Archive for March, 2009

MayThere Be ManyMore Such Encounters!

Sunday, March 29th, 2009

May There Be Many More Such Encounters!

M. Bakri Musa

I congratulate Ustaz Sheikh Mahmud for bringing Prime Minister Abdullah Badawi and Opposition Leader Anwar Ibrahim together recently for a luncheon honoring Prophet Muhammad’s birthday. I also applaud Anwar and Abdullah for their very public display of civility towards each other on that occasion.

Along the same vein, I am pleased to see on the last day of the UMNO General Assembly Tun Mahathir and Abdullah Badawi shaking hands. Despite the many harsh exchanges between them recently, at least they could still manage a brief show of courtesy. Supporters and commentators may read many things on that, but the fact they could bury their personal differences even if only momentarily is praiseworthy enough.

Such public gestures of cordiality and mutual respect are sadly lacking in our society today. As with everything else, we could only change that if we have some very visible examples set by our leaders. We can do without such obscene displays as when a supposedly “Honorable Member” calling the Deputy Prime Minister a murderer in the hallowed hall of Parliament, or the Minister of Education branding the leader of the Opposition “a traitor to Malays!” Splendid example for our school children!

I wish academics as well as heads of NGOs, think tanks, and professional bodies would emulate Sheikh Mahmud. They too should bring together our leaders to discuss issues that deeply affect us in settings other than the political arena.

Unnecessary Conspiracy Theories

It reflects the rarity of the event, as well as the volatility of the current political climate, that a social encounter between Anwar and Abdullah would raise eyebrows among local political observers. Otherwise perceptive and sensible commentators are reduced to concocting mysterious conspiracy theories purportedly to explain and interpret such a happening.

We should all relax and quit being suspicious or invoke conspiratorial tones lest we might discourage or frighten other leaders from taking similar initiatives. Even if Anwar and Abdullah had discussed nothing more than their host’s rendang on that day, the fact that they had shared lunch together at the same table was enough. Anwar and Abdullah need not apologize for what they did. On the contrary they should thank their host publicly and profusely for that opportunity.

Anwar should not dismiss the meeting as mere “coincidence.” Even if it were so, he should still make full use of the opportunity. Likewise, Abdullah should not pretend, as he did, that Anwar “unexpectedly” dropped by. Yes, I know this is Malaysia, and an invitation from a friend of a friend to visit another friend is valid enough!

Imagine if either Anwar or Abdullah were to have said something along this line: Someone from the Ustaz’s office had approached me about the meeting and I readily agreed to it. To add some religious pizzazz to the response, make some references to the sunnah (practices) of the Holy Prophet to suit the occasion. The one that readily comes to mind would be the Prophet’s offer to negotiate with the Meccan leaders that culminated with their signing the peace treaty at Hudaybiyyah. That spared a potentially bloody battle between the followers of the prophet and the then pagan Meccans.

If Anwar or Abdullah had responded thus to the many ensuing queries instead of trying to dismiss this important encounter, even it was truly happenstance, imagine the valuable message of reconciliation and respect it would have sent to the citizens, especially their followers.

I am also pleased that Anwar had brought along his wife Azizzah. I wish that Abdullah too would have done the same. Spouses of leaders play a major role in moderating and supporting their respective wives and husbands.

I am not in tune with the Malaysian social protocol, but arriving after the Prime Minister on any occasion is definitely a “No! No!” However, Anwar had a ready explanation for his late arrival as he had to put up with some shenanigans at the courthouse.

Learning From Others

During the height of the American presidential election last year, candidates Barack Obama and John McCain took time off from their hectic campaigns for a joint appearance at the annual charity event, the Alfred E Smith Foundation Dinner, where they poked fun at each other (and shared the same dining table).

Similarly, former Presidents Bush, Sr., and Clinton, once fierce political competitors, were able to combine their considerable influence and prestige to head a charitable fund to help victims of the Asian Tsunami and Hurricane Katrina.

As Prime Minister, Tunku Abdul Rahman made it his practice to invite Members of Parliament and their spouses for a social evening of joget dancing at the Sri Perdana on the opening day of Parliament. The Tunku was a gracious host; he knew how to make his guests feel at home and have an enjoyable evening. Even parliamentarians from PAS felt at ease at such parties.

Such social interactions serve a very useful purpose; they help smooth and cement relationships in other spheres. Such interactions are what enabled the late Tan Chee Koon, Malaysia’s “Mr. Opposition,” to be a trenchant critic of the government and yet earned the admiration of government leaders.

It is not a surprise that the Selangor state government under Datuk Harun, an UMNO ultra, gave Tan, a socialist and in the opposition, a land grant for him to build Sentosa Hospital. Such goodwill gestures across the political (and also racial) divide are unimaginable today. Witness the current very ugly and public spat between Selangor Mentri Besar Khalid Ibrahim and his predecessor Khir Toyo. And they are both Malays! Imagine if they were of different races! As it is, you can bet that you would not find them at each other’s “Open House” during Hari Raya.

