The state of non-Muslims in Penang and Selangor

Religion will be an ever-present issue in our country. Here we look at non-Muslim policies of the Selangor and Penang governments, first published in the Penang Monthly in January 2012.

The state of non-Muslims in Penang and Selangor

The criterion for successful nation building today where Malaysia is concerned lies in how governments manage to settle interfaith issues. As with all controversial matters in a democracy, it is the legal protection of the rights of minority groups – be these ethnic, religious or something else – that shows how mature the country is.

The season for cheer last December was slightly dampened by several events in the months leading up to Christmas. Christmas carollers were thrown into confusion over local police requiring them to apply for permits beforehand, something they never had to do previously. Various leaders then gave contradictory statements, saying simultaneously that permits were not needed but encouraged, and then, that they were not needed at all.

At around the same time, a New York Times article highlighted the uneasiness among Christians who feel that “they are being used as political pawns to win support among Muslim voters”, and that there are “accusations that they are trying to … [convert] Muslims, which is illegal.” (Gooch, December 12, 2011)

These recent stories are merely reminders of the complexities involved in managing the plural and particularly multi-religious society we have in Malaysia. Incidents have happened time and again throughout our country’s history which showed the tensions existing between different faith groups, and which are often swept under the carpet for fear that dealing with such problems will invite a backlash. There are approximately 61% Muslims, 20% Buddhists, nine per cent Christians, 6.3% Hindus and 1.3% adherents of other Chinese religions in Malaysia.

The reality is, however, that these are issues all stakeholders in society must face squarely in order to improve relations and create a more conducive environment for all to live in. For instance, prior to the 2008 General Election, one issue that caused tremendous dissatisfaction with the Barisan Nasional government was the demolition of ancient Hindu temples. On hindsight, one of the problems was simply the failure to conduct a registration exercise, which would have led to a more amicable resolution.

It is a delicate balancing act, and a government’s job is unenviable under such circumstances. The federal government, for example, formed a national interfaith committee, formally known as the “Cabinet’s Special Committee to Promote Interreligious Understanding and Harmony”, but has since not gained significant ground in handling tough subjects such as the alleged “Christianisation” of Muslims. The deafening silence speaks loudly of the difficulties leaders are facing.

Ugly though the situation may seem, this is an area in which the Pakatan Rakyat (Pakatan) coalition can play a more significant role. The advantage of Pakatan lies in its willingness to engage with one another in an open fashion.

Pakatan-led states have led by example in recent years. One of the first things the new government did when taking over Selangor was to revamp the Selangor Non-Muslim Council. The council is jointly headed by three state executive council members – Xavier Jeyakumar, Teresa Kok and Ronnie Liu – and four other assemblymen, with members including seven representatives of the main non-Muslim religious bodies and various representatives from district offices, the Selangor Islamic Department (Jais), Public Works Department (JKR) and the Land Office (PTG).

The council conducted consultations with representatives of the major religious groups, which resulted in amendments being made to the council’s guidelines. These guidelines then ensured that there was now in place a transparent and clear method of dealing with non-Muslim places of worship. This was non-existent previously. The Selangor state factsheet on this issue states that “the Selangor government believes in the constitutional right of all Malaysians to profess and practise their respective religions freely” and that it is “committed to ensuring that adherents of all faiths receive the proper care and attention, and that their concerns are dealt with in a compassionate, reasonable and transparent manner.”

It is believed that such interfaith consultations are ongoing, whilst negotiations continue to take place with regard to allocation of land for schools and places of worship. To date, the state has approved 128ha of land for non-Muslim places of worship, coming from 90 applications altogether. (Of the total, 114ha are for Chinese temples, 7.67ha for Hindu temples, 4.74ha for churches and 0.74ha for gurdwaras, as of March 2011).

Earlier this year, the Penang state government made the positive move of setting up a state interfaith council, significant because it exists as a separate and new executive council portfolio, the first such portfolio in the country. In the Chief Minister Lim Guan Eng’s statement, he said that this initiative reflected the state government’s “genuine concerns on all religious matters”. The state has since given land to schools and temples as well as at least RM1mil annually to the Hindu Endowment Board.

The setting up of these interfaith bodies has not come without opposition, though. Pembela, the Muslim Organisations in Defence of Islam, called their formation a threat to Islam’s position as the official religion. And other events of the year have also tested the fragile notion of “harmony” within the states as well. The controversial church raid in Petaling Jaya in August elicited different reactions from different groups within civil society – some Muslim non-governmental organisations (NGOs) were adamant the raid was valid, whilst other groups questioned its legitimacy.

The Pakatan coalition often finds itself in a fix, having to allay fears that it is not merely a “marriage of convenience” especially between the Democratic Action Party (DAP) and the Pan-Malaysian Islamic Party (PAS), where the latter would impose its ideals without due consideration from the former. Whilst it is true that they each have a different ideal “Malaysia”, it is also true that each party is committed to a process of negotiation, in the spirit of camaraderie. This openness and willingness to discuss matters is crucial, because it is only through such decent dialogue that a solution can be found, collectively. And these internal negotiations have obviously led somewhere, with the recent launch of PAS’s “Welfare State” document, signifying that its historical ideal “Islamic State” is now put on the backburner.

Whilst it is well and good that the two state governments have formed non-Muslim committees and executive council portfolios to sort out the thorny issues non-Muslims deal with, surely there is a larger, more national-level role the Pakatan coalition can play. The interfaith committee at the Cabinet level exists for formal purposes, and in reality may not achieve very much due to political constraints.

Perhaps these state-level bodies can take on a greater responsibility and confront the difficult question of how all religions (and their adherents) can work together towards a united, harmonious and fair Malaysia. This would move beyond practical administrative tasks to a deeper, more philosophical discussion. Above all, Malaysian citizens would then have a glimpse into the sort of leadership an alternative government could offer. The deep divisions within Malaysian society may well continue, but the onus now lies upon Pakatan to show that it can offer a better deal, distinctly different from the current model and structure.

Posted in Ethno-Religious Politics, Religion, Selangor | Leave a comment

Politics vs Policies: How do People Really Vote?

People don’t vote on policies, or do they? This was my piece in January 2012 in Selangor Times.

Politics vs Policies: How do people really vote?

 

How do people evaluate their leaders in government, through their satisfaction with policies, or based on emotional tags linked to the personalities of politicians? When voting, do they think of the impacts felt on a daily basis, or are they reminded of the candidates’ antics as portrayed in the media?

