The Episodes: Chapter 3: An Academic Firmament Episode 4: Conference of the Birds is Now Out!

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In the epic Persian sufi poem, Conference of the Birds, the writer Farid ud-Din Attar described the birds’ of the world search for a king, and led by the hoopoe, the wisest of them, at whose suggestion they went to look for the Simorgh, a legendary bird likened by the phoenix in western literature.  Flying over seven valleys (representing life’s struggles), thirty of them finally arrived at the dwelling of the Simorgh, there for them only to find a lake in which they could see only their reflection.  The allegorical poem is a reference to human qualities and failings (represented by each of the birds), the journey being a test of character for anyone to attain enlightenment (tauhid). It reminded me of events that propelled a life through a logic only the Divine can fathom because He ordained it.  The two strands of thought and action that wound through events in my life, one set academic and the other political, were brought together over the coming decade of my years in USM.  This intertwining of the professional and the political in my career only became unwound, only just, during the time I was at the Malaysian Institute for Policy Research, MIER, still ten years away.  Before then, it was as if I inhabited in two minds, sometimes in conflict sometimes in cahoots in determining the path of my life and career.  It was T. Jefferson Parker in his 1996 crime novel, The Triggerman’s Dance, which I was reading who quoted Aeschylus, “Man grows wise against his will”.  I had hoped that the USM experience would have made me wiser.

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The 11th Malaysia Plan and the Denial of Income Inequality

The Malaysian Insider

Rama Ramanathan

Published on 23 April 2015

For reasons best known to himself, the chairman of the Malaysian Rubber Board who happens to be the MP for Jasin, asked the government whether the gap between the rich and the poor was widening in Malaysia. The government’s response was: “No way!”

The government’s response was that Malaysia uses the Gini coefficient to measure income inequality and that the Gini for 2014 is 0.421, which is smaller than the Gini for 2012 (0.431) and for 2009 (0.441). The claim is “lower Gini, therefore lower inequality”.

Yet those who monitor such data know that in 1989, the Gini coefficient was 0.422. So, if the Gini coefficient were the only measure of inequality, the government would have to say that the inequality in 2014 was the same as it was 25 years ago.

In the News: Low Wages Linked to Fewer, Weaker Unions

The Malaysian Insider
BY SHERIDAN MAHAVERA
Published: 4 April 2015

The goods and services tax (GST) which kicked in on April 1 has turned the spotlight once again on the country’s low-wage rut, with economists pointing at the weakening bargaining power of workers, influx of migrant labour and national economic policies as the main causes.

A long-standing problem, experts have said low wages were the result of Malaysia's industrialization policy, which has long focused on the manufacturing sector.  But it also correlates with a steady fall in union membership, in part caused by dependence on foreign labour.

Dr Muhammed Abdul Khalid TMI
pic by Mukhriz Hazim April 4, 2015

In fact, an economist at a recent forum on the welfare of Malaysians, said better bargaining rights for workers, such as through unions, could ensure better wages and benefits. Dr Muhammed Abdul Khalid (pic), who co-authored the United Nations’ Malaysian Human Development Report 2013 (MHDR), said countries with high unionization rates tended to have citizens who were fairly paid.

Union proponents claimed that industrial productivity gains in the past few years have not been matched with a rise in wages, partly because the power of unions to press for them has been diluted by the flood of foreign workers.

The Episodes: Chapter 3 Episode 3 In the Academic Fast Lane is Now Out!

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The pace of my academic life continued to pick up even after the dust finally settled on the Baling demonstrations.  Even with the implementation of the Universities and University Colleges Act, the academics on campus tried to maintain a semblance of normality in their teaching and research work.  And with the adoption of the Harun Commission Report, academic terms and conditions of service improved, but the bureaucratization of academia had begun.  Over the next five years I managed to strike a balance between teaching, research and administrative work that were typical of the life of an academic.  But I had kept up such a pace in these activities that Terry McGee, after five years of my returning to Malaysia worried that I might suffer a premature burn-out if I didn’t slow down.   I noted but didn’t heed his advice.  Besides teaching young students, the biggest joy for me was the conduct of policy research.  And there were plenty of these issues on the table in the first decade of the implementation of the New Economic Policy, which was launched while I was still in training overseas.

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Tengku Razaleigh Hamzah's Speech in Parliament

Pada 30hb Oktober 2014, saya mengutus surat kepada setiap Ahli Dewan Rakyat tanpa pengecualian,suatu tindakan yang tidak pernah berlaku sebelumnya. Ia menitikberatkan kebimbangan saya yang amat sangat terhadap kesejahteraannegara kita yang tercinta serta kedudukan Dewan yang mulia ini.

2. Saya mengambil tindakan tersebutmemandangkan bahawa di dalam sesebuah demokrasi berperlembagaan, DewanRakyatlah merupakan institusi terakhir yang bertanggungjawab ke atas keadaannegara dan rakyat jelata. Di samping itu, sebagai Ahli Dewan Rakyat kita telahbersumpah untuk berkhidmat kepada negara serta menegakkan Perlembagaan demikepentingan rakyat Malaysia. Sayugia diingat bahawa sumpah setia itu bukanlahkepada parti ataupun pemimpinnya.

