The present focus in the country should be on reducing disparities and contain the social tension and anger in certain sections of society. Malaysia is a democracy in the sense that we have elections every five years and voters turn out in large numbers in what is a generally 'free and fair election'. However the content of democracy is getting reduced day by day. For instance once a government is elected there is hardly any interaction between the elected representative and the voters.
Earlier MPs and used to visit their constituencies more frequently than they do now. A vibrant democracy is one in which there is an active civil society, an independent judiciary and an alert press which are all essential ingredients if the right of the citizens are to be safe guarded.
Pakatan Rakyat parliamentarians are fuming. Parliament is about to end second week, and yet, the Auditor-General's report has not been presented to the House. They are also worried in case there were astounding discoveries in the report that Prime Minister Najib Razak's government was trying to hide.
“We’re planning to file a motion regarding this matter because today is the fourth day we’re debating the Budget 2012, but the report is still absent,” PAS MP for Pokok Sena Mahfuz Omar told a media conference at the Parliament lobby on Thursday.
He is also puzzled why the report can be absent when some states including Kelantan have already received their respective audit reports. He called on the Public Accounts Committee to be responsible and take action, rather than wait until they were pushed to do so.
“In other countries, PAC is chaired by an opposition representative so it is easy to urge the government but in Malaysia, PAC is headed by a government representative, that is why they are slow,” said Mahfuz.
Take responsibility
Tumpat Member of Parliament Kamarudin Jaafar wants PAC chairman Azmi Khalid to personally take responsibility and explain the matter.
“We call for Azmi Khalid to explain because this is really embarrassing. After four days, there is still no audit report,” said Azmi.
PKR MP for Sungai Petani Johari Abdul said the Auditor-General's office was shocked when he informed them that Parliament had still not receive the report.
“The department officer was shocked and told us that the Auditor-General himself was happy because the report was completed earlier than last year. This is what we are wondering about. Where did the report get stuck at? Is it at the Parliament or in the hands of a certain minister?” asked Johari.
Opposition Leader Anwar Ibrahim had raised the matter himself last week, saying that Najib should have made sure the Audit report had been duly presented before tabling the Budget 2012.
"Unfortunately, we are debating the budget today, but the Auditor-General’s report has not been presented,” Anwar told the House last week.
Datuk Seri Najib Razak is a cautious man who is caught between a crisis of confidence and trust.
Whether he chooses to call for national elections early or wait out the full term now depends on how well he convinces voters he has the will to change.
But with 18 months left to the Barisan Nasional’s (BN) mandate and with the US and European markets crashing one after the other, Najib’s options have narrowed to a six-month deadline that started last Friday immediately after the government’s sugary Budget 2012 that is being financed heavily through borrowings.
Najib’s options to call for a general election have narrowed to a six-month deadline that started last Friday. — File pic
“Any strategic leader will call for elections within six months of the budget before the world economy gets worse,” she said.
Economists predict that Malaysia may recover from the world economic fallout in two years at best; at worst, they think the gloomy global economy may hover for five more years, which will exceed the mandate expiry.
The Treasury, which is already strained by the government’s promise to maintain its RM33 billion annual cost in subsidies, is unlikely to pull through in an emergency.
Political analysts said that time difference is the key factor that will decide if the ruling coalition can regain its two-thirds control of Parliament, lost for the first time in Election 2008, or see public support swing further in favour of the opposition Pakatan Rakyat (PR) pact.
“The prime minister is flying high now compared to after the Bersih 2.0 demonstration on July 9. He’s got to show a vote for Najib is a vote for BN,” said political scientist Sivamurugan Pandian.
The sixth prime minister scored close to 80 per cent public support when he entered office in April 2009.
His popularity plunged 20 percentage points in the days immediately after his government cracked down on civil society dissenters who took to the streets in calling for elections to be cleaner and more transparent.
Najib’s Malaysia Day announcement for a bipartisan parliamentary panel to discuss electoral reforms has helped restore public trust to a certain degree.
But Mr Cautious’ swift move to repeal outdated laws that allow detention without trial in Parliament last week and which free up the media helped boost public confidence.
Born into the Pahang aristocracy, the son of Malaysia’s second prime minister Tun Abdul Razak Hussein will be seeking his first mandate since taking over office from fifth prime minister Tun Abdullah Ahmad Badawi.
