Friday, June 15, 2018

The original KLEPTOCRATIC regime

Extracts from Nikkei Asian Review:

Before Mahathir looks to the future he must exit the past

by William Pesek - 04 June 2018

Mahathir Mohamad circa 1998 would not recognize 2018's Mahathir -- and that is a good thing.

As prime minister in the 1990s, Mahathir was the father of Malaysia's modernization, presiding over rapid industrialization and huge infrastructure projects that put it on the global investment map.

But investors came to distrust his autocratic tendencies, anti-capitalist rhetoric and the ways of a regime that critics denounced as kleptocratic.

They took the opportunity to flee amid the 1997-1998 Asian crisis. 

Today, at 92, Mahathir seems downright warm, fuzzy and business-friendly. In an uncharacteristically calm voice following last month's surprise election win, Mahathir said: "We strive to be a trading nation. A trading nation means markets and you do not quarrel with your markets. You try to be friends with them." [...]

But the bad news is that Mahathir has yet to articulate plans to overcome the biggest challenges facing Malaysia.

The most immediate is impressing investors. Mahathir's initial priority is reining in government finances he says are in a "horrid state." How, though, can he reconcile the bevy of populist handouts he promised voters with his fiscal disciple pledge?

As Finance Minister Lim Guan Eng told the South China Morning Post a few days ago, "we want to be a 'what you see is what you get' government.'"

It is hard not to see that Mahathir's pledges to cut taxes, renew fuel subsidies, write off farmers' debt and dole out cash bonuses to civil servants and pensioners will be impossible to meet.

Plans to scrap the 6% national goods-and-services tax alone makes meeting 2.8% fiscal deficit target for 2018 (from 3% in 2017) seem fanciful.

more expensive without GST??? 

Mahathir also will face difficulties instilling financial discipline within his Pakatan Harapan coalition, which is ruling for the very first time.

The new government is being creative in launching a crowdsourcing effort to reduce national debt. A few donations, though, will be no panacea for a prime minister who promised far more in largesse than tax receipts are likely to generate.

Bringing the top executives of state-owned enterprises to account and tightening corporate governance must be priorities. Open tenders in public procurement should come as soon as possible. The push for transparency and efficiency would also get a serious boost by listing state oil company Petronas. It would be a vital first step toward reducing the role of state companies, paying down debt and signaling to investors that Malaysia is pro-business.

Mahathir must reverse steps he took in the 1990s to weaken the judiciary, water down parliament's powers, jail critics and neuter the media. Sadly, Najib learnt from his former mentor and deepened the assault on institutions that hold leaders accountable.

There is also the matter of foreign economic partners. Mahathir criticized Najib's cozy ties with China and his overreliance on mainland cash. Malaysia, Mahathir warns, risks becoming "the next Sri Lanka," a reference to heavy debts smaller countries take on as part of Chinese infrastructure projects.

In the search for alternatives, Mahathir would be wise to renew his old friendship with Japan, where he is due to pay a visit this month. Prime Minister Shinzo Abe, after all, is anxious to expand Japan's influence in Southeast Asia. Abe could kick in a generous plan to build a bullet-train link from Kuala Lumpur to Singapore -- with Tokyo and the private sector assuming most of the cost so as not to wreak Malaysia's balance sheet.

Mahathir could reciprocate by giving Tokyo greater access to Malaysia's resources. It is a win-win that would throw Beijing off balance.

Dr M must prove the 90s are really over. Last week, another blast from Mahathir's past, financier George Soros, warned "we may be heading for another major financial crisis."

In the late 90s, remember, Mahathir blamed Soros -- whom he called a "moron" -- for the ringgit's sharp drop. Now, as the ringgit comes under downward pressure anew, Mahathir is pointing to Najib's neglect. But Mahathir should look in the mirror, too.

In the years after 1997 and 1998, Indonesia, the Philippines, South Korea and Thailand, to varying degrees, let the forces of creative destruction cleanse financial systems. Mahathir's approach was from the populist playbook: impose capital controls, call currency trading "illegal" and circle the wagons. As a result, Malaysia still has one foot stuck in a bygone economic era.

Voters are looking forward as they give Mahathir a chance to right the wrongs of two decades ago. Mahathir, in turn, has the future in mind with plans to pass the baton to Anwar Ibrahim, his 70-year-old ally, in a year or two. Both men need to bridge the gap between the vibrant Malaysia of their dreams and political reality.

An obvious way it to shake up Malaysia's sprawling bureaucracy.

