Tuesday, April 26, 2016

Politics & Business

Politics and business seem to be badly mixed up nowadays, with politicians blatantly doing business and businessmen playing politics. But there is such a thing as real politics and real business.

Real politics is when the government sets about pursuing policies that champion the interests of the nation and the well-being of the general public. The government is the politicians and the civil servants. Politicians are supposed to come and go while the civil servants are supposed to be professional and know their stuff. But when ignorant politicians push policies down to inept civil servants to implement or when they listen to inept advice, we have an economic disaster in the making.

The current episode is bad politics killing off real business. Nowhere have I seen such an eagerness of a government to destroy the underlying foundations of an economy. The government seems to be at war with real business. Giving the benefit of the doubt, policies may be good but the mishandling of their implementation is a sure way to destroy the dynamics of real business.

The GST is a case in point. This is not my favourite topic, but the more I hear the more I am unhappy.

1. The GST is now justified on the ground that we are undertaxed as per the GDP compared to other countries. The blame goes to the black economy and therefore the indirect attempts to capture all transactions in the economy. But for all I care, the GDP number may have been blown up to show that the economy is doing better than it actually is by inflating on the growth of the services sector. And if we realise that the most incentivised sector of the economy is the financial industry with virtually zero tax on any profit made in the stock market, then that is a big chunk of the tax gone. There are no taxes on foreign investments, and the government even gives grant to foreign firms to invest here. So now real business must be properly taxed. At the same time, the government is trying to encourage entreprenuership through start-ups when even existing businesses are struggling to survive in the current environment.

2. The government is very happy to take the GST money from real business even when the invoices are not properly made. But it does not allow claims on the same ground. Is the government a money sucking machine? The government is incompetent to run the GST, being implemented without proper preparation. However the government is going to justify itself, for sure, the GST is a downer on the economy. How the strong will surely survive, I pity the small firms that cannot withstand the burden of having to cope with having to deal with the GST, and administrative as well as the tax cost.

I have applauded the government's policy on restricting foreign workers in the country for several reasons: It is time to move up the value chain. It is time to treat foreign workers here properly by paying them decent wages and offering them decent social services. It is time to take stock of the foreign workers we already have here, rather that importing more. There should be a comprehensive registration of all individuals residing in this country. It is time to ensure that foreign workers are healthy as many are employed in the food and beverage industry.

What happened? Well, real business has real problems registering their workers. End of business and end of story. The civil servants continue to enjoy their take-home pay and go on long training and long leave. (I think the annual leave of civil servants should be cut to 20 days a year and their annual training to not more than 3 days a year.)

Real business is usually small business. I don't think you can nurture young entrepreneurs when the environment is set to kill anyone struggling to make ends meet. The black market exists because not very well educated people are trying to cope in an unfriendly bureaucratic environment. I am not championing the black market. I am calling for a competent and efficient civil service.

I am of course by the racism in real business, when politics is involved in the business world. The government should champion all businesses for the national good. To have government departments championing racism is a bad sign. (I won't comment on religion.)

Politicians play politics, businessmen make money. That the right order of things. It should not be politicians making money and businessmen playing politics.


walla said...

Just some rejoinders before a bad day to start shortly, presaged last year:

1. Mixing Politics and Business

Politicians say they need money to campaign. They say their allocations will not be enough.

A genuine democracy will just double the allocation - and equally for both sides.

It will next publicly announce the lock-down to any further increase so that everyone including recipients will realize they cannot ask for more from anyone.

Campaigning and operating financial statements will have to be presented by each candidate or politician as will full acceptance by both sides for any rationale of electoral boundary drawing which will size the allocation according to acreage spread and population density.

The public announcement will ensure vote-buying will be scrutinized. One cannot for instance spend two hundred thousand on certain longhouse dwellers with nothing to show for it after the disbursement. One cannot also for instance as a JB laundry businessman take one million, then resign from politics and say nothing of what has been done with that public money.

