A question of faith, the corridors of power in Malaysia


Family dynasty: Malaysians are familiar with related politicians, but we should create a racket if Anwar is PM and Nurul Izzah becomes a Minister while Dr Wan Azizah still remains Deputy Prime Minister

The deal was sealed, yet, for inexplicable reasons, PKR president Datuk Seri Anwar Ibrahim’s route to the top is being challenged …

THE Port Dickson by-election has unexpectedly become a controversy for some PKR leaders and the party’s supporters.

Suddenly, Datuk Seri Anwar Ibrahim has found himself being openly challenged by some of the top brass for his purported failure to consult them on the selection of the coastal town for a by-election, and why his wife or daughter weren’t asked to vacate their seats, instead.

For sure, this is unfamiliar ground to any leader – to be openly challenged. Call it democracy, but it looks more like an open rebel.

Anwar is now being accused of nepotism and those who have defiantly questioned this move include prominent lawyer S. Ambiga, who is closely linked to Pakatan Harapan.

Even the issue of race has cropped up in social media, with some, hiding behind anonymity, demanding why an Indian MP had to be sacrificed for the PKR president.

Others have suggested that Anwar is an impatient man, and that he should wait until the next general election in five years’ time for his turn. Perhaps he could be named senator, first, and save the big bucks needed for a by-election.

However, some of these politicians have suddenly developed amnesia, it seems, now that they hold positions in government.

They seem to have forgotten the pledge made to Malaysians was for Anwar to be pardoned and released from his incarceration.

In fact, that’s the basis of the PKR struggle – to free Anwar, who had to live with the unofficial title of de facto PKR leader. He was the party boss, even while languishing behind bars for 11 years.

Love him or loath him, only Anwar can glue the PH government in Tun Dr Mahathir Mohamad’s absence.

Not any PH leader, including Datuk Seri Dr Wan Azizah Wan Ismail, Mohamed Sabu, Lim Guan Eng, or, for the time being, Datuk Seri Azmin Ali, could manage it.

It’s not about competence or ability, but about holding a government together. All his harshest critics, including those who questioned his trustworthiness, would admit it, even if reluctantly.

Anwar is also the only one who can man the fort against opponents like Umno, PAS and the right wingers who wield race and religion like weapons.

He was the man who issued press statements from jail, as we wondered how he did it.

And, of course, we remember all those street protests under different names and colours, all essentially for a singular purpose – to free him. So, it must be surprising to Anwar, who would probably feel slighted, to learn about the rebellious remarks made by some self-important key personalities for his need to first earn their approval and then consult them to contest in a by-election.

Suggestions of deceit abound, and no wonder, what with decisions shrouded in secrecy and lacking transparency.

And there we were thinking it was clear that Anwar would contest a by-election, get into Parliament and wait for his turn to be Prime Minister. Even premier Dr Mahathir has proclaimed unequivocally that he would hand the torch to Anwar and honour the agreement by the four partners of the Pakatan Harapan alliance to step down after two years.

So, the question is, how can Anwar be the successor if he is not an MP?

It’s pointless being the PM-in-waiting if one isn’t elected. We could not give two hoots about the charade and antics of politicians, who have the audacity to tell us they dislike politicking. We want certainty, stability and succession planning.

Dr Mahathir is already 93 years old, and it is just biologically and physically impossible to expect him to be PM until the next general election. We can’t allow the rigours of the job to take their toll on him.

A video of him walking wobbly recently circulated, so surely, we want him to remain healthy. However, he is still a mere mortal.

Anwar being named successor and elected into Parliament will provide better comfort because otherwise, an ugly scramble for power is bound to ensue, which we have no wish to see.

We don’t really care if Anwar chooses Port Dickson, Puncak Borneo or Timbuktu, because we are all suffering from the fatigue of election fever, which never seems to cease in Malaysia as they come in all forms and temperatures.

A by-election costs money. Also, it is in poor taste to ask a serving MP to step down to make way for Anwar. Most of us might hate the idea, but progression needs to take place.

Let’s be openly ignorant about this, because up until last week, most of us had never heard of Datuk Danyal Balagopal Abdullah, with due respect. Of course, we didn’t even know he was a retired first admiral. But those who attended his ceramah during GE14 said he never failed to remind them he served in the navy for 38 years.

Danyal has been recognised as the “voice” of the navy, and for them, his loss means no one will champion their cause.

Once Anwar is elected MP and eventually becomes Prime Minister, the full breadth of his ability will be on display, courtesy of his authority and power as a leader. Every constituent would want the serving PM as their MP, so the same can be said for PD. Surely, they can see the preferential treatment accorded to Langkawi and Pekan.

Then there is the issue of family dynasty, but let’s not get into this because the Lim brood has two MPs and a senator, the Karpal clan has two MPs and one state assemblymen, and of course, there’s the PM and his Mentri Besar son.

Malaysians are familiar with this situation, and how most of these individuals got elected is proof that it has never been an issue.

But we should create a racket if Anwar is PM and Nurul Izzah becomes a Minister while Dr Wan Azizah still remains Deputy Prime Minister.

You can count on your bottom ringgit, though, that’s neither going to happen, nor be allowed to happen.

Credit: On The Beat , Wong Chun Wai – The Star’s managing director/chief executive officer and formerly the group chief editor.

Well, at least that is the plan, unless Mahathir moves first and scuttles this plan. Now, what was
that again about Malaysia being a boring country to live in? Let me tell you, even the UK and the US, which are also in political turmoil, are not as interesting as Malaysia. And I think I will support Mahathir just to see Anwar fail and to make sure the rollercoaster ride ends here, once and for all.

I would rather support Mahathir than Anwar –

THE CORRIDORS OF POWER by

Raja Petra Kamarudin

If it comes down to whether to support Tun Dr Mahathir Mohamad or Anwar Ibrahim, in 1998 I supported Anwar (although I did not like both). Today, I would support Dr Mahathir rather than Anwar (even though I still do not like both).

The issue here is between the lesser of the two evils, as the Pakatan Harapan people, in particular the DAP Chinese, have been telling us since 2015. So, it is not whether you support the angel or the devil but more like which of the two devils you prefer.

I suppose, to be able to stay as Prime Minister for 22 years, survive so many ‘assassination’ attempts over those 22 years, and to be able to come back 15 years later for a second round, you really need to be a devil.

Now, the reason why I prefer Mahathir over Anwar is because Anwar has been taking us for a rollercoaster ride for the last 40 years or so and that ride is still not over. Now we are going for yet another rollercoaster ride with the ‘PD Move’ after the most disastrous ‘Kajang Move’ that took us nowhere.

 

The plan was for Anwar and not Mahathir to become the Seventh Prime Minister

With Anwar you do not know whether you are coming or going. One day we are asked to go east and another day we are told to go west. And while Anwar confuses us with the change of direction from east to west, we find out that he is going north while leaving us all behind.

Say what you like about Mahathir, but when you serve him he looks after you well. He never abandons ship and allows you to drown. If you are loyal to Mahathir he is loyal to you in return.

