Tuesday, December 15, 2015

Are Malaysian Muslims still moderate?

The Transport Minister (and mind you not the Home Minister/Deputy Prime Minister) says there are at least 50,000 sympathizers of the Islamic State (IS) militants in Malaysia. He also said around 100 Malaysians are fighting in Syria and Iraq with the IS. Others estimate around 200 or more Malaysians who are actively fighting alongside IS militants. Over the past couple of years, at least 120 Malaysians have been arrested either trying to join IS or returning from fighting with IS. A recent leaked police memo highlighted the risk of suicide bombers running around KL. More revealing is a recent PEW survey of support for IS in Malaysia as shown below.

If this poll is to be taken at face value, people having a favorable view of IS in Malaysia at 11% of the population is amongst the highest compared to other predominantly Muslim countries. Despite the widespread media coverage of IS, a shocking 25% of Malaysians surveyed did not have an opinion on IS. It is likely that a proportion of these Malaysians did not want to share their real views on IS for whatever reasons.

The Government seems to be in denial that we have a serious threat of Islamic militancy festering amidst us. The Prevention of Terrorism Act (POTA), the Sedition Act and the recently passed National Security Council Bill are seemingly to counter the threat of Islamic militancy. However the problem is more deep rooted. UMNO has shamelessly exploited Islam to stay in power in an attempt to outIslamicize PAS and to disguise the rot within. Islam will never condone the corruption and abuse of power that is at the core of UMNO. PAS itself is nebulous about IS and has never taken a clear stance against Islamic extremism. While the Prime Minister has recently taken a supposedly strong public stance against IS, he was also the one to encourage Malaysians to emulate the bravery of IS fighters in Iraq. Witness his pandering to PAS in the recent UMNO General Assembly and his pathetic attempts to bolster his Islamic credentials in his speech.

This hypocrisy has to stop and both PAS and UMNO should stand up and declare publicly their respective positions on Islamic extremism. Malaysian Muslims need to face head on the challenges of global Islamic extremism and address these in a thoughtful and honest way bearing in mind that they live as part of a multiethnic and multireligious society. This soul searching is best conducted through open and honest discourse amongst reasonable people and not dominated by dictates and diatribes from the self annointed clerics. Continuing to deny the rise of Islamic extremism and merely hiding behind proclamations of being a moderate Islamic state is a sure path towards disaster.

Sunday, December 13, 2015

What it means to be a Malaysian

Someone told me that I need to lighten up as they find my blog all doom and gloom. I have taken heed. I have made a list of things that mean inclusive Malaysia for me. The common everyday things that define all Malaysians. There is a bit of a generational bias here though and in no particular order, here goes:

Roti canai and teh tarik. All Malaysians enjoy roti canai and teh tarik (kurang manis or not).

Kumpulan Alleycats. Songs about longing and heart break in Malay, written by Malays and performed by Indians and Chinese for generations of Malaysians. What can top that for inclusiveness?

P. Ramlee movies. I grew up on them. We need remakes for the current generation.

Lat cartoons. Bulat, the quintessential Malaysian who captures Malaysia in a way that no one else has been able to. Time to bring out new editions and a TV series.

Mee goreng and nasi lemak. Yes food again but Malaysians are bound together by cuisine than anything else. A National Food Day?

Diabetes. No surprises here given our passion for food!

Nicol David. Our world champion of mixed ancestry whose rock star appeal cuts across the spectrum of Malaysian society.

Bahasa Malaysia. Malay as she is spoken in amazing variety from Perlis to Sarawak. Efforts to create Bahasa Baku and Bahasa Melayu have floundered against the Malaysian ability to speak as they will

Manglish. Know what I mean lah?

Fear of the supernatural. Spirits, bomohs, black magic, fortune tellers…you name it and every Malaysian will have a story or knows someone who has a story

Football. We may not be world beaters but which Malaysian has not played or watched bola sepak? The passion of fans of Liverpool and Manchester United FCs rival that of those in the UK.

Lepak. Whether in roadside stalls, golf clubs or malls, lepak is a national past time.

Ang pows. Those red packets now come in a variety of colors from green to yellow to celebrate all festivals.

Hospital Kerajaan (GH). Our world class public health care system brings all Malaysians together to share their ailments and seek common bonds.

Honda cub. The ubiquitous Malaysian mode of transport before the Protons and Peroduas. Also the Suzukis and Yamahas.

Yay for Inclusive Malaysia!

The Unexplained Money Not Objectionable (UMNO) Assembly

The UMNO assembly ended with a whimper. The party President and his coterie succeeded in drowning out any honest question or substantive debate with empty rhetoric. No issue was too difficult to avoid or obfuscate.

Can the President explain the unaccounted for donations in his personal account?
We need a united UMNO to protect Malays from the DAP and the Jews.
Can the leadership explain Malaysia’s position on climate change and the Paris conference?
What is UMNO’s position on Islamic extremism and the international backlash against violence committed in the name of Islam?
Malaysia is a moderate Muslim nation and I can quote extensively from the Koran.
What about the weak ringgit and the struggling economy?
Trust me.
What about 1Malaysia?
UMNO will form a perfect Malaysia with PAS.
What do think about Dr. Mahathir’s criticism of your leadership?
What about Muhyiddin?
I will shake his hand.
Do you think Malaysian firms are going to be affected by the Trans Pacific Partnership Agreement (TPPA)?
Do not worry.

