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Sakmongkol ak 47

Saturday, 5 September 2009

Learning from LDP

In a previous essay, I mentioned the name of Junichiro koizumi. He was a popular figure and came out from nowhere to be Japan’s PM in 2001. He won the LDP a landslide victory in 2005. He has been PM since 2001 and started reforms on the economy and bureaucracy. He was succeeded by Abe as the LDP’s constitution then did not allow its president to serve more than two 3-year terms. Abe’s tenure as PM was short-lived and he was succeeded by Taro Aso san who led LDP to its most devastating drubbing by the DPJ.

In terms of ambitions, PM Najib’s premiership is similar to Koizumi. Like Koizumi PM Najib has promised and started to carry out several economic reforms. Very early on, he has discarded the FICC and decreed that from henceforth investors need not satisfy the requirement of having bumi partners to set up business. They could own 100% equity. He has scrapped of the ministry responsible for entrepreneurial development; a ministry looked upon as strategic by the Malay community. Most recently, he has done away with the 30% equity requirement inherited from the NEP. That ruling says that a company en route to listing must have as a qualification at least 30% of its equity owned by Malays. PM Najib has publicly revealed that RM52 billion of equity held by Bumiputeras was sold off leaving a paltry RM 2 billion. In other words, he has shown some fortitude to break away from old school economic policies. By old school we mean, break way from an inherited past.

Koizumi wanted to liberalise the Japanese economy from being big government-centric to more free market-centric. The Japanese in 2005 knew these reforms will not yield immediate benefits but these will come over a longer period. Koizumi wanted to follow the economic route charted by America’s Reagan or Britain’s Maggie Thatcher.

In that sense, PM Najib treads on similar paths. By announcing his reforms, he has indicated that he intends to disengage from big government-centric policies to more free market policies. His ‘government knows best is over’ declarations sums it all up.

PM Najib must be careful on these areas. The scrapping off of the MECD for example was regarded as ill timed. Not that the ministry did outstanding things for the Malays in business or anything. It existence nevertheless provided the escape route and a sense of comfort and assurance. If not for anything else, it’s the comforting thought associated with having a ministry specially assigned to look after nascent Malay business interests that’s important. PM Najib doesn’t have to resuscitate the ministry; he could for example set up another ministry with a bolder name. It’s symbolic significance will arrest the further downslide of UMNO.

PM Najib must also watch out for another lesson from Koizumi san. Koizumi reforms were cut short by mediocre successors. PM Najib’s political and economic moves may be frustrated by sub standard generals. PM Najib’s deregulations won’t benefit the public until much later- but do you see his people and UMNO VPs groping going around winning people over? The deregulations are essentially good because they undercut the resources that have brought benefit largely to the selected few. As I have said in previous essays, many aspects of the NEP’s implemented policies were in practice giant Ponzi schemes benefiting the super 30.

PM Najib’s UMNO can avoid LDP’s fate by doing 2 things:

1. He can continue by carrying out what Koizumi did not do.

2. Carry out preemptive strikes by adopting what BPJ wants to do or exposing the fallacies of BJP’s policies.

The second thing first. What has BPJ promised to do?

The Democratic Party offers a dramatically different platform. Party leader Yukio Hatoyama recently delivered a stinging attack on "market fundamentalism." Instead of this "U.S.-led" approach, he argued that "we must work on policies that regenerate the ties that bring people together, that take greater account of nature and the environment, that rebuild welfare and medical systems, that provide better education and child-rearing support, and that address wealth disparities."

Although basically populist in tone, these promises resonated well with the Japanese public enshrouded with an ABL mentality (Anything But LDP). Japan might become the first country to implement a serious, post-meltdown economic policy that will humanize de-regulated market system and drive a stake through casino capitalism.

The DPJ wants to move Japan away from a corporate-centric economic model to one that focuses on helping people. They have proposed an expensive array of initiatives: cash handouts to families and farmers, toll-free highways, a higher minimum wage and tax cuts. The estimated bill comes to 16.8 trillion yen ($179 billion) when fully implemented starting in the 2013 fiscal year.

The party has said it plans to cut waste and rely on untapped financial reserves to fund their programs. The key difference is the Liberal Democrats' spending on public projects and infrastructure, but the Democrats promises to spend on family and education.