Speaking of Hari Raya “Open House,” it was commendable of Anwar to be at Abdullah’s soon after he (Anwar) was released from prison. Alas, that was then. It seemed so very long ago!

UMNO Youth used to organize an annual social golf tournament with its counterpart in Singapore’s PAP Youth. To say that the political philosophies of UMNO and PAP are poles apart would be an understatement, yet their members were able to set that aside for an afternoon of friendly rivalry on the greens. If UMNO Youth could this with the PAP, why not with PAS Pemuda? If those folks at PAS are not into golf, then why not try Quran reading sessions or a zikir barat?

Instead we have that ugly scene of Hishammuddin calling Anwar Ibrahim a traitor. Even factoring in the highly partisan atmosphere of the recently concluded UMNO General Assembly, I still find Hishammuddin’s utterances offensive and unpardonable. And this guy fancies himself leading UMNO and our country some day!

I hope that new Prime Minister Najib Razak would reinstate the Tunku’s practice of having a social gala at the “People’s Palace” in Putrajaya on the opening day of Parliament so our legislators and their spouses, as well as senior government officials, could get together for an evening of fun and relaxation. Surely those folks could put politics aside for the evening.

I would also like our future Prime Minister to make it his practice of meeting regularly with the leader of the opposition to discuss pending major legislations. That would also help smooth out Parliament’s operations.

It would be too much to expect Najib and Anwar to spend a quiet social evening together as President Reagan did with the Democratic Speaker of the House Tip O’Neill. Of course it is not the place for Anwar to seek such regular meetings, but it would be the courteous and civilized thing for Najib as Prime Minster to initiate the gesture, just as Reagan did with O’Neill.

There was something else remarkable and heartening about the Mauludal Nabi event at Ustaz Sheikh Mahmud Al-Mazjub’s place, quite apart from the presence of both Anwar and Abdullah. The occasion was also graced by the presence of not only ulamas from neighboring countries but also the head of the Buddhist Monastery in Bangkok.

I hope that our leaders and Malaysians generally would learn something from this great alim, and that at our next national Maludal Nabi event we should also invite the heads of other religious organizations in the country. We should go further and expect our leaders to visit each other’s “Open House” during the festive seasons. Wouldn’t that be wonderful! That would truly be a worthy legacy for this great alim.

Towards A Competitive Malaysia # 96

Wednesday, March 25th, 2009

Chapter 13:  Deteriorating Institutions

Islamic Institutions

Increasing Islamization of public institutions has consequences for both Muslim and non-Muslim Malaysians. As indicated earlier, the expansion of the Islamic establishment absorbs Malay talent and resources at the expense of other pursuits. Hence the concomitant decline in Malay participation in the economy, sciences and technology. This causal link has yet to register on Malay leaders. As Malays become more preoccupied with religion, by default the productive economic activities will fall increasingly on non-Muslims.

The mounting intrusiveness and fundamentalism of the Islamic establishment drive Malays away from their faith. Many do not wish to have their wives, daughters, sisters, and mothers be treated in the “Islamic” way as perceived by the Talibans. In Saudi Arabia, the model state for the Islamists, women are not allowed to drive or be out by themselves. They could be divorced simply with their husbands’ sending them short-text messaging on their cell phones. Seventh century culture co-existing with modernity! These Islamists are obsessed with turning Malaysia into seventh century Bedouin society.

As Islam has a special place in the Malay psyche, every leader is exploiting Islam to further his personal and political goals. Civil servants outdo each other in embellishing their Islamic credentials in order to advance their career. Instead of taking senior management courses or continuing professional education to enhance their skills and professionalism, they opt for postgraduate diplomas in Islam.

Politicians willingly ride the Islamic tiger in order to corral votes. The Islamic party PAS was very successful, encouraging UMNO to follow suit. Former Prime Minister Mahathir too rode the Islamic tiger; he got more than he bargained for. He could barely dismount. Today, the Islamists treat him with contempt. With the bureaucratization of Islam, the religion has become less a personal faith and more a massive bureaucracy. Imams are less spiritual leaders, more pompous bureaucrats. They have become the arms and eyes of the state. Many brandish their secular titles with flourish, and like the other civil servants, become corrupt. Hence the epithet Imam Duit (Cash Imam) applied to the Imam of the National Mosque. That should be a very prestigious appointment, reserved for the most pious and religious. This particular Imam Duit went on to contest the Federal elections of 2004 as an UMNO candidate and lost! That says volumes of the community standing of these modern political imams.

