Source: http://thestar.com.my/columnists/story.asp?file=/2010/8/27/columnists/questiontime/6926221&sec=questiontime
We need more debate and less rhetoric in ironing out the real issues of affirmative action.
WITH all the brouhaha over Malay and non-Malay rights and the relentless rhetoric of race-based politics coming to the fore in the economic arena yet again, it is time to revisit the tenets of the original New Economic Policy (NEP) and separate fact from fiction.
Sadly, the major problem with the NEP is that the 30% equity target for Malays and other bumiputras became the very visible and de facto criterion for measurement of the very success of the NEP.
The other contentious part was quotas for all manner of things and preference given to bumiputra companies and individuals when it is related to procurements and contracts from the Government, often as a means to achieve that 30% target.
Both of these were administrative measures and targets and did not even form part of the policy aims of the NEP.
Very few people, if any, are likely to disagree that the broad twin aims of the NEP, formulated in the wake of the racial riots of 1969, were to eradicate poverty irrespective of race and to eliminate the identification of race with economic function.
The first aim, according to government figures, was very much achieved with hardcore poverty being virtually eradicated. And there have been major strides made in terms of Malays and bumiputras, and jobs with them making major inroads into all areas.
These are achievements of the NEP which no one can deny, although there are valid arguments and concerns such as whether the poverty line figure is a realistic one and whether there is too high representation of Malays in Government services even as they made inroads into the private sector.
While no one questions the twin aims of the NEP — everyone, including the Opposition, is in agreement — the problem is with the administrative measures that have been put in place.
These are being challenged by all sides: some sides want more and some less, some want them to be dismantled and others want them to not only be continued but reinforced.
So, let’s agree on the aims – and move on from there.
Thus, it will not be seditious if someone questions the 30% bumiputra equity target or says the measurement criteria are seriously flawed.
If someone said quotas should be reconsidered given the progress that Malays have made in some areas, that should not be interpreted as questioning Malay rights. Under the Constitution, the Government has the right to undertake affirmative action provided it is justified and it has the right not to.
The NEP (technically, the NEP has expired but the present policy still relies on the original NEP) and its future form will benefit substantially from the right kind of debate about it without emotions clouding the issues.
But there are some bodies and people who are bent on bringing in emotions precisely because it will cloud the issues. They must not be allowed to have their way.
Let’s take the 30% equity target for instance. It cannot be taken as the sole or even the most important part of NEP achievement because there are other things which are far more important – poverty eradication and racial balance in employment to name just two.
There is therefore nothing wrong in asking that this target be reviewed so that we can have better measurement of Malay and bumiputra participation in the economy and to avoid all the perils of patronage that come with this.
The same applies to quotas and bumiputra discounts for high-end property.
It is because the NEP has done so much in narrowing the gap between the races that there is a need to review some of its administrative targets to ensure that the wrong people do not benefit from it.
Bumiputras who have already made it don’t need quotas and affirmative action anymore. But others might.
But we must expect that some of those who will lose their so-called privileges will fight a rearguard action to preserve them, for that’s a way to quick riches when abused. These are the people who will benefit most by obscuring the real issues under a cloud of emotional rhetoric.
The time has come for all Malaysians to see beyond these and do what is right for everyone. Help everyone who is needy and if any particular race is more needy than another, it will automatically be helped more too.
Move to a needs-based system and you eliminate racial posturing and fighting just like that.
Saturday, August 28, 2010
FDI – more than economics - DENNIS IGNATIUS
Source: http://thestar.com.my/columnists/story.asp?file=/2010/8/26/columnists/diplomaticallyspeaking/6919211&sec=diplomaticallyspeaking
Malaysia needs to go well beyond mere economic and fiscal measures if it is to reverse the decline in foreign direct investment.
THE recently released UNCTAD World Investment Report 2010 indicating that foreign direct investment (FDI) in Malaysia declined by a massive 81% in 2009 has quite understandably grabbed headlines.
According to the report, FDI declined from US$7.3bil (RM23bil) in 2008 to a mere US$1.4bil (RM4.4bil) last year. In addition, there was a massive US$8.04bil (RM25.3bil) outflow of capital.
The overall result was that our country experienced its worst FDI performance in decades.
As we so often tend to do with bad news, we shift the blame; the drop in FDI was explained away as the result of “external factors.”
The argument was made that the global economy is, after all, still recovering from the worst economic crisis since the Great Depression. Besides, the doubling of foreign ownership of Malaysian Government Securities (compared to the previous year) and the splendid performance of the Ringgit indicate that investor confidence continues to remain high.
The massive outflow of funds from Malaysia, on the other hand, was explained away as Malaysian companies aggressively pursuing investment opportunities abroad, a coming of age of sorts even, by our multinationals.
Nevertheless, for a country that has long depended upon FDI to prosper and grow, such a drastic decline comes as a rude awakening.
For years we always bragged about how special Malaysia was by virtue of our success in attracting FDI at levels which left our neighbours green with envy.
High investment inflows were seen as a reflection of our competitiveness, our highly favourable business environment as well as our political maturity and stability.
Dismissing the significance of the precipitous decline in FDI might be politically convenient but it will not hide the arresting message that it sends: a serious loss of confidence in Malaysia and a sign of our decline.
Anyone closely monitoring developments in Malaysia, including foreign investors, cannot but conclude that our nation is now increasingly shaky in several areas. And they must also wonder, given recent events, if we are even up to the challenges we face.
Right now we are transfixed by the staggering RM12.5bil Port Klang Free Zone scandal.
What is really distressing is that such corruption and scandalous mismanagement of public finances keeps recurring with frightening regularity.
We seem to helplessly careen from one major scandal to another. It is a mess, a sordid mess, that must surely cause many foreign investors to simply shake their heads in disbelief and dismay.
And more than that, it tells the world that we still have not found the political will or the necessary institutional architecture to prevent such massive corruption from recurring.
It would be naïve to think that corruption on this scale will not impact investor confidence.
And, given our dismal record of bringing to justice the real kingfishers of corruption, not many believe that things are about to change.
Cumulative scandals affecting other national institutions, including the police and judiciary, have also steadily undermined the perception of Malaysia as a safe and competitive place for long term investments.
And then there is the increasingly strident and racially charged rhetoric that marks so much of what passes for political discourse in our country these days.
It may be just politics Malaysian style to some or a convenient, if morally bankrupt way, to garner support to others but it makes foreign investors, and many locals too, very jittery.
It is not for no reason that more and more Malaysians of all ethnic backgrounds are packing up and moving abroad.
According to the World Bank, the number of emigrants out of Malaysia rose from 9,576 in 1960 to almost 1.5 million in 2005. Over 300,000 left between March 2008 and August 2009 alone.
In this connection, I wonder how much of that US$8.4bil that left our shores last year was simply Malaysians moving their capital to safer shores.
The assurances by the government that it will take proactive measures to reverse the decline in FDI are of course welcome as are the measures already introduced under the Government Transformation Programme and the New Economic Model.
Our response, however, needs to go well beyond mere economic and fiscal measures if we are to reverse the decline.
What is also urgently needed is real and effective political leadership to tackle head on the corruption issue and the growing racial and religious divide.
The Prime Minister’s 1Malaysia policy, while constructive and desperately needed, unfortunately already suffers from a thousand cuts. Unless he is able to revive confidence in the Government’s ability to bring about its realisation, it will not help turn the tide of slumping investor confidence.
If we ever hope to raise the RM115bil worth of investments to achieve the goals of the 10th Malaysia Plan, we must act now.
And not with half-measures and half-hearted gestures but with credible policies and programmes backed by the necessary political will.
Bearing in mind the turbulent and uncertain global economic environment we are in, our very prosperity, if not survival, depends upon it.
Malaysia needs to go well beyond mere economic and fiscal measures if it is to reverse the decline in foreign direct investment.
THE recently released UNCTAD World Investment Report 2010 indicating that foreign direct investment (FDI) in Malaysia declined by a massive 81% in 2009 has quite understandably grabbed headlines.
According to the report, FDI declined from US$7.3bil (RM23bil) in 2008 to a mere US$1.4bil (RM4.4bil) last year. In addition, there was a massive US$8.04bil (RM25.3bil) outflow of capital.
The overall result was that our country experienced its worst FDI performance in decades.
As we so often tend to do with bad news, we shift the blame; the drop in FDI was explained away as the result of “external factors.”
The argument was made that the global economy is, after all, still recovering from the worst economic crisis since the Great Depression. Besides, the doubling of foreign ownership of Malaysian Government Securities (compared to the previous year) and the splendid performance of the Ringgit indicate that investor confidence continues to remain high.
The massive outflow of funds from Malaysia, on the other hand, was explained away as Malaysian companies aggressively pursuing investment opportunities abroad, a coming of age of sorts even, by our multinationals.
Nevertheless, for a country that has long depended upon FDI to prosper and grow, such a drastic decline comes as a rude awakening.
For years we always bragged about how special Malaysia was by virtue of our success in attracting FDI at levels which left our neighbours green with envy.
High investment inflows were seen as a reflection of our competitiveness, our highly favourable business environment as well as our political maturity and stability.
Dismissing the significance of the precipitous decline in FDI might be politically convenient but it will not hide the arresting message that it sends: a serious loss of confidence in Malaysia and a sign of our decline.
Anyone closely monitoring developments in Malaysia, including foreign investors, cannot but conclude that our nation is now increasingly shaky in several areas. And they must also wonder, given recent events, if we are even up to the challenges we face.
Right now we are transfixed by the staggering RM12.5bil Port Klang Free Zone scandal.
What is really distressing is that such corruption and scandalous mismanagement of public finances keeps recurring with frightening regularity.
We seem to helplessly careen from one major scandal to another. It is a mess, a sordid mess, that must surely cause many foreign investors to simply shake their heads in disbelief and dismay.
And more than that, it tells the world that we still have not found the political will or the necessary institutional architecture to prevent such massive corruption from recurring.
It would be naïve to think that corruption on this scale will not impact investor confidence.
And, given our dismal record of bringing to justice the real kingfishers of corruption, not many believe that things are about to change.
Cumulative scandals affecting other national institutions, including the police and judiciary, have also steadily undermined the perception of Malaysia as a safe and competitive place for long term investments.
And then there is the increasingly strident and racially charged rhetoric that marks so much of what passes for political discourse in our country these days.
It may be just politics Malaysian style to some or a convenient, if morally bankrupt way, to garner support to others but it makes foreign investors, and many locals too, very jittery.
It is not for no reason that more and more Malaysians of all ethnic backgrounds are packing up and moving abroad.
According to the World Bank, the number of emigrants out of Malaysia rose from 9,576 in 1960 to almost 1.5 million in 2005. Over 300,000 left between March 2008 and August 2009 alone.
In this connection, I wonder how much of that US$8.4bil that left our shores last year was simply Malaysians moving their capital to safer shores.
The assurances by the government that it will take proactive measures to reverse the decline in FDI are of course welcome as are the measures already introduced under the Government Transformation Programme and the New Economic Model.
Our response, however, needs to go well beyond mere economic and fiscal measures if we are to reverse the decline.
What is also urgently needed is real and effective political leadership to tackle head on the corruption issue and the growing racial and religious divide.
The Prime Minister’s 1Malaysia policy, while constructive and desperately needed, unfortunately already suffers from a thousand cuts. Unless he is able to revive confidence in the Government’s ability to bring about its realisation, it will not help turn the tide of slumping investor confidence.
If we ever hope to raise the RM115bil worth of investments to achieve the goals of the 10th Malaysia Plan, we must act now.
And not with half-measures and half-hearted gestures but with credible policies and programmes backed by the necessary political will.
Bearing in mind the turbulent and uncertain global economic environment we are in, our very prosperity, if not survival, depends upon it.
Stand up and be counted, Malaysia - AZMI SHAROM
Source:http://thestar.com.my/columnists/story.asp?file=/2010/8/26/columnists/bravenewworld/6923883&sec=bravenewworld
It is strange that in the 21st century, we are still having to face the problem of institutionalised racism.
OVER the past week or so, there have been some developments in our country which are more disturbing than usual.
In particular, the two cases of alleged racist remarks by school heads; the accusations that Penang mosques have replaced the Yang di-Pertuan Agong with the Chief Minister’s name in their prayers; and the continued insistence that Article 153 of the Constitution is equal to an inalienable right that could not be questioned.
These events are interrelated and it seems to me that they indicate that there is a battle of ideology going on in the country now.
On one side is the idea that a person’s ethnicity and religion entitles him to be treated better than anyone else who is different. On the other side is the idea that equality is an aspiration that is both noble and necessary for nation building.
It is strange that in the 21st century we are still having to face the problem of institutionalised racism.
Looking at our history, one can see why this has occurred. The combination of race-based politics and poorly interpreted constitutional provisions have meant that the idea of racial and religious superiority has been allowed to grow and become the norm rather than something undesirable and out of the ordinary.
How else can one explain the possibility that teachers, the very people to whom we entrust the education of our children, can have such warped values and also have the gall to express those views publicly?
How else can we explain the near rabid attack on the Penang Chief Minister for something which he and the state religious department have vehemently denied and in fact would have been insane to attempt?
Let’s analyse this one step at a time. When the dominant political parties in this country do not have any political ideology to speak of and are instead, based on the principle that each race-based component has a duty to safeguard the interest of its community, what one has is a recipe for the kind of policy and rhetoric that divides rather than unites.
Historically, one can see the reasons why the politics of the nation was forged in this way. It was a necessary evil in the face of the divide-and-rule policy by the British to show that even when separate, the three major communities of the nation can still work together politically.
However, it is an unsustainable model and what started life as a fairly rosy example of racial cooperation too easily descended into crude racialist type politics.
Which is why the early aspirations that our founding fathers had for a society treated with equality has now been all but buried by the idea that one race is superior to others and in fact is the only race with any right to be here in Malaysia.
This is because in the battlefields of politics, it is easiest to appeal to base racialist emotions, especially when without those types of ideas, a party based on race will have no collateral to work with.
In this kind of political atmosphere, it is of no surprise that what has been forgotten is that the basis of this nation was one of justice and equality. And the document that is meant to protect that, the Federal Constitution, has been misinterpreted to the extent that there is no longer any trace of this aspiration in the mainstream discourse of the day.
Let us be absolutely clear on this matter, the Constitution does give powers to the government to take affirmative action and it does acknowledge the fact that Islam has a special place in the public life of the nation.
What it does not intend to do however is create a perpetual system of ethnic-based favourable treatment nor does it advocate the idea that all other religious beliefs must be subservient to Islam.
However, instead of this reasonable position, what we have today is the idea that affirmative action for Malays is unquestionable and to be continued in perpetuity becoming the norm.
This cannot be further from the truth as there are no legal justification for it at all.