Most right thinking Japanese think that all these are balderdash. But they are accepted by the majority motivated by undisguised dissatisfaction with the status quo. The sclerotic LDP presides over a patronage system that no longer delivers the goods and an economy that has been hit hard by the global recession. In February, the former LDP finance minister gave a drunken press conference in Rome in February, proving what many secretly suspected: the people in charge of the Japanese economy are not in their right minds. Prime Minister Taro Aso, his poll numbers edging ever southwards, has tried to revive his fortunes by accusing the Democratic Party of insufficient patriotism for not displaying the Japanese flag and even, improbably, cutting up the flag to make their own party symbol. In other words just say some foolish things. Here for example, the severed cow head reflects the stupidity of the PKR government in Selangor.

Japanese support for the Democratic Party is not all protest politics. There is enthusiasm for the opposition's promise to clean out the Aegean stables of Japanese politics. The party says it will ban corporate political donations, restrict the ability of retired bureaucrats to find lucrative jobs in industries they regulated and ban hereditary seats in parliament. It is also promising child support payments to cash-strapped families and more social security funding, both popular policies in a country with a rapidly aging population.


Red Alfa 5 September 2009 at 12:49  

Dear Dato'

You will not win and you will be hoping in vain UMNO should/would learn with your series learning from LDP's downfall. The correct tactics and strategies will never get adopted because the critical humanistic principles and leadership characteristics are not being made key requisites. They are too lost in living by their corrupting moneyed politics. Because they "must win by any means and at any costs" you have lost. You can hope they will learn future and any support for UMNO shall be conditional.

Anonymous,  5 September 2009 at 16:48  

With due respect to you Datuk, Japan is different. Japanese politics do not use religion and race in their considerations. They do not have ketuanan Jepun, traitors to the japanese race etc. Unlike Japan,UMNO is forever playing the race cards, and we have plenty of overzealous so-called "religious" people around. The holier than thou attitude. This is actually stopping us from moving forward. Rather than focus on policies to make this country better for everybody, we are embroiled in petty things. Sigh....may God this country

Anonymous,  5 September 2009 at 18:32  

Sorry for PM Najib!!!
Dato', whatever he does it will not help and he can only try and I wish PM good luck.dh9753.

Suci Dalam Debu 5 September 2009 at 21:12  


You failed to mention that J Koizumi did not have the Mongolian baggage when he became Japan's PM. Neither was he known for racial rhetoric etc etc.

J Koizumi won in elections, our Najib took Perak with dubious means and now wants Selangor at all costs.

J Koizumi has integrity whereas our Najib is not renown for one.

Truly the differences between the two men are light sky and earth. The list is too long to list here.

LDP was 54 years old and Malaysia's UMNO has been ruling Malaysia for almost the same number of years come GE13.

The fate of UMNO looks very similar to LDP's.

Honestly I welcome a change. It would lead to a better Malaysia in the long run.

Anonymous,  5 September 2009 at 21:26  

"Here for example, the severed cow head reflects the stupidity of the PKR government in Selangor. "

I think this is a typo error. It should be "---- reflects the stupidity if UMNO in Selangor" . Every sense pointed to UMNO behind this stupid action.

Greenbug 5 September 2009 at 21:46  

Dato Sak, I have to disagree with your views about PM Najib and these strategies in Japanese politics.

We do not have the culture. Our people's charcaters are also dissimiliar. Money & corruption, race and religion are not the main aspects of Japanese politics but in UMNO's. It won't work.

p.s. would you care to comment on this morning's town hall meeting in Shah Alam. During this holy month, right from the start the word Khalid Babi was uttered. I saw this from the video on Malaysiakini. A long-haired guy pulled a chair away when an Indian resident wanted to sit and that made him fall.

I am not shocked by this anymore. I am more shocked that other Muslims have remained quiet on the sideline. It was not like this before Dato, thats why many of us are really seriously thinking about our future.

Anonymous,  6 September 2009 at 01:00  

PM is a real ok guy...he actually built the bridge promised in Manek Urai even tho BN lost.I hope he will give the oil royalty to PAS govt next..rakyat di dahulukan >>regardless of politics

With that sudden influx of big money PAS might self destruct too..

Sans 8 September 2009 at 16:55  

One point, it's the DPJ, the BPJ is a party in India

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