Anwar, however, is another kettle of fish. He uses you to serve his agenda and when you are no longer useful to him he discards you. Your loyalty is not repaid. In fact, your loyalty is betrayed.

And this is what makes Mahathir a better ‘boss’ compared to Anwar.

Back in 2006 when I used to go to Mahathir’s house to meet him, he would wait for me at the door and walk me to my car when we leave. That ‘small gesture’ meant a lot considering he was the ex-Prime Minister.

At least Mahathir does not treat you like a donkey the way Anwar does

Do not expect that from Anwar. He would sit on his throne and expect you to pay him homage.

In 2008, the day I was released from ISA detention, Mahathir phoned me to ask how I was. That phone call made my day and convinced me that Mahathir cares about the people who work for him or with him.

On the other hand, I had to make an appointment to meet Anwar and only managed to see him two weeks later. And when I met him he never inquired about my health. He just spoke about how he is going to come back as Prime Minister — as if I cared whether he becomes Prime Minister or not.

As I said, for more than 40 years Anwar has been taking us on a rollercoaster ride and with him we really do not know whether we are coming or going. In the 1970s, I supported Anwar Ibrahim because he supported PAS — and I also supported PAS after I moved to Terengganu in 1974.

Anwar defected to Umno in 1982 because that was the only way be could become Prime Minister

In 1982, Anwar abandoned us and defected to Umno in what I considered a betrayal. But when Anwar needed to challenge the Umno Youth leader, Suhaimi Kamaruddin, and he did not have the ‘machinery’, he came back to us for help.

Anwar promised if he wins the Umno Youth leadership he will make Umno more Islamic. Ustaz Fadzil Muhammad Noor, the late PAS President, told us to give Anwar a chance so we supported Anwar in his challenge for the Umno Youth leadership.

In 1987, Tengku Razaleigh Hamzah (Ku Li) challenged Mahathir for the Umno presidency (while Tun Musa Hitam challenged Tun Ghafar Baba for number two). Anwar instructed us to support Mahathir and Ghafar (even though at that time most of us preferred Ku Li).

Then we realised why Anwar instructed us to support Mahathir and Ghafar. If Ku Li and Musa wins, Anwar is finished. If Mahathir and Ghafar wins instead, Anwar can oust Ghafar and take over as number two and then oust Mahathir and take over as number one.

Anwar wanted Ghafar to win because it would be easier to oust Ghafar and take over as the new Deputy Prime Minister

That was already Anwar’s plan in 1987.

In 1993, Anwar challenged Ghafar for the Umno Deputy Presidency but I refused to support him and left his team. This is because Anwar was being funded by Vincent Tan and hundreds of millions was being spent to oust Ghafar — RM200 million in Sabah alone.

Because Ghafar could not match Anwar’s financial onslaught, he backed out and allowed Anwar to win uncontested. Four years later, in 1997, Anwar made his move to oust Mahathir but Mahathir was ready for him. This time Anwar was outfoxed by the old fox.

Fast-forward to 2018. Anwar is yet again preparing to challenge Mahathir for the post of Prime Minister. We would think he would have learned his lesson from the 1997 fiasco. Anwar wants to be back in Parliament by October in time for the November session.

Anwar expects Azmin to lose the deputy presidency contest, after which he will leave PKR with his supporters

Anwar’s plan is simple. He wants to do a deal with Umno and PAS and create a new or third coalition (let’s call it Barisan Rakyat). Anwar wants to make sure that Rafizi Ramli wins the PKR deputy presidency and he expects Azmin Ali to leave PKR with his supporters and join PPBM.

Anwar has been talking to Taib Mahmud and Shafie Apdal to get Sarawak and Sabah to join his new coalition. With half of Umno, more than half of PKR, PAS, Sabah and Sarawak, Anwar can get enough majority to form a government.

And, by Christmas, ‘Malaysia Lagi Baru’ will have ‘Barisan Rakyat’ running the country with Anwar as Prime Minister and Ahmad Zahid Hamidi as Deputy Prime Minister — and with another two Deputy Prime Ministers, most likely from PAS and Sabah-Sarawak.

Well, at least that is the plan, unless Mahathir moves first and scuttles this plan. Now, what was that again about Malaysia being a boring country to live in? Let me tell you, even the UK and the US, which are also in political turmoil, are not as interesting as Malaysia. And I think I will support Mahathir just to see Anwar fail and to make sure the rollercoaster ride ends here, once and for all.

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Wising up to a Billion Dollar Whale of a tale


 

Wising up to a whale of a tale

Once upon a time, Malaysians were enchanted with Jho Lows champagne lifestyle and proud that he had friends in high places. We now know better.

IF a poll was conducted to ask Malaysians to name their 10 most hated people, Low Taek Jho – also known as Jho Low – would surely be in the top five, if not three.

There has been a quick succession of books on the 1Malaysia Dev­elopment Bhd (1MDB) saga and in the one by two Wall Street Journal reporters, Billion Dollar Whale, Low is the central villainous character.

Yet for a brief shining moment, this man was the pride of his home state and the nation.

Then Penang chief minister Lim Guan Eng was reported as saying that he was proud to note the accomplishments of overseas Pen­angites, including this particularly “well-connected” fellow.

That was back in July 2010 when a mysterious Malaysian man of means started hitting the headlines for partying with the likes of Paris Hilton, and counted actors Jamie Foxx and Leonardo DiCaprio and singer Usher as his good friends.

When Hilton – the glamour party girl before the Kardashians overtook her – was detained by drug enforcement officers in Paris in 2010, she was reportedly travelling with “personalities close to power in Malay­sia”, Low being identified as one of them.

In just three months, his champagne-infused big spending ways – US$50,000 (RM206,800) or US$60,000 (RM248,190) a pop – set New York’s nightlife scene on fire and caught the attention of the US media. And that was how Low became famous.

Oh wait! He’s Malaysian, not some little emperor from Shanghai or Shen­zhen, so we puffed up with pride at the success of one of our own.

Somehow, the ability to party with the rich and famous became a yardstick for success. The assumption was that Low must have done something great to be so filthy rich and make such “friends”.

Low, then 28, became a subject of intense curiosity that Malaysian and foreign media wanted to know.

Then The Star landed an exclusive interview with him. The two hours with him provided enough fodder for stories spread over two days on July 29 and 30, 2010.

The interview covered topics like his Arab childhood friends and investors whom he said were the real big spenders, how he made his first million when he was just 20 and his expertise in setting up sovereign wealth funds.

Yes, we were pretty pleased with ourselves for beating the competition in getting Low to speak.

The interview was picked up by other newspapers and portals locally, regionally and internationally.

The Star took efforts to provide Low’s personal details like his age, birthplace, education and languages spoken.

What I also found amusing was that we also gave his height (1.7m) and his weight (88kg), which is not common for such interviews. That was probably our nice way of indicating how chubby he was.

The stories were positive pieces, painting Low as a successful role model. Of course, at that time, no one suspected that he was the mastermind behind the world’s biggest kleptocracy.

