Malay, needless to say, is also the sole official language of Sabah and Sarawak. More significantly, like the Malays, the natives of the two states are also recognised in the Constitution as indigenous people or Bumiputeras.

Three, logically, indigenous Malay kingdoms of the pre-colonial period should have evolved into a Malay nation at the time of Merdeka. This did not happen mainly because the British colonial administration which had facilitated the huge influx of Chinese and Indian migrants into the country in the 19th and early 20th centuries changed its policy immediately after World War 2 and insisted that Chinese and Indians be granted citizenship.

Why there was a change in policy and why the Malay rulers and the Umno political elite, who were at the helm of the Merdeka movement, acquiesced with the British are beyond the scope of this article.

What should be clearly understood by all is that as a result of the extraordinarily generous conferment of citizenship upon a million Chinese and Indians on the eve of Merdeka, the political landscape changed drastically.

To illustrate this point, in the 1955 election to the partially elected federal legislature, only two out of the 52 seats had a Chinese majority. But in the 1959 parliamentary election, when the number of seats was doubled to 104, Chinese majority seats increased to 39.

By sharing their land with the non-Malays, a people who through the normal course of events should have formed their own Malay nation-state became a community among communities.

The Malays had made a significant concession on the identity of the nation. It is this concession, almost unprecedented and unparalleled in the annals of nation-states, which leading Malay scholars and writers have described as a "huge sacrifice".

It is a sacrifice that has seldom been appreciated by the Chinese and Indian communities.

Four, viewed against this backdrop, the accommodation of the Chinese and Tamil languages in the nation's life is also without precedent.

There is hardly any other society in the world that allows the mother tongue of its non-indigenous communities to be used as a medium of instruction in the national school system. Chinese and Tamil are also part of the official information and broadcasting system.

These unique features of the Malaysian nation have not won accolades from the champions of these two languages.

Five, if non-Malays acknowledge the foundation of this nation and the remarkable accommodation of their languages, cultures and political rights, they would have no problem accepting Malays as the nucleus of the national political leadership. And indeed, in the last 51 years the moral legitimacy of this Malay nucleus has never really been questioned by the non-Malay masses.

It should be distinguished from ideas such as Ketuanan Melayu which has been erroneously translated as "Malay supremacy" and has no basis in the Constitution.

Six, again it is because of the unique circumstances surrounding the emergence of the Malaysian nation that the special position of the Malays and other indigenous communities has been entrenched in the Constitution.

The community that agreed to the accommodation of the non-Malays was an economically disadvantaged community in 1957 with 64 per cent living below the poverty line.

This is why "special position" was conceived at the outset as an affirmative action policy applicable to specific sectors of society. Whatever the abuses, the policy has succeeded to a great extent in transforming the socio-economic status of the Malays.

Seven, nonetheless, since Malays and other indigenous communities continue to lag behind in business, there should be a concerted, organised endeavour on the part of outfits such as the Chinese Chambers of Commerce to provide meaningful assistance to the former to enable them to establish sustainable enterprises.

While it is true that a lot will depend upon the Bumiputera entrepreneurs themselves, it is unfortunate that strengthening their position in commerce and industry has never been part of the agenda of what is undeniably an eminently successful business community.

Just as non-Malays should show some understanding of the Malay position, so Malays with moral weight should try to develop empathy within their community for the legitimate concerns of their non-Malay co-citizens.

Malay empathy could express itself in relation to the following seven issues.

One, Malays should understand that while a big segment of the Chinese and the majority of the Indians served the interests of the colonial economy, a lot of them were also marginalised and exploited by the colonial power structure.

The Indian poor in particular in the plantations and in the public works sector were exploited mercilessly and subjected to various indignities.

Like the Malays who were robbed of their land, the Chinese and Indians were also victims of British colonialism. They shared a common bond of pain and suffering that most of them were not even aware of.

Two, after three or four generations of domicile, non-Malay citizens in present-day Malaysia want to be accepted as equal partners in the building of the nation.

In their quest for equality and justice, they are no different from the descendants of other immigrants, such as Bangladeshis or Pakistanis who had settled down in Britain decades ago and who today want to be treated like any other indigenous British citizen.