Article 153 of the Federal Constitution is seen as the holy grail for those who hold this view. However, if we examine the provision closely we will notice two things.
Firstly, affirmative action is not a Malay right. Article 153 does not endow a right. What it does is to merely give government the power to take affirmative action despite the overarching ideal of equality which is enshrined in Article 8 of the Constitution.
To support this contention, we see that Article 8 clearly states that all citizens in this country are equal except for situations specifically provided for in the Constitution. Those “specific provisions” are found in Article 153 and there are not many of them.
They include the power to establish quotas for the civil service, permits and licences, scholarships and education.
Therefore anything other than these areas should not be subjected to affirmative action.
Furthermore, any affirmative action has to be reasonable. The idea of what is reasonable must surely be open to research and debate otherwise there will always be the risk of abuse and wastage of resources.
This being the case, although questioning the existence of such a power to have affirmative action is moot, discussion on the efficacy of affirmative action policies and programmes surely is not.
The way the discourse is today, and not merely by the racialist fringe but by mainstream politicians in power, is that even the implementation of Article 153 is not to be questioned at all.
This is surely wrong based both on the meaning of the Constitution as well as the principle held by the founding fathers that Article 153 was an unfortunate but necessary aberration from the ideals of equality and that it was to be used not in perpetuity.
With these kinds of distortion of law, is it any wonder then that we still get people actually classifying whole swathes of the citizenry as having no right to be here?
Is it any wonder then that a crazy accusation against a Chief Minister whose government has given twice as much money to the Islamic bodies in the state than the previous administration, can give rise to the belief that he is a threat to the faith?
If this country is to have any future as a true nation, the time has come for those who believe in the ideals of equality, ideals which were held by the political founding fathers of the country as well as the traditional Rulers of that time, to stand up and be counted.
To not be cowed by the bigots and to say that this is our country and it stands on noble humanitarian ideals, not opportunistic racialist thinking.
It is strange that in the 21st century, we are still having to face the problem of institutionalised racism.
OVER the past week or so, there have been some developments in our country which are more disturbing than usual.
In particular, the two cases of alleged racist remarks by school heads; the accusations that Penang mosques have replaced the Yang di-Pertuan Agong with the Chief Minister’s name in their prayers; and the continued insistence that Article 153 of the Constitution is equal to an inalienable right that could not be questioned.
These events are interrelated and it seems to me that they indicate that there is a battle of ideology going on in the country now.
On one side is the idea that a person’s ethnicity and religion entitles him to be treated better than anyone else who is different. On the other side is the idea that equality is an aspiration that is both noble and necessary for nation building.
It is strange that in the 21st century we are still having to face the problem of institutionalised racism.
Looking at our history, one can see why this has occurred. The combination of race-based politics and poorly interpreted constitutional provisions have meant that the idea of racial and religious superiority has been allowed to grow and become the norm rather than something undesirable and out of the ordinary.
How else can one explain the possibility that teachers, the very people to whom we entrust the education of our children, can have such warped values and also have the gall to express those views publicly?
How else can we explain the near rabid attack on the Penang Chief Minister for something which he and the state religious department have vehemently denied and in fact would have been insane to attempt?
Let’s analyse this one step at a time. When the dominant political parties in this country do not have any political ideology to speak of and are instead, based on the principle that each race-based component has a duty to safeguard the interest of its community, what one has is a recipe for the kind of policy and rhetoric that divides rather than unites.
Historically, one can see the reasons why the politics of the nation was forged in this way. It was a necessary evil in the face of the divide-and-rule policy by the British to show that even when separate, the three major communities of the nation can still work together politically.
However, it is an unsustainable model and what started life as a fairly rosy example of racial cooperation too easily descended into crude racialist type politics.
Which is why the early aspirations that our founding fathers had for a society treated with equality has now been all but buried by the idea that one race is superior to others and in fact is the only race with any right to be here in Malaysia.
This is because in the battlefields of politics, it is easiest to appeal to base racialist emotions, especially when without those types of ideas, a party based on race will have no collateral to work with.
In this kind of political atmosphere, it is of no surprise that what has been forgotten is that the basis of this nation was one of justice and equality. And the document that is meant to protect that, the Federal Constitution, has been misinterpreted to the extent that there is no longer any trace of this aspiration in the mainstream discourse of the day.
Let us be absolutely clear on this matter, the Constitution does give powers to the government to take affirmative action and it does acknowledge the fact that Islam has a special place in the public life of the nation.
What it does not intend to do however is create a perpetual system of ethnic-based favourable treatment nor does it advocate the idea that all other religious beliefs must be subservient to Islam.
However, instead of this reasonable position, what we have today is the idea that affirmative action for Malays is unquestionable and to be continued in perpetuity becoming the norm.
This cannot be further from the truth as there are no legal justification for it at all.
Article 153 of the Federal Constitution is seen as the holy grail for those who hold this view. However, if we examine the provision closely we will notice two things.
Firstly, affirmative action is not a Malay right. Article 153 does not endow a right. What it does is to merely give government the power to take affirmative action despite the overarching ideal of equality which is enshrined in Article 8 of the Constitution.
To support this contention, we see that Article 8 clearly states that all citizens in this country are equal except for situations specifically provided for in the Constitution. Those “specific provisions” are found in Article 153 and there are not many of them.
They include the power to establish quotas for the civil service, permits and licences, scholarships and education.
Therefore anything other than these areas should not be subjected to affirmative action.
Furthermore, any affirmative action has to be reasonable. The idea of what is reasonable must surely be open to research and debate otherwise there will always be the risk of abuse and wastage of resources.
This being the case, although questioning the existence of such a power to have affirmative action is moot, discussion on the efficacy of affirmative action policies and programmes surely is not.
The way the discourse is today, and not merely by the racialist fringe but by mainstream politicians in power, is that even the implementation of Article 153 is not to be questioned at all.
This is surely wrong based both on the meaning of the Constitution as well as the principle held by the founding fathers that Article 153 was an unfortunate but necessary aberration from the ideals of equality and that it was to be used not in perpetuity.
With these kinds of distortion of law, is it any wonder then that we still get people actually classifying whole swathes of the citizenry as having no right to be here?
Is it any wonder then that a crazy accusation against a Chief Minister whose government has given twice as much money to the Islamic bodies in the state than the previous administration, can give rise to the belief that he is a threat to the faith?
If this country is to have any future as a true nation, the time has come for those who believe in the ideals of equality, ideals which were held by the political founding fathers of the country as well as the traditional Rulers of that time, to stand up and be counted.
To not be cowed by the bigots and to say that this is our country and it stands on noble humanitarian ideals, not opportunistic racialist thinking.
Saturday, August 21, 2010
China surpasses Japan as world's second largest economy
Source: http://www.malaysianmirror.com/lifestyledetail/184-economy/48890-china-surpasses-japan-as-worlds-second-largest-economy
COMMENT Where world economy is concerned, August 16, 2010 will go down history as a significant date.
On this day, Japan quietly ceded to China the coveted title as the world's second largest economy which it had held for four decades.
China's GDP officially overtook Japan in the second quarter of this year to become the world's second largest.
Sure enough the United States will remain the Big Brother until at least 2025, when it is expected to get dethroned by the Asian giant.
Over the past two decades, China's economy has been expanding at impressive double-digit annual rates compared to the lacklustre Japanese economy hovering at around the 1% level since 1990.
In economics, GDP measures the combined market values of all the products of a country within a specific period of time, and can vaguely reflect the size of that country's economy.
With the Chinese economy now larger than Japan's, it shows that China's economy and national strength have experienced a tremendous lift, as well as signifies a remarkable shift in global economic prowess and influences.
From historical point of view, perhaps many Chinese will take delight in such a shift as if the humiliation suffered during the past century would now be obliterated and taken over by glory and pride.
I would nevertheless choose to look at things from more pragmatic perspectives.
The phenomenal growth of GDP should not just bring a sense of vanity, more importantly it must also lift the living standards of China's billion-strong population.
Of course, it is essential that we strive to get a better understanding of the true significance of GDP growth instead of getting carried away by the superficial number game.
China's GDP has been established upon the productivity of some 1.3 billion people. If we divide that figure by 1.3 billion, all we get is the per capita GDP, which is short of a tenth of Japan's and ranked beyond 100 in the world.
We can see from this angle that even as China is a wealthy nation, it is made up of mostly poor people.
Moreover, a second ranking in GDP does not denote that China is now the world's second most powerful nation.
As a matter of fact, China's economy is still very much at the bottom of the economic chain, relying largely on an abundance of inexpensive labour to churn out a multitude of low-cost products. Such a growth model may not be sustained, and often achieved at the expense of the environment and quality of life.
In the latest issue of Newsweek, China has been ranked 59 among a hundred odd countries in the world based on hygiene, economic vibrancy, education, political environment and quality of life.
China is still poorly ranked in terms of political openness and quality of life, not something a real global power should boast.
Small countries such as Finland, Switzerland, Sweden and Australia, on the other hand, enjoy very high per capita incomes and excellent quality of life despite their relatively small GDP. This is what we should really explore. - MySinChew.com
COMMENT Where world economy is concerned, August 16, 2010 will go down history as a significant date.
On this day, Japan quietly ceded to China the coveted title as the world's second largest economy which it had held for four decades.
China's GDP officially overtook Japan in the second quarter of this year to become the world's second largest.
Sure enough the United States will remain the Big Brother until at least 2025, when it is expected to get dethroned by the Asian giant.
Over the past two decades, China's economy has been expanding at impressive double-digit annual rates compared to the lacklustre Japanese economy hovering at around the 1% level since 1990.
In economics, GDP measures the combined market values of all the products of a country within a specific period of time, and can vaguely reflect the size of that country's economy.
With the Chinese economy now larger than Japan's, it shows that China's economy and national strength have experienced a tremendous lift, as well as signifies a remarkable shift in global economic prowess and influences.
From historical point of view, perhaps many Chinese will take delight in such a shift as if the humiliation suffered during the past century would now be obliterated and taken over by glory and pride.
I would nevertheless choose to look at things from more pragmatic perspectives.
The phenomenal growth of GDP should not just bring a sense of vanity, more importantly it must also lift the living standards of China's billion-strong population.
Of course, it is essential that we strive to get a better understanding of the true significance of GDP growth instead of getting carried away by the superficial number game.
China's GDP has been established upon the productivity of some 1.3 billion people. If we divide that figure by 1.3 billion, all we get is the per capita GDP, which is short of a tenth of Japan's and ranked beyond 100 in the world.
We can see from this angle that even as China is a wealthy nation, it is made up of mostly poor people.
Moreover, a second ranking in GDP does not denote that China is now the world's second most powerful nation.
As a matter of fact, China's economy is still very much at the bottom of the economic chain, relying largely on an abundance of inexpensive labour to churn out a multitude of low-cost products. Such a growth model may not be sustained, and often achieved at the expense of the environment and quality of life.
In the latest issue of Newsweek, China has been ranked 59 among a hundred odd countries in the world based on hygiene, economic vibrancy, education, political environment and quality of life.
China is still poorly ranked in terms of political openness and quality of life, not something a real global power should boast.
Small countries such as Finland, Switzerland, Sweden and Australia, on the other hand, enjoy very high per capita incomes and excellent quality of life despite their relatively small GDP. This is what we should really explore. - MySinChew.com
Millions of Japanese trapped in 'hidden poverty'
Source: http://www.malaysianmirror.com/featuredetail/162-japan/47754-millions-of-japanese-trapped-in-hidden-poverty
TOKYO – Consumer gluttony, astronomic real-estate prices and jobs for life were once normal in Japan -- but today the country also has millions of poor people desperately struggling to make ends meet.
Two decades after Japan's wealth bubble popped, its citizens have got used to higher unemployment and homeless people sleeping in the streets. Statistics released for the first time last year held yet another surprise.
Nearly one in six Japanese lives below the poverty line – meaning they earn less than half the median household income, or less than 1,830 dollars for a four-person family – in a country that prides itself on its egalitarianism.
Many of the worst-off are single mothers, the elderly, and people who lost their jobs in the latest recession, the worst since World War II.
Swelling their ranks has been a new generation of workers who lack the job security their parents enjoyed during Japan's "miracle" growth years from the 1960s onward and through the go-go wealth era of the 1980s and early 90s.
Temporary and part-time jobs and short-term contracts have become the norm for half of all employees under 39 years of age, a group dubbed "Freeters" – made up of the words "freelancer" and "Arbeiter", German for worker.
"There is a generation gap between those who were hired up until the 90s on permanent contracts and those who entered the job market later," said David-Antoine Malinas, a social scientist at the Maison Franco-Japonaise Tokyo.
These employees are often paid less, and are more vulnerable to job market swings during downturns than permanent staff. Hundreds of thousands of temporary workers were laid off during the recession of 2008-2009.
"I worked for 20 years as a temporary employee at a branch office of a large company before losing my job in March 2009," said one middle-aged man, a member of the new poor at an anti-poverty meeting organised in Tokyo.
"I lived in the company's dormitory and was kicked out one month after I was laid off," he said, adding that since then he had had to occasionally sleep rough in public places, making it much harder to find a new job.
Many on the brink of poverty fall over the edge because of the demise of family structures that once acted as a safety net, said Aya Abe, a researcher at the National Institute on Population and Social Security.
In the past, three generations often lived under one roof, meaning that up to four people – the parents and grandparents – could work and pool their wages, which limited the shock of one person losing their job.
Today "many single mothers juggle two jobs," said Abe. "They work in the daytime, then cook dinner for their children before heading off to their second job. They return home around 3:00 am to sleep before a new day begins."
It is now often the elderly – whose proportion in society is on the rise in rapidly greying Japan, with its low birthrate and high life expectancy – who pay the heaviest price as poverty grows in Asia's biggest economy.
The role of the company and the family have diminished in people's lives, but the government has failed to fill the void, say experts.
"For the past 20 years, taxes and social security contributions have risen," to the detriment of the poor who have seen little in return, said Abe.
OECD data shows that the government in Japan actually worsens child poverty because it demands more money from low-income families in taxes than it gives them back in benefits -- a situation unique in the developed world.
Social mores dictate that almost no-one begs in Japan, and crime rates are low, but Abe said there is nonetheless widespread "hidden poverty", where people may, for example, skip a meal just to save money.
"I don't turn on the lights and don't use heat or air conditioning in order to save electricity costs," said one student living on a scholarship in Tokyo, who said he had spent nothing on leisure and bought no clothes for a year.
The Japanese public only became aware of the country's rising poverty in the mid-2000s, a trend many commentators blamed on the neoliberal pro-market reforms under conservative former prime minister Junichiro Koizumi.
"The public became aware after (public broadcaster) NHK first introduced the term 'working poor' in their report, which was followed by the Lehman shock," said Makoto Yuasa, head of the non-profit group Link Association.