The thinking UMNO members must be weeping in shame and frustration. UMNO has become a tool for a few to enrich themselves and bamboozle the rest with despicable ethnic and religious bigotry. Naked power play and subverting the institutions of state for political survival is now firmly in UMNO's DNA and is being openly displayed by the current scandal ridden President. Reform from within is near impossible given the extent to which corruption is entrenched and power is manipulated within all levels of UMNO. The thinking UMNO members need to stop weeping and figure out how to get rid of the most incompetent and corrupt leadership that UMNO has ever had in its history. That is if there are any still left standing...thinking UMNO members I mean.

Sunday, August 23, 2015

1Malaysia in tatters

One must give due credit to Prime Minister Najib Razak for his attempt at developing an inclusive Malaysia through the One Malaysia concept which was launched 5 years ago. 1Malaysia was to unite all Malaysians under a common set of values transcending ethnicity and religion evolving around a culture of excellence, perseverance, humility, acceptance, loyalty, meritocracy, education and integrity (www.1Malaysia.com.my). The 27 products under the concept ranged from the noble such as free medical treatment for senior citizens, low risk maternity centers, mobile clinics and student discount cards to the rather exotic including a people’s menu, people’s fish shop and people’s shop. 1MDB was however not part of the original 1Malaysia program.

After 5 years of 1Malaysia, it does not take a genius to figure out that Malaysia is worse off and even more divided than before. Although I must admit that PM Najib has quite an inclusive outlook looking at his impressive 1MDB friends ranging from rich Arab sheikhs to international bankers and a playboy Malaysian Chinese millionaire. Under the circumstances, one cannot really fault him for sacrificing meritocracy for loyalty in the appointment of his Deputy PM and the new Attorney General while he is persevering to hang on to power by all means.  Integrity was a foregone conclusion in any case given the decadent state of UMNO and BN that he inherited and which he has now taken to new depths of ignominy. Culture of excellence, humility, acceptance and education are nice words to include in speeches but most Malaysians would like to see some evidence of actions matching words (or in Malay cakap tak serupa bikin).

Unfortunately for Najib, the 1MDB fiasco involving dodgy financial transactions overshadows whatever benefits were brought about by the 1Malaysia concept and programs. There was and continues to be absolutely no socio-economic rationale for 1MDB given that Khazanah Malaysia, TNB or a myriad of other GLCs and private investors were better placed to carry out the intended real estate and energy investments. If these more established corporate players were unable or unwilling to take on these new investments or were denied these opportunities, it makes the 1MDB proposition even more dubious.

If anything, 1MDB has provided a glimpse into the workings of the murky depths of the UMNO-led BN government where the nation’s interests are sacrificed for the wealth of politicians and their cronies. This is probably the most significant unintended outcome of 1Malaysia: to unite all thinking Malaysians against the greed, corruption and incompetence of the UMNO/BN leadership. The UMNO leadership is too compromised for any hope in cleaning house through internal reforms. The rest of the BN parties depending on UMNO’s gravy train have no real incentives to reform. The only hope for Malaysia and Malaysians is to throw out UMNO/BN at the next general elections.

Monday, July 20, 2015

A world class Malaysian university

What would it take for a Malaysian university to be among the top 100 universities in Asia? The Times Higher Education World University Rankings compares university performance across their core missions - teaching, research, knowledge transfer and international outlook using 13 performance indicators. There is no Malaysian university in the top 100 in Asia compared to two universities from Singapore and surprisingly two from Thailand.


What is preventing our universities from being globally competitive? Surely it is not the shortage of resources: Malaysian public universities received almost 25% of the total expenditure on education and training (about RM 12 billion in 2013). Yet surveys show that more than 25% of university graduates in 2012 had not secured a job 6 months after graduation. At the same time, Malaysian employers are lamenting a shortage of talent as a major constraint in growing their business. There is evidently a mismatch between what the local universities are producing and what the labor market needs leading to underemployment and frustration amongst university graduates. Many of them turn to the public sector for employment which means that the public sector is not attracting the best and brightest talent.


Then there are the over 56,000 Malaysian students studying in foreign universities, many of whom are likely to be excellent students and a number of whom are also sponsored through Government scholarships. There are no publicly available tracer studies on the career prospects of these students and their competitiveness in the labor market compared to the graduates of Malaysian universities (one can however speculate that they are likely to be more competitive). Access to university education for young Malaysians is unequal and largely influenced by household income: while 40% of young adults from the top quintile of Malaysians (by household income) have a university degree, only 5% from the bottom 60% have a degree.


