Monday, August 26, 2013
Tuesday, August 13, 2013
Najib’s getting off this tiger’s back
Aug 12, 2013
Aug 12, 2013
COMMENT In the Malaysian public domain one issue seems to be taking a lot of attention; its source, of all things, is a book.
For a people not known to read much, this is bizarre. For it to be written purportedly by Abdullah Badawi, as some have assumed, more bizarre still.
Actually ‘Awakening: The Abdullah Badawi Years in Malaysia’ is not a book written by Abdullah Ahmad Badawi at all; it’s one about him but edited by Bridget Welsh and James Chin.
In it Abdullah makes comments about his tenure as prime minister, about how he dared go against the wishes of predecessor Dr Mahathir Mohamad who apparently was holding the reins of power in the background.
Abdullah was commenting on how he was hounded by Mahathir but stood his ground anyway, and even cancelled some Mahathir-conceived mega projects.
Abdullah claimed his action had helped save the country from bankruptcy.
Mahathir, the megalomaniac supremo, was so upset by this rebuff and as history has indicated, used all realpolitik tricks (as a past master he has a lot up his sleeves) to throw out Abdullah from his perch as prime minister.
The issue here is that at long last, Abdullah as a former political leader, has dared to make comments, to question, tarnish and demolish the record and performance, achievements and prestige of Mahathir his predecessor.
Also it revealed the sad truth that under Mahathir’s long tenure as president of Umno and prime minister, he has transformed the party from one of liberation and reform into one ferocious tiger.
So when Abdullah took over he was riding on the back of this tiger.
This tiger of course is the animated composite of Mahathir the institution, his cronies and party warlords, the religious bigots, the civil servants, all those people directly benefitting from the status quo.
Mainly it is the mentality that unites them together – the racist (like Ibrahim Ali) and the religious extremist (like Harussani Zakaria). Mahathir would be the tiger’s fangs.
Upon realising this, Abdullah wanted to tame this tiger. But the tiger did not take too kindly to his act of defiance and mauled Abdullah instead.
How indeed does anyone tame a tiger? He unceremoniously lost his job.
This defiance and recalcitrance has been a form of progress and development of sorts in this subservience and loyalty based Umno polity.
The previous norms have been for all and sundry (and this includes former prime ministers) to say only good things about Mahathir.
Underlining this groundbreaking development Abdullah’s comments has been that they were taken up by his successor Najib Razak, who appeared to concur with Abdullah’s views.
But perhaps upon noticing how Abdullah was mauled by the Umno tiger and being coy, Najib merely expressed his support indirectly, thus; that Umno members are now aware they need to change.
He cited the change in the party constitution as one solid example.
But he cautioned eager Malaysian beavers starved and clamouring for change that going into the entire Umno polity (and by extension the public policy changes this ruling coalition would bring), is a very slow process.
For Umno members this might take several generations he reportedly said.
Najib might have a point. Change is indeed a peculiar thing – it is there every second of the day, all the time, but it does not happen if there is no awareness of it happening.
There is no change if you are not aware of it taking place, there is only a happening.
To reiterate, change takes place if a person is aware it is indeed taking place. Without this awareness there is only a natural transformation, not change.
Right now the country is so ready for change. To say the least, it needs to get out of its many social, economic, political and intellectual ailing most of which were created by the outdated Umno mentality.
These are not to be repeated here in detail, their broad outlines would suffice: widening racial distrust, citizen distrust of the police and the AG’s office, corruption involving astronomical amounts and committed at the highest echelons, mountain high national debt, young talents fleeing abroad, Hollywood, nay, Mafia style gangland shootings.
Now, Najib is jittery. He is the incumbent prime minister and aware of the enormity of his task. He knows what he should do like putting the people together again under the 1Malaysia rallying call.
He wants the economy to move forward under the various transformation programmes.
But with the tiger under him Najib has not been able to do much. He sees Abdullah’s dumping as a clear and real possibility that this can also happen to him.
Now the Umno general assembly is about to take place in October. His post of party chief and thereby the premiership can be challenged with the real possibility of him losing his present job come October.
So what can he do to contain the tiger and maintain his job?
On this, the alternatives are wide open. Many things can be done. He could listen to the advice and comments made by concerned citizens, and reinstate the rule of law.
He could reintroduce checks and balances; rein in those who in public opinion, are the breakers of the rule of law.
He should allow the police do their job, silence Mahathir and his civic society cohorts like Perkasa and Jawi.
Rein in all other race-based civic societies and religious bigots like Harussani Zakaria.
Inculcate into them the fact and reality that the constitution is the supreme law of the country.
But he is not going to do any of these for the party elections are just around the corner.
He has to play safe and to the gallery. Indirectly agreeing and supporting Abdullah Badawi is about the only thing he is willing to do now. How sad.
AB SULAIMAN is an observer of human foibles, and has written and recently published a book ‘Sensitive Truths in Malaysia’.
Monday, August 12, 2013
The Edge: Reining in our Debt Problem
KUALA LUMPUR, Aug 10 — Putrajaya needs to rein in Malaysia's debt problem by controlling its spending and plugging wastages that occur through procurement, local business weekly The Edge reported today as concerns over the country's financials continue to pour in from analysts, economists and politicians across the board.
