Friday, 31 July 2009

The Road to Prosperity

Malaysia is a case that mirrors a controlled test situation. We have different races here in Malaysia. But operating under different enabling control environments has produced differing economic results. Malays operate basically under an environment of over political intervention (direct and indirect) while non Malays, especially Chinese operate under a control environment, relatively free from government intervention. What were the outcomes of these differing environments? Malays lag behind in the economic race while Chinese as a whole has surged ahead. They have accomplished more even under a period of determined and deliberate government intervention that has favoured the Malays while more or less leaving them alone.

Can the differing outcomes be explained by cultural reasons? The oft repeated reason is the Chinese has had thousand of years cultural training. That makes them predisposed to excel in commerce. The problem with this reasoning is that the cultural values compatible to commerce are also teachable and learnable traits. These were no means unique to the Chinese alone.

There is a more practical explanation to the differences. I would simply put it as two different operating political environments.

Malays operate under an environment where collectivist ideas prevail. Under this environment, the main elements included centralised planning for Malays, indirect intervention in the form of rules and regulations, quotas, departmental directions, barely disguised transfer programs etc. These were done under the name of equality and eradication of poverty. In reality, these produced as stated by Milton Friedman in his preface to Hayek's The Road to Serfdom- an erratic and contradictory melange of subsidies to special interest groups. In an earlier article, I have pointed out that the 30% equity allocation rule has benefited largely the special interest groups- the elite and the putras in the bumis.

The signals supporting the dismantling of hurdles to better economic growth to Malays were already there to be seen. Despite the operation of the NEP and NEP successor polices, the lot of the Malays has remained lacklustre. Despite direct and indirect government intervention, the economic lot hasn't improved. Malays remained largely behind the economic success of the Chinese. Wealth disparities within the Malay community have widened.

The logical step is to dismantle certain derelict edifices of the interventionist policies. This has been met with stiff opposition. Even the abolition of one ministry seen to be directly in charge of Malay economic interests was met with voluble opposition. Instead we have energised calls to have more application of regulatory and interventionist measures considered as insufficient thus far. Many of us fall back to the Khir Toyo-esque arguments; we lost Selangor because we did not implement as much Malayness as we should, we lost because we did not implement as much Islam as we should. Hence, we underperformed because we did not implement more regulations. We held back.

Our experience in the last 20 years has confirmed the ascension of capitalism. India experienced fastest growth when it started dismantling many of the regulatory hurdles. India decided to dismantle many of the ideas set by the much loved J. Nehru and when they did, it wasn't out of debunking or demonising Nehru, but carried out because the Nehru approach wasn't right.

China emerged as an economic superpower when it shed much of the collectivist tendencies of Communism. They did so not to despoil Mao's ideas but they carried out policies suited to the needs of the people. What China did would probably be more appropriate in a let a thousand flowers bloom setting. Taiwan and Hong Kong continued to surge ahead because they embraced the direction offered through voluntary cooperation of individuals.

The historical paths of these countries should provide us with an object lesson that coordination of men's economic activities through commissarish directions and through voluntary cooperation are roads going in very different directions. The first leads to serfdom, the second to liberation. Central direction has also proven to be a road to more dissatisfaction for the Malay man. When people are allowed to pursue their own economic self interests- that choice has led to less poverty.

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Thursday, 30 July 2009

The Foundations of Wealth of a Nation.

We may remember, the government has used an extensive repertoire of catchphrases to prop up Malay dynamism. From the 1960's and 1970's- it was berdikari, jati diri, Malay par excellence, towering inferno Malay, Melayu Baru, and countless others. We have even used religion. Sometime ago it was Islam Maddani which was abandoned when the chief architect of that concept exited UMNO politics is 1998.

For a while Islam Hadhari was the craze. Both watered down faces of Islam were designed in part, to create the rugged Malay. These were aimed to inculcate strong individualism and ruggedness so essential, it is thought to empower the Malays. More importantly Malay leaders recognised and acknowledged these as essentially individualistic values.

We accept these are necessary qualities Malays must have. These qualities are also necessary to enable Malays to play a more active role in economics. While we accept these qualities as vital for the development of the rugged Malay, the Maddani or the Hadhari Malay,the 2020 Malay and now the One Malaysia Malay, we appear to have missed a crucial point. These qualities are associated with a particular nurturing political environment. That environment calls for limited government interference in the affairs of the Malay. As F.A. Hayek pointed out, these individualistic qualities can only be achieved under a liberal order in which government activity is limited to providing the basic framework within which each individual is allowed to purse his own interest. In other words, it is the Malay Adam Smith we are looking for and not a Malay commissar.

Malay politics especially the one that is pursued by UMNO is counterproductive when it comes to nurturing the rugged Malay. Its central weapon has always been the use of governmental/political power to prevail over others. Governmental power is essentially coercive by nature. It uses a slew of legal instruments, legislation and raw political power. It stands for the enlargement of government programs. As it does all these, government saps the one essential quality which they sought out to do- the creation of the rugged individualistic Malay. Instead it spawns generations of dependent Malay paranoid over losing political power.

Two things stand in the way of Malay progress:-

  1. The Malay elite's intoxication with power masked behind the facade of benevolent and paternalistic despotism.
  2. The reality that the elite are actually fearful of the rise of the rugged Malay. Hence the incessant and tireless invocation of the good old days. The glorious feudal past or in modern times to the golden 22 years.

Our solution then, is always to find ways to justify enlarged government involvement and intervention. There is a possibility that we have been wrong in our approach. Perhaps the better approach is to cultivate the voluntary cooperation between individuals allowing each to pursue his or her own economic interest.

Up to the 1960's, we argued against the evils of capitalism. We believed all the social ills were the result of unbridled capitalism. The greedy capitalists who control the means of production were turning the people into impoverished and exploited masses. Capitalism never seemed to die. People continue to be rich as they also became poor. The poor were that way because of capitalist greed. Capitalism is evil.

The ideological weapon to stop the evil of capitalism was found in communism, socialism and their variants in one form or another. In economics, these political beliefs were translated in the form of enlarged government involvement in economics. They took the form of central planning- the commissar, the government bureaucrats planning and determining what is best and beneficial for the people. Government intervention in economic affairs was regarded as necessary to stem the greed and rapaciousness which are associated with greedy businessmen and individuals.

When communism became no longer appealing, objections to capitalism took novel forms. For example damage to the environment stirred up ecological consciousness. Damage to our environment is caused by the greed of evil capitalists, correctable only through enlarged government intervention. The shortages of foodstuffs and essential items must be the result of capitalist speculations and can only be corrected again, by determined government intervention. Although communism or its variants that provided opposition to capitalism are no longer around, the same collectivist tendencies exist in the form of determined government intervention.

In Malaysia, the greedy and rapaciousness of businessmen and people was represented by the Chinese businessmen and capitalists. Government intervention was regarded as necessary to provide the counter balance to the expansion of Chinese economic power.

Politics and government were dominated and controlled by the Malays. The division of power therefore was neatly demarcated along the division between politics and economics. Allow Malays to dominate politics and let the Chinese control the economy.

This rough division of powers as it were, led to differing outcomes. Focussing on politics resulted in Malays lagging behind in economics. The truth emerged that actually, economics is the more important element in statehood. A poor country breeds instability and dissatisfaction. If government is but the external expression of political power, economics is the substance. Malays soon realised that without the substance, the form crumbles and is weakened from within.

The Malay answer to counter economic sluggishness is through determined and aggressive government intervention. More government intervention created more dependence and prevented the rise and emergence of rugged Malay individualism so essential for economic prosperity. As Malays rely more on political solutions to correct their economics, such reliance reduces the schooling of Malays in the art of pursuing their own economic interests, a central tenet of Adam Smith's foundations for the wealth of a nation.

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Wednesday, 29 July 2009

Adam Smith’s Chinamen


Adam's Smith's Chinamen?


If competitive capitalism thrives under a specific political climate where the role of government is limited, then it follows, that more of government hinders capitalism. Let us be clear at the outset, that less government does not mean government withdraws from providing services normally associated with being a government- security at home and protection against threats from abroad, upholding the rule of law through the relevant institutions etc, presiding over monopolies that only government should do.

What less government means is that government refrains from getting involved in business affairs which are better run by private individuals and enterprise. Like spending our own money. Like Milton Friedman says, nobody spends our money better than we ourselves do. If our money is spent by the government, the circumspect behaviour isn't just there. Our money means tax payers money.

If capitalism has been proven as the better way to create wealth, it follows therefore any fetters on the growth of capitalism also fetters wealth. Government's bossy involvement for instance can hinder the growth of capitalism which is necessary for wealth creation.

If one then looks at the different economic positions between Malays and Chinese, perhaps the chief reason why Malays lag behind is because of excessive government interference into the affairs at which the Malays would be better off in doing as private citizens.

In an earlier article, I got this comment (thank you anonymous) which I think is quite pertinent to my point:-

What is necessary is to develop genuine Bumis with the prerequisite skills/attitude within a competitive environment and incubated through a 5 year program i.e. no instant wealth thru APs, monopolies, brokerage etc..No issue about depriving the non Bumis but complementing existing capacities and competencies...

