Malaysia and the Muslim Spring how can the government help middle class ?

Ukraine’s jailed former Prime Minister Yulia Tymoshenko exhorted her country Saturday to “rise up” against President Viktor Yanukovych’s party in next month’s parliamentary election.

In an emotional video appeal, recorded covertly by her lawyer with a cell phone in a hospital where she is undergoing treatment, Tymoshenko accused Yanukovych of turning Ukraine into a “police state” and her own life into “hell.” The state prison agency retaliated by publishing a video of Tymoshenko banging her high-heeled shoe against a hospital door in order to be allowed to see her supporters.

The videos offered a rare glimpse into Tymoshenko’s life and state of health behind bars over a year after she was jailed on charges of abusing her office during natural gas import negotiations with Russia in 2009.

In the both videos, apparently shot around the same time, Tymoshenko, her hair combed into a long blond braid, looks pale, but energetic and determined. She is wearing blue jeans, a white shirt and high-heeled shoes and is moving around with the help of walking aids. Tymoshenko is suffering from a herniated disc and has been receiving treatment in a local hospital for months.

The West has condemned Tymoshenko’s imprisonment as politically motivated and the European Union has put on hold a key cooperation deal with Kiev over Tymoshenko’s jailing.

Tymoshenko, 51, the country’s top opposition leader, denies all the charges against her, and accuses Yanukovych of throwing her in jail to bar her from the contesting the Oct. 28 election.

In the video recorded by her lawyer Friday and released Saturday, Tymoshenko urged Ukrainians to support her party in the vote and end what she called Yanukovych’s “criminal” rule.

“Today, unfortunately, the whole country lives under a criminal authority,” Tymoshenko said.

Yanukovych’s Party of Regions hopes to maintain its parliamentary majority, but will struggle to do so in the face of an opposition re-energized by Tymoshenko’s jailing. The next presidential election is in 2015.

Tymoshenko used the video message to complain about her hardship in prison.

“Every day I find myself not only under psychological pressure. Every day here is turned into hell in an absolutely conscious, deliberate way and it is Yanukovych’s direct plan,” Tymoshenko said.

Yanukovych’s office declined to comment on the video.

The state prison agency responded by saying that Tymoshenko’s video was recorded illegally and released its own video, which it says shows her resorting to a “provocation” and behaving inappropriately.

In that video, Tymoshenko takes what appears to be a portable metal detector and bangs it against a hospital door.

“Stop these illegal actions,” a guard says as he confiscates the object.

Tymoshenko then takes off her right shoe and strikes it against the door.

“You are not letting me see the people who have come for me,” Tymoshenko says. “You are breaking the law.”

If our new found prosperity and dignity is founded on reforms, how does one explain the lack of reform in the past seven years of the Barisan government—
What politicians of all parties need to understand is that the newly emerged middle class, having attained hard-fought dignity, will no longer allow itself to be humiliated by public officials as in the pre-reform decades of the licence raj. It sees today a dramatic contrast between its own private life of accountability—if you don’t perform, you lose your job–and the public life where you are rewarded even if you don’t perform or are corrupt. It just won’t put up with it. Since its voice is not heard in Parliament, it expresses itself in the only way it can, through rage on television night after night. Rising expectations are creating pressures on leaders and these could either undermine the political system or be a transformative force for the good. Bourgeois dignity is the key to an Malaysian puzzle.

Kee Thuan Chye

I don’t know about you but I got practically nothing from the 2013 Budget. I don’t qualify for the BR1M payout of RM500 for households with a monthly income of not more than RM3,000. I also don’t qualify for the 50% discount on passports for senior citizens.

But that’s all right. I don’t want anything from the Budget. It comes from the people’s money and should be spent wisely on developing the country. I should not expect to get something directly from it.

The way it looks, though, Prime Minister Najib Razak doesn’t seem to think the same way. His 2013 Budget is a lot about giving money away to people. It seems this is to make them happy, and perhaps this feeling of happiness could translate into votes for his Barisan Nasional (BN) government at the upcoming general election.

What worries me is that Najib is spending money like there is no tomorrow. That seems the right way to put it because his Budget does not address the future. Maybe except for education, especially in boosting vocational training and encouraging small entrepreneurs.

There’s hardly anything about enhancing the country’s economic growth, spending prudently or reducing the national debt.

In fact, of the projected amount of RM252 billion to be spent, a whopping RM202 billion will be used for operating expenditure. Only one-fifth left is for development expenditure.

