The Truth Revealed

Tuesday, February 28, 2012

Key trends in the looming GE13

By Karim Raslan @www.thestar.com.my

Datuk Seri Najib Tun Razak is slated to win the next general election, with the margin depending on how both sides of the political divide appeal to and win over the 1.9 million new voters.

I have spent the past three weeks almost exclusively in Malaysia – travelling and listening to people. A lot of this time has inevitably been spent with fellow writers and editors.

In fact, journalists prefer talking to other journalists so there’s always a danger that we’re living in a bubble — something that we often accuse politicians of doing! At the same time, and as explained by Malaysian Insider’s Jahabar Sadiq: “We were caught napping in 2008. Ever since, we’ve been over-compensating.”

So bearing in mind our collective fear of being wrong, here – for what it’s worth – are the key trends I’ve identified that will feature in the next general election (GE).

  • The delayed pendulum: Ma­lay­sian GEs have tended to follow a pendulum-like movement, with swings to and from Barisan National (BN) in alternate polls.

However, in 2012/3 there will be a subsidiary trend at work in Sabah, Sarawak and Johor (dubbed BN’s “Fixed Deposit”) if there is a shift of Chinese support while the rest of the peninsula reverts to form.

  • The democracy wave from Singapore: The vote in southern Johor will be impacted by the many Malaysians who live and work in the city-state.

Having observed the republic’s two nation-wide polls (parliamentary and presidential) in 2011 and witnessed the extent to which the PAP government subsequently reversed unpopular housing, healthcare and immigration policies, Johoreans will have learnt the value of tactical voting in order to engineer policy shifts.

  • Sabah: West Malaysian/UMNO leaders continue to underestimate the importance of the Royal Commission of Inquiry on Illegal Immigrants for Sabahans (especially the KadazanDusun and Murut communities).
  • The Prime Minister’s two key performance indicators (KPIs): Datuk Seri Najib Tun Razak is slated to win the next GE.

However, victory is only the first of his KPIs.bThe second is that he must surpass his predecessor Abdullah Ahmad Badawi’s 2008 showing (140 seats). Indeed, the rationale behind Najib’s rise to the premiership was his unspoken promise of returning UMNO (and BN) to its earlier glory. Failure to achieve this will lead to a reassessment of his leadership.

  • Najib’s presidential style campaign: It has boosted the premier’s approval ratings. Given the fact that Malaysia has adopted the Westminster system, the PM’s popularity has not translated into greater support for UMNO (or BN), leaving many potential candidates to struggle.

As such, there is no guarantee that Najib’s personal popularity will strengthen BN in the 13th GE.

  • Newly-registered voters: Esti­mated at some 1.9 million, both sides are scratching their heads as to how to appeal to and win over this disparate and largely disinterested mass of voters.

There appears to be little party loyalty and commitment among this group. Their support may well depend on a last-minute and/or unexpected political “black swan-type” event triggering a sudden and massive swing in either coalition’s favour.

  • Indian community: The community is no longer virulently anti-Barisan. While Malaysian Indians are by no means “grateful”, the Hindraf-connected anger has dissipated with the departure of MIC honcho Datuk Seri Samy Vellu and Datuk Seri G. Palanivel’s low-key leadership.

The Indian vote will help BN in countless marginal seats.

  • NFC – “Istana” Mat Deros for 2012: In 2008 we had UMNO’s Port Klang Assemblyman, the late Zakaria Mat Deros, and his infamous “Istana” built on allegedly illegally-acquired land.

In 2012/13 we have the National Feedlot Corporation (NFC) scandal, which continues to unfold.The NFC has been very damaging in rural Malay and Indian communities where voters are most familiar with the economics of cattle-rearing.

  • Changing face of domestic politics: Malaysian politics is shifting. This will be the last GE for “institutional” players, the UMNO warlords who refuse to court public opinion.

Most of these political dinosaurs can’t be bothered to engage with the public, debate and/or win support from the media. Indeed, party hacks – from both BN and Pakatan – will become increasingly unpopular and loathed.

They have no future and will be replaced by those who can think, talk and argue in public such as Saifuddin Abdullah, Zambry Abdul Kadir and Shabery Cheek.

Emotional intelligence and humility will also be important. The absence of these two qualities will lead to the premature political demise of certain candidates.

  • Kedah: Pakatan extols its successes in Penang and Selangor. However, the coalition is strangely silent about the Kedah government’s less than sterling record of administration.
  • Public trust in the Government: Widespread cynicism and distrust will force the Government to shelve many policy and business initiatives.

BN’s ability to command public support without extensive consultation and stakeholder engagement has evaporated.Put all this together and what do you get? A very, very interesting 2012/13 indeed.

Raking in the Bounty of FELDA’s IPO

by Dr.M. Bakri Musa
Morgan-Hill, California

In the run-up to the Initial Public Offering (IPO) of FELDA Global Ventures Holdings (FGH), there is little, in fact no discussion on how the exercise would benefit FELDA settlers. Surely that should be the foremost consideration. The only criterion upon which to judge the wisdom or success of any FELDA initiative, including this proposed IPO, would be to assess its impact on the settlers.