The challenge for Malaysia therefore is both to expand opportunities for all Malaysians to have a university education as well as improve the quality and relevance of university education. There are obvious areas for improvement focusing on creating a more meritocratic and open culture in universities. This requires a fundamental reform of the university system starting with the Ministry of Higher Education. However that may be too ambitious an undertaking and it may be more pragmatic to focus efforts on one university as a pilot. This would require revamping the university leadership, recruiting and rewarding the best academics and researchers irrespective of their origin or ethnicity, selecting the best qualified students and establishing a culture of excellence in research and teaching, learning from the best experiences in the world. Above all, the Government needs to realize that throwing more money at the current system and seeking band aid fixes without fundamental reforms is unlikely to get any lasting or meaningful impacts.

Malaysians deserve better education

The Low Yat incident has brought into sharp focus how our education system is failing Malaysians. Half of Malaysian 15 year olds are functionally illiterate. At the same time, half of Malaysian employers in a recent survey identified the shortage of talent as a constraint for future economic growth. The under-schooled youth end up in the job market with low basic numeracy and literacy skills and with little if any communication or problem-solving abilities. Yet they live in a society that is visibly prosperous and of course they want their share of the good life. Being unemployed or under employed, this group of Malaysian youth is ripe for recruitment by the criminal fringe elements which promise them the wealth and status that they know they cannot get otherwise.

Clearly the national educational system has failed these Malaysian youth. While we lament over how poorly Malaysian kids are performing in global standardized testing, there is a clear correlation between socio-economic status and educational performance with the schools catering for poorer Malaysians being more likely to be under resourced and under managed. Access is still a challenge: about a third of kids from rural households live more than 5 km away from the nearest secondary school.

The quality of teaching and school leadership and management remains a significant challenge. The respect and social status enjoyed by teachers and school heads has eroded over the years. The blatant politicization of the educational system has not only marginalized non-Malay teachers and parents but also disillusioned all teachers who are committed to excellence. Mediocrity and group thinking in schools has overshadowed innovation and passion and it is not surprising that the cream of Malaysian school leavers do not view teaching as a preferred career option. Most tragically, the education system has failed in creating an integrated, inclusive Malaysian society and is more ethnically and socially polarized today than at independence.
The Low Yat rioters and the many others like them, irrespective of ethnicity, are a product of a school system that is simply broken. Clearly it is not a problem of a lack of resources but effectiveness of delivery and results. In 2013, the Government spent about RM54 billion on education and training of which around 10% was on post-secondary technical, vocational training and labor market programs. It is time we take a hard look at the effectiveness of this considerable public spending.  To start with perhaps we need a more reform minded Minister of Education who has a stellar track record as an educationist and who is committed to excellence irrespective of ethnicity and political affiliations.

Sunday, May 3, 2015

Overpaid lawmakers?

Recent statistics from the Employees Provident Fund (EPF) reveal that one third of Malaysian workers earn less than RM 1,000 per month and about 40% earn less than RM 2000 per month. The lower wage growth for low income wage earners occurs in an environment of stagnant wage share of national income. The wage share of national income has actually declined from 33.8% in 1970 to 32.9% in 2012 while at the same time corporate profits increased from 50% to 67% of national income. There is a clear disparity between labor productivity and wages. Annual wage growth is about 2.6% despite labor productivity increasing at 6.7% which reveals labor market inefficiencies and depressed wages due to weakened collective bargaining power and poorly regulated migrant labor. This is a critical challenge which we need to be concerned about for sustained productivity-led growth.

Contrast this with the recent hefty salary increases that our lawmakers awarded themselves (presumably in rare unanimity between the ruling and opposition lawmakers). The new monthly salary of about RM 16,000 which supplemented by allowances could reportedly be up to RM 35,000 does seem extravagant especially given the current economic challenges and the national debate on GST and the minimum wage. In very simple terms, this means that a typical Wakil Rakyat will earn about 18 times more than the typical worker in his or her constituency. To stretch this point a bit further, an elected representative could take home about 40 times the national minimum monthly wage.

The rationale for the increase is to quote the Minister: “the duty of MPs is getting heavier in carrying out the high hopes of the people, and the increase will boost the spirit of the elected representatives to work with more commitment and dedication”. Presumably this heavier duty includes staying awake in the middle of the night to sneak through repressive legislation to further stifle fundamental liberties of the people who elected them in the first place. One would think that elected representatives who lack commitment and dedication will be booted out by their constituents and that should be sufficient incentive to boost their spirits. Not to mention the lucrative licenses, contracts, business deals and other rewards that at least most BN MPs seem to consider as their entitlement.

There is no question that our lawmakers need to be compensated appropriately especially in order to discourage corruption. Not to begrudge the salary increases but I think it is only fair that we demand more from them. To start with, every elected representative needs to publicly declare his or her wealth and income. It would also help to have transparent performance metrics such as an annual report card so that the electorate can tell which representative lacks commitment and dedication. And yes, presumably lawmakers will be equally generous when they decide on what the new national minimum wage should be this year.


Saturday, May 2, 2015

Who is running Malaysia?