The new government plans to save about $2.5 billion on such reforms this year. Why not raise those ambitions? A labyrinthine bureaucracy that protects the status quo. It keeps the fruits of Malaysia's 5% annual economic growth from trickling down to those being left behind.

The downhill journey for our once-impeccable Civil Service started with Operasi Isi Penuh which doubled its workforce of approximately 400,000 to a massive 800,000 in 1983.

The very title of that operations Isi Penuh gave an inkling of the recklessness of the recruitment into the Malaysian Civil Service (MCS).

The conceptualizer was none other than then-PM Mahathir

Like most of his schemes, his Operasi Isi Penuh was a terrible failure.

But in fixing a tactical problem he endowed us with a strategic headache, as he had done so with so many other issues, eg. judiciary, senate, forex, bmf, bank bumiputra, maminco, memali, Sabah illegal influx, perwaja, proton, bakun, road tolls, etc etc etc - so what's new?.

for more see:

(a) Isi Overflow?
(b) Ops 'Isi Penuh' revisited

Perhaps the greatest challenge of all is the country's deep-rooted system of race-based quotas, which discriminate in favor of the dominant ethnic Malays at the expense of the Chinese and Indian ethnic minorities.

Mahathir and Anwar are painfully aware of the political passions involved. Back in the 1990s, when Anwar was Dr M's deputy prime minister, he enraged his boss by calling for an end to affirmative action.

Now, Anwar 2.0 is telling Malays fearing a loss of status and benefits not to worry. The new government, he says, will "honor the guarantees" for so-called Bumiputeras.

That would be a grave mistake. Restricting the access of Chinese- and Indian-Malaysians to affordable housing, college scholarships, government jobs and contracts amounts to preserving economic apartheid.

These retrograde policies, says economist Udith Sikand of Gavekal Research, means that, "longer term, Malaysia is destined to remain stuck in the middle-income trap," which can afflict developing nations when they approach the $10,000 income level. That is where Malaysia is today. And it is where it might stay unless Mahathir and Anwar break with the past.


  1. This ignorant foreigner either fails or refuses to recognise is that the principal reason Malaysia's 5% economic growth fails to reach to benefit the common folks is that much of the economy's surplus is Gasak by corrrupt leaders and hanger-on businessmen.

    Excellent example is the RM 100 Billion High-speed Rail Link to Singapore, a corrupt gravy train of Titanic proportions.

    1. So the solution is to choose as PM the same PM who was in charge during MISC scandal, PKFZ scandal, MAS scandal, Bank Negara Forex scandal, BMF scandal, Perwaja scandal, Maminco scandal...

    2. You lost money buying perwaja share hah?

  2. The reality in Malaysia is that Pakatan needs to keep the Malays on board even as it moves forward with reforms.

    Pakatan Harapan was elected with some +/- 35% of the Malay vote.

    Most conservative Malays consider Pakatan Harapan an "Ali Baba" operation. With Malay leaders in prominence but mainly dependent on Chinese support.

    1. Reality check:
      95% Nons + 35% Malays against 5% Nons + 65% Malays ? Hmmmm...

    2. Reality check:

      65% Malay of what? Half half bn(umno) & pas!

      At best the half (32.5%) of bn(umno) might not be all pas friendly.

      Hmmmmm… 35+16.25=51.25%. Maksud more than half of the melayu still favour PH!

      Did u fail yr arithmetic at high school?


    3. Monsterball, I am not as educated like CK. Can you help me to understand his arithmetic and calculation as per his comment please. Thank you.

    4. CK is just like his master, LGE. Both can't seem to count past the number of digits on their hands and feet.

    5. That's why both of u know NUTS about simple arithmetic!

      Their digits on both limbs r still evolving from tree climbing to walking.

  3. Kaytee aka reincarnated chicken little.....the sky is failing

    Kaytee wants najib to rule again.....izzit kaytee?

    1. Others want Mahathir to rule again... and got what they wanted! Termasuk mangsa mangsa-nya dahulu! Aiyoyo!

    2. So? Better than you? Fucking ketuanan freak!

  4. A kleptocrat thrives when there are many "yes men" to do his bidding, for a price. The previous government had droves of these, from MBs to Cabinet Ministers to MPs to leaders of GLCs to the Civil service to the Judiciary (ouch) and uniformed servicemen. All were subservient to the ruling party, of which the Kleptocrat heads. He even keeps all the cash and jewelry in his home, doling them out as he pleases.