Instead the focus has been on bragging rights, as with trumpeting FGH to be the biggest IPO for the year, among the top 20 on the KLSE, and the world’s biggest plantation company. Such milestones are meaningful only if achieved as a consequence of the usual business activities and not through fancy paper-shuffling exercises.

Apple recently surpassed Microsoft in market capitalization, but that was the consequence of Apple’s much superior products like iPads, iPods, and iPhones. Contrast that with earlier achievements of such now-defunct financial giants as AIG and Lehman Brothers that were based on fancy “financial engineering” instead of solid products and services.
Instead of delineating the potential benefits that would accrue on the settlers from this IPO, its proponents are content with dismissing the critics and imputing evil motives on their part. There are legitimate concerns that this exercise would prove to be nothing more than yet another fancy scheme for the politically powerful to cash out on a lucrative but under-priced government asset. We already have many ready examples of such greed.

NFC Saga

Consider the National Feedlot Corporation (NFC) “cowgate” mess involving considerably much smaller sum of money. Despite the presence of high government officials on NFC’s board to safeguard the government’s interest, NFC’s senior managers still managed to subvert those publicly-subsidized loans to purchase luxury condominiums totally unrelated to the company’s activities. This oversight failure reflects both the incompetence of the government’s representatives in discharging their fiduciary responsibility, as well as the lack of integrity on the part of NFC’s management.

Such despicable omissions and spectacular failures are not unique only to NFC; they are endemic in government-linked corporations. Thus Malaysians have good reasons to believe that FGH would be no exception once the money starts rolling in.

It also does not escape the public’s attention that the man helming FGH, and thus whose hands would be at the till once the billions start pouring in from the IPO, is one Isa Samad, a former UMNO Vice-President. Not any VP however, but one who was found guilty by his party of “money politics” and subsequently suspended. UMNO is no paragon of virtue; to be found guilty by it would be akin to being called a slut by hookers. You have to be disgustingly gross.

Najib is a Poor Judge of People
(?)

It would be easy to blame Isa Samad. The bigger question, and one that has yet to be answered, is why did Prime Minister Najib choose such a shady character to helm this major corporation? That is as much a reflection of Najib as it is on Isa.

Peruse FGH current corporate structure. It has nearly over a hundred subsidiaries, associated companies, and joint ventures, many with overlapping functions, markets and products. Those units are created less in response to commercial needs, more to create opportunities for senior civil servants to be appointed to the many governing boards, and thus garnering extra income in the form of directors’ fees, in addition to their regular civil service pay. Ever wonder why these GLCs lack effective oversight and our government departments are shoddily run? You would think that their regular government jobs, diligently executed, would keep them fully occupied.

A more sinister reason for these GLC directorships is that they are an effective trick to trap the loyalty of civil servants. Be too critical of the idiotic ideas of your political superiors and you risk being left out on those lucrative board appointments. With Isa Samad, it is also a case of Najib buying Isa’s silence, for reasons best known only to the pair.

Corrupting A Noble Initiative

FELDA was the crown jewel of Tun Razak’s imaginative rural development scheme. It was to provide land to otherwise landless villagers, the equivalent of land grants homesteading to early American settlers. The other reason was to encourage Malays to undertake an internal migration of sorts by uprooting them from their tradition-bound villages to begin a new life unencumbered by prevailing non-productive cultural practices.

With the expertise of and financing from the government, those villagers would develop hitherto virgin jungles into productive rubber and palm oil plantations, with those settlers eventually getting title to their holdings. At about 14 acres each, those units were definitely economically viable. To make sure that those lands would survive the next and subsequent generations and not be endlessly subdivided, the settlers had to agree to dispense with their usual Islamic inheritance practices. Meaning, the property would be inherited by only one of the children.

The surprise was the absence of howling protests from the ulama to this clear departure from Islamic inheritance practices as everybody saw the wisdom of the move; to maintain the economic viability of these holdings.

If this IPO were to enhance the condition of the settlers, then it should be supported. FELDA is meant to serve the settlers, not the other way around. Isa Samad had it backwards when he dismissed the concerns of the settlers as voiced through their cooperatives.

In response to the settlers’ concerns, Isa suggested a portion of the proceeds be placed in a “Special Purpose Vehicle” specifically to meet their needs. Unfortunately he did not provide the specifics. Consequently this SPV risks degenerating into yet another honey jar to be passed around among the politically powerful bears.

In my forthcoming book, Liberating the Malay Mind, I put forth ideas on how to maximize the use of these GLCs in improving the lot of Bumiputras. The focus should be on investing in people – human capital – not companies. Companies are subject to business cycles; they can also be ruined by incompetent and corrupt managers. All you would be left with then are worthless stock certificates. Where is Bank Bumiputra today? Malaysia Airlines is in no great shape either, despite the billions expended through SPVs and other accounting gimmicks.

Invest in our people instead; the skills and knowledge they acquire would stay with them to benefit society through good and bad times. Thus I suggest selling these GLCs and putting the proceeds into an escrow account for the sole purpose of investing in and developing Bumiputra human capital.

Bringing the issue specifically to FGH, I would commit a third of the IPO proceeds to a special fund to be used to develop the human capital of the settlers and their children. That money would be used to air-condition their schools, build adequate laboratories and libraries, and to bring qualified teachers especially in English, science and mathematics. If you want the children of those settlers to be other than penorakas (homesteaders), the best route would be to provide them with superior education. That means their schools and teachers should be among the best; today they are among the worst.