Perhaps there was a collective sigh of relief (or horror, depending on which side one was on) after the verdict of Anwar Ibrahim’s sodomy case was announced. There was certainly a tension that had been built up in the preceding weeks, with members of his party making preparations for a worst case scenario.

The decision was predicted to have coloured the political fabric for the year ahead, giving pundits some indication as to when polls may be called. Predictions vary for the elections to be held anytime between June this year to March 2013, the latter being the full term of five years. Malaysians have been sitting on the edge of their seats for at least two years already in trepidation, waiting for the big game to begin.

Politics does have the tendency to transform Malaysians into wild things who channel all energies into anticipating a single event. Press conferences, finger-pointing, scandalous revelations and the like are geared toward the likelihood (or not) of a particular party winning in the elections.

What often goes swept under the carpet is the arduous task of policy-making. This ought to be the bread and butter of governments, where positions taken by federal, state and local governments, then translated into programmes and projects, are evaluated and scrutinised by citizens. Surely the socio-economic philosophy behind a certain party should influence how people feel towards them.

However, this requires a more educated society. When I went to the United States to observe the 2008 elections, for example, I was surprised at the detail that the average American voter was expected to know when voting. There, you are not merely voting for the President, Senator, Congressman or local councillor; depending on the state and municipality, you are also expected to vote for specific legislation. For example, Californians were able to vote on whether to ban same-sex marriages in the state.

In such a situation, numerous civil society groups and non-governmental organisations publish information in little booklets to educate the public, conduct seminars and campaigns for or against a certain legislation being voted upon. This of course requires an educated public and an environment conducive to promoting freedom of speech and expression.

We have not gone down that route yet, where Malaysians only vote for two public representatives: their state assemblyperson and Member of Parliament. These elected individuals are then expected to represent their constituents’ views in making policy decisions. By right, these leaders should therefore be judged according to their policies and actions, since we have given over the right to decide on what’s best for us to them.

Let’s face it. Elections is a popularity contest, and numerous factors come into play, not necessarily reflecting how wise the candidate has been in executing the best safety, health or public transport policies. The media also contributes to playing up issues: the question thereby arises of whether the supply of political gossip precedes its demand, or vice versa.

That being said, Malaysians are maturing as a voting society. Take the episode of Bersih 2.0 as an example, where people are rooting for what is essentially a policy change. In this respect, the policy of electoral reform precedes the personality of a leader. Whichever political leader who is able to demonstrate his affinity to the reform demands would be seen as favourable in the court of public opinion.

And this is surely the route to take if we want to develop an advanced democracy. Sure, Malaysia is still very much a rural polity, and sure, the national education system has not necessarily produced critically thinking individuals. But we cannot wait for that to take place. Already, heated discussions ensue on important policy issues facing the country: budget deficits, economic sustainability, national bankruptcy, urban poverty, and so on.

As we find ourselves facing an upcoming election year (whether or not the elections are actually called this year, politicians will surely act as if it will), it is important that Malaysians stay focused on what will most impact society and the country. It is often easy to be distracted by reports on sodomy, party-hopping, traitorous behaviour, and so on.

Evaluating of our leaders based on their performance, how they have handled their budgets, and positions taken on everyday affairs, say, violence against women or traffic jams, should be considered important indicators of effective leadership.

This piece argues for greater consideration of policy decisions and their implementation when observing politicians. However, the reality is that how people vote will be an amalgamation of their perceptions both emotional and rational: the fine interplay between politics and policy. Research into this area would surely offer a rich understanding of voters’ behaviour, expectations and how these values influence their final mark on the ballot.

Posted in Elections, General Politics | Leave a comment

Game-Changers at the Year’s Start

At the beginning of 2012, this was the series of incidents taking place, including the sacking of Hasan Ali, the “We are all Adam Adli” and others. A version of this was published in theSun on the 13th January 2012.

Game-Changers at the Year’s Start 

Welcome back to reality and its various antics of the new year. Without so much as a breather, events of the first two weeks of 2012 have come tumbling upon us one after the other relentlessly. Three in particular are looking to be game-changers in this political chess board that is Malaysia.

First, the sacking of Selangor state executive councillor Hasan Ali from PAS after having publicly expressed views divergent to the party’s. Second, the three-month suspension of student activist Adam Adli from Universiti Pendidikan Sultan Idris (UPSI) after lowering a banner of Prime Minister Najib Razak, and finally, the one with the most significant impact, the breaking news of Anwar Ibrahim’s acquittal in the sodomy case, having dragged on for more than three years now.

Each of these incidents will cause ripples in their respective communities of influence; in the case of Hasan Ali, amongst PAS members themselves in particular, and the Muslim community as a whole. In the context of his recent claims about Christians attempting to convert Malay Muslims out of their faith, it would spark a debate on that ever-raging question of religion’s role (more specifically, Islam) within a multi-faith society.

He had also criticised PAS for choosing the term ‘welfare state’ as what it aspires towards, as opposed to the ‘Islamic state’, the latter having been the party’s previous position. For PAS to take this stand despite potential backlash, it sends a signal to the non-Muslim community that the party is willing to focus on less controversial values for the sake of sharing a common platform within the Pakatan Rakyat coalition. This certainly sets the tone for Pakatan in the lead-up to what will be a hotly contested election, and one in which the Malay ground will be dearly fought over.

The less well-known case of Adam Adli, although a smaller headline grabber, has already reverberated around public tertiary institution campuses, perhaps the exact symbol the student movement was waiting for. Accused of “bringing the institution into disrepute”, he and those rallying around him, the Movement for Academic Freedom (Bebas) for example, are protesting for the right to freedom of expression.

We all grieve (well, some of us, anyway) the demise of Malaysian student activism, most prevalent in the heyday of the 1960s. Campus politics came to a grinding halt after the enactment of the Universities and University Colleges Act (UUCA) 1971. Swimming against the tide, several dedicated individuals have continued to pursue the cause.

Today, Adam has lent a voice to the movement, with 34,000 people backing a Facebook campaign, “We Are All Adam Adli”, and student activists staging a sit-in at UPSI’s campus on New Year’s Eve in which several students claim they were assaulted by the police. The rise of the young vote is still not fully understood by either side of the political divide, also a constituent group whose support will be keenly sought after, but whose likes and dislikes need deeper analysis.