Najib is gung-ho about the global economy despite the uncertainties predicted by financial analysts. He said, “In 2013, based on the prospects of an improved global economy, the Malaysian economy is forecast to expand strongly between 4.5% and 5%.”

Is that predicated on a DR1M?

Meanwhile, the reality, according to online news website Free Malaysia Today, is that this year the national debt has risen 10.1% to a new high of RM502.4 billion or 53.7% of the GDP. That is only 1.3% short of the 55% debt ceiling the country is allowed to reach.

And according to The Malaysian Insider, this debt figure “does not include hidden liability of RM117 billion (12 percent of GDP) in the form of guarantees issued against commercial loans to government agencies and GLCs (government-linked corporations)”.

Is our fiscal future already in the pawnshop?

In the social media, people are calling Najib “an illusionist” for throwing so much money around when Malaysians are wondering where it is coming from. They’re calling this Budget “the biggest bribe Budget of all time”.

The main targets appear to be the low-income groups, youths and civil servants (who will be getting one-and-a-half month’s bonus).

BR1M is back. It has even been extended to unmarried individuals aged above 21 who are earning not more than RM2,000 a month. These people will get RM250.

I don’t understand the rationale for this. In fact, I think it’s rather silly. Perhaps the minimum age is too low. A newly graduated employee who earns, say, between RM1,500 and RM2,000, which is about what a lot of fresh graduates get these days, would be entitled to the BR1M RM250 even if he or she doesn’t need it.

And what if this person has lost both parents and is therefore a household of one? Does he or she claim the RM250 plus the BR1M RM500, which in principle he or she should also be entitled to?

Even more mind-boggling is the RM200 rebate for those aged between 21 and 30 earning not more than RM3,000 to buy smartphones. Why smartphones? It’s a non-essential item. Besides, many may already own one.

Consider this: A 20-something who earns RM2,900 and has no dependents, therefore no commitments, would be flushed with cash and already own a smartphone. Why give him or her that aid?

As someone pointed out on Facebook, it may transpire that some of them will make a deal with the smartphone dealers and get the cash instead. “Just give me RM150, you keep the other RM50” or something like that.

We saw signs of such a tendency when the Government gave tertiary students book vouchers earlier this year only to see them put up for sale on the Internet. Not having learned from that experience, it is still giving out more book vouchers, worth RM250, through the new Budget.

Indeed, the range of goodies dished out to youths seems to show desperation on the part of BN to secure their goodwill since many of them will be voting at GE13. The Budget even offers a 20% discount to borrowers who pay back in full their National Higher Education Fund Corporation (PTPTN) loans by the end of September next year.

This was, to be sure, taking a leaf from the Opposition’s Buku Jingga. It just falls short of Pakatan Rakyat’s proposal to do away with the loans totally and therefore giving free education to everyone. Nonetheless, the Government was not bashful about appropriating the basic theme.

That’s not surprising. This is not the first time the Government has taken ideas from Pakatan and used them. Besides, with the general election coming up, any populist idea has to appear a great idea.

Skeptics, however, are not persuaded. Neither are those who are capable of seeing beyond the temporary gratification of the handouts they are given.

As one Netizen wrote on Facebook: “Ini semua secara ‘pinjaman’ saja (This is all just a ‘loan’). Payback time will come after GE13. The people will have to pay back with interest if BN wins. Wait and see.”

Indeed, when the Government has to give money out like this, something must have been wrong with its administration of the country. Has it not done the right things to improve the economy of a country blessed with a wealth of natural resources in order to ensure that its people enjoy a high per capita income arising out of a huge GDP?

Why are we at this point in our development still trying to become a high-income nation? Why is our average national wage still so low? According to CIMB, in 2010 it stood at only RM1,804.43.

I was recently reminded by a friend about ‘Bersih, Cekap dan Amanah’ (Clean, Efficient and Trustworthy), the tagline of former prime minister Mahathir Mohamad’s administration. What happened to its promise? Did it turn out to be the opposite instead? And thereby led to leakage and wastage of public money and corruption in high places that sucked away our resources and rendered us poorer than we should be?

Ironically, then, the 2013 Budget shows us even more clearly the failure of the BN government over the decades in taking the country’s economy to a higher level. Compared to Singapore, which has no natural resources, Malaysia is a laggard.

And yet, to make doubly sure that Malaysians got the message that his goodies were meant to secure their votes, Najib stressed: “With… support from the rakyat, God-willing, we will see six more budgets tabled by the BN government before Malaysia transforms into a nation with high-income status” (meaning in 2020).