I would use the funds to enrich the curriculum as with providing music classes. I would go further and provide free musical instruments and after-class music lessons, modeled after Venezuela’s highly successful El Sistema initiative. New York is modeling a similar Harmony program with its low-income students, and this week those students had the thrill of their lifetime when their orchestra was conducted by Placido Domingo. Gustavo Dudamel, the young conductor of the Los Angeles Philharmonic Orchestra, is a product of El Sistema, a tribute to Venezuela’s investment in human capital.

Similarly I would use the IPO funds to mechanize the operations on these plantations. Today palm nuts are still harvested in the same labor-intensive and back-breaking ways as they were 50 years ago; there is little innovation or mechanization. I fail to see why FELDA engineers could not design harvesting machines and trucks with hydraulic lifts like those used by utility repair workers to fix broken lines. Only through mechanization could the workers’ safety and health could be assured, and their productivity enhanced.

If through this IPO the lives of those FELDA settlers and their children were to be made better, then the initiative would find many ready supporters. What many fear is that this IPO would prove to be nothing more than a windfall for the likes of Isa Samad so they could acquire their luxury condos, fancy cars, and trophy wives.

NEP is far all Malaysians, not just some crony Malays

by Tengku Razaleigh Hamzah

I am indeed honoured to have been invited to speak to all of you gathered here this morning on a subject of great importance for the continued preservation and survival of our nation.

As all of you are aware, our nation became free from the fetters of colonial domination about five-and-a-half decades ago. Sadly and strangely, after 55 years of independence, I think we are farther apart now than we have ever been before.

On August 31, 1957 our freedom from the shackles of a colonial past was greeted with euphoria by the different races who came together on the basis of a common vision for a shared future.

We then had a prime minister who believed that the purpose of independence was the pursuit of happiness for the different races in the country, and our success in that pursuit was to him the ultimate test of our success as a nation.

“Greatest happiness principle”, "what I gave to one, I also gave to others"

Tunkuʼs vision for the newly independent nation was based on the “greatest happiness principle”, a subject of intense political discourse in eighteenth- and nineteenth-century Europe.

Like the enlightened political philosophers in the western world, our father of independence believed that governments existed to provide for the happiness of the people, and nothing more.

“For us in the Alliance we have no dogma other than to ensure happiness for the people,” the Tunku once said.

Tunku recognised that individual happiness was tied up with collective happiness, and that sometimes we needed to sacrifice our own comforts willingly so that people from another community were not deprived of happiness.

Like Jeremy Bentham, the great English philosopher would have it, Tunku therefore favoured policies that would bring the greatest happiness to the greatest number of Malaysians.In his words, “what I gave to one, I also gave to others. In this way, we made everybody happy. This has always been my aim.”

In fact, according to him, “that is what I live for, to ensure peace, happiness and prosperity for our Malaya which we all love so well.”

Tunkuʼs policies were tied up with the golden rule that we must have respect for one another and treat others just as we wish others to treat us. This golden rule was an important principle in an interdependent, multi-ethnic society such as ours.

Tunkuʼs basic concept of happiness is best expressed in his favourite maxim, “live and let live”.It is a maxim that calls for acceptance of people as they are, although they may have a different way of life. Tunku applied the maxim in the public domain.

Dashed by May 13, 1969

Tunku was a real father to the nation, as expressed in these words, “… I am a happy prime minister and I have cause to be so. I can feel the pulse of this nation; I am not the prime minister of this nation, but the father to all the peoples who live here.”

If Tunku had boasted that he was the happiest prime minister in the world, it was only because the people were happy. In Tunkuʼs words at that time, “I pray and hope that this happy state of affairs will continue for all times.”

Unfortunately, however, Tunkuʼs dreams were dashed to dust by the events of May 13, 1969.

This once happiest prime minister expressed the pain he felt as Father of Merdeka as he relived those traumatic moments:

“I have often wondered why God made me live long enough to have witnessed my beloved Malays and Chinese citizens killing each other.”

Such was the man that Tunku was. He was the moving spirit of the nation.

Tunku has long gone, and today his premiership is a distant memory. Since the time he left, inter-ethnic relations have taken a turn for the worse on all fronts.

Today, we have a regime that promotes the concept of 1 Malaysia with all its contradictions.We have an official document that explains the 1 Malaysia concept as a nation where every Malaysian perceives himself as Malaysian first, and by race second.

However, we have a leader who openly transgresses his own official policy by declaring that he is “Malay first” and “Malaysian second”.The statement comes as a severe blow not just to the concept of 1 Malaysia, but also as a nullification of Jiwa Malaysia or the National Spirit that Tunku was trying hard to inculcate.

No wonder that people can no longer recognise the jiwa — they just donʼt feel as though they are fully Malaysian.

A nation of strangers

It is strange that after 55 years of freedom, we have not learnt the simple art of living together as brothers and sisters.The countryʼs source of strength is unity, and this source of strength has been slowly whittled away over the years.

We have become a nation of strangers, as evidenced in the fields of politics, the economy, education and the civil service.

The strong presence of communal political parties in the country is chiefly to be blamed for the sad state of race relations in the country. These political parties invariably support racial policies and imbibe racial sentiments among the people whom they represent.