We were simply dazzled by his partying playboy high life and accepted in good faith all his claims on why he was successful: he went to the right schools, from Chung Ling to Wharton School of Business, made well-connected, influential friends (especially Arab royals) and got a great financial start.

As The Star reported: “At the age of 20, (he) started an investment company called The Wynton Group with US$25mil (RM103.4mil) from family and South-East Asian and Middle Eastern friends. The investment company in which he owns a stake is now worth in excess of US$1bil (RM4.1bil).”

Penang businessman Tan Sri Tan Kok Ping, a close family friend, described Low as a very bright person who respected his elders.

He was also “an active person, has a corporate brain and his public relations skills are equally good. He’s also quite a fast eater.

“I watched him grow up since he was a kid and I knew he was brilliant, but I never thought he would be so successful,” said Tan.

A reader who was so impressed by the Star exclusive blogged about his son having studied in Harrow in Bangkok and opined: “He (the son) is certainly no Jho Low, but I hope he can learn the positives from Jho’s life and work hard and be successful.”

Well, we now know better how Low operated and whose money he was spending on his celebrity friends and more.

From the man with the Midas touch, he has become the embarrassment no famous person wants to touch. I doubt Hilton or Usher takes his calls anymore. He is a fugitive on the lam, hunted by governments around the globe.

Much as he is furiously claiming innocence, he is indeed our billion-dollar whale. The whale is a metaphor in business, meaning to land large accounts that can transform a small company into a major player.

A whale can also mean a businessman who is close to a country’s regime, is protected by the state and receives government contracts and large bank loans without any collateral, as explained in the book, Why Nations Fail: The Origins of Power, Prosperity and Poverty.

The maddening fact is this portly plunderer is hard to find. He apparently has multiple passports, including one from St Kitts and Nevis.

It’s very possible he is no longer 88kg. He could be thinner or fatter – depending on whether stress makes him eat even more and faster – or had plastic surgery, grown or lost his hair, but he should still be 1.7m tall, unless he wears hidden heels in his shoes.

Our government has said it is not sure where he’s hiding, but with Malaysians in just about every corner of the world, can we not somehow tap into this vast network? Even a whale must surface for air somehow, somewhere.

What really got my goat was what he glibly said in the Star interview: “Ultimately, I am Malaysian. I am one who does not forget my country and I think there is a lot we can do for Malaysia. But when you build the trust of investors, you need to deliver what you promised.

“For me, we all work very hard. Of course, we have a disadvantage where at our age, people may perceive it differently. At the end of the day, I handle investors’ money prudently. I generate returns for them.”

And this: “I am not an excessive person. Excessiveness with alcohol is just not me.”

No, not in alcohol but his name is now synonymous with excessiveness in luxury acquisitions.

Oh, where’s Capt Ahab when we need him?

Aunty wants to remind all of us that truly, all that glitters is not gold. Feedback to aunty@thestar.com.my

Credit:  June H. L Wong, So aunty, so what?

 

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Be ready – financial crisis is near


Prepare Now for the Next Financial Crisis

THE financial crisis affecting developing countries arrived in full-scale fashion in our region last week when the Indonesian economy experienced shocks reminiscent of the Asian crisis 20 years ago.

With the crisis coming so close to home, it is time to contemplate what may unfold in the near future and list measures to respond to each scenario, so that we are not taken by surprise.

The agreement reached with Singa­pore to postpone construction of the Kuala Lumpur-Singapore high-speed rail (HSR) project until end-May 2020 (with Malaysia paying S$15mil [RM45.1mil] in cost) was an achievement. It allows us a gap of two years before having to meet the mega project’s large expenses.

The next couple of years will be crucial, as the country will be in the midst of managing the “perfect storm” of servicing the trillion-ringgit government debt and preventing the government deficit from ballooning, while facing the challenges of the emerging global financial crisis.

In this tight situation, every billion ringgit counts; indeed every single ringgit counts.

As more discoveries are made of missing money, whether due to the 1MDB scandal or unpaid tax refunds, there is increasing pressure to save money and cut costs to avoid wider deficits.

So the HSR’s two-year deferment helps a lot. It may be like kicking the can down the street, but hopefully, the situation will improve by the end of the two years to allow the can to be picked up, especially if during the period, ways are found to cut the overall cost of the project.

Other projects too have to be scrutinised. Besides the East Coast Rail Link and Trans Sabah gas pipeline projects, there are many other projects whose costs have to be examined, and whose implementation can be postponed or cancelled.

Besides the scourge of overpricing and kickbacks, there is the over-riding concern that a financial crisis has to be averted.

Indonesia’s Energy Minister last week announced that energy projects worth US$25bil (RM103.64bil) and representing half of President Joko Widodo’s grand electricity programme, would be postponed or restructured. This is to save US$8bil (RM33.1bil) to US$10bil (rm41.45bil) on imports for the projects.

Indonesia is also raising tariffs to 10% on over 1,000 goods in a move to reduce the import bill.

These are some measures the country is forced to take as its economy enters full crisis mode. It could even face a meltdown of the 1998-99 scale. The rupiah fell to almost 15,000 per US dollar, the lowest point since the 1998 crisis.

Indonesia is vulnerable to a financial crisis due to its dual deficits (in the current account and government budget), large external debt and high foreign ownership of equity and government bonds.

Indonesia is caught in a vicious cycle, which is typical when financially liberalised countries follow orthodox fire-fighting policies. When the markets perceive that the external reserves could be insufficient to pay for imports, service debts and absorb potential capital outflows, the currency depreciates.

The perception sparks a self-fulfilling prophecy. The fall in currency makes it more difficult for the government and companies to service foreign loans, and also prompts investors to pull out their money.

In such a situation, the government raises the interest rate to incentivise investors to retain their money in the country. Indonesian interest rates have risen by 1.25 percentage points since May.

However, the side effect is that homebuyers and companies find it more difficult to service their mortgage and business loans. Credit slows down, and so does the economy. This in turn causes the currency to drop further, prompting more rounds of interest rate increases, which lead to loan defaults and bankruptcies.

The economy goes into recession, leading to more capital outflows, including by local people. The currency drops again, recession deepens, and the cycle continues.

Indonesia is still at the start of this cycle. Hopefully it will find the policy tools, including unorthodox ones that work, to avoid a long stay in the spiral. But Indonesia is by no means alone. Argentina and Turkey are deep in their crises, and more and more countries are suffering the contagion effect, including South Africa, India, Iran and the Philippines.

Following the 2008-09 global financial crisis that especially hit the United States and Europe, many hundreds of billions of dollars rushed to emerging markets, including Malaysia, in search of higher yields. The liquidity was created by quantitative easing (government pumping money into the banking system) and low interest rates in the US and Europe.

Now the funds are leaving the emerging economies and returning to the US. This is due to the US policy reversing to quantitative tightening, the rise in its interest rates, and fears of an emerging market crisis and a worsening trade war.