At first glance, it would appear that the Inspector General of Police (IGP) is running Malaysia. But surely he must be taking his instructions from somewhere given his slavish subservience to UMNO interests. In any case, the fig leave of moderation has dropped and the dust knuckles have come out. The beleaguered UMNO leadership is revealing its true colors and displaying fangs and claws to intimidate Malaysians into submission. Led by perhaps the most incompetent IGP in Malaysian history, the police force seems to have become a complete tool of UMNO interests with little regard for due process or professionalism. The roster of Malaysians arrested and charged for sedition or illegal assembly reads like a roll of honor of courageous Malaysians who are struggling to save the country from the tyranny of the UMNO/BN government.

The Prime Minister has gone back on his words to repeal the Sedition Act 1948. Instead the amended Act is a greater threat to fundamental Constitutional rights and is clearly being abused to silence any form of criticism or dissent. The Home Minister (whose incompetence rivals that of the IGP) justified the amendments as necessary to address social media threats and to prevent separation of states and handle offenses that could lead to property damage. Perhaps he should be urging the Government to address the root causes of dissatisfaction across the South China Sea (see earlier posts). There are already adequate laws to address property damage and why is the Government so fearful of social media if they have nothing to hide?
And then we have the Prevention of Terrorism Act or POTA which was sneaked through Parliament while Malaysians were literally asleep. The brilliance of the Home Minister was at full display when he said POTA, which allows detention without trial, was to detain Malaysians fighting for the Islamic State (IS) to be detained immediately upon their return to Malaysia. He was admitting that while he and the police were sleeping on their jobs, Malaysians were being actively recruited by IS. Here again, he should be urging the Government to understand the root causes of why some young Malaysian Muslims find the psychopathic IS attractive. Take the Malaysian fringe group calling themselves Hizbut Tahrir who want a Islamic caliphate in Malaysia because Parliamentarians recently gave themselves huge pay rises while ordinary Malaysians were being saddled with the Goods and Services Tax (GST).

The UMNO/BN government may think that by increasing oppression and silencing dissent, they can avoid difficult reforms to tackle mismanagement, corruption and inequality in Malaysia. The folks like Hizbut Tahrir, no matter how misguided, are a reminder that unless these root causes of dissatisfaction are addressed and there is adequate democratic space for dissent, there are global actors who are ready to take Malaysia down the path of ruin.

Friday, March 20, 2015

The hypocrisy of hudud in Kelantan

The Kelantan Chief Minister, Ahmad Yaakob, must be relishing his success. He was able to get 13 Muslim assemblymen from UMNO and PKR to unanimously vote for the amendment to the Syariah Criminal Code 1993 to implement hudud law. He also succeeded in creating further polarization and anguish amongst all Malaysians while thumbing his nose at the Malaysian Constitution. Clearly Ahmad Yaakob and his proxies do not believe in an inclusive Malaysia (and I am sure he does not read my blog). I wish he would though as he might just be reminded of a thing or two.

Kelantan remains the poorest state in Malaysia due to the incompetence and misrule of Ahmad Yaakob and his predecessors fueled by the political chicanery between UMNO and PAS. The average household income in Kelantan today is the lowest in Malaysia and is about a third of a household in Kuala Lumpur. Kelantan has the highest infant mortality rate in the country. The risk of a new born child in Kelantan to die before reaching age 5 is twice higher than that of a child in Kuala Lumpur. By very conservative estimates, 15% of children in Kelantan live in poverty while at least 7% are under-nourished. There is one doctor in Kelantan for every 500 children (compared to one doctor for 80 children in Kuala Lumpur).
Instead of proper nutrition, health care, quality infrastructure, education, skills, jobs and higher income, the poor in Kelantan can instead now look forward to hudud law. There is no evidence that Kelantan has a dramatically higher rate of hudud crimes than the rest of Malaysia. Nor is there any evidence that Muslims in Kelantan have a higher proclivity towards fornication, homosexuality, alcohol consumption, apostasy and stealing thus requiring draconian deterrent punishments to keep them in line.

On the other hand, Kelantan’s poverty is in shocking contrast to the oil revenues flowing from the state to the coffers in Putrajaya. It is estimated that at least RM 1 billion in oil revenues that rightfully belong to the people of Kelantan is being denied them by the BN government (read UMNO). One would think that this would be the priority of Ahmad Yaakob and his assemblymen, voting unanimously across party lines to seek legal recourse to recover the state’s wealth to improve the lives of the poor rather than impose medieval punishment on them.
Under the misrule of the supposedly pious and spiritual leadership, the rich cultural heritage of Kelantan embodied in such arts as wayang kulit, mak yong and dikir barat has been systematically denigrated. Instead, the Muslims in Kelantan are being directed to look towards the likes of Saudi Arabia, Iran and Afghanistan to emulate cultural practices that are completely alien to Malay traditions. In the meantime, Kelantan’s rich biodiversity is being destroyed and the poor bear the brunt of devastating floods caused by the wanton destruction of watershed areas due to state sanctioned logging, poor planning and weak control of development.

It is time for the people of Kelantan to reject the hypocrisy of Ahmad Yaakob and his kind and punish them in the next elections. Kelantan does not deserve to be marginalized from the rest of Malaysia.

