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Thursday, October 24, 2019

Malay Dignity: Whither Malaysia now?

 

THE Kongres Maruah Melayu, or Malay Dignity Congress, held in a stadium near Kuala Lumpur on Oct 6 raised a furore among Malaysians. Organised by four public universities – including Universiti Malaya, the nation’s premier institution of higher learning – the congress was attended by about 5,000 people, mostly students but also leading politicians from Umno and PAS.

Rather than a forum to discuss issues faced by Malays and ways to overcome them, the congress has been widely condemned as a racist gathering. In his speech, Zainal Kling, the chief convener of the conference, declared that Malaysia belonged to Malays and reminded other races of their “social contract” with Malays, claiming it was the basis for granting them citizenship rights which could be revoked if they breached the agreement (bit.ly/dignity_congress).
https://www.freemalaysiatoday.com/category/nation/2019/10/06/malaysia-belongs-to-malays-shah-alam-congress-warns-ahead-of-dr-ms-speech/

Prime Minister Tun Dr Mahathir Mohamad aroused public ire by attending the conference; critics saw his decision to participate as a betrayal of the ideals of the reformist Pakatan Harapan coalition which toppled the previous Barisan government in a shock landslide victory at the polls last year.

Dr Mahathir made his mark as a champion of Malay rights early on. In The Malay Dilemma published in 1970, he argued passionately that due to hereditary and geographical factors, the Malays could not keep pace with Chinese immigrants and advocated special rights for the Malays. He became the chief architect of Dasar Ekonomi Baru, or the New Economic Policy (NEP), which was unveiled in 1972 for a term of 20 years and was designed to accelerate the development of the Malay majority (comprising circa 60% of the population of 32 million now) through affirmative action.

The NEP failed to achieve its stated goals, and Dr Mahathir stepped down as PM in 2003, but after 20 years in place, NEP privileges came to be seen as entitlement and could not be dismantled. Meanwhile, the Malaysian economy trails behind smaller Asian territories with fewer natural resources such as South Korea, Taiwan or even Singapore (2018 GDP).

In his 50-minute speech at the dignity conference, Dr Mahathir pointed out that the NEP failed “because the effort by the Malays was less than expected or hoped” and warned that “as long as we do not change our lifestyle, as long as we are unwilling to strive to face challenges at work, we will be left behind”. He said, “Our dignity depends on our achievement, not on government aid. If we are capable of making good products and creating wealth, no one will look down upon us.

“I believe that the Malay people have the capability but there is a difference between capability and willingness to work. They can do it but don’t want to do it, ” he chided. “We can build our dignity with our achievements in all fields, ” he declared. “Otherwise there will be another 10 dignity conferences and nothing will change.

“What I am saying may be hard to accept... but this is the truth of what has happened and this is what will be inherited by the young generation of which there are many in this auditorium today.” (Video at bit.ly/dignity_video.)

Dignity comes from doing and not just asking, Dr M tells Malay congress

https://youtu.be/tdIXzkuZQm8


But his words fell on deaf ears and resolutions passed at the conference made no reference to his pleas. There were calls instead for key government positions including the prime minister, deputy prime minister, finance, education, defence and home ministries and the attorney general to be reserved for Malay Muslims only. Another resolution called for the abolition of vernacular (Tamil and Chinese medium) schools. (“Resolutions on five areas presented at Malay Dignity Congress, but PM says not all will be met”, The Star, Oct 6; online at bit.ly/star_dignity.)

At 94, Mahathir has little need to make polite speeches to cling to power. Time is not on his side. He loves his people and deserves praise for his tireless efforts to change them but he forewarned in The Malay Dilemma that because politics created for the Malays a soft environment which removed all challenge to their survival and progress, “political power might ultimately prove their complete downfall”. No other Malay leader has shown equal foresight.

To a significant degree, the previous government fell because of a massive corruption scandal involving the theft of billions of dollars by then prime minister Datuk Seri Najib Razak. But, partly through a lack of administrative experience and partly due to foot-dragging by civil servants loyal to the previous government (which had been in power for 61 years), the current Pakatan Harapan coalition has failed to deliver on much of its reform agenda and is far from certain to win the next general election.

Malaysia has often been held up as a model Muslim-majority country but in a society where it is all too easy to play the race and religion card, the economy will not realise its full potential and the political future of minorities will remain at risk.

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US ‘hegemonic tariff’ will not make America great again

Photo: VCG

Sustaining hegemony is selfish in nature, especially when hegemony is in decline. The nature of the US wielding the tariff baton, sanctioning other countries' officials and companies is a "hegemonic tariff."

This can be defined by a series of its behaviors, including cracking down on Chinese tech giant Huawei and lobbying its allies to reject Huawei's 5G technology without solid proof; blacklisting Chinese companies for their alleged connections with so-called human rights issues in China's Xinjiang Uyghur Autonomous Region; declaring trade wars against the world; frequent military interventions in other countries' domestic affairs, claiming human rights are superior to sovereignty, and overthrowing governments of other countries.

Take trade wars. China is not the only target of the US. Washington has not even cut its allies some slack. Since 2018, not only Venezuela, Cuba, Ukraine, Turkey have been hit by US sanctions. Quite a few of traditional US allies, including Canada, Japan and South Korea, have also been sanctioned by the hegemonic power. Washington's goal is simple: To protect its domestic market and expand foreign markets to maximize global trade. This philosophy is also called "America First," and the US believes it is able to seek more interests through hegemonic means.