What strikes me in the above statement apart from the technical feasibility of such proposition is an acceptance that good business skills are teachable and are not genetically encoded.

My point is this. Let us dispel this myth about the Chinese having thousand of years cultural experience in dong business and hence their innate eminence in commercial abilities. That would suggest that business skills (now, business is a skill and not a cultural trait) are easily encoded in the genetic makeup of a particular race. Further, once encoded these are passed on from one generation to the next and so forth. In our present case, it is the Chinese whom we assigned this capability.

That statement crumbles when facts are brought up to refute it. The truth of such a statement would depend on whether it was a fact that those immigrants who immigrated into Malaya in those days, came from the merchant class. Now, as pointed out by many bloggers writing or commenting on this subject, the majority or indeed all those immigrants descended from the lower strata of Chinese society. Those better off on the social hierarchy stayed behind where life for them was better. Those who had nothing to lose except their miserable existence in China came over to the Nanyang and Malaya in those days. They met up with the challenges by an appropriate response- cultivating teachable habits and skills. those Chinese planters featured in the book Land to Till or Stepping Out- The Making of Chinese entrepreneurs, pardon my word, were the dregs of society or whom the Malays once referred to as sengkek.

Those early Chinese were able to thrive because our own rulers at that time regarded them more as a curiosity usable because they were industrious workers. I am not sure and certainly refuse to accept that industriousness is a cultural habit/trait unique only to the Chinese. Because of this trait, and not because of any other innate abilities, they were given initial start to engage in commercial activities. The opportunity was only at the beginning- once the Chinese applied themselves on economic endeavours, they were basically left alone to do their stuff. Again, it was the limited 'governmental' involvement in the handling of Chinese business affairs best run by themselves, pursuing their own interests, which allowed the Chinese to prosper.

This is classic Adam Smithian behaviour. Malays must take note of this.



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Tuesday, 28 July 2009

Paths to Prosperity


The very cerebral Din Merican in his latest posting has a few video clips about Milton Friedman and Naomi Klein. He has invited a few bloggers including myself to a debate/discussion on the ideas of Friedman and Klein. In all humility I am afraid I will not be able to do justice to a direct and exhaustive analysis of the ideas of the two protagonists based on the video clips. However, as many readers have noticed, I am more interested to test the applicability of Friedman's ideas in the local context. Here is another gloss on Friedman's ideas.

The role of government is a central theme in Friedman's ideas as a public intellectual. His insistence on minimal government interference into the economic affairs of people reaches a point of 'nuttiness'. The last remark was made by another Economics icon, Paul Samuelson. Just to mention: Paul Samuelson entered University of Chicago at the age of 16 and in 1941 produced his highly technical (calculus and high maths) in his Doctoral thesis- Foundations of Economic Analysis. A first reading of this thesis can be intellectually overwhelming as it did me in 1981. The two have vastly different approaches in managing the country's economy.

We see two differing paths to economic prosperity adopted by Malays and Chinese. I think it's worthwhile to examine how the different paths adopted have led to different outcomes. On the whole, the Chinese are more prosperous than Malays. Malays lag behind as a result of excessive government while Chinese despite minimal government interference have surged ahead. Or perhaps the Chinese thrived because of minimal government involvement?

Just recently, a former prime minister of Malaysia, reminded us of the stark reality. The Chinese since 1970 has emerged to control about 50% corporate equity while Malays owned 20%. That 20% share of corporate wealth, represents the economic aspiration of 14-15 million Malays or 60% of the population. The Malaysian Chinese who constitutes 25% of the population controls 50%. Although, not exactly true of the reflection of wealth in this country, the distribution of equity wealth, is taken as representative of overall wealth distribution. The Chinese in fact owned the greater part of this country's wealth. The Chinese are recent immigrants to this country, as the populist explanation promotes it. Yet they have come to dominate us? Who let this happened?

In this short article, I don't propose to ask the question often asked by one group in Bernad Lewis's scheme of things. (See Bernard Lewis- What went wrong?). According to Lewis, when people faced calamities, hardships, extreme problems, they fall into 2 groups. The first will ask how and why these things happened to us. The second asks who did this to us? The second looks for some one else to blame. The first wants to investigate the causes behind the things that happen. I choose the first group's approach. By looking out for causes, we choose to be objective.

Similarly, we face the same choice in the issue of wealth ownership in Malaysia. We can debate the politics of wealth distribution endlessly till we are blue in the face and the cows come home. We can ask who caused us to be poor or we can inquire as to the causes of unfair wealth distribution.

Let's examine why the two different approaches led to 2 different outcomes. Malays operate their economy under extensive government patronage. Chinese operate under minimal government intervention. Prosperity for the Chinese occurred under a climate of least government intervention. Malay economics actually slowed during excessive government participation.

Allow me to provide a more specific example. In Kuantan, there is a Chinese property developer- ALAM TENGGARA SDN BHD. It competes with a GLC owned property developer; let us refer to as X Corporation. On its own, X-corp. can never compete with ALAM TENGGARA nor I suspect with any other china man owned property developer. X corp. recently has shown business activism but only after having JV's with other china man owned businesses. Even in JV's X-corp. is reduced to a minor partner. In a massive property development venture, developing a gargantuan mall on a state owned land, our GLC managed to obtain a 17% share. This is a JV on a very prime land where a kampung makcik can be expected to demand at least 30% share. But our GLC, in its infinite wisdom which is not to be questioned by any public spirited individual such as you and I, says, 17% is best.

On its own it can never compete. There was one particular year, its turnover was RM20 million, big perhaps for a GLC (which is accustomed to registering habitual losses). What was the turnover of AlamTenggara? RM 200 million. So in the Pahang state assembly, I suggested that this GLC may as well wound up.

Ok, that's a slight diversion to drive the following point. That chinaman company operated on their own, without any government assistance, clout or officious protection. X corp. gets land either free or on transferred prices, easily gets approval from government departments. With all the assistance from the government, it should have pulverized its competitors. X corp.'s performance is representative of the general performance of almost all GLCs in this country.

I was reading a book by Tan Pek Leng, Land to Till. It is a book that chronicles the contribution of the Chinese on the agricultural economy of Malaya. It is a rich account of the major Chinese planters in Malaya who thrived in spite of minimal government assistance. During that same period, there weren't any Malay plantations of any repute.

I have only one explanation for these two different outcomes. The Chinese practise more capitalism than Malays. They operate under a more permissive laissez faire economic regime than Malays. The extent of governmental intervention or participation through Chinese based political parties is minimal. Chinese political parties function basically as representatives to ensure the rules of economic game are not unduly and excessively disturbed. After all the Chinese will say- they just want to cari makan. Chinese businessmen actually prefer to left alone pursuing Adam Smith's 'their own self interest'.

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Monday, 27 July 2009

The Doctrine of the Freed Malay

The government has announced the removal of the 30% rule on equity allocation. Earlier, it has also done away with the FICC and the rules associated with foreigners setting up businesses in Malaysia. This administration has started dismantling certain edifices of the NEP. Clearly, this new approach indicates a changing perception on managing this country's economy.

There is a term for this stand that refuses to accept things as they are. It is directly opposite to that of conservative thinking. Conservatism in the original sense means a stand taken to insist things to remain as they are. It stands for the business as usual approach. In political terms it means reliance on the state or government to perform the functions which are better accomplished by the free individual.

The opposite of this stand, which is being adopted by this current administration, is libertarianism. It represents an unwillingness to see things as they believe that things can be done and get better through the free individual. It relies on the voluntary cooperation of individuals each pursuing their own interest.

Let me be more direct. The NEP is a legislative instrument designed to achieve a number of economic objectives which should be carried out by free men. We accepted it as necessary because of certain debilitating factors in society especially so in Malay society, which occurred as a result of a number of reasons. The NEP therefore became a means to concentrate economic and political powers at one place. Such concentration was fraught with dangers but we accepted the arrangement as necessary as it was only meant to be temporary.

This is the political arrangement favoured by the Malay conservatives who regard themselves as loyal to the Malay cause. The term Malay conservatism is associated with an unquestioning readiness to rely primarily on the state rather than on private voluntary arrangements to achieve a set of objectives. In the name of welfare and equality for instance, these people favour policies of state intervention and paternalism against the pursuit of the idea of freedom. Those who oppose their views are easily castigated as traitors.

I have written in support of the removal of the rule on 30% equity participation. I have said it is the most undemocratic aspect of the NEP and the most abused. The rule has benefited only the elite, the selected few excluding the ordinary Malay. The common folks don't know anything about this rule. Because of that, I welcome its removal. As to the other aspects which were designed for capacity building turning the Malays into wealth generating agents, I am in full support.

I have expressed my opinion about this matter and have given my reasons for believing so. I expect disagreement over this opinion to be refuted by reasoned argument. There was one particular comment by an anonignoramus (a combination between an anonymous and ignoramus) who stated that by arguing the line which I have taken, I am a traitor and a liberal.

A liberal traitor? That's a new one.