As there is no conceivable way to reform the Islamic establishment, I would simply get rid of it. This is not anti-Islam. The Islamic bureaucracy has nothing to do with Islam, rather it is another powerful political constituency bent on preserving its dependency on and privileged links to the government. The clergy and royalty classes share this same interest; the former uses religion to further its aims and buttress its position; the latter, our culture and traditions. Stripped off their cover, they are like any other interest groups, except for the fact that they are powerful and hide behind equally powerful emotional and cultural symbols.

America is a secular society and has no Department of Religion, yet Americans remain religious. Islam thrives in America; it is one of the fastest growing faiths, with no government help, thank you.


There was no Islamic bureaucracy during colonial times, yet there was no indication that Malays were any less Islamic, less religious, or less pious then they are today. In fact, the reverse is true. Divorce, child and spousal abuses, incest, drug addiction and other indicators of social dysfunction disproportionately afflict Malays today than in years past. More significantly, more Malays today are openly contemplating deserting their faith, an idea unheard of a generation or two earlier.

All these are happening with the greater emphasis on and massive expansion of the Islamic establishment. It is time to reverse course. Liberate Islam to where it rightly belongs: in the hearts of Muslims, not in government offices. It may well take someone with the Islamic credentials of Abdullah Badawi to tame the Islamic establishment, just as it took a conservative Republican President with proven anticommunist convictions like Nixon to initiate relations with China.

In later chapters (18 and 19) I will elaborate on how Malaysia could leverage its unique position to lead the Islamic world towards modernization, and to play the crucial role of bridging the West with the Islamic world.

Institutions of Politics

Malaysia addresses its race problems head on. It recognizes that issues of race are never far from the citizens’ consciousness, and acknowledges this fully by having explicit race-based political parties.

America does not have race-based political parties and has to resort to grotesque gerrymandering to ensure minority representations in Congress. In the Senate, representation is by entire state and since no state has a majority of Blacks or minorities (except possibly Hawaii), the US Senate is almost exclusively White. If not for gerrymandering, so would the House of Representatives. The District of Columbia has a majority of Black voters. Their quest for Senate representation has been stymied even though (or perhaps because) that would ensure at least two Black senators.

The Malaysian senate in contrast is not elected but appointed and counts among its members an Orang Asli (Aboriginal), a Portuguese minority, plus representatives from the small tribes in East Malaysia. The appointed Malaysian senate is more representative of Malaysians than the elected American senate is of Americans. Chalk one up for Malaysia!

Malaysia’s race-based parties work well because their leaders are aware of their obligations and responsibilities beyond their party members. While they do resort to chauvinistic exhortations especially during their parties’ elections in order to be seen as champions of their respective races, nonetheless sober reality soon returns. There is always the danger that these leaders could get carried away and egg their followers to extremes, as had happened in1969. Extremist leaders do get voted in, sometimes to very high positions. Nonetheless the members wisely draw the line and thus far, those elected to the very top slots have been those who have shown their ability to accommodate the other races. The shrill politicians do eventually get sidelined, thanks to the collective wisdom of the voters.

There are exceptions, of course. Lim Kit Siang, leader of the predominantly Chinese Democratic Action Party, takes perverse pleasure in taunting Malays. Yet he is the perennial leader of the DAP. No surprise that his party remains marginalized in the greater scheme of things. No Malay would even consider voting him as dogcatcher. Likewise with leaders of the Islamic Party, PAS; at least they are finally getting it and are now trying hard to tone down their racist core by wrapping themselves around the universal message of Islam.

In the ideal world, having non raced-based political parties is the way to go. However, we are not living in one; for now the Malaysian formula seems to work. We should focus on refining and enhancing an already workable system.

Next: Chapter 14:  Environmental, Regional, and Global Challenges

First Things First With Najib Razak

Sunday, March 22nd, 2009




First Things First With Najib Razak

M. Bakri Musa

Barring divine intervention, or an incredibly stupid move on his part, Najib Razak is set to be Malaysia’s next Prime Minister come this April. He will assume office with an approval rating even lower than that of the man he will be replacing. He also has a dark cloud hovering over him that simply refuses to fade away.

Despite that, Najib could still lead Malaysia out of its current doldrums and on to greater heights. To achieve that, he must address two critical issues, one relating to his personal integrity and the other, his leadership. For the first, he must answer the many sordid allegations swirling around him, specifically with regard to the brutal murder of the pregnant Mongolian model Altantuya. With the second, he must select a cabinet and leadership team that would “wow” the nation.

One thing is certain. This is not the time for Malaysians to resort to extra constitutional means or set dangerous precedents that could later haunt us just to deny Najib his due. Asking the King to intervene is one such dangerous precedent. Allah aside, only Parliament or UMNO Supreme Council could legitimately remove Najib. As both moves are unlikely, we might just as well focus on the potentially more productive pursuit of at least trying to ensure that his tenure will be successful. We owe that to our children. Love for country should transcend obsession with politics.

This is also not the time to demonstrate on the streets just to express our loathing for the man. That would only hasten Malaysia’s degeneration towards another Pakistan. During these perilous economic times, Malaysians would not forgive their politicians should they indulge their followers in such theatrics.

Every new leader deserves the courtesy of a grace period. There will be time enough in the next election for us to express our judgment on Najib. Meanwhile be thankful that the incompetent and neglectful leadership of Abdullah is finally coming to an end.

The Mongolian Murder Mystery

For Najib to simply deny that he is not in any way involved with the murder or attribute evil motives on his critics – his current strategy – will not cut it. His swearing of innocence over the Quran may convince some mosque attendees but it will not remove the lingering suspicion. The alleged evidences against him are just too specific and detailed. There are the purported SMS exchanges with a prominent lawyer who was initially involved in defending one of the accused, as well as the erasure of the murder victim’s record of entry into the country.

I applaud Najib in not resorting to libel suits to silence his critics. This is a particularly pernicious habit of the powerful in the region, a reflection of their ingrained “might being right” mentality. This is also the addiction of those who think they are powerful (and thus beyond criticism) simply because they have privileged access to the court system.

What Najib should do is to have a full press conference open to all, including and especially foreign correspondents, representatives of the alternative media, prominent bloggers, and his severest critics. I would include here Malaysia-Today’s Raja Petra Kamarudin.

Apart from being thoroughly prepared, Najib should bring to and distribute at that press conference all possible exculpatory documents such as his phone logs and billing records, as well as copies of Altantuya’s visitor entry record. Anything less would only deepen the suspicion. Najib needs to prevail in the court of public opinion, not the court of law.

I am making a crucial assumption here, and that is, Najib is truly innocent. If he is in any way involved in the murder, no matter how tangentially, then he does not deserve to be in Putra Jaya. He should be sent to Pudu Prison instead.

A “Wow” Cabinet and Leadership Team

Tun Mahathir’s warning to Najib that he should not pick a corrupt cabinet, while headline grabbing and stern sounding, is neither insightful nor helpful. Of course no one wants to be associated with the corrupt. Unlike Mahathir’s advice, mine is more specific and practical.

Najib should dispense entirely with the current cabinet, bar none. This includes the most likely candidate for Deputy Prime Minister, Muhyuddin Yassin. This is the team that passionately supported Mahathir when he wanted to build that crooked bridge to Singapore, and then just as enthusiastically backed Abdullah when he cancelled it! These ministers are incapable of independent thought; they serve nothing more than as their leader’s echo chamber. Get rid of them all.

The job of finding enough fresh talent to fill his new cabinet would be made considerably easier if Najib were to substantially reduce its size to about a dozen members. Get rid of the Ministries of Women Affairs, Youth, Tourism, and Information, among others. Apart from the cost savings, such a move would also streamline his administration.

Widen the search beyond UMNO and Barisan, or even outside of politics. Malaysia does not lack for talent, only that many are currently turned off by politics.

Najib may not remember this, but his father effectively used the senate appointment route to recruit new talents. That was how he brought in such outstanding individuals as Tengku Razaleigh, Ghazali Shafie and Chong Hon Nyan. Tun Razak even sought those who had previously been expelled from the party, as he did with Mahathir. Likewise, Najib must be as daring and unconventional as his father was. This is no time to stick to the old tired playbook.

A pivotal decision for Najib would be his choice for Deputy Prime Minister. Although Muhyuddin is likely to be elected the deputy UMNO leader, he would be a poor choice as Deputy Prime Minister, Mahathir’s endorsement notwithstanding. Najib should politely decline Mahathir’s recommendation and buck party tradition.

Being of the same age and experience as Najib, Muhyuddin would bring nothing extra to the team. For another, there would always be the subtle and distracting rivalry between the two, with Muhyuddin impatiently waiting his turn. We have been through that before! In part to allay our fears of this, he has already displayed the stereotypical UMNO streak of sucking up to his superior, as evidenced by his over enthusiastic embrace of Najib. He also goes to great pain impressing everyone on how well he can work with Najib. In Freudian psychology they call that “reaction formation,” a tried-and-true defense mechanism.

Muhyuddin’s fatal flaw is that he views the office of Deputy Prime Minister primarily as Najib’s chief “gofer” rather than as the nation’s second in command.

Najib should break once and for all the current unhealthy coupling of party positions with governmental appointments. Thus he should keep Muhyuddin out of government and task him to reform UMNO, a monumental undertaking in itself. He had been chairing the committee to reform the party for the past few years. Let him continue there.

Najib should instead invite (beg if necessary) Tengku Razaleigh to be his Deputy. His considerable experience and wisdom would confer upon Najib’s team instant respect and credibility. While that is important it should not be the sole reason for picking him. Rather, Najib should maximally utilize Razaleigh’s skills and talent.