It is a legitimate aspiration which the Malaysian Constitution takes cognizance of. Article 8 not only states that "all persons are equal before the law" but also prohibits discrimination, "except as expressly authorised" by the Constitution.

Three, in this regard, the application of the special position of the Malays and other indigenous communities does not need to violate the principles of equality and justice if law and policy are aimed solely at helping the needy and the deserving, and, if at the same time, the concept of "the legitimate interests of other communities" in the Constitution is also directed towards assisting the needy and the deserving among the Chinese, the Indians and other non-Bumiputeras.

In other words, it is possible within the framework of the existing Constitution to be fair and just to everyone regardless of ethnicity.

Such an approach, the Malays can rest assured, will not jeopardise their well-being.

On the contrary, if one endeavours to be just and fair to everyone, it would be easier to curb the abuse of the special position by the rich and powerful which has been detrimental to the interests of poor and powerless Bumiputeras.

Four, being just and fair to everyone also means ensuring that non-Malay, non-Muslim Bumiputeras from Sabah and Sarawak are provided ample opportunities for progress and advancement qua Bumiputeras in government, politics and the economy.

More specifically, their mobility should be accelerated in the federal, civil and public services and also in the police and the military. There have been times when the state's commitment to improving their status and their well-being has not been as strong as it should be.

Five, as with the non-Muslim Bumiputeras, the scope for emplacement and promotion for non-Bumiputeras in the bureaucracy should also improve.

The present government under Prime Minister Datuk Seri Abdullah Ahmad Badawi has already begun to take concrete measures in this direction. In the police and the military, too, there are some attempts to encourage non-Bumiputeras to play more prominent roles.

Six, as with their role in public institutions, non-Malays have some legitimate grievances about the lack of recognition of their contributions to the development of literature and the arts.

Malay leaders and Malay society as a whole should be more forthcoming in rewarding the accomplishments of these non-Malay writers, artists and singers, especially when their medium of expression is Bahasa Malaysia, the language of the land.

Seven, Malays as Muslims should appreciate that integrating non-Malays into the public service and the nation's cultural milieu and ensuring that justice is done to the non-Muslims who live in peace and harmony with Muslims in no way undermines Islamic ethics.

Indeed, the Islamic perspective on humanity as embodied in the Quran is uncompromisingly universal and inclusive.

When Islamic civilisation was at its pinnacle, it was this all-embracing, integral outlook that prevailed, which is why ideas and individuals from so many different religious and cultural backgrounds contributed to its triumph.

Malays have nothing to fear from a universal, inclusive approach to society and its challenges, especially since the socio-economic position of the community is bound to get stronger over time while the nation's demographic trend will witness an even more pronounced shift towards the community in the coming decades.

For Malays to understand the non-Malay situation and vice-versa and for each to communicate their ideas to their respective community, the media has a critical role to play.

It is perhaps the only channel through which a balanced perspective on our ethnic problems and their solutions can grow and develop.

One hopes that the media realises how important its role is in promoting inter-ethnic understanding.

Indeed, understanding the other is one of the vital prerequisites for our survival and success as a nation.

About the Author: Dr Chandra Muzaffar is president of the International Movement for a Just World (JUST) and Professor of Global Studies at Universiti Sains Malaysia

Can Najib transform Malaysia’s and Umno’s fortunes?

DEC 6 — Throughout the latter half of Prime Minister Datuk Seri Abdullah Ahmad Badawi’s period in power, the issue of leadership had been heatedly discussed. The general consensus seemed to be that he was a nice man, but one who had waded in way beyond his depth.

Now, as he prepares to leave the stage, the focus moves to the premier-in-waiting, Datuk Seri Najib Razak, and many worry about what type of leadership this aristocrat will provide.

What differentiates these two from Malaysia’s earlier four prime ministers is that they are too young to be among those fired up by the wish to end colonialism, and consumed by the idea of national independence.

They belong to another generation in the nation-building process, and are the grateful inheritors of the apparatus that the first generation of leaders put into place.

Their climb to power started half-way up the ladder. This is a common enough phenomenon in the life of nations. The second or third generation cannot be expected to be as tough, hungry or desperate as the first was.

Najib has denied that he will be returning to the authoritarian style of the fourth premier, Tun Dr Mahathir Mohamad. At the same time, despite having been Abdullah’s deputy for almost five years, he cannot merely adopt his predecessor’s slow-burning and ineffectual style of system-tweaking reform.

It is often claimed that a country gets the type of leader it deserves. But of course, the issue is much more complicated than that.

What type of leader arises or is needed at any particular time depends on what needs doing, and on the type of interaction the leader manages to build with those he intends to lead, or represent.

It is this relationship that decides the fate of a nation — the adaptability of those who rise to become its leaders, the challenges that are most pressing for the times, and the ease — or lack of ease — with which followers comply.

It is a truism that with very few exceptions, all societies put into place a mechanism that holds good promise of picking talents as future leaders and preparing them to perpetuate the system.

This role of generating leadership material may be undertaken by a wide variety of institutions such as business schools, the school system in general, as well as universities and colleges — even foreign ones — and also political parties, among others.

The United States has its Ivy League colleges, the French have the École Normale Supérieure and the Institut Européen d’Administration des Affaires (Insead), the British have Oxbridge, Eton and the London School of Economics, and others.

Highly politicised countries tend to generate leaders through their major political parties. This can be done either through the internal education (or indoctrination) of promising members or in conjunction with some elaborate screening process in the nation’s school system.

In the case of Malaysia, the dominance that Umno and its allies in the Barisan Nasional have exercised over the country since 1957 has meant that anyone wishing to become a future leader has had to be part of this machinery.

Seldom is anyone brought in from the outside to be placed in a prominent position. One exception was of course Datuk Seri Anwar Ibrahim, whom Dr Mahathir brought in from outside Umno to reverse the party’s loss of Muslim support. The leadership material that Umno possessed up to that point was then slowly eradicated, leaving only Dr Mahathir and Anwar in the end.

Dr Mahathir, being the first non-aristocrat to become prime minister, was a self-made leader who rose to power by firing up the imagination of the Malay community.

Anwar was also a self-made leader who excelled at exciting the crowd with his rhetoric, and at organising mass movements.

Once Anwar was pushed out in 1998, and once Dr Mahathir had resigned in 2003, Malaysia entered a new period of leadership.

The country awaited a new type of leader to reform the system and to secure good governance after the excesses of the Mahathir period.

Not only are these men and women, whose convictions were forged in the fight against colonialism gone, the citizenry has become more sophisticated. Malaysians are now more educated, more widely-read, more self- assured, more global in their outlook, and less prone to swallow propaganda wholesale.

The challenges of the times have gone beyond the mere avoidance of inter-ethnic violence and the mere improvement of material standards. Politics of division based on ethnicity and religion no longer has the powerful effect that it used to have.

Such an electorate wished for a new type of leader and a new type of politics.

It was clear from the electoral successes he achieved in March 2004 that Abdullah had promised exactly the right things to the public. But he let the moment slip, and having failed to reform and repair the system, he fell from grace in March — in the eyes of the electorate and of his party.

Few observers believe that Najib is up to the job that Abdullah failed to carry out, and after suffering the failure of the Abdullah period, there is little wish for another such disappointment.

That is Najib’s big challenge. He has to win popular support as quickly as possible because he is faced with a disillusioned and impatient electorate.

His allies are insecure, at his heels snaps an opposition led by a wounded but nevertheless formidable leader in Anwar Ibrahim.

The crisis of leadership that a Malaysia governed by an uninspired Umno-led Barisan Nasional is suffering today is evidenced by the present show of strength from the sultans, the pre-Umno traditional Malay leaders. Where a modern democracy is concerned, only when a power vacuum exists do monarchs get a chance — or feel called upon — to provide moral leadership. — TODAYonline

Note: The writer is a Fellow at the Institute of Southeast Asian Studies.

Dr M mocks Abdullah’s vow on reforms

Singapore, December 6, 2008

Former Prime Minister Tun Dr Mahathir Mohamad has poured scorn on Prime Minister Datuk Seri Abdullah Ahmad Badawi's promises to push through reform before he steps down in March next year.