The principal person initiating the removals of these unfair vestiges of the NEP is the PM himself. The outbursts from the Malay anarchist such as the anonignoramus would therefore place the PM squarely in the category of traitor and liberal. That would be an interesting classification.

Obviously this anonignoramus hasn't read my articles on this issue. I have said cleanly that this particular aspect I cannot apply myself to believe- but as to the other aspects of the NEP which build capacity and empower the majority Malays, I am in full agreement.

Let us be clear about this so as not to debate endlessly on a position not taken.


 

A failed Welfare state.

I am sure many of you have heard the phrase- we want a fair society not a welfair society. I am not attributing the quote to anybody because, that in itself can be a contentious starting point. Welfare is for the infirmed, the old, the sick and the debilitated. These people deserved to be on permanent welfare schemes. It is the right thing to do.

Temporary assistance is for those who suffer temporary misfortunes. The wife whose husband who is also the breadwinner has died, wives left by husbands, young and able widows, those who are laid off. These people also deserve temporary assistance. Even orphans received temporary welfare. When they grow older, go to school and become adults, they fend for themselves.

I come back again to the ascriptive or status centric and achieved societies classification. As a reminder, a progressive society is associated with achieved norms. Such a society is characterised by a values system that place prominence on what a person can do, social and function mobility and specific role of individuals. A status cantered or acriptive normed society places a high premium on who you are, social exclusivity and undefined role of the individual.

Let's apply the status centric classification on the 30%equity rule. Who were the ones lucky enough to get the privilege of being allocated shares in listed companies? They would be those who the titled elite, senior civil servants, well connected people, the puteras of the left behind bumis, and so on. In other words you got to be given the allocation because of who you are, to which section of society you belonged and so forth. This would be a perfect example of the practice of ascriptive norms.

I have one term of the Malay who cherishes this arrangement- the Feudal overlord.

Malay political conservatism is therefore is state absolutism in disguise. It holds the state as the absolute arbitrator in the affairs of free Malay people. Accordingly, any questioning and challenges to the state are regarded as a direct challenge to the Malays. This mindset provides the perfect excuse for the political operators to leverage on crass racism.

Hence, when the issue of the death on an aide to a DAP exco became an issue of public interest, this was quickly seized by the Malay feudal overlords as a challenge to the Malay people. When the ISA is being challenged it was met with an aggressive reaction by a group of Malays designating themselves as presumably, the only custodian of Malay heritage.

As a responsible political party,UMNO should distance itself from these brownshirts with black gloves.

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Sunday, 26 July 2009

Looking for a New Deal


The subject which has aroused intense debate has been the application of the NEP. We know that the policy ended officially in 1990. It has since been continued under different guises, retaining its most essential element- affirmative action to expand Malay economic advancement.

It seems to me, we have been concentrating on the wrong indicator as to the measure of Malay economic achievement. One particular measure is the 30% share in corporate equity. Malay ownership in the equity of businesses registered with the ROC is taken as indicator for the extent of Malay share in the business. At the time the NEP was started, the Malay share of corporate equity was about 2%. The objective is 30% by the end of the NEP- 1990. Now, the figures tell us, the corporate share of Malay equity is somewhere close to 20% still short of the 30% target. This shortfall has emboldened policy makers in telling that we have not done enough actually.

We have not been told whether this 20% share is held by individuals or institutions. There is a strong presumption to believe if the equity held by government GLCs is also included; the extent of Malay equity in corporate share may have well exceeded the 30% magical mark. Indeed the findings of a non Malay academic ( Dr.Lim Teck Chee) in this area were brutally savaged and dismissed.

The use of equity share is not a definite indicator of the extent of Malay economic power. Equity share is fluid because it's traded all the time. Businesses started by Malays may have gone under and have not been accounted for. That portion of Malay businesses that have failed must have reduced the size of Malay equity. Shares held by Malays in listed companies may have changed hands and sold off to non Malays. Indeed the PM has admitted that out of the RM54 billion worth of equities allocated to Malays since 1970, only RM 2 billion remain. I assume that is the latest figure.

It's hard to reconcile the extent of Malay equity with the fact, that by and large, the Malays remain relatively less advanced that the non Malays in economics. Why is that so?

Why do you suppose that, taking as an example, ownership of housing by the Malays is still far less than the non Malays. Upscale houses appear to be owned more by non Malays. Malays lived in less appealing housing schemes. They dominate in low cost housing schemes. They dominate the numbers of inhabitants on illegal settlements. Why do you suppose that in terms of land acreage, the holdings by Malays are far less than non Malays? Take the case of the acreage of palm oil estates. The size of Malay owned estates is miniscule when compared to estate sizes owned by non Malays. Choice lands in urban areas as a rule are owned by non Malays. Most of the commercial buildings in urban areas are owned not by Malays.

So ask yourself, why despite extensive government intrusion and government involvement, the Malay economy is weak? Is this a sign of the failure of capitalism and failure of the laissez faire system? The government has spent billions of money from 1970, yet the condition of the Malay economy has not even reached its modest targets.

It will be the contention of the series of articles I am working on to show, that the plight of the Malays, is the result of the failure NOT of the free market system, but a failure of the GOVERNMENT. What is now needed is a New Deal in which the role of a paternalistic government is re appraised and a culture of free to choose is practised by the people. I end this short article with a video of a lecture by Milton Friedman.



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Saturday, 25 July 2009

30% bukan DEB(2)

Sambungan.

Yang kita nak tarik rambut dan mengamuk tak tentu pasal kenapa? Kerajaan hanya membuang satu aspek dari DEB yang selama ini menguntungkan sebahagian kecil orang Melayu. Andaikata kerajaan bersedia menerbitkan nama penerima agihan saham tersebut, tentu sekali langkah tersebut amat menarik. Dari situ, dapatlah kita menterjemah profail golongan Melayu yang menerima agihan saham tersebut.

Besar kemungkinan penerima dan pembeli saham itu terdiri daripada golongan atasan bangsa Melayu. Pemimpin parti, pegawai kerajaan, syarikat syarikat bogus yang di ujudkan semata mata untuk menerima pink form dan seterusnya. Pembaca semua boleh bertanya sama ada rakyat biasa tahu apa peraturan mengenai peruntukan 30% ekwiti. Saya percaya rakyat marhen dan bawahan seSatu Malaysia gerenti tidak tahu. Bagaimana sesuatu yang tidak pernah memberi faedah kepada mereka, kini menyusahkan hidup mereka bila ianya di buang?

Adakah orang kebiasaan memperdulikan pengekalan 30% peruntukan saham? Reality nya, peraturan 30% ekwiti ini hanya menguntungkan segelintir dalam masyarakat Melayu dan mereka pula tidak menghargai status kebumiputeraan mereka. Jika daripada alokasi sebanyak RM50 billion lebih hanya tinggal RM 2 billion, bererti hampir semua sudah menjual kepentingan untuk mendapat untung sekelip mata. Sesungguhnya, ini membuktikan bahawa status Bumiputera yang mereka miliki hanya di gunakan sebagai alasan mengejar kepentingan peribadi. Kenapa kita mesti menerima ilusi bahawa hanya golongan atasan sahaja berhak merealisasikan kepentingan peribadi manakala golongan bawahan tidak? Kita semua manusia juga dan orang Melayu juga.

Mana mungkin kita mempertahankan perbuatan mengorbankan kepentingan jangka panjang bangsa Melayu dan kita tidak ada alasan untuk menolak, golongan ini tidak akan mengulangi salah guna status Bumiputera jika terus di beri peluang yang sama. Selebihnya, ada isiu keadilan disini. Penerusan agihan saham 30% ini tidak adil kerana ia mengayakan segelintir orang Melayu dan penerusan nya akan menjadikan diskriminasi antara dua darjat di kalangan orang Melayu, sebagai sesuatu yang di institutionalised. Penerusan 30% agihan saham adalah unsur yang paling tidak demokratik dalam DEB.

Mereka bukan seperti saudara dan saya yang terpaksa berusaha untuk mendapat faedah kehidupan. Bukan saya kata, tapi PM- daripada RM 50 lebih billion nilai saham yang di agihkan melalui dasar 30% ini, hanya tinggal RM2 billion. Ertinya, mat laon yang dapat 30% sudah menjual kepentingan tersebut yang di dapati mereka kerana ada satu aspek DEB yang menghalalkan nya. Jadi, jika kerajaan nak buang aspek DEB yang tidak pun menyakitkan diri kita jika di buang, biarkan mereka membuat nya.

Yang dalam ketakutan , bimbang dan ragu jika peruntukan agihan saham di buang ialah golongan atasan Melayu. Kita faham bahawa jika syarat 30% tidak di pertahankan, maka golongan elit dan bangsawan dan mereka yang ada conection tidak dapat hidup. Ini kita faham dan mereka akan melawan dan membuat bising.

