By Kee Thuan Chye | FMT
BN happens to have been in federal government for so long that people tend to automatically assume they have the required leadership.
I’m finding this frequent comment by people rather irksome: “But does Pakatan Rakyat (PR) have leadership? Can it take over the federal government?”
I’m prompted to ask: What do they mean by “leadership”? Is the Barisan Nasional (BN) leadership the kind we want?
I’d take it further: Does BN have leaders? I mean, real leaders?
People tend to forget to look at the states currently being governed by PR. I don’t know much about Kedah and Kelantan, but Selangor and Penang have been doing fine.
I live in Selangor, and as a Penang-born-and-bred, I visit Penang from time to time. The Auditor-General has commended the PR government of Penang for its financial management and monitoring system for three consecutive years – 2008, 2009 and 2010.
The Auditor-General has also commended the PR government of Selangor for its “very good” performance in 2010 of reducing public debt and loan repayment arrears. And from 2009 to 2010, its consolidated revenue also increased by 20.2%.
Leadership must have something to do with it, must it not?
As for BN, people think it has leadership because it is a perception that has been ingrained in them for more than five decades. BN happens to have been in federal government for so long that people tend to automatically assume they have the required leadership.
But look at BN’s leaders today. Which of them are really good? Quite a few have been making stupid statements, that’s for sure. And the statements have been getting worse and worse.
Look at Home Minister Hishammuddin Hussein’s response to a question on why during the Bersih 3.0 rally, the police were confiscating memory cards from the cameras of press photographers and members of the public. “I don’t know,” he said. “This is the standard operating procedure of the police.”
And how about MCA president Chua Soi Lek blaming Opposition Leader Anwar Ibrahim for Ng Yen Yen’s recourse to Australian permanent residence? He said it was because of Anwar’s “restrictive” policies while he was Education Minister that compelled non-Malays like Tourism Minister Ng to seek PR status abroad in the 1990s for the sake of their children’s education. Never mind that Anwar was not the Education Minister then, that it was actually Sulaiman Daud.
Keeping faith with the devil?
Another comment I find irksome is “Better the devil you know than the angel you don’t” – courtesy of ex-prime minister Dr Mahathir Mohamad recently.
He was not saying something new; this had been bandied about for the last couple of years – by people trying to advocate that even though BN is a “devil”, it is safer to keep BN in power than to opt for a new government and potential uncertainty.
What’s new is that Mahathir has now admitted that BN is indeed a “devil”. Unwittingly, I suppose.
Well, should we keep faith with the devil we know?
The devil we know has not brought us a single institutional reform yet despite Prime Minister Najib Tun Razak’s numerous pledges.
Just to quote one example, why hasn’t Article 121 of the Federal Constitution been restored so as to return real independence to the judiciary? Without that, the judiciary is still answerable to Parliament, which was not the original intent of our founding fathers, who recognised the need for the separation of powers between the Executive (Government), the Legislative (Parliament) and the Judiciary.
Neither has the devil we know done away with repressive laws like the Internal Security Act (ISA) and the Sedition Act. It has merely replaced the ISA with the Security Offences (Special Measures) Act, and is proposing to replace the Sedition Act with the musical-sounding National Harmony Act.
In fact, the devil we know has restricted our democratic space by first enacting the Peaceful Assembly Act and then giving us the new amendment to the Evidence Act called 114A.
This amendment presumes the accused guilty and places the onus on him/her to prove his/her innocence. It goes against the principle of natural justice. Under this amendment, someone could borrow your computer to post a seditious comment on some blog or website and you could be held responsible for that comment.
You may not even be aware of that posting but you’d have to produce witnesses to testify that you were not at your computer when the posting was done. See how ridiculous it is?
Furthermore, the devil we know has demonstrated that it has different sets of laws for different sets of people. A 19-year-old was arrested for baring his buttocks over photographs of Najib and his wife, Rosmah Mansor, while the incidents of BN supporters burning photographs of Penang Chief Minister Lim Guan Eng and urinating on the posters of Kelantan Menteri Besar Nik Aziz and DAP leader Lim Kit Siang have been ignored by the authorities.
And a 19-year-old girl who surrendered herself to the police for having stepped on the photographs of Najib and Rosmah got handcuffed like a criminal. But if you were to look at photographs of ex-menteri besar Khir Toyo and ex-minister Ling Liong Sik when they were arrested – one for land fraud, and the other for cheating the Government – you’d see that neither of them was handcuffed
It looks like on the one hand, we are told we are 1Malaysia, but on the other, there are these double standard.
The devil we know has also been spending public funds to the tune of RM5.77 billion for the political purpose of buying our hearts – and votes.
And in other ways as well. Only recently, Najib, while attending the launch of the Sultan Ahmad Shah Environmental Trust, surprised everyone there by announcing that the government would donate to it one million ringgit. Just like that – one million ringgit of the people’s money, given away at a glitzy launch party. Who gave him the permission to give away our money?
Roaring national debt
Meanwhile, our national debt keeps increasing at an alarming rate.