“He’s being tested. He’d not want to go down as the BN’s last PM,” Sivamurugan said of Najib.
But the USM don did not think Najib is in a position to call for polls until after March, when the controversial Internal Security Act (ISA) is due to be repealed in Parliament and its two replacement security laws that deal directly with terrorism and domestic racial and religious tensions are presented for approval.
“People want to see to see the outcome of the law reforms first, especially ISA, which is only going to be tabled in March. It’s an opposition bullet so he has to handle it wisely,” Sivamurugan said.
He echoed Tun Dr Mahathir Mohamad, the country’s longest-serving PM who is also seen to be Najib’s sifu, to hold off calling elections until next year.
The still-influential Umno politician has twice warned Najib this year against holding the 13th general election this year, saying the BN lynchpin party was fragmented and internal sabotage will cost Najib to lose big in the ballot boxes.
“He needs to strengthen co-ordination among BN parties too,” Sivamurugan said, referring to the squabbles that continue to plague the ruling coalition’s 13 parties.
Is it any surprise that a close crony to Mahathir Mohamad is making the news? It was merely a matter of time before news leaked out that all is not well for these businessmen, who became rich beyond imagination during the time when the authoritarian Mahathir was prime minister of Malaysia.
Ananda Krishnan, who has long been regarded in Malaysia as one of former premier Mahathir Mohamad's closest cronies, has found himself in trouble in India. To many who have been watching the local economic scene where big business is often intertwined with politics, this is a deep irony.
Ananda and Maxis senior executive Ralph Marshal are now part of a probe by India's Central Bureau of Investigation into claims that Dayandhi Maran, the country's Minister of Telecommunications between February 2004 and May 2007, had been involved in criminal conspiracy, fraud and corruption in granting telecommunications licenses to operations that may include Maxis.
So we are left to wonder, if there is corruption to be weeded, why must it be a foreign agency that does the weeding? Why is the Malaysian authority last on the scene - if they get to the scene at all, that is. Remeber the 2010 fiasco in London where the Malaysian Anti-Corruption Commission was 'forbidden' at the 11th hour to take down a statement from private investigator P Balasubramaniam with regards to the Altantuya murder and Scorpenes kickback case.
What a sharp contrast when the French financial police opened wide their doors for Bala, while the MACC slammed theirs tightly shut! And Bala's information must have checked out quite well because the French authorities have given the green light for an investigative judge to hear the case, which should begin soon.
Arm-twisted
But the question remains, why is Malaysia so 'reliant' on utilizing foreign 'help' to conduct their menial tasks so much so that even investigating corruption cases must be sub-contracted to a foreign agency? Is the MACC afraid to investigate anything that has ties to Mahathir or the Umno elite?Ultimately, most business ties in Malaysia leads back to Mahathir, mainly because he was in charge for such a long time from 1981 to 2003. And this may be the stumbling block for the MACC and any other agency investigating instances of corruption in large Malaysian firms. It is an old-boys network that is extremely hard to crack.
Malaysians can expect MACC to pretend not to hear or see what's going on with the India’s Central Bureau of Investigation. It will surely turn a blind eye to investigating Ananda Krishnan as it has with other cronies of Mahathir Mohamad, including the likes of Tajudin Ramli or Tun Daim Zainuddin and even Tony Fernandes.
Perhaps the ill-repute of the Umno elite and their hold over the MACC is better known worldwide than they care to acknowledge. It is telling that Mumbai-based newspaper The Indian Express has reported that the Enforcement Directorate, which combats money laundering and foreign currency leakages, has stepped up investigations into Aircel, which is the Indian mobile phone operator that Ananda bought and for which he is being probed.
ED officials will send a letter rogatory, which is a formal request from a court to a foreign court, to Malaysia seeking legal assistance to question Ananda and Marshall. But surprise! surprise! The Malaysian judiciary is just as 'independent' as the MACC!
Shifting sands
This shows that Mahathir is still numero uno in both the corridors of power in Putrajaya as well as in corporate Malaysia, where some of the richest and most powerful business players owe their success to his direct intervention when he was still prime minister.
Sadly for Malaysia, Mahathir is not a democrat at heart, and this may be an understatement. Some of his actions in the past indicate an outright autocratic streak.
