Monday, June 25, 2018

Malaysia Policies: New First Steps

I am sorry if I am stating the obvious. But sometimes what is obvious is not obvious when we are inclined to delude ourselves.

1. Basic Premise

Where Malaysia is now at is the result of bad thinking - that the Malays are the rightful inhabitants of Malaysia and that Chinese and Indians are immigrants.

Even this simple statement is erroneous if you take into consideration the orang aslis, the babas and the nyonyas and others in Malaya and not excluding the 30 to 40 ethnic groups in Sarawak and Sabah.

There is a correction to be made in the basic premise of the nature of Malaysia - that obviously Malaysia is the homeland of each and every Malaysian, i.e., anybody who is born in Malaysia and anybody whom one parent is a Malaysian or any foreign born who has been granted Malaysian citizenship.

If we can't get this simple sentence right in our head, then I don't think we are going to get this country right in any direction but self-destruction.

2. NEP

First, they said get the colonists out so that Malaysians could rule ourselves and enjoy the keep the fruits of our own labour. Let us fight the colonists together. Independence was won.
Second, by year 12, it was decided that the Chinese were doing too well and the Malays were not. Therefore, redistribute wealth as a matter of national policy. We control all policies and use government tax revenue to acquire Chinese assets for the Malays, i.e., the UMNO elite.
Third, the eventual purchase by Petronas of the KL Twin Towers woke up the Sarawakians and the Sabahans that they had also been plundering the wealth of the Borneo states.

The rot started in 1970 with beginning of the systematic replacement of Chinese and Indian bureaucrats with Malay ones, coinciding with the replacement of English with Malay as the medium of instruction in schools. This created an insular civil service and brought about the closing of the Malay mind. With that began the Malayanisation of Malaysia. As the East Coast rejected KL and with the ascent of PAS, this evolved into an Islamisation of Malaysia when UMNO strived to be more Islamic than PAS.

There is a need now to level the playing field for everyone and abolish the NEP immediately. Except social services for the very old and very young and those who are incapacitated. Pursue economic efficiency as the instrument for economic restructuring, not restructuring while championing inefficiency.

The rise of the power of senior civil servants and political dynasties led to the creation of GLCs who are now monopolising the entire economy, in the name of NEP. The cost of living in Malaysia has escalated because of these monopolies which must pay annual dividends to the government for the politicians spend on big projects. The GLCs should be privatised or dismantled and the government should retreat from business. There should be a clear separation of politics from business and business from policies. While politicians will operate according to the law, businesses must operate according to policies.

3. BNM

The head of the central bank is called the Governor. The designation is given to signal that the politicians including the Prime Minister or the Fiance Minister cannot intrude upon the duties of the Governor. There is a separation of the central bank from the finance ministry.

The job of the central bank is to protect the value of the local currency. The key method is to ensure that there is no excessive supply of the local currency as well as that there is no excessive and unproductive borrowing of foreign currencies. The central bank can implement monetary policies and the foreign exchange policy to protect the value of the ringgit, without resort to the government. If the government intervenes, the Governor can bring its case to parliament.

The deterioration of the value of the ringgit by 60% from 2.50 in its prime days to 4.00 today is a clear case of the bad management of the ringgit and poor monetary policies. We have been suffering from a prolong period of central bank silence, probably except on non-monetary issues.

I hope things will change and improve from here onwards.

For a start, raise ringgit interest rates in line with the US interest rates. BNM had said in the past that it cannot differ from the US Fed when rates fell. Ditto, the reversal. Otherwise, we will see another bout of ringgit deterioration, regardless of what the PM may say about its fair value. I would say the fair interest rate is 5% pa.

4. Growth, Growth, Growth

This cannot be over-emphasised. We heard in the 1980s that the government was prepared to sacrifice growth to achieve "fair" distribution. Today is what that looks like, and this is not what we want.

There are rich Chinese and there are poor Chinese. There are rich Malays and there are poor Malays. There are rich Indians and there are poor Indians. There are rich Ibans and there are poor Ibans. There are rich Kadazandusuns and there are poor Kadazandusuns. The same applies to all races.