Developing countries vulnerable to currency decline, a pull-out of funds and a crisis are those with significant current account deficits, government budget deficits and debts; low foreign reserves; large external debt; and high foreign ownership of local bonds and equities.

Malaysia is so far safe but it is wise not to be complacent. It is not easy to escape contagion once it spreads.

A few warning signs have appeared, such as a narrowing of the current account surplus and significant portfolio investment outflows (both in the second quarter), and a weakening of the ringgit, besides the larger than previously reported government debt and the need to prevent the budget deficit from increasing.

The old Scout motto, “Be Prepared”, comes in handy at times like this. It is good to prepare now for any eventuality, so as to avoid being caught by surprise.

Credit: Martin Khor Global Trends The Staronline

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We are Malaysians first, not Malay first!


 

 

We are Malaysians first – own it!

We can do it: When faced with the challenges of being truly Malaysian, we should not be as timid as Game of Thrones
Theon Greyjoy (left) waiting for sausages to be served.

I SPEAK my mind. I don’t care what you think of me or what I say. I care that I move people, and hopefully for the best. You cannot sugar-coat truth, truth must be spoken loud and clear if we want to make a difference. Speak Out.

A great nation is one where the majority looks at its marginalised minorities with compassion and empathy, and ensures their wellbeing is taken care of, and the weak among us are always protected. A great society ensures that the disadvantaged are helped in the best way such that opportunities do not pass them by.

Malaysia in this sense is a real paradox.

It has a majority that is politically powerful and yet economically weak and uncompetitive. The Malays (and to some extent our bumiputras overall) by and large have been told over decades that they are superior but are unable to compete and therefore needed every advantage and protection by their political leaders, their clerics, the state, the monarchs and every other self-proclaimed champion under the sun.

Hence, we create a supremacist complex, subconscious in most and overt in some, but one with a dependency syndrome.

The minority Chinese and Indians are economically strong, competitive and over the years, in the absence of a reliance on government assistance, has also become urbane and progressive in outlook.

Hey! Do you know the other minority that to a certain extent fit this category? The progressive Malay liberals.

That despised minority among the majority. What do all these people have in common? When faced with the challenges of being truly Malaysian, they are as timid as a gang of Theon Greyjoys waiting for sausages to be served. The majority of them are so scared to speak out or come out. Witness the Bersih rallies, the numbers are way below the actual support.

I have news for all you Theons, we can do it. You’ve proven it on May 9. You all came out. Don’t stop there. It’s time all of us come together to change our nation to be truly progressive, modern and, sooner rather than later, join the ranks of developed nations.

To do that we must be Malaysian first – without fear or favour. Never again allow an injustice perpetrated upon your fellow Malaysians be left unquestioned and unanswered.

Never again allow that little voice that says “let’s not court trouble”, or those that shout at you “you are not of the religion, do not interfere” stop you.

Humanity knows no race, no religion nor does it care what your supposed station in life is. We are all Malaysians. If we want to be equal we have to behave as equals, until the powers that be capitulate.

If we see our race denigrating or abusing the other, speak up and condemn it. If we see another race doing it to their own, speak up as well.

If we see another people of a different religion abusing and persecuting their own kind, speak up. They are your fellow Malaysians. There is no justification in persecuting our fellow Malaysians.

Let me give you an example.

If someone proposes to impose penalties upon Malaysian Muslims that only the Muslims in our nation will be subjected to for the same crime, we must all speak up and oppose it. This is not about religion. It is about fairness to our fellow citizens.

Being a Malaysian means speaking up on behalf of every one of our countrymen. Standing up to oppression and for justice for all. None of us can or should be shut up for one reason or another when it comes to what happens in Malaysia and to Malaysians. We are all equal. We need to walk this talk until we change the environment by which discourse takes place in this country.

There will be many detractors and there will be many people who will mine the well of extremism to stop us. We should not be cowed by them because that is what they want of us. They have been scaring us all to compliance all these years.

Right-thinking Malaysians must demand that our elected leaders step up and lead, and not follow the herd. The herd follow the shepherd, not the other way around. When I hear characters say “we must be sensitive to the feelings of the majority”, I know these are no leaders.

These are mere political hacks, characters who are interested in the jockeying of position and personal victory, rather than one willing to risk his or her popularity to stand by the courage of their convictions and chart the destiny of the nation and its people. More than likely such people do not even have any convictions.

This nation needs leaders. We are at crossroads in our history. I believe the next three years will determine whether we will sink back into the old politics of protecting and championing race and religion, or we will emerge as a confident nation of equals ready to bring our collective strength to take on the world on our own terms. The result will be determined by us Malaysians speaking out and standing up to and with our fellow countrymen, and insisting that our “leaders” lead.

This is what I intend to continue to do.

The fundamental need in Malaysian education reform

THE Science and Technology Human Capital Report and Science Outlook 2015 by Akademi Science Malaysia show that we may soon have a serious shortage in science-related fields.

It seems more students are opting out of STEM (Science, Technology, Engineering and Mathematics) fields at secondary and tertiary levels.

Deputy Women, Family and Community Development Minister, Hannah Yeoh – quoting the National Council of Science, Research and Development which stated that the country needed about 500,000 scientists and engineers by 2030 – pointed out that we have only 70,000 registered engineers, seven times lower than the number required.

Meanwhile, the Education Ministry proposed black shoes, special number plates and a manual for noble and religious values to be read out at assemblies.

What is going on here? Why is there this serious disconnect between what the nation needs and what the so-called custodian and driver of the nation’s education machinery?

I think it’s time to talk about the fundamental elephant in the room that no one wants to talk about when it comes to education reform in Malaysia – the number of hours dedicated to religion (including its related subjects) and the influence of religion in Malaysian schools.

With 60% of our population being Malay-Muslims, what and how their children are educated from young is a concern to all Malaysians.

They are the backbone of the nation’s future. Even a cursory look at the hours spent by these children in religious classes should alarm everyone, what more in the government’s Sekolah Agama (religious schools).

Equally of concern, in Sekolah Kebangsaan (national schools), non-Muslim children would be attending alternative subjects that may not enhance their educational value, especially in Science, at the times Malay children attend their religious classes.

Educating children is a zero-sum game. There are only so many hours in a day. Children cannot be going to classes all day long.

They also need time for games and sports and other extracurricular activities that have nothing to do with classroom learning but more to do with expanding their experience of life, physical exertion and just relaxing.

Therefore, their “classroom time” is finite and each subject accommodated means another will have less of it.

A typical Malay-Muslim child in Year One at national school undergoes approximately four hours per week of religious studies (including related subjects such as Tasmik or Quran reading).

Another hour and a half per week go to Bahasa Arab.

Science, on the other hand, is only accorded an hour and a half per week. A Year Six pupil gets about four hours of religion and related subjects, with one hour of Arabic per week. Science gets two hours per week.

Let’s be honest.

The only reason for Arabic being taught is due to its affiliation to the religion, otherwise the next language a Malay child should be learning is either Chinese, Tamil or even Spanish, the next most spoken language after English.