Finally, the most unexpected of all, the fate of Anwar himself: a free man – for now. It surprised many, and was certainly a welcome decision for his family and supporters. Whilst some have commented on this as proof of the country’s judicial independence, the more skeptical of analysts wonder if this is really the end of the game. The alleged victim, Saiful Bukhari, for example, has stated his hopes of the prosecution team appealing the High Court’s decision. This is a possible next step, although no indication has been given yet.

This decision has cast light on the year ahead, politically at least. It reflects a government that seems to be willing to create a more level-playing field. That is, the conditions that are considered visible in the public eye, at least. It seems to speaks of a leadership that is going the extra mile to say, “Look, I am independent, I am fair. Now, let’s play.”

Having said that, an elections has much more to do with what is unseen and shrouded from public attention. It involves the mobilising of massive funds, goods and machinery, volunteers (or paid staff, which also depends on financial resources) and other ‘friendly donations’. How constituencies are delineated, and how well-cleaned-up voter rolls are, all have a huge impact on electoral outcomes.

To say that the path is clear for all parties (Anwar included) to enter the polls fairly is therefore premature. The Parliamentary Select Committee on electoral reform, for example, is expected to table its report to Parliament in March, providing recommendations for the Election Commission to implement, in ensuring a free and fair elections.

Although it will probably take months to unveil the full impact of these three (and other) incidents, suffice to say these have somewhat shifted the gears forward, in what may be a reckless ride toward the 13th general election.

 

Posted in General Politics, Reflections | Leave a comment

Financial Outflows Hamper Growth

I wrote this in 2011, but today again we have the Global Financial Integrity report now stating Malaysia is the third highest in the world in terms of illicit financial outflows, and second only in Asia, and first in terms of per capita! This is a version of what was published in theSun on the 23rd December 2011.

Financial Outflows Hamper Growth

For my ‘A’ Level literature class, we studied Ayi Kwei Armah’s ‘The Beautyful Ones are Not Yet Born’, in which a nameless man struggles against a post-independent Ghana rife with corruption and rot. Humanity, it seems, rides with the tide of evil as a norm, and the few exceptional people feel like they have to swim against strong currents to maintain some semblance of honesty and goodness. And this problem spins further out of control once an individual problem becomes a systemic one.

It is hardly any different in Malaysia, where we can hardly keep track of the growing list of financial scandals, the roots of which are greed and the propensity to be corrupted. This year alone, we have had to deal with the mega cattle-rearing project, government departmental overspending as found by the Auditor-General’s report, and the resurfacing of the issue of certain submarines speculated to have been purchased for more than their worth.

These are individual issues requiring investigation, for sure, but more shocking are the recent figures released by the Global Financial Integrity (GFI) organisation in their ‘Illicit Financial Flows from Developing Countries Over the Decade Ending 2009’ report updated this month. The Washington-based GFI claimed that RM150 billion in illicit money has been siphoned out of Malaysia in 2009 alone, on top of the RM927 billion losses between 2000 and 2008.

The GFI had earlier this year reported on outflows that more than tripled in 2000 to 2008, the scale of which was “rarely seen in Asia”. With the latest country data from 2009, Malaysia now sits within the top five exporters of illicit capital. The top ten illict capital exporting countries account for 70 percent of total outflows from developing countries. Several reasons were given for this, including export under-invoicing, and unrecorded transfers using non-trade channels, amongst others. Although the figures are likely estimates at best, it is certainly cause for concern.

In January this year, the government responded with a mix of reactions, with one Minister initially flatly refusing to consider the report’s claims, and the Prime Minister and Finance Ministry later acceding that Bank Negara ought to probe these details. This investigation, however, has not yet resulted in any public statement to date.

In fact, the police responded most recently that illicit outflows are nothing new, and that they have been freezing assets of organised crime and drug rings to tackle the problem. It is true that Malaysia does have an Anti-Money Laundering Act (2001), and it has also signed and ratified the United Nations Convention Against Corruption (UNCAC), Article 14 of which requires the country to prevent money laundering. In addition, the Money Business Services Act has just recently come into force in December this year, which Bank Negara states will address the outflow of funds from the country. We do have the regulatory framework, then, which is an excellent starting point.

But let’s be clear about this: the problem is not limited to crime and drug rings alone. There are governance issues that affect both the private and public sectors. The January 2011 report also stated that “large state-owned enterprises such as Petronas could … be driving illicit flows”. This is a serious claim to make, and certainly official probes need to be urgently and immediately carried out, if only to respond and clarify matters to the Malaysian public.

Why is it so crucial that the source of such illicit capital outflows is determined? Ultimately, it is not with the intention of targeting the culprit(s) involved, but to ensure that such capital can contribute to productive efficiency within the country itself. All that lost capital could have been rechannelled and better targeted for socio-economic needs at home, or invested to stimulate greater economic growth and create jobs.

The response from the Indian government, for example, was to get four top Indian research institutions to submit proposals to study the issue of ‘black money’ generation. Likewise, Malaysia could be equally proactive in getting to the bottom of these claims. If true, it is indeed worrying, as this jeopardises the effectiveness of even current government expenditure, savings or investments.

Some of the indicators that were found to drive illicit capital from developing countries include political instability, rising income inequality, corruption and discrimination in labour markets. If these contributing factors worsen in Malaysia, much will need to be done in order to reverse the trend of capital outflow. One hopes that efforts are underway within the Malaysian central bank and the respective ministries involved. Should these massive sums continue to leave the country, this will eventually have grave implications on our national growth and development.

Posted in Corruption, Economics, Outside Malaysia | Leave a comment

Managing Plural Societies

In this article, I look at just how a consociational a democracy our country is, based on reflections of a dialogue session that I participated in at the Centre for Dialogue in Melbourne. A version of this was published in theSun on the 9th of December 2011.

Managing Plural Societies

Earlier this week, I had the opportunity of speaking at a Malaysia-Australia dialogue at the Centre for Dialogue, La Trobe University, in Melbourne. This was the second of such dialogues, the first of which took place in Penang two years ago. The theme was Malaysia-Australia relations and a sub-theme of managing plural societies was chosen, particularly relevant given that both countries consist of communities with diverse ethnic and cultural backgrounds.