According to finance expert Teh Chi-Chang, in his book Umno-nomics: The Dark Side of the Budget, “Our national debt now stands at nearly 54% of total national income or GDP …”.
This, he adds, is just one per cent below the 55% debt ceiling set by “our more prudent forefathers” in the Loan (Local) Act 1959 and the Government Funding Act 1983. The way Najib keeps spending, we might soon go through the ceiling.
The devil we know hijacked Merdeka Day this year and turned it into BN’s own day of celebrations and election campaigning, culminating in the setting of a “world record” in the number of tweets in an hour! How that would benefit the country only a twit would know.
The devil we know is currently drawing up a new curriculum for the teaching of History in schools that will supposedly instil “patriotism” in our students. What that probably means is that history being told by the victors about the achievements of the victors will be indoctrinated in the minds of our young.
And our young will be captive because History has been made a must-pass subject at SPM starting next year.
So, what do you think? Better the devil we know, or the idea of a two-coalition system turning into reality that might convince sceptics that it is workable – and that it is the better option?
Even someone from the MCA, which is part of the ruling coalition, has come out to suggest that the devil we know has dark secrets to hide.
Lee Hwa Beng, writing in his book PKFZ: A Nation’s Trust Betrayed, points out that if it had not been for the outcome of the 2008 general election, at which BN lost its two-thirds majority and four states plus Kelantan, “we would never have known what happened in [the] PKFZ [scandal]”.
He adds, encouragingly, “If a repeat of March 2008 occurs at the 13th general election, which are due very soon, who knows what other truths could be revealed.”
For the sake of a better Malaysia , would you not want more truths to be revealed?
Friday, October 5, 2012
Thursday, October 4, 2012
The 2013 Budget: Najib’s Last Hurrah? (1)
Lim Kit Siang
“More debt has been accumulated in six years than what took 48 years after Merdeka to accumulate.”
A Brief History
The Budget unveiled by the Prime Minister on September 28th , his fourth budget, contained no real surprises. It followed the broad pattern of previous Budgets presented since 1998, the year of the East Asian Financial crisis.
A constant feature of these Budgets has been the use of deficit financing to further the BN agenda of promoting the interest of its key constituents while maintaining a grip on the loyalty of its traditional supporters. Tax giveaways and subsidies were part of the instruments used.
Despite buoyant revenues from the exploitation of natural resources which provided almost a third of revenue, the Government has consistently ran deficits which contributed to the buildup of a mountain of debt. The initial rationale for deficit financing was to stimulate and revive the economy after the devastating set back resulting from the East Asia Financial crisis of 1998.
Public funds were initially used to bail out corporations and to inject resources into the banking system. Simultaneously, a relaxed fiscal policy was justified on the grounds of encouraging the private sector to take the lead in accelerating economic growth.
Mega projects became a hallmark of the Mahathir era; generous tax concessions were granted to GLCs and crony corporations; toll operators and independent power producers benefitted from the largess extended by the government; consumer subsidies were extended to placate the electorate and to retain the loyalty of key groups.
In the years that followed, deficits continued to be incurred and became a constant feature of Malaysian budgets. The ritual promises to achieve fiscal balance were never kept.
The Badawi administration made some feeble attempts but gave into pressure groups and vested interests. Deficits continued to be run.
The general elections between 1998 and 2008 were preceded by “feel good” Budgets that created the illusion of well-being. The electoral set back suffered by the BN in 2008 led to a change in the way public funds came to be utilized. The most recent Budgets delivered by Najib have moved towards targeted cash and other handouts to key support groups.
These transfers were directed to select voting groups and segments of the population. The Budget for 2013 proposes the following key transfers:
The over-riding issue confronting Malaysia at this critical phase in its economic history is the alarming rate of increases in level of debt. Malaysia faces insolvency unless urgent measures are taken to check this slide to disaster.
Malaysia is in danger of a serious major debt crisis. It faces the very same issues that triggered the financial crisis faced by Greece and other weaker economies in the EUROZONE.
In a sense the circumstances in Malaysia are worse. There appears to be a total lack of willingness to learn lessons or to heed the polite warnings extended by the IMF and the rating agencies.
The lack of transparency and a sense of denial pose special dangers that the Prime Minster has chosen to ignore in his thrust to buy the next election. And buying the election appears to be the over-arching goal irrespective of the economic cost to the nation.
He is hell bent on his quest for power.
This potential crisis has been long in the making. The Budget deficits have ballooned and for the year 2012; the Federal Government’s debt is estimated to amount to RM502 billion or 53.7 percent of GDP just a little short of the 55 percent mark that sets limits to the size of permissible debt.
The Federal Government’s debt has grown from RM 229 billion in 2005 to RM 502 billion under the Najib administration. Thus, more debt has been accumulated in six years than what took 48 years after Merdeka to accumulate.
Some salient features merit mention.
The Government appears to have strayed from the path of fiscal sustainability even as it targets to reduce the budget deficit to 4% of GDP for 2013 from 4.5% this year, which was trimmed from the earlier target of 4.7%.
These estimates are based on rather rosy assumptions of growth, an under estimate of expenditures which conventionally increase after supplementary budgets are introduced like clockwork, a hallmark of the budget strategies of the Government. The final outcomes are likely to be higher if past experience is a guide.