Every population profiles fall into a natural distribution. You cannot create a perfect profile for your race at the expense of every other races because it will not happen.

The challenge for any government is to raise the economic profile of everyone so that Malaysia can really boast itself it be a nation that creates that the best economic opportunities for everyone. This will make Malaysia an attractive place for people to come and we should welcome them so that we can build the society together.

The urban-rural divide occurs everywhere because of the investments that are poured into the urban centres. The rural areas will always be caught in a material dilemma as they struggle to hold on to their traditional ways of life which have been encapsulated as their traditional cultures, which is correct, by definition. It is a good strategy if a good urban-rural balance can be maintained. I see the key instruments are education and technology.


walla said...

1. The Mistake

The British made a mistake. They forgot the immigrants to be given quid pro quo citizenship in exchange for recognition of Malay privileges would later become naturally born citizens which would therefore make the notion of those privileges untenable and therefore by protective reaction open to abuse by Malays who want to continue capitalizing on those privileges.

The Malays under Umno and PAS have continued to live that same mistake made by the common British adversary all overthrew; opportunistically some of them have held on and made it their battle standard ever since in a direct affront to the other signatories of the Alliance which then inevitably became a horse-trading Front later a single-race dominant political power now standing on the brink of irrelevance.

M 1.0 personified that mistake on the argument that for stability there should be equal opportunity for political and economic powers. It was believed political and economic powers are zero-sum games. It was believed that more for you must mean less for me. But he forgot one thing.

The Malays are in the majority so whatever happens they will continue to wield major political power whether it be under the banner of a Malay political party or in a multiracial political party in which Malays predominate in numbers. On the other hand economic power is not inelastic. More for me doesn't have to mean less for you.

A business grows when there are more customers who can afford to buy goods to be sold. A business grows when there are more workers who can afford to make more goods to be sold. More businesses grow when there are more who can afford to start their own businesses because they have earned enough to do so. More businesses grow when people have learned good knowledge on how to run businesses properly to make better profits. More businesses grow when knowledge is learned because there is no association with 3Rs to block cooperation, goodwill and teamship.

Inevitably all points to the need to dissolve the original mistake by making being Malaysian as the common, primary and overriding standard which was why this nation was given its birth certificate in the first place. Without that, there will be no personal compensating mechanism to thwart the two feelings of insecurity and arrogance which will spring mistrust and rivalry.

It may be said pride is important as a motivator for success. If a race is seen to succeed independent of the others, it will good for stability. But in this world which is ever more inter-connected and complex, how can one assume success is ever made independently? Furthermore if one is on a lower base, putting all eggs into one race basket will get riskier when there are more competitors for the same prize outside the market and industries of one's own home-ground. If all see this rationale honestly, there should be no more doubt that the original argument has instead led to instability instead of stability.

Yet some may still argue that actually the mistake made by the British was to get our Malay Rulers to agree to naturalizing those immigrants, and if the country had remained Malay from the start of independence with those immigrants remaining foreign workers forever, today things will be smoother for our Malays. But isn't it fortuitous that it didn't happen like that because history rolled on to reveal it would have been a mistake magnified because now we find some of the Malays who have made it and benefited from privileges are the same ones who have abused their political-economic powers against their very own Malay community in a shroud of elitism and arrogance, what more against the other communities which have silently contributed more to the national funds tapped for the exclusive use of our Malays?

The abiding lesson is race doesn't have anything to do with good governance. The principles of fairness, justice, integrity and honesty are all that are the dials of the moral compass of good government, and whichever holy book professed.

walla said...


2. The Solution

The blogger has offered a set of succinct strategies going forward. No other person in the country could have articulated them better. They are the heart of the matter.

The question now should you choose to accept it is whether M 2.0 is ready and able to move on them. Only he can answer that question in his march to his personal redemption.