The challenge of dealing with pluralism is obviously real in Malaysia, and we see evidences of this everyday whether we are dealing with religious, educational or political affairs. What this challenge is grounded upon is the problem of identifying boundaries between the exercising of respective communities’ freedoms. For example, to what extent can my rights be exercised such that it does not impinge upon the rights of someone else’s? And it is this negotiation of precisely what defines the ‘freedom’ each community enjoys – both theoretically and realistically – that we in plural societies grapple with on a daily basis.

Take civil society, for instance, which is the subject I chose to speak on. Civil society itself is not homogeneous in Malaysia, which is fragmented along the lines that have come to define society here, and as a result also represents the multiple demands they have for the country. Put simply, with each community envisioning different, and often polarising, ideals for Malaysia, the notion of a “common identity” and “common goal” for the sake of unity is sometimes considered fallacious.

But hold on a minute. We have presumed these divisions to be natural, inherent, in-built into our ethnic and cultural roots. Perhaps to a certain extent, yes, there will be a tendency for Muslims to want more mosques, Hindus and Buddhists their respective temples, Christians churches, and so on. This does require some give-and-take since land and economic resources are scarce.

The real problem, however, is centred upon a more systemic one, the country’s political structure.

A ‘consociational democracy’ can be defined as one in which a stable democracy is achieved through a power-sharing, or guaranteed group representation, solution, in societies that are differentiated by sharp cultural, social, religious, ethnic, and political cleavages. The Barisan Nasional model is a good example, whose component parties satisfy these elements by having race-based parties representing each ethnic group.

All well and good, except that the conditions for such a consociational arrangement to survive may no longer be existent today, more than 50 years after Malaysia’s independence. The political scientist Lijphart proposed several favourable conditions, including segmental isolation of ethnic communities, where it must be possible to identify the segments into which society is divided.

Because the Barisan coalition has been so structured along ethnic lines, it has never been in their interest to cultivate a true commonly shared vision, beyond race or religion. In fact, such “segmental isolation” that is a pre-condition for a stable power-sharing agreement would be to an electoral advantage. This is to say that the problem lies within the very structure of political governance.

And so, even though modern trends of globalisation, the Internet and the like ought to dictate the blurring of ethnic identities, in Malaysia we have seen the reverse taking place. One would have imagined that by now, with inter-racial marriages, the concept of ethnicity would have ceased to be all that significant. (After all, it is not as simple as looking at physical traits these days as a differentiating factor – I have several times been mistaken as Malay especially when clad in a sarong kebaya.) One would have also imagined that with technology, culture (albeit, and unfortunately so, Western) would cut across other societal differences.

Some of this has taken place, this is true, but it is my suspicion that if not for our ethnic-based political structure, and the very strong political incentive to keep society divided that way, Malaysia’s pluralism would be a much more flourishing one. In the sense that although ethnic and religious identities would remain, this would be so only for cultural and festive reasons. On issues that truly matter: democratic development, economic growth, social justice; it would be citizenship first and foremost that determines and informs our shared vision for Malaysia.

Where does this lead us? Well, back to square one, apparently, judging from the closing remarks of the recent general assembly of a certain political party. The very predictable retreat to the comfort zone of maintaining ethnic fears and insecurities about “the other”. It is my idealistic, naïve self that hopes against hope for alternative media, education and civil society efforts to undo the knots of a pluralism that keeps people apart instead of bringing them together.

Can plural societies be managed successfully? Sure. It ought to be everyone’s responsibility. But in reality, so much of it has been taken into the hands of government, and so, the buck stops there.

Posted in Ethno-Religious Politics, Outside Malaysia, Religion | Leave a comment

What do the state budgets of Penang and Selangor tell us? (2012)

The 2012 state budgets of Penang and Selangor would speak of brilliant financial performance from both states, an affirmation that Pakatan Rakyat governments have done well in managing their states. This is a case study for what a Pakatan federal government would achieve.

What do the state budgets of Penang and Selangor tell us?

With power going to different parties and coalitions after March 8, 2008, policy competition became a thing to watch. This was one of the major gains for Malaysia as a democracy. Now, three-and-a-half years down the road, enough time has passed for us to do some comparisons. What better way than to compare budgets?

We are living in times beset by talk of financial difficulties all over the world.

The Eurozone crisis continues to unfold with the economies of Spain, Greece and soon Italy spiralling steadily downward, while the US’s massive budget deficit threatens to have far-reaching implications for other economies. How efficiently public finances are managed will determine how stable governments can stay in each of these nations. It is a tough battle to fight, balancing harsh austerity measures yet retaining enough popularity to stay in power.

Malaysia is no different, and Minister in the Prime Minister’s Department Idris Jala had warned in 2010 that we were heading for bankruptcy if subsidies were not removed eventually. Although there is some internal dispute on actual figures, all would agree that Malaysia’s budget deficit (14 years of consecutive deficit) needs reducing. Whether or not this can be achieved is a different question, given the government’s track record.

Whilst the national budget was being debated, yet another level of budgets was passed recently: the state governments’. The Pakatan Rakyat (Pakatan) coalition is often harshly critical of the Barisan Nasional’s inability to manage the country’s wealth, and so it is of interest to examine the performance of Pakatan-led states.

This article focuses on selected aspects of the state budgets of Penang and Selangor to gain some insight into how the governments there are doing.

Tabling the budget each year is as good a time as any to reflect upon the year’s achievements. The first trend that is evident here is that in both states the emphasis was on the performance of financial management. Both had budget themes along these lines: the Penang Chief Minister’s budget speech contained phrases such as “thrifty expenditure”, “reducing state debt, increasing revenue” and “financial management based on CAT (competency, accountability, transparency)”; while the Selangor Menteri Besar’s was peppered with “state revenues for the people”, “better financial management” and so on.

Such highfalutin language may have been unnecessary; the results were able to speak for themselves. Penang, for instance, managed to reduce its state deficit from RM630.13mil in 2008 to RM29.66mil in 2011. This marks a reduction of 95.29% over a period of three years. This reduction was attributed first to the migration of water assets to Water Assets Management Berhad, and second to a strategic financial management practice – mainly with reference to its decision to implement an open tender system more than a year ago.

Similarly, Selangor registered its highest cash savings in 28 years—a total of RM1.2bil made up of RM946.65mil in cash reserves and the remaining in trust reserves. The data obtained from the Selangor state government is reflected in an impressive graph that clearly shows the reserves growing significantly since the coalition took over in 2008. This increase in reserves is attributed to better management of state resources, more efficient collection of overdue arrears and stricter use of state assets.