Yuasa was the organizer of a tent village of irregular workers who had lost their jobs that arose in the winter of 2008-09 in a park on the edge of Tokyo's government district.
The event stunned many in Japan and helped change official attitudes about the right of everyone -- not just the elderly and disabled, but also young people -- to "seikatsuhogo", or state social benefits.
When the centre-left Democratic Party of Japan took power last year, it recruited Yuasa as an advisor, leading to the establishment of "one stop service" facilities for the unemployed during his six-month stint.
Japan's growing poverty has brought much soul-searching in the media.
"Poverty's dark shadow can be seen in various social problems – rising cases of suicide, solitary death and child abuse, and languishing birth rates," the Asashi Shimbun daily said in a recent editorial.
"This is a malaise that can threaten the very existence of our country."
New Prime Minister Naoto Kan in his first official speech vowed to do everything possible to "reduce the factors that make people unhappy".
"The feeling of suffocation has increased" since the early 90s, he said, highlighting the suicide rate of more than 25 per 100,000 people, above the global average of 16 per 100,000, according to the World Health Organisation.
The government has introduced bills to establish a minimum pension of 70,000 yen (635 euros) per month for elderly people without financial resources, and to strengthen safeguards for temporary workers.
However, since his party took heavy losses in July 11 upper house elections, these bills are on hold and may never become law. - AFP
TOKYO – Consumer gluttony, astronomic real-estate prices and jobs for life were once normal in Japan -- but today the country also has millions of poor people desperately struggling to make ends meet.
Two decades after Japan's wealth bubble popped, its citizens have got used to higher unemployment and homeless people sleeping in the streets. Statistics released for the first time last year held yet another surprise.
Nearly one in six Japanese lives below the poverty line – meaning they earn less than half the median household income, or less than 1,830 dollars for a four-person family – in a country that prides itself on its egalitarianism.
Many of the worst-off are single mothers, the elderly, and people who lost their jobs in the latest recession, the worst since World War II.
Swelling their ranks has been a new generation of workers who lack the job security their parents enjoyed during Japan's "miracle" growth years from the 1960s onward and through the go-go wealth era of the 1980s and early 90s.
Temporary and part-time jobs and short-term contracts have become the norm for half of all employees under 39 years of age, a group dubbed "Freeters" – made up of the words "freelancer" and "Arbeiter", German for worker.
"There is a generation gap between those who were hired up until the 90s on permanent contracts and those who entered the job market later," said David-Antoine Malinas, a social scientist at the Maison Franco-Japonaise Tokyo.
These employees are often paid less, and are more vulnerable to job market swings during downturns than permanent staff. Hundreds of thousands of temporary workers were laid off during the recession of 2008-2009.
"I worked for 20 years as a temporary employee at a branch office of a large company before losing my job in March 2009," said one middle-aged man, a member of the new poor at an anti-poverty meeting organised in Tokyo.
"I lived in the company's dormitory and was kicked out one month after I was laid off," he said, adding that since then he had had to occasionally sleep rough in public places, making it much harder to find a new job.
Many on the brink of poverty fall over the edge because of the demise of family structures that once acted as a safety net, said Aya Abe, a researcher at the National Institute on Population and Social Security.
In the past, three generations often lived under one roof, meaning that up to four people – the parents and grandparents – could work and pool their wages, which limited the shock of one person losing their job.
Today "many single mothers juggle two jobs," said Abe. "They work in the daytime, then cook dinner for their children before heading off to their second job. They return home around 3:00 am to sleep before a new day begins."
It is now often the elderly – whose proportion in society is on the rise in rapidly greying Japan, with its low birthrate and high life expectancy – who pay the heaviest price as poverty grows in Asia's biggest economy.
The role of the company and the family have diminished in people's lives, but the government has failed to fill the void, say experts.
"For the past 20 years, taxes and social security contributions have risen," to the detriment of the poor who have seen little in return, said Abe.
OECD data shows that the government in Japan actually worsens child poverty because it demands more money from low-income families in taxes than it gives them back in benefits -- a situation unique in the developed world.
Social mores dictate that almost no-one begs in Japan, and crime rates are low, but Abe said there is nonetheless widespread "hidden poverty", where people may, for example, skip a meal just to save money.
"I don't turn on the lights and don't use heat or air conditioning in order to save electricity costs," said one student living on a scholarship in Tokyo, who said he had spent nothing on leisure and bought no clothes for a year.
The Japanese public only became aware of the country's rising poverty in the mid-2000s, a trend many commentators blamed on the neoliberal pro-market reforms under conservative former prime minister Junichiro Koizumi.
"The public became aware after (public broadcaster) NHK first introduced the term 'working poor' in their report, which was followed by the Lehman shock," said Makoto Yuasa, head of the non-profit group Link Association.
Yuasa was the organizer of a tent village of irregular workers who had lost their jobs that arose in the winter of 2008-09 in a park on the edge of Tokyo's government district.
The event stunned many in Japan and helped change official attitudes about the right of everyone -- not just the elderly and disabled, but also young people -- to "seikatsuhogo", or state social benefits.
When the centre-left Democratic Party of Japan took power last year, it recruited Yuasa as an advisor, leading to the establishment of "one stop service" facilities for the unemployed during his six-month stint.
Japan's growing poverty has brought much soul-searching in the media.
"Poverty's dark shadow can be seen in various social problems – rising cases of suicide, solitary death and child abuse, and languishing birth rates," the Asashi Shimbun daily said in a recent editorial.
"This is a malaise that can threaten the very existence of our country."
New Prime Minister Naoto Kan in his first official speech vowed to do everything possible to "reduce the factors that make people unhappy".
"The feeling of suffocation has increased" since the early 90s, he said, highlighting the suicide rate of more than 25 per 100,000 people, above the global average of 16 per 100,000, according to the World Health Organisation.
The government has introduced bills to establish a minimum pension of 70,000 yen (635 euros) per month for elderly people without financial resources, and to strengthen safeguards for temporary workers.
However, since his party took heavy losses in July 11 upper house elections, these bills are on hold and may never become law. - AFP
Friday, August 20, 2010
Malays cannot accept bumi equity cut, says Rais
Source: http://www.malaysianmirror.com/media-buzz-detail/6-nation/48891-malays-cannot-accept-bumi-equity-cut-says-rais
JELEBU – Dr Rais Yatim (left) has described the call by MCA president Dr Chua Soi Lek for the gradual reduction of bumiputra equity, as running contrary to the constitution.
The Information Communication and Culture Minister said Article 153 of the Federal Constitution guaranteed the special position of the Malays and natives of Sabah and Sarawak and the legitimate interest of other communities.
"When he called for the gradual reduction of the 30% bumiputra equity in all sectors of the economy, he was going against the constitution of Malaysia.
"Maybe he did not realise this but I would like to remind that Article 153 is not a simple provision; in fact, it cannot be amended by any party unless with the consent of the Conference of Rulers and subject to provisions in Article 159 of the Federal Constitution," he told reporters after breaking fast at the Felda Pasoh 1 Mosque near here yesterday evening.
He said that although Chua might have tailored his remark to the political sentiment of his party, the Malays especially, could not accept it.
"If the call were to be implemented, firstly we would be going against the Federal Constitution and secondly, we would be undermining the position of the Malay rulers, especially the Yang di-Pertuan Agong who is responsible for safeguarding these interests.
"This is not a mere practice but something that has been accepted by parties involved in the social contract in 1956-57 when the Reid Commission was formed, and when the Constitution of the Federation of Malaya, and later the Federal Constitution, was formulated," he said.
Rais said he hoped that in future, political leaders would refrain from saying things as they please, and should recognise things that had become "pillars of the country".
These pillars, he said, should be accepted and not be changed based on current political sentiments.
"For instance, if Umno itself wants to amend Article 153, it won't be able to do so, let alone Datuk Seri Chua Soi Lek, because there are layers of powers protecting it," he said.
Rais said the constitution also provided safeguards for other communities.
If Chua wanted make a demand, he said, he could do so under this spirit of the constitution and not by denying the rights of the Malays and natives of Sabah and Sarawak.
Asked on Chua's statement that the MCA would not hesitate to share common views with the DAP for the sake of the Chinese community, Rais said Chua had shown that he no longer had respect for the vision of Barisan Nasional which is headed by the prime minister.
"The Malays should therefore unite in the face of this. If we are strong, we cannot be easily manipulated by others. We should unite and voice out to defend what is rightfully ours.
"If this is not done, then people like Datuk Seri Dr Chua will continue to undermine the basis of our struggle," he said. - Bernama
JELEBU – Dr Rais Yatim (left) has described the call by MCA president Dr Chua Soi Lek for the gradual reduction of bumiputra equity, as running contrary to the constitution.
The Information Communication and Culture Minister said Article 153 of the Federal Constitution guaranteed the special position of the Malays and natives of Sabah and Sarawak and the legitimate interest of other communities.
"When he called for the gradual reduction of the 30% bumiputra equity in all sectors of the economy, he was going against the constitution of Malaysia.
"Maybe he did not realise this but I would like to remind that Article 153 is not a simple provision; in fact, it cannot be amended by any party unless with the consent of the Conference of Rulers and subject to provisions in Article 159 of the Federal Constitution," he told reporters after breaking fast at the Felda Pasoh 1 Mosque near here yesterday evening.
He said that although Chua might have tailored his remark to the political sentiment of his party, the Malays especially, could not accept it.
"If the call were to be implemented, firstly we would be going against the Federal Constitution and secondly, we would be undermining the position of the Malay rulers, especially the Yang di-Pertuan Agong who is responsible for safeguarding these interests.
"This is not a mere practice but something that has been accepted by parties involved in the social contract in 1956-57 when the Reid Commission was formed, and when the Constitution of the Federation of Malaya, and later the Federal Constitution, was formulated," he said.
Rais said he hoped that in future, political leaders would refrain from saying things as they please, and should recognise things that had become "pillars of the country".
These pillars, he said, should be accepted and not be changed based on current political sentiments.
"For instance, if Umno itself wants to amend Article 153, it won't be able to do so, let alone Datuk Seri Chua Soi Lek, because there are layers of powers protecting it," he said.
Rais said the constitution also provided safeguards for other communities.
If Chua wanted make a demand, he said, he could do so under this spirit of the constitution and not by denying the rights of the Malays and natives of Sabah and Sarawak.
Asked on Chua's statement that the MCA would not hesitate to share common views with the DAP for the sake of the Chinese community, Rais said Chua had shown that he no longer had respect for the vision of Barisan Nasional which is headed by the prime minister.
"The Malays should therefore unite in the face of this. If we are strong, we cannot be easily manipulated by others. We should unite and voice out to defend what is rightfully ours.
"If this is not done, then people like Datuk Seri Dr Chua will continue to undermine the basis of our struggle," he said. - Bernama
Don't be fooled by latest growth rate
Source: http://www.freemalaysiatoday.com/fmt-english/politics/pakatan-rakyat/9413-anwar-dont-be-fooled-by-latest-growth-rate
PETALING JAYA: PKR de facto leader Anwar Ibrahim warned Malaysians against the attempt by the Barisan Nasional government to delude them through the latest economic growth rate which stood at 8.9% in the second quarter.
The opposition leader said the growth, announced by Bank Negara Malaysia yesterday, is commendable but the former finance minister added that the growth rate must be relatively compared to previous economic performance.
Malaysia saw its economy contracting at 1.7% last year and Anwar said the current 8.9% growth rate paled in comparison with neighbouring countries like Singapore and Indonesia which recorded steady and consisted growth amid the 2009 global recession.
"The disconnect between an announcement of stellar economic performance and realities on the ground is symptomatic of an economic management that is unable to eradicate income inequality in society," he told a press conference here.
Anwar argued that the adage in Malaysia is that the rich get richer and the poor become poorer each time the economic disparity in the society is discussed.
"There is not going to be much celebration on the streets... while the cost of living continues to rise, 2.4 million families or 40% of the households earn less than RM2,300 per month. They form the poorest section of our society and 75% of this group are Malay/Bumiputera families," he said.
Anwar claimed the Economic Transformation Programme (ETP) released by Prime Minister Najib Tun Razak on Aug 17 did not indicate a roadmap to close this disparity.
The ETP promises massive improvement to the economy, aiming to triple the Gross National Income to RM1.7 trillion in 2020 from RM600 billion in 2009.
It claims that this will translate to an income per capita of RM49,500 by 2020 and 3.3 million new jobs will be created.
To achieve the targets means Malaysia requires RM2.2 trillion in new investments, 92% of which is expected to come from private sectors and 75% from of it from domestic direct investments and the rest from foreign direct investments.
Anwar said the projections, however, are not grounded in reality and may sound like a credible plan but this has become the "standard modus operandi" for the ruling coalition to "throw a lot of big numbers and hides behind assumptions" that will eventually be proven wrong.
"Announcing a set of ambitious economic targets to be built almost entirely on private investments is irresponsible, to say the least, when Malaysia has been relying on pump priming for the past 12 years and private investment growth was minimal
"Similarly, the promise of 3.3 million new jobs and (increase in per capita income) is detached from the hardship of the people for the last 10 years. The reality is 34% of our workforce earns below the poverty line (less than RM700 a month) and the average salary increase for the last one decade is only at 2.6%," said Anwar.
Pakatan targets RM4,000 household income
Anwar said Pakatan Rakyat will strive to address the income disparity by promising economic programmes that could alleviate the poor, targeting a RM4,000 household income should it wrest federal power.
"A staggering two-thirds of our population survive on a household income of below RM4,000 a month. These four million families will continue to face hardship due to rising cost of living unless priorities are given to increase their income level drastically," he said.
The opposition leader said the proposal will be raised at the next Pakatan meeting as the flagship of the opposition pact's economic target.
"PKR will propose to its partners in the Pakatan government to implement a series of policies to change the level of wages in the country to achieve a minimum household income of RM4,000," he said.
These policies include strong commitment to plug leakages, determination and honesty to fight corruption, reforms of the judiciary and public institutions to bring back credibility and attract foreign direct investments (FDIs), added Anwar.
He said the country must move away from concepts and economic promises that cannot be achieved like the 30% Bumiputera quota, which he said remains unfulfilled.
"(It) remains unfulfilled and hardly has any effect on Malay families grappling with low wages and high cost of living (but) yet it is bandied as a cornerstone of gift from Umno to the public," said Anwar.
PETALING JAYA: PKR de facto leader Anwar Ibrahim warned Malaysians against the attempt by the Barisan Nasional government to delude them through the latest economic growth rate which stood at 8.9% in the second quarter.
The opposition leader said the growth, announced by Bank Negara Malaysia yesterday, is commendable but the former finance minister added that the growth rate must be relatively compared to previous economic performance.