The major challenge would be to make Razaleigh accept the appointment. Appealing to the man’s sense of public duty would help, indicating that this would further his publicly-stated quest for a “unity” government.

The age, experience and temperament of the two are sufficiently different that the two would unlikely get entangled in a destructive rivalry. Instead they would complement each other, recalling the successful Tunku-Tun Razak’s partnership of two generations earlier, only this time with a role reversal.

Early in his term I suggested that Prime Minister Abdullah should choose Tengku Razaleigh as a sort of Co-Prime Minister. Such successful co-leadership teams are seen in many large corporations, the most visible being Microsoft’s Bill Gates and Steve Ballmer. Had Abdullah done that, his (as well as the nation’s) fate would today be far different.

Apart from the cabinet, there are two other crucial senior governmental appointments: the chiefs of the police and the Anti Corruption Commission. Both institutions are now hopelessly corrupted and irreparably politicized; likewise their senior officers. The only way to regain the public trust is for Najib to recruit internationally, possibly from the FBI, Scotland Yard, or the Royal Canadian Mounted Police. Once he has reestablished trust, then he can revert to local talent.

A One-Term Mindset

To focus on these difficult tasks, Najib should develop a Reagan-like mindset of not worrying about the next election. He should act as if he would be a one-term Prime Minister. That would instill a much needed sense of urgency and discourage him from worrying about short-term political considerations. Such an attitude would also embolden him to make the necessary tough decisions.

By instituting these changes Najib would quickly assert his leadership as well as send the clear message that he is fully aware of the awesome responsibilities of his office and that he has the wherewithal to fulfill them. That would more likely make him succeed as Prime Minister, which in turn would ensure his party’s re-election.

These changes would of course trigger anger among the many powerful warlords in his party. Rest assured that as most of them are corrupt, a reinvigorated Anti Corruption Commission under professional leadership would keep them occupied.

However, first things first; Najib has to assure Malaysians that his personal integrity is beyond reproach. Frontally addressing the many ugly accusations leveled at him regarding the tragic end of that pregnant Mongolian model would be a good and essential start.


Towards A Competitive Malaysia #95

Wednesday, March 18th, 2009


Chapter 13: Deteriorating Institutions

The Civil Service

If I were to survey the top 100 civil servants, I would likely find the following: they are overwhelmingly Malays, liberal arts graduates of local public universities, and joined the organization immediately upon graduation. They have no or minimal experience outside of government (excluding pseudo private entities like GLCs and local public universities). The only publications they regularly read are local newspapers. Most have limited comprehension of English, and magazines like the Economist and Harvard Business Review or professional journals pertaining to their field are foreign to them. They have probably never read a book within the last few years.

Unlike senior executives in the private sector, they do not own a laptop; their secretaries still type their memos and write or reply their e-mails. When these officials go out of town, they are completely out of touch with their offices. These civil servants are frequently rotated; they have little expertise in specific areas. They may be at Tourism Ministry one year, then Health or Defense the next; there is no specialization. With a strict seniority system, civil servants do not reach the top until they are within a few years of their retirement. Then they would be preoccupied not with running their agencies but lobbying for their post-retirement careers. As promotions are strictly from within, there is no infusion of fresh talent at the upper levels, making the civil service very insular.

A reflection of the caliber of these senior civil servants is that few are sought after by the private sector when they retire. The private sector does not value their skills and experiences. If indeed they were hired by the private sector it is for lobbying their former colleagues.

Many have graduate degrees from good foreign universities, but lacking experience elsewhere and after decades in the civil service, they have internalized its stultifying work culture. They have to in order to survive.

The civil service is also very bloated, with over a million civil servants for a population of 25 million. As it is essentially a Malay organization, the reference population should be that of Malays: 13 million. The civil service is overwhelmingly Malay in culture and psyche.

Reforming the civil service means addressing the twin issues of bloat and insularity. With the government expanding its reach and taking over what should rightly be the realm of the private sector, this bloat will only get worse. With thousands of unemployed local graduates, the government is under tremendous political pressure to employ them, and Abdullah Badawi has responded to this by filling in and creating vacancies in the civil service. He has also expanded his cabinet to 33, with each ministry needing its own hordes of civil servants.

Reduce the civil service by at least 20-25 percent; that would streamline the government and make it efficient. This magnitude of reduction would send a very strong message to those remaining to shape up.

There will be a hue and cry to such cuts. To mitigate, I would offer generous severance pay, freeze new hires, and undertake massive re-deployment. A reduced civil service would discourage Malays to pursue the liberal arts knowing that there would not be jobs in the civil service.

The insularity could be effectively broken by the infusion of fresh talent at the upper levels. Once these civil servants realize that the top slots are not automatically theirs, there would be immediate improved performances as they would have to compete with potential outside candidates. A few such senior recruitments would send shock waves throughout the organization.