On my part, i am hesitant because i think it may not be the right time given two factors, one the economic situation not just in this country but also the rest of the world with which we trade for our prosperity. And two, the political echoes that still resonate in the background.

Economically, we are in a trying position where the play market reflects a lack of confidence, furthermore with little prospect of a fast return. This affects future investments. And investments are needed to blunt the effect of having to pay ruinous interest charges for bad loans taken on toxic assets, those charges wolving future development funds. Hopefully, we are not at the edge of a vicious cycle. People should wake up to that tragic possibility and work together to find real solutions.

It is political situation which may hinder the roll-out of those strategies until the risk looms real of a reversal come GE15 which is a mere five years away. Furthermore, Pakatan looks like it never learns from its own history. But that is because it has yet to configure itself to be the strongest and best organized political force in the history of Malaysia.

Being relieved that one has won, sitting on laurels and making thoughtless snafus are exactly what can turn the tide in the blink of an eye. After all, Umno has more cashable assets, knowhow and jalan that it soon will weaponize in cahoots with a PAS waiting in the background while sneaking in the comment that it will let the incumbent government clean up Umno's mess and then grab power under the old formula of 3R forever, one that has traction given the slim wins in Perak, Kedah, Melaka and Negri Sembilan with Johor a future question mark and Pahang, Terengganu and Kelantan sure losses only mitigated by wins and walk-overs in Sabah and Sarawak which are however with their personal non-federal opportunistic interests.

What does Pakatan really have that however it must not get by going down the same corrupt route of money politics under the 3R aegis? See the dilemma? Get real or perish. After all, change is the only constant and Pakatan has only loose change because it must send assets back to the rakyat.

walla said...


3. The Phasal Approach

Given the above perceptions which of course may be too timid, my conclusions are the following:

We must recognize the Malays need help. NEP can continue but it must be shaped by meritocracy and for every help rendered to a Malay, no lesser a help must be offered to the others who are no lesser Malaysians. There are many Malays who can also perform well. Kick out the political appointees from the boardrooms and give these Malays a chance to shine as Malaysians. Give the others a chance as well to help them as a Malaysian team to clean up the mess and heal the corporations. Hinge compensations to publicly-verifiable results.

Give the corporations a chance to live by a new corporate landscape that merges big lumbering GLCs under perhaps a rebranded umbrella that will excite investors, find economies of scale, solidify efficiencies, and provide clean businesses for SMEs and local enterprises to re-start their engines of growth even while the government progressively sheds its hand in trying to control private sector businesses in which it should have no business doing.

One is however mindful that each re-engineering of businesses will come at the price of headcount shedding so offer a single performance-based and time-locked reprieve that days of cushy jobs are over because wages are paid by the rakyat so that shareholders and businesses must surmount all new challenges in order to survive to pay those others who have been honestly working hard and deservedly need to be supported. The real world works by performance and results against the vagaries of external market forces. That should be each and every realization from now on. Not just talk to hide personal insufficiency, patronage privileges and pure thievery.

Pay attention to the States. One must never just leave the MBs to run them independently of a central mechanism overseeing the whole country. Relook land and religious practices. Be extremely careful of MBs who hire ex-Umno/PAS affiliates to be their private assistants who can take weekly cabinet files from their bosses and pass on copies to the opposition waiting over each weekend so that by Monday, they can throw salvos to twist the minds of easily swayed and agitated future voters.

MARA should continue but the others must also be helped. In fact, for MARA, its education structure should be upgraded for the remits of human capital needed for new industries in this century. Things are changing fast in the industrial world. Malaysians should not be caught unprepared. If need be, add ten percent to its budget after shaving off all the fat, then allow for 10 percent of its students to come from the other communities so that the ninety percent won't think they are the only citizens in the country. All must think as Malaysians first in order to ease the process of helping each other up - if only to block the return of 3R mischief from now on which one and all have seen how devastating on the country it has been. Commission plus omission.

James said...

