Chapter 4: The MIER Years, Episode 4: Son of the NEP is NOW OUT!!

Read it HERE

Dr. Mahathir didn’t seem to be worried about the situation.  It was about a year away from the end of the First Outline Perspective Plan (OPP), the twenty year timeframe from 1971 through to 1990, marking the formal end of the New Economic Policy, that was mandated by the National Consultative Council in 1970 to be implemented over the twenty years.  The national consensus was to restructure Malaysian society and eradicate poverty on the back of the May 13th Incident.  At this time the government was focussed on consolidating the nation’s recovery from economic recession of 1985. 

Read it HERE

Achieving Malaysia's Potential

Tengku Razaleigh Hamzah

14 July 2015

Kuala Lumpur - Today, 14 July 2015, marks the 40th day of the passing of my dear wife.  As I overcome the sadness of her absence, I feel freer now to reflect upon and address the goings on in Malaysia during the last several months.

2.  We are being constantly bombarded with an overdose of news about the sorry state of our national finance.  Controversies abound and purported mega financial scandals are being discussed and gossipped over social media.  Gripes about this situation are making the round.  Not least is the dire strait that our sovereign fund, 1MDB, finds itself in.

3.  However, the reality is that all these remain mere talk and nothing has changed.  In effect, currently there is much confusion in the people's minds which have to process statements whose veracity is suspect and might not reflect the true situation.

4.  We earnestly hope that there is still honour left in our beloved country and that there are honourable men who have the relevant facts to put the matter to rest.  They should stand fast by their principles and take the moral high ground to assist in the resolution of the problem.  If this were the case, surely there is no necessity for us to waste time instituting inquiries and investigations.  Knowing the facts and the problem not telling the truth is not an option.

5.  Such an action would enable the country to restore our battered and damaged image and dignity within the world community.  This is essential in our effort to rebuild the confidence that was painstakingly developed by our founding fathers.

6.  Most importantly, we must stay focussed on the more immediate concern facing our people; that is, the economic and financial difficulties due to the shrinking Ringgit and the indifferent take-home salaries and wages made worse by the spiraling cost of such essentials such as motor fuel and burdensome impositions such as the GST.  Given the crisis we are facing, it would not be unreasonable to defer the GST as it has a negative impact on ordinary people.  To mitigate the loss of revenue, it could be replaced by some other taxation.  We must alleviate the hardship of the people in their trying to make ends meet.  We must address how the ever increasing living cost can be mitigated and overcome.

7.  It is undeniable that life is a constant struggle for the many.  They worry about the future of their children and grandchildren.  They fret about the continuously deteriorating quality of life.  Indeed they deserve better.  A particular socio-economic issue creating much worry among the people is the lack of a financial safety net to provide economic security for retirees.

8.  Worries about unemployable graduates must necessarily lead us to the type of education that we are giving to our children.  This does not quite prepare them for employment.  What should we do?  Perhaps the country could adopt a national education policy that can withstand the test of time.

9.  We must, therefore, stop bickering, squabbling and politicking.  We must close ranks and come together to achieve the rich potential that has always been our feature.  We should consider a total overhaul of the system.

On that note, I wish every Malaysian "Selamat Hari Raya Aidil Fitri" and happy holiday ahead.

Tengku Razaleigh Hamzah

Member of Parliament Gua Musang

Kuala Lumpur

14th July 2015

27 Ramadhan 1436H

Greece Reaches Deal with Creditors, Avoids Euro Exit

By Pan Pylas and Raf Casert, Associated Press

Associated Press

Published on 13 June 2015

BRUSSELS (AP) -- After months of acrimony, Greece finally clinched a bailout agreement with its European creditors on Monday that will, if implemented, secure the country's place in the euro and avoid financial collapse.

The terms of the deal, however, will be painful both for Greeks and their radical left-led government, which since its election in January had vowed to stand up to the creditors and reject the budget cuts they have been demanding.

Before it can get 85 billion euros ($95.07 billion) in bailout cash and support for its banks to reopen, the Greek government will have to pass a raft of austerity measures that include sales tax increases, reforms to pensions, and labor market reforms.

Greece will be on a tight timetable to implement its reforms — a reflection of how little its creditors trust the government to honor a deal.  Greek Prime Minister Alexis Tsipras infuriated his European partners last month when he called for a popular vote against economic reforms the creditors has proposed.