Sunday, February 15, 2015

Who is plundering Malaysia’s wealth?

A staggering total of US$395 billion was siphoned out of Malaysia in illicit financial flows in 2003-2012.  Malaysia has the ignominy of being the top fifth country globally for illicit financial outflows (India nudged Malaysia from 4th to 5th place in 2014). According to the Global Financial Integrity report, Malaysia alone contributes to 6% of the total global illicit flows from all developing countries.

Putting it another way, for every US$1.0 of foreign direct investment that Malaysia received in 2012, US$5.0 was being smuggled out of the country. This is only a conservative estimate as the methodology to estimate the outflows is very rigorous based on reported balance of payment and trade statistics (www.glofintegrity.org has the details). Close to 20% of Malaysia’s GDP is being stolen and spirited away overseas and kept in safe havens as either cash or invested in assets. While the volumes have been declining since 2010, the question is how can such plunder on a national nay international scale, mostly through deliberate trade misinvoicing, escape the notice of Bank Negara, the Royal Malaysian Customs and the Royal Malaysian Police.
Let us look at another recent revelation through secret Swiss banking files of 30,000 accounts that were leaked last week (the Swiss Leaks). Malaysia is ranked 87 among the countries with the largest dollar amounts stashed away with one notable Malaysian who has squirreled away US$68 million. The International Consortium of Investigative Journalists (ICIJ) has named a member of the Pahang royal family. Unfortunately the ICIJ site www.icij.org  does not allow access to country level data which will reveal who are the other Malaysian luminaries who prefer to keep their money in secret accounts in Switzerland rather than in Malaysia.

Given that the top 10% own 40% of the total wealth of Malaysia (see previous post), we can safely assume that it is not the average struggling Malaysian taxpayer who is stealing the national wealth. Let me offer some questions to the Inspector General of Police and the Governor of Bank Negara. Which Malaysia based individuals and firms are well positioned to carry out trade invoice shenanigans? How many of these are either proxies or linked in some form to the Barisan National political parties and networks? How many current or former Malaysian political leaders have interests in these businesses? How can such a huge amount of money leave Malaysia without the tacit complicity of the authorities? I can't wait for a tweet on these questions from the Inspector General of Police.

Saturday, February 14, 2015

Repeal Section 377

The jailing of Anwar Ibrahim for allegedly consensual sex with an adult male puts Malaysia in the spotlight for being rabidly homophobic. Whether Anwar is guilty or innocent of this charge is not the issue here (although the tainted court process and evidence of political chicanery has put Malaysia’s entire judiciary on trial, never mind the credibility of the Government). The real question is why is consensual sex between two adults of the same sex a heinous crime in Malaysia?

To put it simply, Anwar is in jail today because of the British colonial Raj in India. The British Raj introduced Section 377 of the Indian Penal Code which was drafted in 1860! So 155 years later, in the age of Fifty Shades of Grey, poor Anwar is being subject to the moral rectitude of the British Raj. Section 377 of Malaysia’s Penal Code modeled after the Indian Penal Code (note the same section number!) criminalizes carnal intercourse against the order of nature i.e. oral and anal sex. Yes even oral sex between heterosexual adults.

So clearly we have an antiquated law. But how many times has this law been enforced in Malaysian history? According to Simranjit Kaur Gill, there have been a grand total of seven charges brought under this law since 1938. Four out of these seven charges were connected to Anwar! Hmmm….do the words selective prosecution, abuse of the legal process, witch hunt and political persecution come to mind?

What have the Indians done with their Section 377 of the Penal Code which was the fountain of the sodomy laws for the Commonwealth? Why, they repealed it of course: in 2009. Two years earlier, Singapore modified Section 377a of their Penal Code to exclude consensual oral and anal sex (well in typical Singaporean fashion of course). So where does that leave Malaysia?

Leaving religion out of the bedroom (I know I know…JAKIM would have less to do) and with apologies to the Sharia fans out there (sorry folks stoning and decapitation are so retro), it is time to follow the Indians (there has been no surge in homosexuality in India since 2009 and the right wing Hindus there are as equally worked up over sexual morality as our Malaysian Sharia advocates).

So let us repeal Section 377….and free Anwar, taking another step towards a more inclusive Malaysia.

Monday, January 26, 2015

Rich Malaysian, poor Malaysian

Abdul Taib Mahmud, the former Chief Minister of Sarawak from 1981-2014 and the current Head of State has never appeared on any international wealth ranking list. Yet according to the Bloomberg Billionaires Index, he presides over a family fortune exceeding US$1 billion. Sarawak is the third poorest state in Malaysia with an average household income that is about half that of Kuala Lumpur and with some of the poorest and most marginalized communities in Malaysia (see previous blog). So when the current Head of State of the third poorest state has amassed a huge fortune, this reads like a clich├ęd story of a feudal Rajah.