Agreed, but I point to the single cause perpetuating all these issues - race and religion must be deleted from Malaysian birth certificates and IC, and thereafter organizations that perpetuate racism such as BTN, Jakim must be re-engineered to bring integration. Only then, meritocracy will have a chance. But I seriously doubt it. The change by PH can only be gradual because the Ketuanan concept is cemented in the civil service survive by gaji buta and not render service. How can the civil service manage, when they do not even understand simple management concepts?

As for the Brits, my perception was the Brits were more concerned that the would not be able to control a former colony that is could be controlled by the yellow peril.

M 2.0 motivation remains the same - to help Malays by means that does not promote competitiveness. His strategy has help to create a culture of rent seeking, and that will not change. If M 2.0 seriously wants Malaysia to progress, the racial delineations and discrimination must end, and talent must be cultivated and allowed to grow. Malays need to be able to compete on equal grounds, otherwise, they will forever be dependent on Tongkat Ali. M 2.0 I think is still stuck in his old mindset that only Malays deserves economic attention. That will be the fundamental driver of internal rapture of PH.

walla said...

It has been a long time since visiting a state government office.

To one's horror, things have not improved at all despite service charters and new management homilies. Officers were pontenging at 4, staff were looking drily at their handphones and screens despite rakyat standing at counters who had to call out for them to languor out of their seats wearing faces annoyed at being interrupted only to be gently suggested on what they should procedurally do next when it should have been them telling their customers instead, and in parts of the office were snugged old and broken furniture as eyesores barely deflected from attention by decor that would have fitted in more in some rundown schoolrooms in the backyard of the history of this setengah abad negara.

So shall we henceforth drop the 'ku' from now on? Faced with worldwide efficiencies elsewhere but domestic denudation galore, it's a frigging embarrassment and catastrophic disaster.

The cause and reason should be apparent by now. There is no generational progress based on a permanent personal need to improve one's performance.

That leads to many acting like cuckold clocks. Wind up with some money, bonus, handouts and promotions, and the clock springs to life for as long as those items subsist.

After they are blown furthermore without a single conscience-stricken thought on who actually have been from the beginning to the end paying for those items, the clock automatically slows down again in a clear statement of the downside of the NEP which cannot seem to close real gaps.

Where are the leaders and supervisors?, someone barks extemporaneously from the back. They are busy dealing and politicking, an answer is timidly heard. None manages by walking around with a big stick because none can sell to their staff the importance of service, the origin of their salaries, the dangers facing a country with such public service slides, the hypocrisy of trying to save a race by policies that ignores reality on the ground, or specimens in the policy lab, some may add. The schoolboy classroom back-home mentality is all that remains.

Yet, Malay customers will say they are us too from the same places so it's alright, non-Malay customers will mutter ABB (apa bolih buat), foreign customers, should they have the bad luck to need to visit one, will say WTF (to polite company, that is just world transport federation), and the staff themselves will excuse themselves as just minions because if the boss doesn't care, why can't we not wear the tidakpathy badge of no-shame.

In four words, they-just-don't-care. From top to bottom.

So why continue with the NEP?

1. there will be no M 3.0. He knows the coalition leadership needs time to groom a succession; the anointed replacement is sick, and some are starting to suspect M's mortality is now working on his ingrained personality to try and succeed on his past prejudices like policies affirmative for one race but disapprobatory to other races, a second national car project, and some persistent antagonism against one neighbor.

He knows Pakatan will need more than one term of five years to clean up the mess and put the nation back onto the track of real progress and growth so that the rakyat will get more and better benefits to improve themselves in the new century of limiting resources but increasing needs and demands;

2. unless one and all in the coalition wake up, stay focused, and re-sensitize themselves to threats arising from general perceptions of them which are manufactured by an opposition bent on bending its rules of political warfare, the incumbents will fall into the same somnambulant daze such as what was seen after GE12 when they were in the opposition, and get duly whacked by voter reversal come GE15 because many Malays had only voted against the Rahman factor while spurred by the M-factor, not because they had a proper handle on the Pakatan factor;

walla said...