He then proceeded to bash the Opposition.

It prompted someone to post in Facebook: “This is the first time in the history of Malaysia that a PM shamelessly tells us that we need to vote for him after he gives out the goodies. Tak malu ke? (Not embarrassed?) Does he think the Government coffers belong solely to BN?”

Yes, lest we forget, the money is not BN’s. It is the public’s money. Yours and mine.

Blogger Sakmongkol AK47 puts it aptly, “The Budget is about the PM asking for our money and telling us how he wants to use the money he is asking from us.  It is not a gift from him, not ehsan or hadiah.”

This connotes that we need not be grateful for getting the handouts because it’s our own money. Nonetheless, we still need to ask: Is the PM doing the right thing with our money? Is he bribing us? And if he is, will we allow ourselves to be bribed?

These are questions we also need to answer.
Robert Lucas, the Nobel Prize winner, says that ‘for income growth to occur in a society, a large fraction of people must experience changes in the possible lives they imagine for themselves and their children…economic development requires a million mutinies’. There are still vast areas of horrible poverty and deprivation in Malaysia but there is also a critical mass of people who can see that their lot is palpably better than their parents; their future is open, not pre-determined, and can be changed by their own actions. They feel that dignity is not
being bestowed on their middle class Dignity is a state of mind engendered by social, political, and economic liberty. For too long Malaysian have been denied dignity by public officials who ride around with lights flashing on top of their cars and announce their dignity either by making citizens wait while they pass or by placing endless red tape in issuing a birth certificate, a passport or whatever a citizen is owed as a matter of right. Liberty without dignity is self-despising; dignity without liberty makes for status without hope; but liberty with dignity is hugely empowerin

It is the wishful thinking of Najib, but he should not neglect that the middle class and swing voters might have a different thought. For example, some people might be worried that the treasury revenue is estimated to increase only by 0.7 per cent while the expenditure increases by RM18.8 billion, including the administrative expenses that have been increased year-by-year, accounting for 80 per cent of the total expenses. Although the fiscal deficit has been reduced to 4 per cent, the debt has increased from 51.8 per cent to 53.7 per cent.

Moreover, government departments have always spent unwisely and have to ask for a supplementary budget every year. For example, the Finance Ministry had sought for a supplementary budget of RM13.79 billion in June this year.

It is also a question whether one-off aid can really alleviate the people’s living burden, particularly prices have been continuously rising. The RM500 aid means only RM41.67 for each month. Therefore, the right way is to increase the disposable income.

The government has to take care of the feelings of too many people and thus, the measures taken are not strong enough. For example, increasing the real property gain tax by only 5 per cent is not enough to curb speculation.

Could the budget for development programmes and projects support the economic growth after being reduced to 20 per cent? It is a warning to have a 35 per cent shrink of manufacturing investment in the second quarter this year.

Other events will also weaken the good feelings, such as the forthcoming Auditor-General’s Report might reveal some frauds. They might also lose votes if laws and orders are not improved.

In addition, various social protest movements, including the Pengerang anti-RAPID movements, will also affect the election deployment.

The Budget has sounded the election bugle. Do you still have passion for it?

In spite of everything that occurred over the past four years, many in the global financial industry appear content to continue to beat a well-worn drum, wanting investors to believe that ‘technical’ factors and historical stock market performance are all that is required to predict the future behavior of stock markets — as if everything else in the world is dynamic and ever-changing, but what drives stock market performance is predictable. This demonstrates a willful and perhaps purposeful ignorance of what is happening in the world. Investors should be concerned about the plethora of external factors that could impact the global investment climate in the coming months.

It is of course no news to anyone that the global economy remains on a precipice, based on a combination of debt-infused anemic growth in the developed world, slowing growth in the emerging and developing world, and sharply lower global trade figures this year. Yet global stock markets seem content to continue to overemphasize any shred of good economic news, while underemphasizing bad news and longer-term trends. This makes little sense in a world where local events have global impact — and yet, it continues, as if nothing has changed over the past decade.

This propensity to brush off bad news has the potential to have truly significant impact on global stock markets, but so far the markets have gotten away with it because government economic stimulus packages around the world have largely had their desired short-term effect, creating an illusion that everything is just fine to the average investor, and masking over the lingering structural deficiencies that plague so many economies.