However he is in good company. The total wealth of the richest 40 Malaysians (you don’t need me to list them, just Google) is equivalent to 22% of Malaysia’s total GDP and their share has been increasing continuously. In relative terms, these fine gentlemen (unfortunately there are no women yet amongst their ranks) are in fact much wealthier than the top 40 richest individuals from the US.

The richest 10% of Malaysians take home 32% of the total income of the country while the poorest 10% have to manage with a measly 2%. In terms of wealth ownership (assets, savings, investments), the disparity is even more striking. The top 10% own 40% of the total wealth of Malaysia while the top 20% own 60%. The bottom half of Malaysians own only 14% of the nation’s wealth. The top 1% of Malaysians (our top 40 friends) earn 8% of the total income which is almost equal to what the bottom 25% earn. They also control more than 10% of the nation’s wealth. That has not changed much in the past 25 years.

I can rattle off more boring statistics that pretty much all tell the same story. Malaysia has a problem of persistent income and wealth inequality that will affect its long term growth prospects unless specific measures are taken. Despite overall household incomes increasing on average, the relative income gap between the top 20% (rich) and the bottom 40% (poor) has remain stuck at 7.0 since 1990. The relative income gap between rural and urban households in 2012 is the same as at independence in 1957! The richest state in Malaysia has about 3 times more income than the poorest state. This is of course not to say that there has been no progress. Incomes have increased overall but the rich are getting richer faster than the poor are getting less poor, irrespective of ethnicity. Some states have progressed while others are languishing. Rural households are at risk of being left behind.
We need new policies in place to address the growing gap between rich and poor as we are fast heading towards a divided Malaysia. Not so much by religion or ethnicity as we are being constantly reminded. But by income and wealth distribution and the accompanying access to power and opportunities. Unless the Government gives everyone a hand up without pushing others down or out and making sure no one gets left behind.

Monday, January 19, 2015

Outsiders in their own land

I borrowed this title from a presentation by Colin Nicholas of the Centre for Orang Asli Concerns (COAC) http://www.coac.org.my/. One cannot discuss inclusive growth in Malaysia without highlighting the living conditions of the 18 major Orang Asli communities in Peninsular Malaysia. To begin with, we don’t seem to have any reliable statistics on the Orang Asli population. The MHDR 2013 report indicates that there were an estimated 308,000 Orang Asli in 2010 living mainly in Pahang, Perak, Selangor and Johor. The COAC reports 869 Orang Asli communities with a total population of 178,197 for 2010. The Jabatan Kemajuan Orang Asli, JKOA (formerly the Jabatan Hal Ehwal Orang Asli, JHOA until 2011) which ought to be the authoritative source, provides only a 2006 population estimate of 141,230.

Perhaps it is just evidence of how we as a nation treat the Orang Asli: with paternalistic indifference rooted in ignorance and prejudice. The Orang Asli are not covered under Article 153 of the Constitution that confers special position to the Malays and natives of Sabah and Sarawak. They come under legislation for the protection of aboriginal people under the Aboriginal Peoples Act, 1954.
Without reliable population data poverty estimates are rather meaningless. The 2013 MHDR refers to 2003 data that reveals a poverty rate of 77% of which 35% are hardcore poor. It is unlikely that conditions have improved significantly over the past 10 years. The average life expectancy of an Orang Asli is significantly lower than the national average with higher rates of maternal and child mortality.

Historically, the Orang Asli have been enslaved, converted, coopted into conflict, controlled, patronized, displaced, disempowered and exploited (you have to take these assertions at face value as I do not have hard data). The core of their wellbeing is their ancestral land which gradually and systematically is being denied them. Land already gazetted as Orang Asli reserves has shrunk and land approved but not gazetted has decreased by more than 30%. Conversely, land applied for gazetting but not approved has increased by over 30%.  The Orang Asli are therefore being systematically denied their rightful land through sheer inaction or even complicity of local authorities.
Government programs for the Orang Asli managed by the JKOA/JHOA are the euphemistically termed arranged placement, economic and social development. There is little evidence that these programs have had any significant positive impact on their lives (I hope I am wrong).  An objective assessment of the performance of the JKOA/JHOA would probably merit their shut down. As a footnote, amongst the objectives of the Jabatan Kemajuan Islam Malaysia (JAKIM) is to proselytize to the Orang Asli, following in the long tradition of the Christians and others to save their souls.

The root cause of the Orang Asli’s marginalization is the lack of respect and recognition of their rights to self-determination: where and how they choose to live and their social, economic, cultural and political rights. All Malaysians need to support people like Tijah Yok Chopil of the Jaringan Kampong Orang Asli Semenanjung (Village Network of Peninsular Malaysia Orang Asli) who are struggling to fight for a place for the Orang Asli under the Malaysian sun.

Sunday, January 18, 2015

Poverty amidst plenty across the South China Sea

So how are our fellow Malaysians across the South China Sea faring? Let us begin with average household monthly incomes. In 2012, average monthly household incomes in Sabah and Sarawak were about half that of households in Kuala Lumpur. Sabah, with 10% of the Malaysian population, has a poverty rate of 8.1% (based on the official poverty line income which I had discussed in the earlier blog) and is the poorest state in Malaysia. Sarawak is the third poorest state in Malaysia with an official poverty rate of 2.4%. As we all know, both Sabah and Sarawak are extremely wealthy in terms of natural resource endowments and with a relatively small population. So what gives?