Malaysia saw its economy contracting at 1.7% last year and Anwar said the current 8.9% growth rate paled in comparison with neighbouring countries like Singapore and Indonesia which recorded steady and consisted growth amid the 2009 global recession.
"The disconnect between an announcement of stellar economic performance and realities on the ground is symptomatic of an economic management that is unable to eradicate income inequality in society," he told a press conference here.
Anwar argued that the adage in Malaysia is that the rich get richer and the poor become poorer each time the economic disparity in the society is discussed.
"There is not going to be much celebration on the streets... while the cost of living continues to rise, 2.4 million families or 40% of the households earn less than RM2,300 per month. They form the poorest section of our society and 75% of this group are Malay/Bumiputera families," he said.
Anwar claimed the Economic Transformation Programme (ETP) released by Prime Minister Najib Tun Razak on Aug 17 did not indicate a roadmap to close this disparity.
The ETP promises massive improvement to the economy, aiming to triple the Gross National Income to RM1.7 trillion in 2020 from RM600 billion in 2009.
It claims that this will translate to an income per capita of RM49,500 by 2020 and 3.3 million new jobs will be created.
To achieve the targets means Malaysia requires RM2.2 trillion in new investments, 92% of which is expected to come from private sectors and 75% from of it from domestic direct investments and the rest from foreign direct investments.
Anwar said the projections, however, are not grounded in reality and may sound like a credible plan but this has become the "standard modus operandi" for the ruling coalition to "throw a lot of big numbers and hides behind assumptions" that will eventually be proven wrong.
"Announcing a set of ambitious economic targets to be built almost entirely on private investments is irresponsible, to say the least, when Malaysia has been relying on pump priming for the past 12 years and private investment growth was minimal
"Similarly, the promise of 3.3 million new jobs and (increase in per capita income) is detached from the hardship of the people for the last 10 years. The reality is 34% of our workforce earns below the poverty line (less than RM700 a month) and the average salary increase for the last one decade is only at 2.6%," said Anwar.
Pakatan targets RM4,000 household income
Anwar said Pakatan Rakyat will strive to address the income disparity by promising economic programmes that could alleviate the poor, targeting a RM4,000 household income should it wrest federal power.
"A staggering two-thirds of our population survive on a household income of below RM4,000 a month. These four million families will continue to face hardship due to rising cost of living unless priorities are given to increase their income level drastically," he said.
The opposition leader said the proposal will be raised at the next Pakatan meeting as the flagship of the opposition pact's economic target.
"PKR will propose to its partners in the Pakatan government to implement a series of policies to change the level of wages in the country to achieve a minimum household income of RM4,000," he said.
These policies include strong commitment to plug leakages, determination and honesty to fight corruption, reforms of the judiciary and public institutions to bring back credibility and attract foreign direct investments (FDIs), added Anwar.
He said the country must move away from concepts and economic promises that cannot be achieved like the 30% Bumiputera quota, which he said remains unfulfilled.
"(It) remains unfulfilled and hardly has any effect on Malay families grappling with low wages and high cost of living (but) yet it is bandied as a cornerstone of gift from Umno to the public," said Anwar.
Economy to exceed 6% growth in 2010
Source: http://www.freemalaysiatoday.com/fmt-english/business/9385-economy-to-exceed-6-growth-in-2010
KUALA LUMPUR: Malaysia's gross domestic product (GDP) is expected to exceed 6.0% this year, according to Bank Negara Malaysia.
This is based on the strong growth figure recorded in the first half of this year despite the economic slowdown in advanced economies, Bank Negara governor Zeti Akhtar Aziz said.
Bank Negara has been monitoring the economic slowdown, she said, adding that it strongly believed that the Malaysian economy will continue to grow in the second half of this year.
The growth momentum in the first half of 2010 rebounded to 9.5% from a negative 5.1% in the same period of 2009, Zeti said.
"Based on the strong growth that we have experienced in the first half of this year, we believe the economy will continue to grow in the second half despite the challenging environment where we could see further slowing down in advanced economies, who are our trading partners," she told reporters after announcing the GDP growth for the second quarter of this year here today.
Asked whether this is a new forecast by the central bank, Zeti said: "There is no forecast, just saying that this is the expected number based on what we have seen so far."
"We don't expect a recession in advanced economies but the pace of growth has slowed," she said, adding that there is increased risk of a moderation in the global growth momentum moving forward following rising concerns over the ongoing sovereign debt crisis and the planned fiscal consolidation in several advanced economies.
The forecast growth will be announced during the 2011 Budget in October, she added.
Bank Negara has earlier forecast that the GDP for 2010 will be expanded between 4.5% and 5.5%.
Fundamentally strong
Zeti said going forward, the domestic demand, which is playing an important role in the Malaysian economy at present, is expected to remain strong, sustained by robust private sector demand.
The Malaysian economy, she said, is fundamentally strong, supported by strong financial system, ample liquidity and easy access to financing.
On foreign direct investment (FDI), Zeti said: "We expect that there would continue to be a steady inflow of FDI."
"This is further reinforced by the government's effort to improve business processes for companies to come to Malaysia," she said, adding that intra-Asean trade has improved.
Asked whether the central bank will increase or pause interest rate hike, Zeti said the current interest rate level of 2.75% is considered appropriate and consistent with the assessment of growth and inflation.
"Our monetary policy is forward-looking. It is not based on the current conditions but based on the outlook. Based on outlook for inflation and growth, the current level of interest rate is consistent and appropriate," she said.
For the ringgit, Zeti said Bank Negara does not have any target levels and what it wanted to see is orderly adjustments and movement of the currency.
"We saw that in 2009 the ringgit had appreciated the least and it so happens that this year, it has appreciated more. So, if compared within the two-year period, it is moderate, not deviating significantly from trends that occur in Asian region," she said.
Zeti said that Bank Negara was pleased that the market has remained orderly with trade activities increasing significantly.
"To exporters, their competitiveness has never really relied on the exchange rate. Malaysia has been able to enhance this through efficiency, quality and innovation," she said.
- Bernama
KUALA LUMPUR: Malaysia's gross domestic product (GDP) is expected to exceed 6.0% this year, according to Bank Negara Malaysia.
This is based on the strong growth figure recorded in the first half of this year despite the economic slowdown in advanced economies, Bank Negara governor Zeti Akhtar Aziz said.
Bank Negara has been monitoring the economic slowdown, she said, adding that it strongly believed that the Malaysian economy will continue to grow in the second half of this year.
The growth momentum in the first half of 2010 rebounded to 9.5% from a negative 5.1% in the same period of 2009, Zeti said.
"Based on the strong growth that we have experienced in the first half of this year, we believe the economy will continue to grow in the second half despite the challenging environment where we could see further slowing down in advanced economies, who are our trading partners," she told reporters after announcing the GDP growth for the second quarter of this year here today.
Asked whether this is a new forecast by the central bank, Zeti said: "There is no forecast, just saying that this is the expected number based on what we have seen so far."
"We don't expect a recession in advanced economies but the pace of growth has slowed," she said, adding that there is increased risk of a moderation in the global growth momentum moving forward following rising concerns over the ongoing sovereign debt crisis and the planned fiscal consolidation in several advanced economies.
The forecast growth will be announced during the 2011 Budget in October, she added.
Bank Negara has earlier forecast that the GDP for 2010 will be expanded between 4.5% and 5.5%.
Fundamentally strong
Zeti said going forward, the domestic demand, which is playing an important role in the Malaysian economy at present, is expected to remain strong, sustained by robust private sector demand.
The Malaysian economy, she said, is fundamentally strong, supported by strong financial system, ample liquidity and easy access to financing.
On foreign direct investment (FDI), Zeti said: "We expect that there would continue to be a steady inflow of FDI."
"This is further reinforced by the government's effort to improve business processes for companies to come to Malaysia," she said, adding that intra-Asean trade has improved.
Asked whether the central bank will increase or pause interest rate hike, Zeti said the current interest rate level of 2.75% is considered appropriate and consistent with the assessment of growth and inflation.
"Our monetary policy is forward-looking. It is not based on the current conditions but based on the outlook. Based on outlook for inflation and growth, the current level of interest rate is consistent and appropriate," she said.
For the ringgit, Zeti said Bank Negara does not have any target levels and what it wanted to see is orderly adjustments and movement of the currency.
"We saw that in 2009 the ringgit had appreciated the least and it so happens that this year, it has appreciated more. So, if compared within the two-year period, it is moderate, not deviating significantly from trends that occur in Asian region," she said.
Zeti said that Bank Negara was pleased that the market has remained orderly with trade activities increasing significantly.
"To exporters, their competitiveness has never really relied on the exchange rate. Malaysia has been able to enhance this through efficiency, quality and innovation," she said.
- Bernama
Pencapaian Setengah Tahun Ekonomi Negara
Source:
http://anwaribrahimblog.com/2010/08/19/pencapaian-setengah-tahun-ekonomi-negara/#more-12946
PENCAPAIAN SETENGAH TAHUN EKONOMI NEGARA:
PAKATAN RAKYAT MENJANJIKAN PENDAPATAN ISI RUMAH MINIMUM MENJELANG 2020
Pencapaian setengah tahun ekonomi negara bersama dengan angkanya telah diedar/dikeluarkan semalam. Ianya seperti yang dijangkakan. Pertumbuhan sebanyak 8.9% pada suku kedua dan 10.1% pada suku pertama, sungguhpun memberansangkan, hakikatnya angka tersebut berdasarkan ekonomi yang menguncup pada tahun 2009, iaitu pada kadar 1.9% . Jika dibandingkan dengan Indonesia dan Singapura, pertumbuhan yang dicatatkan ini membolehkan kita membandingkannya dengan pencapaian negara-negara jiran pada masa akan datang sekiranya reform/perubahan tidak dilaksanakan segera- Singapura dijangka mencatat pertumbuhan sekitar 13%-15% pada tahun 2010, manakala Indonesia dijangka mencatat pertumbuhan sekitar 6% kelansungan dari pertumbuhan yang dicatat pada tahun lalu iaitu 4.9% tatkala Malaysia dibelenggui kemelesetan.
ANGKA CUBA MENGABURI HAKIKAT SEBENAR
Apa yang pasti pengumuman semalam tidak mencerminkan realiti ekonomi buat kebanyakan rakyat negara ini. Sejumlah 2.4juta keluarga bersamaaan 40% isi rumah negara ini hanya berpendapatan RM 2300 sebulan, membentuk golongan termiskin di negara ini. Wajar diberi perhatian adalah 75% dari jumlah itu merupakan keluarga Melayu dan peribumi.
Upah yang rendah begitu menekan rakyat Malaysia tatkala mereka terpaksa berdepan dengan kos kehidupan yang semakin hari semakin meningkat. Kebanyakan graduan yang berjaya mendapat pekerjaan bergelut hanya untuk membayar segala macam bil, jauh sekali mampu untuk menabung.
Hakikat ekonomi buat kebanyakan rakyat Malaysia yang berbeza dengan apa yang diumumkan semalam memperlihatkan sebuah pengurusan ekonomi yang gagal membasmi ketidaksamaan dalam masyarakat. Setiap kali kita membincangkan kedudukan ekonomi negara, terutama apabila menyentuh jurang yang kian melebar, pastinya kedudukan ekonomi dapat disimpulkan sebagai “Yang Kaya Bertambah Kaya, Yang Miskin Papa Kedana.”
Program Transformasi Ekonomi(ETP) yang dikeluarkan oleh Jabatan Perdana Menteri pada 17 Ogos 2010 tidak menjelaskan sebarang peta jalan(road map) untuk merapatkan jurang tersebut. Program Transformasi Ekonomi menjanjikan ekonomi yang sihat dan lebih baik serta peningkatan pendapatan negara kasar dari RM 600billion (yang dijanjikan pada tahun 2009) kepada RM 1.7 billion menjelang tahun 2020. Peningkatan tersebut dikatakan mencipta 3.3 juta pekerjaan baru dan pendapatan per kapita sebanyak RM 49 500 menjelang 2020.
SASARAN PROGRAM TRANSFORMASI EKONOMI MUSTAHIL
Sebagai satu pelan ataupun kebijakan, ianya pasti sedap didengar. Namun sepertimana kebijakan atau dasar yang dibentangkan sebelum ini, Kerajaan Persekutuan sering melontar angka-angka besar dan bersembunyi di belakang asumsi serta premis yang akhirnya terbukti salah.
Demi untuk mencapai matlamat yang digariskan itu, Malaysia memerlukan RM 2.2 trilion pelaburan, 92% dari jumlah tersebut dijangka dari sektor swasta. Manakala itu 75% dari 92% tersebut sepatutnya dari pelaburan tempatan secara langsung dan bakinya dari pelaburan asing secara langsung.
Berasaskan inilah matlamat yang digariskan oleh pentadbiran sekarang pada pandangan kita tidak berpijak pada hakikat ekonomi yang sebenarnya. Mengumumkan sebuah kebijakan yang bercita-cita tinggi manakala untuk mencapainya berasaskan pelaburan swasta semata merupakan satu perancangan yang tidak bertanggungjawab sedangkan selama 12 tahun ini Malaysia begitu bergantung kepada “pump priming” dan pertumbuhan pelaburan swasta begitu kecil. Perancangan tersebut cuba mencapai yang mustahil dan menafikan rekod sebelumnya hanya demi sebuah pengumuman.
Begitu juga dengan sasaran untuk mencipta 3.3 juta pekerjaan baru dan pendapatan per kapita sekitar RM 49, 500 menjelang 2020 merupakan satu matlamat yang terpisah dari hakikat kesusahan rakyat sepanjang 10 tahun ini. Hakikatnya 34% dari tenaga kerja kita berpendapatan di bawah paras kemiskinan(kurang dari RM 700 sebulan) dan peningkatan upah hanya pada kadar 2.6%(berbanding 10% yang dicapai Indonesia di antara 2007 dan 2009)
Usaha untuk mengalihkan perhatian dengan membentangkan angka-angka baru telah membenihkan sikap untuk tidak cuba berdepan dengan punca permasalahan yang sebenar. Walaubagaimanapun saya yakin rakyat sedar ini merupakan satu lagi upaya untuk menyogok khabar muluk demi mengelirukan serta mengalihkan perhatian mereka dari hakikat kedudukan ekonomi yang sebenarnya tidak berubah sepanjang dua tahun ini.
SASARAN PR SETIAP ISI RUMAH BERPENDAPATAN RM 4000
Saya menegaskan kebijakan ekonomi yang mampu membasmi kemiskinan merupakan satu perancangan yang tidak terpisah dengan hakikat ekonomi rakyat dan akar umbi.
Sejumlah dua pertiga dari penduduk negara ini, pendapatan isi rumahnya berada di bawah RM 4000 sebulan. 4juta keluarga akan terus berdepan dengan kenaikan kos sara hidup, kecualilah ada upaya yang menjurus untuk meningkatkan pendapatan mereka dengan kadar segera.