    Allah (and Malaysians) then decided to give Wile E Coyote a second chance to redeem himself. Two years (he says) to undo the first 22. We will get a clue on whether he has changed, when he completes naming his cabinet. So far in the first 13 Ministers I see a few problematic yes-men, if that is what he wants. When he names the other 15 or so we shall see if another Kleptocrat can re-emerge.

    A few Menteri Besars like from Penang, Selangor, Sabah, and now from Sarawak, not to mention Kelantan and Terengganu will not give any Putrajaya Kleptocrat wannabee too much face, since none of them come from his party.

    And based on the strength of his Bersatu vs the other parties in Harapan a vote-of-no-confidence would be a simple clinical extraction, unlike before when UMNO/BN reigned supreme in Parliament.

    1. "give Wile E Coyote a second chance to redeem himself. Two years (he says) to undo the first 22."

      The term for this is "Abusive Relationship", a.k.a "Battered Wife Syndrome".

    2. Actually access to files given to Daim et al is a ploy by Maddy to get rid of old incriminating evidence against these people....Anwar included. LGE is also now compromised by the 2 criminal charges against him and therefore father and son must go along.

      All in a happy family.

      A change in government is good, but not to these thieving hands.

    3. Madhater got his chicken and you get lathing

      Plus no virgins for u afterlife.....saddd......

    4. Agree with ravan up there. A change to PAS would have ensured both sides won't be able to cover up their sins. Alas, now Mahathir finally had a second chance to fully get rid of incriminating evidences of his past crimes.

    5. So ravan are you suggesting a change to PAS or what? I didn’t see any other option on my ballot slip.

    6. I like PAS’s solution to “thieving hands” hands!!!!

    7. hmmm, what about looes74's 'naughty' wriggling tongue? ;-)

    8. PAS can elect Looes as the Minister of Foreign Tongue Affairs and based him in Pauline's residence. Her views on a PAS Malaysia will surely turn 180 degrees after 1 month. Hohohoho!

    9. @TS
      Hmm, I should consult with PAS members on what's the punishment for the Father who made it possible for his sons to have "thieving hands". Is the Father guilty too, hence must suffer the same punishment as well? Such dilemma.

  5. So far since 9/5 it seems TDM has exited the past already by his actions and Kaytee still has not grasp what the voters esp the mostly nons has seen and decided even before 9/5.

    Instead of looking wholly at percentages (according to race and which the figures are suspect) who voted for PH, if one were to look at the numbers, it cannot be denied that the number of Malays or Bumiputeras and nons are about equal in numbers and PH is the most true blue multiracial party compared to BN or other parties.

    For Malaysia to progress and move forward, the discriminatory and wanton abuse of the NEP (or whatever name it has acquired since) whether it be for business, education, subsidies, contracts, jobs, loans, licences, APs, permits, discounts etc need to be targeted to the mostly B40 and M40 irrespective of race or religion.

    Give free reign to the private sector to develop and grow the economy and not place roadblocks and other hindrances. Privatise all large GLCs and GLICs which have no business to be part of Govt. unless it is of National security interests.

    It takes political will to do all these for the future and that is where TDM now needs to play his part whether as truly a statesman or just another politician redeeming his past mistakes before he goes away.

  6. "Mahathir's approach was from the populist playbook: impose capital controls, call currency trading "illegal" and circle the wagons. As a result, Malaysia still has one foot stuck in a bygone economic era."

    R u confused contrarian approach with popularist sand castle?

    Mamak's capital control was never a popularist mean.

    Perhaps, u SHOULD refrain to comment on economical mechanism. Yr blur2 twistings of such theory make u come out a full growth fool le!

    1. It was popularist to the rakyat, because it was propaganda'ed to the hilt that these measures were for their own good. To the economic experts, it slowed our progress by 10 years.

    2. Kaytee just wanna twist and turn la. Spin spin like rumpelstillskin. Spin hays into gold. Guess what happen to rumpelstillskin in the end

  7. Hopefully, Kita Rakyat will see the rise of a new breed of politicians with integrity to serve Kita Rakyat and able to transcend the immoral politics of race, religion and fake news. Kita Rakyat has taken the first baby step and must press on even though the "new" government in power is seen to be true to their old selfish deeds and agenda...

  8. Hopefully we will see the rise of a new breed of patriots to serve us, Kita Rakyat. It is time to transcend the old paradigm of politics of race, religion, fake news and corruption. Will the real Patriots please stand up and be counted?