Be that as it may, the estimates of the deficits and the resulting size of the Federal Government’s debt do not take account of the rising level of contingent liabilities which are debt guarantees issued by the Federal Government. These stood at RM96.9 billion or 12.2% of GDP at the end of 2010 and mushroomed to RM 117 billion by the end of 2011. They continue to grow.
(to be contd)
“More debt has been accumulated in six years than what took 48 years after Merdeka to accumulate.”
A Brief History
The Budget unveiled by the Prime Minister on September 28th , his fourth budget, contained no real surprises. It followed the broad pattern of previous Budgets presented since 1998, the year of the East Asian Financial crisis.
A constant feature of these Budgets has been the use of deficit financing to further the BN agenda of promoting the interest of its key constituents while maintaining a grip on the loyalty of its traditional supporters. Tax giveaways and subsidies were part of the instruments used.
Despite buoyant revenues from the exploitation of natural resources which provided almost a third of revenue, the Government has consistently ran deficits which contributed to the buildup of a mountain of debt. The initial rationale for deficit financing was to stimulate and revive the economy after the devastating set back resulting from the East Asia Financial crisis of 1998.
Public funds were initially used to bail out corporations and to inject resources into the banking system. Simultaneously, a relaxed fiscal policy was justified on the grounds of encouraging the private sector to take the lead in accelerating economic growth.
Mega projects became a hallmark of the Mahathir era; generous tax concessions were granted to GLCs and crony corporations; toll operators and independent power producers benefitted from the largess extended by the government; consumer subsidies were extended to placate the electorate and to retain the loyalty of key groups.
In the years that followed, deficits continued to be incurred and became a constant feature of Malaysian budgets. The ritual promises to achieve fiscal balance were never kept.
The Badawi administration made some feeble attempts but gave into pressure groups and vested interests. Deficits continued to be run.
The general elections between 1998 and 2008 were preceded by “feel good” Budgets that created the illusion of well-being. The electoral set back suffered by the BN in 2008 led to a change in the way public funds came to be utilized. The most recent Budgets delivered by Najib have moved towards targeted cash and other handouts to key support groups.
These transfers were directed to select voting groups and segments of the population. The Budget for 2013 proposes the following key transfers:
a) RM60 million to increase the minimum pension from RM720 to RM820 for pensioners who have been in civil service for at least 25 years.
b) RM301 million to provide a special incentive of RM200 per month to all military personnel, effective from 1 January 2013.
c) RM224million for a one-off RM1,000 to assist former members of the armed forces who have opted for early retirement;
d) RM3billion for assistance of RM250 to households where the head is earning less than RM3,000 and for single unmarried individuals aged 21 and above earning less than RM2,000 per month.
e) Individual income tax rate is to be reduced by 1 percentage point for each income bracket where annual taxable income falls between RM2,500 to RM50,000.
f) RM540 million will be allocated for the Schooling Assistance Program under which RM100 will be provided to all primary and secondary students.
g) Payment of an additional half-month bonus to civil servants in Dec-12 and another half-month bonus
The over-riding issue confronting Malaysia at this critical phase in its economic history is the alarming rate of increases in level of debt. Malaysia faces insolvency unless urgent measures are taken to check this slide to disaster.
Malaysia is in danger of a serious major debt crisis. It faces the very same issues that triggered the financial crisis faced by Greece and other weaker economies in the EUROZONE.
In a sense the circumstances in Malaysia are worse. There appears to be a total lack of willingness to learn lessons or to heed the polite warnings extended by the IMF and the rating agencies.
The lack of transparency and a sense of denial pose special dangers that the Prime Minster has chosen to ignore in his thrust to buy the next election. And buying the election appears to be the over-arching goal irrespective of the economic cost to the nation.
He is hell bent on his quest for power.
This potential crisis has been long in the making. The Budget deficits have ballooned and for the year 2012; the Federal Government’s debt is estimated to amount to RM502 billion or 53.7 percent of GDP just a little short of the 55 percent mark that sets limits to the size of permissible debt.
The Federal Government’s debt has grown from RM 229 billion in 2005 to RM 502 billion under the Najib administration. Thus, more debt has been accumulated in six years than what took 48 years after Merdeka to accumulate.
Some salient features merit mention.
The Government appears to have strayed from the path of fiscal sustainability even as it targets to reduce the budget deficit to 4% of GDP for 2013 from 4.5% this year, which was trimmed from the earlier target of 4.7%.
These estimates are based on rather rosy assumptions of growth, an under estimate of expenditures which conventionally increase after supplementary budgets are introduced like clockwork, a hallmark of the budget strategies of the Government. The final outcomes are likely to be higher if past experience is a guide.
Be that as it may, the estimates of the deficits and the resulting size of the Federal Government’s debt do not take account of the rising level of contingent liabilities which are debt guarantees issued by the Federal Government. These stood at RM96.9 billion or 12.2% of GDP at the end of 2010 and mushroomed to RM 117 billion by the end of 2011. They continue to grow.