So basically from Year 1 to Year 6, the ratio is approximately on average two hours of Science versus five hours of religion per week.

That is the formative years of our children. What are we doing to our children? This is appalling.

We are basically indoctrinating our children in religion and neglecting basic sciences that will make them critical thinkers and progressive individual with real foundation.

In the same instance, our non-Malay children also are disadvantaged because they are not taught those sciences at the time Malay children are in their religious classes.

Let’s get it clear.

The function of education is learning to think critically.

The function of religious studies is indoctrination to be obedient followers. We are regressing our Malay children and failing our Malaysian children overall.

Again, let us be honest. Our national education system today, save the vernacular schools, both from an administrative and teaching standpoints are overwhelmingly Malay.

And the Malay-centric system is overwhelmingly religious.

Our children are taught overtly and subliminally that being the “correct” Muslims is the only option.

The authoritative teacher and peer pressure brought upon the Muslim child today is overwhelming at school.

It is a norm to find daughters coming home in tears being bullied as a result of their or their parents’ outward appearance, especially mothers, that do not conform to religious dogma.

The bullies in most circumstances are the Malay teachers themselves. As such, both parents and children conform to avoid the oppressive peer and teaching pressure.

In such an environment, the dichotomy between Muslim and non-Muslim children becomes pronounced.

Is it any wonder that our society right from school to their adulthood has become divided and suspicious, and in a significant portion, easily inflamed with hatred?

Today, race is not the main driver of such divisiveness, it is the religious influence over society starting from the schools.

We need to confront this issue head-on and not be cowed by the label of “sensitivity”.

It is the sensitivity of not talking and confronting these issues that has made the bad become even worse. One cannot solve a problem if one cannot acknowledge and confront their existence in an honest manner.

We need honest conversations and political will from the Education Ministry to overcome this seemingly intractable virus that has infected our whole education system and administrative body.

In this aspect, I have not even touched about the watered-down content or substance of the school subjects, especially Science and History, as a result of the religious influence within our education system.

That will be for another day.

What we have is an almost unique Malaysian national education problem found nowhere else in a functioning democracy.

The result of at least 30 years of Barisan Nasional and PAS politics of using religion to buy the votes of the Malay electorate.

We require a head-on examination of the philosophy of Malaysian education which is today religious-centric instead of education-centric and STEM-centric as would be required by a 21st century modern nation that wants to be developed.

It also requires a total re-education of our teaching human resources – from one that has been religiously indoctrinated to one that will be accepting of all religious and non-religious peoples and societies as being equally good.

One where the teachers are focused on STEM education and ensuring critical thinking rather than being obsessed with religious pre-occupation of any sorts when they are in the national schools educating our children.

One where rational critical thought is the inspiration for good values rather than one that derives on religious books and doctrines as the minister has instead suggested.

We need to demand this of our Government, from our educators and our education system.

If these two fundamental aspects of our basic primary education cannot be rectified – a major increase in teaching/learning time for the sciences and a significant reduction in religious indoctrination and influence in national education – no amount of other esoteric and sophisticated policies and plans would be of any worth.

By Siti Kasim

We are Malaysians first – own it!

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The right way to speak out I REFER to the article “The real Malay Dilemma” (The real Malay dilemma: race, religion & politics ,

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Malaysia’s Vision 2020: Falling apart with alarming speed; Dr M is creator and destroyer, said Musa

KUALA LUMPUR: Former Deputy Prime Minister Tun Musa Hitam said Malaysia’s Vision 2020 objective was “falling apart” with “alarming speed”, and he blames Tun Dr Mahathir Mohamad for it.

In his keynote speech at an event to mark the sixth anniversary of the Institute for Democracy and Economic Affairs (Ideas), Musa said this was because the former premier did not train leaders but instead chose to retain and train followers instead.

“It is ironic that Dr Mahathir’s vision is now certain to fail because of Dr Mahathir himself.

Liberating the Malay mindset, the right way to speak out


 

 

The right way to speak out

I REFER to the article “The real Malay Dilemma” ((The real Malay dilemma: race, religion & politics, Siti Thoughts, Sunday Star, Aug 26). Siti Kassim made her details as clear as they can be but not without error in her bewildering opinion on the subject.

Siti’s observation is near faultless and I wonder if she is sincere enough to defend the cause of changing the so-called Malay mindset. Firstly, why publish such a strong, emotional and provocative article in an English newspaper if she insists that she has studied her “targeted audience” well enough?

Learn and appreciate the views of a different mindset before telling everyone to change. According to Bakri Musa, a mindset refers to the outlook in or philosophy of life. It is a set of ideas, attitudes and opinions that we – as individuals or members of a group – share of reality, or of what we recognise to be reality.

Neurologically speaking, a mindset is the pre-existing neural pattern in our brain; conceptually, it is our mental hypothesis of reality. Having said this, the mindset is not really a result of the religion’s influence but rather of their past experiences.

It is common to see differing mindsets among people in other countries too, but why exactly wouldn’t anyone in those countries make a big fuss about it?

Malaysia is a progressing population and some of its characters do not wish to portray their advancement as a double-edged weapon. We need to be thoughtful and informed about it.

Not only is it the wrong thing to say but it is also the wrong way to do it. We understand that Islam is a way to help ourselves to improve. There is no flaw in Islam when we talk about civilisation; Islam is civilisation. It was a tried-and-true Islamic value that brought the ancient world to its golden age during its peak.

Some individuals who have a lazy understanding of Islam will describe its teachings as backward, prohibitive and jumud; and they repeatedly use Islam as an excuse for many problems. This unceasing stream of vitriol towards Islam is nothing new.

A change in government will not change the people’s mindset. The May general election did not bring about a change in mindset but rather a choice of two governments, one less benign than the other.

It is not surprising that the so-called liberal Malays are accused of being blasphemous because the accusers are not able to answer or defend a particular issue brought up by repugnant personas. With this in mind, if we let it continue, Malays will be further divided as liberals and conservatives.

Majlis ilmu, seminars and tahfiz schools are not harmful; on the contrary, they are as good as TED Talks if we want them to be. Let’s see them in a different light. Being obsessed with such things is not harmful. We are in dire need of getting the right contents and ideas to share – and we have many of them.

Why would we want to waste such golden opportunities for getting the right message across? If we need to tweak the content to make it more conducive, multicultural or suggestive, we will do better as multicultural societies.

If we can encourage the Malays to ask the right questions about development and their contribution as a Malaysian community, and ultimately shape the demand for knowledge, then every ustaz, ustazah and religious teacher will have to provide the right answers.

But why wouldn’t the Malays ask the right questions? Maybe that is when the fixed mindset comes into play. Rather than putting these forums in a poor light and defining them as the reasons for the nation’s problems, there are more effective ways to bring the change via the same existing ground.

We do not want to compare Malaysia with Iran, Saudi Arabia, or even Switzerland for that matter. There are different dynamics in Malaysia, and even Aceh has its own uniqueness. Malaysia will never be like those countries and those countries will never be like Malaysia.