Based on 2009 household income statistics for Sabah (Figure 3.17 of the MHDR), the Bajau are the poorest community with a poverty rate of 28%, followed by the Murut (26%) and the Kadazan Dusun Sabah (25%). The Iban, Bidayuh and Melanau are the poorest in Sarawak (about 11%) followed by the Sabah Malays (7%). According to the same source, the Sarawak Malays with a poverty rate of 3.8% fare slightly better than the Malays in Peninsular Malaysia (4.3%). These rates are based on the unrealistic measure of poverty line incomes…so feel free to extrapolate the real figures.
I do not have more recent data but the point to note is that the combined population of the major ethnic minorities in Sabah and Sarawak (who are Bumiputeras) is about 8% of the total Malaysian population and a significant proportion of them are living in poverty. The situation of some of the smaller ethnic minorities is indeed dire. The Penan in Sarawak have a hardcore poverty rate of a shocking 65% while more than 50% of the Kajang are considered as hardcore poor.

The picture that emerges is one of deprivation and marginalization and a failed affirmative action program despite the incredible wealth enjoyed by the top 10% of the population of these states. So how did the affirmative action program for Bumiputeras fail for these communities? Many of these poor, rural, isolated communities do not have access to quality education, social development and job opportunities which hinder their social mobility. To take the Penan as an example, their culture and very identity are under threat and the destruction of their traditional lifestyles and communities through forced assimilation have not been compensated by an equitable share of the revenues from the logging industry. The official response is that despite the best efforts of the Government, these communities are either unable or unwilling to take advantage of the support being provided. That is an unacceptable response. There could be elements of ethnic and religious discrimination in the delivery of the programs which need to be investigated in an objective assessment. Forced assimilation has not worked. There is a need for a new policy that is respectful of the cultural identities of each of these communities and designed and implemented with their direct participation and monitored independently.
That would first require an honest admission by the Federal and State governments and all Malaysians that this is indeed a national problem and not something tucked away across the South China Sea.

Lies, damn lies and poverty statistics

One of the key measures of inclusive growth is the level of poverty and income inequality in Malaysia. By all measures, Malaysia’s efforts in reducing poverty are remarkable and admired by the international community. My parents grew up in poor or even hardcore poor circumstances and I grew up in a poor household. My social mobility was due to my parents living and saving responsibly for their children’s future which was enabled by the Government’s growth policies. So this is not a diatribe against the Government as I am a grateful beneficiary of the growth and poverty reduction policies since the 1970s.

Let us begin with official statistics from the Economic Planning Unit, Prime Minister’s Department, which is the authoritative source for poverty data. Malaysia’s official poverty rate for 2012 is 1.7% based on what is defined as the poverty line income (PLI) which is RM 763 per household of 4.4 persons per month for Peninsular Malaysia (we will discuss Sabah and Sarawak in a separate analysis). What this means is that a household with less than RM 763 per month to pay for food and other basic necessities such as clothing, rent, fuel and utilities, transport and communications, medical expenses, education and recreation is officially poor. Jayanath Appadurai (please refer to blogs by Kamal Salih and Charles Hector) works out that this is about RM5.80 per person per day to meet all the above needs which we all know is completely unrealistic. To be considered as hardcore poor, the same household needs to earn less than RM 430 per month which works out to a ridiculous RM 3.30 per person per day to survive on (the hardcore poverty rate for Malaysia in 2012 was 0.25%).
Let us turn to indirect estimates of poverty which are more realistic. More than a third of Malaysians earn less than RM 1,000 per month and about half earn less than RM 2,000 per month. Assuming a family of 4.4, with both parents working, the total monthly household income of RM 2,000 will enable them to spend about RM 15 per person per day. Selangor has defined the PLI as RM 1,500 per month which works out to around RM 11 per person per day which has led to about one third of the households in the state classified as poor. So a more realistic measure of poverty level income would certainly increase the poverty rate in Malaysia from 1.7% to perhaps between 20 to 30%.

Then there is the question of relative poverty. Relative poverty is measured based on income that is less than half of the median income of all Malaysians which was RM 3,626 for 2012. Based on this measure, the poverty line income increases to RM 1,813 per month which would dramatically increase Malaysia’s poverty rate to over 20%. Even more depressing, relative poverty has increased from 18.9% in 1989 to 20% in 2012 with almost no change for urban households (all data is from the Malaysian Human Development Report, 2013 unless otherwise indicated).
The picture that emerges behind the statistics is rather grim: a significant proportion of Malaysian households are in debt (for housing, appliances, vehicles, education) with very little savings and surviving from day to day. The death or illness of an income earner will quickly slip these families into poverty. The paucity of publicly available and trusted household income data and independent academic analysis hinders an objective, honest discussion on poverty and inequality in Malaysia. This is unfortunate because Malaysia has a great track record on poverty reduction but we need to take a good, hard look at whether we are in denial now.