(to be contd)
Defaming Penang CM akin to Nazi Germany tactics
Zairil Khir Johari | Malaysiakini
Outrageous defamation of Guan Eng in the STPM trial examinations is nothing more than a malicious personal attack based on fabricated lies and a shameless attempt at brainwashing students.
According to press reports, state-wide STPM trial examinations in Johor contain an inflammatory question-and-answer scheme that asserts the implication that Penang Chief Minister Lim Guan Eng’s “warning” to schools in Penang not to subscribe to Malay mainstream newspapers is “racist and impeding integration among races”.
The essay question requires students to discuss the hypothesis that “integration among races can be achieved through national education system, but various challenges have to be overcome to realise this objective.”
According to the alleged answer scheme, one of the answers to this question was:
“The warning of Penang Chief Minister Lim Guan Eng to 84 Chinese primary schools in the state to stop subscribing to Malay language mainstream newspapers is a racist action that impedes integration among races”.
Such an attempt to implicitly accuse the chief minister of a racist action is outrageous because not only is it a malicious personal attack based on fabricated lies, it is also a shameless attempt at brainwashing students through politicising education.
In early April this year, the chief minister had in jest asked Chinese schools not to subscribe to Utusan and Berita Harian but to replace them with Sinar Harian instead, a national Malay daily that is more respected and objective in its scope.
This is based on the fact that the BN-controlled media such Utusan Malaysia and the official Umno website Umno-Online have repeatedly fabricated malicious lies and accusations against the chief minister, including allegations that his underaged son had assaulted a female classmate.
The arrogance of money
Even though such and many other allegations have been proven to be untrue, no apology or action from the authorities have been forthcoming.
As a result of this inaction, the chief minister had no choice but to bring the matter to the courts by filing two defamation suits against Utusan.
In both cases, the chief minister won and was awarded RM200,000 in damages.
However, RM200,000 appears to be loose change for Utusan for they have continued to defame the chief minister, safe in the knowledge that they can afford such damages.
With a proven history of defamation and lies against the chief minister, is it even right for schools to continue to subscribe to such a rag?
For the chief minister to be implicitly called a racist for this comment is both injudicious and misleading, when the chief minister had also “suggested” that the schools subscribe to Sinar Harian instead.
Is the latter not a Malay newspaper as well?
Finally, the politicising of education has to stop. In addition to the above, another examination question listed “joining the opposition” as one of the choices to the question, “Which of the following will cause a person’s citizenship to be stripped?”
Clearly, there is a concerted attempt to malign and influence young students against the Opposition.
This shameless case of brainwashing students is repugnant and akin to propaganda tactics used in Nazi Germany.
ZAIRIL KHIR JOHARI is special officer to the Penang Chief Minister.
Outrageous defamation of Guan Eng in the STPM trial examinations is nothing more than a malicious personal attack based on fabricated lies and a shameless attempt at brainwashing students.
According to press reports, state-wide STPM trial examinations in Johor contain an inflammatory question-and-answer scheme that asserts the implication that Penang Chief Minister Lim Guan Eng’s “warning” to schools in Penang not to subscribe to Malay mainstream newspapers is “racist and impeding integration among races”.
The essay question requires students to discuss the hypothesis that “integration among races can be achieved through national education system, but various challenges have to be overcome to realise this objective.”
According to the alleged answer scheme, one of the answers to this question was:
“The warning of Penang Chief Minister Lim Guan Eng to 84 Chinese primary schools in the state to stop subscribing to Malay language mainstream newspapers is a racist action that impedes integration among races”.
Such an attempt to implicitly accuse the chief minister of a racist action is outrageous because not only is it a malicious personal attack based on fabricated lies, it is also a shameless attempt at brainwashing students through politicising education.
In early April this year, the chief minister had in jest asked Chinese schools not to subscribe to Utusan and Berita Harian but to replace them with Sinar Harian instead, a national Malay daily that is more respected and objective in its scope.
This is based on the fact that the BN-controlled media such Utusan Malaysia and the official Umno website Umno-Online have repeatedly fabricated malicious lies and accusations against the chief minister, including allegations that his underaged son had assaulted a female classmate.
The arrogance of money
Even though such and many other allegations have been proven to be untrue, no apology or action from the authorities have been forthcoming.
As a result of this inaction, the chief minister had no choice but to bring the matter to the courts by filing two defamation suits against Utusan.
In both cases, the chief minister won and was awarded RM200,000 in damages.
However, RM200,000 appears to be loose change for Utusan for they have continued to defame the chief minister, safe in the knowledge that they can afford such damages.
With a proven history of defamation and lies against the chief minister, is it even right for schools to continue to subscribe to such a rag?
For the chief minister to be implicitly called a racist for this comment is both injudicious and misleading, when the chief minister had also “suggested” that the schools subscribe to Sinar Harian instead.
Is the latter not a Malay newspaper as well?
Finally, the politicising of education has to stop. In addition to the above, another examination question listed “joining the opposition” as one of the choices to the question, “Which of the following will cause a person’s citizenship to be stripped?”
Clearly, there is a concerted attempt to malign and influence young students against the Opposition.