On the same note, we do not need to model Malaysia on other Muslim-majority countries, good or bad. We should stand on our own and set a new precedent for other Muslim countries to follow.

We are not going to focus on religion solely for the afterlife but as an equally important design to survive and compete globally together as a nation.

Any issues found in other Muslim countries are coherently found in non-Muslim countries: bad governance and corruption are universal. We can uphold syariah law and be 100% Islamic, yet there will still be people who circumvent the law to line their pockets.

We are moving towards changing the paradigm of Malays being supplicants. Most Malays are ready to lead the change. The only thing is they are not singing loudly enough. So who or what is holding them back?

Malays can’t dispel the stereotypical perception others have of them. And we always make efforts to maintain our self-affirmation, not surprisingly buttressing the stereotype in the process.

Some Malays fear more the threat of being seen as a stereotype rather than actually being the stereotype, and this could be one of the reasons why we see gaps in streamlining the grand purpose of understanding Islam among the progressive Malays.

Being apologetic for the bumiputra policy is not considered appropriate as it was properly studied and the implication was well understood.

Our forefathers would have known the long-term divisive consequences, and this is particularly poignant given the non-bumiputra’s outstanding contributions in developing the country.

However, all Malaysians must accept that such a policy is the right way to help the nation. Malays have already become aware of the reasons for such policies and of how the opinions of some of them are being manipulated by politicians to stay in power. We just need to know when and where to make a healthy distinction.

I celebrate Siti’s righteousness and her gifts but she has to be careful that she uses them wisely and avert some scenarios that will hamper everyone’s efforts.

If maybe one day Siti could share the good things she likes about Muslim and Malays, and share these as an agent of change, there would definitely be more who would listen to her and be inspired, I guarantee it.

Being an activist without having an action plan to change the people’s mindset is not going to work.

IKMAL BAHARUDIN Kuala Lumpur, The Staronline
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>>> ” 90% of the Malay wealth is not from the fruits of their labour as great entrepreneurs , like the Chinese , but rather the hand-outs of their political patronage and cronyism and there is nothing to be proud of the huge mansions and expensive cars and life-style , because they are nothing but the produce of utter corruption at stealing the wealth of the people’s blood , sweat and tears , and yet , without shame their spouses and children flaunt it like they earned all these through intelligence and hard-work .

 

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Malaysia’s Vision 2020: Falling apart with alarming speed; Dr M is creator and destroyer, said Musa

KUALA LUMPUR: Former Deputy Prime Minister Tun Musa Hitam said Malaysia’s Vision 2020 objective was “falling apart” with “alarming speed”, and he blames Tun Dr Mahathir Mohamad for it.

In his keynote speech at an event to mark the sixth anniversary of the Institute for Democracy and Economic Affairs (Ideas), Musa said this was because the former premier did not train leaders but instead chose to retain and train followers instead.

“It is ironic that Dr Mahathir’s vision is now certain to fail because of Dr Mahathir himself.

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The real Malay dilemma: race, religion & politics messed up!

Old politics: If the leadership keeps to the racialist, feudalist and religious-centric tactics and policies of the past, thinking this is what they need to do to keep the votes, it will just be the repeat of  past mistakes of the Umno era.

Malays are powering the nation

WE refer to “The real Malay Dilemma” (The real Malay dilemma: race, religion & politics./Sunday Star, Aug 26) by Siti Kassim. Siti’s rambling diatribe against Malay Muslims can be reduced to two baseless, provocative, insulting and defamatory allegations, namely:

1. Assimilation of Islamic values in governance is responsible for Malay backwardness and inability to compete with other races; and

2. Malays, constituting 60% of the population, are unproductive and parasitical, depending on the industry and labour of the remaining 40%, Chinese and Indians.

On the assimilation of Islamic values in governance, Siti questions whether “a Malay society, more insular and superstitious in thought… can compete on a fair footing with the rest of the Malaysian non-Muslim population.” She writes that Malays have been given preferred places in universities, GLCs and the civil service for over 40 years, resulting in “uncompetitive universities, a significant pool of unemployable Malay graduates and with most being employed by the civil service… failed GLCs and …corrupt administration…” She asks if more religion would help and continues, “This has been the unintended consequence of the assimilation of Islamic values in governance.”

What evidence has Siti got to link the above allegations of Malay backwardness to the so-called Islami­sation? Has she conducted any studies or consulted reports and research findings to come to that conclusion? Her claim is just hot air driven by prejudice towards Islam.

There has been no assimilation of Islamic values in governance as provided by the syariah. Having prayer rooms in government offices, teaching Islam to Muslim students in schools, broadcasting azan on TV or having an Islamic TV channel do not make governance Islamic. The Malaysian state is based on a constitution drafted by secular jurists and not on syariah. Most government leaders and top bureaucrats, products of Western education, are very much influenced by secular ideas and ignorant about Islam and its contributions to civilisations.

It is the separation of the moral from governance under a secular system that has facilitated the corruption, abuse of power, nepotism and cronyism of our government leaders and administrators. So, why blame Islam?

Siti condemns Malays as parasites. The Cambridge English Dictionary defines a parasite as a person who is lazy and lives by other people working and giving them money.

Siti writes that the majority of Malays are satisfied with their lives and carry on being religiously obsessed because they have been “able to live off the teats of the government in one way or another”.

She continues: “Thirty per cent to 40% of the population cannot sustain 100% of us. You need the remaining, at least majority, of that 60% (Malays) to be able to truly contribute economically and not be consumers of tax from the minorities. And religion is not an economic contributor. It is an unproductive consumer of epic proportions with no returns.”

Obviously, she has not heard of Max Weber’s The Protestant Ethic and the Spirit of Capitalism. To Siti, Malay businessmen, professionals, workers, farmers, fishermen, civil servants, police and soldiers do not contribute sales tax, income tax, road tax and other taxes payable under our laws. They are only “consumers of tax from minorities (Chinese and Indians)”. In other words, they are parasites. This is an insulting and provocative lie!

She claims that the transformation of Malaysia from an agricultural to an industrial nation with liberal economic policies was “powered by an industrious non-Malay population and the liberal segment of the Malay society”. She must have been blinded by prejudice not to see the role played by millions of Malay workers, engineers, surveyors, architects, policymakers and administrators in the industrial development of Malaysia.

Good public education and healthcare services are essential to becoming a developed industrial society. In 2016, Irina Bokova, then the Unesco director-general, praised Malaysia for “leading the way in South-East Asia in fostering inclusive and equitable education as the basis of sustainable green growth”.

And in his message on 2018 World Health Day, WHO regional representative Dr Lo Ying-Ru Jacqueline stated that Malaysia has been acknowledged globally for its high-performing health system based on a well-trained workforce, excellent infrastructure and quality service delivery.

Since independence, infant death has fallen by more than 90% to 6.7 deaths per 1,000 live births in 2016. Maternal mortality has also decreased by 89% between 1963 and 2013.