In a report titled "Malaysia's debt mountain", the newspaper noted that the country was caught in a debt trap, saying that overspending was aided by easy credit.
"From households to corporates, as well as at both the federal and state levels, Malaysia is a nation in debt, spending more than we earn on the back of easy and abundant credit and a shocking lack of financial discipline," it said.
The Edge noted that the household debt to GDP ratio stands at 83 per cent, while corporate debt is now at a whopping 95.8 per cent of the GDP.
Malaysia's national debt is currently at 53 per cent of the GDP, just slightly below the government's self-imposed debt ceiling of 55 per cent. But if government guaranteed debt is added, the government debt to GDP ratio stands at 68.9 %.
The total debt ( government,household,
corporate) is a mind boggling figure- almost 250 % of GDP.
The Edge reported that economy observers as saying that Malaysia has to stop the abuses of public funds and procurement practices where purchases are made way above market value.
"Proper controls will cut wastages and inflated costs, making every ringgit of government revenue and taxpayer money count towards higher impact economic activities or aiding the lower income group," an analyst was quoted as saying by The Edge.
The analyst also noted the challenge posed by the cost in maintaining Malaysia's public sector, where an estimated 1.4 million of the country's 28 million-strong population are employed as civil servants.
"If you cannot significantly reduce operating expenditure, then you have to increase your revenue sources...It's just like how if you've overleveraged on credit card debt to a point where your income is not enough to make monthly payments, one way is to sell assets and significantly cut back on your living standards," he was reported as saying.
An economist also suggested that Malaysia still has a chance at fixing its debt levels, pointing out that the country had managed to turn around its extremely high debt-to-GDP ratio situation to register surpluses in the early 1990s.
"The budget deficit was over 10 per cent of GDP in the early 1980s and debt-to-GDP ratio was more than 100 per cent in 1987 before the government took steps to progressively reduce its debt servicing burden.
"But we [eventually] had several years of fiscal surpluses in the early 1990s, thanks to good control of expenditure coupled with decent economic growth, so I wouldn't say things are too bad to be fixed. But we need to move quickly and be upfront about matters.
"No more of all these off-balance sheet nonsense and bad procurement practices," the economist was quoted saying.
Last week, DAP's Tony Pua said the government should recognise off-balance-sheet loans and contingent liabilities as part of the government's debt, saying that the actual figure would exceed the 55 per cent debt ceiling.
"In reality, if both official government debt and government-guaranteed debt are put together, our debt to GDP ratio will be a much higher and worrying 68.9 per cent,” Pua had said.
London-based Academic Danny Quah said the government needs to explain the debt situation to the public in order to effectively control debt.
"Fear and uncertainty can needlessly and dangerously worsen any debt situation," the professor of economics and international development at the London School of Economics and Political Science (LSE) said.
But Quah indicated that crises can be averted even with high debt levels, provided that the economy grows at a fast pace.
"For instance, what might otherwise be a dangerous debt situation could turn out to be benign through the economy simply growing itself sufficiently quickly. Conversely, if that growth fails to materialise, then even what initially appeared to be unremarkable debt ratios can turn out to be unsustainable. This is arithmetic and is uncontroversial.
"In our case, Malaysia needs to continue to keep its eye on generating sustainable growth, evading the middle-income trap. What happens in the global economy - Asia in particular - will matter importantly, not just for generating demand for Malaysia's exports but to provide appetite for debt.
"But at the same time, both public and private debt in Malaysia need to be kept under control," Quah was quoted saying by The Edge.
Yesterday, The Malay Mail Online reported economists and a think tank's head as saying that Putrajaya needs to show its political will by moving on with reforms to the economy.
The economy observers pointed to various reforms which Putrajaya had raised but failed to implement, including the proposed Goods and Services Tax (GST) to boost the government's income, as well as an exercise to trim spending by cutting down on government subsidies.
CIMB’s chief economist Lee Heng Guie said fiscal reforms could be sped up with the formation of a Fiscal Reform Committee, while also saying that Putrajaya needs to send out a strong message through the Budget 2014 that will be tabled this .
Suhaimi Ilias, group chief economist at Maybank Investment said Putrajaya needs to control its spending.
“[Hopefully] government will become more disciplined in terms of spending. Over the past few years it has been a regular situation with the government asking a big increase in the budget through the supplementary budget Bill which does not correlate with discipline budgeting and spending,” he told The Malay Mail Online.
Last Wednesday, global ratings agency Fitch Ratings cut its outlook on Malaysia’s sovereign debt to “Negative”, citing gloomier prospects for reforms to tackle the country’s rising debt burden following a divisive election result this year.
The revision from a stable outlook adds to concerns over Malaysia’s high debt pile at a time when the currency has been pressured by bond fund outflows and talk of the US Federal Reserve ending its easy monetary policy.
In its downgrade, Fitch had singled out the lack of political fortitude to see through necessary reforms.
“Prospects for budgetary reform and fiscal consolidation to address weaknesses in the public finances have worsened since the government’s weak showing in the May 2013 general elections,” Fitch said in a statement.
The Fitch outlook downgrade appeared as other warning signs began surfacing over Malaysia’s slowing economy: slowing export growth, a falling trade surplus, and a ringgit at a three-year low against the US dollar.