Thursday, June 19, 2008

Blogging & the New-Age Courage of Conviction

An abridged version of this blog was published by Malaysiakini as Brave new blog

"Who in old times ever held anything so uncalled for as an opinion? ...History, history really was, still is, the agenda of activists. The rest of us, you, me, the rest of us, are mere fans of a world view and use the news like theater--episodes, chapters in some Sabbath soul serial... If we don't have the gift for effecting change, we have the solace of criticism." ~ Stanley Elkin, novelist in "The First Amendment as an Art form" quoted in Saul Bellows It All Adds Up, Penguin Modern Classics, 2007, pp109.

When I first stumbled into the world wide web in 1996, it was purely for the sake of being technologically savvy.

Yes, then it had also to do with keeping in touch with and gaining 'quicker' access to scientific advances that I was interested in. Then again, my obsession with the PC was an expensive hobby, which seemed to be an unending catching-up exercise to try outrun its obsolescence.

I seemed to be upgrading all the time--and the PC continues to advance by truly doubling at diminishing intervals--so clairvoyantly predicted by Gordon E. Moore, Intel's first guru. See Moore's Law.

Still, few would have expected how much every aspect of our human lives seems to have been touched by such a proliferation and permeating ubiquity of knowledge/information perfusion and the almost seamless person-to-person interconnectivity. In ten short years, this wondrous growth has stupefied everyone including many of its greatest detractors.

It became obvious that soon from the geeky nerdy preoccupation, PC and internet use has ballooned into an all-pervasive universal phenomenon which has outstripped the imagination of everyone.

This global engagement which helps connect people and ideas at the click of a mouse, and some dogged two-finger typing, appears to have permeated every strata of society--equalising access to information as never before.

Not to be outdone, it also created another phenomenon of personal spewing (and sharing) of ideas, thoughts and opinions, with nary a thought as to consequences, except that one can vent these as one chooses. The anonymity (and perceived closeted safety) of one's own most private thoughts and darkest if bigoted/radical viewpoints, provides an individual derring-do and bravado that has in the past constrained many a written word.

Thus, many of these are indiscriminately enunciated without secondary considerations as to their impact on anyone else. This ultimate freedom to express at will and without any restraints, is perhaps the quintessential mark of a New Age.

Although, this newfound expression of freedom to think and speak out loud is welcome, there are possible downsides to these unfettered unsolicited commentaries and occasionally abusive invectives.

Web-blogging has unleashed an unprecedented phenomenon where everyone is entitled to his/her own say, but also subjects every person to the blunt, unregulated, unconfirmed, inaccurate or downright untruthful remarks and personal attacks from others--including what has previously been considered quite libellous and defamatory. Blogging apologies are rare, and correcting misconceptions and misrepresentations are even rarer.

Another downside to the internet age, is the individual's selective power to decide which news item or blog to read, to digest or to dismiss outright! This can sometimes breed very intolerant and lopsided personalities, quite warped by their partisanship, and create unbalanced bigots--'neocons' will remain as hardened rightists, and libertarians, even more indulgent progressives, and never the twain shall meet!

Thus, the danger of such polarisation can become extreme, and create fundamentalists among many possible groups! This is the new age 'information' jungle of anything goes! But isn't this just another invariable extension of our multichannel cable television, when one can click on or off any programme that appeals to us?

Indeed, I'm convinced that there will never again be any possibility of restraining or controlling information, as this escaped genie has outgrown the confining lamps of every regulator, despot and dictator. Yes, how times have changed.

Yet there is a tremendously uplifting positive on this. Propaganda and highly biased messages will find their ease to control modern minds increasingly difficult to impress, much less to influence or even gain more than a casual and/or a passing glance. These will be sorely tested and debunked sooner than later. Healthy skepticism has become the natural order of the day.

Mainstream media (MSM) has suffered most from their overly cautious take on news and news spins. Especially among Malaysians, many now increasingly feel that the MSM are too politically-slanted or too pusillanimous to tackle hard issues directly; they seem to toe the line so rigidly drawn by the strict diktats of their wayang-kulit (shadow play) masters.