Oleh itu selepas beberapa siri perbincangan dan penelitian, Keadilan bersetuju untuk menetapkan serta mensasarkan pendapatan isi rumah minimum pada kadar RM 4000 dalam jangka masa 5 tahun pentadbiran persekutuan Pakatan Rakyat nanti. Dasar yang dibentangkan ini akan dibawa ke Majlis Pimpinan Pakatan Rakyat untuk perbincangan selanjutnya.
Keadilan akan mencadangkan kepada rakan-rakan dalam Pakatan Rakyat untuk melaksanakan beberapa kebijakan yang berupaya untuk melonjakkan kadar upah di negara ini demi mencapai kadar minimum pendapatan isi rumah RM 4000. Di antara dasar tersebut ialah iltizam untuk memerangi ketirisan serta rasuah, melakukan reform terhadap sistem kehakiman serta institusi awam lainnya di samping mengembalikan kredibiliti, ketelusan dan pertanggungjawaban untuk menarik pelaburan asing secara langsung(FDI).
Negara ini tidak boleh lagi menabur janji serta membentangkan perancangan yang tidak mampu dicapai dan tidak memberi manfaat kepada rakyat. 30% pegangan ekuiti yang dijanjikan Umno masih gagal dipenuhi dan ternyata memberi kesan yang nyata kepada keluarga Melayu yang sentiasa bergelut dengan upah rendah serta kos sara hidup. Namun demikian dasar itu sering di war warkan sebagai anugerah Umno kepad rakyat.
Asas kepada kebijakan pembangunan kita sewajarnya menjurus kepada penciptaan masayarakat yang adil serta memberi penumpuan kepada pengagihan adil khazanah dan sumber nagara.
YB DATO’ SERI ANWAR IBRAHIM
KETUA PEMBANGKANG
19 OGOS 2010
PRESS RELEASE
YB DATO’ SERI ANWAR IBRAHIM, LEADER OF OPPOSITION
HALF YEAR ECONOMIC PERFORMANCE:
PAKATAN RAKYAT PROMISES RM4,000 MINIMUM HOUSEHOLD INCOME WITIHIN FIVE YEARS OF ADMINISTRATION
The nation’s economic figures released yesterday were as anticipated. The growth of 8.9% in the second quarter and 10.1% in the first quarter, while commendable, came on the back of a contraction of 1.7% in 2009. Compared to Indonesia and Singapore, our half year economic growth provides a glimpse of our comparative prosperity vis-a-vis our neighbours’ in the future, if reforms are not carried out immediately.
Singapore is expected to grow at 13% to 15% for 2010, compared to Malaysia’s growth forecast of 6% to 7% by the end of the year. On the other hand, Indonesia is anticipated to register a growth of above 6% for 2010, continuing a 4.6% growth in 2009 when Malaysia was in recession.
FIGURES MASK GRIM REALITIES
The disconnect between an announcement of stellar economic performance and realities on the ground is symptomatic of an economic management that is unable to eradicate income inequality in society. The adage that in Malaysia the rich get richer and the poor become poorer comes to mind each time the economic disparity in our society is discussed.
There is not going to be much celebration on the streets as the economic reality for the majority of Malaysian households is different, especially when they have had to put up with a few price hikes in the last two years. This remains a key concern for Pakatan Rakyat, that while cost of living continues to rise, 2.4 million families or 40% of the households earn less than RM2,300 per month. They form the poorest section of our society and 75% of this group are Malay/bumiputra families.
Low wages continue to put pressure on Malaysians as they grapple with steadily rising cost of living. The majority of graduates entering the job market struggle to pay for the bills, let alone to save.
The Economic Transformation Programme (ETP) released by the Prime Minister’s Department on 17 August 2010 did not indicate a roadmap to close this disparity. It promises massive improvement to the economy, tripling the Gross National Income to RM1.7 trillion in 2020 from RM600 billion in 2009. It claims that this will translate to an income per capita of RM49,500 by 2020 – on the back of 3.3 million new jobs to be created.
ETP TARGETS UNATTAINABLE
This sounds credible as a plan, similar to other plans previously unveiled by Barisan Nasional. It has become standard modus operandi that the Federal Government throws a lot of big numbers and hides behind assumptions and premises that eventually are proven wrong.
In order to achieve these targets, Malaysia requires RM2.2 trillion new investments, 92% of which is expected to come from private sectors. 75% of this 92% is projected to come from domestic direct investments while the rest is from FDI.
This is where the projections and assumptions are not grounded on reality. Announcing a set of ambitious economic targets to be built almost entirely on private investments is irresponsible to say the least, when Malaysia has been relying on pump priming for the past 12 years and private investment growth was minimal. This is akin to planning for the impossible and ignoring past track records for the sake of an announcement.
Similarly, a promise of 3.3 million new jobs and income per capita of RM49,500 by 2020 is detached from the hardship of the people for the last 10 years. The reality is 34% of our workforce earns below the poverty line (less than RM700 per month) and the average salary increase for the last one decade is only at 2.6% (compared to 10% for Indonesia in between 2007 to 2009).
The act of perpetually throwing new numbers to distract the public’s attention from economic realities on the ground perpetuates the habitual refusal to address the root cause of the problems. I am confident that the public will quickly conclude that ETP is another instance in a long line of public relations gestures meant to delude the public when the realities on the ground hardly changes over the past two years.
PR TARGET OF RM4,000 FOR EACH FAMILY
That is why I have always emphasised economic programmes that can alleviate the poverty of the people such that there is no disconnect between the supposedly good performance of the economy with the realities on the ground.
A staggering two-thirds of our population survive on a household income of below RM4,000 a month. These four million families will continue to face hardship due to the rising cost of living, unless priorities are given to increase their income level drastically and quickly.
Therefore, after a series of consultations and studies, Keadilan has agreed to set a target of RM4,000 minimum household income within the first five years of Pakatan Rakyat’s federal administration as our flagship economic target . This policy proposal will be brought to Pakatan Rakyat’s leadership council for further deliberation.
Keadilan will work with its partners within the framework of Pakatan Rakyat government to implement a series of policies to step change the level of wages in the country to achieve a minimum household income of RM4,000. These policies include strong commitment to plug leakages, determination and honesty to fight corruption, reforms of the judiciary and public institutions to bring back the credibility and promoting transparency and accountability to attract new FDIs.
The country must move away from concepts and economic promises that had never been achieved or translated well to benefit the public. The 30% equity promise by Umno remains unfulfilled and hardly has any effect on Malay families grappling with low wages and high cost of living. Yet it is bandied as a cornerstone of gift from Umno to the public.
Keadilan’s gift is more straight-forward and easily translatable to dollars and sens to the public. Under a Pakatan Rakyat government, there will not be a family which earns below RM4,000 within the first five years of our administration.
YB DATO’ SERI ANWAR IBRAHIM
LEADER OF OPPOSITION
19 AUGUST 2010
http://anwaribrahimblog.com/2010/08/19/pencapaian-setengah-tahun-ekonomi-negara/#more-12946
PENCAPAIAN SETENGAH TAHUN EKONOMI NEGARA:
PAKATAN RAKYAT MENJANJIKAN PENDAPATAN ISI RUMAH MINIMUM MENJELANG 2020
Pencapaian setengah tahun ekonomi negara bersama dengan angkanya telah diedar/dikeluarkan semalam. Ianya seperti yang dijangkakan. Pertumbuhan sebanyak 8.9% pada suku kedua dan 10.1% pada suku pertama, sungguhpun memberansangkan, hakikatnya angka tersebut berdasarkan ekonomi yang menguncup pada tahun 2009, iaitu pada kadar 1.9% . Jika dibandingkan dengan Indonesia dan Singapura, pertumbuhan yang dicatatkan ini membolehkan kita membandingkannya dengan pencapaian negara-negara jiran pada masa akan datang sekiranya reform/perubahan tidak dilaksanakan segera- Singapura dijangka mencatat pertumbuhan sekitar 13%-15% pada tahun 2010, manakala Indonesia dijangka mencatat pertumbuhan sekitar 6% kelansungan dari pertumbuhan yang dicatat pada tahun lalu iaitu 4.9% tatkala Malaysia dibelenggui kemelesetan.
ANGKA CUBA MENGABURI HAKIKAT SEBENAR
Apa yang pasti pengumuman semalam tidak mencerminkan realiti ekonomi buat kebanyakan rakyat negara ini. Sejumlah 2.4juta keluarga bersamaaan 40% isi rumah negara ini hanya berpendapatan RM 2300 sebulan, membentuk golongan termiskin di negara ini. Wajar diberi perhatian adalah 75% dari jumlah itu merupakan keluarga Melayu dan peribumi.
Upah yang rendah begitu menekan rakyat Malaysia tatkala mereka terpaksa berdepan dengan kos kehidupan yang semakin hari semakin meningkat. Kebanyakan graduan yang berjaya mendapat pekerjaan bergelut hanya untuk membayar segala macam bil, jauh sekali mampu untuk menabung.
Hakikat ekonomi buat kebanyakan rakyat Malaysia yang berbeza dengan apa yang diumumkan semalam memperlihatkan sebuah pengurusan ekonomi yang gagal membasmi ketidaksamaan dalam masyarakat. Setiap kali kita membincangkan kedudukan ekonomi negara, terutama apabila menyentuh jurang yang kian melebar, pastinya kedudukan ekonomi dapat disimpulkan sebagai “Yang Kaya Bertambah Kaya, Yang Miskin Papa Kedana.”
Program Transformasi Ekonomi(ETP) yang dikeluarkan oleh Jabatan Perdana Menteri pada 17 Ogos 2010 tidak menjelaskan sebarang peta jalan(road map) untuk merapatkan jurang tersebut. Program Transformasi Ekonomi menjanjikan ekonomi yang sihat dan lebih baik serta peningkatan pendapatan negara kasar dari RM 600billion (yang dijanjikan pada tahun 2009) kepada RM 1.7 billion menjelang tahun 2020. Peningkatan tersebut dikatakan mencipta 3.3 juta pekerjaan baru dan pendapatan per kapita sebanyak RM 49 500 menjelang 2020.
SASARAN PROGRAM TRANSFORMASI EKONOMI MUSTAHIL
Sebagai satu pelan ataupun kebijakan, ianya pasti sedap didengar. Namun sepertimana kebijakan atau dasar yang dibentangkan sebelum ini, Kerajaan Persekutuan sering melontar angka-angka besar dan bersembunyi di belakang asumsi serta premis yang akhirnya terbukti salah.
Demi untuk mencapai matlamat yang digariskan itu, Malaysia memerlukan RM 2.2 trilion pelaburan, 92% dari jumlah tersebut dijangka dari sektor swasta. Manakala itu 75% dari 92% tersebut sepatutnya dari pelaburan tempatan secara langsung dan bakinya dari pelaburan asing secara langsung.
Berasaskan inilah matlamat yang digariskan oleh pentadbiran sekarang pada pandangan kita tidak berpijak pada hakikat ekonomi yang sebenarnya. Mengumumkan sebuah kebijakan yang bercita-cita tinggi manakala untuk mencapainya berasaskan pelaburan swasta semata merupakan satu perancangan yang tidak bertanggungjawab sedangkan selama 12 tahun ini Malaysia begitu bergantung kepada “pump priming” dan pertumbuhan pelaburan swasta begitu kecil. Perancangan tersebut cuba mencapai yang mustahil dan menafikan rekod sebelumnya hanya demi sebuah pengumuman.
Begitu juga dengan sasaran untuk mencipta 3.3 juta pekerjaan baru dan pendapatan per kapita sekitar RM 49, 500 menjelang 2020 merupakan satu matlamat yang terpisah dari hakikat kesusahan rakyat sepanjang 10 tahun ini. Hakikatnya 34% dari tenaga kerja kita berpendapatan di bawah paras kemiskinan(kurang dari RM 700 sebulan) dan peningkatan upah hanya pada kadar 2.6%(berbanding 10% yang dicapai Indonesia di antara 2007 dan 2009)
Usaha untuk mengalihkan perhatian dengan membentangkan angka-angka baru telah membenihkan sikap untuk tidak cuba berdepan dengan punca permasalahan yang sebenar. Walaubagaimanapun saya yakin rakyat sedar ini merupakan satu lagi upaya untuk menyogok khabar muluk demi mengelirukan serta mengalihkan perhatian mereka dari hakikat kedudukan ekonomi yang sebenarnya tidak berubah sepanjang dua tahun ini.
SASARAN PR SETIAP ISI RUMAH BERPENDAPATAN RM 4000
Saya menegaskan kebijakan ekonomi yang mampu membasmi kemiskinan merupakan satu perancangan yang tidak terpisah dengan hakikat ekonomi rakyat dan akar umbi.
Sejumlah dua pertiga dari penduduk negara ini, pendapatan isi rumahnya berada di bawah RM 4000 sebulan. 4juta keluarga akan terus berdepan dengan kenaikan kos sara hidup, kecualilah ada upaya yang menjurus untuk meningkatkan pendapatan mereka dengan kadar segera.
Oleh itu selepas beberapa siri perbincangan dan penelitian, Keadilan bersetuju untuk menetapkan serta mensasarkan pendapatan isi rumah minimum pada kadar RM 4000 dalam jangka masa 5 tahun pentadbiran persekutuan Pakatan Rakyat nanti. Dasar yang dibentangkan ini akan dibawa ke Majlis Pimpinan Pakatan Rakyat untuk perbincangan selanjutnya.
Keadilan akan mencadangkan kepada rakan-rakan dalam Pakatan Rakyat untuk melaksanakan beberapa kebijakan yang berupaya untuk melonjakkan kadar upah di negara ini demi mencapai kadar minimum pendapatan isi rumah RM 4000. Di antara dasar tersebut ialah iltizam untuk memerangi ketirisan serta rasuah, melakukan reform terhadap sistem kehakiman serta institusi awam lainnya di samping mengembalikan kredibiliti, ketelusan dan pertanggungjawaban untuk menarik pelaburan asing secara langsung(FDI).
Negara ini tidak boleh lagi menabur janji serta membentangkan perancangan yang tidak mampu dicapai dan tidak memberi manfaat kepada rakyat. 30% pegangan ekuiti yang dijanjikan Umno masih gagal dipenuhi dan ternyata memberi kesan yang nyata kepada keluarga Melayu yang sentiasa bergelut dengan upah rendah serta kos sara hidup. Namun demikian dasar itu sering di war warkan sebagai anugerah Umno kepad rakyat.
Asas kepada kebijakan pembangunan kita sewajarnya menjurus kepada penciptaan masayarakat yang adil serta memberi penumpuan kepada pengagihan adil khazanah dan sumber nagara.