Lost in this morass of self-delusion is the cold hard reality that 2013 presents some great challenges for the world. The pending climax between Iran and Israel tops the list. Regardless of who wins the U.S. presidential election, there seems to be a good chance that either Israel or the U.S. will indeed proceed with an attack on Iran, given that both countries have repeatedly stated that Iran will not be allowed to obtain a nuclear weapon. In the absence of Iran suddenly losing in pursuing its nuclear program (which will not happen), what else would stop it, and what other option would either Israel or the U.S. choose?

Prime Minister Netanyahu’s recent focus on adopting ‘red lines’ has been heard loud and clear by the US Congress.

Late last week, the U.S. Senate voted 90-1 in favor of expressing the “sense of the Congress,” a non-binding position that “strongly supports U.S. policy to prevent Iran from acquiring a nuclear weapons capability, and rejects any U.S. policy that would rely on efforts to contain a nuclear weapons-capable Iran.” Mr. Romney has said this is the essence of his position. My guess is that soon enough, Mr. Obama will be saying the same thing. A number of pundits have stated that if an attack is to occur, 2013 is likely to be the year. I think they are right.

Iran’s Brigadier General Hajizadeh stated over the weekend that Iran would consider a pre-emptive strike on Israel, if it believed an Israeli or U.S. attack were imminent. Some might believe all this to be just a ratcheting up of bellicose rhetoric, but it is hard to believe. Ahmadinejad has said nothing will stop Iran from its pursuit of a ‘peaceful’ nuclear capability, Netanyahu firmly believes Israel faces an existential threat as a result, and it is clear that sanctions are not working. At some point in time — likely very soon — words may turn to action, and unlike when Iraq and Syria’s nuclear sites were attacked by Israel, Iran and its proxies throughout the region have the ability and will to strike back.

On the economic front, the U.S. faces its ‘fiscal cliff’ at the end of this year — presenting lawmakers with the option of either increasing taxes and implementing spending cuts, which would negatively impact growth and possibly force the U.S. economy back into recession (some would say we’re still in one), or canceling some or all of these tax increases and spending cuts, which would increase the deficit and increase the likelihood that the U.S. will face an economic crisis similar to what is occurring in Europe. The next U.S. president and Congress really have no choice but to tackle this issue head on, and most any direction they turn is likely to negatively impact the U.S. economy and stock market.

Then there is Europe, which continues to limp along in the belief that the sun really will come out tomorrow. In spite of massive ongoing stimulus spending by the ECB and national governments, European growth remains barely positive, and the various stimulus measures are having rather limited positive impact. More money is being thrown into a black hole in the belief that fundamental structural reform — the only thing that has a hope of turning it all around — can be avoided.

The rest of the world is slowing down, too. China’s manufacturing index has nowexperienced 11 consecutive months of decline. Export levels are falling in many countries; in the second quarter of this year, Britain and India experienced a 4 percent decline in exports, while Russia and South Africa were down more than 8 percent. Since last year, imports into the EU have fallen by 4.5 percent. Container volumes from Asia to Europeplunged by more than 13 percent in the first seven months of this year. The trend is clear.

So, why is so little of this translating into pessimism or even realism, instead of unbridled optimism in so many stock markets? The simple answer appears to be that the talking heads in the financial news media have a vested interest in making it seem as if no tsunami warning has been issued, and the viewing public doesn’t appear to know the difference, or care. If, for example, as they suggest, U.S. companies are ‘lean and mean’ and the U.S. economy is doing just fine, then why have some of America’s best known business titans dumped so much stock? Earlier this year, George Soros sold nearly all his positions in U.S. banks, Warren Buffett reduced his stake in U.S. consumer product makers by more than 20 percent, and John Paulson dramatically reduced his holdings in U.S. equities.

They appear to realize that a major correction is well overdue, whether the market realizes it or not. The global economy has slowed down noticeably, Europe’s troubles are no better than they were a year ago, the U.S. fiscal cliff is looming, and war between Israel and Iran seems increasingly likely. Investors should be cautious in the coming months. A perfect storm is brewing.

President Obama’s recent address to the UN (September 25, 2012) referred to change in the Middle East and North Africa saying that “the path to democracy does not end with the casting of a ballot”.

The President went on to deplore the convulsion of violence in the last two weeks in Muslim countries, in reaction to the “crude and disgusting video” denigrating Islam. He said that recent events speak to “the need for all of us to honestly address the tensions between the West and the Arab world that is moving towards democracy”.

His remarks brought a welcome balance to recent overreaction by international media to the unrest and violence around the world, by acknowledging that the global movement towards liberty and democracy would not be denied.