The beauty of the internet age and the blogging phenomenon is that it is so dynamic, so unpredictable. For every possible idea or viewpoint so espoused by anyone, there now appears many others which can either agree, disagree or even counterpoint another--suggestions or reasonings which appear more plausible, perhaps more believable. It will be increasingly difficult to blatantly lie and get away with it, unless one is so deviously a master of deceit.

Some have lamented that lies, big lies, (see malaysiakini's A Big Lie told repeatedly) repeated often enough can be powerful propaganda stuff (so much a cliche of Nazi information chief Josef Goebbels), and they are right--we can become influenced, even indoctrinated into attentive but noddingly agreeable yes-men. After all wasn't it Bertrand Russell who said:

"Man is a credulous animal, and must believe something; in the absence of good grounds for belief, he will be satisfied with bad ones."

We can still be shaped and moulded into mindless followers of the "great and the powerful" simply because of blind faith towards their sheer towering charisma or presence, or a hankering back to those historical perceptions of a better life/experience in the not-so-distant past...

For decades, perhaps 50 years, Malaysians have been thus pre-shaped and moulded into pliant citizens, who though increasingly disgruntled, continue to elect our politicians to lead us--year in, year out--despite their lies, their threats, their corruptibility, their arrogance, their bullying, their known expediencies and excesses...

Perhaps, at our coming of age party of 51 years, this bygone era will be passe and a new era of openness and fearless demand for public accountability will begin.

Malaysians and citizens the world over are hoping that we can cross this Rubicon of political naivete and finally outgrow the adolescent timidity and awkwardness, that we have been saddled with for so long. We have to mature into a multifaceted, multi-ethnic tolerant and open-minded citizenry.

We can only hope to have finally reached the courage of conviction to be our true selves and help the nation grow and build as never before, to greater heights of meaning and cohesiveness...

P.S. Malaysian Insider just posted another take on how the new media will continue to trump the MSM, unless they recognise that the blogosphere is far more influential than they had pooh-poohed earlier on, and still deny its legitimacy.

Sunday, June 8, 2008

Subsidy Woes, more than meets the eye...

See Malaysiakini Subsidy Woes...

Economics-trained or free-market-inclined Malaysians are now speaking out loud, that we should accept the fact that subsidies are no longer tenable in today's globalised economy.

One recurring theme emerges: Market prices should dictate 'real prices' of goods and services as if the entire world is on par with each other, and the playing field is level the world over.

Thomas Friedman's The World is Flat dictum appears to influence everyman's idea of where the world is now and especially where it should be heading: "that globalization has leveled the competitive playing fields between industrial and emerging market countries."

But not everyone agrees that this perspective accurately reflects the situation on the ground. In the real world, perhaps some 80-90% of the world's people remain outside the reach and access of globalised markets and benefits (Why the World isn't Flat)

Professor Pankaj Ghemawat argues in Foreign Policy, Mar/Apr 2007, that more than 90% of all business worldwide are local affairs, where regional, investment and niche factors continue to dominate and exert great economic impacts.

But the 'reality bites' so forcefully enunciated by new-age economists are less sanguine and less certain for its unequal and asymmetric effects on the widely divergent and disparate economies around the world - invariably worse for poorer, less developed nations.

It is true that whenever governments try to apply 'unrealistic' protectionist methods to cushion local economies, (by price controls or artificial suppression on certain goods and services), these may in the longer term be harder to equilibrate when markets are forcefully pried open due to shocks such as the current oil price crunch. (It's worthwhile reminding ourselves that in 1990s, a barrel of oil was selling at US$10-20; in 2006 US$70; and today June 2008 we're at US$135 per barrel! See BBC's Why the oil price keep rising)

Supply chain mechanisms so long entrenched in our modern economic structure, have also undervalued many commodities such as grains (rice, corn or wheat), greens, fruits, etc.

Thus far, the brawn of being a farmer and/or grower has had unequal, artificially constrained but lesser benefits when compared with the downstream supplier, processor and/or distributor.

Then we have market speculators who disproportionately live off the paper or electronic gambles of artificial prices and guessworks, who profit at 'unreal' excesses, at the drop of a phone call, an email, an sms, or a wave of the hand!

Such inequitable distribution of economic benefits have led to great distortions and disparity of wealth. While most people welcome the much-touted 'trickle-down' effects, this mechanism tends to find its equilibrium at snail's pace. Completely free-market forces work by uplifting the lowest strata of society in staggeringly slow steps, whilst creating a smaller but hugely enriched upper class, a new bourgeoisie through near-instantaneous windfalls.