Explaining the Greek Debt Crisis and What It Means for the Eurozone

New York Times
By LIZ ALDERMAN
Published April 8, 2015

Updated: June 28

Greece, the weak link in the eurozone, is inching closer to defaulting on its debt. The country has been in a long standoff with its European creditors on the terms of a multibillion-dollar bailout. If the country goes bankrupt or decides to leave the 19-nation eurozone, the situation could create instability in the region and reverberate around the globe.

A statue of the goddess Athena in Athens. Greece is struggling to avert bankruptcy.Credit

Aris Messinis/Agence France-Presse — Getty Images

What’s the latest?

The European Central Bank said on Sunday that it would not expand the emergency loan program that has been propping up Greek banks in recent weeks. But at the same time, the bank did not cut off support entirely, giving the Greek government some extra flexibility in the coming days

Chapter 4: The MIER Years Episode 3: Policy Waltz is NOW OUT!!

Read it HERE

The view of Mt. Cook from the lounge of the Hermitage Hotel set in the plain of the glacier valley of the famous New Zealand mountain was tourist-poster perfect.  It was early summer in the second year of MIER’s establishment, and I was a guest of the New Zealand government under its ASEAN visiting fellows programme, to acquaint myself with policy research in that country’s economic reform plans. 

Read it HERE

RMK11 – MERANCANG UNTUK GAGAL

Darah Tuah Blog

Written by Datuk Akbar Ali, Former Senator

7 June 2015

A forgotten and broken promise?:

“A fair distribution must encompass the whole spectrum of measuring wealth such as equity ownership, other financial and non-financial assets, and access to wealth creating opportunities such as long term concessions and contracts. Even in measuring ownership, it should go beyond equity to include other properties, such as retail, landed properties, comercial buildings, intelectual property and other services as well as managerial positions” – Janji YAB Dato’ Sri Mohd Najib pada 30 Mac 2010 semasa melancarkan MBE.

Pengenalan

1. Sebelum saya pergi jauh, eloklah saya menarik perhatian kepada pengakuan ikhlas YAB DS Najib bahawa era kerajaan tahu semua telah berakhir. Justeru terimalah pujian, teguran dan syor saya ini mengenai RMK11 dengan berlapang dada dan seterusnya baikilah dokumen penting tersebut demi faedah kita bersama (https://darahtuah.wordpress.com/2015/05/21/rmk11-jangan-harapkan-miracles-jurang-akan-melebar%e2%80%8f/).

2. Diakui bahawa sebahagian besar kejayaan negara kita adalah kerana adanya perancangan yang dipandu oleh Rancangan Pembangunan 5 Tahun yang berturutan dari RM Pertama hinggalah ke RMK11 ini. Tidak perlulah saya mengulangi angka-angka yang telah disebut oleh YAB PM, seperti tahap daya saing yang mengukuh, untuk menyokong hakikat negara kita telah berjaya.

3. Pada masa yang sama, bermacam data telah dipaparkan dalam RMK11 untuk membuktikan kejayaan tersebut. Ia merangkumi kedua-kedua bidang ekonomi – ekonomi modal dan ekonomi rakyat.

4. Cukuplah sekadar saya merujuk kepada Human Development Index (HDI ) yang meletakkan Malaysia di kalangan High Human Development countries dan kini kita berada di tangga ke 62 di antara 187 buah negara. Tahniah kepada kerajaan di atas kejayaan tersebut dan khasnya kepada EPU berhubung penyediaan Rancangan ini.

5. Selain daripada Rancangan Pembangunan Lima Tahun ini kita juga mempunyai rancangan-rancangan besar yang lain seperti dalam bidang pendidikan, pembangunan belia dan industri.

6. Kita juga mempunyai dasar-dasar utama seperti Hanruh, Dasar Pertanian Negara dan Dasar Automotif Negara, selain Model Baru Ekonomi.

Dasar Induk

7. Walaupun banyak dasar dirangka, malangnya kita masih tidak merangka Dasar Induk (Mother Policy)seperti yang terdapat di Switzerland. Switzerland mempunyai dasar induk yang dipanggil Total Security.

8. Dasar induk inilah yang menjadi penentu dan pengikat semua dasar dan program kerajaan yang lain secara coherent agar ianya inter connected atau adanya vertical and horizontal integration. Yang demikian, semua dasar dan program kerajaan yang dirangka mestilah menjurus ke arah turut menyokong kejayaan Total Security tersebut demi survival dan keselamatan negara berkenaan.