YB DATO’ SERI ANWAR IBRAHIM
KETUA PEMBANGKANG
19 OGOS 2010
PRESS RELEASE
YB DATO’ SERI ANWAR IBRAHIM, LEADER OF OPPOSITION
HALF YEAR ECONOMIC PERFORMANCE:
PAKATAN RAKYAT PROMISES RM4,000 MINIMUM HOUSEHOLD INCOME WITIHIN FIVE YEARS OF ADMINISTRATION
The nation’s economic figures released yesterday were as anticipated. The growth of 8.9% in the second quarter and 10.1% in the first quarter, while commendable, came on the back of a contraction of 1.7% in 2009. Compared to Indonesia and Singapore, our half year economic growth provides a glimpse of our comparative prosperity vis-a-vis our neighbours’ in the future, if reforms are not carried out immediately.
Singapore is expected to grow at 13% to 15% for 2010, compared to Malaysia’s growth forecast of 6% to 7% by the end of the year. On the other hand, Indonesia is anticipated to register a growth of above 6% for 2010, continuing a 4.6% growth in 2009 when Malaysia was in recession.
FIGURES MASK GRIM REALITIES
The disconnect between an announcement of stellar economic performance and realities on the ground is symptomatic of an economic management that is unable to eradicate income inequality in society. The adage that in Malaysia the rich get richer and the poor become poorer comes to mind each time the economic disparity in our society is discussed.
There is not going to be much celebration on the streets as the economic reality for the majority of Malaysian households is different, especially when they have had to put up with a few price hikes in the last two years. This remains a key concern for Pakatan Rakyat, that while cost of living continues to rise, 2.4 million families or 40% of the households earn less than RM2,300 per month. They form the poorest section of our society and 75% of this group are Malay/bumiputra families.
Low wages continue to put pressure on Malaysians as they grapple with steadily rising cost of living. The majority of graduates entering the job market struggle to pay for the bills, let alone to save.
The Economic Transformation Programme (ETP) released by the Prime Minister’s Department on 17 August 2010 did not indicate a roadmap to close this disparity. It promises massive improvement to the economy, tripling the Gross National Income to RM1.7 trillion in 2020 from RM600 billion in 2009. It claims that this will translate to an income per capita of RM49,500 by 2020 – on the back of 3.3 million new jobs to be created.
ETP TARGETS UNATTAINABLE
This sounds credible as a plan, similar to other plans previously unveiled by Barisan Nasional. It has become standard modus operandi that the Federal Government throws a lot of big numbers and hides behind assumptions and premises that eventually are proven wrong.
In order to achieve these targets, Malaysia requires RM2.2 trillion new investments, 92% of which is expected to come from private sectors. 75% of this 92% is projected to come from domestic direct investments while the rest is from FDI.
This is where the projections and assumptions are not grounded on reality. Announcing a set of ambitious economic targets to be built almost entirely on private investments is irresponsible to say the least, when Malaysia has been relying on pump priming for the past 12 years and private investment growth was minimal. This is akin to planning for the impossible and ignoring past track records for the sake of an announcement.
Similarly, a promise of 3.3 million new jobs and income per capita of RM49,500 by 2020 is detached from the hardship of the people for the last 10 years. The reality is 34% of our workforce earns below the poverty line (less than RM700 per month) and the average salary increase for the last one decade is only at 2.6% (compared to 10% for Indonesia in between 2007 to 2009).
The act of perpetually throwing new numbers to distract the public’s attention from economic realities on the ground perpetuates the habitual refusal to address the root cause of the problems. I am confident that the public will quickly conclude that ETP is another instance in a long line of public relations gestures meant to delude the public when the realities on the ground hardly changes over the past two years.
PR TARGET OF RM4,000 FOR EACH FAMILY
That is why I have always emphasised economic programmes that can alleviate the poverty of the people such that there is no disconnect between the supposedly good performance of the economy with the realities on the ground.
A staggering two-thirds of our population survive on a household income of below RM4,000 a month. These four million families will continue to face hardship due to the rising cost of living, unless priorities are given to increase their income level drastically and quickly.
Therefore, after a series of consultations and studies, Keadilan has agreed to set a target of RM4,000 minimum household income within the first five years of Pakatan Rakyat’s federal administration as our flagship economic target . This policy proposal will be brought to Pakatan Rakyat’s leadership council for further deliberation.
Keadilan will work with its partners within the framework of Pakatan Rakyat government to implement a series of policies to step change the level of wages in the country to achieve a minimum household income of RM4,000. These policies include strong commitment to plug leakages, determination and honesty to fight corruption, reforms of the judiciary and public institutions to bring back the credibility and promoting transparency and accountability to attract new FDIs.
The country must move away from concepts and economic promises that had never been achieved or translated well to benefit the public. The 30% equity promise by Umno remains unfulfilled and hardly has any effect on Malay families grappling with low wages and high cost of living. Yet it is bandied as a cornerstone of gift from Umno to the public.
Keadilan’s gift is more straight-forward and easily translatable to dollars and sens to the public. Under a Pakatan Rakyat government, there will not be a family which earns below RM4,000 within the first five years of our administration.
YB DATO’ SERI ANWAR IBRAHIM
LEADER OF OPPOSITION
19 AUGUST 2010
Thursday, August 19, 2010
Wednesday, August 18, 2010
Rethinking Development and the State: Reflections of the Late Tony Judt
Rethinking Development and the State: Reflections of the Late Tony Judt
Source: http://dinmerican.wordpress.com/2010/08/16/rethinking-development-and-the-state-reflections-of-the-late-tony-judt/
August 16, 2010
http://www.nybooks.com
Ill Fares the Land
April 29, 2010
by Tony Robert Judt FBA (January 2,1948 – August 6 2010)
Something is profoundly wrong with the way we live today. For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth. We no longer ask of a judicial ruling or a legislative act: Is it good? Is it fair? Is it just? Is it right? Will it help bring about a better society or a better world? Those used to be the political questions, even if they invited no easy answers. We must learn once again to pose them.
The materialistic and selfish quality of contemporary life is not inherent in the human condition. Much of what appears “natural” today dates from the 1980s: the obsession with wealth creation, the cult of privatization and the private sector, the growing disparities of rich and poor. And above all, the rhetoric that accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.
We cannot go on living like this. The little crash of 2008 was a reminder that unregulated capitalism is its own worst enemy: sooner or later it must fall prey to its own excesses and turn again to the state for rescue. But if we do no more than pick up the pieces and carry on as before, we can look forward to greater upheavals in years to come.
And yet we seem unable to conceive of alternatives. This too is something new. Until quite recently, public life in liberal societies was conducted in the shadow of a debate between defenders of “capitalism” and its critics: usually identified with one or another form of “socialism.” By the 1970s this debate had lost much of its meaning for both sides; all the same, the “left–right” distinction served a useful purpose. It provided a peg on which to hang critical commentary about contemporary affairs.
On the left, Marxism was attractive to generations of young people if only because it offered a way to take one’s distance from the status quo. Much the same was true of classical conservatism: a well-grounded distaste for over-hasty change gave a home to those reluctant to abandon long-established routines. Today, neither left nor right can find their footing.
For thirty years students have been complaining to me that “it was easy for you”: your generation had ideals and ideas, you believed in something, you were able to change things. “We” (the children of the Eighties, the Nineties, the “Aughts”) have nothing. In many respects my students are right. It was easy for us—just as it was easy, at least in this sense, for the generations who came before us. The last time a cohort of young people expressed comparable frustration at the emptiness of their lives and the dispiriting purposelessness of their world was in the 1920s: it is not by chance that historians speak of a “lost generation.”
The Young are at a loss
If young people today are at a loss, it is not for want of targets. Any conversation with students or schoolchildren will produce a startling checklist of anxieties. Indeed, the rising generation is acutely worried about the world it is to inherit. But accompanying these fears there is a general sentiment of frustration: “we” know something is wrong and there are many things we don’t like. But what can we believe in? What should we do?
This is an ironic reversal of the attitudes of an earlier age. Back in the era of self-assured radical dogma, young people were far from uncertain. The characteristic tone of the 1960s was that of overweening confidence: we knew just how to fix the world. It was this note of unmerited arrogance that partly accounts for the reactionary backlash that followed; if the left is to recover its fortunes, some modesty will be in order. All the same, you must be able to name a problem if you wish to solve it.
I wrote my book Ill Fares the Land for young people on both sides of the Atlantic. American readers may be struck by the frequent references to social democracy. Here in the United States, such references are uncommon. When journalists and commentators advocate public expenditure on social objectives, they are more likely to describe themselves—and be described by their critics—as “liberals.” But this is confusing. “Liberal” is a venerable and respectable label and we should all be proud to wear it. But like a well-designed outer coat, it conceals more than it displays.
A Liberal and A Social Democrat
A liberal is someone who opposes interference in the affairs of others: who is tolerant of dissenting attitudes and unconventional behavior. Liberals have historically favored keeping other people out of our lives, leaving individuals the maximum space in which to live and flourish as they choose. In their extreme form, such attitudes are associated today with self-styled “libertarians,” but the term is largely redundant. Most genuine liberals remain disposed to leave other people alone.
Social democrats, on the other hand, are something of a hybrid. They share with liberals a commitment to cultural and religious tolerance. But in public policy social democrats believe in the possibility and virtue of collective action for the collective good. Like most liberals, social democrats favor progressive taxation in order to pay for public services and other social goods that individuals cannot provide themselves; but whereas many liberals might see such taxation or public provision as a necessary evil, a social democratic vision of the good society entails from the outset a greater role for the state and the public sector.
Understandably, social democracy is a hard sell in the United States. One of my goals is to suggest that government can play an enhanced role in our lives without threatening our liberties—and to argue that, since the state is going to be with us for the foreseeable future, we would do well to think about what sort of a state we want. In any case, much that was best in American legislation and social policy over the course of the twentieth century—and that we are now urged to dismantle in the name of efficiency and “less government”—corresponds in practice to what Europeans have called “social democracy.” Our problem is not what to do; it is how to talk about it.
The European dilemma is somewhat different. Many European countries have long practiced something resembling social democracy: but they have forgotten how to preach it. Social democrats today are defensive and apologetic. Critics who claim that the European model is too expensive or economically inefficient have been allowed to pass unchallenged. And yet, the welfare state is as popular as ever with its beneficiaries: nowhere in Europe is there a constituency for abolishing public health services, ending free or subsidized education, or reducing public provision of transport and other essential services.
Taking on Conventional Wisdom
I want to challenge conventional wisdom on both sides of the Atlantic. To be sure, the target has softened considerably. In the early years of this century, the “Washington consensus” held the field. Everywhere you went there was an economist or “expert” expounding the virtues of deregulation, the minimal state, and low taxation. Anything, it seemed, that the public sector could do, private individuals could do better.
The Washington doctrine was everywhere greeted by ideological cheerleaders: from the profiteers of the “Irish miracle” (the property-bubble boom of the “Celtic Tiger”) to the doctrinaire ultra-capitalists of former Communist Europe. Even “old Europeans” were swept up in the wake. The EU’s free- market project (the so-called “Lisbon agenda”); the enthusiastic privatization plans of the French and German governments: all bore witness to what its French critics described as the new ” pensée unique.”
Today there has been a partial awakening. To avert national bankruptcies and wholesale banking collapse, governments and central bankers have performed remarkable policy reversals, liberally dispersing public money in pursuit of economic stability and taking failed companies into public control without a second thought. A striking number of free-market economists, worshipers at the feet of Milton Friedman and his Chicago colleagues, have lined up to don sackcloth and ashes and swear allegiance to the memory of John Maynard Keynes.
This is all very gratifying. But it hardly constitutes an intellectual revolution. Quite the contrary: as the response of the Obama administration suggests, the reversion to Keynesian economics is but a tactical retreat. Much the same may be said of New Labour, as committed as ever to the private sector in general and the London financial markets in particular. To be sure, one effect of the crisis has been to dampen the ardor of continental Europeans for the “Anglo-American model”; but the chief beneficiaries have been those same center-right parties once so keen to emulate Washington.
No Re-thinking the State
In short, the practical need for strong states and interventionist governments is beyond dispute. But no one is “re-thinking” the state. There remains a marked reluctance to defend the public sector on grounds of collective interest or principle. It is striking that in a series of European elections following the financial meltdown, social democratic parties consistently did badly; notwithstanding the collapse of the market, they proved conspicuously unable to rise to the occasion.
If it is to be taken seriously again, the left must find its voice. There is much to be angry about: growing inequalities of wealth and opportunity; injustices of class and caste; economic exploitation at home and abroad; corruption and money and privilege occluding the arteries of democracy. But it will no longer suffice to identify the shortcomings of “the system” and then retreat, Pilate-like, indifferent to consequences. The irresponsible rhetorical grandstanding of decades past did not serve the left well.
We have entered an age of insecurity—economic insecurity, physical insecurity, political insecurity. The fact that we are largely unaware of this is small comfort: few in 1914 predicted the utter collapse of their world and the economic and political catastrophes that followed. Insecurity breeds fear. And fear—fear of change, fear of decline, fear of strangers and an unfamiliar world—is corroding the trust and interdependence on which civil societies rest.
All change is disruptive. We have seen that the specter of terrorism is enough to cast stable democracies into turmoil. Climate change will have even more dramatic consequences. Men and women will be thrown back upon the resources of the state. They will look to their political leaders and representatives to protect them: open societies will once again be urged to close in upon themselves, sacrificing freedom for “security.” The choice will no longer be between the state and the market, but between two sorts of state. It is thus incumbent upon us to reconceive the role of government. If we do not, others will.
The Way We Live Now
All around us, even in a recession, we see a level of individual wealth unequaled since the early years of the twentieth century. Conspicuous consumption of redundant consumer goods—houses, jewelry, cars, clothing, tech toys—has greatly expanded over the past generation. In the US, the UK, and a handful of other countries, financial transactions have largely displaced the production of goods or services as the source of private fortunes, distorting the value we place upon different kinds of economic activity. The wealthy, like the poor, have always been with us. But relative to everyone else, they are today wealthier and more conspicuous than at any time in living memory. Private privilege is easy to understand and describe. It is rather harder to convey the depths of public squalor into which we have fallen.
Private Affluence, Public Squalor
No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. —Adam Smith
Poverty is an abstraction, even for the poor. But the symptoms of collective impoverishment are all about us. Broken highways, bankrupt cities, collapsing bridges, failed schools, the unemployed, the underpaid, and the uninsured: all suggest a collective failure of will. These shortcomings are so endemic that we no longer know how to talk about what is wrong, much less set about repairing it. And yet something is seriously amiss. Even as the US budgets tens of billions of dollars on a futile military campaign in Afghanistan, we fret nervously at the implications of any increase in public spending on social services or infrastructure.
