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!

Read it HERE

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.

Read it HERE

UNDP MHDR Third Campus Round UUM

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

Read it HERE

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

Malaysia Fund's Debts Make Defending Ringgit Tougher

Bloomberg Business
by Y-Sing Liau
Published on 27th February 2015

(Bloomberg) -- Malaysia’s task in propping up Asia’s worst-performing currency just got a lot tougher.

The cost of options protecting against further ringgit declines approached a 1 1/2-year high on speculation 1Malaysia Development Bhd., the state investment fund, will need a bailout. The currency is already languishing at its weakest level since 2009 as the oil-exporting nation suffers amid sliding crude prices.

“The market remains wary of 1MDB’s ability to repay its debt,” Irene Cheung, a foreign-exchange strategist in Singapore at Australia & New Zealand Banking Group, said Feb. 24. “The ringgit is vulnerable to the near-term outlook for oil prices. A recovery is difficult.”

A weaker currency is a concern for Malaysia because it pushes up the cost of servicing the second-highest external debt burden among Asia’s developing nations. Further losses in the ringgit may hasten an investor exodus from Malaysian assets and hurt the government’s efforts to rein in its budget deficit.

The ringgit has tumbled 7.4 percent in the past three months, the most among 11 Asian currencies tracked by Bloomberg, and touched a six-year low of 3.6460 a dollar on Feb. 23.

Chapter 2: Training Days Episode 4: Go West, Young Man is OUT NOW!

Read it Here

Saudis’ Oil Price War Is Paying Off

by Grant SmithAnthony Dipaola
Published in Bloomberg Business
on 27th February 2015

Three months after Saudi Arabia made clear it was going to let oil prices keep tumbling, the strategy is showing signs of working.

U.S. drillers are idling rigs at a record pace, gutting investment plans and laying off thousands of workers.

Those steps highlight how the Saudi-led OPEC decision on Nov. 27 to maintain output levels and protect its market share is having the desired effect -- pushing prices down so far that they threaten to curb output in the U.S. and other non-OPEC countries. Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries, will maintain that tack when the group next meets in June, according to some of the world’s biggest banks.

“OPEC giving up on trying to control the price is working,” Francisco Blanch, head of commodities research at Bank of America Corp. in New York said by phone. “It is having the effect that we would expect, which is a decline in investment and ultimately supply, and somewhat higher demand. We think this change is for good.”

The number of rigs drilling for oil in the U.S. dropped by 37 last week to 1,019, the fewest since July 2011, data from Baker Hughes Inc. showed Feb. 20. Since Dec. 5, a total of 556 have been taken out of service. Oil explorers including Royal Dutch Shell Plc and Chevron Corp. have announced spending cuts of almost $50 billion since Nov. 1.

Public Lecture: Size Matters: Why is it so Small and How to enlarge It, the Middle Class.

Size Matters:  Why is it so Small and How to enlarge It, the Middle Class.

By Tan Sri Datuk Dr. Kamal Salih

Abstract of Lecture

The lecture will address the issue of the middle class in inequality and Inclusive Growth, which entails lifting households out of poverty and facilitating upward, especially inter-generational, mobility through graduation to middle class status. Noting the difference between the “aspirational” middle class reported by the World Bank recently which was put at 65% of all households, while the finding of the first Malaysian Human Development Report 2014 put the “actual” middle class size, defined in income terms by the World Bank as those households positioned between 20% above and below the median income, has remained relatively small for Malaysia, trending around the 22% level when in comparison in the typical developed country situation the percentage is closer to 50-55%, the lecture will attempt to explain why the Malaysian middle class is relatively so small through historical comparisons as well as with countries at a similar stage of development. 

This lecture will note that the median income profile of the NEP generation improved more rapidly than that of the earlier generation and in comparison with  the post-NEP generation, though the median levels of incomes are higher for the latter.  In other words middle class formation was fastest during the implementation of the NEP in the twenty-year period involved, but evidently not in the liberal and globalization era after the Asian Financial Crisis of 1997. 

The lecture will also describe the status of the middle class in terms of the composition of its fiscal capability. While the bottom 50% has wages/salaries making up 97% of their purchasing power, the upper part of the middle class would exhibit a similar pattern to the upper 50% with contribution from wealth effects approaching 11% and increasing as they climb the income ladder.  In other words, on the basis of household fiscal capability Malaysia essentially exhibits a two-class social stratification, with inequality diminishing between ethnicities but within-group income gaps rising more and more to obliterate the NEP-based ethnic classification as a relevant issue of equity in development.   Income inequalities then become essentially a question of class. 

The lecture will seek to find the factors behind this, including issues such as the contribution of labour productivity to per capita income growth, wage-productivity gap and the wage premium, and the distortions attributable to policy and institutional failure, and conclude with some exploration of how to enlarge the middle class through appropriate interventions through the next generation of development policies.