3. no one has any formulaic solution to the key triangulating matter - the inability of the Malays themselves to generate their own generational progress. One generation retires, and the next comes in with exactly the same fears, behaviors, misgivings, and under-performances despite no relents on the aid, assistance, support and quiet understanding.

The cause cannot be genetic because there are Malays in Singapore, Indonesia, Thailand, Philippines, IndoChina, Australia, America and Europe who have worked hard and done better; many Malays of Malaysia have succeeded but one hastens to discount the Wahids and Nazirs who can't seem to say no to bad deals losing immense shareholder funds for that matter wrong deals skirting the edge of integrity.

The cause could be communal demographics persuaded by religious license. The poor marry young in order to produce babies who then grow until the eldest takes care of the younger siblings so that the mother can go out to get a job to supplement the father's fixed and oft variable monthly incomes.

On this argument and by religious license, more are produced than can be afforded on the wages of the father; if he gives more to groom the eldest, the rest will each receive less to grow; if he gives equally, all will face the risk of not being able to meet the critical minimum needed to emerge; a plate of carbohydrates cannot offer better nutrition than one with more costly protein.

Then, faced with the prospect that political power of this country must ensure the continuation of the NEP owing to the continuation of the lack of generational progress of the tribe, the community thus continues to take license and latitude to continue what they are doing.. produce and demand.. furthermore, persuaded by an inherent knee-jerk reaction to every inadequacy on the excuse of being orang bawahan yang mengikut perintah yang belum diterima.

In short, feudal patronage devolves into organizational patronage because it is easy to ignore that a customer going to a government department will only remember the political organization behind it, not whether it is federal or state or local district.

walla said...


4. On the other hand, there is a growing but still occasionally cagey coexistence peppered with mutual muhibbah. In the private sector, the different races work together and some Chinese and Indians will find in their Malay colleagues the best of friends who care and share even what little they have.

This is the kernel of the reason why it is easy to relent that the NEP should continue - to grow the meritocracy of better Malays getting up in life professionally in their careers and business, and better Malays becoming the majority glue of the very Malaysian-ness that defines this crummy nation. Betul-tak, sayang? Ku?

5. The question marks are the religious zealots in PAS which has morphed into a neo-Umno outfit game for money to monetize their proselytization of a faith where taking a second wife owing to more unsupported widows from tribal wars in the past on the other side of the planet has given license to embedding household poverty and destroying generational progress on this side of the planet. Don't they have suffering mothers and wives?

Tok Aziz's PAS had principles. Hadi's PAS is just gloating how it can take over the government after Pakatan has cleaned up PAS' co-felon Umno's mess. Bilious, guiltless guile and gall, no?

If the Malay minds in Pakatan and Umno grow weaker in the coming years, the political landscape can tectonically shift to a theocratic lock-in under a titular patronage forever in the background; neither is open to reason, commonsense, and progress even if all will be eating ubi kayu when investors and brains flee by the buckets. Who will pay the next gaji then? After all, money drops from skies only once every millennium.

6. All that said and out of the way, it remains to adopt one overdue and good motto:

"End all freakin' sin taxes".

After all, if there are no sinners, religious practitioners will have nothing to do. Do try to see the logic.

That, however, is only said to keep one from demanding that religion be evicted from politics. Because in Malaysia, some people will have no compunction to turn religion into a mobocratic weapon of mass destruction.

James said...

Danger understood but equally dangerous to enrich a religious system to enhance the potential of mass destruction. Systematic reduction is critical. As for a world without sinners, that is an impossibility, as even the higher ups in churches eyes everyone's rears with hunger.

walla said...

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walla said...


the links list is in your blog spam reverse to here.

walla said...

James said...


Would love to know what you think about the US China trade wars. Lots of stuff in the internet but as non economists, it is difficult to distinguish between propaganda, half truths and outright lies. Hope you consider it, or even walla. This shit between Trump and Ji could bankrupt some of us, so some insight as to where this is heading. Like to visit you guys for coffee

walla said...


Looks like etheorist has disappeared.

On your request: