Sieg Heil Economics-1 by Sakmongkol AK47

Source:http://sakmongkol.blogspot.com/2009/11/sieg-heil-economics-1.html

After 1969, the answer to Malay economic problem is solvable it was thought through command center economics and centralized planning. A variant to this command centre economics and centralized economic planning is we get to play god in choosing who we want to advance. What developed is not only siege mentality but could be more appropriately termed the bunker mentality. The high seats once occupied by the money changers are now seating officious and benevolent G Men. They are the public sector money changers in the temple of the New Deal for Bumiputeras. Once you are ensconced inside the bunker, comforted by the impenetrable walls, asking these people residing there to dismantle that edifice will not be a walk through the park. You are going to get stiff opposition and outright denunciations.

This led to an economics which I termed as Sieg Heil economics. You actually choose people who you want to succeed. They then become salutary examples of the Malay can-do-anything spirit if given the license, quota, monopoly chance.

Hence we saw the emergence of handpicked and anointed super Bumiputeras who were given quotas, exclusive licenses, protection and so forth. To this very day, this kind of sieg heil economics- where the chosen one is expected to raise his hands saluting Malay-can-do anything spirit is still happening. Witness for example the license given to Naza Group to build a RM600 million Matrade Centre in exchange for land valued to be worth RM15 billion. To me, we must add a new definition to the concept of usury in the Islamic Lexicon.

Groups of benevolent public officials huddled together to plan the industry and improvement of the Malays. Of course we didn't see the extreme form of centralized planning such as the Mahalanobis gigantic input output tables in Nehru's India planning every minutiae of economic life of the Malays. That kind of planning wasn't sustainable because that kind of planning was discovered to be not so successful. The more potent reason for its disavowal was because it conflicted with the idea of freedom.

Unfortunately, the failure of omnipotent economic planning hasn't stopped the expanded role of government. The expanded role of government took different forms such as nationalization by other means as in the formation of GLCs and even direct ownership of the means of production. It also took the form of regulatory activities.

Just like Roosevelt's New Deal, the new approach to solving the Malay economic problem was accepted by the public as successful because it did achieve successes for the Malays to shout in triumph. From a share of around 2% in corporate equity, by the end of 1990, the share of Bumiputera equity in corporate wealth was around 19%. Though short of the targeted 30%, it was hailed as a qualified success better than nothing. Out of the whole thing, emerged the acceptance that enlarged government participation in the economy is justifiable as a means to remedy the economic problem.

The idea of a caring benevolent government resonated well with the consuming public especially the Malays and definitely with policy makers and politicians. It gave them an added source of omnipotent powers. Hardly anyone would argue for example with the government's agenda to care for the Malays from the cradle to the grave. Indeed as is the customary practice, policy makers in almost all the Dewan Undangan Negeri will justify expanded government involvement and outright ownership of the means of production and therefore budget deficits as necessary to carry out welfare programs for the poor. Who would want to oppose such noble intention if it's meant for the poor?

Have the programs succeeded? That is another issue. Each year, the number asking for welfare assistance in the form of cash disbursements seemed to increase rather than decrease. Dissatisfaction over the actual disbursements has aggravated rather than subsided. The number partaking in the welfare disbursements in the PM's own parliamentary constituency is growing each year indicating that the number of poor people is increasing as the magnitude of the disbursements increases. Or the increasing number indicates, more are joining the cue to get free gravy from the gravy train.

It means that this expanded role of the government hasn't worked well. It worked well for those in the bunker who happen to be the very ones bitterly opposed to the dismantling of the Sieg Heil economics.

The Idea of Justice by Amartya Sen

Source:http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/books/non-fiction/article6723663.ece

Polymathic brilliance among scholars is now generally agreed to be a thing of the past. The advance of knowledge means that providing intellectual leadership in economics, political theory and ­philosophy, as John Stuart Mill did, is not possible. Academics need to pick a subject and burrow into it as deeply as possible. But someone ­forgot to tell all this to Amartya Sen.

An accomplished mathematician, a brilliant economist (he won the Nobel prize in 1998) and now a giant of contemporary philosophy, Sen has also worked for the UN on human development. As a young man, he kicked off by reshaping welfare economics. One of his ­earliest and most famous claims was that famines do not occur in properly functioning democracies with a free press, because the pressure of public opinion forces the fairer distribution of food. As so often with great public philosophers, a childhood experience profoundly shaped his outlook. As a nine-year-old, Sen witnessed first-hand the 1943 Bengal famine, when hundreds of thousands died in the British colony under the cover of a news blackout.

Democracy, especially in the shape of public argument and debate, plays a key role in Sen’s ­latest work. Public reasoning is the “primary hero” of The Idea of Justice. It is up to individuals to determine their own course through life, based on their own reasoning and reflection — in this sense Sen is an indefatigable liberal — but the tackling of injustice and the shaping of progress rely on a constant, engaged public ­conversation. For Sen, democracy is not, at heart, a set of institutions and rules. “The working of democratic institutions, like that of all other institutions,” he writes, “depends on the activities of human agents.”

It is clear that this volume is intended to be the “Essential Sen”. All the primary themes of his previous five and half decades of work are here, in synthesis. For those who know Sen’s work well, there is a strong sense of déjà vu about many of the chapters. But anybody sufficiently motivated to have read ­Inequality Re-examined or the ­doorstop treatise Rationality and ­Freedom will probably not mind.

The Idea of Justice, though, wouldn’t be a book from Sen if it did not also provide something fresh. And the most important new intel­lectual notion here is a working through of the fundamental distinction between two competing approaches to justice.

Most modern political philosophers are concerned with finding the right rules, institutions and social contracts for a just society. This school of thought — dubbed “transcendental institutionalism” by Sen — found its greatest 20th-century exponent in John Rawls, who built on foundations laid by Kant and Rousseau.

Sen characterises the institutionalists as engaged in a “long-range search for perfectly just institutions”, and a hunt for “spotless justice”.

For Sen, these philosophies are ultimately regressive, because societies full of actual human beings will never agree on a final, perfect set of institutions and rules. He quotes his old friend Bernard Williams, who wrote that “disagreement does not necessarily have to be overcome”. More immediately, the search for a perfect set of arrangements for ­society can distract us from tackling real-life, immediate injustices such as access to education for women in the developing world or action on climate change. The perfect becomes the enemy of the good.

The competing vision of justice Sen prefers is a “comparative” one, which examines “what kind of lives people can actually lead”. The heroes of the comparative pantheon are Condorcet, Wollstonecraft and Mill. For them, as for Sen, abolishing slavery or giving women the vote would free people to lead lives of their own choosing, even without creating a perfectly just society. The keystone of judging the lives people can actually lead is an assessment of what Sen has labelled their ­“capabilities” — or, as he explains, “the power to do something”.

Freedom, in Sen’s eyes, does not consist merely of being left to our own devices. It also requires that people have the necessary resources to lead lives that they themselves consider to be good ones. The focus on the individual has led some critics to accuse Sen of “methodological individualism” — not a compliment. Communitarian opponents, in particular, think that Sen pays insufficient regard to the broader social group. In response, Sen — usually an unfailingly courteous writer — becomes a bit cross. He points out that “people who think, choose and act” are simply “a manifest reality in the world”. Of course communities influence people, “but ultimately it is individual valuation on which we have to draw, while recognising the profound interdependence of the valuations of people who ­interact with each other”.

Nor is Sen easily caricatured as an egalitarian: “capabilities”, for example, do not have to be entirely equal. Sen is a pluralist, and recognises that even capabilities cannot always trump other values. Liberty has priority, Sen insists, but not in an absurdly purist fashion that would dictate “treating the slightest gain of liberty — no matter how small — as enough reason to make huge sacrifices in other amenities of a good life — no matter how large”.

Throughout, Sen remains true to his Indian roots. One of the joys of the volume is the rich use of Indian classical thought — the debate between 3rd-century emperor Ashoka, a liberal optimist, and Kautilya, a downbeat institutionalist, is much more enlightening than, say, a tired contrast between Hobbes and Hume.

Despite these diverting stories, the volume cannot be said to fall into the category of a “beach read”: subtitles such as “The Plurality of Non-Rejectability” provide plenty of warning. But for those who like their summer dinner tables to be filled with intelligent, dissenting discourse, the book is worth the weight. There’s plenty here to argue with. Sen wouldn’t have it any other way.

In pursuit of the greatest happiness

Source:http://www.guardian.co.uk/commentisfree/2009/sep/19/gdp-pursuit-of-happiness

In pursuit of the greatest happiness
GDP is not the be-all and end-all of our existence; it talks of value added to economies but has little to say about anything else

Tim Worstall
guardian.co.uk, Saturday 19 September 2009 14.30 BST

Richard Layard and Joseph Stiglitz (one a Nobel Laureate, the other one of those who tried to jam some economic understanding into my brain) rightly tell us that gross domestic product isn't in fact the be-all and end-all of how we should be measuring life, the economy and everything. They also, again correctly, point to various alternative ways in which we might measure, thus set as our target, things which are more important than merely the value added in an economy.
What is always interesting is to take such suggestions and follow them to see where they lead: so let's do exactly that with the proposal from the professor at the old alma mater, my Lord Layard.

So I propose a campaign for the Principle of the Greatest Happiness. This says I should aim to produce the most happiness I can in the world and, above all, the least misery. And my rulers should do the same.

Sounds like a plan, so, using only the professor's own work, where will this lead? Specifically, where will this lead us if we try to design a tax system which accords with this principle (that's the "rulers should do the same" bit)?

Vital clues can be found in his book Happiness, something which if you haven't read you probably ought to. There are two major points made about the taxation of incomes in it and we'll add just one commonplace observation from the world around us to reach what we must assume will be the taxation system that will produce the maximal amount of happiness: the top fluffy kitten count, if you will.

The first point is that happiness does indeed rise with income – but only to a certain point. That point varies a little, dependent on where you are and with exchange rates and so on, but a reasonable estimate is about £15,000 a year. Less than that and earning more money makes you happier simply because you're earning more money. More than that and you might be happier or not, but it's not the extra money that's making you so.

Excellent. So the first and most obvious principle of our high kitten-cuteness tax system is going to be that we're not going to tax incomes below £15,000. This would clearly make people less happy, as it would take them below that number where higher incomes make them happier.
The second point is a little more complex. The contention is that when we earn more than £15,000 we create a kind of pollution. It's never quite really nailed down: one way of describing it would be jealousy, the green-eyed god, over the fact that others have more than we do. Layard's description is more gentle, in that others having more impels us to emulate them; we try to keep up with the Joneses. In doing so we strive for higher incomes, despite the way that these will make us no happier, at the expense of the many other things that will make us happier – time with family, with friends and so on.
Thus those earning more than £15,000 are imposing an externality of unhappiness on those around them: and we all know what happens to such negative externalities in welfare economics. We tax them! This is exactly the same economic argument behind carbon taxes, the congestion charge and air passenger duty. The polluter must pay the social cost of their pollution. Turning the argument around the other way, that positive externalities should be subsidised is exactly the economic argument used for tax contributions to basic science and such things as universal primary schooling. There's nothing odd or strange about the economics here, only the aspect of life to which it is being applied.

Layard's estimate is that the unhappiness caused by those on higher than £15,000 incomes is some 30% of the amount of those higher incomes. Someone on £1,015,000 a year is causing £300,000 of unhappiness elsewhere while someone on £45,000 is causing £10,000s' worth (umm, OK, I'm using one third not 30%, but you get the picture). We should thus tax the two, respectively, £300,000 and £10,000 for the externality of the non-fluffy kitten time they are imposing on those around them.

Our third point is simply the commonplace that people do not like to pay taxes. Yes, yes, I know, there are endless screeds here at Comment is free insisting that no, really, offering up the sweat of our brow to the state is such a pleasurable experience that we'd all do it willingly, without the compulsion of law. Actually, this seems not to be the case. Last time I got the figures from the Treasury (for the tax year 2005), it turned out that only five people across the entire nation had voluntarily paid more than was their legally demanded due – and four of those were dead. So if we adopt the entirely uncontroversial economic idea of revealed preferences (don't look at what people say but what they do) we can be sure that for the vast majority of the population taxes are not something paid for the joy of them. They are, in fact, something which make us unhappy.
This now gives us the details which we need to build our tax structure for optimal happiness. We can and should tax those who cause unhappiness in others by the value of the unhappiness they create through their higher incomes. We should not tax more than this for we will be creating unhappiness by doing so. Finally, we should not be taxing incomes below £15,000 a year because taking money below that sum will again increase unhappiness.

So our tax system with the highest fluffy-kitten count, the one that will "produce the most happiness" as our rulers should strive to do, just as we ourselves should, is a flat-tax system of 30% with a high personal allowance of £15,000 a year.

While this is, of course, very different from our current tax system, it is still progressive (yes, it is: work out the maths for yourselves – as incomes rise so do the portions of those incomes paid in tax) and it ticks all the boxes that will lead to maximal happiness.

In the UK, the US and Germany, happiness has been stagnating for decades. A civilisation based on the Greatest Happiness Principle would be a great improvement. Yes, indeed it will, as long as we actually accept the implications of that Great Happiness Principle as laid out for us by one of the great researchers into that principle, Richard Layard himself.

The only conundrum left is that there are only two organisations that I know of (that I am a member of both of them is entirely coincidence) which actually have as suggested policy anything close to this top cute-kitten system: Ukip and the Adam Smith Institute. But then the reason that I am a member of both is because they are both well ahead of the progressive crowd, in so many important ways.

The Malaysian Resource Curse - William Leong Jee Keen

Source:

http://steadyaku-steadyaku-husseinhamid.blogspot.com/2009/11/malaysian-resource-curse-william-leong.html

The Malaysian Resource Curse

Pump priming : Wrong Diagnosis

Prime Minister Najib Tun Razak announced that the government will prime the economy with an additional RM1 billion monthly till the end of 2010 in a bid to bolster the country’s economy. Unfortunately, allocating RM200 billion under the 2010 budget or pump priming the economy will not return Malaysia to economic competitiveness. Malaysia’s economy was ill long before the sub-prime implosion and the consequent global financial crisis. Najib Tun Razak will not be able to redress Malaysia’s economic woes unless and until he and the Barisan Nasional Government has the honesty and courage to deal with the Malaysian Resource Curse and have the political will to carry out the necessary fundamental structural reforms.

The Dutch Disease

Malaysia has exhibited the classical symptoms of the “Dutch Disease” or “the Resource Curse”. The term “Dutch Disease” was coined in 1977 by the Economist to describe the decline of the manufacturing sector in the Netherlands after the discovery of a large natural gas field in 1959, culminating in the world’s biggest public-private partnership, N.V. Nederlandse Gasunie between Esso (now ExxonMobil) Shell and the Dutch government in 1963 only to see the rest of its economy shrinking. It refers to the paradox that countries with an abundance of natural resources specifically resources like minerals and fuels, tend to have less economic growth and worse development than countries with fewer natural resources. The Dutch Resource Curse is an economic concept to explain the relationship between the exploitation of natural resources and a decline in the manufacturing sector combined with moral fallout. The concept explains that an increase in revenues from natural resources will de-industrialize a nation’s economy by raising the exchange rate, which makes the manufacturing sector less competitive. It also leads to the public administrators getting entangled with business interests.

Political Corruption

One of the negative effects of the Dutch Disease is that it is often easier for a natural resource rich government to maintain authority through allocating resources to favoured constituents than through growth-oriented economic policies and a level, well regulated playing field. Huge flows of money from natural resources fuel this political corruption. The government has less need to build up the institutional infrastructure to regulate and tax a productive economy so the economy remains undeveloped.

Rent Seeking Behavior

Another negative effect is the creation of rent seeking behavior. “Rent seeking” in this sense does not mean the usual payment of a lease but stems from Adam Smith’s division of income into profit, wage and rent. Rent seeking behavior is distinguished from profit seeking behavior in that in profit seeking behavior, entities seek to extract value by engaging in mutually beneficial transaction. On the other hand, in rent seeking behavior, entities seek to extract uncompensated value from others without making any contribution to productivity through manipulation and exploitation such as by gaining control of land and other pre-existing natural resource or by imposing burdensome regulations or other governmental decisions that may affect consumers or businesses.

Loss of Entrepreneurial Skills

The rationale for identifying rent seeking as the problem in economies suffering from the Dutch Resource Curse is that resource revenues constitutes vast wealth and when individuals or groups of individuals attempt to take control over it, they become less entrepreneurial. Rent seeking activity involves several detrimental aspects. First the attempts themselves are time consuming and draw valuable labour hours from productive, innovative activities. Talent is wasted in the pursuit of existing wealth instead of being employed at producing new growth. Second when the activities are successful, the wealth may be disposed of in ways that are not conductive to growth. If the wealth is spent for personal consumption abroad for the successful rent seeker and it is not invested in domestic technological progress and human capital, growth suffers. Few individuals acquire wealth to act for the common good. The country’s resource rent is converted to luxury items, not research and development. So growth stagnates. Rent seeking degenerates into corruption which discourages investment and limits growth.

Rich become Richer

Think of Ghana and Zambia, countries abundantly endowed with minerals or oil and gas has swung from booms to busts and back again. Their politics are hopelessly corrupt. The central government, far from being an effective regulator, serves as the handmaiden to a group of powerful oligarchs, making it easier for the rich to become richer while the poor become poorer. Now think of Malaysia.

The Malaysian Resource Curse

Malaysia’s economic growth is a three legged growth model based on:-
Manufacturing trade
Commodity trade
Public sector economy

Petroleum and natural resources provides 40% of the Malaysian government’s revenues. This in turn supports the largest public sector economy in Asia with 27% of the GDP. Malaysian manufacturing exports are under structural pressures and are losing competitiveness. The real effective exchange rate (REER) appreciated 11% between 2005 and 2008. This has led to competitiveness erosion of the manufacturing sector. The natural resources sector provided the revenues to allow the Government to sustain economic growth through government spending. This has reduced the urgency to increase productivity and allowed marked inefficiencies to set in; the erosion of education standards, distortion and suppression of the labour market and sustaining unprofitable and ineffective affirmative action policy projects. The end result is the erosion of manufacturing exports and a fall in inward FDI that will undermine the economy.

Underperformance in Education Standards

The oil and gas revenue driven economic growth lulled UMNO and the Barisan Nasional Government to misconstrue the importance of maintaining excellence in our education system. This allowed misguided and mismanaged policies to turn our schools and universities into factories churning out unemployed and unemployable graduates. This has resulted in our nation suffering a severe underperformance of our education standards. Malaysia tertiary enrolment and completion ratio has lagged that of some of our Asian counterparts. At 28.6% and 15%, Malaysia’s gross tertiary enroll ratio and completion ratio are 7% and 6% lower than the average expected of economies with similar level of GDP per capital. This means Malaysia is having a tertiary skills shortage. This point to Malaysia lacking the necessary skills and knowledge human capital essential to move the Malaysian economy up the value added chain.

Skills Mismatch

With the labour force growing, unemployment rate has stayed range bound at around 3% and with the skills shortage, graduates surprisingly continues to make up an increasing proportion of the unemployed group from 15.2% in 2000 to 25.1% in 2007. The Government in answer to a question I posed in Parliament gave the following breakdown of unemployed graduates:-
· In 2004, there were 4,594 unemployed graduates of which 163 were Chinese, 207 were Indians and 4,060 were Malays;
· In 2005, there were 2,413 unemployed graduates of which 31 were Chinese, 70 were Indians and 2,186 were Malays;
· In 2006, there were 56,750 unemployed graduates of which 1,110 were Chinese, 1,346 were Indians and 50,594 were Malays.
· In 2007, there were 56,322 unemployed graduates of which 1,348 were Chinese, 1,401 were Indians and 49,075 were Malays.
· In 2008 (as of June) there were 47,910 unemployed graduates of which 1,403 Chinese, 1,569 Indians and 49,075 were Malays.

This suggests that we have a problem of graduate skills mismatch.

Singapore in comparison has its universities design their curriculum in collaboration with the industry players. The majority of the students are offered jobs before they graduate and 82% are employed within 3 months of their graduation.

Labour force a key business constrain

The education gaps have led to skills shortage and skills mismatch. 42% of Malaysian businesses rate the unavailability of a skilled labour force as the most severe business constraint compared to 37% in East Asia and 35% globally. The shortage of skilled labour is compounded by shortsighted and misconceived immigration policies. These policies instead of attracting the talented and the best and the brightest, discourages and prevents them from working in the country. The rejection of Vijay Singh’s citizenship application and the resulting loss to the nation of a world golf champion is one example. The thousands of tertiary graduate and professional foreign spouses of Malaysians being consigned by these immigration policies to become housewives is another. These same policies are the causes for the severe brain drain suffered by our nation. Due to the skills shortage, we will be unable to move the economy up the value added chain.

Falling FDI

The net inward FDI in Malaysia has been in decline. As net FDI in the region (China, India, Singapore and Thailand) continues to climb, Malaysia has experienced a downward trend from the peak in the early 1990s and is now in negative territory. The net FDI stood at -3.8% of GDP in June 2009 from +2.4% of GDP in June 2004. Malaysia has fallen from 67th in the Inward FDI Index in 2006 to 71st in 2008. The outward FDI has exceeded the inward FDI for the past 3 years and this trend is expected to continue and increase in the future.

Loss of Manufacturing Trade Surplus

Malaysia manufacturing trade surplus of machinery and transport equipment fell from USD 10.5 Billion in 2000 (11.2% of GDP) to USD 9 Billion in 2008 (4.1% of GDP). In comparison China had a trade surplus for the same period from USD 9.3 Billion to USD 231.3 Billion, Korea USD41.2 Billion to USD 119.1 Billion, Taiwan USD 19 Billion to USD 45.1 Billion and Singapore from US 11.2 Billion to US 22.9 Billion.

Suffering in Silence

We are in the throes of the Malaysian Resource Curse. The rent seekers have privatized and created monopolies of every conceivable resource and amenity in the country from roads, to bridges, water, electricity, disposal of rubbish and sewerage. Petronas revenues have been used to pay for mega personal enhancing projects such as the Petronas Twin Towers where US 1.6 Billion (RM5.6 Billion) was spent to enjoy the brief moment of fame in owning the tallest building in the world. Petronas money was again used through 40% equity in Putrajaya Holdings to pay the total costs of building the new Federal administrative capital of Putrajaya amounting to RM11.831 Billion. There many more of such project in the past decade. The public have been suffering in silence as the Malaysian Resource Curse takes its toll.

Prescription

Malaysia no doubt is affected by the global financial crisis but its problems have a deeper underlying cause. It is this underlying cause that has to be addressed. The Malaysia Resource Curse must be exorcised. There are many resource rich countries that have escaped and avoided the disease.

The key is governance. Well governed countries find ways to insulate their economies from the down side of commodities and natural resources trade. Resource rich countries such as Norway has shown that this can be done by adopting straight forward economic fundamentals, sound monetary policies, and having open trading and investment regimes. The enforcement of laws against corruption is a basic requirement. The strengthening of political and economic institutions by giving effect to the democratic institutions and constitutional guaranteed fundamental liberties is another. Investing in education and infrastructure will increase competitiveness of the manufacturing sector. Sadly these have been ignored by the Prime Minister in his push for pump priming.

A global investor said that if Najib and Barisan Nasional do not recognize the Malaysian Resource Curse and do not have the political will to address it, neither he nor any other investor is going to put money into Malaysia. Without the structural reforms, pouring RM 1 billion a month into the rent seeking economy is just pouring good money down the drain. How long can the Malaysian public continue to suffer in silence?

William Leong Jee Keen
Member of Parliament Selayang
7th October 2009

Daron Acemoglu - What Makes a Nation Rich?

Source: http://www.esquire.com/features/best-and-brightest-2009/world-poverty-map-1209

What Makes a Nation Rich? One Economist's Big Answer

Say you're a world leader and you want your country's economy to prosper. According to this Clark Medal winner from MIT, there's a simple solution: start with free elections.

By Daron Acemoglu

We are the rich, the haves, the developed. And most of the rest — in Africa, South Asia, and South America, the Somalias and Bolivias and Bangladeshes of the world — are the nots. It's always been this way, a globe divided by wealth and poverty, health and sickness, food and famine, though the extent of inequality across nations today is unprecedented: The average citizen of the United States is ten times as prosperous as the average Guatemalan, more than twenty times as prosperous as the average North Korean, and more than forty times as prosperous as those living in Mali, Ethiopia, Congo, or Sierra Leone.

The question social scientists have unsuccessfully wrestled with for centuries is, Why? But the question they should have been asking is, How? Because inequality is not predetermined. Nations are not like children — they are not born rich or poor. Their governments make them that way.

You can chart the search for a theory of inequality to the French political philosopher Montesquieu, who in the mid-eighteenth century came up with a very simple explanation: People in hot places are inherently lazy. Other no less sweeping explanations soon followed: Could it be that Max Weber's Protestant work ethic is the true driver of economic success? Or perhaps the richest countries are those that were former British colonies? Or maybe it's as simple as tracing which nations have the largest populations of European descent? The problem with all of these theories is that while they superficially fit some specific cases, others radically disprove them.

It's the same with the theories put forth today. Economist Jeffrey Sachs, director of Columbia University's Earth Institute, attributes the relative success of nations to geography and weather: In the poorest parts of the world, he argues, nutrient-starved tropical soil makes agriculture a challenge, and tropical climates foment disease, particularly malaria. Perhaps if we were to fix these problems, teach the citizens of these nations better farming techniques, eliminate malaria, or at the very least equip them with artemisinin to fight this deadly disease, we could eliminate poverty. Or better yet, perhaps we just move these people and abandon their inhospitable land altogether.

Jared Diamond, the famous ecologist and best-selling author, has a different theory: The origin of world inequality stems from the historical endowment of plant and animal species and the advancement of technology. In Diamond's telling, the cultures that first learned to plant crops were the first to learn how to use a plow, and thus were first to adopt other technologies, the engine of every successful economy. Perhaps then the solution to world inequality rests in technology — wiring the developing world with Internet and cell phones.

And yet while Sachs and Diamond offer good insight into certain aspects of poverty, they share something in common with Montesquieu and others who followed: They ignore incentives. People need incentives to invest and prosper; they need to know that if they work hard, they can make money and actually keep that money. And the key to ensuring those incentives is sound institutions — the rule of law and security and a governing system that offers opportunities to achieve and innovate. That's what determines the haves from the have-nots — not geography or weather or technology or disease or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.

How do we know that institutions are so central to the wealth and poverty of nations? Start in Nogales, a city cut in half by the Mexican-American border fence. There is no difference in geography between the two halves of Nogales. The weather is the same. The winds are the same, as are the soils. The types of diseases prevalent in the area given its geography and climate are the same, as is the ethnic, cultural, and linguistic background of the residents. By logic, both sides of the city should be identical economically.

And yet they are far from the same.

On one side of the border fence, in Santa Cruz County, Arizona, the median household income is $30,000. A few feet away, it's $10,000. On one side, most of the teenagers are in public high school, and the majority of the adults are high school graduates. On the other side, few of the residents have gone to high school, let alone college. Those in Arizona enjoy relatively good health and Medicare for those over sixty-five, not to mention an efficient road network, electricity, telephone service, and a dependable sewage and public-health system. None of those things are a given across the border. There, the roads are bad, the infant-mortality rate high, electricity and phone service expensive and spotty.

The key difference is that those on the north side of the border enjoy law and order and dependable government services — they can go about their daily activities and jobs without fear for their life or safety or property rights. On the other side, the inhabitants have institutions that perpetuate crime, graft, and insecurity.

Nogales may be the most obvious example, but it's far from the only one. Take Singapore, a once-impoverished tropical island that became the richest nation in Asia after British colonialists enshrined property rights and encouraged trade. Or China, where decades of stagnation and famine were reversed only after Deng Xiaoping began introducing private-property rights in agriculture, and later in industry. Or Botswana, whose economy has flourished over the past forty years while the rest of Africa has withered, thanks to strong tribal institutions and farsighted nation building by its early elected leaders.

Now look at the economic and political failures. You can begin in Sierra Leone, where a lack of functioning institutions and an overabundance of diamonds have fueled decades of civil war and strife and corruption that continue unchecked today. Or take communist North Korea, a geographical, ethnic, and cultural mirror of its capitalist neighbor to the south, yet ten times poorer. Or Egypt, cradle of one of the world's great civilizations yet stagnant economically ever since its colonization by the Ottomans and then the Europeans, only made worse by its post-independence governments, which have restricted all economic activities and markets. In fact, the theory can be used to shed light on the patterns of inequality for much of the world.

If we know why nations are poor, the resulting question is what can we do to help them. Our ability to impose institutions from the outside is limited, as the recent U. S. experiences in Afghanistan and Iraq demonstrate. But we are not helpless, and in many instances, there is a lot to be done. Even the most repressed citizens of the world will stand up to tyrants when given the opportunity. We saw this recently in Iran and a few years ago in Ukraine during the Orange Revolution.

The U. S. must not take a passive role in encouraging these types of movements. Our foreign policy should encourage them by punishing repressive regimes through trade embargoes and diplomacy. The days of supporting dictators because they bolster America's short-term foreign-policy goals, like our implicit support of Muhammad Zia-ul-Haq in Pakistan starting in the 1970s, and our illicit deals with Mobutu's kleptocratic regime in the Congo from 1965 to 1997, must end. Because the long-term consequences — entire nations of impoverished citizens, malnourished and hungry children, restive, discontented youngsters ripe to be drawn toward terrorism — are too costly. Today that means pushing countries such as Pakistan, Georgia, Saudi Arabia, Nigeria, and countless others in Africa toward greater transparency, more openness, and greater democracy, regardless of whether they are our short-term allies in the war on terror.

At the microlevel, we can help foreign citizens by educating them and arming them with the modern tools of activism, most notably the Internet, and perhaps even encryption technology and cell-phone platforms that can evade firewalls and censorship put in place by repressive governments, such as those in China or Iran, that fear the power of information.

There's no doubt that erasing global inequality, which has been with us for millennia and has expanded to unprecedented levels over the past century and a half, won't be easy. But by accepting the role of failed governments and institutions in causing poverty, we have a fighting chance of reversing it.

Acemoglu is currently writing a book about his theory of inequality with James Robinson, a Harvard government professor, from which this essay was adapted.

Talk: Jacqueline Novogratz on escaping poverty

Jacqueline Novogratz tells a moving story of an encounter in a Nairobi slum with Jane, a former prostitute, whose dreams of escaping poverty, of becoming a doctor and of getting married were fulfilled in an unexpected way.

About Jacqueline Novogratz

Jacqueline Novogratz founded and leads Acumen Fund, a nonprofit that takes a businesslike approach to improving the lives of the poor.

Watch the talk here:

http://www.ted.com/talks/jacqueline_novogratz_on_an_escape_from_poverty.html

and here:

http://www.ted.com/talks/jacqueline_novogratz_invests_in_ending_poverty.html

Talk: Iqbal Quadir says mobiles fight poverty

Iqbal Quadir tells how his experiences as a kid in poor Bangladesh, and later as a banker in New York, led him to start a mobile phone operator connecting 80 million rural Bangladeshi -- and to become a champion of bottom-up development.

About Iqbal Quadir

Iqbal Quadir is an advocate of business as a humanitarian tool. With GrameenPhone, he brought the first commercial telecom services to poor areas of Bangladesh.

The talk could be viewed here:
http://www.ted.com/talks/iqbal_quadir_says_mobiles_fight_poverty.html

Lecture: The power of time off - Stefan Sagmeister

Every seven years, designer Stefan Sagmeister closes his New York studio for a yearlong sabbatical to rejuvenate and refresh their creative outlook. He explains the often overlooked value of time off and shows the innovative projects inspired by his time in Bali.

The video could be viewed here: http://www.ted.com/talks/stefan_sagmeister_the_power_of_time_off.html

DR. ASRI - Agama Bukan Candu Untuk Mengkhayalkan Orang Miskin

Sumber: http://drmaza.com/home/?p=808

Disiarkan pada Nov 11, 2009 dalam kategori Isu Semasa
(Antara artikel lepas (Jun 2008) yang menyebabkan Dr. Asri tidak disenangi oleh sesetengah pihak agama dan politik)

“Dan berikanlah kepada kaum keluargamu, dan orang miskin serta orang musafir akan haknya masing-masing; dan janganlah engkau membazir dengan pembaziran yang melampau. Sesungguhnya orang-orang yang membazir itu adalah saudara-saudara syaitan, sedang syaitan itu pula sangat kufur kepada Tuhannya”. (Surah al-Isra: 26-27).

Saya tertarik apabila membaca membaca kisah al-Imam al-Nawawi (631-676H) yang diminta oleh Raja pada zamannya al-Malik al-Zahir untuk memberikan fatwa bagi mengharuskan Raja mengambil harta rakyat untuk digunakan memerangi musuh yang mengancam negara iaitu tentera Tatar. Tujuan itu pada zahirnya baik kerana mempertahankan negara dari ancaman musuh. Harta itu pun hendak digunakan untuk keperluan jihad.

Namun ramai ulama yang telah dibunuh ketika itu kerana enggan mengeluarkan fatwa berkenaan. Al-Nawawi juga enggan menulis surat sokongan terhadap tindakan Raja Zahir itu sekalipun beliau tahu pengambilan harta itu untuk kepentingan negara juga.

Apabila Raja bertanya kepada beliau mengapa beliau enggan menyokong? Beliau menjawab: Setahu saya engkau dahulunya seorang hamba, tidak mempunyai harta. Kemudian Allah memberikan kurniaan kepadamu lalu diangkat engkau menjadi seorang raja. Aku dengar engkau memiliki seribu hamba lelaki yang setiap mereka memiliki talipinggang daripada emas. Engkau juga ada memiliki dua ratus hamba perempuan, dan setiap mereka memiliki sebekas perhiasan. Jika engkau belanjakan itu semua, sehingga hamba-hamba lelakimu hanya memakai tali pinggang kain, dan hamba-hamha perempuanmu hanya memakai baju tanpa perhiasan, juga baitul mal sudah tiada simpanan wang, harta dan tanah lagi, maka aku akan fatwakan untukmu keharusan mengambil harta rakyat itu. Sesungguhnya yang menolong jihad dan selainnya ialah penyerahan diri kepada Allah dan mengikut jalan nabiNya s.a.w. (lihat: ‘Abd al-Ghani al-Daqar, al-Imam al-Nawawi, 144-145, Damsyik: Dar al-Qalam).

Saya suka dengan jawapan al-Imam al-Nawawi ini. Saya tahu, selepas ini banyak forum-forum perdana, ceramah-ceramah di radio dan televesyen akan memperkatakan tentang kewajipan berjimat cermat. Maka ustaz, ustazah dan penceramah pun –atas pemintaan penaja yang membayar harga ceramah- akan bersungguh-sungguh menyuruh orang-orang bawahan untuk berjimat cermat.

Dalil-dalil pun akan dibaca. Mungkin akan ada ustazah yang mencari cerita-cerita ajaib yang baru untuk dikaitkan dengan bab jimat cermat dan jangan membazir. Mungkin akan ada penceramah yang cuba menangis-menangis –seperti seorang pelakon berjaya yang menerima anugerah- bercerita kepada mak cik-makcik yang kusyuk menonton tentang azab seorang yang membazir ‘nasi lemaknya’.

Datanglah orang-orang kampung mendengar forum perdana dengan basikal atau motosikal sebagai menyahut seruan agar tidak membazir petrol. Adapun penceramah, datuk-datuk pengajur, YB-YB hanya menggunakan kenderaan mewah yang berkapasiti atas daripada 2000cc. Tujuannya untuk mengelakkan pembaziran wang kerajaan yang terpaksa dibayar kepada empunya kenderaan 2000cc ke bawah, lebih tinggi daripada 2000 ke atas.