Respons daripada golongan ini dan sambutan sunyi dari rakyat majority, mendedah perbezaan idea DEB di kalangan orang Melayu. Golongan bangsawan mempunyai idea mereka dan golongan bawahan, idea DEB yang lain. Idea golongan atasan ialah DEB merupakan satu skim cepat kaya- saya telah mengibaratkan ianya sebagai suatu skim Ponzi yang raksasa. Setiap tambahan ahli menambahkan pulangan kepada pencetus skim ini. Terjemahan: setiap peraturan dan syarat yang di kenakan oleh kerajaan menambahkan peluang jadi kaya golongan elit.

Manakala, idea majority orang Melayu, ialah DEB itu suatu skim membina kemampuan mereka. Mereka melihat DEB sebagai blueprint mengalirkan punca punca menghasilkan kemakmuran secara lansung ke dalam tangan mereka. Idea DEB orang atasan, ialah pembangunan untuk orang Melayu mesti melalui mereka sebagai orang tengah.

Baru baru ini, bekas PM yang kita sayangi telah memberi pandangan nya terhadap isiu penghapusan 30% ekwiti dalam syarikat. Saya telah memberi pandangan saya mengenai perkara ini dan ianya tidak sependapat dengan pandangan Dr Mahathir. Saya rasa perbezaan pendapat dengan penghujjahan tidak lah boleh di terjemahkan sebagai cubaan untuk menjembalangkan(demonise) Dr Mahathir. UMNO hari ini tidak memerlukan mereka yang baharu sehari dua jadi ahli yang cuba mempertahankan Dr Mahathir secara taksub. Sifat paranoid kalangan mereka ini menganggap pendirian tidak setuju dengan Dr Mahathir sebagai suatu dosa besar.

Saya cukup bengang dengan mat laon yang hipokrit yang menghentam saya kerana menyentuh TDM. Dr Mahathir bukan nya maksum dan tidak bersetuju dengan sebahagian pendapat nya bukanlah bererti membenci Dr Mahathir. Yang saya pelik nya, bila Dr Mahathir di hentam dengan lebih teruk oleh orang lain, seperti Nazri Aziz, semua mereka yang mengaku pemuja Dr Mahathir membisu seribu bahasa. Satu Malaysia tahu Nazri Aziz menghentam Dr Mahathir dalam bentuk serangan peribadi serta dengan keceluparan mulut yang ekstrim. Ini berlainan dengan cara kita berbeza pendapat dengan Dr Mahathir. Saya harap geng geng muahaha dan wakakaka dapat memahami perbezaan fundamental ini.

Kepada saya, pandangan Dr Mahathir supaya 30% ekwiti di kekalkan tidak dapat di pertahankan apabila kita melihat kepada fakta. Fakta nya ialah hampir semua alokasi 30% di jual. Ternyata strateji meng-alokasi 30% ekwiti dalam sector korporat, gagal mengukuhkan ekonomi bangsa Melayu. strateji alokasi ekwiti atau agihan secara monetary tidak berjaya mengembangkan ekonomi orang Melayu. Kegagalan cara ini membuktikan bahawa cara yang lebih baik ialah dengan melancarkan strateji memperluaskan penglibatan ekonomi orang Melayu dalam the real economy.

Adalah menakjubkan untuk sesetengah orang yang biasanya melihat pasaran saham sebagai suatu kasino besar, menjadikan penglibatan orang Melayu dalam kasino besar ini sebagai elemen terpenting dalam DEB. This is clearly a wrong strategy. Ianya kearah penglibatan dan sumbangan dalam real economy yang patut kita lihat. Untuk meningkatkan penglibatan orang Melayu dalam the real economy, memerlukan dasar yang membina kapasiti, dasar yang menjadikan mereka mahir dan produktif. Apabila kapasiti terbina, ia memerlukan pula dasar yang meletakkan punca menghasilkan kekayaan secara lansung kedalam tangan orang Melayu yang berusaha.

Idea kita terhadap DEB berbeza dengan idea DEB golongan elit. Idea mereka, ialah dengan mengeksploitasi status Bumiputera, mereka mahu mendapat kaya dan untung sekelip mata. Immediate gratification adalah matlamat golongan ini. Kita, majority orang melayu berpegang kepada idea DEB sebagai strateji membina keupayaan atau capacity building. Idea DEB sebahagian besar bangsa Melayu ialah seperti yang di sebut oleh Amartya Sen - kemajuan ekonomi melalui DEB adalah proses kemerdekaan. Kita mahukan kemerdekaan ekonomi untuk mendapatkan kebebasan social dan politik. Mereka yang bergantung kepada ujud dan penerusan syarat 30% hanya mahukan penyambungan ketergantungan.

DEB di ujudkan sebagai penyelesaian kepada masaalah ekonomi orang Melayu. Mereka merupakan golongan yang ketinggalan dalam pelbagai aspek sosio ekonomi. DEB di lancarkan dari tahun 1970 dan berkahir pada tahun 1990. Semenjak tahun 1990, DEN diganti dengan beberapa dasar ekonomi yang lain yang meneruskan dasar affirmative ekonomi.

DEB dan degenerasi nya kepada isiu perkauman.

Pada asas nya DEB melibatkan aplikasi dan implementasi langkah langkah pentadbiran/administrative measures untuk membentulkan keadaan ekonomi yang tidak seimbang. Umum berpendapat bahawa suatu sebab terbesar meletusnya peristiwa perkelahian kaum 1969 adalah perasaan tidak puas hati yang membuak di kalangan rakyat miskin. Orang Melayu mendapati diri mereka ketinggalan dalam bidang ekonomi dalam negara sendiri. jika keadaan tersebut tidak dibetulkan, maka negara akan jadi huru hara. Pembetulan keadaan ini di terima oleh semua kaum. Oang bukan Melayu menerima hakikat, jika ekonomi Melayu tidak di perbetulkan, ianya suatu resipi sempurna untuk kehancuran.

DEB dilihat sebagai suatu dasar nasional untuk merapatkan jurang beza antara yang kaya dan miskin, yang apabila dilakukan akan membawa kepada perpaduan negara. Harapan seperti ini cukup munasabah. Tidak ada sesuatu yang mencerna dan menghasilkan ransangan ganas melebihi perbezaan ekonomi. Sudah tentu ianya menimbulkan rasa tidak puas hati bahkan menimbulkan syak bahawa ada konspirasi antara kerajaan dengan golongan atasan untuk mengayakan segelintir masyarakat sahaja.

Di negara kita pula, perbezaan ekonomi mempunyai wajah yang lebih sinister kerana ia berlaku mengikut identity kaum. Golongan minoriti terutama Cina merupakan golongan yang kaya, menakala majoriti orang Melayu miskin. Sudah barang tentu, ia nya menimbulkan anggapan bahawa orang Cina telah memboloti kekayaan di Malaysia dengan bantuan dasar kerajaan yang sedia ada.

Penerangan yang populist ialah keadaan tidak adil ini disebabkan oleh bangsa pendatang yang menjadi golongan yang tamak haloba. Mereka lah, kata para demagog yang menyebabkan orang Melayu mundur.

Namun, kita tanya diri kita, bagaimana perkara ini boleh berlaku? Kaum pendatang ini tidak memiliki atau menguasai alatan kuasa oppressive?- mereka tidak mendominasi kerajaan jadi bagaimana mereka membenam penduduk pribumi? Tentu sekali kemahiran berdagang, penggunaan bahan yang ada di antara dua telinga mereka, daya saing tidak boleh di samakan dengan alatan dan perbuatan oppressive? Kita hanya boleh membenamkan rakyat jika ada kuasa keatas the oppressive instruments of power.

Maka pandangan kita tertumpu kepada persoalan siapakah yang menguasai opppressive instruments of power? Jawapan nya ialah pihak kerajaan. Dengan segala peraturan dan undang2, dan ancaman fisikal yang boleh di gunakan. Maka, jika kita tanya , siapakah tuan keatas negara ini, jawapan nya ialah golongan elit yang menguasai the oppressive instruments of power.

Ketidakadilan ekonomi, pada asanya ialah suatu isu ekonomik. Ia menjadi rumit apabila pertimbangan dan kepentingan politik bercampur aduk dengan nya. Tujuan berpolitik ialah mendapat kuasa dan yang ada kuasa boleh mempengaruhi dan configure the economic outcomes. Jika sekarang, kita bertanya mengapa ketidakadilan ekonomi masih berterusan dan perasaan tidak puas hati masih ujud setelah hampir 40 tahun perlaksanaan dasar affirmative , kita boleh beri jawapan seperti berikut. Kepincangan ekonomi terus ujud dan malah bertambah kerana phenomena ekonomik yang memerlukan penyelesaian bersifat ekonomik di tonggeng terbalikkan menjadi isiu politik. Ya, semua nya kerana politik.

Perlumbaan kemakmuran ekonomi menjadi perlumbaan mendapat kuasa. Sesiapa yang menjadi berkuasa dari segi ekonomi di lihat sebagai ancamam kepada kuasa politik dan oleh yang demikian, yang berkuasa dari segi ekonomi,mesti di lemahkan. Golongan Cina yang di lihat sebagai powerful dari segi ekonomi di lihat sebagai ancaman kepada pemegang kuasa yang konvesnsional. Mereka mesti di imbangi supaya tidak menjejaskan imbangan kuasa. Politik sekolah lama yang biasa dengan penerimaan keterangan tanpa soal, menghentam kaum Cina dan mencadangkan pengekalan 30% saham sebagai elemen pengimbang. Sebab itu, 30% ini mesti di pertahankan.