In their day-to-day administration of the country, the powers that be often give scant regard to the constitutional provision contained in Article 8(1) which states that “all persons are equal before the law and entitled to the equal protection of the law”; and Article 8(2) which states that “there shall be no discrimination against citizens on the ground only of religion, race, descent or place of birth in any law relating to the acquisition, holding or disposition of property or the establishing or carrying on of any trade, business, profession, vocation or employment”.

One major sore point in the area of race relations is the New Economic Policy, whose original intention to create unity has been subverted to become a major source of disunity not only between the various races but also among the Malays and Bumiputeras in general.

The New Economic Policy, which was conceived in 1971 not long after the Tunku had retired as prime minister, was primarily created to address poverty, and to raise the level of Malay participation in the economy.

NEP was meant for ALL Malayians

It was intended for all Malaysians, and not just for the Malays or Bumiputeras.

As a former finance minister, let me emphasise that it was never the intention of the NEP to create an incubated class of Malay capitalists.

If we visit the government departments or universities, we wonder where all the non-Malays have gone.

After 1969, suddenly there was this attempt to recruit mostly Malays into the civil service.It is tragic that the civil service does not reflect the racial composition of the Malaysian population, as the predominant presence of only one race tends to engender a sub-culture that is antithetical to the evolution of a dynamic and efficient civil administration in the country.

Our school system is not as it used to be. The non-Malays prefer to send their children to vernacular schools, as the national schools have assumed an exclusively Malay character.Needless to say, national schools have become even less attractive to the non-Malays as English is no longer used in the teaching of mathematics and science.

The situation will be very different if all discriminatory practices in the education system were to be abolished, and a common system of education for all is adopted.

National unity is the one area that we cannot afford to ignore, and the real genesis of national unity, I submit, is from an unlikely source: Parliament, warts and all.

It is the Parliament that has the final say in charting the direction the country is heading to.We must have a strong and resolute government which recognises the needs of all Malaysians, and formulates the right policies for the propagation of a cohesive and integrated society.

If Parliament enacts laws that are just and fair for all Malaysians based on meritocracy and need, more than half the battle for national unity would be won.

In this respect, the rakyat as voters must realise that in the ultimate they alone hold the key to the future of this country.

- Text of the speech by Tengku Razaleigh Hamzah at the Breakfast Meeting at the Kuala Lumpur Convention Centre organised by Paddy Schubert Sdn Bhd on February 24, 2012.--www.malaysia-chronicle.com

PDRM: Charge the NFC Chief with CBT

by BERNAMA

Police are proposing to charge the chairperson of the National Feedlot Corporation (NFC) Dr Mohamed Salleh Ismail, the husband of the Women, Family and Community Development Minister Shahrizat Abdul Jalil with criminal breach of trust.

Bukit Aman Commercial CID director Syed Ismail Syed Azizan said the proposal was in the investigation paper being prepared by police after it had been returned from the Attorney-General's (A-G) Office on Tuesday to investigate several other matters.

"The investigation would be sent back to the AG shortly," he said when contacted by Bernama tonight.

The issue on NFC headed by Mohamad Salleh as the executive chairperson began to receive public attention after the Auditor-General's 2010 Report in October said NFC failed to meet the objective of its establishment.

It became a hot issue when the opposition alleged misappropriation of the government's RM250 million allocation to NFC.

NFC is a beef valley project in Gemas, Negri Sembilan to increase the production of local beef and reduce national dependence on imported beef.

- Bernama

The MAS Saga: Victims Continue to Fall

NO HOLDS BARRED

by Bukit Aman Deep Throat

In 2006, Malaysia Today started the series on the MAS story about how the national airline company, a company with a cash reserve of RM600 million in the bank, was pushed to the point of bankruptcy with RM8.8 billion in liabilities. MAS was bailed out by the Widespread Asset Unbundling (WAU) rescue scheme using taxpayers' money. Malaysia Today exposed that MAS’s former Chairman, Tan Sri Tajuddin Ramli, could plunder MAS at will because it was all part of UMNO’s bigger plans at filling its political coffers and enriching its powerful members, especially its former Treasurer, Tun Daim Zainuddin.

That this was all part of UMNO’s plans was revealed in several affidavits filed by Tajuddin Ramli in his court papers against MAS and supported by recent court testimonies of other UMNO cronies such as Dato Seri Rahman Maidin who once helmed MRCB and Tan Sri Halim Saad of Renong in other cases that came up for trial over the past year.

The UMNO modus operandi is still continuing, as can be seen from the NFC RM250 million Scandal involving Shahrizat Jalil’s family and the Kinrara-Damansara Expressway (Kidex) RM2.2 billion project involving the ex-Chief Justice and UMNO’s Legal Advisor. In the NFC scandal, the MACC dragged its feet and passed the buck to the police by saying that the investigations did not fall under the ambit of the MACC Act. Suddenly, the MACC is curtailing its own powers when it comes to investigating UMNO big guns!

Not wanting to be made a whipping boy in this whole episode, the police have now passed the buck to A-G Gani Patail to take action by disclosing that they have recommended to AG Gani Patail that Shahrizat’s husband and children be charged for CBT.