While the US is busy charging its "hegemonic tariff," it is putting the blame on China. The Atlantic published an article on Saturday entitled "The NBA-China Disaster Is a Stress Test for Capitalism," claiming "Chinese companies, furious over [US] public sympathy for Hong Kong, were swift in their vengeance. They suspended licensing agreements with the NBA." It then concluded that firms with business in China pay "values tariff."

This is deliberately confusing right from wrong. It shows the US does not respect Chinese sovereignty, while even wishing to impose its own values and political views on the Middle Kingdom.

Hegemonic measures are no longer effective. Trade lasts only when based on mutual respect, equality and mutual benefit. When US companies make money from around the world, they can achieve their goals smoothly only by complying with others' laws and respecting their public opinion.

However, Washington is now becoming increasingly narrow-minded and selfish, regarding mutual benefit as US losses. Worse, it is asking the world to compensate for its losses, urging others to make contributions to "America First" through political, financial and military means.

The Atlantic article noted "the partnership between the NBA and China, which is worth billions of dollars over the next decade, is now in jeopardy." This is exactly the consequence of the US obsessing over hegemony as well as the US obsessing with its so-called moral high ground.

China will not pay a penny for the US "hegemonic tariff," and will take countermeasures to take back what the US has seized from it. The chances of the US profiting from its hegemony are dwindling.

The key to making America great again is to boost the country's competitiveness and innovation, rather than slapping "hegemonic tariffs."

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Tuesday, October 15, 2019

Budget that braces for tough times


Broad measures spelt out under Budget 2020 will likely sustain the economy, if there is no further escalation in trade fights.

A glimmer of hope emerged after the US outlined the first phase of a deal to settle some issues related to trade, but there is a lingering suspicion that China could be just buying time as it will most likely not concede to any loss of sovereignty.

China is developing its own ecosystem that could be “outside the reach” of the US, and it is possible that the time bought with such rearguard actions may allow China to achieve its aims.

Malaysia, a trade dependent economy, can only hope that it all works out well, if it can integrate into both ecosystems, said Inter-Pacific Securities head of research Pong Teng Siew.

More stimulus measures would be undertaken should the global economy worsen and in the worst case scenario, Malaysia would have room to spend more if it increases the budget deficit, currently at 3.2% of the gross domestic product (GDP).

The worry is that a further deterioration in global trade tensions may push the global economy into recession. If that does not happen, these Budget 2020 measures should be able to sustain the economy, according to RHB Research Institute chief Asean economist Peck Boon Soon.

Given the external headwinds that continue to pose more downside risks, it looks like Budget 2020, which attempts to spread out its positive effects, has been designed to brace for rough times.

Some positive impetus could be derived from measures to support tourism, construction and infrastructure, as well as small and medium scale enterprises (SMEs), said AmBank Research head Anthony Dass.

Tourism-related businesses such as food and beverage, accommodation, travel and transport, shopping and entertainment will likely benefit.

Recognising the importance of SMEs in driving growth, a string of measures to facilitate their financing needs, ease of doing business, faster adoption of high technology and green initiatives, should also bode well.

The bottomline is that resources are limited while the government still aims for fiscal consolidation and repayment of all debts.

Spreading out these scarce resources will probably succeed in paring off any broad-based slowdown, but it will be hard to make a dent when the sense of a loss in economic momentum is gradually settling in, said Pong.

More measures are required to stimulate the economy but in view of the gloomy global outlook and domestic issues, it is still overall, a good budget.

However, the allocation between capital and operating expenditure is still imbalanced; there is too little capital expenditure and there appears to be ‘little effort’ to reduce operating expenditure.

This will have a long term effect, especially in an aging society, according to Areca Capital CEO Danny Wong. In view of concerns over the lack of investments and falling revenue, efforts to boost foreign direct investments and tourism are welcome but more robust steps are required.

A correction in property prices may be a remedy for the overhang and inaffordability issues especially among young people.

The budget tries to forestall a price pullback, which would affect developers stuck with high land prices, by allowing foreigners to fill the demand gap.

But demand has evaporated, partly caused by the migration of mid-level talent and delays in household formation, the driver of long term demand and new home construction. Developers, lulled by the padding of demand through low interest rates for borrowers, high financing margins and easy access to debts, find it hard to lower prices.

They had thought the elevated level of demand was sustainable but it was not. Reduced prices may mean less profits but possibly a lifeline by way of cashflows, and may help restore delays in household formation and loss of talent, said Pong.

A worrying trend is that more and more young Malaysians are moving out of the country in search of jobs.Even mid-level expertise and talent is migrating; previously, it was mostly those who were highly mobile internationally.

A major cause is the lack of growth in real purchasing power.

Is the projected GDP growth of 4.8% achievable?

With the government continuing its spending and development initiatives, growth should remain robust, supported by services and construction, higher production from agriculture and mining. But manufacturing is expected to moderate.

Malaysia can achieve its 4.8% growth target, said Hong Leong Bank chief operating operating officer, global markets, Hor Kwok Wai.

However, in view of slower world GDP growth of 2.8%, AmBank Research expects growth of 4.0% with an upside of 4.3% for Malaysia.

Coming up with a further set of stimulus, should things worsen, may be a challenge.

Columnist Yap Leng Kuen is watchful of the tech war. The views expressed are the writer’s own.

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Viewing trade talks progress with rationality, calmness

Ending the trade war benefits whole world

Both China and the US still have resources to sustain a trade war, but further consumption of those resources is unnecessary since their goals have proved naive and absurd. The situation is still highly uncertain, but the historical indicators will gradually be corrected. China and the US will not get lost and the world will benefit from the implementation of the consensus reached by the two heads of state, assuming the responsibility to both countries and the world and moving steadily towards the final end of the trade war in stages.


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