Namun demikian, 30% ini jangan pula di salurkan kepada golongan marhaen, golongan murba dan lumpen proletariat. Jika ini terjadi, tentulah ini tanda kiamat kepada peradaban yang golongan 'kita' kenali selama ini. Tentu sekali kita tidak mahu melihat mat2 kampong memukimi dan mencemar lifestyle kita di atas persekitaran nyaman Bukit Tunku, Damansara Heights atau Country Heights bukan? Maka nya, 30% mesti hanya berligar di kalangan rangkaian kroni lama, golongan elite dan beras terpilih. Jika tidak, menuntut dan mendesak pengekalan 30% ini hanya untuk lihat ianya jatuh ke tangan mat kampong, tindakan tersebut juga akan menjejaskan imbangan kuasa di kalangan bangsa kita. 30% mesti terus kekal dalam jengkaman dan dakapan golongan lumpen aristocracy.

Kenapa sasaran 30 % ekwiti dalam sector korporat tidak tercapai lagi? Jawapan nya politik. Mengapa penyusunan masyarakat megikut perkongsian ekwiti 30:40:30 tidak tercapai? Jawapan nya sekali lagi politik. Realiti nya, kita telah entrust 30% itu kepada kumpulan yang salah.

Siapa yang patut di persalahkan jika DEB gagal? Pihak yang mesti menanggung perjawaban ialah kerajaan. Mereka ada kuasa, mereka menggubal dan mengenakan syarat, dan mereka telah gagal. Kerajaan meletakkan panduan asas, menyediakan keselamatan dalam negeri dan mempertahankan negara, kerajaan juga mendukung keluhuran undang2- siapa yang mempunyai reservoir kuasa yang tersangat luas, merekalah yang menangung perjawaban.

Jika sekarang kita tanya siapa yang patut di persalahkan kerana masaalah yang sekarang ini menenggelami kita, jawapan nya kerajaan yang di pimpin oleh UMNO. kamu memegang tampuk kuasa, kamu lah jawab mengapa kita boleh lagi mencapai keadilan ekonomi. Kita telah merdeka selama 52 tahun dan dari tempoh tersebut, lebih sepertiga dan hampir separuh tempoh dipimpin oleh Tun Dr Mahathir. Dan jika sekarang Dr Mahathir shifts the blame to others, ini sungguh pelik dan ajaib.

Kita telah merasai hampir 40 tahun amalan command centre economics dan memilih 'pemenang' mengikut budi bicara. Kita sekarang menyedari bahawa sebahagian dari aspek DEB yang berpotensi berjaya telah gagal. Memang seperti yang di nyatakan oleh George Santayana- aspek bodoh sejarah akan kita ulangi, jika kita sendiri memilih untuk mengulangi nya.

PM Najib sedang cuba menggunakan penyelesain2 ekonomik. Dia bersikap rasional jika enggan kembali kepada aspek2 DEB yang tidak demokratik dan yang telah gagal.

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Friday, 24 July 2009

30% bukan DEB(1)

30% ≠ NEP

Kenyataan diatas bermaksud 30% itu bukan lah DEB.

Oleh kerana ada pembaca yang mahukan artikel asal yang di tulis dalam bahasa Inggeris di terjemah ke dalam bahasa Melayu, maka saya akur. Apabila berlaku terjemahan maka mustahil ianya pergantian perkataan dengan perkataan yang identikal. Saya membuat penambahan yang sesuai. Ini bahagian pertama.

Saya mahu nyatakan kepada saudara saudara sebangsa saya, jangan lah kita terpengaruh dengan dakwaan hujjah yang menyatakan jika peraturan 30% di mansuhkan, maka orang Melayu akan berantakan. Kita dapat gambaran bahawa dunia orang Melayu akan kiamat. Percaya lah, orang Melayu tidak kojol jika aspek DEB yang selama ini menguntugan golongan elit ini dimansuhkan.

Yang di bisingkan 30% ini apa benda nya?

30% yang saya maksudkan ialah peruntukan bahawa semua syarikat yang mahu disenaraikan di bursa saham, mempunyai sekurang kurang nya, 30% kepentingan orang Melayu. Peruntukan angka ajaib ini di terjemahkan kepada peraturan mandatory bahawa semua syarikat2 pernigaan yang mahu membuka perniagaan yang memerlukan lessen, quota atau sebarang apa jua bentuk kelulusan kerajaan, mesti ada 30% kepentingan Melayu. Nak buka bank? Boleh jika bank beri 30% share kepada Melayu. Berilah free atau dengan harga diskaun. Berilah kepada yang mengetahui dan rapat. Nak dapat lessen buat kebel optikal? Bisa, jika 30% ekwiti orang Melayu yang punya. Lama kelamaan, aspek 30% pemilikan ekwiti menjadi ukuran sama ada DEB Berjaya atau tidak.

Jurang pendapatan yang hendak di rapatkan menjadi pengrapatan jurang pendapatan sesama orang kaya. Aspek yang hanya menguntungkan segelintir orang Melayu yang mengkudai jenama 'Melayu' lah yang kita bangkang. Jangan kita biarkan DEB menjadi suatu dasar ekonomi yang melambangi perasaan dengki dan iri hati orang Melayu- tak boleh tengok orang lain senang.

Ertinya, yang kita tolak ialah suatu aspek dari DEB. Cuba pembaca kaji. Aspek aspek DEB yang menguntungkan orang Melayu ialah perkara perkara yang bersangkutan dengan pelajaran dan pendidikan; bagaimana misalnya mereka ada ada gred 3 SPM/MCE dahulunya dapat belajar ke IPT seperti ITM dan kolej kolej lain; bagaimana mereka yang ada gred 2 dapat melanjutkan pelajaran ke tingkatan 6; bagaimana kerajaan mengujudkan kemudahan supaya masuk university tidak memerlukan STP atau HSC.

Aspek yang menguntungkan orang Melayu ialah bersangkutan dengan pemberian dan konsolidasi tanah untuk rakyat seperti FELDA, FELCRA dan sebagainya. Erti nya, aspek DEB yang menguntungkan orang Melayu ialah elemen2 DEB yang meningkatkan kapasiti manusia atau dalam bahasa hari ini, yang memperkasa mereka. Aspek DEB yang menguntungkan orang Melayu ialah aspek2 yang memberi maruah kepada bangsa Melayu yakni dengan memudahkan usaha orang Melayu. Aspek aspek ini tentulah kita sokong.

Sejak dari dulu lagi, kita ada idea bahawa semua perniagaan mesti mempunyai rakan kongsi Melayu. Keadaan ini mengujudkan fenomena Ali-Baba, di mana Ali mendepani perniagaan sementara si Baba menyediakan modal, pengurusan dan operasi perniagaan. Dari sini timbul lah suatu amalan bahawa orang Melayu yang menjadi kan diri mereka si Ali dalam perniagaan si Baba, memperolehi imbuhan dengan menyewakan nama mereka. Ini lah permulaan apa yang di sebut sebagai penerima sewa- atau rent seekers. Sudah barang tentu 'nama' yang ada harga ialah nama yang ada gelaran, kedudukan, kuasa, jawatan penting. Dalam perkataan lain, nama nama yang tergolong di bawah kategori elit Melayu.

Idea tersebut diasaskan diatas prinsip bahawa kita orang Melayu mendapat sesuatu dengan percuma atau dengan harga yang lebih mudah, dengan cara yang lebih mudah, kerana kita lahir sebagai orang Melayu. Ini bertentangan dengan prinsip universal, yakni kita dapat sesuatu faedah melalui apa yang kita lakukan- menggunakan otak, berusaha, membuat pelaburan. Dengan berusaha kita dapat sesuatu. Bukan nya dengan bersandar pada nama kita.

Syarikat asing yang mahu membuka perniagaan mesti mendapat kelulusan daripada jawatan kuasa pemilikan ekwisiti asing. Dah dapat kelulusan yakni dengan menjunjukkan bahawa syarikat ada partner Melayu, kerajaan kasi lulus.

Sekarang kerajaan sudah pun membuat keputusan bahawa peraturan seperti ini sudah di perlukan lagi. Jika orang Melayu hendak berniaga, mereka tidak boleh dapat free lagi, atau dapat peluang membeli saham yang mesti di agihkan kepada orang Melayu. Penghapusan peraturan inilah sekarang di jadikan semboyan menghebahkan rasa cemas bahawa pelindungan keatas orang Melayu kian terhakis. Ramai lah orang manyatakan, tanpa perlindungan, matilah orang Melayu.

Maka saya ingin bertanya? Siapakah yang melindungi kita sebenarnya? Jika kita kanak kanak kecil, yang melindungi kita ialah ibu dan bapa kita sendiri. Selain itu keluarga dan sanak saudara. Jika kita orang dewasa yang melindungi kita ialah kita sendiri, yakni dengan kudrat kita sendiri, kita bangkit.