In Malaysia, to be fair, we have less of such a chasm of wealth disparity, although pockets of shameful indigence and poverty can be found in marginalised segments in inner city slums, suburban TOLs, hardcore rural communities, and some itinerant indigenous peoples.

More a problem would be that huge middle-to-low-income segments which embody a probable three-quarters of our population - these people are neither here nor there... Needless to say, these people will be hardest hit, when their bread-and-butter issues are put at serious jeopardy.

Because of our aggressive stance at luring Foreign Direct Investments (FDIs) with low-wages and tax-exempt pioneer statuses, many of our workers are paid artificially-suppressed salaries - hence their income has remained low. (For years, The Economist's Big Mac Index frequently attest to the fact that Malaysians are paying relatively cheaply for a similar priced Big Mac elsewhere.) To cushion this, we have introduced subsidies which are needed to price-control a basket of commodities, so that these remain affordable to the low earning power of the general populace!

Now we are told to buck up and face up to the facts - no more subsidies! We are expected to sustain our lifestyle with the relatively low wages that had for so long been thrust upon us, in the name of competitiveness for foreign funds and investments. Our workers have been denied minimum wage negotiations, and many industries are deprived of the bargaining power of trade unions!

On top of this, our Ringgit (Malaysian currency) has been protected from finding its true value, and we lag behind many regional currencies - our money is quite small! And we do this because, we wish for our exported goods to remain competitive...

Thus, our purchasing power has been severely curtailed when one wanders into the real globalised world out there - we have to pay so much more in real terms for goods outside this country. This is extremely onerous when one is a lowly-paid Malaysian worker.

So it is extremely unfair to now ask of Malaysians to tighten our belts and be more prudent! I don't believe the rakyat has been profligate or spendthrift, most of us just don't earn enough!

Then, we also have these ridiculously expensive prices of cars and road taxes. Whatever the arguments for discouraging outflow of local funds for foreign goods, we are simply paying too exorbitant a price.

For most Malaysians, owning a car is a necessity and not a luxury! Imagine that many cars are now hire-purchased upwards to 9 years! Imagine the interests one has to cough up, the loss of discretionary spending power for more productive purposes rather than just servicing unending loans. Painfully count the numbers - of wasted funds, which are a form of individual tax, the benefits of which elude us.

Of course, one can also argue for greater utilisation of local public transport, but these have always been the most inconsistent and arguably the worst managed public service! One spends hours in erratic, uncomfortable, crammed spaces, which once again makes the task of getting to and from work all the more wasteful in terms of loss of time, energy and productivity!

Our houses are also high-priced with relatively few people actually owning their own homes - some housing loans now stretch into 30 years and beyond, with some lenders introducing loan carry-forwards to the next generation! How sick and cynical to imagine that we pass on our debts into the new generation!

So how can the average rakyat cope especially now with further inevitable increases in costs for almost everything else on top of fuel, gas, food, etc? The authorities must find alternative measures to soften the blow of its most painful and inconsiderate fuel price hike in Malaysian history. It must take cognizance of all these real-life facts and how it is impacting the common people, and not argue Keynesian economic niceties for a beleaguered populace!

One must read the arrogant and insensitive editorial in yesterday's NST to understand the warped psyche of our MSM and its cloistered masters: "... after decades of mollycoddling with some of the world's highest fuel subsidies and lowest pump prices, the spoilt Malaysian consumer had no way to anticipate what it would feel like actually to have the candy snatched from the cradle... Enough of such mewling. This country has for too long carried too great a burden in its paternalistic protection of consumers, encouraging profligate consumption in blase indifference to real costs -- and can hardly be said to have received any lasting appreciation for that in return, witness the present administration's continuing travails in the wake of its mauling in the general election... this is the shock of recognition that runs the circle round: the anaesthesia of artificially low fuel and power prices had made a fools' paradise of life in this country. Now here's the wake-up call."

Such paternalistic scolding and the crass reference to vengeance against a populace which had not appreciated and thus rejected the previous administration at the last election, is truly uncalled for and shameful! It's no wonder that more and more Malaysians believe that the authorities and the mainstream media (MSM) have loss their bearings and are totally out of touch with the rakyat. Will they never learn?