This shameless case of brainwashing students is repugnant and akin to propaganda tactics used in Nazi Germany.
ZAIRIL KHIR JOHARI is special officer to the Penang Chief Minister.
Tuesday, October 2, 2012
Why are they so worry and secretive about Petronas?
Each time the oil producing States request for increased royalties, everyone jumped up from their chairs in defending Petronas. The latest came from Umno youth chief Khairy Jamaluddin. My only discourse is, how much does he knows about Petronas when 99.999% of Malaysians do not know how Petronas operates and how its money moves around.
Petronas is in fact under the OSA, no one knows anything about its financial accounts but presumably must be making tonnes of money. Henceforth only a handful of top government officials have the privileged to view what goes on inside Petronas. Was Khairy one of them?
My tweets on Petronas were tagged to Khairy after his statement that Oil royalty hike affects tax collection, Petronas profits but till now he has yet to response.
Following were my tweets:
Petronas is in fact under the OSA, no one knows anything about its financial accounts but presumably must be making tonnes of money. Henceforth only a handful of top government officials have the privileged to view what goes on inside Petronas. Was Khairy one of them?
My tweets on Petronas were tagged to Khairy after his statement that Oil royalty hike affects tax collection, Petronas profits but till now he has yet to response.
Following were my tweets:
1 In reference to @Khairykj bold statement touching about #Petronas. Let us ask a few questions & logically analyzed it, your views/comment
2 Who actually owns #Petronas, a listing co, international share holders, umno, bn, govt (indirectly the rakyat) ?
3 Who actually has privilege 2view #Petronas accts in full, sure no1 frm public, @Khairykj has since he can talk about profit & loss?
4 Any1 knows actually how many barrels of oil are siphoned out from all the oil rigs in MY water owned by #Petronas?
5 How many knows about #Petronas ventures in the international arena? How much are allocated for all these ventures? and what are the ROI?
6 Where does the nett profit of #Petronas goes2 after, ddt payment2govt, allocation 4international ventures, operating cost& other expenses?
7 All the above cannot be known due to the strictest confidentiality place under the OSA hence #Petronas is a no go zone? So far am I right?
8 Pls correct me if I am wrong. #Petronas oil discovery within MY territory belongs 2govt with agreement of certain %tage of payment2 States
9 Anything belonging to the govt, inclg #Petronas belong to the country & ultimately the rakyat. Pls clarify if I am wrong.
10 If #Petronas belongs to the rakyat, Y are there hue & cry when the rakyat are asking for their money especially States where oil r found?
11 Y #Petronas need to hide their nett profit when it should be distributed to the rakyat.The so call tax 2govt is 1thing but nett profit?
12 #Petronas has never make any loses in the acct books? As long as there r no loses govt should provide more 4 oil producing States.
13 In conclusion can I ask @Khairykj what he meant by "we have 2 think of the financial implications when we talk about increasing royalty,"
14 Declaration, all the above are just my understanding/opinion about #Petronas, because its not open and transparent 2the public. @Khairykj
Popular populism? Najib’s Budget 2013 gamble
ByBridget Welsh | Malaysiakini
Prime Minister Najib Abdul Razak has announced the second election primer budget full of goodies, extending from bonuses to civil servants to handouts to lower income households.
This budget is Najib’s latest fiscal effort to secure him a solid victory in the 13th general election that has to be held before the end of June next year.
The budget is a continuation of a historically unprecedented pattern of direct government transfers to woo political support that has broadened in scope, increased in amount and moved development policy from needs based initiatives to what appears to be a coordinated regime political survival programme.
Najib’s main campaign strategy to win political support has been to offer financial rewards, and he has used his position as premier in an attempt to buttress his political position.
With something for everyone, he is clearly trying to increase his popularity through a variety of populist initiatives. Given his priorities, will this budget actually secure his political fortunes?
Although at first glance it is difficult to see through the mass of ringgit allocated, the measures introduced Friday were carefully aimed at different constituencies. Foremost is an effort to secure Umno’s traditional base – older voters, civil servants and lower income Malaysians.
The 1.3 million civil servants have been Umno’s political foundation. The party was formed by many civil servants, and although former civil servants only comprised less than 20 percent of the party representatives today, it is estimated that every Malay family has a relative who is a civil servant. Importantly, they are spread out across political constituencies nationwide, comprising a tipping group in tight races.
Of special focus are teachers, who are influential opinion-makers in local communities, a group that has become increasingly quietly critical of the incumbent coalition.
They received special attention in the budget, with greater training opportunities, improvements in education content and the upgrading of school facilities – the latter factor has been a persistent complaint especially for older schools. Najib’s is shoring up the barricades to diminish the possibilities of changing loyalties.
This is the second out-of-the-norm allocation for civil servants in less than a year, and suggests that the political support for Najib within the bureaucracy is not as secure as it once was.
While the budget announcement actually amounts to a one-month bonus (not one and a half, as half a month was distributed for Hari Raya Aidilfitri), this is a calculated act based on a recognition that a split in the bureaucracy could lead to BN losses.