The second visible trend is that both governments have been increasingly dedicating financial resources to the democratisation process, which includes empowerment of communities and maintenance of transparency and accountability standards. Penang, for example, is in the process of forming its Penang Women’s Development Corporation to empower women through developmental and training programmes. It also initiated an Accountability Index for its civil servants, with an audit being carried out in January 2011 which ranked various government agencies accordingly.

Selangor introduced a “Selangorku Grant” for 2012, which includes allocations to various communities with a specific focus on empowerment. Some of these include a grant to empower women, to train and develop young entrepreneurs, to strengthen democracy, to contribute to culture and activism and for other vocational educational support. It is important to note that this philosophy is one that propels individuals to better themselves through the equipping of knowledge, training and skills development to enhance their capabilities. Nevertheless, both state budgets do still allocate certain sums to ensure social safety nets are provided to the lower income segments of society.

It is commendable that both governments have decided to spend state resources on empowering the citizenry through programmes that promote democratisation.

Finally, both state budget speeches seem to place a strong emphasis on developing their state economies on a higher-level plane, in recognition of the demand for high-quality performance-based services. One theme in the Selangor budget is to build a society that is knowledgeable. After all, the services sector contributed 57.4% to its state gross domestic product (GDP) in 2010. In Penang, the tourism sector is to play an increasingly important role, with plans to capitalise on its World Heritage status through a number of events (George Town World Heritage Festival is one), its food as an attraction and the Meetings, Incentives, Conventions and Exhibitions (MICE) industry. Penang attracted 18.3 million tourists between 2008 and 2010.

The two states in which the country’s major industries, offices and factories are located seem to be moving forward with a steady momentum. There are certainly success stories to speak of, chief of which is better efficiency in public financial management.

Then there are the budget figures themselves: Penang tabled a budget of RM740.53mil, an increase of 0.16% from RM638mil for 2011. Out of this total, RM599.6mil is for operational costs, and RM44.24mil is for development. However, this was a deficit budget of RM213.71mil, which Penang said would be funded by State Accumulated Savings. Selangor tabled a balanced budget of RM1.6bil, an increase of 11.89 % from RM1.43bil in 2011. Out of this, RM1bil is allocated for the operational budget (62.5%) and RM600mil for development (37.5%).

At the national level, things remain uncertain. The principle is simple enough: governments ought not to spend more than their revenues unless they have savings to turn to. Notwithstanding the political unpopularity of pulling out subsidies and implementing the Goods and Services Tax (GST) at this crucial pre-election period, it is surprising that the federal government has not yet emerged with an alternative solution that safeguards the interests of future generations. As long as the government continues spending heedlessly, long-term consequences are to be expected.

In the words of Idris Jala himself, “…If our economy grows less than four per cent… and we don’t cut our operating expenditure, if we borrow at 12.5%, if our annual debt rises to 12.5% and our revenue does not grow, then it (bankruptcy) will happen.” (The Malaysian Insider, November 1, 2011).

It is a healthy exercise for us Malaysians to compare and contrast the financial performance of different governments in matters of governance and in the management of public funds. This, after all, should be a determining factor in our evaluation of government.

Posted in Economics, Public Administration, Selangor | Leave a comment

Malaysian Lessons from Bolivia

Having worked on a documentary last year, I truly appreciate the worth of the visual medium now. Documentaries add great value to the study of politics as well, as the “Our Brand is Crisis” documentary shows. This was first published in Selangor Times in December 2011, but equally relevant for us today.

Malaysian Lessons from Bolivia

At the Centre for Independent Journalism’s ‘Human Rights in Outer Space’ series of events last week, I was asked to speak on a panel analysing the “Our Brand is Crisis” documentary and draw comparisons between issues arising within that, and the Malaysian context. My fellow panelists were the established Hishamuddin Rais (also known as Tukartiub) and Ray Lagenbach, both esteemed in their own right. The little I had to contribute came in the form of experience working within a state government, and my observations of the Malaysian political and electoral system.

The documentary, in short, shows the intimate behind-the-scenes action of the Bolivian Presidential Election campaign, specifically that of Goni’s (Gonzalo Sanchez de Lozada, Presidential candidate) team. An American political consultant, Greenberg Carville Shrum, was hired to conduct a series of focus group discussions in order to ascertain the needs and wants of the local Bolivians. Following this, the Goni team was to have crafted political campaign messages such that they reflected what the people most wanted to hear.

The role of consultants

There were four themes that I highlighted during my short presentation. First, the role of consultants. In the documentary, the consultants were presented as Western, young and English-speaking, juxtaposed visually against the Bolivian team who were depicted as relatively older, Spanish-speaking. The latter group was placed in an awkward position of having to begrudgingly follow whatever instructions were given to them from this foreign consultant, since it was placed upon them, presumably by Goni himself.

The moral question that emerged was whether it was possible to export an American-style politics into a country like Bolivia, and whether the consultants were able to provide relevant and suitable advice given the varied political conditions. For example, at the end, when Goni admits his campaign did not go as successfully as he expected, he says, “Only in the US can you believe that you can change people with information.”

In the Malaysian context, we have had our fair share of foreign consultants. One need not be reminded of the criticisms befalling the federal government upon the exposure of its utilising Apco as a public relations consultant, and its alleged Jewish connections by the Pakatan Rakyat. Secondly, the Pemandu outfit under the Prime Minister’s Department has freely employed the services of consultants under its ETP and GTP programmes, oftentimes paying a significant amount to conduct workshops. Whether or not this is justified is left for another debate.

Marketing and branding

The second theme I spoke on was on the fact that the world of marketing and branding has been absorbed into that of politics, just as the theme of the documentary suggests. The consultants immediately launch into how to position the economic crisis; in their own words, they say “we must own crisis” and therefore, “we must brand crisis” to their electoral advantage, as spin-doctors.

Capitalism, although in its purest form is meant to be based on the belief that human beings are perfectly capable of forming their own decisions based on a set of incentives, most usually economic, this has resulted in something quite the opposite. The fact is material and non-material consumerism is now a lot less dependent upon the content’s value as it is on the marketing and branding associated with the content. This notion has spilled over into the spheres of politics, as we can see in the documentary, where it is now the flashiest of campaigns, the most beguiling of politicians, the most emotional of messaging, that finally hits home in the supermarket culture of capitalistic politics.