But perhaps, there's more than meets the eye. I have heard quiet musings that our country coffers may be drying up. That despite our healthy trade surpluses month on month, we might be facing a credit crunch soon. Some business and economist friends have calculated that despite all the pump-priming from Petronas Ringgit diversions, we are now running out of bail-out money.

By refusing IMF and World Bank intervention and dictates during the 1997-8 financial crisis, the then government had pushed for and relied on internal funding on several mega-projects to sustain the appearance of a healthier than actual economy. It is believed that tens of billions of ringgit have been pumped into the Putrajaya and KLIA projects - now the chicken has come home to roost.

Some remembered that several Malaysian Sovereign Wealth Bonds have been sold at very attractive interest rates, and may now be at the verge of maturing - so, the reality of having to come true on our promises is near, unless we forfeit our goodwill and solvency! Perhaps these are the real reasons why we cannot sustain the subsidies, we are simply running on empty.

How is it we have not utilised our Petro-dollars or ringgit for better more prudent iron-clad funds for the future is a question that has to be addressed. Dr M Bakri Musa has lamented the fact that we have not had a Malaysian Petroleum Heritage Fund, to help safeguard our future and that of our next generations.

During the Agong's Birthday address, Baginda Yang Di Pertuan Agong Tuanku Mizan said "I was concerned when informed that by 2011, the nation's petroleum imports would be much higher than its exports. I am of the opinion that it would be an injustice if we were to completely extract and enjoy the benefits without leaving anything at all for future generations." Tuanku Mizan further noted that the nation's petroleum resources should be managed efficiently so that the nation's wealth could be inherited and enjoyed by future generations. We all echo His Majesty's wise call and heart-felt concern.

Malaysians can expect no less than a true and transparent accounting of the state of our nation's coffers - our future may hinge on this precarious crisis.

Thursday, June 5, 2008

Fuel Price hikes will invariably stoke inflation; health care costs included...

The government's sudden decision to offload its usual subsidies for oil and gas, has taken all of us by surprise - in fact, more shock at its extreme and precipitate implementation.

A hefty increase to RM 2.70 per litre for petrol (40.6% hike) and to RM2.58 per litre of diesel (63.3% hike) is totally out-of-whack and quite unexpected for most Malaysians! The graphics from malaysiakini shows just how steep and drastic the increase has been!

Although many of us have been bracing ourselves that fuel subsidies would have to go sooner rather than later, we hadn't counted on the very abrupt and seemingly insensitive manner in which this has been announced and put into immediate effect.

Whatever little goodwill the rakyat has left for the BN-government would surely have evaporated following this tragic blow to consumers nationwide! BN's pledge not to have any more fuel price increases formed an integral part of its election manifesto, which they have now reneged upon so soon after March 2008. More than half who believed in and voted for them, are now feeling sorely shortchanged.

By whatever emotional measures, this step is simply too heartless and too quickly implemented. It rips apart the implicit social contract of concern and responsive government-citizen relationship, just so recently concluded and empowered following the defining elections in March 2008. This government's faux pas will be decried by most if not all angry Malaysians.

It is true that we have been cushioned by the fact that we are a net oil exporter, and thus falsely believed in the security that we should be pampered and protected from market forces. However, it is precisely because we are a net exporter of oil that perhaps we can and should have the privilege of giving something back to our citizens.

We are not alone in this. We don't have to obtusely follow what other neighbouring countries or more developed nations are doing. Letting unfettered free-for-all market forces dictate food or fuel prices is not necessarily the correct tack. We must not be so readily persuaded by stronger economies (or the IMF/World Bank dictates) that subsidies are all bad or taboo.

For decades, Europe and the USA have been having food and farm subsidies to the tune of billions of dollars or euros. It appears that these subsidies continue despite huge fines from free trade or grouping authorities. Because for these countries, the social contract with its core citizens override such free-market concerns, and help bolster the very traditional but all-important fabric of sociocultural connection, purpose and ties.