Rumblings in the civil service began last year over the flawed pay scheme that favoured the higher ranks in the service and was seen to unfair to lower and middle ranks. They involve not just issues of pay, but corruption, promotions, and a sense that the civil service is being side-lined in governance decision-making with organisations such as Pemandu taking the lead.
Many in the civil service have also been quietly worried that the direct transfers will actually curtail their ability to have funds to carry out their programmes and run their offices, as one feature of Najib’s governance has been reductions in budget allocations to the operating funds of departments.
Najib’s knows his political position is at stake and is extending personal pocket-book oriented financial incentives as an olive branch.
Essential to BN
Similar base-protecting measures are directed at senior citizens, whose low pensions have made them more vulnerable to rising costs. Older voters have been the most loyal to Malaysia’s governing coalition and least likely to change loyalties. They have witnessed first-hand the developmental changes in infrastructure and seen qualitative improvements in Malaysia’s hardware.
Now they face increasing difficulties in making ends meet, especially with regard to health care, as Malaysia is aging. Today 5.1 percent of the Malaysia’s 29.5 million population is over 65, with greater numbers living longer in the expanding population. With more senior citizen benefits in the budget, the aim is to keep Malaysia’s Merdeka generation within the BN fold.
The third group central to the BN’s political fortunes are lower income groups. An estimated 53 percent of Malaysians make under RM3,000 in monthly income. Last year they were eligible to apply for the one-off payment of RM500 in the Bantuan Rakyat 1Malaysia (BR1M) cash transfer programme (although income alone is not the only determinant of eligibility).
Five million Malaysians received a total of RM2.6 billion. The budget allocates another RM500 to this group and extends the range to single-earners under RM2,000, aged 21-30, broadening the umbrella to include as much as 60 percent of the population.
The total allocated to cash transfer spending involved has risen sharply another RM3 billion. This programme is especially targeted for Malaysians in Sabah and Sarawak. Thirty-seven percent of the governing coalition’s seats are from the two states and over the last year, these states have become more politically competitive with the advent of a Borneo political awakening.
Disproportionally these states are poorer, with Sabah having the highest incidence of lower incomes nationally. The cash transfer initiative is aimed at reducing the income imbalances, but it is not a sustainable initiative. At its heart it is political, aimed at assuring the seats the government needs to hold its majority. The programme’s wide eligibility assured that a large share of possible voters will gain – at least short term.
Swing group political targeting
To complement this initiative are special measures for fisherman, retired military personnel and hawkers, all of whom experience high levels of vulnerability but are decisive constituencies.
Fishermen are notably actors in multiple seats in Perak, Kedah, Terengganu and Johor, many of them competitive such as Pengerang. This shows careful thought on the groups that will matter in close races.
This budget is also extending outreach to another important political group. The focus on youth is clear – graduate employability task force, entrepreneur funds and smart phone allocations.
It is sweetened by a first home programme, although the actual delivery of these will not be before polls and some of this measure is repackaging of programs introduced last year. Voters under 30 make up 25 percent of the electorate, and whoever wins will need youth support to do so.
A boost, blip or backfire?
This politically crafted budget rests on the underlying assumption that Malaysians are motivated by bread-and-butter concerns and pocket book enticements sway support. No question, Malaysians are concerned with the economy, and this factor historically has been decisive at polls. Jobs, salaries prices, and economic management are dominant issues.
Yet, the impact of financial cash rewards is less known. Surveys show that less than 10 percent of Malaysians admitted to receiving benefits tied to elections before this year and most of these were in Sabah and Sarawak. These ‘gifts’ are highly symbolic and often spent quickly. In close races spending can be the determinant, as has happened in by-elections.
We have also seen that targeted financial incentives, as occurred in Terengganu in 2004 through the allocation of wang ehsan, can have their effect. Monetary incentives are seen to disproportionally sway those with lower education and lower incomes, when the amounts involved are well beyond their usual incomes.
These earlier measures were markedly different than what is happening now. The current allocations are government transfers from taxpayer money openly given at a time of high political polarisation and greater competition.
They are not party funds, but the people’s money. By using public funds so openly Najib faces a potential backlash from voters, as the spending could be seen as an indication of weakness rather than strength, particularly the focus of the measures on the traditional base of Umno.
The fact is that many Malaysian voters recognise the political nature of the allocations. And no matter how often the government denies the political rationale and points to initiatives that address broader problems in society – and there are measures in this budget that do so, such as the programme for health – they cannot step away from the reality of the political interests that embedded in this spending bonanza.
This strategy also faces the risks as it is short-term and shallow. The first round of BR1M did give Najib a boost, but it was short-lived and actually quite small, a few percentage points in his popularity. Like the electoral gifts, this money will be spent quickly.
Importantly, it did not markedly sway support for Umno, whose popularity remains at record lows. The budgetary spending will very likely have to be followed by additional gifts during election time, which are also reaching unprecedented financial amounts.
Election timing will be crucial for these measures to have a political impact. Any delay beyond one month of distribution will diminish any budget bonus Najib hopes to get. Voters forget easily, especially after the money is spent. The timing of budgetary distributions suggests a February or March polls.