In the Kidex matter, the RM2.2 billion project was awarded to Emrail Sdn Bhd and Zabima Engineering Sdn Bhd, both without any highway construction experience, but were awarded still because the players of these two companies are UMNO lawyer Hafarizam Harun (right) and former Chief Justice Zaki Azmi. RPK revealed that is their reward for their efforts to ensure the ousting of the Pakatan Rakyat state government in Perak.

Hafarizam’s claim that RPK’s allegations was mala fide and was aimed at dragging him and Zaki “into scandal and disrepute” is laughable. In the first place, Zaki is infamous for his playboy ways and has never had the credibility to become the Chief Justice. This was the man UMNO appointed as Chief Justice despite after he admitted in the Shariah Court that he married illegally in a textile shop in Perlis in order to get a Thai marriage certificate, which he later burned when the woman he married sought to enforce her rights as his second wife.

So, what mala fide and ill-repute on RPK’s part is Hafarizam talking about?Back to the MAS case, Malaysians would still remember the extent UMNO would go to cover up for Tajuddin in the MAS Scandal. In 2006, then MAS Managing Director Idris Jala accompanied Dato Ramli Yusuff, then the Director of Commercial Crimes Investigation Department (CCID), to brief then PM Abdullah Badawi about Tajudin’s misconducts. Ramli Yusuff even prepared a report recommending that Tajudin should be charged. For doing that, some months later, Ramli was discredited by the mainstream media as a corrupted cop. Ramli engaged Lawyer Rosli Dahlan to defend him.

What the public may not realise is that it was Rosli Dahlan, as the MAS external lawyer, who had exposed Tajuddin’s related third party contracts and has been fighting all the MAS cases against Tajuddin and his camouflaged third party companies. To erode Dato’ Ramli’s credibility for writing the report to Abdullah Badawi, they needed to first bring Rosli down. This they did by making the MACC brutally arrest and charge him just the day before Hari Raya of 2007. Then, on November 1, 2007, Dato Ramli was stripped off his rank as Commissioner of Police and charged for purportedly unauthorised use of a Police Cessna. The rest of Rosli’s and Ramli’s story were already reported previously by Malaysia Today.

So, only in Malaysia do the real crooks get off while the innocent whistleblowers get charged. As proof that all that Malaysia Today had reported in the MAS Story series since 2006 are the truth and nothing but the truth, five years later, on August 8, 2011, Minister Nazri Aziz issued his infamous letter directing MAS to sack Rosli’s firm and replace them with the UMNO lawyer Hafarizam. This was in order that all the shenanigans in the GLCs including in the MAS cases will not be discovered.

Last Tuesday, 21st February 2012, Tajuddin settled with Danaharta, Telekom Malaysia Bhd, Naluri Corporation, Celcom (M) Bhd, Atlan Holding Bhd and CIMB Group. The only GLC not settling yet is MAS. Sources say that it is because Rosli is still leading the MAS series of litigation despite his name not appearing in the case.

On the settlement, Transparency International Malaysia Chairperson, Paul Low, issued a statement that the case indicated blatant abuses of power and a lack of prudence in the managing of the country’s finances, resulting in losses of public funds. Low also warned that following the court settlement, Malaysia’s aspiration of having good governance has also come under scrutiny:

“His (Tajuddin’s) claim that the government (through the assurance given by the then Prime Minister and Minister of Finance) had indemnified him of any liability incurred in his purchase of the MAS shares from Bank Negara needed to be substantiated and disclosed by the institutions and the ministers concerned.

We are extremely concerned as to the lack of public disclosure of the reasons for what seems to be a ‘arbitrary write-off’ of the RM589 million loan owed by Tajuddin relating to his purchase of MAS shares,” Low told Malaysiakini.

Since CJ Zaki’s retirement, there is some independent streak in the Malaysian judiciary. So, later this week, all that Malaysia Today had reported about the MAS story since 2006 would unfold in court when the MAS cases come to trial before Justice Rosila Ayob. Let’s see if something happens to this Judge for “judicial indiscipline” for not following the Court of Appeal, which had already allowed Tajuddin’s request for adjournment in the MAS cases before that court.

To prevent the MAS trial from proceeding smoothly, early this year one of MAS key witnesses, Raja Azura Mahayudin, who prepared the audit report of Tajuddin’s related party contracts, was moved out of MAS. She has been rewarded with a position as CEO of the Peneraju Bumiputera Foundation Fund. That was how they bought Idris Jala’s silence by making him a Minister in charge of PEMANDU.

On the other hand, Shahari Sulaiman, the man who lodged an MACC report on May 20, 2009 against Tajuddin and others who covered up the case, was quietly removed from his position as Managing Director of MASKargo on some obscure allegations of corruptions. To discredit Shahari as a witness in the MAS cases, and to remind Shahari of what they did to Dato Ramli in 2007, the MACC ransacked Shahari’s house on November 1, 2011 in full view of his wife, children and neighbors.

Déjà Vu!

Then, in further repeat of what happened in 2007 to Dato Ramli and Rosli Dahlan, just last week, on February 22, 2012, Shahari Sulaiman was hauled up by the MACC and subjected to a 13-hour interrogation grilling. To inflict maximum damage and fear, the MACC also gave notice that they will also grill Shahari’s wife, who has nothing to do with the husband’s business affairs.