Hujjah yang menyatakan jika 30% ini di lupuskan, kita akan hancur adalah hujjah putar alam. Jika anda seorang pak tani, penoreh getah, semua percakapan mengenai perolehan 30% adalah percakapan dalam bahasa Yunani. Iaitu tidak di fahami oleh sesiapa. Para petani dan nelayan dan majority orang Melayu akan rasa cemas jika kepentingan mereka yang lansung terancam. Jika anda penanam getah, anda akan lebih mementingkan supaya harga getah sekerap anda baik. Kepentingan petani ialah mendapatkan grant keatas tanah yang anda usahakan semenjak tahun 1970. Kepentingan anda ialah memastikan anak anak mendapat bantuan kewangan untuk persekolahan dan pengajian mereka. Kepentingan kita ialah mengharapkan bahawa setelah anak anak kita mendapat kelulusan meraka da keraja. Hal 30% ekwiti dalam syarikat perniagaan asing? Ini tidak penting kepada anda.

Kita lebih mementingkan supaya suatu pentadiran yang cekap beroperasi ujud untuk berkhidmat kepada masyarakat. Permohonan tanah yang kita sudah kemukakan 5 tahun dahulu belum lagi berjawab. Kelulusan pertukaran nama keatas tanah yang anda jual kerana keadaan terdesak masih belum selesai setelah 3 tahun. Ini lagi penting kepada kita.

Kita hendak tahu mislanya mengapa kerajaan menghalang kita menanam sawit secara kecil kecilan. Yang penting kepada kita ialah kita mahu tahu mengapa syarikat besar di benarkan dan di berikan tanah untuk menanam sawit, sementara kita tidak boleh. Jika alasan nya ialah takut perbekalan sawit berlebihan, sudah barang tentu alasan perbekalan lebihan ini lebih mengena keatas syarikat besar yang mengerjakan tanah yang lebih luas. Anda pergi ke pejabat tanah untuk bertanyakan status permohonan anda, yang anda temui ialah layanan bisu atau berkerjaran dari satu kaunter ke satu kaunter.

Kita nak tahu sama ada kerajaan betul betul serius hendak membasi rasuah. Jika serius kita hendak kerajaan buktikan dengan menyumbat beebapa orang bekas menteri, bekas menteri besar, bekas pegawai tinggi kerajaan kedalam jel dan lokap. Bila ini di lakukan, baru kita boleh terima kerajaan serius mengenai rasuah.

Jadinya, lebih besar dan penting dari soal 30% ekwiti ini, kita lebih mementingkan ujud nya sebuah pentadibiran yang cekap, bersih, dedikasi yang menjalankan suatu dasar ekonomi yang meletakkan sumber penghasilan kekayaan secara lansung dalam tangan rakyat.

Dan sudah barang tentu, kita berharapkan pengistiharan penghapusan 30% ini tidak digantikan dengan dasar lain yang akan terus menguntungkan golongan elit Melayu. Kerana, terdapat syak dan wasangka semula jadi, bahawa mesti lah sukar golongan elit mengorbankan kepentingan matrial mereka. Apa yang DS Najib tawarkan kepada orang melayu akan dikaji dengan teliti oleh masyarakat.

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Thursday, 23 July 2009

30% is ≠ NEP

30% is ≠ NEP

I am telling my fellow Malays not to be taken in by this argument that if the 30% rule on equity participation is done away with, the Malays are lost. There will no longer be protection. We need to ask ourselves, who protect us? If we are children, our parents do. If we are adults, we pull ourselves using our own bootstraps.

This argument that if the 30% is removed, we are lost is all hogwash. If you are a farmer, pak tani, penoreh getah, this talk about 30% is all Greek to them. You would be more concerned if the price of your rubber scraps is ok; you will be more concerned if the title to the small plot of land on which you have been working since 1970 will be granted to you. You will be concerned whether your children will be able to go to school, get financial assistance, books on loan, and after graduation, will they be able to get jobs. That 30%? It's of no concern to you.

You are more concerned with an administration that works. Your land application which you sent 5 years ago hasn't been answered. You go to the land office and inquire, you are stonewalled. That's more of concern for you. You want to know why big companies are allowed land to cultivate oil palm but you aren't. If the oversupply argument applies to you it should also apply on big planters. Indeed more so. You need and want to know, whether the government is serious about combating corruption. If it does, you would like too see ex mb's, ex ministers, ex top government officers sent to jail for a few years. Then you will accept that the government is indeed serious.

Therefore, over and above the 30% thing, you are more concerned to have an administration that is efficient, clean and dedicated and an economic policy that places wealth creating assets directly into your hands. Of course you are concerned if the abolition of the 30% rule is replaced with another wool over the eyes of a policy favouring the elite Malays.

You understand if that 30% is not secured, those lumpen aristocrats, the well connected will never be able to survive. You, like the majority of Malays, want capacity building, you want like what Amartya Sen says- development as freedom. You want economic freedom to get social and political liberation. Those surviving on the 30% thing, all they want are continuation of dependency.

The NEP was supposed to be the solution to Malay economic woes. It was launched in 1970 and ended in 1990. Since then, the policy was replaced by several other successive affirmative economic policies.

Essentially it involves the application and implementation of various administrative matters to correct economic imbalances. It was seen as a national policy to bridge the gap between the rich and poor so that once, it is reduced, national unity can be achieved. Nothing cultivates aggressive impulses more than economic inequities. In our country, the economic disparities assume a more sinister facet because it is identified along racial lines. The non Malay minority is seen as economically dominant while the majority Malays, the original inhabitants of this country are marginalised in terms of economics.

The staple explanation for this disparity has it that the immigrants, whom the natives have been kind enough to accommodate, became rapacious economic predators. It is they, say the demagogues, who have displaced us the natives.

But how, we ask? They didn't have the instruments of oppressive powers- did not have governmental powers, how did they therefore overwhelm the natives? Commercial cunning, competitive drive, usage of the material between the ears cannot be accepted as things or behaviour reprehensible can they? You can only marginalise people, if you have control over the oppressive instruments of power.

So your attention is turned to the question, who has control over the oppressive instruments of power? The answer is the government. Hence, if we were to ask who are the masters of this country, they are the elite who control the oppressive instruments of power.

Economic inequities are largely an economic issue. It becomes complicated when it's tied up to politics. Politics is essentially the employment of means to secure power and the one who has power can influence and configure the economic outcomes. If now, the question is asked, why disparities and therefore unhappy feelings are still in the air after almost 40 years of implementing affirmative polices, we can answer as follows. They continue to exist and increase because what was originally an economic phenomenon requiring economics solution has been turned onto its head to become a political issue. Yes, it's all due to politics.

Hence the race for economic prosperity becomes a race for acquiring power. Those who become economically better are viewed as a threat to power and accordingly, the economically powerful must be cut down to size. The Chinese who are economically more powerful are therefore seen as a security threat to holders of conventional political power. They must therefore be cut down to size so as not to upset the balance of power. Old school politics accustomed to muted submission assails the Chinese ingrates. In order to balance things up, the 30% rule must be defended and restored.

But then the 30% mustn't go into the hands of the riff raff, the hoi polloi, and the lumpen proletariat. If that happens, that will mean the end civilisation as we, the elites know of. We certainly don't want the hobos to inhabit and adulterate our pristine way of life here in the hallowed grounds of Bukit Tunku, Damansara Heights or Country Heights do we? So, the 30% must be confined to the same old network of cronies, elites and the select few. Otherwise, by demanding we take and retain the 30% only to see it fall into the hands of the plebeians, that decision would upset the balance of power within our class. The 30% must stay within the lumpen aristocracy.

Why hasn't the target of 30 % ownership of corporate equity been achieved? Answer, politics. Why haven't the economic configurations of Malays according to the guideline of 30:40:30 been achieved? Again the answer is politics.

Who is to blame of the NEP failed? The only party blameable is the government. They had the power, they legislated, they implemented and they failed. Again we repeat , the purpose of politics is to acquire power. To form the next government. The government sets the guidelines, provides for domestic and external security and upholds the rule of law. Governments do these things to varying degrees; hence we have democratic and less democratic countries.

Whatever levels of democracy are practised, the ultimate accountability rests with those who control the levers of politics. If we now ask, who is to blame for the state of affairs in which we find ourselves mired in- the answer is the UMNO led government. You hold the power, you answer why we have not achieved economic fairness and justice. We have been independent for 52 years. Almost half and more than a third of the period was headed by Tun Dr Mahathir.

We have had almost 40 years of command centre economics and arbitrary picking of winners. We have now realised, certain aspects of what was a workable economic solution have failed. The stupid aspects of history will certainly repeat themselves, if we choose to repeat them.

The PM is now trying his approach to find an economics solution. He is being reasonable not to fall back on the aspects of the NEP that have failed.

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Tuesday, 21 July 2009

If the shoes don’t fit, you must discard!


 

If it doesn't fit, you must acquit!