Importantly, for most OPEC countries, pump prices have almost always been subsidized as of a unique right for being privileged citizens. Cheap fuel then helps power their economies in their own select and inimical manner which underscores traditional economics. See It's only 16 sen per litre in Venezuela

But as Pak Lah has been pained to repeat, the writing has been on the wall for some time now--although we choose to ignore the reality bites.

Perhaps we need to be shocked back into reality. We need to recognise that globally oil pricing mechanisms have failed and are now subject to the whims of unquenchable energy demands (from China, India, etc.) and the hoards of keyed-up speculators fanning the relentless escalation of oil price and oil price futures into stratospheric heights.

Perhaps, the embattled government is trying to deflect its current financial malaise and the economic uncertainties associated with its political gridlock. Whatever the reason, Pak Lah's timing is simply wrong and ill-advised, especially at a time when soaring food prices have been making the poor Malaysian already so antsy and prickly. Encroaching further upon our purse-strings is perhaps a last straw for apathetic tolerance.

It should be remembered that our Malaysian wages are also relatively meagre when compared with the purchasing power parity (PPP) of some of our neighbours, so it is disingenuous to keep comparing with say Singapore, Australia, Europe or elsewhere.

If we are earning in dollar terms as much as these neighbours have been, then the attendant increases in unsubsidised fuel would not have been so big a blow. If say our average per capita annual income is S$26,000, [as is the case with Singapore, its PPP = USD$48,900 (2007 est.)], then what is paying some S$2 per litre (RM 4.70/l), when compared with our Malaysian per capita income [of PPP of USD$14,400 (2007 est.] and now paying upwards of RM 2.70/l for fuel? Singaporeans have nearly 4x the purchasing power parity compared with Malaysians, hence they can more easily afford to pay more when compared to us!

Besides, we are also paying astronomical prices for our automobiles, easily one-third as much again to 3 times more for different makes of imported cars, because of questionable excise duties and other protectionist taxes. Our road taxes are nothing to sniff about also.

Ironically, our national oil company Petronas has the dubious distinction of being one of the most profitable companies in the world with huge mega-billion profits year in, year out - yet, its precious financial and operational data is not for public disclosure but for the PM's eyes only! For an in-depth if somewhat contentious view on this, see Kenaikan Harga Minyak.

Fuel costs increase always mandate further increases in all other socio-economic enterprises. Electricity tariffs are among the first to go up in tandem. Food and transport bills will surely rise as a result, as would most other costs of services.

Hence, the cost of doing business will surely escalate. Thus, it is presumptuous to imagine that our CPI will only increase by some 5% this year! I predict a far more painful number which will affect every Malaysian! See Malaysiakini's article TNB: Power rates to be linked to oil prices

As it is, even before the recent elections, complaints had been mounting on the spiralling costs of food, goods and services, and how run-away inflation had been hurting the ordinary citizen. This would have translated into the huge protest votes against the incumbent government, and which had led to its worst electoral performance in Malaysian history.

Whither now health care costs? It would not be surprising if this will go up even more soon, but not because of hikes in medical professional fees (this has been capped in the much maligned Private Health Care Facilities and Services Regulations, PHFSR 2006!) as much as with other incidentals, hospitalisations, drugs and disposables, staff remuneration, etc.

At the recently concluded MMA AGM, the Council unveiled a final draft report on the new 2008 version of the medical professional Fees Schedule (this was last updated in 2002, six long years ago!) How this new schedule will go down with the public in this era of universal price increases remains to be seen, but it will certainly not be without some scathing consumer disgruntlement!

Moreover, the Minister of Health will have to agree to update the current schedule, as promised earlier in our joint MOU to further improve and remove some faults in the PHFSR 2006. Under this climate of recriminations and unpopular authority, we can only expect Ministerial caution and laggardness.

So, we are even more unsure when or if this would find its way into the new regulatory amendments. Once again doctors would be made to wait and exhibit their goodwill and patience... Our ethically-entrenched altruism, our nobler instincts are once again expected not to unduly impinge upon our patient's better interests, especially under such sensitive times...

Welcome to the new era of Inflation! Goodbye social contract and goodwill! "Everybody must simply learn to tighten their belts, be more thrifty, and live within their own means and capacity. For the rest of those who are struggling--well, just too bad!" to paraphrase some of our piously admonishing and economically-savvy Ministers!

Perhaps Malaysia still Boleh...