3. Sejak penulisan surat tersebut, keadaanekonomi dan politik dunia telah pun berubah secara mendadak. Barang diingatbahawa setiap negara saling bergantung antara satu sama lain. Ini bermaknaMalaysia tidak terlepas daripada merasai kesan perubahan ekonomi dan politikyang dialami dunia. Keadaan baru ini memerlukan kita mengambil kira danmenimbang perubahan yang perlu kita buat. Sekiranya kita hendak menyelamatkanrakyat, apa-apa cadangan kita untuk perubahan mestilah mampu menimbulkan kesan positif untuk mengatasi masalah berat yang melanda negara. Dalammenimbang apa jua perubahan, kita seharusnya memahami keadaan yang sedangmelanda negara. Yang demikian saya ingin nyatakan kerisauan saya terhadapkeadaan negara sekarang ini.

In the News: As GST kicks in, call to rescue Malaysia from low-wage rut

The Malaysian Insider
BY SHERIDAN MAHAVERA
Published: 30 March 2015 6:59 AM

As wage earners brace for higher spending under the goods and services tax (GST) that takes effect on Wednesday, they will feel the brunt of decades of Malaysia's economic policies which have kept wages low and local industries uncompetitive.

Low wages have not helped the government improve its revenue, as only 1.7 million Malaysians pay income tax out of a workforce of 12 million, and Putrajaya is seeking to increase earnings with the broad-based consumption tax.

But low wages are the legacy of Malaysia's industrialisation policy, which has long focused on making the country a low-cost, low value manufacturing hub.

Although this helped transform the economy in the early 1990s, experts are now warning that a new industrialisation policy is needed, as there are worrying signs that the government’s push for developed status in five years is not raising the incomes of the majority of people.

The call to reform the manufacturing sector is the key to solving the problem of low wages, said Yin Shao Loong, executive director of the think-tank Institut Rakyat.

Deciphering the Fall and Rise in the Net Capital Share

Brookings
Brookings Papers in Economic Activity
By: Matthew Rognlie
Published on 19th March 2015

ABSTRACT

In the postwar era, developed economies have experienced two substantial trends in the net capital share of aggregate income: a rise during the last several decades, which is well-known, and a fall of comparable magnitude that continued until the 1970s, which is less well-known. Overall, the net capital share has increased since 1948, but when disaggregated this increase comes entirely from the housing sector: the contribution to net capital income from all other sectors has been zero or slightly negative, as the fall and rise have offset each other. When decomposed into a return on fixed assets and a residual share of pure profits, the fall and rise of capital income outside the housing sector in the US owes mostly to the residual: it is not paralleled by fluctuations in the measured value of non-housing capital. This observation—combined with the theory of factor substitution, and simulation results from a multisector model—casts doubt on explanations of changes in the net capital share that rely on changes in the value of capital. There is greater support in the data for narratives that emphasize cyclical and trend variation in market power.

The Elusive Quality of Inclusive Growth

Malaysian Insider
Rash Behari Bhattacharjee
Published on 28th March 2015

The 11th Malaysia Plan (2016-2020), which is due to be tabled in Parliament in June, has a special significance because it marks the final phase of the nation’s Vision 2020 development agenda, which is envisaged to take the nation to developed country status.

In a sense, it could be a marker of the nation’s coming of age as a member of the international community, a point in its journey as an independent state when it can be measured against its record of delivering progress and prosperity to its people, how well it has nurtured its society and how it contributes towards a better world.

In other words, it could mark a time when Malaysia can be considered grown-up, with all the rights and responsibilities that come with that status.

Many questions arise in this connection as the achievement of that goal would change quite a few assumptions about who we are, what we do and how our people live and die.

These include how a “First World” economy is defined, whether we can indeed achieve that goal at the end of this decade, whether the “developed nation” label makes sense to the underserved sectors of our society, whether we have got our priorities right, whether we are in fact heading in the opposite direction in some respects, and many more such thought-provoking issues.

The Episodes: Chapter 3 Episode 2 Year of Living Dangerously is Now Out!

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On November 19, 1974, more than 1,000 rubber smallholders and farmers demonstrated in Baling, Kedah, over falling rubber prices and rising cost of essential food items such as sugar and flour.  The demonstrations went on for another two days.  And grew by the third day to more than 13,000. They demanded that the government announce measures to alleviate the suffering of the people within 10 days.  When the deadline expired with no response from the government, on December 1 about 30,000 people massed and marched through Baling to show their growing frustration.  When students from the University of Malaya and ITM started their own demonstration on their campuses in sympathy with the plight of the villagers, the police moved in with tear gas to breakup the protest.  Anwar Ibrahim and Ibrahim Ali were among the leaders of this student demonstration.

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UNDP MHDR Third Campus Round UUM

Chapter 3: An Academic Firmament; Episode 1: Coming Home is NOW OUT!

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The Episodes: Chapter 2 Episode 5 is Now Out!

By the time I arrived at Penn, regional science was more than ten years old and the field of choice for those interested in the regional impacts of national or global processes of economic and social change.  In 1969, Isard and his students had published the General Theory of social, economic, political and regional change, and this became the main text of the theory course conducted by Isard.  I was profoundly influenced by this text, which defined much of my approach to policy analysis in my future work.

Read Chapter 2: Training Days Episode 5: Walter Isard’s Legacy Here