I would like to see ordinary Bumi-Puteras wear the shoes of the puteras- putera bangsawan, putera raja, putera UMNO etc. experience how it feels to have the power. You have the full force of legislation to prevail on others.

I am sure that wish will be rejected. Similarly we want to reject an economic policy that has failed to uplift the ordinary Malay. I feel like echoing Johnny Cochran's- if it doesn't fit, you must acquit to translate into, if it has failed, you must reject! If the shoes don't fit, you discard.

Why should we believe that a specific economic policy that has failed to uplift the Malays can work if it is now applied with added intensity? Yes I am talking about that piece of legislated economic solution to help out the Malays- the new economic policy. We are now arguing like Khir Toyo- the Malays are left behind because we failed to carry out more Islam, more Malayness and all those camel excretion arguments.

Since the 1970s, the government has forced the private sector to sell/give/transfer RM56 billion worth of equity in businesses that require licenses, quotas, permissions, monopolies etc. From that amount/value only RM2 billion is left. This has been confirmed by the PM.

What has that led to? It led to the creation of a parasitic elite eager to devour more at the expense of an adaptive and dynamic group of economic actors. Why should I agree to have this portion of the NEP fought for and retained? That portion of the NEP has not enabled the larger majority to benefit.

We should be treated as equals, we Bumiputeras. Our wants and desires are the same as those who inhabit the mansions in Bukit Tunku, Damansara Heights or even in Country Heights. The benefits must go to those best able to adapt themselves to external challenges. I mentioned adaptive- yes, its economic evolutionary process- survival of those elements that adapt to their environment.

Back to what's left of the RM56 billion. To me that only show that those Bumiputeras who were given the opportunities to become rich overnight, have cashed out. Let the government publish those who sold out and have them banned for life from having another chance to get freebies from the government.

The only aspects of the NEP that have benefited the Malays were those policies that involved land consolidation as in giving land to FELDA settlers, educational opportunities like giving those 3rd graders at one time, opportunities to go to places like ITM then, or 2nd graders for being able to go into 6th forms. The policies of giving jobs to Malays in the public and private sector and policies regarding scholarship and other forms of financial assistance for education have benefited the Malays. They did because these policies build capacities and empower ordinary Malays to free themselves from shackles.

The problem is, when things go back we want to go back to control- central planning. Central planning means by fiat, by legislation. You legislate prosperity onto Malays, the special Malays that is. The Malays have political control and by virtue of that, they prefer central planning. I have news for my Malay friends, central planning is often practised by communist countries. If the habit of inferring guilt by association is still practised, I would have to say, the Malays are nearer to communism than the Chinese. The Chinese are basically enterprising and entrepreneurs and by virtue of that disposition, are inclined to free market and competition. Not necessarily because they like it, but they have to adapt and survive.

Malays like to play the role of economic commissars ordering this and that. But they themselves do not want to do what it takes to succeed. When we fail, we attribute our failure as a result of some underhand scheming and conspiracy that unite to do us in.

Milton Friedman once came to KL and gave a lecture at the University of Malaya. That was probably in 1963 when he and his wife were travelling around the world. He put forward the idea of the path towards progress by comparing the paths taken by Japan and India. Japan was forced to modernise and to adopt almost a complete laissez faire system. India on the other hand rebelled against free market and opted for central planning ideas. (Nehru was prime architect). The differing economic paths produced contrasting economic achievements and should be an object lesson to Malaysia. At that particular lecture, the moderator was a Malay professor who quickly retorted by saying, if we followed Japan, the Chinese will dominate us. We Malays can't allow that.

That explains the primal paranoia of Malays about having to compete. Just like their politics, they want to control economics. The only way they can control is to have more quotas, more licences, more regulations, and more economic commissars.

We have failed since 1970 to correct the economic imbalances between races. We have to examine the central command edicts that we have used- from NEP to picking winners as TDM himself did. It is curious that TDM should now assail the policies that he himself used in creating economic mandarins among the non Malays.


 

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Monday, 20 July 2009

Ideas and Progress


 

Now that the government has decided that maths and science will be taught in Malay, I hope the Malays will not forsake mastering the English language. The decision, says the Education Minister and Deputy PM, is irreversible. Malay students must make tremendous efforts to learn the language. Ignore the politicians who say that the language is not important. Define for yourself what is important or isn't. Take your future in your hands.

Yes take our future in our hands. As Donella 'Dana' Meadows, the renowned environmentalist says- the future of our planet is a CHOICE, not a FATE. Similarly, our future is a choice and not a fate. (Dana Meadows was lead author of the famous book- Limits to Growth).

What do we need to shape the future? We need like what Nandan Nilekani says- a government as aspiring as its people, politicians as optimistic as its youth, bureaucrats as innovative as its entrepreneurs and state, local and national leaders as impatient , creative, and energetic as their kids.

I am reading a book written from a world class Indian entrepreneur, Nandan Nilekani. His book is titled Imagining India. I haven't finished reading the book, but I guess, he is talking about India as one imagines her to be and become. It's a question of imagination and application of the imagination. Its ideas that shape a nation.

On page 7, Mr Nandan wrote:-

..Through the early days of independent India, many saw English as a language of the imperialists and did everything possible to marginalise the tongue. This included attempts to make Hindi the sole national language and restricting or banning outright the teaching of English in state schools. But once outsourcing made English the entry ticket to a global economy and higher incomes, the language rapidly became a popular aspiration, a ladder to upward mobility for both the middle class and India's poor.

I am glad the Malaysian government has not reached the state of extreme paranoia. It hasn't banned the English Language and is in fact committing more funds to teach the language. I also hope the government is aware that mastery of any language for that matter involves application. The teaching of subjects on the language could have enhanced application and mastery. It also involves practice and interaction. Malay students studying in Middle Eastern countries have been discovered not to know how to speak Arabic because they live in houses among themselves and speak the Malay language. There's no practice and little application.

The more I think about it, I find myself in agreement with Nandan Nilekani's observation:-

..When it comes to policy, the urgent wins over the important, tactic triumphs over strategy and patronage over public good.

Policy makers want policies that are either good for money or votes or both.

We have to imagine and deliver a different future by refusing to accept politics and governance that is so much less than the talents possessed and needed by the people.

Let's look at governance for example. I am not as familiar of other towns as I am with my hometown Kuantan. There is a place known as Air Puteh in Kuantan. During my schooling years, Air Puteh was a backwater region- least developed and notorious for its gangsterism. Today, it is a thriving town within a town, developed largely by entrepreneurs. Never mind the ethnic identity of the entrepreneurs. The fact that it can develop and indeed pull itself ahead of other areas reliant and dependent on bureaucratic governance proves what can be achieved through entrepreneurship. Fast growth and tremendous development can be achieved in spite of government support or in spite of government obstruction and political dysfunction. I venture to say the same of places like Kota Damansara or Bandar Sri Damansara in Selangor. The development there took place without the instruction from a central authority.

Development took place as a result of entrepreneurship by people refusing to settle for less than the talents they possessed and need. Progress can only take place if we choose to throw out the shackles of low aspirations and failed economic ideas imposed from above.

We must begin by demanding higher standards from our politics and governance.

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De-politicizing issues


 

From an anonymous commentator to my latest blog entry, I got these words:-

Forget about the economy. It will be politics from now on. The stupidity of one agency has now blown apart any semblance of direction. This is a stupidity egged on by the politicians.

I think we are going to find a flat battery.

19 July 2009 19:31

Sad but true. The state of our economy is the least of concerns. The natural proclivity and favourite pastime is about politics, the more damning the better. The death of an aide to a state EXCO is subjected to various interpretations. The often combative stance taken by bloggers underscores the need to carry out an impartial inquiry to ascertain the true cause of death.

I received an insouciant and supercilious comment that agrees with me that we are saddened by the death of Teoh Beng Hock but I was aping KJ in asking for the formation of a RCI. I was aping KJ therefore I must be on the payroll of KJ. How trite.

The objective of an RCI is to establish the guilt or innocence of a party or parties. If the government moves quickly to form one, it is signalling to the public it is serious about transparency and integrity. Only through the forensic inquiry of an independent body answerable to the King or to parliament can we seek out the truth.

Those bodies that have vested interests or deemed to have even the remotest of interest cannot instil confidence in the public of their impartiality. The MACC internal affairs inquiry will never be accepted as credible because the MACC is seen as the most interested of parties. It must be an inquiry that must be done and seen to be done by a special constituted body.

If the government doesn't want to constitute an RCI, it must assume the responsibility to set up a special inquiry team made up of distinguished personalities. The formation of one is necessary to quell public distrust and to snuff out the politicisation of the death of Teoh from both divides of the political spectrum.

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Sunday, 19 July 2009

Re-charging the Economy.


 

Next year (2010), our economy is expected to shrink by 4-5%. Simply put, that will mean reduction in our national income. The government will have less income to tax from. This will mean cutting back on certain expenditures, less development, less capacity building, less of everything. Jobs will be lost as plants and factories scale down. Our exports will decrease. A shrinking economy will create reversed multiplier effects.

