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.

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.

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.

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 clichéd 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.

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.

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.