Maka insaflah mak cik dan pak cik yang barangkali teringatkan tulang ikan yang pernah dibuangnya padahal masih ada sedikit sisa isinya yang melekat. Itulah membazir namanya. Maka, atas keinsafan dan taubat itu, mungkin ada yang akan mula mengurangkan makan nasi lemak daripada sebungkus seorang kepada sebungkus yang dikongsi bersama. Air kopinya yang memang sudah ‘ceroi’ akan ditukar kepada yang warna hitamnya antara kelihatan dan tidak. Maka selamat negara kita ini, disebabkan pakcik dan makcik, pak long dan mak long, pak lang dan mak lang di kampung sudah mengubah gaya hidup mereka.

Jika saya hadir ke forum yang seperti itu, saya ingin bertanya soalan, tapi soalan yang belum ‘dijakimkan’, “apakah agama ini dihantar oleh Allah untuk menghukum manusia bawahan dan menghalalkan yang lain tidur dalam kekenyangan dan kemewahan?”. Sebelum harga minyak naik, telah sekian mereka yang berada di teratak usang itu menjimat makan dan pakai. Saban hari mereka mengira belanja untuk memboleh mereka terus hidup di kala negara dunia belum menghadapi krisis harga minyak.

Saya tidak mahu membicarakan tentang kenaikan harga minyak dari sudut perjalanan ekonomi antarabangsa. Telah banyak pakar-pakarnya bicarakan. Tapi saya ingin bincangkan tentang soal pembaziran dan jimat-cermat. Ya, memang Islam memusuhi pembaziran. Bahkan al-Quran tidak pernah mempersaudarakan antara mana-mana pembuat dosa dengan syaitan, melainkan mereka yang membazirkan.

Allah menyebut dalam al-Quran: (maksudnya): “Dan berikanlah kepada kaum keluargamu, dan orang miskin serta orang musafir akan haknya masing-masing; dan janganlah engkau membazir dengan pembaziran yang melampau. Sesungguhnya orang-orang yang membazir itu adalah saudara-saudara syaitan, sedang syaitan itu pula sangat kufur kepada Tuhannya”. (Surah al-Isra: 26-27).

Demikianlah Allah persaudarakan pembazir dengan syaitan. Kesan pembaziran sangat besar. Lihat negara kita yang kaya dengan berbagai hasil. Sepatutnya kita akan tetap kukuh dan setiap rakyat akan menikmati kekayaan ini dengan adilnya. Namun, disebabkan pembaziran, harta negara yang sepatutnya dapat dimakan puluhan tahun, tetapi surut mendadak dalam masa beberapa tahun.

Maka, yang patut mendapat bantuan dan hak, tidak cukup untuk sampai kepadanya. Barang keperluan pula bertukar menjadi mahal. Pembaziran memusnahkan kehidupan rakyat bawahan dan menghalang hak yang sepatutnya sampai kepada mereka. Maka betapa wajar untuk para pembazir itu dipersaudarakan dengan syaitan. Apatah lagi dalam banyak keadaan, pembaziran itu lahir dari keangkuhan dan kesombongan. Sifat-sifat itulah jua yang menjadi asas kepada kekufuran syaitan.

Soalannya, mengapakah apabila kita membicarakan tentang pembaziran, kita hanya terbayang orang-orang bawahan di kampung ataupun bandar. Jika kita ingin meminta supaya setiap warga negara ini berjimat dan jangan membazir, maka bermulalah daripada atas. Bukan sekadar untuk ‘mengenakan si miskin yang sekian lama telah berjimat dan sudah tidak tahu apa yang hendak dijimatkan lagi. Mengapa kita hanya terbayang rakyat yang berada dalam rumah persendirian dan berbelanja dengan wang poketnya yang sudah lelah?

Kita sepatutnya terlebih meneliti semula bagaimana perbelanjaan yang menggunakan harta negara dan rakyat yang sedang berjalan di istana-istana, kediaman-kediaman rasmi kerajaan di peringkat negara dan negeri?. Apakah wajar di kala ini keraian untuk orang-orang besar sama ada sultan atau menteri begitu mewah? Makanan yang dihidangkan untuk mereka, harga satu meja kadang-kala boleh dimakan oleh ratusan rakyat bawahan. Karpet yang dipijak oleh mereka harganya ribuan bungkusan nasi yang dimakan oleh ‘orang biasa’.

Apakah patut di saat yang sebegini, ada istana atau kediaman rasmi menteri yang hendak ditambahmewahkan? Apakah patut orang-orang besar ini diraikan dengan hiburan atau pertunjukan dan konsert yang menelan puluhan ribu ringgit sempena sesuatu kunjungan mereka. Wang itu, wang negara. Wang itu, wang rakyat.

Apakah dalam masa yang sebegini mereka masih mendapat peruntukan untuk bersantai, bermain golf dan ‘berhiburan’ dengan menggunakan wang rakyat bawahan yang disuruh menjimatkan nasi lemak dan air kopi mereka?. Pembaziran sebegini lebih rapat menjadi saudara syaitan dibanding wang persendirian yang dibelanjakan.

Meminjam falsafah al-Imam al-Nawawi yang saya sebutkan tadi, jika orang atasan telah benar-benar berjimat, maka wajarlah untuk dikurangkan subsidi rakyat. Al-Nawawi telah dibuang negeri kerana enggan bersekongkol dengan perkara yang seperti ini. Namun, jika itu tidak dilakukan, ulama bukan burung kakak tua.

Saya mengambil risiko menulis hal ini. Tanggungjawab di hadapan Allah lebih besar daripada segala-galanya. Para ulama dahulu jauh lebih mulia, tidak dibandingkan kedaifan saya ini. Pun mereka telah menunaikan tanggungjawab al-Amr bil Ma’ruf dan al-An-Nahy ‘an al-Munkar ini. Semoga Allah menimbang tinta para ulama dengan darah para syuhada.