Banks will not want to lend money or they will make it more stringent to lend money. The psychology associated with sub prime loans will be so pervasive that bankers will be paralysed with fear. They will lend to people whom they are comfortable with. They will lend to the same old boy network. Productivity has shrunk or will shrink means that the labour market is not responsive to changing market environment.

What can the government do? There is universal agreement among policy makers that this condition is brought about by insufficient aggregate demand. The slack in aggregate demand is caused by several factors. Tight liquidity, people are not confident to spend, investors are not wiling to expand, labour isn't as productive and competitive. How then to bolster the aggregate demand?

Use either fiscal or monetary policies. Spend and tax. Ease liquidity or reduce interest rates. That's monetary measures. Which to use?

All over the world, the economic recession is pointing towards the failure of the market system. And since the economy depends on demand from households(C), Investors (I), Government spending (G), and net exports(X-M) - it remains for the authorities to manage these variables. Further, it is generally accepted that now, the only variable manageable by the authorities and seen to be the most potentially effective, is government expenditure. The government must step in to correct the market.

Let' see what the government has done. First the government introduced the RM7 billion package. This was followed by the RM60 billion. That's a total of RM67 billion to be spent over a period. What have the packages achieved? The answer who knows?

The man who announced the stimulus packages then was the finance minister. He is still the finance minister and now Prime Minister. He must have gotten advice from the Malaysian Keynesians. Like Keynes in the 1930's, the basic idea was simple: to keep the economy fully employed, governments have to run deficits when the economy is slowing because the private sector will not invest enough to increase production and reverse the recession. Keynesian economists want governments during times of economic crisis to pick up the slack by increasing government spending and/or cutting taxes.

Note the two important key elements here: - run deficits and finding answers as to why is the non government sector reluctant to invest, increase production so as to reverse the recession? We will have to come back to this issue later.

In order to justify specific expenditures, economist will offer empirical tests. The best expenditures economists argue are those that give greatest multiplier effects. This is the idea that an initial amount of spending leads to increased consumption spending and so results in an increase in national income greater than the initial amount of spending. Suppose an investor invests RM 1 million to build a factory. The money spent becomes wages to builders and revenue to suppliers etc. The builders will have higher disposable income and provided they spend, consumption rises as well, and hence aggregate demand will also rise. Those who supply goods and services to te builders/consumers, in turn receive additional disposable income will further raise consumption and demand.

The rationale is this. In order for the government to have money to spend, it taxes the economy. Nobody likes to be taxed. But suppose, more income can be generated from the taxed amount, then the decision to tax can be defended. But the government must know that more can be generated if the money is applied to economic actors capable of generating surplus revenues. So now, the government must find: - (a) those who when receiving doses of money, know how to apply it and make more money (b) apply the money to economic activities that are capable of creating more money.

In other words, spend more that you tax. If you have been taxing RM100, spend 150. That RM50 is the fiscal stimulus. That RM50 is also deficit spending. How do you finance the deficit? The deficit spending must be financed from government reserves (if any) or net borrowing from private or foreign investors. If the money is borrowed, it must eventually be paid back with interest, such that the long term effect on the economy depends on the trade off between the immediate increase to the GDP and the long term cost of servicing the resulting government debt.

So it is not easy after all to manage the economy responsibly. People will start question, what happened to our reserves? The government answers, we have plenty. That is good news, but now we want to know, whether the reserves will be applied wisely so that more income can be generated. It is reasonable to impute, the people say, that if the government can fritter away the billions of money it receives from PETRONAS, our reserves can also be wasted away.

We can dovetail the issues thus: - find ways to induce the public to spend more. This will depend on whether the households have more disposable income. They can have more disposable income if taxes on them are reduced. For example, the government can reduce payroll taxes (EPF contributions and other compulsory payments) so that disposable incomes increase. Investors spend if cost of capital is reduced and more importantly, if the ease by which to borrow is enhanced. Millions of SMEs want to borrow easily and quickly. But if loans to SME's are cornered by a few people, then the idea to finance as many SMEs and entrepreneurs to re-start the economy falls flat. There are vicious rumors circulating that loans for SMEs are cornered by some well connected people only.

Government could provide the needed Keynesian spending by decreasing taxes, increasing government spending, and increasing individuals' incomes. As incomes increased, they would spend more. As they spent more, the multiplier effect would take over and expand the effect on the initial spending.

Whose disposable income should be increased?

Who do you give the money to? Milton Friedman, who is associated with the permanent income hypotheses, says that the marginal propensity to consume is more pronounced in poorer people. That is, if poorer people receive more money they will spend while richer people spend less if they received additional income. The policy implication then is to raise the income of the relatively less well off than the richer people. Give them more money.

Just suppose that the economic institutionalists are right- that our economy is also slowed down because of misfeasance and malfeasance by bankers and industrialists, or incompetence by government officials. This school of economists believed that much of the problems in our economy are caused by the institutions that exists – bureaucratic controls and regulations, bankers and financial intermediaries doing dirty work( the subprime loans in America were caused by bankers colluding with unqualified borrowers).

Suppose these institutional elements are in fact a substantial contributor to our depressed aggregate demand, they actually produced artificial blockages to liquidity. What can the monetary authority do? Then the public would certainly welcome what Milton Friedman suggested that a monetary authority do to escape a liquidity trap; we bypass financial intermediaries to give money directly to consumers or businesses. This is referred to as a money gift or as helicopter money. The term helicopter money is meant to portray the image of a central banker dropping money on people from a helicopter.

Maybe the government needs to look at mechanisms where it can give money directly to people? Perhaps this will be the new deal which Tengku Razaleigh has in mind?


 

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Friday, 17 July 2009

Malaysia Expects


 

ONE MALAYSIA EXPECTS UTMOST INTEGRITY AND ACCOUNTABILITY.

I JOIN MILLIONS OF MALAYSIANS, IRRESPECTIVE OF RACE, CREED, COLOUR AND POLITICS IN EXTENDING MY HEARTFELT CONDOLENCES TO THE FAMILY OF THE LATE MR TEOH BENG HOCK AND HIS BETROTHED. EVERY RIGHT THINKING MALAYSIAN IS SHOCKED OVER THE CIRCUMSTANCES SURROUNDING HIS DEATH.

TO ESTABLISH THIS GOVERNMENT'S INTEGRITY AND ACCOUNTABILITY, IT SHOULD FORM A ROYAL COMMISSION OF INQUIRY TO BRING EITHER THE PERPETRATORS OF THIS HEINOUS ACT TO JUSTICE OR ESTABLISH THE INNOCENCE OF PARTIES. I URGE ALL MALAYSIANS TO REMEMBER, THE LATE MR TEOH WAS SOMEONE'S SON, GRANDSON, BROTHER, COUSIN, NEPHEW, UNCLE, BETROTHED, FRIEND AND ALSO ONE OF US, A MALAYSIAN.

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Thursday, 16 July 2009

Manek Urai- One Swallow does not make a summer..

One Swallow at Manek Urai?


But 191 will make a swarm. 191 UMNO divisions that is. If they carry out radical reforms on leadership, work ethics and a new vision.

The last thing to do is to treat the UMNO resurgence as a definitive turning point when it was actually flash in the pan. I am referring of course to the near miss by UMNO in winning Manek Urai.

I have written that the recent good showing may be indicative of an UMNO on the rebound. It proved that UMNO's rebound must be preceded and underlined by some necessary factors. These included a re-focused and united leadership, diligent ground troops and a re-branding of UMNO. So long as UMNO indicates that it is adopting these factors, the people's confidence will be there.

UMNO's future and longevity will depend on a leadership serious with the intent of remoulding UMNO's ethos. This brief reprieve is no excuse to slouch on changes that must be taken. For example, will the UMNO president continue with the intention to scrap the quota requirement and allow open contest for top leadership? Will the UMNO leadership implement direct selection of UMNO leadership by delegates at divisional meetings? These moves underscore the need to infuse UMNO with dynamic leadership and free UMNO from being strangulated by elitism.

UMNO's longevity needs quality leadership, the infusion of new talent, good work ethics. This brief interlude at Manek Urai, points to the POSSIBILITY of a continued UMNO revival. It has yet to be actualised and can only be achieved given good leadership. Good leadership that requires good men, dedication and visionary ideas. UMNO slackens to its peril.

Here is the danger- it may throw UMNO into complacency believing things are back to normal. Things aren't. There must be something that UMNO people have done up to the by elections that must served as object lessons.

But what if the UMNO's much touted improvement was achieved on overextended application of resources? Quite apart from the endogenous factors we spoke of above, what if UMNO's comeback was actually the result of explicit horse trading, pork barrel politics, outright buying of votes, intimidation and even fraudulent practices? What if UMNO's touted turning point was achieved on the back of duplicitous machinations? Simply put, they neutralise all the above factors.

One swallow does not make a summer. The fact was- UMNO still lost. This near miss at Manek Urai will no doubt serve as a jolt to PAS and they will redouble their efforts to correct their mistakes. What UMNO wants to do is our prime concern. What took place in Manek Urai must never be treated as a generalisation. Can UMNO duplicate the same intensity and application over the whole country as it did in Manek Urai?


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