Dr Mahathir, a withering critic of Abdullah for over two years, first listed all the initiatives that Abdullah had promised back in 2004 and, later on, in 2008, and then proceeded to mock the premier's fond, if wistful, hope that he would achieve much of his promises before next March.

“It is now December 2008,” Dr Mahathir wrote in his blog yesterday. “So far we have seen no progress at all in any of these glorious initiatives. Instead, the prime minister is busy visiting foreign countries with his family in the beautiful, big and new Airbus A320.” In fairness, the Bill to set up a new Anti-Corruption Commission is being tabled in Parliament by Abdullah next Wednesday.

It does not seem to have impressed Dr Mahathir one bit. “After failing to implement any of the promises made in the 2004 or 2008 elections, it looks like nothing is being done either with regard to the promise to carry out a variety of so-called reforms as mentioned in the press statement on why the PM would step down in March 2009 — three months after the scheduled Umno General Assembly,” continued the former premier.

“But the visits to foreign countries to sign contracts which were not mentioned in the statement are being assiduously carried out,” Dr Mahathir noted sardonically. “I wonder why.”

He then claimed that the premier was now busy campaigning for his candidates in polls next March in Umno, the dominant political party over which Abdullah presides.

“(Deputy Prime Minister) Najib (Razak) is going to be surrounded by Abdullah's people and through these people Abdullah will control the government of Najib,” Dr Mahathir wrote.

“Najib has already abandoned (International Trade Minister) Muhyiddin (Yassin), the fierce critic of Abdullah,” claimed Dr Mahathir. “He does not want to incur the displeasure of his boss. Would he refuse to appoint Abdullah's nominees? Would he dare go against them?”

It isn't clear why Dr Mahathir, 82, continues to inveigh against his hand-picked successor given that Abdullah is widely seen as a lame duck with no real power to influence the outcome of the Umno elections.

What's clear is that Dr Mahathir does not trust Abdullah. Last week, he even claimed that Abdullah was still interested in staying on as premier even though he would no longer be Umno president, hinting that Abdullah could resort to other means to stay in power.

“Looking at the Umno leaders and members, it is possible for this to happen,” said Dr Mahathir. “They will not go against Abdullah as they are so comfortable with his leadership and certain pleasures that they have received from him.” — Business Times Singapore

Zaid: Pak Lah a nice man

" No, I think Pak Lah is a nice man. He wouldn’t sack me on his own [...] but then Pak Lah couldn’t even maintain himself..." he said.

Reform of Umno doubtful, says sacked ex-minister

Sacked Umno member and former de facto law minister Zaid Ibrahim is doubtful if the ruling party is capable of reform as pledged following its dismal showing in the March 8 polls.

Zaid, who was given the boot on Tuesday for having close ties with the opposition, lamented that some leaders in Umno could not accept his open-minded approaches and views.

During a press conference in Petaling Jaya today, the former minister was asked if Umno is capable of reforms, to which he replied: "I doubt they (the leaders) can."

"But Umno will have a new leader in March... I may be wrong," he added in reference to the transition of power plan which will see Najib Abdul Razak succeeding Abdullah Ahmad Badawi as number one.

On the same note, Zaid stressed that his sacking underscored the fact that Umno leaders were not open to the ideas of change which he advocated.

"The criticisms against me were because they cannot accept these ideas of change. (Otherwise) why are they so angry with me? What have I done? They can't accept these changes," he said.

Among others, he said, certain party leaders could not accept his stand on wanting to make the Malays more independent.

These party leaders, he added, considered such a view as a 'betrayal' of the Malay race.

'Stop belittling me'

Although he did not name the leaders, Zaid, when responding to another question, called on Umno vice-president Muhyiddin Yassin, information chief Muhammad Muhd Taib and supreme council member Mohd Nazri Abdul Aziz to stop ‘belittling’ him.

"Umno leaders like Nazri, Muhyiddin, Mat Taib (Muhammad) and others always made fun of me and said all sort of things. I think they should concentrate on doing their work and resolve the country’s problems.

"Like they said, since I am a nobody, there is no need for them to belittle me all the time, focus on your work," he added.

Zaid said his attempt to articulate a new vision for the party which was less communal had been misconstrued as being ‘rebellious’.