Broader questions
The scope and amount of goodie spending raise broader issues the country’s economic management. Najib now has to contend with the criticism from some that he is primarily concerned with his own political interest.
He has had consistent and higher deficit spending – every year he has been in office, making the country’s finances more precarious longer term. This places the country in a less robust fiscal position at a time of global economic uncertainty and bucks the trend internationally of greater fiscal prudence.
Cash transfer programmes moreover are not seen to generate long-term economic growth or development aims. While they are likely to give a boost to consumption, they are unlikely to bring back significant revenue in the government’s coffers.
The benefits for the private sector are mixed at best, as the link between Najib’s budget and growth is not clear. Real questions are being raised – about the size of the debt, the size of the revenue base, the sources and sustainability of growth, and importantly, the impact on development.
The questions are even more serious when one considers the longer term effects on ordinary people. The high spending now will only make for a more austere cuts and reforms later, bringing to the fore the real possibility of the introduction of a goods and service tax (GST).
For every person who receives funds now, they is a real possibility that they will have to give much more back to the government through a GST tax later. It also will make the challenges of resilient solutions to inequality harder, as it is challenging to move out of a sense of dependence and entitlement that are the product of repeating cash transfers towards genuine sustainable transformation.
Najib hopes that Malaysian voters will ignore these longer term questions at the polls. He hopes the spending will give him and his party the security they appear to need. He is hoping that his populist spending will make him popular. He is taking a gamble.
DR BRIDGET WELSH is associate professor of political science at Singapore Management University and she can be reached at bwelsh@smu.edu.sg
Prime Minister Najib Abdul Razak has announced the second election primer budget full of goodies, extending from bonuses to civil servants to handouts to lower income households.
This budget is Najib’s latest fiscal effort to secure him a solid victory in the 13th general election that has to be held before the end of June next year.
The budget is a continuation of a historically unprecedented pattern of direct government transfers to woo political support that has broadened in scope, increased in amount and moved development policy from needs based initiatives to what appears to be a coordinated regime political survival programme.
Najib’s main campaign strategy to win political support has been to offer financial rewards, and he has used his position as premier in an attempt to buttress his political position.
With something for everyone, he is clearly trying to increase his popularity through a variety of populist initiatives. Given his priorities, will this budget actually secure his political fortunes?
Although at first glance it is difficult to see through the mass of ringgit allocated, the measures introduced Friday were carefully aimed at different constituencies. Foremost is an effort to secure Umno’s traditional base – older voters, civil servants and lower income Malaysians.
The 1.3 million civil servants have been Umno’s political foundation. The party was formed by many civil servants, and although former civil servants only comprised less than 20 percent of the party representatives today, it is estimated that every Malay family has a relative who is a civil servant. Importantly, they are spread out across political constituencies nationwide, comprising a tipping group in tight races.
Of special focus are teachers, who are influential opinion-makers in local communities, a group that has become increasingly quietly critical of the incumbent coalition.
They received special attention in the budget, with greater training opportunities, improvements in education content and the upgrading of school facilities – the latter factor has been a persistent complaint especially for older schools. Najib’s is shoring up the barricades to diminish the possibilities of changing loyalties.
This is the second out-of-the-norm allocation for civil servants in less than a year, and suggests that the political support for Najib within the bureaucracy is not as secure as it once was.
While the budget announcement actually amounts to a one-month bonus (not one and a half, as half a month was distributed for Hari Raya Aidilfitri), this is a calculated act based on a recognition that a split in the bureaucracy could lead to BN losses.
Rumblings in the civil service began last year over the flawed pay scheme that favoured the higher ranks in the service and was seen to unfair to lower and middle ranks. They involve not just issues of pay, but corruption, promotions, and a sense that the civil service is being side-lined in governance decision-making with organisations such as Pemandu taking the lead.
Many in the civil service have also been quietly worried that the direct transfers will actually curtail their ability to have funds to carry out their programmes and run their offices, as one feature of Najib’s governance has been reductions in budget allocations to the operating funds of departments.
Najib’s knows his political position is at stake and is extending personal pocket-book oriented financial incentives as an olive branch.
Essential to BN
Similar base-protecting measures are directed at senior citizens, whose low pensions have made them more vulnerable to rising costs. Older voters have been the most loyal to Malaysia’s governing coalition and least likely to change loyalties. They have witnessed first-hand the developmental changes in infrastructure and seen qualitative improvements in Malaysia’s hardware.
Now they face increasing difficulties in making ends meet, especially with regard to health care, as Malaysia is aging. Today 5.1 percent of the Malaysia’s 29.5 million population is over 65, with greater numbers living longer in the expanding population. With more senior citizen benefits in the budget, the aim is to keep Malaysia’s Merdeka generation within the BN fold.
The third group central to the BN’s political fortunes are lower income groups. An estimated 53 percent of Malaysians make under RM3,000 in monthly income. Last year they were eligible to apply for the one-off payment of RM500 in the Bantuan Rakyat 1Malaysia (BR1M) cash transfer programme (although income alone is not the only determinant of eligibility).