The movement behind the Arab Spring — or rather the Muslim Spring — has a different connotation in Southeast Asian countries where Burma for example, is slowly transitioning into democracy and Thailand and Pakistan are emerging from periods of military rule. Popular protests and elections have helped bring about change in these countries — some peaceful, some violent — but have been more evolutionary than revolutionary in recent years.

Malaysia too, is undergoing change, but its struggle for democracy has also taken a different route from the sudden change of the Arab Spring; it achieved its independence from British colonial rule in 1957 and has since become an example to the world of what an independent multi-racial federation can achieve.

One of the Asia Tigers in economic transformation due to its continued political stability, Malaysia has been governed since 1970 by a coalition headed by the United Malays National Organisation (UMNO) which has presided over a period of dramatic economic growth and increased living standards. Rapid growth, the embrace of technology and industrialization have been accompanied by generous government investment in education, with the result that Malaysia has had one of the best economic records in Asia, with GDP growing at an average of 6.5% for almost 50 years.

Today however, the electorate is restless – the young, educated and relatively well-off population is demanding change. They see the government as representing a past that has been overtaken by modernity. Laws remain on the books that should be repealed in the name of democracy and freedom of speech. At the same time, there is ongoing debate over whether the laws and society of Malaysia, a majority Muslim country, should reflect secular or Islamic principles. Conservative elements in the ruling UMNO coalition are resisting change or want the state to reflect more fundamental Islamic principles and Prime Minister Najib Razak is trying to appease his base while offering reforms to the center, described by some as offering “just enough to alienate his own party and not enough to convince the center ground.” (Economist, Feb 4, 2012)

There is one man however, who seems to have a better understanding of the wave of change overtaking Muslim nations right now. Anwar Ibrahim sees his role in the Muslim Spring as reflecting the mood for change from an autocratic and out-of-touch government whose numerous corruption scandals and police brutality prove that government reform is necessary and democracy needs to be up-dated.

Anwar is described as “vibrant, compelling, persuasive” in his public appearances and rallies and has long been a politician of note in Malaysia, being named Newsweek’s Asian of the Year in 1998. A personally pious Muslim, he is also a modernizer, a universalist and believer in democracy and economic openness. His defence of civil society, justice and freedom led to a dramatic falling out with then prime minister Mahathir Mohamad and Anwar was imprisoned for six years on politically motivated, trumped-up corruption and sexual misconduct charges.

His years of imprisonment have served to increase his popularity and his opposition coalition now consists of his own People’s Justice party, the Pan-Malaysian Islamic party and the ethnic Chinese Democratic Action party. The alliance made unprecedented gains in the 2008 election in spite of widespread tampering with electoral rolls. Recent further attempts to blacken Anwar’s name are only backfiring on the ruling party and causing cynicism and anger within the wider Malaysian community.

Anwar is aware of the challenges involved in holding together a disparate alliance and dealing with pressures from extremists on the edges. He calls for “active and vibrant intellectual discourse” to resolve differences, with more liberal tolerance of dissent and an end to violence. He has brought Malays and non-Malays together in opposition to the cronyism and patronage of the past and pledges to introduce social justice, openness, transparency, and anticorruption measures.

Malaysia has a number of organizations which stand for reform and an end to corruption in high places, notably Bersih, a coalition of civil society groups whose name means “Clean” in Malay, and who have recently organized rallies to support clean elections. There is also Suara Rakyat Malaysia (SUARAM), which in spite of government harassment has brought into public light the corruption scandal surrounding the Scorpene submarines deal.

These and other movements represent Malaysia’s maturing as the hard lessons are learned about the paradoxes and hypocrisies of democracy. A ruling party is not legitimate if the electoral process is flawed, “national interest” and “realpolitik” are not a legitimate excuse for corruption and police brutality. Re-definitions of democracy are emerging from the lessons of the Arab Spring and the Occupy movement in the U.S. with affirmation that democracy needs more than the ballot box, but also a free media, an independent judiciary, along with an open economy and incorruptible leadership.

If Anwar Ibrahim manages to hold the center in the next election, to be called before June next year, then Malaysia will make an important leap forward into continuing peace and prosperity, a powerful example of a Muslim country making a successful transition from tradition to modernity, embracing the best of both worlds. This will give Southeast Asia an important example of stability and progressive vision as surrounding countries attempt the same balancing act of race, religion, tradition and progress in a rapidly changing global environment.

Dr Azeem Ibrahim is the Executive Chairman of The Scotland Institute and a Fellow and Member of the Board of Directors at the Institute for Social Policy and Understanding.