Who are these “well-trained workforce”? Mostly “unemployable Malay graduates” from “uncompetitive universities” and other institutions.

Who are the members of “the liberal segment of the Malay society” who powered the industrial transformation of Malaysia?

Are they those who are blond and advocating “separation of religion and government; religion must be a private matter and kept private; take out religious education from the public arena”?

Or those who call for recognition of homosexual, gay and lesbian rights; criminalisation of polygamy and decriminalisation of adultery; and free sex?

Sorry Siti, if there was any contribution from this deviant group, it was very minimal as many of them look to green pastures outside Malaysia and migrate. The rapid transformation of the Malaysian economy has been powered by patriotic devout Malay Muslims and the minorities, Chinese and Indians.

It is not the Malays who face a dilemma in engaging the modern world because their religion teaches them to seek success in this world and in the hereafter (Quran 2:201). It is Siti who faces a serious dilemma on whether to decolonise her thinking and become a true Malay Muslim or remain a Western secular clone.

By MOHD AZMI ABDUL HAMID President
Malaysian Consultative Council of Islamic Organization

Endorsed by:

Syekh Ahmad Awang, chairman, International Union of Muslim Scholars Malaysia

Syekh Abdul Ghani Samsudin, chairman, Secretariat for the Assembly of Ulama of Asia

Assoc Prof Dr Roslan Mohd Nor, secretary-general, Ulama Association of Malaysia

Datin Ustazah Aminah Zakaria, chairperson, Persatuan Persaudaraan Muslimah Malaysia

Hj Baharudin Masrom, secretary, Kongres Ummah

Dr Mohamad Ali Hassan, committee member of SHURA

Prof Dr Rahmatullah Khan, committee of MaSSa

Dr Abdul Rahman Ahmad, committee of SUARA

Datuk Abdullah Mad Din, former director of Islamic Division, Ministry of Education

Datuk Hadzir Md Zain, former deputy director-general, Implementation Coordination Unit, JPM


Elaborating the dilemma in today’s terms

I REFER to the comments from the Malaysian Consultative Council of Islamic Organization in response to my latest column “The real Malay Dilemma” (The real Malay dilemma: race, religion & politics/Sunday Star, Aug 26).

Mine was an opinion piece. It seems the writer of the letter from the Malaysian Consultative Council of Islamic Organization and the characters endorsing it cannot differentiate between journalism and opinion. Having said that, whatever I say speak for itself.

Our former prime ministers Tunku Abdul Rahman, Tun Abdul Razak Hussein and Tun Hussein Onn were all secularists. Our present Prime Minister Tun Dr Mahathir Mohamad’s “Malay Dilemma” and what he continues to say today about how we Malays practise Islam still stands. I just elaborated the dilemma in today’s terms.

Is our Malay society not more insular or more superstitious than in the 80s? Ask yourselves. I won’t go into the nonsense and tahyul being preached on Malay sites that are popular today; let’s just look at the public universities that are managed and led by Malays. Did we use to have faculties in universities producing anti-hysteria kits or paranormal detection equipment or holding seminars on hell or how to interact with non-Muslims?

There’s a chief syariah judge proposing to have standard operating procedures for cases with “mystical elements”.

What is going on? Even in the 70s or 80s, such nonsense was unheard of among Malays leading our institutions.

Just reading the rants equating liberalism with perverts and everything to do with sex practically tells one of their mindset. They cannot escape from their dogmatic conservative religious notion of what makes a person a liberal.

They are intent on demonising liberalism so they can impose devoutness as they see it unto society.

Where were all these defenders of Islam and the Malays when our leaders were robbing the nation blind? Did we hear a peep from them?

I speak of leadership to change our society. I am so glad, in spite of the recalcitrant conservatives, that the Sultan of Selangor took the mantle of leadership and pronounced that the legal age of marriage be raised to 18 for Muslims. That is liberalism.

Only liberals have been calling for this to protect the childhood of our girls and to ensure they have the opportunity for education and a full life.

I am a Malay and a Muslim. I will speak up for the good of our society without fear or favour or intimidation. We need to face our demons and change to progress. Someone needs to tell the inconvenient truths.

By SITI KASSIM

National unity – an inconvenient truth?

Dear new government, if you continue to divide us, you will rue the day.

 

TWO events in recent days reminded me what is truly important to this nation.

The first was the National Day celebration on Friday in Putrajaya.

Although the euphoria over GE14 has waned, there was still enough to make me want to be part of the National Day celebration even if via my telly. So I did something I hadn’t done in years: got up early just to watch the parade.

The cameras at Dataran Putrajaya showed thousands of Malaysians who were more excited than me and had taken the trouble to line the thoroughfare to enjoy the spectacle and catch glimpses of members of the new Cabinet.

Indeed, it was deja vu to see Tun Dr Mahathir Mohamad as Prime Minister and Tun Dr Siti Hasmah Mohd Ali sitting with the Yang di-Pertuan Agong Sultan Muhammad V on the VIP grandstand.

It was also a touch surreal to see several faces we once thought impossible to see in such a setting – Cabinet members such as Datin Seri Dr Wan Azizah Wan Ismail, Gobind Singh Deo, Lim Guan Eng, Mohamed Sabu, M. Kulasegaran and Teresa Kok.

On the pavement, the opening and closing acts by flag-waving young Malaysians dancing in unison warmed the cockles of my heart.

I appreciated the effort to ensure all races were brought together to perform in a show of unity, emphasising the slogan: Sayangi Malaysiaku.

Yes, I do love my Malaysia, as do millions of others who were born and bred in this gracious, blessed land. That birthright is what unites us all.

And that is the key lesson to the well-being of our nation – unity.

Which leads me to the second event: the GE14-inspired movie, Rise: Ini Kalilah.

I caught it on Monday night and relived somewhat that incredible time when Malaysian history was made.

While not perfectly told and it is a story that only Malaysians can fully understand and appreciate, the movie has enough to keep its audience interested and it ultimately delivers the feel-good factor as it too reinforces the power of unity; that is, what can be achieved when enough citizens unite for a common cause.

Yet that power was never properly developed because it was politically inexpedient.

For its own political survival, especially after the 2008 GE, the Barisan Nasional government preferred to use race and religion to divide and rule the nation. That ultimately wreaked havoc on our interracial ties, as stated in local human rights group Pusat KOMAS’ Malaysia Racial Discrimination Report released in March this year.

National unity, as far can I can remember, was trotted out as important only after something bad had happened.

It took the terrible May 13, 1969, racial riots for the government to set up the National Unity Council.

The council was disbanded in 1971 and replaced by the National Unity Advisory Council, whose secretariats were the Department of National Unity and the National Muhibbah Office.

The two agencies were merged to form the National Unity Ministry in 1972. But it only lasted till 1974, when it was replaced by the National Unity Board.

The next time national unity took the spotlight was after GE13. The results showed the need to do something to reduce racial polarisation and to build a “united Malaysian nation”. That led to the formation of the National Unity Consultative Council in September 2013.