To understand the depths to which we have fallen, we must first appreciate the scale of the changes that have overtaken us. From the late nineteenth century until the 1970s, the advanced societies of the West were all becoming less unequal. Thanks to progressive taxation, government subsidies for the poor, the provision of social services, and guarantees against acute misfortune, modern democracies were shedding extremes of wealth and poverty.
To be sure, great differences remained. The essentially egalitarian countries of Scandinavia and the considerably more diverse societies of southern Europe remained distinctive; and the English-speaking lands of the Atlantic world and the British Empire continued to reflect long-standing class distinctions. But each in its own way was affected by the growing intolerance of immoderate inequality, initiating public provision to compensate for private inadequacy.
Over the past thirty years we have thrown all this away. To be sure, “we” varies with country. The greatest extremes of private privilege and public indifference have resurfaced in the US and the UK: epicenters of enthusiasm for deregulated market capitalism. Although countries as far apart as New Zealand and Denmark, France and Brazil have expressed periodic interest in deregulation, none has matched Britain or the United States in their unwavering thirty-year commitment to the unraveling of decades of social legislation and economic oversight.
In 2005, 21.2 percent of US national income accrued to just 1 percent of earners. Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker. Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee. Indeed, the wealth of the Wal-Mart founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent of the US population: 120 million people.
The UK too is now more unequal—in incomes, wealth, health, education, and life chances—than at any time since the 1920s. There are more poor children in the UK than in any other country of the European Union. Since 1973, inequality in take-home pay increased more in the UK than anywhere except the US. Most of the new jobs created in Britain in the years 1977–2007 were at either the very high or the very low end of the pay scale.
The consequences are clear. There has been a collapse in intergenerational mobility: in contrast to their parents and grandparents, children today in the UK as in the US have very little expectation of improving upon the condition into which they were born. The poor stay poor. (See Figures 1 and 2.) Economic disadvantage for the overwhelming majority translates into ill health, missed educational opportunity, and—increasingly—the familiar symptoms of depression: alcoholism, obesity, gambling, and minor criminality. The unemployed or underemployed lose such skills as they have acquired and become chronically superfluous to the economy. Anxiety and stress, not to mention illness and early death, frequently follow.
Income disparity exacerbates the problems. Thus the incidence of mental illness correlates closely to income in the US and the UK, whereas the two indices are quite unrelated in all continental European countries. Even trust, the faith we have in our fellow citizens, corresponds negatively with differences in income: between 1983 and 2001, mistrustfulness increased markedly in the US, the UK, and Ireland—three countries in which the dogma of unregulated individual self-interest was most assiduously applied to public policy. In no other country was a comparable increase in mutual mistrust to be found.
Even within individual countries, inequality plays a crucial role in shaping peoples’ lives. In the United States, for example, your chances of living a long and healthy life closely track your income: residents of wealthy districts can expect to live longer and better. Young women in poorer states of the US are more likely to become pregnant in their teenage years—and their babies are less likely to survive—than their peers in wealthier states. In the same way, a child from a disfavored district has a higher chance of dropping out of high school than if his parents have a steady mid-range income and live in a prosperous part of the country. As for the children of the poor who remain in school: they will do worse, achieve lower scores, and obtain less fulfilling and lower-paid employment.
Inequality is corrosive
Inequality, then, is not just unattractive in itself; it clearly corresponds to pathological social problems that we cannot hope to address unless we attend to their underlying cause. There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness, and anxiety are so much more marked in the US and the UK than they are in continental Europe. (See Figures 3, 4, and 5.)
The wider the spread between the wealthy few and the impoverished many, the worse the social problems: a statement that appears to be true for rich and poor countries alike. What matters is not how affluent a country is but how unequal it is. Thus Sweden and Finland, two of the world’s wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens—and they consistently lead the world in indices of measurable well-being. Conversely, the United States, despite its huge aggregate wealth, always comes low on such measures. We spend vast sums on health care, but life expectancy in the US remains below Bosnia and just above Albania. (See Figure 6.)
Inequality is corrosive. It rots societies from within. The impact of material differences takes a while to show up: but in due course competition for status and goods increases; people feel a growing sense of superiority (or inferiority) based on their possessions; prejudice toward those on the lower rungs of the social ladder hardens; crime spikes and the pathologies of social disadvantage become ever more marked. The legacy of unregulated wealth creation is bitter indeed.1
As recently as the 1970s, the idea that the point of life was to get rich and that governments existed to facilitate this would have been ridiculed: not only by capitalism’s traditional critics but also by many of its staunchest defenders. Relative indifference to wealth for its own sake was widespread in the postwar decades. In a survey of English schoolboys taken in 1949, it was discovered that the more intelligent the boy the more likely he was to choose an interesting career at a reasonable wage over a job that would merely pay well.2 Today’s schoolchildren and college students can imagine little else but the search for a lucrative job.
How should we begin to make amends for raising a generation obsessed with the pursuit of material wealth and indifferent to so much else? Perhaps we might start by reminding ourselves and our children that it wasn’t always thus. Thinking “economistically,” as we have done now for thirty years, is not intrinsic to humans. There was a time when we ordered our lives differently.
—This essay is drawn from the opening chapter of Tony Judt’s newly published book, Ill Fares the Land (Penguin).
1.The best recent statement of this argument comes in Richard Wilkinson and Kate Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger (Bloomsbury Press, 2010). I am indebted to them for much of the material in this excerpt.↩
2.See T.H. Marshall and Tom Bottomore, Citizenship and Social Class (London: Pluto, 1992), p. 48.↩
Source: http://dinmerican.wordpress.com/2010/08/16/rethinking-development-and-the-state-reflections-of-the-late-tony-judt/
August 16, 2010
http://www.nybooks.com
Ill Fares the Land
April 29, 2010
by Tony Robert Judt FBA (January 2,1948 – August 6 2010)
Something is profoundly wrong with the way we live today. For thirty years we have made a virtue out of the pursuit of material self-interest: indeed, this very pursuit now constitutes whatever remains of our sense of collective purpose. We know what things cost but have no idea what they are worth. We no longer ask of a judicial ruling or a legislative act: Is it good? Is it fair? Is it just? Is it right? Will it help bring about a better society or a better world? Those used to be the political questions, even if they invited no easy answers. We must learn once again to pose them.
The materialistic and selfish quality of contemporary life is not inherent in the human condition. Much of what appears “natural” today dates from the 1980s: the obsession with wealth creation, the cult of privatization and the private sector, the growing disparities of rich and poor. And above all, the rhetoric that accompanies these: uncritical admiration for unfettered markets, disdain for the public sector, the delusion of endless growth.
We cannot go on living like this. The little crash of 2008 was a reminder that unregulated capitalism is its own worst enemy: sooner or later it must fall prey to its own excesses and turn again to the state for rescue. But if we do no more than pick up the pieces and carry on as before, we can look forward to greater upheavals in years to come.
And yet we seem unable to conceive of alternatives. This too is something new. Until quite recently, public life in liberal societies was conducted in the shadow of a debate between defenders of “capitalism” and its critics: usually identified with one or another form of “socialism.” By the 1970s this debate had lost much of its meaning for both sides; all the same, the “left–right” distinction served a useful purpose. It provided a peg on which to hang critical commentary about contemporary affairs.
On the left, Marxism was attractive to generations of young people if only because it offered a way to take one’s distance from the status quo. Much the same was true of classical conservatism: a well-grounded distaste for over-hasty change gave a home to those reluctant to abandon long-established routines. Today, neither left nor right can find their footing.
For thirty years students have been complaining to me that “it was easy for you”: your generation had ideals and ideas, you believed in something, you were able to change things. “We” (the children of the Eighties, the Nineties, the “Aughts”) have nothing. In many respects my students are right. It was easy for us—just as it was easy, at least in this sense, for the generations who came before us. The last time a cohort of young people expressed comparable frustration at the emptiness of their lives and the dispiriting purposelessness of their world was in the 1920s: it is not by chance that historians speak of a “lost generation.”
The Young are at a loss
If young people today are at a loss, it is not for want of targets. Any conversation with students or schoolchildren will produce a startling checklist of anxieties. Indeed, the rising generation is acutely worried about the world it is to inherit. But accompanying these fears there is a general sentiment of frustration: “we” know something is wrong and there are many things we don’t like. But what can we believe in? What should we do?
This is an ironic reversal of the attitudes of an earlier age. Back in the era of self-assured radical dogma, young people were far from uncertain. The characteristic tone of the 1960s was that of overweening confidence: we knew just how to fix the world. It was this note of unmerited arrogance that partly accounts for the reactionary backlash that followed; if the left is to recover its fortunes, some modesty will be in order. All the same, you must be able to name a problem if you wish to solve it.
I wrote my book Ill Fares the Land for young people on both sides of the Atlantic. American readers may be struck by the frequent references to social democracy. Here in the United States, such references are uncommon. When journalists and commentators advocate public expenditure on social objectives, they are more likely to describe themselves—and be described by their critics—as “liberals.” But this is confusing. “Liberal” is a venerable and respectable label and we should all be proud to wear it. But like a well-designed outer coat, it conceals more than it displays.
A Liberal and A Social Democrat
A liberal is someone who opposes interference in the affairs of others: who is tolerant of dissenting attitudes and unconventional behavior. Liberals have historically favored keeping other people out of our lives, leaving individuals the maximum space in which to live and flourish as they choose. In their extreme form, such attitudes are associated today with self-styled “libertarians,” but the term is largely redundant. Most genuine liberals remain disposed to leave other people alone.
Social democrats, on the other hand, are something of a hybrid. They share with liberals a commitment to cultural and religious tolerance. But in public policy social democrats believe in the possibility and virtue of collective action for the collective good. Like most liberals, social democrats favor progressive taxation in order to pay for public services and other social goods that individuals cannot provide themselves; but whereas many liberals might see such taxation or public provision as a necessary evil, a social democratic vision of the good society entails from the outset a greater role for the state and the public sector.
Understandably, social democracy is a hard sell in the United States. One of my goals is to suggest that government can play an enhanced role in our lives without threatening our liberties—and to argue that, since the state is going to be with us for the foreseeable future, we would do well to think about what sort of a state we want. In any case, much that was best in American legislation and social policy over the course of the twentieth century—and that we are now urged to dismantle in the name of efficiency and “less government”—corresponds in practice to what Europeans have called “social democracy.” Our problem is not what to do; it is how to talk about it.
The European dilemma is somewhat different. Many European countries have long practiced something resembling social democracy: but they have forgotten how to preach it. Social democrats today are defensive and apologetic. Critics who claim that the European model is too expensive or economically inefficient have been allowed to pass unchallenged. And yet, the welfare state is as popular as ever with its beneficiaries: nowhere in Europe is there a constituency for abolishing public health services, ending free or subsidized education, or reducing public provision of transport and other essential services.
Taking on Conventional Wisdom
I want to challenge conventional wisdom on both sides of the Atlantic. To be sure, the target has softened considerably. In the early years of this century, the “Washington consensus” held the field. Everywhere you went there was an economist or “expert” expounding the virtues of deregulation, the minimal state, and low taxation. Anything, it seemed, that the public sector could do, private individuals could do better.
The Washington doctrine was everywhere greeted by ideological cheerleaders: from the profiteers of the “Irish miracle” (the property-bubble boom of the “Celtic Tiger”) to the doctrinaire ultra-capitalists of former Communist Europe. Even “old Europeans” were swept up in the wake. The EU’s free- market project (the so-called “Lisbon agenda”); the enthusiastic privatization plans of the French and German governments: all bore witness to what its French critics described as the new ” pensée unique.”
Today there has been a partial awakening. To avert national bankruptcies and wholesale banking collapse, governments and central bankers have performed remarkable policy reversals, liberally dispersing public money in pursuit of economic stability and taking failed companies into public control without a second thought. A striking number of free-market economists, worshipers at the feet of Milton Friedman and his Chicago colleagues, have lined up to don sackcloth and ashes and swear allegiance to the memory of John Maynard Keynes.
This is all very gratifying. But it hardly constitutes an intellectual revolution. Quite the contrary: as the response of the Obama administration suggests, the reversion to Keynesian economics is but a tactical retreat. Much the same may be said of New Labour, as committed as ever to the private sector in general and the London financial markets in particular. To be sure, one effect of the crisis has been to dampen the ardor of continental Europeans for the “Anglo-American model”; but the chief beneficiaries have been those same center-right parties once so keen to emulate Washington.
No Re-thinking the State
In short, the practical need for strong states and interventionist governments is beyond dispute. But no one is “re-thinking” the state. There remains a marked reluctance to defend the public sector on grounds of collective interest or principle. It is striking that in a series of European elections following the financial meltdown, social democratic parties consistently did badly; notwithstanding the collapse of the market, they proved conspicuously unable to rise to the occasion.
If it is to be taken seriously again, the left must find its voice. There is much to be angry about: growing inequalities of wealth and opportunity; injustices of class and caste; economic exploitation at home and abroad; corruption and money and privilege occluding the arteries of democracy. But it will no longer suffice to identify the shortcomings of “the system” and then retreat, Pilate-like, indifferent to consequences. The irresponsible rhetorical grandstanding of decades past did not serve the left well.
We have entered an age of insecurity—economic insecurity, physical insecurity, political insecurity. The fact that we are largely unaware of this is small comfort: few in 1914 predicted the utter collapse of their world and the economic and political catastrophes that followed. Insecurity breeds fear. And fear—fear of change, fear of decline, fear of strangers and an unfamiliar world—is corroding the trust and interdependence on which civil societies rest.
All change is disruptive. We have seen that the specter of terrorism is enough to cast stable democracies into turmoil. Climate change will have even more dramatic consequences. Men and women will be thrown back upon the resources of the state. They will look to their political leaders and representatives to protect them: open societies will once again be urged to close in upon themselves, sacrificing freedom for “security.” The choice will no longer be between the state and the market, but between two sorts of state. It is thus incumbent upon us to reconceive the role of government. If we do not, others will.
The Way We Live Now
All around us, even in a recession, we see a level of individual wealth unequaled since the early years of the twentieth century. Conspicuous consumption of redundant consumer goods—houses, jewelry, cars, clothing, tech toys—has greatly expanded over the past generation. In the US, the UK, and a handful of other countries, financial transactions have largely displaced the production of goods or services as the source of private fortunes, distorting the value we place upon different kinds of economic activity. The wealthy, like the poor, have always been with us. But relative to everyone else, they are today wealthier and more conspicuous than at any time in living memory. Private privilege is easy to understand and describe. It is rather harder to convey the depths of public squalor into which we have fallen.
Private Affluence, Public Squalor
No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. —Adam Smith
Poverty is an abstraction, even for the poor. But the symptoms of collective impoverishment are all about us. Broken highways, bankrupt cities, collapsing bridges, failed schools, the unemployed, the underpaid, and the uninsured: all suggest a collective failure of will. These shortcomings are so endemic that we no longer know how to talk about what is wrong, much less set about repairing it. And yet something is seriously amiss. Even as the US budgets tens of billions of dollars on a futile military campaign in Afghanistan, we fret nervously at the implications of any increase in public spending on social services or infrastructure.