A measure of the difficulty in improving the government machinery is exemplified by the Police Force. That the Force is corrupt, incompetent, and lacks discipline is obvious. The world had a glimpse of this when the Police Chief brutally assaulted former Deputy Prime Minister Anwar Ibrahim. The sad part to that horrible incident (as revealed in a subsequent criminal trial) was not the fact that the chief himself personally beat up his victim, but he did so in the presence of his senior officers. Yet not one of them had the courage to restrain their chief who had obviously gone berserk. Worse, none of them had been disciplined for their obvious dereliction of duty. They witnessed a horrendous crime being committed and yet did nothing to stop it.

The rot in the Police Force had been going on for decades; it was apparent when Abdullah was the minister in charge. Yet nothing was done. When public outrage could no longer be contained, Abdullah as Prime Minster set up the investigative commission. It duly submitted its recommendations, and that was the end of it. A year later, another scandal erupted, this one over making female detainees do repetitive squatting in the nude (the “nude squad-gate”). Abdullah’s response this time was (you guessed it!) to form yet another Commission of Inquiry!

Among the first Royal Commission’s recommendations were to increase the number of recruits and raise their qualifications, pay, and amenities. Those measures would not help. Those recruits would quickly fall into the same culture of corruption. With their now higher pay and increased qualifications, they would demand even greater loot. Whereas before, a RM100 ‘tip’ would have been enough to fix a traffic ticket, now they would sniff at that.

My solution would be the very opposite; reduce the size of the force by laying off personnel. If there were to be any new recruitment, it would be for civilian employees. Shift the administrative work to civilian workers and have all uniformed personnel be on the beat. I would also outsource some of the police work to private security companies.

Another solution would be to have separate police jurisdictions. America has separate and independent police forces for cities, counties and states. There are also separate units for large institutions like universities. If you suspect corruption at the city police, you could go to the state or federal level (the FBI) and lodge a complaint.

The police force is huge, monolithic, and unwieldy. When it is corrupt, ineffective, or inefficient, there is no way to bypass it. There is no reason for Penang not to have its own state police; likewise Sabah and Sarawak. There could be separate units for ports and airports. Dispersal of power and authority would reduce corruption and create a competitive atmosphere.

At present, all police work in Malaysia is done by the Royal Malaysian Police. They do everything, from providing outriders to ministers and sultans to providing color guards and other ceremonial functions. The negative consequence of this is that the talented and honest policeman would aspire to be assigned to these easy and plush units. Those who are corrupt would shun those jobs, as opportunities for duit kopi (coffee money) are non-existent. In America, such duties as guarding the president and senior officials fall on the secret service, another independent agency.

The difficulties of effecting change would be equally formidable with all the other agencies. It would take a strong and determined leader to execute it, the very qualities lacking in Abdullah Badawi. As a former civil servant, he thrives in the present culture of the civil service. To expect him to change would be a tall order.

Next: Islamic Institutions

Calling For A New Breed of Politicians

Sunday, March 15th, 2009

Book review: Saifuddin Abdullah: Politik Baru: Mematangkan Demokrasi Malaysia. English version: New Politics: Towards A Mature Malaysian Democracy. Institut Terjemahan Negara Malaysia, Kuala Lumpur, 2008. 88 Pages, RM 30.00 (Sabah & Sarawak: RM35).

It is now de rigeur for ambitious politicians to pen their autobiographies, or put in print their political thoughts. Barack Obama did both, presumably just to be sure, first with his autobiographical Dreams From My Father: A Story of Race and Inheritance, and then his The Audacity of Hope: Thoughts on Reclaiming the American Dream. That strategy obviously worked!

I am not privy to Deputy Minister for Entrepreneur and Cooperative Development Saifuddin Abdullah’s political aspirations, but he has written Politik Baru: Mematangkan Demokrasi Malaysia, and its English translation, New Politics: Towards A Mature Malaysian Democracy. Both versions are included under this one cover.

Saifuddin has written three other books. Impressive! He is way ahead of another leader both in literary as well as political milestones. At a comparable stage in his life, Dr. Mahathir had yet to write a book or hold any ministerial appointment.

Clearly what we have in Saifuddin is a new breed of politician, a committed as well as a reflective one.

Straightforward Thesis

In Politik Baru Saifuddin puts forth a straightforward the thesis that Malaysian politics desperately needs players who are wise, knowledgeable, and with integrity. And to launch Malaysia into its next trajectory of development the government specifically and the political process generally must meaningfully engage the private sector and civil society.

He may be young but in framing the issues thus Saifuddin has demonstrated early his superior political skills. The politically tone deaf like me would have and had indeed stated the problems differently and more frontally. To me our current politicians are a bunch of opportunists who are also corrupt and incompetent, while our government acts in a highhanded fashion and ignoring the needs of the private sector as well as the sensitivities of civil society.