He also warned that if Umno did not adopt a more inclusive approach, race relations in this country would be further affected.

"Umno has become more etno-centric, more communitarian but that is not our role. Umno’s role is to be the provider for everyone [...] that is where we differ," he said.

'Pak Lah a nice man'

Zaid also disagreed when asked if his sacking was a move by Abdullah to boost his popularity in the party.

No, I think Pak Lah is a nice man. He wouldn’t sack me on his own [...] but then Pak Lah couldn’t even maintain himself..." he said.

Zaid's resignation from his ministerial post in September and his sacking this week render a blow to the Abdullah administration.

The 58-year politician had left a successful legal practice to serve in Abdullah’s government in March and his appointment was lauded as a sign of the premier’s resolution to push for reforms.

Zaid was entrusted with the task of reforming the judiciary, one of the major reforms that was promised by Abdullah.

Nevertheless, it was a bumpy road for Zaid during his short tenure in government after he was dealt with internal criticisms on several counts such as the setting up of the judicial appointment commission and the issue of apologising to six affected judges in the 1988 judicial crisis.

He finally resigned in protest over the use of the Internal Security Act, which allows for detention without trial, against an opposition politician, a blogger and a journalist - Malaysiakini.com

Anwar's new promise

By Elizabeth Looi and Ng Boon Hooi
elizabethlooi@thenutgraph.com, ngboonhooi@thenutgraph.com
1 Dec 08 : 9.00AM

PKR leaders shaking hands with delegates

FOR all intents and purposes, Datuk Seri Anwar Ibrahim is not a man who gives up easily.

At Parti Keadilan Rakyat (PKR)'s just-concluded national congress, he failed to adequately explain why Pakatan Rakyat did not manage to take over the federal government by 16 Sept as repeatedly promised. The failure to fulfil one promise, however, didn't stop the party advisor from setting new goals for the opposition.

The new goal is the takeover of the Sarawak government by the time the state holds its next elections, latest by 2011.

That was the topic that gripped the three-day congress, which ended on 30 Nov, at Stadium Malawati Shah Alam where the largest opposition party gathered for the first time since its spectacular victory in the 8 March 2008 general election.

Although PKR has never been popular in East Malaysia, Anwar, who is also opposition leader, was confident about winning the state elections with the support of the other Pakatan Rakyat members, PAS and DAP.

"I will make sure that all of PKR's wakil rakyat and members start going to Sarawak next month to do their groundwork," he said during his public speech on 29 Nov, to loud cheers and applause.

Vice-president Azmin Ali also told reporters the party planned to organise a big rally in Miri on 14 Dec.

But is this yet another attempt to whip up the people's imagination for more change, as 16 Sept seemed to be, or is Anwar's new goal realistic?

Over-ambitious

Sarawak Chief Minister Tan Sri Abdul Taib Mahmud has predictably scoffed at Anwar's declaration.

He's not the only one who is sceptical. Political analyst Ong Kian Ming says PKR is being over-ambitious and they should instead start with trying to break Barisan Nasional's two-thirds majority in Sarawak.

"I don't think they can win the state. They will win between 25% and 40% of seats. That will give them some headway and it will be significant," he says in an e-mail interview.

He adds that Pakatan Rakyat should first overcome various challenges before trying to rule the state. Among these are the disagreement between PKR and DAP in Sarawak, and whether PKR is able to attract eligible Dayak leaders for the elections.

Sarawak has an unstable political landscape (pic by Lainie Yeoh)

"Can they also overcome the resource imbalance in Sarawak which, because of its relative poverty and inaccessibility, makes more of a difference than in the peninsular?" asks Ong.

Ong opines that Taib, who has been chief minister since 1981 and hounded by allegations of corruption, could be one of the factors that swings the peoples' votes.

"I don't think Sarawakians are happy with him but Sarawak is not the same as the US. You can shift the popular vote by 5% and win the presidency in the US but in Sarawak, you can shift the popular vote by 5% and win only 10 state seats more," Ong explains.

He also points out that the Dayaks themselves are split, resulting in an unstable political landscape.

Longing for change

Political analyst Dr Mohammad Agus Yusoff, however, believes that the people have been longing for change and are ready for a new government.