Dato Ramli and Rosli may have been acquitted by independent-minded Sessions Court Judges, but AG Gani has pursued and is still pursuing appeals in the High Court, the Court of Appeal and the Federal Court against them. These appeals against Ramli and Rosli appear totally senseless when the country can see bigger abuses committed by UMNO goons and cronies not acted on by A-G Gani Patail.

Dates seem important in all these. This is the Water Dragon year. Apparently Dato Ramli was born on February 29, 1952, which was a Water Dragon year. So, Dato Ramli is not just a Water Dragon baby but also a leap year child, which makes him very special -- thus, explaining why all these “special” things happened to him.

The Chinese believe that if one completes the five cycles of the Water Dragon year, once will go straight to heaven. I have this to say to Dato Ramli: having gone to the abyss of hell in the past five years, he deserves to now go to heaven.

Happy Birthday, Dato Ramli!

Malaysia's Political Economy and the International Economic Crisis

by Tengku Razaleigh Hamzah*

Thank you very much for inviting me and for giving me this opportunity to address this very important and topical subject that is likely to affect the future of all of us.

The relationship between Malaysia’s political economy and the international economic crises is not an easy subject but a vast and complex subject which can touch on very sensitive issues. But the urgency of the subject is such that we must think and speak about it.

Be that as it may, I have to state what I think is the heart of the problem of our political economy in view of the experience of the West which is unfolding at the moment. The full impact of what is happening in the West is yet to be revealed and it is possible that it will be a continuing process of revelation.

No Country is an Economic Island, or indeed a Political Island

It has been suggested by some political and economic observers that the crisis is likely to be the worst economic crises since the 1930s, and that it is bound to affect the entire world. But there are some who believe that the effect on Asia will not be the same as in the West. That may or may not be true, but in this age, no country is an economic island or indeed a political island. To emphasize the point, 30% of China’s economy is dependent on the well being of the European economy. Any shrinkage in the West is bound to affect China. This can be said of many Asian countries.

In trying to understand what is likely to happen to the Malaysian economy and its political consequences, it is important for us to understand the character of our own economy, and the similarities and dissimilarities with American and European capitalism. Western capitalism that is now accepted as a failure is a capitalism that has had a long history, with very strong political and cultural underpinnings, particularly in the Rule of Law. It is for this reason alone that Western capitalism, for all its faults, has lasted so long. There are many lessons we can learn from Western capitalism – successes and failures. While there are similarities, the Malaysian version of capitalism unfortunately does not have the long history of political and cultural foundation. The significance of this cannot be underestimated.

Malaysia’s economy was a colonial economy. Soon after independence, there was no real change of the colonial political economy. In 1970 we made the first real attempt to change the political economy to address same urgent imbalances.

Malaysian Capitalism in the 1980s

I would like to open the discussion today by suggesting to you that the capitalism in Malaysia took a decisive change in the 1980s. It is that change that we have to understand and deal with if we are to avert the same crisis as the West is going through.

It is my contention that the changes that took place in the 1980s were profound, pervasive, and influenced the value systems in public life. It has also brought about structural changes in our society. These structural changes – I don’t mean formal constitutional changes only – relate to the way that constitutional issues are being interpreted today. They relate to the way in which political parties have been transformed and the manner in which politics is being conducted today, both within and outside the political parties themselves. It has also brought about changes to the administration of the state apparatus – both unto itself and in its relations with the public. Equally important is what I call public values; in other words, values associated with the public responsibility that goes along with the position that one assumes. The sum total of the transformation and its influence will have serious consequence on the future of our country, as those changes are still with us in public life, particularly the politics of the day.

Before I explain the nature of the changes and its consequence, I would like to state briefly the political culture, understanding, and values that prevailed prior to the transformation, just in order to emphasize the contrast. At the time of Independence, the problems of the country were those that we inherited from our colonial past. The most striking aspect of it was the fragmented nature of our society in almost every aspect of public life, particularly in politics and the economy. Race dominated the general view of both politics and the economy. There was also extensive poverty, both in the rural and urban areas. But the rural and the urban distinction had another aspect to it, and the rural economy was at subsistence level unlike the urban areas. It had also a racial distinction. But the distinctions of poverty levels carried also a racial distinction. In the urban areas, the middle class also had racial characteristics. Capitalism as practiced in the colonial period was clearly unsustainable to maintain a cohesive and united community within Malaysia.

Many of us who decided to be involved in politics soon after Independence were inspired by the challenges that the new nation faced in solving those problems. The ideals were those that were prevalent at that time in Asia and inspired by thinkers of that time. The ideals were for change in society to a more balanced and one where racial divisions will not be identified with politics or economy, and poverty, both in the rural and urban areas, would eventually disappear without the racial divide. The objective was always the common good and to create a nation that was cohesive and modern. This was to be achieved by economic changes in their nation’s economy and the lives of its people.

The best way in which I can illustrate the point is by drawing your attention to the ideals as expressed in the 1971 Second Malaysia Plan. It is a quote that is worth repeating and remembering:

“National unity is the overriding objective of the country. A stage has been reached in the nation’s economic and social development where greater emphasis must be placed on social integration and more equitable distribution of income and opportunities for national unity.”