Had Saifuddin presented the problems as I did, it would be unlikely for a government-linked corporation to publish his book, much less have Deputy Prime Minister Najib Razak launch it.

Saifuddin may also be demonstrating the halus (subtle) ways of our culture. Sometimes that may prove to be much more effective; the operative word there being “sometimes.” Mahathir catapulted his political career by writing his brutally direct if not frankly insulting The Malay Dilemma.

In his book Saifuddin frequently uses catchy if not poetic phrases, as in, “Politik ilmu dan bukannya politik ampu; politik hikmah dan bukannya politik fitnah; serta politik bakti dan bukannya politik undi.” (“Knowledge politics instead of ingratiate politics; wisdom politics instead of defamatory politics; and service politics instead of vote politics.”) Another, “UMNO perlu diisi dengan ahli politik yang ‘berjuang’ dan bukannya yang ‘berwang.’” (“UMNO must be filled with politicians who ‘struggle’ and not politicians who are ‘wealthy.’”)

As is obvious, the English version is not as cute; it lacks the alliterative or rhyming ring, but more on the translation later.

Participatory Democracy in Perspective

It is not surprising that Saifuddin calls for the greater participation of civil society as he was once active in the Youth movement. True to his word, soon after being elected to Parliament for the first time in 2008, he set up a community liaison committee that would have included the PAS state assemblyman in his constituency. However, subsequent directives from above precluded him from having that state politician. I hope Saifuddin would not be discouraged and that he would still meet regularly in an unofficial basis with that opposition politician, as well as others.

Saifuddin does not explore why politics has degenerated in our country, or why our current politicians do not share their earlier compatriots’ deep sense of duty and service to the community. My own theory is this. Unlike earlier leaders who were inspired by the struggle for merdeka; today’s politicians lack such transcendental ideals; hence they are easily corrupted by material gains.

Further unlike the past, today’s best and brightest today have other much more rewarding avenues for their talent. If they have not already succumbed to the seduction of the First World, there is the lucrative private sector at home.

Attracting talent is a major challenge. Generous compensation is not entirely the answer. America does not pay its leaders on the same scale as the private sector, yet there is no shortage of capable and willing candidates. Paying them poorly however, would definitely attract only the corrupt and the less-than-talented, a destructive combination.

Then there is the matter of choosing the best candidate. Clearly this is one of UMNO’s major systemic weaknesses. I agree with Saifuddin that having the candidates debate each other openly is one of the better ways of assessing them. Although he does not specifically say so, UMNO’s “no contest” tradition is one it can do without.

Saifuddin would prefer our political leaders be knowledgeable (“berilmu”). He digresses somewhat with his philosophical deliberations on the meaning of knowledge, and ends up declaring his preference for intellectuals and scholars as leaders. Unfortunately such individuals, in Malaysia as well as elsewhere, rarely prove to be good leaders or executives, quite apart from their being politically inept.

While we should strive for competent, dedicated and incorruptible leaders, we should nevertheless be realistic and deal with the cards we have. To prioritize, I would put competence first. The public would readily overlook if not forgive an otherwise competent leader’s other inadequacies. Witness America’s continuing admiration for Jack Kennedy despite his unsavory personal morality. Malaysians tolerated the corruption of the Mahathir era because his was a competent administration, and the level of sleaze was at least manageable.

In contrast there is Kelantan’s Nik Aziz, a pious and honorable leader, berintegriti as Saifuddin would put it, but totally lacking in management competence. I would not tolerate him leading the nation, despite his admirable piety, honesty, and humility.

The worst would be a leader who is incompetent and corrupt. Unfortunately that is what we have with the Abdullah Administration; thus it is not a surprise that he is being booted out early.

In engaging the private sector and civil society, Saifuddin advocates a more participatory form of democracy, going beyond the rituals of regular elections. While I am fully supportive of that, we have to be careful not to buy in too much into it.

India and the Philippines have participatory democracy on a scale a quantum leap higher that what they have in Singapore and South Korea, but no Singaporean or South Korean would trade places with the Indians and Filipinos. The reason is obvious: Singaporean and South Korean leaders are competent despite their being repressive (Singapore) or corrupt (South Korea). Their competence enabled them to grant their citizens their most basic and greatest freedom, the freedom from hunger and privation.

It is for this reason that I am not enamored with Saifuddin’s idea of electing town councilors. In theory that would be the essence of grassroots participatory democracy, in practice however, it would merely bring the current political gridlock down to the local level. Witness the ongoing paralysis in Perak and elsewhere where the party in power is different from the one nationally. Now imagine the local, state and federal governments all under different political parties! To reemphasize, I would put competence ahead of everything else, including ideology. Town dwellers just want their potholes filled and drains unclogged!