To understand the depths to which we have fallen, we must first appreciate the scale of the changes that have overtaken us. From the late nineteenth century until the 1970s, the advanced societies of the West were all becoming less unequal. Thanks to progressive taxation, government subsidies for the poor, the provision of social services, and guarantees against acute misfortune, modern democracies were shedding extremes of wealth and poverty.
To be sure, great differences remained. The essentially egalitarian countries of Scandinavia and the considerably more diverse societies of southern Europe remained distinctive; and the English-speaking lands of the Atlantic world and the British Empire continued to reflect long-standing class distinctions. But each in its own way was affected by the growing intolerance of immoderate inequality, initiating public provision to compensate for private inadequacy.
Over the past thirty years we have thrown all this away. To be sure, “we” varies with country. The greatest extremes of private privilege and public indifference have resurfaced in the US and the UK: epicenters of enthusiasm for deregulated market capitalism. Although countries as far apart as New Zealand and Denmark, France and Brazil have expressed periodic interest in deregulation, none has matched Britain or the United States in their unwavering thirty-year commitment to the unraveling of decades of social legislation and economic oversight.
In 2005, 21.2 percent of US national income accrued to just 1 percent of earners. Contrast 1968, when the CEO of General Motors took home, in pay and benefits, about sixty-six times the amount paid to a typical GM worker. Today the CEO of Wal-Mart earns nine hundred times the wages of his average employee. Indeed, the wealth of the Wal-Mart founder’s family in 2005 was estimated at about the same ($90 billion) as that of the bottom 40 percent of the US population: 120 million people.
The UK too is now more unequal—in incomes, wealth, health, education, and life chances—than at any time since the 1920s. There are more poor children in the UK than in any other country of the European Union. Since 1973, inequality in take-home pay increased more in the UK than anywhere except the US. Most of the new jobs created in Britain in the years 1977–2007 were at either the very high or the very low end of the pay scale.
The consequences are clear. There has been a collapse in intergenerational mobility: in contrast to their parents and grandparents, children today in the UK as in the US have very little expectation of improving upon the condition into which they were born. The poor stay poor. (See Figures 1 and 2.) Economic disadvantage for the overwhelming majority translates into ill health, missed educational opportunity, and—increasingly—the familiar symptoms of depression: alcoholism, obesity, gambling, and minor criminality. The unemployed or underemployed lose such skills as they have acquired and become chronically superfluous to the economy. Anxiety and stress, not to mention illness and early death, frequently follow.
Income disparity exacerbates the problems. Thus the incidence of mental illness correlates closely to income in the US and the UK, whereas the two indices are quite unrelated in all continental European countries. Even trust, the faith we have in our fellow citizens, corresponds negatively with differences in income: between 1983 and 2001, mistrustfulness increased markedly in the US, the UK, and Ireland—three countries in which the dogma of unregulated individual self-interest was most assiduously applied to public policy. In no other country was a comparable increase in mutual mistrust to be found.
Even within individual countries, inequality plays a crucial role in shaping peoples’ lives. In the United States, for example, your chances of living a long and healthy life closely track your income: residents of wealthy districts can expect to live longer and better. Young women in poorer states of the US are more likely to become pregnant in their teenage years—and their babies are less likely to survive—than their peers in wealthier states. In the same way, a child from a disfavored district has a higher chance of dropping out of high school than if his parents have a steady mid-range income and live in a prosperous part of the country. As for the children of the poor who remain in school: they will do worse, achieve lower scores, and obtain less fulfilling and lower-paid employment.
Inequality is corrosive
Inequality, then, is not just unattractive in itself; it clearly corresponds to pathological social problems that we cannot hope to address unless we attend to their underlying cause. There is a reason why infant mortality, life expectancy, criminality, the prison population, mental illness, unemployment, obesity, malnutrition, teenage pregnancy, illegal drug use, economic insecurity, personal indebtedness, and anxiety are so much more marked in the US and the UK than they are in continental Europe. (See Figures 3, 4, and 5.)
The wider the spread between the wealthy few and the impoverished many, the worse the social problems: a statement that appears to be true for rich and poor countries alike. What matters is not how affluent a country is but how unequal it is. Thus Sweden and Finland, two of the world’s wealthiest countries by per capita income or GDP, have a very narrow gap separating their richest from their poorest citizens—and they consistently lead the world in indices of measurable well-being. Conversely, the United States, despite its huge aggregate wealth, always comes low on such measures. We spend vast sums on health care, but life expectancy in the US remains below Bosnia and just above Albania. (See Figure 6.)
Inequality is corrosive. It rots societies from within. The impact of material differences takes a while to show up: but in due course competition for status and goods increases; people feel a growing sense of superiority (or inferiority) based on their possessions; prejudice toward those on the lower rungs of the social ladder hardens; crime spikes and the pathologies of social disadvantage become ever more marked. The legacy of unregulated wealth creation is bitter indeed.1
As recently as the 1970s, the idea that the point of life was to get rich and that governments existed to facilitate this would have been ridiculed: not only by capitalism’s traditional critics but also by many of its staunchest defenders. Relative indifference to wealth for its own sake was widespread in the postwar decades. In a survey of English schoolboys taken in 1949, it was discovered that the more intelligent the boy the more likely he was to choose an interesting career at a reasonable wage over a job that would merely pay well.2 Today’s schoolchildren and college students can imagine little else but the search for a lucrative job.
How should we begin to make amends for raising a generation obsessed with the pursuit of material wealth and indifferent to so much else? Perhaps we might start by reminding ourselves and our children that it wasn’t always thus. Thinking “economistically,” as we have done now for thirty years, is not intrinsic to humans. There was a time when we ordered our lives differently.
—This essay is drawn from the opening chapter of Tony Judt’s newly published book, Ill Fares the Land (Penguin).
1.The best recent statement of this argument comes in Richard Wilkinson and Kate Pickett, The Spirit Level: Why Greater Equality Makes Societies Stronger (Bloomsbury Press, 2010). I am indebted to them for much of the material in this excerpt.↩
2.See T.H. Marshall and Tom Bottomore, Citizenship and Social Class (London: Pluto, 1992), p. 48.↩
Sunday, August 15, 2010
Wednesday, August 4, 2010
Speakers blame NEP vestiges
Source: http://biz.thestar.com.my/news/story.asp?file=/2010/8/3/business/6781230&sec=business
Datuk Nicholas Jefferys
They result in slow development, symposium told
PETALING JAYA: Speakers from the civil society, business lobby groups and academia who took part in a symposium on the 10th Malaysia Plan (10MP) yesterday pointed out that vestiges of the New Economic Policy (NEP) were making the country falling behind in terms of socio-economic development.
They pointed out that ethnic-based affirmative policies, which had pervaded policy and decision-making over the past four decades, had also polarised the country.
The symposium, which saw Minister in the Prime Minister’s Office Senator Tan Sri Dr Koh Tsu Koon as the keynote speaker, was jointly organised by Asian Strategy & Leadership Institute, Centre for Pubilc Policy Studies and the American Malaysian Chamber of Commerce (Amcham).
Speakers at the first session were also pessimistic about whether the political will was there to drive reforms in order to make the country more competitive.
Datuk Nicholas JefferysAmcham president Datuk Nicholas Zefferys summed up the system of preferences given to bumiputra companies, oligopolies, cartels, price controls and subsidies as an “NEP run amok”.
He said in the symposium’s first session that the situation had led to a negative perception of Malaysia by foreign companies, with many complaints over the years on how foreign companies had to go through bumiputera-owned companies in order to do business with government-linked companies (GLCs).
“An example is how a US company which wanted to supply products to the Government saw the original contract value rise to US$300mil from US$30mil via such business arrangements,” Zefferys said.
He said the fall in private sector investment over the years could be attributed to the “crowding out” of the private sector by state investment firm Khazanah Nasional Bhd and GLCs.
Zefferys said Malaysia was more ethnically polarised today as people were “not living side-by-side comfortably,” changes must come via redefining affirmative action, government decentralisation and strengthening the rule of law.
Koh said the challenges that came with a multi-ethnic and multi-religious society had to be seen more positively.
He said what was new in the 1Malaysia concept embodying national unity and efficient governance was the emphasis on outcome instead of input.
Koh said as part of the move to make the government machinery less wasteful, RM24bil was shaved off Budget 2010 mostly in operating expenditure compared with Budget 2009 while the 10MP’s budget allocation had been kept to the same amount as the 9MP’s.
“The political will is only as strong as the political endorsement,” he said, adding that the Government could not afford to ignore critical views on the ground despite the obstacles.
Among other speakers, Universiti Malaya’s Professor Edmund Terence Gomez said the weakness of property rights in the country made both locals and foreigners fear investing in the country.
“I believe the Government knows what needs to be done but can they deliver?” he asked.
There were still questions over whether the 30% equity policy would continue to be implemented, he said, adding that other critical issues were reform of the education system and the public sector.
Gomez also said it was “not possible” to have market-friendly affirmative action as it would not work in business. “We need to confront this clearly and openly,” he said.
Time running out for M’sian economy
| CPI Writings |
| WRITTEN BY DR LIM TECK GHEE |
| TUESDAY, 03 AUGUST 2010 10:37 |
More evidence has just come in that time is running out for the country to get its basics right if the Malaysian economy is to grow at a respectable pace.
According to the United Nations’ World Investment Report 2010, foreign direct investment (FDI) for Malaysia has plunged 81 percent from US$7.32 billion (RM23.47 billion) in 2008 to just US$1.38 billion (RM4.43 billion) last year.
This is further confirmation that despite the many efforts to court foreign investors to invest here, the foreign and local business community is not buying what is being sold to them in terms of the attractiveness of Malaysia as a place to do business.
The latest data must be especially a letdown for Prime Minister Najib Razak who has been active on the international front, attending investor meetings and courting foreign fund managers and foreign business leaders to persuade them to put their money in Malaysia.
There are various important points that we can deduce from the data in the table, and other tables in the report comparing the Malaysia inflows with other countries in the SE Asian region.
o The downturn in FDI is not a one or two year phenomenon but a long term trend. The previous attraction that we had for foreign investors is no longer there, and this is likely to continue in the foreseeable future.
o The trend is not only of diminishing FDIs into Malaysia but for us to do worse than the rest of our neighbors in the region. In 2008 we accounted for 15.5% of FDI flows into SE Asia; in 2009 it was down to 3.7%.
o Short of a complete breakdown in the governments in neighboring countries such as Singapore, Thailand, Indonesia and Vietnam, we are looking at foreign investors preferring to invest in these countries rather than Malaysia.
o Even if political turmoil and social instability appears to be more pronounced in countries such as Thailand, we are no longer able to compete with them for FDI.
o The outflow of domestic investments is a new trend. This suggests that the country is unable to develop new industries or sustain existing industries to prevent local funds from leaving the country. It also indicates loss of confidence by local business in the country’s economy and politics.
What are some of the implications of this trend of diminished FDI flows?
Obviously, if it is not reversed, it will result in less high quality employment generated. The chain effect is more than just jobs lost for Malaysians. It also means that local suppliers will lose out; services such as catering, transport, etc will have a smaller clientele; and the government will collect less in terms of business and income tax and other taxes. In other words, the country may well end up poorer; much poorer.
Even if local businesses step in to fill some of the gap, they will not be able to make up for the loss. Unlike other countries such as Taiwan or South Korea, few import-substituting domestic industries in Malaysia have become world-class export industries. The undeniable fact is that most world-class exporting firms in Malaysia are foreign-owned or joint-venture ones with foreigners providing the crucial technological and market know-how and cutting edge.
Back to the drawing board on FDIs
What this means is that the country needs to go back to the drawing board if it wants to compete for FDI or even to ensure that domestic investors do not flee the country (as they are already doing in droves).
In the past, we have relied on a range of perks to attract foreign investors including tax-free pioneer status; investment tax allowances; reinvestment allowances, etc. We had also in the 1980s and 90s a head start over countries in attracting FDI due to our superior infrastructure and – at that time – our more competitive labour force.
All this has now been eroded. There is similar tax concessions found all over the world.
Furthermore, our electricity and water utility costs are beginning to soar, and our worker productivity has stagnated in comparison with other countries whilst wages have gone up.
It does not require rocket science to recognize what is holding back investors – whether foreign or local. They include
• NEP requirements and barriers
• Rising costs of production leading to lower profits
• Low levels of efficiency arising from lack of worker skills, poor R&D and low technological capacity
Most damaging of all to business and investor confidence (although not easily quantifiable) is the rising racial and religious ranting from Malay extremists. Although mainly conducted in the Malay media and targeted at Malay audiences, the new wave of emotive breast-thumping (and occasional posturing with the keris) in the name of Malay dominance and Malay unity surely has not gone unnoticed.
Besides reading the internet news portals for a more accurate gauge of what is taking place in the politics and economics of the country, many savvy business leaders keep close tabs on what is put out in the Utusan Malaysia and Berita Harian, as well as over the government Malay language electronic media.
Government dithering on NEM
Foreign investors may initially have been encouraged by the launching of the NEM and would have harboured hopes that this would mean a new economic era of liberalization and higher competitiveness for Malaysia.
The NEM has been silent on any mention of the NEP and has called instead for “market friendly”, “merit-based”, “transparent” and “needs-based” policies. Investors would have inferred from the lack of mention of the NEP in the NEM that this 40-year-old socioeconomic policy would finally be laid to rest.
However, like others, they are now nonplussed by the government’s dithering on whether or not to finally abandon this anachronistic policy. They would undoubtedly be especially troubled by the remarkable ability of the Prime Minister to sing a different tune on the subject depending on his audience.
Adding to their worry would be the Prime Minister’s speech at the closing ceremony of the first Malay Consultative Council (MPM) congress held at the PWTC on May 30 where Najib stated that the NEM is a “trial balloon” and the policy has yet to be finalized.
Attaining Vision 2020
In another recent speech, the PM has also begun to back off from his earlier confident claim that the country would be able to achieve Vision 2020 by clarifying that the external economic environment may well derail the achievement of key targets such as per capita income and others.
Of course, foreign investors understand that the external environment, external factors and foreign investors can help the country in its realization of Vision 2020 and the NEM’s goals.
However, I am sure they will beg to differ with the Prime Minister’s assessment of the critical importance of the external environment. Many amongst them will emphasize that it is the internal environment and internal factors – in particular the politicking (and associated rent-seeking) by Umno – that holds the key to the economic fortunes of Malaysia.
Note: An earlier version of this appeared in Chinese in the paper, the Red Tomato.
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