The NUCC held a series of meetings with agencies and NGOs to formulate a National Unity Blueprint. In 2014, it proposed three so-called Harmony Bills to replace the Sedition Act.

But the Act remained and the Bills became mired in controversy since they would make it mandatory for the government and all persons to promote equality and prohibit discrimination based on religion, race, birthplace, gender and disability. That was somehow anathema to the Malay agenda and the Bills went on the backburner.

It would appear the previous government saw the need for better national unity as an inconvenient truth and continued to use it for “display purposes only.”

So whither national unity in New Malaysia?

Political scientist Chandra Muzaffar, in criticising Pakatan for leaving it out in its election manifesto, wants the new government to make its stand known and emphasise the Rukunegara to show “it is serious and sincere about one of Malaysia’s foremost challenges but would have also demonstrated that it is crystal-clear about the direction we should take as a people.”

But others take a different view. Prolific online commentator T.K. Chua says: “What is the point of declaring unity as our goal when our policies, programmes and actions are doing just the opposite?”

He adds: “It is time to stop the endless declarations and slogans typical of a third world country. We can’t talk ourselves to national unity. National unity is the product of years of inclusive policies, programmes and actions.”

And that is what he wants to see in the Pakatan government – action, or in today’s jargon, walk the walk.

I take both views to be important: talk the talk and walk the walk. In our fractured nation, we sorely need to hear Pakatan leaders openly and loudly embrace national unity as a must-do KPI and then see them implement it in all their policies and actions for the long haul. Only then can we hold them to their words and judge them by their actions.

For now, Pakatan still seems dazed by its own victory and further stunned to find government machinery that Dr Mahathir says is broken.

If that is the case, Pakatan has the chance to rebuild the machinery that was abused by its predecessors and set it right. No more “divide and rule” but “one for all and all for one”!

By June H L Wong
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SST – for better or worse ?


What is Sales & Service Tax (SST) in Malaysia? – SST Malaysia

Today, the Sales and Service Tax (SST) makes a comeback on our tax radar screen to replace the three years and two months old Goods and Services Tax (GST), which was implemented on April 1, 2015.

The abolition of the GST and replaced with SST is an election promise of the Pakatan Harapan manifesto.

It has been claimed that the GST is a regressive broad-based consumption tax that has burdened the low- and middle-income households amid the rising cost of living. The multi-stage tax levied on supply chains also caused cascading cost and price effects on goods and services. That said, the Finance Minister has acknowledged that the GST is an efficient and transparent tax.

Following the implementation of the SST, the Government will come to terms that the budget spending will have to be rationalised and realigned with the lower revenue collection from the SST to keep the lower budget deficit target on track.

The expected revenue collection from SST is RM21bil compared to an average of RM42.7bil per year in 2016-17 from GST.

During the period 2010-2014, the revenue collection from the SST, averaging RM14.8bil per year (the largest amount collected on record was RM17.2bil in 2014), of which 64% was contributed by the sales tax rate of 10% while the balance 36% from the service tax of 6%.

Faced with the revenue shortfall, the Government expects cost-savings, plugging of leakages, weeding out of corruption as well as the containment of the costs of projects would help to balance the financing gap between revenue and spending.

The sales tax rate (0%, 10% and 5% as well as a specific rate for petroleum) and service tax of 6% is imposed on consumers who use certain prescribed services. The taxable threshold for SST is set at annual revenue of RM500,000, the same threshold as GST, with the exception for eateries and restaurants at RM1.5mil.

As SST is levied only at a single stage of the supply chain, that is at the manufacturers or importers level and NOT at wholesalers, retailers and final consumers, it has cut off the number of registered tax persons and establishments from 476,023 companies under GST as of 15 July to an estimated 100,405 under SST.

The smaller number of registered establishments means no more compliance cost to about 85% of traders.

The distributive traders (wholesalers and retailers) will be hassle-free from cash flow problems, as they are no longer required to submit GST output tax while waiting to claim back the GST input tax. During GST, many traders imputed refunds into their pricing because of the delay in GST refunds. This was partly blamed for the cascading cost pass-through and price increases onto consumers.

For SST, 38% of the goods and services in the Consumer Price Index (CPI) basket are taxable compared to 60% under the GST.

It is estimated that up to RM70bil will be freed up to allow consumers to spend more.


Expanded scope

The proposed service tax regime has a narrower base (43.5% of services is taxable) compared to the GST (64.8% of services is taxable).

Medical insurance for individuals, service charges from hotel, clubs and restaurants as well as household’s electricity usage between 300kWh and 600kWh are not taxable. However, the scope of the new SST has been expanded compared to the previous SST. Among them are gaming, domestic flights (excluding rural air services), IT services, insurance and takaful for individuals, more telecommunication services and preparation of food and beverage services as well as electricity supply (household usage above 600kWh).

For hospitality services, the proposed service tax lowered the registration threshold of general restaurants (not attached with hotel) from an annual revenue of RM3mil under old service tax regime to RM1.5mil, resulting in expanded coverage of more restaurants.

Private hospital services will be excluded under the new SST regime.

How does SST affect consumers?

Technically speaking, the revenue shortfall of RM23bil between SST and GST is a form of “income transfer” from the Government to households and businesses. This is equivalent to tax cuts to support consumer spending.


Will it lead to higher consumer prices?

The contentious issue is will the SST burden households more than that of the GST? It must be noted that the cost of living not only encompasses prices paid for goods and services but also housing, transportation, medical and other living expenses.

The degree of sales tax impact would depend on the cost and margin (mark-up) of businesses along the supply chain before reaching end-consumers.

The coverage and scope of tax imposed also matter.

As the price paid by consumers is embedded in the selling price, this gives rise to psychology effect that sales tax is somewhat better off than GST.

The good news to consumers is that 38% of the goods and services in the Consumer Price Index (CPI) basket are taxable compared to the 60% under the GST.

Technically speaking, monthly headline inflation, as measured by the Consumer Price Index, is likely to show a flat growth or even declines in the months ahead.

It must be noted that consumers should compare prices before GST versus the three-month tax holiday (June-August).

Generally, consumers perceived that prices should either come down or remained unchanged as the sales tax is levied on manufacturers.

On average, some items (electrical appliances and big ticket items such as cars) would be costlier when compared to GST and some may come down (new items exempted from SST).

Nevertheless, we caution that consumers may experience some price increases, as prices generally did not come as much following the removal of GST in June.

There are concerns that prices may still go up in September when the new SST kicks in as irresponsible traders may take advantage to increase prices further.

Household consumption, which got a big boost during the three-month tax holiday in June-August, could see some normalisation in spending.

The smooth implementation of the new SST, accompanied by strict enforcement of price checks and the curbing of profiteering, especially for essentials goods and services consumed by B40 income households, are crucial to keep the level of general prices stable.

Strong consumer activism with the support of The Federation of Malaysian Consumers Association and the Consumers Association Penang as well as the media must work together to help in price surveillance and protect consumers’ interest.

Credit to Lee Heng Guie – comment

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