Hence, similar to the commercial world, the tools and methodologies used there have also been absorbed and adopted into the political world. Focus group discussions and opinion polls are often used within the market research industry in order to test all sorts of things, including advertisements, packaging, pricing, products and so on. These days, companies are also observing acutely any movements and trends emerging from social media and social networks like Facebook, Twitter, and any online chatter.

Let’s face it. Market research does work, simply because when brands find out how their consumers tick, it makes it all that much simpler to craft messages along those lines. In fact, there are numerous examples in which companies did not conduct research and then failed miserably when their new products were launched. In this case, the product in question is a candidate. And without a doubt politicians would want to have their ears to the ground, detecting any likes or dislikes of their personality’s image. This is only natural, and the political polling and research industry is ever growing, including within Malaysia, where political stakes are high.

One of the unfortunate elements about this, however, is that it is easiest to appeal to one’s emotions. In Malaysia, we are not alien to the game of emotional politics, and indeed, parties have played into the sentiments of fear and insecurity, very often irrational in nature. The Umno party within Barisan Nasional knows perfectly how to tug at the heartstrings of the Malay Muslim, for example. But in order to move towards a more inclusive society, surely all parties have it in their interest to have a different sort of branding exercise altogether?

Popular vs. Effective Leadership

There is a disparity between doing what is popular, and what is actually effective for the country. For example, the people stated upfront within the focus groups that they did not want drastic measures that would affect their income. They also said they did not want their country to sell gas (especially through Chile, for historical reasons), but Goni, upon becoming President, immediately instituted these two measures. When asked, he replied by saying, “I don’t have time to meet the people; I don’t want to be popular, I want to be a good President.”

So there you had a President who was willing to push through policies that the majority of the people did not support – in our analysis, perhaps one who is either stubbornly foolish, or confident, or both, resulting in his eventual fall.

The trick is balancing between popularity and doing something unpopular but necessary for the country. In his case, he felt that selling gas was important to increase national revenue, although the people considered this to be selling away the country’s natural resources to the corporates. Note that Goni was already known for liberal economic policies, and had to defend himself for bringing in foreign companies at the expense of local jobs.

In Malaysia, the government has a tough position in removing subsidies for oil and essential items, as well as the still frozen Goods and Services Tax (GST), which it considers necessary to fill government coffers. These are undoubtedly unpopular measures, and the latter would be impossible to implement just before a general election.

Promise vs. Implementation

There is a danger of over-promising at the campaign level, which leads people to overwhelmingly reject the politician in question if no such change takes place within the first year of administration. Goni promised local jobs to a degree that was unrealistic. In Malaysia, we have seen the example of former Prime Minister Abdullah Badawi promising to rid the country of corruption, but whose ratings fell all too quickly.

It is clear that in the lead-up to the next General Elections, there will be much activity and hype, research, polling and focus groups similar to what was observed in the documentary. Malaysians will see the political battle played out in real life, and if there are lessons to be learnt from the “Our Brand is Crisis” documentary, it is this: That despite the wonderful advantages of branding, communication, and consultancy work, nothing can bear down the will of a people frustrated with their government. Goni was forced to step down less than one and a half years into his Presidency. We hope Malaysian leaders will learn to read the right signals and messages from the voters who are also increasingly frustrated with their government.

Posted in General Politics, Outside Malaysia | Leave a comment

The Paradox of Plenty

Haven’t you ever wondered why Malaysia with all its glorious resources, is not more developed than it is today? This has been called the “Paradox of Plenty” – my piece which was published in theSun on the 25th November 2011.

The Paradox of Plenty

The paradox of plenty refers to resource-rich countries that had slower economic growth and worse development outcomes than those without. At first glance, it does not look like we have been hit with this “resource curse”. But a deeper analysis might show otherwise.

The Malaysian story of growth and development has been romanticised over the years, having successfully reduced poverty to very low levels. Its economic growth also surpassed many Southeast Asian neighbours in the 1980s and 1990s (except our island neighbour down south, of course). Even now, Malaysia scores fairly decently on international indices measuring the ease of doing business, human development and competitiveness levels, moving up or down several notches each year.

But an alternative way to view it is: Given our geographic advantage, abundance of resources, language and cultural diversity, we could have achieved a great deal more. Over the past few years, this problem has been acknowledged by various quarters and coined into catchy phrases such as being stuck in the “middle-income trap” and the need to “move up the value chain”. Simply put, it is a culture of mediocrity that has led to this rather dull mode of stagnation.

High Oil Dependence

But it is not just by chance that we are sluggish. One of the most important factors that must be considered is Malaysia’s unhealthy dependency on oil and gas resources. Almost 40 percent of our national revenue comes from oil and gas revenues.

The recently released World Bank’s Malaysia Economic Monitor reiterated this burgeoning problem, stating that although higher oil prices have driven revenues higher, this also means that Malaysia’s dependency on oil has increased. Over the past five years, petroleum-related revenues “averaged 38 percent of all revenues”.

There are several implications for this. First, oil prices are volatile, which means that our national fiscal position is exposed to such global uncertainty. Government developmental expenditure would be highly dependent on what happens to the oil and gas market internationally.

Second, Malaysia is falsely lulled into believing that our national balance sheet looks fairly healthy. It is crucial to look into non-oil growth to examine the activity of real economic and industrial sectors, where in the case of Malaysia, “the non-oil primary deficit has roughly doubled over the past five years to almost 20 percent of GDP in 2009” (World Bank, 2011). Is our non-oil sector growing at a much slower pace, but having gone unnoticed because of the oil sector’s growth?

Third, there is a risk that these plentiful funds are made use of with less stringent oversight and caution. In Malaysia, it is impossible to tell what our oil money is used for specifically, because all revenues are pooled together into a consolidated fund, which contributes to all government spending. For example, would government embark on mega-projects if we did not have oil money to fund them?

Note that Petronas controls 84 percent of Putrajaya Holdings Sdn. Bhd. Petronas also financed and built a private healthcare facility Prince Court Medical Centre in Kuala Lumpur, with costs estimated at RM544 million. Although one argument is that the country’s resources ought to be used for national development, these commitments must be prioritised. Such new business investments must be adding value to the core petroleum business and not burden Petronas (and the country) with additional costs.