It went on to state:

“The quest for national identity and unity is common to many countries, especially new and developing countries. This search for national identity and unity involves the whole range of economic, social and political activities, the formation of educational policies designed to encourage common values and loyalties among all communities and regions; the cultivation of a sense of dedication to the nation through services of all kinds, the careful development of a national language and literature, of arts and music, the emergence of truly national symbols and institutions based on culture and tradition of society.”

The basic point is emphasized in the Rukun Negara:

“… from these diverse elements of our population, we are dedicated to the achievement of a united nation in which loyalty and dedication to the nation shall over-ride all other loyalties.”

What happened in the 1980s was a deviation from these ideals. It had nothing whatsoever to do with the New Economic Policy. It was something very, very different. An economic policy of the kind that the Second Malaysia Plan envisaged would require a gestation period of more than a decade, optimistically. It was intended as a social engineering policy. It is in the nature of economic policies that results are not immediately evident and can only be achieved in the fullness of time. The New Economic Policy unfortunately did not survive the leadership prior to 1980 and faded before the full impact of that policy could be seen.

Neo-Liberalism Malaysian Style

What happened from 1980 onwards was an intervention of a new form of capitalism that was not obvious but reflected in the way the leadership that came after the mid-1980s conducted itself in the implementation of economic policies and the exercise of political power. The dominant economic thinking during the 80's was economic policies which came under the category of neo-liberalism. Neo-liberalism was an ideology and a political philosophy with its own values of public responsibility. It had a very precise view of what the economic system should be and what kind of supporting financial system should underpin it.

The distinguishing feature of this policy is privatization of public ownership of utilities essential for public good, such as water, power, public transport, health and other services irrespective of whether they were efficient and must necessarily be owned by the State. In order to assist the neo-liberal economic policy, it also encouraged low taxation, mobility of labour to keep wages low, unrestrained mobility of finance, and the rise of the stock market as a means of financialization of profit and capital to facilitate its mobility and accumulation.

It was within that new dominant ideology of neo-liberalism that the incumbent power realized that this new approach to economy opened up opportunities for those who had power and those whom they wanted to favour. There was an understanding that in order to benefit from that new economic system, political power needed selective businessmen who would work together for their mutual benefit. The benefit to the nation was merely incidental and necessary to continue the new status quo that they were building. Eventually, by this relationship, political power became a means to business and accumulation of wealth as a practice of those in politics and business; in other words, those in politics sought out business and businessmen sought out politicians who would work with them.

This new feature came into existence gradually and had its peak in about the 90's. The character of capitalism changed and the values of some Malaysians also changed. By privatizing the public ownership of what is economically called “public good,” the values that went with public good changed to private profit accumulation of wealth and greed. The nature of public responsibility also changed.

This new feature in Malaysian political life eventually became a powerful mode of thinking that permeated political parties and the institutions of the State. Party politics, particularly, took a change in order to consolidate the status quo of power. Changes in the constitution of political parties ensured continuation of leadership and political power. But the leadership within the party and the political system became acceptable only because the benefits of business were also shared by those who supported the leadership. A hierarchy of financial interest coinciding with the power structure was built within and outside the party.

These changes also created a corrupt form of public values which has very serious consequences and with which society is now burdened. The system became self-serving for entrenched political and business interests. All those in the hierarchy of the system also benefited and, in order to maintain that system, they supported the centralization of power within the party leadership and the government.

With the changes in the political party system, particularly a political hierarchy supported by business, the centralized political power had to feed this combination of business and political hierarchy with business opportunities. The centralized power enabled discretionary use of political power to make decisions on public expenditure and privatization.The public expenditure that I am referring to is the public procurement contracts. The money generated by the distribution of public procurements, contracts and privatization programme became a self-serving economic system to maintain power and accumulate wealth.

The volume of money generated in terms of public expenditure and private gain arising from this policy has never been properly audited or revealed to the public. In order to avoid public controversy of the public procurement contracts and privatization, the Official Secrets Act was expanded to include contracts involving public procurements and privatization.

As a result, business and power became more and more entrenched and powerful. The fear of losing power also equally became a matter to be avoided at all costs. In these circumstances, money became a dominant political weapon in political parties and the entire electoral process. This new culture of politics released forces within the political parties and the public arena unseen before.

This new focus of the political economy became less and less sensitive to the real socio-economic problems of the people and essential changes that were necessary were ignored or misconceived.

It is now generally accepted by those who understand economics that statistical evidence and economic reality are not the same. Nevertheless, the reliance on statistical evidence can lead us to make believe that all is well when it is not. I say this because the empirical evidence that is evident seems to suggest that over time the focus of growth was on accumulation of wealth rather than the realities of the socio-economic problems that the people face.

One example of this is the changes in the character of labour in Malaysia. The demand for labour has been seen as an opportunity to create a rentier political class from those who are part of the political apparatus .It has reached such proportions that there is an alarm that the employment opportunities have all been taken up by foreign labour.

The effect of the policies of making labour a commodity available to employers has many consequences, one of which is to squeeze out our citizens from gainful employment and the lower end of the economy, such as hawking, etc, as a means of living.