Telah berlaku tahun kesusahan dan kelaparan yang amat sangat di Semenanjung Arab pada zaman Amirul Mukminin ‘Umar bin al-Khattab. Dikenali dengan ‘Am al-Ramadah kerana seakan bagaikan warna ramad atau abu disebabkan kekurangan hujan, warna tanah dan warna kulit manusia yang bertukar disebabkan kekeringan. Ini berlaku pada antara tahun 17H dan 18H selama sembilan bulan.

Amirul Mukminin telah berhempas pulas menguruskan harta negara ketika itu bagi mengatasi kesusahan rakyat. Di samping kecemerlangan pengurusan, yang ingin disebutkan di sini kecemerlangan pendirian dan sikap. Ibn Jarir al-Tabari meriwayatkan bahawa ‘Umar bin al-Khattab tidak memakan pada tahun berkenaan lemak haiwan, susu dan daging sehingga orang ramai dapat memakannya. Barangan makanan berkurangan di pasar.

Pada suatu hari pekerjanya dapat membeli untuknya lemak dan susu namun dengan harga yang agak tinggi. ‘Umar enggan makan bahkan berkata: “Engkau telah menyebabkan lemak dan susu menjadi mahal, sedekahkan keduanya, aku bencikan pembaziran. Bagaimana aku dapat memahami keadaan rakyat jika tidak mengenaiku apa yang mengenai mereka?”. (Al-Tabari, 2/358, Beirut: Dar al-Fikr).

Juga diriwayatkan bahawa suatu hari pada tahun berkenaan disembelih unta lalu dimasak dan dibahagikan kepada orang ramai. Lalu diceduk masakan itu untuk dihidangkan juga buat ‘Umar. Tiba-tiba yang diceduk itu bahagian belakang unta dan hatinya. Lalu ‘Umar bertanya: “Dari mana diperolehi ini?”. Daripada unta yang kita sembelih hari ini. Kata ‘Umar: “Oh! Alangkah buruknya aku ini sebagai pemimpin, jika aku memakan bahagiannya yang baik lalu aku berikan rakyat makan yang sisa” (Ibn Sa’d, al-Tabaqat al-Kubra, 3/312, Beirut: Dar Sadir).

Maka alangkah buruknya seorang presiden, atau sultan, atau raja, atau perdana menteri, atau menteri besar, atau menteri yang makan dengan mewah daripada peruntukan harta negara atau negeri sedangkan rakyatnya dalam kesusahan. Ketika rakyat membilang butiran beras, helaian ringgit untuk persekolahan anak, keperitan membayar sewa rumah, api dan air, sementara mereka yang berkuasa ini pula menghadiri jamuan negara dan negeri itu dan ini.

Bermewahan dengan pertunjukan dan hiburan dari peruntukan wang negara. Kemudian bercuti rehat, tanpa rakyat ketahui apakah kepenatannya untuk rakyat. Kos cuti itu pula ditanggung oleh negara tanpa sebarang pulangan keuntungan buat rakyat. Alangkah zalim! Alangkah keji sikap yang sedemikian rupa.

Saya kadang-kala begitu hairan apabila seseorang dianggap ‘berjiwa rakyat’, hanya kerana makan nasi yang dijamu oleh rakyat, atau masuk ke kampung mendukung anak rakyat untuk beberapa minit bagi membolehkan wartawan mengambil foto. Apakah itu dinamakan berjiwa rakyat?

Jika hendak diiktiraf sebagai berjiwa rakyat, rasailah apa yang rakyat rasai. Orang seperti ‘Umar bin al-Khattab lebih mulia daripada segala keturunan atau pangkat yang ada di kalangan manusia. Kemuliaannya telah diiktiraf oleh Allah dan RasulNya. Dia ahli syurga dengan jaminan Allah dan RasulNya sementara politiknya tidak ada saingan yang menggugatnya. Namun tetap amanah dan jujurnya terhadap rakyatnya. Merasai penderitaan rakyat. Beliau idola kepimpinan kita sepatutnya. Walaupun beliau tidak pernah menyuruh orang menyembah atau menjulangnya, namun beliau dipuja oleh sejarah dan diangkat oleh Allah.

Kenaikan harga minyak menaikkan harga barang. Orang berpendapatan rendah menjadi mangsa. Agama berperanan untuk menyedarkan semua pihak tentang tanggungjawab terhadap rakyat. Dalam keadaan begini, antara perkara pertama yang patut dibentang kepada rakyat adalah pengurusan kemasukan dan pengagihan zakat. Zakat yang mungkin sampai kepada peringkat bilion ringgit di seluruh negara mesti diagihkan secara telus dan bijaksana.

Mengapa masih ada fakir miskin yang bagaikan meminta sedekat kepada pihak yang menguruskan zakat? Mengapa program tv lebih menjumpai si miskin dibanding pihak yang menguruskan zakat? Mengapa zakat masih berbaki dengan begitu banyak setiap tahun sedangkan kemiskinan masih banyak? Mengapa pihak yang menguruskan zakat kelihatan bertambah mewah, sementara yang patut menerima hak kelihatannya bertambah letih dengan keadaan sekarang?

Di masa inilah peranan zakat bagi memastikan setiap yang memerlukan memperolehinya tanpa kerenah birokrasi yang bukan-bukan. Jangan sampai untuk mendapat RM150 si miskin berulang alik berkali-kali dengan tambang sendiri, sementara yang mendakwa amil zakat mengisi minyak kereta dengan wang zakat atas nama amil! Ramai kata kita berjaya menguruskan zakat sebab kutipan yang tinggi. Saya katakan, pengurusan yang berjaya itu bukan sahaja kutipan semata, tetapi juga pengagihan secara telus, bijaksana dan bertanggungjawab.

Dalam usaha kerajaan menangani kemelut ekonomi hari ini, perkara-perkara yang disebutkan ini mestilah dipandang serius. Kejayaan sesebuah kerajaan menghayati penderitaan rakyat akan menjadikan mereka lebih disayangi dan disokong. Jika orang atas mengubah cara hidup, kita akan berkempen untuk semua agar mengubah cara hidup. Jika orang agama disuruh berkempen orang bawahan agar mengubah cara hidup, sementara melupai yang di atas, mereka sebenarnya cuba menjadikan agama sebagai candu agar seseorang melupai masalah yang sebenar.