He is confident that Pakatan Rakyat can win the state elections because of anti-Taib sentiments. Mohammad Agus argues that in the past, the Malays continued to vote for Taib, despite his perceived reputation, because they did not have any other Muslim leader to choose from.

"Barisan Nasional (BN) leaders have lost their credibility at the federal as well as state level, and Pakatan Rakyat now seems irresistible to the people," he says, adding that now was the best time for Anwar to bring changes to Sarawak.

The Universiti Kebangsaan Malaysia associate professor adds, however, that the biggest challenge for Pakatan Rakyat and PKR is to convince the Dayak and Chinese voters who make up the majority of the 2.5 million population.

Sarawak PKR deputy liaison chairperson Nicholas Anggat Bawin (pic. left) agrees that Sarawakians are desperate for change. "The 8 March political tsunami in the peninsular has reached Sarawak. It is a big inspiration for us that change is possible."

Nicholas, who is former Sarawak National Party vice-president and deputy youth leader, adds that the Dayaks are tired of losing their rights, especially their land rights.

Unfulfilled promise

Notwithstanding PKR's chances of winning in Sarawak, the question still needs to be asked: Is this yet another tactic to enhance PKR's public image and support, and for Pakatan Rakyat to keep the BN on its toes? The promise that was 16 Sept seemed to be just that, especially since no credible explanation has been forthcoming about why 16 Sept didn't result in a change in government.

Indeed, Pakatan Rakyat is already being pressured by civil society to live up to its promises, instead, it seems, of offering new ones. In a 28 Nov joint statement, 20 civil society organisations called on the loose opposition coalition to expeditiously form a shadow cabinet to prove that it was ready to and capable of taking over the federal government.

"Nearly nine months after the March elections, Pakatan Rakyat which vowed to take over federal executive power via crossover of BN parliamentarians must now be prepared to show that they are not only interested to govern, but are able to do so," the joint statement said.

"Positioning himself as the prime-minister-in-waiting, Anwar Ibrahim must present his team of ministers-in-waiting not later than his rival (Datuk Seri) Najib Razak announces his line-up in March (2009).

"(A) shadow cabinet is a common feature in Westminster democracies as it indicates the opposition's readiness to take over governing if the incumbent government is defeated in a parliamentary no-confidence vote or an election," the statement added.

Delegates formed a long queue to share a few words with PKR's top leaders

Among others, the civil society groups said having a shadow cabinet would consolidate the position of Pakatan Rakyat component parties on policies at a time when the parties have been publicly contradicting themselves. Such contradictions have occurred over issues such as the proposed 50% housing quota for bumiputeras in Kedah; the appointment of a Chinese Malaysian woman to head the Selangor State Development Corporation (PKNS); and the sale of alcohol in Selangor.

But PKR deputy president Dr Syed Husin Ali disagrees that there is a lack of effort on their part to prepare to take over.

"Instead of a shadow cabinet, our parliamentarians have formed committees to check and balance the government," he tells The Nut Graph.

He says Malaysia has a different kind of democracy from Britain's, adding: "We do not have to necessarily follow everything in the Westminster democracy. Their political parties are Labour, Conservative and Liberal Democrat, but our political parties are different."

Azmin adds that Pakatan Rakyat's committees cover most of the senior cabinet portfolios such as international trade and industry, and economy.

Plate will be full

Indeed, it seems unlikely that Pakatan Rakyat will form a shadow cabinet anytime soon to convince the rakyat that they are capable of fulfilling their takeover promise, especially in the absence of any evidence to suggest they can.

PKR leaders standing up for the party's song at the end of the congress

With an upcoming by-election in Kuala Terengganu, and now new hopes for Sarawak, taking over the federal government may not be the immediate priority, earlier promises notwithstanding.

PKR may have high hopes in Sarawak but it will be a tough fight considering that opposition parties have traditionally been weak in the East Malaysian states.

Still, hope springs eternal because Anwar, the politician, has demonstrated the ability to win despite all odds. So far, the 8 March election results hold him in good stead. But can he withstand emerging scepticism and growing cynicism if he offers yet another promise he is unable to deliver on?