Be that as it may, this can be a turning point for our nation in a positive sense if we recognize the nature of our problems. One of the major problems that would be in the way of meeting the consequence of the crisis will be the education and standards of skill of our people. As a means of an economic recovery, we will require a fundamental change in the education system we provide for our citizens. We need an education system that produces quality and skills. I would say that under the present system, it will be difficult for us to achieve that. We need the moral courage to reform the entire education system that we have today. I would also add, we need a massive adult education programme to ensure that the present generation is not left behind.

The objective of the adult education should be to provide the necessary language and technical skills and to involve as large a section of the population in non-formal educational programmes which will bring national cohesion and at the same time rejuvenate dormant areas of our economy, such as the agricultural sector. We have enough land. What we need is for those who are prepared to go into these areas of our economy to be equipped with the technical knowledge that is necessary to bring about a green revolution in our country.

Household Debt more than Household Earnings (More than 100%)

What is illustrative of the consequence of the economic policies of the 1980s and 1990s is the household debt of average Malaysians, which is about 75% and 40% of the household debts is beyond 100% of their earnings. As a result of this, the average Malaysian generally lives under a very high social and economic tension within their families and within society struggling to make ends meet. The household problem has many ramifications. It has spawned wide-spread illegal money-lending (the true “Ah Longs”). The consequences have been devastating on families and individuals.

The financial system as it is now does not seem to be geared to make the lives of ordinary people comfortable or to minimize social tension. Part of the cause of rising debts among households is because of the structure of the financial system within which the ordinary citizen has to live, such as the romping speculation in housing, inflation in the goods of daily requirements, and the mortgage system on which the people depend for ordinary comfort.

Inequalities have widened

As a consequence of economic policies in the past, inequalities have also widened.Today, Malaysians suffer from a very wide inequality, and there is a suggestion that the inequality is higher than in Thailand and Indonesia. This inequality cuts across racial boundaries. If the economy declines in the future, the problems that I have highlighted in terms of the household debt and the widening inequality will go into a deeper crisis of confidence among the people, particularly the young who feel alienated from the economic system.

Money Politics leads to a Dysfunctional Democracy

No democratic system, no institution as envisaged by our Constitution, can survive a political economy of this nature. There is too much money in politics and it has become inseparable from power and the electoral process. The corrupting influence of money in public life is obvious for any need for explanation. While the economic and social problems accumulate, a divide has been created by those who benefit from the dysfunctional system and those who suffer from it. It is no different from the experience of many counties in the Middle East. Many who had enjoyed the benefits of incumbent power sustained the system and were reluctant to give up power or change.

The lesson we have to learn from the Arab Spring is that a dysfunctional democracy, however well dressed by public relations exercises or subsequently by media, cannot withstand the realities that are the natural consequence of abuse of power and wanton accumulation of wealth. That is the most important message, I think, that the Arab Spring has conveyed and we must take cognizance of it.

The danger we face is that the conflation of business and politics has become so dominant that it has the same influence an ideology would have. If we are to restore democratic ideals in our political discussions and the electoral process, have genuine political parties which can genuinely function in what they think is the interest of the people, and participate in the economy, then there must be a separation of business from politics. Without this precondition, Malaysia’s economy can avoid a crisis worse than what we see in the West.

For business to play a responsible and major role in creating a viable economy, it must be freed from politics. The economy of business must be returned to the people in order for them to develop. It must be given the freedom to function without having to depend on political patronage. The right to do business as part of the national economy must be a fundamental right, not subject to favours by politicians or bureaucrats.

But that change will not come about until the public earnestly are allowed to discuss the dangers of conflating business and politics. That includes the danger of allowing political parties that are in power to take advantage of their political power for financial benefit. Parties must be strictly confined to democratic activities and political policies which they believe in and business must function autonomously from political parties. Unfortunately for us, this has not been the debate in any of the elections in the last three decades. We need to think urgently of the dangers of this unspoken reality of our politics.

If I am correct in my understanding that the ideology of business and politics had become fused with the neo-liberal ideology and as part of our political economy - by that I mean the process of thinking about economics, politics, policy, and leadership - then we have a lesson from the crisis in the West which is happening now where neo-liberal policies have failed not only as a financial system but in all its economic and political objectives. It must send a signal for us to seriously examine whether in fact there is a fusion of money politics and neo-liberal ideology, that is the worst of both worlds. And what can happen to us, not now but in the future is an urgent issue we have to deal with now, not when it happens. The gestation period of misconceived economic policy is as long as good economic policies, but the longer we wait the worse the consequences and higher the price we pay.

One of the weaknesses we have as a nation is the absence of a critical mass of people who think in economic terms and can take a critical view of the realities of the economies that we face today as a matter of national interest above sectarian interest. The absence of this critical mass will make it easy for those who want to deviate from the real issues that we face.

My intention, in all that I have said, is for the purpose of reflection, and for us to grasp some realities that are urgent, and to think whether an economic system where money played such a dominant role in the functioning of the state and the constitutional system of democracy can survive. The task of understanding the reality and dangers of a dysfunctional system based on money in the political process is urgent. There is a role for all of us because the country belongs to us and we have a duty to save Malaysia from the trials, tribulations and agony that we see happening as a result of the failure of Western capitalism.

*Speech by Y.B.M. Tengku Razaleigh Hamzah at the Royal Selangor Club Luncheon Talk on Thursday, 16.02.2012 at 12:30pm.