It should not be lost on all that taking the cap off the amount will lead to higher expectations by recipients of more in the future which in turn will lubricate more wheeling-dealing between politicians and their private funders who in turn will expect something in return for their impregnation after the politicians are returned.

That something would not be competition-based otherwise there would be no need for special favors. It will only lead to inflated pricing, market distortions and blunting of the competitive edges which progress peoples and nation.

Furthermore, politicians will not be above creaming for themselves or their relations a part of what has been given since they don't have to present tax invoices for party contributions. They certainly won't be paying taxes on the contributions creamed as well since they won't be declaring them. Isn't that also an example of a black economy in all but tag?

How can all this be healthy? It starts with campaign funding then morphs into thievery which sets in as institutional corruption by those who are elected just to provide leadership services to some standards of integrity so that what is finally and really achieved is the very opposite of what electorates would sensibly want since they would be the ones on the receiving end down the line of budgets for development which have to be shaved or become under-capacitated owing to inflated pricing, siphoning, leakage, sub-standardized.

And worse, to keep the gravy train moving, the entire process will be locked in as standard operating procedure and norm until service providers can just thump their noses whenever electorates raise issues because these service providers are protected by political interests to try and make money out of their positions by creating business dis-incentivizing rules that they know will rile genuine businesses already knocked hard by economic downturns which in turn will lead to quiet breaking of rules not even meant to exist in the first place and in exchange for graft on the perceived ground of public-private income-disparity until a stage is reached when the public servant is actually richer in hidden assets than the maligned businessman.

A new definition of pro-business objective of national management, perhaps?

walla said...

2. Mixing of Race With Political Interests

We started with a framework to uplift those who were poor and needy but made the unwise decision to peg the framework to a particular race.

If race had been removed, the aid and assistance would still have gone to those of the same race by dint of their falling under the category of poor and needy.

That this was not done left other races who were equally if not more poor and needy out of federal and state social support in all its forms - from direct aid to indirect opportunities for educational places, scholarships and employment - so that they naturally reacted to the framework which in turn led to a divisive defense-versus-offense stance that broke social cohesion and interracial cooperation. Meanwhile the problem got bigger as the populations increased, creating demand that were deliberately ignored so that the others became marginalized.

Political interests then became polarized until today 1Malaysia has become a stock pipe dream. Race politics doesn't work because the cost of maintaining it favors selective exploitation, cheapens the meaning of being a citizen, and moves people from supporting policies and programs that are patently prejudiced what more poorly run for lack of real pragmatic realities and wisdom by inputs from all.

Only inherent goodwill between the peoples of different races have reduced the problem but how long can they do so before they too join what they cannot reduce? Especially in some places where they can see people carrying official identity cards however having passport numbers only, and names not of those born in this country.

Which makes a mockery of the official anti jus-soli stand in all but name when politicking and thus punch-bagging those of other races, just by the expedient of twisting the interpretation and substance of the federal constitution.

End result: real citizen-mindedness is sacrificed at the altar of politico-economic racialism.

walla said...

3. The Pivotal Role of Standards

The people who had scorned at meritocracy out of some hubris about its attachment to race-based performance are now eating humble pie in quietude after seeing how such an approach away from standards has economically destroyed the GLCs and politically destroyed the federal finances established in halycon days of meritocrats who have all but been made extinct by the new breed of kleptocrats.

In a newly-emerging country, it is important to establish standards of ability, performance and integrity.

These three corners of the foundation triangle will cooperatively ensure that any progress made in any society anywhere in the world will be progress that inbuilds its own learning/wisdom/biofeedback mechanism and not be subject to the fancies and vagaries of kleptocrats who rose up the rank of politics by bending ninety degrees to kiss money-dirtied hands on the one hand and by spewing unsupportable racist vitriol to stir base emotions of immature, unthinking, unknowing masses in need of the very holistic uplift that if genuine would otherwise have been achieved by straight talk, honest action and wise counseling.

For a country to rise, those who can run must be encouraged to run and those who can walk must be encouraged to walk so that those who have run can sprint to pace those who have walked to run.