Wednesday, January 7, 2015

Inclusive Federal-state relations are not seditious

I was going to focus my second piece on poverty and income inequality. However that has to wait as Awang Selamat’s declaration that it is seditious to discuss greater power-sharing between the Federal and state governments got my attention (Utusan Malaysia, January 4).

This was in response to Zairil Khir Johari’s thought-provoking piece (Malaysian Insider, December 24, 2014) on reviewing the current Federal-state institutional arrangements that led to Awang not only accusing him of sedition but ludicrously questioning his parentage and ethnic identity. As an aside, I admire this young leader (whom I have not met) for being an excellent advocate and champion of inclusive Malaysia.
For Awang's benefit, let me quote from the Malaysia Human Development Report 2013 (which presumably is not seditious!): “Inclusive outcomes undoubtedly require inclusiveness in policymaking and implementation. Inclusive growth corresponds with the balanced participation of the government, the private sector and civil society; higher quality government services; and adequate and efficient delivery of public goods.”

From that perspective, what Zairil was calling for was to review the concept of fiscal federalism which is the optimal allocation of fiscal or public service delivery responsibilities (such as health, housing, education, public transport and sanitation) to the different layers of Government (local, state and federal) and how best to effectively fund these services in a sustainable and equitable manner through public revenue sources (again local, state and federal). Clearly not a call to burn the Federal Constitution as Awang alleges.
In an ideal world, each level of government would raise its own revenue to meet its allocated functions; or get voted out by the electorate if they do not fulfill these functions satisfactorily. State governments in Malaysia are completely at the mercy of the Federal government for the transfer of grants as well as loans and the model of resource allocation is inequitable.  For example, total Federal allocation per capita for the period 1976-2010, for Sabah and Sarawak is about a quarter that for their fellow Malaysians across the South China Sea (MHDR, Fig 11.1, page 239). This is clearly inequitable given the size of Sabah and Sarawak and their development needs. Zairil indicates that the state of Penang contributes 10% of Malaysia’s GDP but gets to spend less than 0.5% of the national budget.

The Malaysian Constitution does provide for state governments to have jurisdiction in areas including public health, drainage and irrigation, fire safety, culture and sports, and housing. The Federal government has usurped many of these functions over the years.  For example, public transport is clearly a candidate for decentralized planning, regulation and service provision which state and local governments can currently only carry out with hands tied behind their backs as they do not have the power to issue licenses and determine service delivery standards.
After 55 years, it is time for Malaysians to demand a more inclusive Federal-State-local relationship in policy making and implementation that cuts across political lines and supports effective, efficient and equitable delivery of public services.

Tuesday, January 6, 2015

Towards an Inclusive Malaysia

Two unconnected events inspired me to start this blog as a 2015 resolution.

The first ever Malaysia Human Development Report (MHDR) 2013: Redesigning an Inclusive Future, published by the United Nations Development Program (UNDP) was launched in Kuala Lumpur in November 2014. An effort that started in mid-2012, the report was published in January 2014 but the formal launch was inexplicably delayed by a year.  Sadly, what is probably the most comprehensive assessment of the Malaysian development story from 1971-2012 was almost completely ignored by the main stream media. Go figure. You can download the report and view video clips here http://www.mhdr.my/

The other event is the worst floods experienced in Malaysia in recent decades which have left 5 dead and more than a 100,000 mostly poor displaced with damage to property and infrastructure estimated at RM1 billion. Is this a random occurrence or a more systemic climate change phenomenon arising from the development model being pursued by Malaysians? More on this subject in future blogs.
Turning back to the MHDR, this is a well-researched study written by highly respected Malaysian economists:  Kamal Salih and Lee Hwok-Aun from University of Malaya and Muhammed Abdul Khalid from the Khazanah Research Institute. The report draws upon background papers from a veritable Who’s who of eminent Malaysian scholars including one who was charged with sedition in 2014 on an unrelated matter :)  The innovative consultation process involving youth and online dissemination of the report including video clips of Nicol David talking about inclusiveness and her experience visiting an Orang Asli community were very refreshing indeed. Congratulations UNDP!

As Kamal Salih acknowledges at the outset of the report, the team was given access to the largest set of unprocessed data and unpublished statistics from the Government that had not been accessible to non-official entities before. Dare we interpret this as a hopeful sign of increasing openness in sharing information?
But I am digressing. The underlying theme of this report is inclusive growth or the lack thereof in Malaysia. In other words, what would it take for Malaysia to achieve high human development levels and become a more equitable, sustainable and successful nation? The timing and theme of this report could not be better given the current shrill national discourse fractured along ethnic, social, political and religious fault lines. Inclusiveness itself is under attack from some quarters as something undesirable in Malaysia. For one, ethno-centric or religious political entities and agendas may find inclusiveness threatening their very reason to exist. This blog is a small effort to hopefully contribute towards the national dialogue on inclusive Malaysia and provide a forum for respectful and thoughtful exchange of ideas. Happy New Year!