Over the years he resented institutional checks on his Executive powers and plotted to have them removed. He was ruthless with those who opposed him. As early as 1983, he unilaterally cut away many of the privileges belonging to the Royalty. He also made the Internal Security Act more severe on the pretext of preventing racial tensions, with more curbs on the media, used federal funds to force the politically 'disobedient' states to toe the line, interfered with the judiciary, and in 1988 sacked the Lord President for "gross misconduct". In case that was not enough, Mahathir also sacked five more Supreme Court Judges for good measure.
Yet Mahathir was the most popular and most powerful leader in Malaysia during his time. It was as if the country was under a fog, with few daring enough to challenge and expose him. Mahathir became a power unto himself, brooking no intereference, not even from international bodies. Going against conventional wisdom and disregarding any public apprehension over the 1997 Asian financial crisis, Mahathir introduced currency controls and weathered the storm refusing advice from the IMF.
His affirmative action in Bumiputra policies did not evoke the bitterness that was experienced in other countries such as Indonesia. Perhaps he was lucky or maybe as president of UMNO, Mahathir wielded enough authority over the Malays to keep them in check. It looks like he is still an influential factor despite the passing years and Malaysia has seen two other prime ministers succeeding him.
Umno elite kiss and tell
Obviously, Najib will not take this lightly and surely more news concerning the wrongdoings of Mahathir and his cronies will see the light of day. Yes, this is another favourite ploy amongst the Umno warlords. They kiss and tell among themselves.
Such moves by the Najib camp in using bad press to gag a rival seems to have worked against Abdullah Badawi. Badawi was easily silenced after the news of efforts to bribe him in connection with a banknote contract surfaced. It followed soon after Badawi's meeting with Ambiga Sreenevasan, the head of the outlawed Bersih rally for free and fair elections. But Mahathir is not Abdullah and will not be easily cowed with bad press.
So Malaysians can expect more headlines concerning Mahathir’s cronies to hit the news as he takes on Najib. And while all this is going on, Malaysia will remain in limbo as the world steps closer to an economic recession that even Mahathir admits will take a very long time to recover from. So for Ananda, there is some Dutch comfort, he won't be alone in the global limelight for long.
Leaders in the MCA, the BN’s Chinese component and second-biggest party, have yet to close ranks and set aside their bitter rivalry despite their recent annual general meeting two weeks ago.
They have been practically written off as irrelevant by its ethnic community they were sworn to represent as more and more Chinese Malaysian businessmen are selling off their public-listed shares and moving their operations, or threaten to, outside the country.
But another political scientist, Mohammad Agus Yusoff, said Najib has little time to weigh his options and must call for elections in January or at the very latest by March next year to capitalise on his Budget 2012, which was designed to please the populace.
“But it’s not good for the country and is not a solution to our economic problem. It’s going to increase the government’s deficit because the money is funded by borrowings. We can’t depend so much on borrowings,” he told The Malaysian Insider.
CPPS’s Ng, who deals with public policies, shared the same view. She said Najib will be taking calculated risks in calling elections early but if he waits till full term, the vulnerable economic situation will become worse and a stronger civil society could emerge.
The Bersih 2.0 rally was led by a coalition of 62-registered civil societies who appear to have gained strength from the global support for their demands, especially from the critical western nations.
The lessons of July 9 seem to have spurred them further to realise their individual causes. Most recently, the anti-Lynas grassroots group from Najib’s home state, Pahang, has boosted its representation and delayed the operations of Australian rare earth miner in the coastal town of Gebeng.
“Najib is holding a double-edged sword whether he calls for elections early or waits out the full term,” Ng said.
Mohammad Agus said if Najib chooses to call polls after March, the latter will lose the momentum from the budget and must start all over again.
The UKM professor in history, politics and strategy studies said: “It won’t be an election budget anymore… The government is under siege. We badly need to restructure the economy.”
This year has witnessed a global wave of social and political turmoil and instability, with masses of people pouring into the real and virtual streets: the Arab Spring; riots in London; Israel’s middle-class protests against high housing prices and an inflationary squeeze on living standards; protesting Chilean students; the destruction in Germany of the expensive cars of “fat cats”; India’s movement against corruption; mounting unhappiness with corruption and inequality in China; and now the “Occupy Wall Street” movement in New York and across the United States.