Responsible Resource Management 

Talking about oversight into oil money, the Petroleum Development Act 1974 actually gives sole discretionary power over the management of Petronas to the Prime Minister, Section 3 (2) reading, “The Corporation shall be subject to the control and direction of the Prime Minister who may from time to time issue such direction as he may deem fit.”

Many countries control for the unpredictability of oil prices by having sovereign wealth funds (SWF), or oil stabilisation funds, which compensate for revenue shortfalls, save for future generations, and invest in physical or human capital for future economic growth. Norway is probably the best example of having a successful SWF, whose operations are strictly controlled and monitored by the Parliament, to which it reports three times a year. On the flipside, Nigeria is an example of a country whose Excess Crude Account (ECA) “will soon be empty of the sizeable windfall profits collected during the recent period of high oil prices” (Gillies, 2010), mainly because the fund was not protected from the short-term political pressures to spend.

The closest Malaysia has to this is a “Kumpulan Wang Amanah Negara”, or National Trust Fund, which has RM5.43 billion as at June 2011. But for the fund to fulfill its purpose, Malaysia must resist the use of windfall profits from petroleum money by present politicians intending to stay in power. Depleting resources should be used for both current and future generations.

Transparency is crucial. A Revenue Watch Index placed Malaysia in the “Partial Revenue Transparency” category, scoring only 48.4 out of the full 100 points. This index measures public accountability by both government and oil companies, in the extraction of oil and gas resources. This was reportedly due to an absence of legislation providing for disclosure of information in the oil and gas sector. Relatively little is publicly disclosed such as contracts and agreements. Also, Parliament does not have the authority to ratify contracts.

Malaysia must therefore have better monitoring of natural resource accounts and the National Trust Fund by government together with civil society. With steadily depleting oil and gas reserves, the non-oil sectors must play the more important role in contributing to national income. Responsible resource management is the only way to ensure a sustainable and promising future for Malaysians in the long-run.

Posted in Economics, Human Rights | Leave a comment

Open Crucial Mega-Deals to Public Eye

And the financial mismanagement of the Malaysian corporate sector (or should we say pseudo-corporate) keep taking place. A version of this was written and published in theSun on the 25th November 2011.

Open Crucial Mega-Deals to Public Eye

Cyberspace was on fire last week after the Auditor-General’s 2010 annual report revealed a whole host of financial irregularities perpetrated by several government agencies and government-linked companies. Indah Water Konsortium (IWK) was among six GLCs reported to have paid up to two months’ bonus despite having suffered RM354.91 million in losses in 2009. IWK suffered losses amounting to RM33.35 million that year (The Malaysian Insider, 24th October 2011).

It isn’t too difficult to understand why people are angered each year when these scandals are unveiled. As taxpayers, they feel indignant that their hard-earned money is being thrown about – and worse, to line the pockets of those they feel are undeserving.

But this is the epitome of everything that went wrong with the country’s privatisation scheme. Sewage treatment was privatised in 1994, taking over the functions of local government authorities to improve service efficiency and effectiveness. Again, the argument that under a privatised company, things would be better managed.

But in 2000, the government had to dish out RM200 million to nationalise IWK because it was debt-ridden, and today it is wholly-owned by the Minister of Finance Incorporated. Just last month, the Finance Ministry said that the government had spent RM1.2 billion to cover its operational deficit. In fact, its total liability (up to June 2011) is made up mostly of “government support loans”, which means that it operates at a loss and could not possibly survive without such grants.

This seems to be the repetitive story for so many of our country’s public utility GLCs. Over the years, we have observed the same drama unfolding within water services and solid waste management as well: privatising and taking over services from the state authorities with the intention of better management, but failing and eventually requiring government assistance.

So, it is most strange that recent reports indicate that the government, after nationalising IWK in 2000, is reverting to the solution of privatising it all over again.

1MDB, a strategic development company wholly owned by the government, has stated that it plans to form a consortium to take over the national sewerage company for a nominal fee. The consortium would secure RM800 million from 1MDB as seed capital and help to clear IWK’s debts, which stand at RM1.5 billion (Business Times, 9th September 2011). Puncak Niaga Sdn Bhd, dominant player in Selangor’s water services industry, is also reported to be involved in the consortium.

Although details of the takeover seem to be unconfirmed, it is certain that the sewerage industry is undergoing major restructuring. This is something all Malaysians should pay careful attention to, for several reasons. One, as ratepayers, we would be directly impacted by any changes made to the sewage management tariff and payment system, not to mention the service quality itself. Secondly, any debts that are paid off by government in acquiring IWK would consist of taxpayers’ funds.

Finally, this is a crucial mega-deal that should not be hidden away from the public eye. In light of the furore sparked off by the Auditor General’s report, anyone in public service ought to realise by now that transparency and accountability are key in winning the hearts of the many.

It is of great concern that these important negotiations are taking place without any participation whatsoever from parties external to the deal. A monitoring body or watchdog group like Transparency International could possibly be invited to ensure transactions take place in an open, transparent manner.

The fact that year after year, billions of public funds seem to disappear in an instant – poof! – is truly astounding. The clarion calls repeat themselves in vain, to improve the system of governance and monitoring.

And these deals that seem to be opaque and obscure really do not help public perception of the administration. One would imagine that we would have learnt from past mistakes on several counts, namely that privatising public utilities does not work in this country. If and when these deals are made, they must ultimately be watertight to protect consumers’ interests.

Before the deal is signed, it is hoped that the officials representing all Malaysians (read: government) are carefully scrutinising every line of the concession agreement, making sure the terms and conditions of the document are favourable to the people. It would be a ridiculous affair if, several years down the line, the same pattern of being financially unviable and the need for public funds arises yet again.

Posted in Corruption, Economics | Leave a comment

What’s in the Budget for State Governments? (Federal 2012 Budget)

Every year when the Federal Government tables the budget in Parliament, the focus tends to be on national benefits. But here in my column for the Penang Monthly in December 2011, I write about what’s in it for state governments (the little that there is!).

What’s in the budget for state governments?

Nowhere is the excessive centralisation of Malaysian politics more obvious than in how the National Budget is controlled and conceived. For example, the Prime Minister’s Department uses up 5.8% of the whole, with a volume that is 10 times the budget of the richest state, Selangor; and 15 times that of Penang’s.