9. Di negara kita juga terdapat raison detre mengenai keperluan mewujudkan dasar induk negara, terutama berhubung pemeliharaan perpaduan dan keamanan kerana hubungan antara kaum di Malaysia amatlahfragile, polarisasi kaum semakin ketara dan suhu perkauman terus meningkat. Dengan dasar yang tegas dan consistent ini maka bolehlah perpaduan dan keamanan itu dipelihara.

10. Sebaliknya, kerana ketiadaan dasar induk itulah maka kita lihat dasar dan program kita sering berubah-ubah dan juga dilihat sering berkontradiksi. Hal sedemikian itu boleh meletakkan para pelaksana dasar dalam keadaan yang kelam kabut dan membuat rakyat pula marah. Seterusnya boleh hilang keyakinan rakyat terhadap kerajaan. Contoh yang jelas ialah kontroversi ekoran hasrat YAB Perdana Menteri hendak memansuhkan Akta Hasutan 1948 dan kemudian menubuhkan pula MKPN (NUCC).

11. Buat kesekian kalinya saya mengesyorkan (pernah saya syorkan di Dewan Negara) agar kerajaan menggubal Dasar Induk Negara. Contohnya Perpaduan Nasional.

RMK11 – Tiada Political Will

Time to move Beyond Bumiputera Agenda, says Saifuddin

The Malaysian Insider
BY ANISAH SHUKRY
Published: 30 May 2015 5:24 PM

Former Umno supreme council member Datuk Saifuddin Abdullah
believes it is time to move beyond polices that target
favour the Bumiputera.
The Malaysian Insider file pic, May 30, 2015.

Putrajaya should not have included a Bumiputera agenda in the 11th Malaysia plan (11MP), given that poverty and income inequality is no longer defined by race, says former Umno supreme council member Datuk Saifuddin Abdullah.

Saifuddin, who is also the Global Movement of Moderates CEO, today said he hoped the plan would look beyond race and focus on boosting the wealth of all Malaysians, as recommended by the Malaysia Human Development Report 2013.

“Today, the main issue with regards to inequality is no longer interethnic inequality but intra-ethnic inequality. I was hoping the 11th Malaysian plan would continue with that discourse,” Saifuddin told a conference organised by Harmony Malaysia in Petaling Jaya.

“That’s why I am saddened that we still have the Bumiputera agenda in the 11MP. I thought the 11MP would be the first ever plan where we do not address race-based policies and look at it purely as needs-based policies.”

He said that if Putrajaya addressed poverty through needs-based policies, all races could benefit from it including the Bumiputera.

Saifuddin added that Malaysians needed to seriously discuss a timeline for the country to stop focusing on Bumiputera policies and privileges.

“The problem is that people think this is a sensitive matter that cannot be discussed, and if you discuss it you risk being charged under the Sedition Act. But we should discuss this,” said Saifuddin

The Malaysia Human Development Report 2013 found that since 1970, inequality between ethnic groups has decreased and contributes only about 4% to Malaysia’s overall inequality in 2009.

In terms of relative poverty, it noted that the rate among the Malays was 19.1%, followed closely by the Chinese at 17.9% in 2012.

Intra-ethnic inequality, however, has risen, contributing to 95% of total income inequalities among Malaysian households, according to the report commissioned and published by the United Nations Development Programme.

Through the 11MP, the federal government outlined five strategies to enhance Bumiputera Economic Community to increase wealth ownership.

The plan detailed how the government would empower Bumiputera human capital and enlarge Bumiputera wealth ownership share.

However, Malay rights group Perkasa has complained that the five-year development blueprint sidelined the Bumiputera agenda, because only 5% of the 389-page document mentioned the Bumiputera economic strategy.

Perkasa president Datuk Ibrahim Ali said on Thursday Putrajaya should reevaluate the 11MP, as its focus on the Malay Bumiputera position was “not very obvious”.

Prime Minister Datuk Seri Najib Razak launched the 11MP on May 21 as the final lap to thrust the country into developed status by 2020. – May 30, 2015.

Chapter 4: The MIER Years Episode 2: A Bright Outlook is OUT NOW!