While these protests have no unified theme, they express in different ways the serious concerns of the world’s working and middle classes about their prospects in the face of the growing concentration of power among economic, financial, and political elites. The causes of their concern are clear enough: high unemployment and underemployment in advanced and emerging economies; inadequate skills and education for young people and workers to compete in a globalised world; resentment against corruption, including legalised forms like lobbying; and a sharp rise in income and wealth inequality in advanced and fast-growing emerging-market economies.
Of course, the malaise that so many people feel cannot be reduced to one factor. For example, the rise in inequality has many causes: the addition of 2.3 billion Chinese and Indians to the global labour force, which is reducing the jobs and wages of unskilled blue-collar and off-shorable white-collar workers in advanced economies; skill-biased technological change; winner-take-all effects; early emergence of income and wealth disparities in rapidly growing, previously low-income economies; and less progressive taxation.
The increase in private- and public-sector leverage and the related asset and credit bubbles are partly the result of inequality. Mediocre income growth for everyone but the rich in the last few decades opened a gap between incomes and spending aspirations. In Anglo-Saxon countries, the response was to democratise credit – via financial liberalisation – thereby fuelling a rise in private debt as households borrowed to make up the difference. In Europe, the gap was filled by public services – free education, health care, etc. – that were not fully financed by taxes, fuelling public deficits and debt. In both cases, debt levels eventually became unsustainable.
Firms in advanced economies are now cutting jobs, owing to inadequate final demand, which has led to excess capacity, and to uncertainty about future demand. But cutting jobs weakens final demand further, because it reduces labour income and increases inequality. Because a firm’s labour costs are someone else’s labour income and demand, what is individually rational for one firm is destructive in the aggregate.
The result is that free markets don’t generate enough final demand. In the US, for example, slashing labour costs has sharply reduced the share of labour income in GDP. With credit exhausted, the effects on aggregate demand of decades of redistribution of income and wealth - from labour to capital, from wages to profits, from poor to rich, and from households to corporate firms - have become severe, owing to the lower marginal propensity of firms/capital owners/rich households to spend.
The problem is not new. Karl Marx oversold socialism, but he was right in claiming that globalisation, unfettered financial capitalism, and redistribution of income and wealth from labour to capital could lead capitalism to self-destruct. As he argued, unregulated capitalism can lead to regular bouts of over-capacity, under-consumption, and the recurrence of destructive financial crises, fuelled by credit bubbles and asset-price booms and busts.
Even before the Great Depression, Europe’s enlightened “bourgeois” classes recognised that, to avoid revolution, workers’ rights needed to be protected, wage and labour conditions improved, and a welfare state created to redistribute wealth and finance public goods - education, health care, and a social safety net. The push towards a modern welfare state accelerated after the Great Depression, when the state took on the responsibility for macroeconomic stabilisation - a role that required the maintenance of a large middle class by widening the provision of public goods through progressive taxation of incomes and wealth and fostering economic opportunity for all.
Thus, the rise of the social-welfare state was a response (often of market-oriented liberal democracies) to the threat of popular revolutions, socialism, and communism as the frequency and severity of economic and financial crises increased. Three decades of relative social and economic stability then ensued, from the late 1940’s until the mid-1970’s, a period when inequality fell sharply and median incomes grew rapidly.
Some of the lessons about the need for prudential regulation of the financial system were lost in the Reagan-Thatcher era, when the appetite for massive deregulation was created in part by the flaws in Europe’s social-welfare model. Those flaws were reflected in yawning fiscal deficits, regulatory overkill, and a lack of economic dynamism that led to sclerotic growth then and the eurozone’s sovereign-debt crisis now.
But the laissez-faire Anglo-Saxon model has also now failed miserably. To stabilise market-oriented economies requires a return to the right balance between markets and provision of public goods. That means moving away from both the Anglo-Saxon model of unregulated markets and the continental European model of deficit-driven welfare states. Even an alternative “Asian” growth model - if there really is one - has not prevented a rise in inequality in China, India, and elsewhere.
Any economic model that does not properly address inequality will eventually face a crisis of legitimacy. Unless the relative economic roles of the market and the state are rebalanced, the protests of 2011 will become more severe, with social and political instability eventually harming long-term economic growth and welfare.
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