Prime Minister Najib Abdul Razak tabled the 2012 Budget amidst great fanfare, announcing a slew of benefits for almost every possible layer of society. One common criticism is that his administration was heavy on welfare handouts, despite the fact its Performance Management and Delivery Unit (Pemandu) chief had earlier warned of the country’s bankruptcy should our deficit be allowed to continue. Malaysia, as a result, is in its 15th consecutive year of a budget deficit, and although the government expects this budget deficit to be reduced to 4.7% in 2012 from 5.7% last year, this will be achieved only given a five to six per cent economic growth —something economists, including those from the Malaysian Institute of Economic Research, have expressed serious doubts over.

So the budget’s ballooning size did not come as a great surprise, especially for political pundits whose every second sentence over the last few months has been to speculate when the 13th General Elections will be called. If this is truly an election budget – and the stakes are extremely high at both state and national levels – how exactly will this budget affect state administrations? This is a particularly necessary question to explore given political competition for state governments between the Barisan Nasional (BN) and Pakatan Rakyat (Pakatan) coalitions.

There are several forms of financial contributions made by the federal government to all the 13 state governments in Malaysia. They are categorised into the following: population size grant, state road-maintenance grant, local and municipal council grant, service payments, grant under the concurrent list (of the Federal Constitution), local and municipal council grant for street lights, road slope maintenance grant and a grant based on development of the economy, infrastructure and prosperity levels.

All 13 states receive some form of allocation under each of these categories. In 2010, Kedah, Selangor, Sabah and Sarawak were also given additional “Annual special grants”, whilst Perlis and Kelantan were given grants due to operational account deficits. Finally, Sabah and Sarawak were given RM120mil each in relation to their petroleum resources.

In the year 2010, Penang received a total contribution of RM144.28mil from the federal government; Selangor received RM589.8mil, Kedah RM296.79mil and Kelantan RM287.8mil. In total, the federal government distributed RM4.75bil to all 13 states in 2010 (Source: Actual Grants to State Governments in 2010, Estimates of Federal Government Expenditure, 2012 Budget, Treasury). This represented 2.48% of the RM191.5bil budget for 2010.

The 2012 budget documents, however, unfortunately do not provide a breakdown of how much the federal government allocated to each of the state governments in the coming year. This is because the budget document (as downloaded on the Treasury website) lists expenditures categorised into respective ministries – no other format is provided. Of course, it would have been possible for the office in charge to extract the values of grants allocated to each state to facilitate detailed analysis.

This is an issue that Parliamentarians perhaps will be raising during the Budget Debates. Only then will researchers have access to estimated financial allocations to states like Penang and Selangor.

Until then, all we have are hints at how the state governments are expected to benefit from the 2012 budget through programmes run by federal-level ministries. What are some of these “benefits” under the budget? The list below is representative of all departments and ministries that explicitly state “State Government” as being a target “customer” of a particular programme.

  • The Auditor-General’s Department will spend RM59.8mil to audit all state governments’ accounts;
  • The Public Service Commission will service the state governments of Penang, Negeri Sembilan, Malacca and Perlis; and act as mediator between the Sabah state government and federal government under the Sabah Secretary Office;
  • The Attorney-General’s Office has representatives in all Legal Advisor Offices of the respective state governments and will spend RM34.65mil in total (RM3.68mil in Penang, RM3.38mil in Selangor, RM2.13mil in Kelantan and RM2.85mil in Kedah);
  • The Treasury will spend RM6mil to process loan applications from state governments (and other loan management duties in relation to development projects);
  • The Ministry of Natural Resources and Environment (MONRE) will spend RM28.64mil to assist state governments in Peninsular Malaysia to settle their land management arrears and other duties (federal government land acquisition operations, and implementing an information and communications technology [ICT]-based land management system); and
  • The Ministry of Housing and Local Government deals largely with local government issues, but one programme specifically listed as “Local government” or Pihak Berkuasa Tempatan has as its objective to assist, coach and encourage socioeconomic development programmes and services, for which RM331.3mil will be allocated. (The total ministry’s budget is RM1.63bil, where other entries on the list include solid waste management, town and country planning, landscaping, housing, policy, management and the fire department). This entry is also included here since local and municipal councils fall under the jurisdiction of state governments.

This list may not be exhaustively representative of other intrinsic benefits that may accrue to state and/or local governments (for example, agriculture departments which are federal offices seconded to state governments, amongst others). However, the total sum of these items which have been explicitly tagged as benefiting state governments come up to a paltry RM460mil, a tiny fraction of the total budget’s RM232.8bil.

This should not be too surprising, nevertheless, given the extremely centralised manner in which budget and policy-making have become (a point I have belaboured in past columns in this magazine). The budget for the Prime Minister’s Department, for example, has grown from RM11.9bil in 2010 to RM15.9bil in 2011. In 2012, this seems to take a slight cut down to RM13.5bil, a positive sign, but the point is that the Prime Minister’s Department alone takes up 5.8% of the total national budget.

Compare this to the Selangor state government budget (one of the larger state budgets in Malaysia), which totals RM1.3bil annually. And the significance is even starker when compared to the smaller state government budgets in Penang (RM900.35mil) and Kelantan (RM53.24mil).

In answering the question of just how much the state governments benefit from the 2012 national budget, one is brought back to the issue of the federal-state structure of government administration. The fact that the figures show minimal direct contributions by the federal government to state and local governments is merely a reflection of the ways in which policies are set and implemented. Macroeconomic and social policies are still largely governed by the centralised federal government, and hence that is where the money lies.

Decentralisation of government policy would encourage greater local participation in the decision-making process. Under the BN coalition, this trend is nowhere near taking place in Malaysia. It is clear that as long as Putrajaya intends to micromanage policy and execution (even of issues that can be much better managed at the local constituency levels, like community public transport and solid waste management), the purse strings will be held tightly at the top of the food chain.

As the general elections approach, some state governments may raise this as an issue of contention. After all, it is extremely difficult to demonstrate to an electorate the changes in a state if its government is not in fact in control of factors affecting their livelihood. Control of funds is tied directly to control of one’s resources: the election issues of, for example, management of water resources and payment of oil royalty (in Kelantan, Terengganu, Sabah and Sarawak) will therefore be recurring themes. For now, state governments will have to be satisfied with a top-heavy budget, taking whatever remains that do trickle down to them.

Posted in Economics, Public Administration, Selangor | Leave a comment