Accelerated assets accumulations by outperformers? Only so if one only means assets in the country. This country is too small for that. The mindset, vision and target should be global assets and internationally-progressive services.

After all, why else would people want to buy mongolian coal mines and debt-ridden paper-only middle eastern oil rights? For that matter, automotive approved permits.

walla said...

4. Peoples Money and GST

Every sen a government spends is taken directly and indirectly from the peoples. Directly, taxpayers work to make income that goes to pay taxes taken by the government. And with the administratively-costly GST, everyone in a supply chain pays taxes including the end-buyer. They also pay penalties and fines not of their making. Indirectly, money is realized from national assets like oil and gas fields which can only give diminishing returns.

Every sen a government takes and spends belongs in the first place to the peoples. Since a government is made of politicians and civil servants, who audits how the politician will spend even when the audits how civil servants have spent have already unearthed a veritable industry of outright financial ruin of the peoples funds?

The meritocracy mentioned above is not just about knowledge, ability and skills but also about being meritorious and conscientious to defend good practices against the onslaught of politics-business impunities and the pie-dipping fingers of racially-predisposed opportunists.

That only a few grafty politicians and high-level civil servants have been paraded does not augur well for any national integrity machine since it is a farce they have also been quietly released thereafter in the face, perhaps artificial, of a much vaunted, just re-paid, judiciary system.

Otherwise how does one explain the papagomo's, ali tinju's and jamal bakar's that still trample unchallenged the pavements of this land?

Meanwhile all manners of conspicuous excesses are committed that reflects massive embezzlement of the peoples money by wild schemes that ostensibly was to buy elections (itself already a crime) by money-wiring (another crime of money laundering) money of the state (yet another crime of daylight robbery) that only results in bad faith assigned to the name of the country, investment flight, and the biggest single-item debt propelled in the single shortest span - for the already-half dead peoples to pay into their next three generations - and that by escape from weakening the very institutions which are supposed to protect the peoples moneys (the final nailing crime since it will ensure the ripping will still continue after those three generations).

walla said...

5. The Foreign Workers Economy

Registration of workers should have been properly done from the very beginning after direct G2G agreement on all terms, especially the screening and other costs to workers in their home countries before they embark.

In all cases, these were not done so that they were already too much in debt when they disembarked here so those who could started to self-manoeuver against the grain of good workmanship and self-discipline despite

Many are illiterate and susceptible to influence by others before them who have learned their own ropes on how to navigate around employers and apply the hard-soft pressure on wages in order to create precedents in wage increments not commensurate with productivity. Simply because they have handphones.

In most cases, employers lament the difficulty of getting enough good and trouble-free workers and, in labor-dependent industries, it opens them to indirect blackmail which can jeopardize businesses in a jiffy when other factors converge.

And many of the more experienced workers did not realize the importance of not absconding with uncompleted permit tenures which in turn opens them to detention which does not solve the labor shortage problem which is the linchpin to industrial survival - a constantly productive, amply supplied, cost-effective and disciplined labour pipeline.

Which employer in his right mind doesn't want that especially when wage rates can only increase and not decrease, good labor is in short supply, discipline is hard to enforce against collectivized lay-downs, and regulations don't match reality on the ground?

If worker rates are surveyed, eyes will open on how much they make for how little done in some sectors with the costs of their living upkeep and resolving their personal social and incidental health issues as additional challenges to employers already beleaguered by other force majeure factors.

No one should comment on labor rates until a full set of payrolls for all manners of tasks and cycles has been manually written out by hand, including company prepaid sundries and passports,permits costs.

All foreign workers uphold only one loyalty - exclusively to their earnings. Other things like helping businesses to save, doing good work and making an honest living are superfluous. A generalization no doubt but peril in own province otherwise.

walla said...

6. The Black Economy

After all that, do we need to debate this, political excess, public sector productivity, even religion?

etheorist said...

Do politicians pay GST on their campaign spending? Hmmm.