Read it HERE

The first National Outlook Conference (NOC) was set for the first Tuesday of December of 1986, for two days.  Following a structure that was retained for every subsequent annual national outlook conference held by the Institute, the inaugural 1986 NOC was planned as the official launch of MIER.  After the opening speeches, by the chairman of the Board of Trustees, and Tun Daim the Minister of Finance as the guest of honour, the first session in the morning would cover the world and regional economic forecasts and followed by the main feature, the MIER economic forecast for Malaysia for the following year, in this case for 1987.

Read More HERE

In the News: A New Game Plan to take Malaysia Further

The Star Online
By Michelle Gyles-McDonnough
Published: Monday May 18, 2015 MYT 12:00:00 AM

THIS month, Malaysia will be launching the 11th Malaysia Plan, which will serve as a platform to transition from a developing nation to a developed nation in 2020.

To reach Vision 2020, a set of important and deep reforms are needed to ensure the country not only achieves the target level of Gross Domestic Product or income per capita, but also that the growth process and the resultant development gains are inclusive, resilient and sustainable.

As we look ahead to 2020, it is imperative to reflect, as the Government is presently doing, upon past successes and the unattained milestones and remaining challenges. It is also imperative to acknowledge new challenges – par for the course in a dynamic world – and make the best decisions for the future.

The challenges include: the growing concern over relative and multidimensional poverty, especially in the states of Sabah and Sarawak; the persistent and increasing inequality of wealth and assets on the back of wage stagnation; the lack of a proportional middle-class growth, despite steady and rapid economic changes; persistent gender gaps in terms of pay, employment, and participation in decision-making; and the continuing need to address the complexities of affirmative action and vehicles for securing inclusion, social cohesion and harmony in a multiracial and multicultural society.

For this, Malaysia would need a new game plan.

Therefore, the Malaysia Human Development Report (MHDR) 2013: Redesigning An Inclusive Future, launched by UNDP in November last year, was to provide an assessment of Malaysia’s growth and policy choices in order to contribute to the development dialogue in the country before 2020.

The report is anchored in the idea that while economic prosperity may help people lead freer and more fulfilling lives, other non-income factors such as education, health and living standards play a vital role to influence the quality of people’s freedoms as well as the opportunities to realise their potential as human beings.

Chapter 4: The MIER Years Episode 1: Academic Fall-out is Now Out!

Read it HERE

A few years after I was settled into my MIER years,  I got feedback that Musa had acknowledged in Senate that the expansion plan that he was implementing in USM was in fact based on the ten-year plan I had introduced.  I was gratified to hear that, for it meant that my effort in USM was not wasted after all.

Read More HERE

The Big Mac Index

The Economist

By D.H. & R.L.W.

Published: January 22nd, 2015

THE Big Mac index was invented by The Economist in 1986 as a lighthearted guide to whether currencies are at their “correct” level. It is based on the theory of purchasing-power parity (PPP), the notion that in the long run exchange rates should move towards the rate that would equalise the prices of an identical basket of goods and services (in this case, a burger) in any two countries. For example, the average price of a Big Mac in America in January 2015 was $4.79; in China it was only $2.77 at market exchange rates. So the "raw" Big Mac index says that the yuan was undervalued by 42% at that time. 

Burgernomics was never intended as a precise gauge of currency misalignment, merely a tool to make exchange-rate theory more digestible. Yet the Big Mac index has become a global standard, included in several economic textbooks and the subject of at least 20 academic studies. For those who take their fast food more seriously, we have also calculated a gourmet version of the index.

This adjusted index addresses the criticism that you would expect average burger prices to be cheaper in poor countries than in rich ones because labour costs are lower. PPP signals where exchange rates should be heading in the long run, as a country like China gets richer, but it says little about today's equilibrium rate. The relationship between prices and GDP per person may be a better guide to the current fair value of a currency. The adjusted index uses the “line of best fit” between Big Mac prices and GDP per person for 48 countries (plus the euro area). The difference between the price predicted by the red line for each country, given its income per person, and its actual price gives a supersized measure of currency under- and over-valuation.

Find the Interactive Chart HERE.

The Episodes: Chapter 3: An Academic Firmament Episode 5: The Crisis of 1985 is Now Out!

Read it HERE

1985 was a year of crisis, for the country, for USM and for me personally.  All crises are turning points.  The Chinese said crises are also moments of opportunity.  And Allah said in the Holy Koran, “Fa innamaal ‘usriyusraa. Innamaal ‘usriyusraa.” (94: 5-6).  (For verily, with every difficulty there is relief.  Verily, with every difficulty there is relief).  He said it twice.

Read more HERE