Five million Malaysians received a total of RM2.6 billion. The budget allocates another RM500 to this group and extends the range to single-earners under RM2,000, aged 21-30, broadening the umbrella to include as much as 60 percent of the population.
The total allocated to cash transfer spending involved has risen sharply another RM3 billion. This programme is especially targeted for Malaysians in Sabah and Sarawak. Thirty-seven percent of the governing coalition’s seats are from the two states and over the last year, these states have become more politically competitive with the advent of a Borneo political awakening.
Disproportionally these states are poorer, with Sabah having the highest incidence of lower incomes nationally. The cash transfer initiative is aimed at reducing the income imbalances, but it is not a sustainable initiative. At its heart it is political, aimed at assuring the seats the government needs to hold its majority. The programme’s wide eligibility assured that a large share of possible voters will gain – at least short term.
Swing group political targeting
To complement this initiative are special measures for fisherman, retired military personnel and hawkers, all of whom experience high levels of vulnerability but are decisive constituencies.
Fishermen are notably actors in multiple seats in Perak, Kedah, Terengganu and Johor, many of them competitive such as Pengerang. This shows careful thought on the groups that will matter in close races.
This budget is also extending outreach to another important political group. The focus on youth is clear – graduate employability task force, entrepreneur funds and smart phone allocations.
It is sweetened by a first home programme, although the actual delivery of these will not be before polls and some of this measure is repackaging of programs introduced last year. Voters under 30 make up 25 percent of the electorate, and whoever wins will need youth support to do so.
A boost, blip or backfire?
This politically crafted budget rests on the underlying assumption that Malaysians are motivated by bread-and-butter concerns and pocket book enticements sway support. No question, Malaysians are concerned with the economy, and this factor historically has been decisive at polls. Jobs, salaries prices, and economic management are dominant issues.
Yet, the impact of financial cash rewards is less known. Surveys show that less than 10 percent of Malaysians admitted to receiving benefits tied to elections before this year and most of these were in Sabah and Sarawak. These ‘gifts’ are highly symbolic and often spent quickly. In close races spending can be the determinant, as has happened in by-elections.
We have also seen that targeted financial incentives, as occurred in Terengganu in 2004 through the allocation of wang ehsan, can have their effect. Monetary incentives are seen to disproportionally sway those with lower education and lower incomes, when the amounts involved are well beyond their usual incomes.
These earlier measures were markedly different than what is happening now. The current allocations are government transfers from taxpayer money openly given at a time of high political polarisation and greater competition.
They are not party funds, but the people’s money. By using public funds so openly Najib faces a potential backlash from voters, as the spending could be seen as an indication of weakness rather than strength, particularly the focus of the measures on the traditional base of Umno.
The fact is that many Malaysian voters recognise the political nature of the allocations. And no matter how often the government denies the political rationale and points to initiatives that address broader problems in society – and there are measures in this budget that do so, such as the programme for health – they cannot step away from the reality of the political interests that embedded in this spending bonanza.
This strategy also faces the risks as it is short-term and shallow. The first round of BR1M did give Najib a boost, but it was short-lived and actually quite small, a few percentage points in his popularity. Like the electoral gifts, this money will be spent quickly.
Importantly, it did not markedly sway support for Umno, whose popularity remains at record lows. The budgetary spending will very likely have to be followed by additional gifts during election time, which are also reaching unprecedented financial amounts.
Election timing will be crucial for these measures to have a political impact. Any delay beyond one month of distribution will diminish any budget bonus Najib hopes to get. Voters forget easily, especially after the money is spent. The timing of budgetary distributions suggests a February or March polls.
Broader questions
The scope and amount of goodie spending raise broader issues the country’s economic management. Najib now has to contend with the criticism from some that he is primarily concerned with his own political interest.
He has had consistent and higher deficit spending – every year he has been in office, making the country’s finances more precarious longer term. This places the country in a less robust fiscal position at a time of global economic uncertainty and bucks the trend internationally of greater fiscal prudence.
Cash transfer programmes moreover are not seen to generate long-term economic growth or development aims. While they are likely to give a boost to consumption, they are unlikely to bring back significant revenue in the government’s coffers.
The benefits for the private sector are mixed at best, as the link between Najib’s budget and growth is not clear. Real questions are being raised – about the size of the debt, the size of the revenue base, the sources and sustainability of growth, and importantly, the impact on development.
The questions are even more serious when one considers the longer term effects on ordinary people. The high spending now will only make for a more austere cuts and reforms later, bringing to the fore the real possibility of the introduction of a goods and service tax (GST).
For every person who receives funds now, they is a real possibility that they will have to give much more back to the government through a GST tax later. It also will make the challenges of resilient solutions to inequality harder, as it is challenging to move out of a sense of dependence and entitlement that are the product of repeating cash transfers towards genuine sustainable transformation.
Najib hopes that Malaysian voters will ignore these longer term questions at the polls. He hopes the spending will give him and his party the security they appear to need. He is hoping that his populist spending will make him popular. He is taking a gamble.
DR BRIDGET WELSH is associate professor of political science at Singapore Management University and she can be reached at bwelsh@smu.edu.sg
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