To enhance citizens’ participation Saifuddin calls for their empowerment. The World Bank defines that as “the process of enhancing the capacity of individuals or groups to make choices, and to transform those choices into desired actions and outcomes.” Saifuddin searched hard to find the right Malay word for this before settling on his penghakupayaan.

I have a simpler and more accurate concept that is readily understood by the masses. We would empower them if we grant them their personal merdeka to make their own decisions. Repealing the Universities and Colleges Act for example, would grant our students their personal merdeka.

As with a nation, we must properly prepare our citizens for their merdeka lest they corrupt that precious gift as a license for anarchy. Meaning, we must make the relevant information readily available to them and they must be capable of thinking critically. Thus we must have freedom of the press and a decent education system.

In many ways the issue of press freedom is now mute. The Internet has democratized access to information and no government, not even the most repressive, has a monopoly on information nowadays. The deficiencies of our education system however is not so readily overcome or bypassed. It remains the biggest obstacle to effectively empowering our citizens.

Saifuddin is silent on the Internal Security Act (and other intrusive laws) and affirmative action. These issues are dear to all Malaysians and must be faced directly. Leaders with higher aspirations cannot pussyfoot around these defining matters. The ISA and other oppressive laws are the antithesis of empowering our people.

Perhaps Saifuddin may have internalized the clear but unspoken boundaries set by his party. If so, my advice would be this. An important aspect of leadership, and also a measure of courage, is one’s ability to push back those boundaries.

Calling for the private sector and civil society be “partners in development” would require an appreciation of their proper roles. This is problematic in Malaysia as the government is heavily involved in business and civil society. The views of those in Petronas and Khazanah may not accurately reflect the aspirations of the genuine private sector. While the UMNO government would readily work with civil society groups that it sponsors or are sympathetic to its cause, there is much less sympathy for others.

Another wrinkle is that with few notable exceptions, civil society in Malaysia is race based. Thus the government has to mediate the conflicting demands of GAPENA, the Malay writers association, and Suqui, the champions of Chinese education.

I am surprised by the omission of credit to the translator of this volume. Translation is an art and the translator’s work must be fully acknowledged. Perhaps the translator does not wish to be recognized here, and for good reasons. The translation is too literal. The imagery that would have been appropriate in Malay is totally meaningless in English. Siafuddin’s likening politics to a taman (garden) that has to be carefully tended is appropriate in Malay but not when translated into English. The better word would simply be ‘landscape.’

The average Malay reader would have considerable difficulty understanding Saifuddin’s original version because of his profuse use of bastardized English words like “integriti,” “adversarial,” “manipulatif,” or even the simple “debat.” All these words have ready and more accurate Malay counterparts. Try “amanah” for integrity.

Another distraction, again endemic with Malay writings, is the lack of consistent stylistic and editorial standards. In the English version he refers to the Malaysian Integrity Institute and then went ahead to use its Malay initials “IIM” that bear no relation to its English name. Malaysians editors and writers must agree on a common stylistic standard so readers would not be distracted.

As a politician Saifuddin faces the twin challenges of first changing UMNO along the lines suggested in his book, and second of ensuring that he is not changed in the process. Both are formidable undertakings. His writing this volume is an excellent beginning.

Saifuddin however cannot do it alone. Even as talented and intelligent a leader as Obama had plenty of help. His party elders recognized his talent and helped paved the way for him. John Kerry, the Democratic Party’s Presidential nominee in 2004 picked Obama to deliver the keynote address at the party’s convention that catapulted him onto the national scene.

Senior UMNO leaders likewise need to help nurture and gracefully make way for promising talent like Saifuddin. Malaysia and UMNO need a new breed of politicians in the mold of Saifuddin Abdullah, someone with fresh ideas and who can express them cogently, and then engage citizens intelligently as he has done with his Politik Baru.

First posted on March 5, 2009.

Towards A Competitive Malaysia #94

Wednesday, March 4th, 2009

[Please note that I will be away for the next week and a half.  The next posting will be on Sunday March 15, 2009]

Chapter 13: Deteriorating Institutions

Reforming Higher Education

As discussed in Chapter 6, the liberalization of higher education was not the consequence of a brilliant strategy rather that events had overtaken the regulators.

Private sector ingenuity had successfully exploited a loophole in the then existing laws prohibiting private degree-granting institutions. They did this by having “twinning” programs with foreign universities. Students would spend their first two years locally and then go abroad to the parent campus of their affiliated universities to finish their studies. The program was wildly successful. It was only a matter of time when these local programs would be extended so students need to go abroad only for a semester or two, and eventually for only a few days, just enough time to participate in the graduation ceremony.

Anticipating that eventuality, the government was forced to liberalize the system. As usual, there was not much thought behind it. Within the first two years, the government approved no less than six hundred institutions! Many were operated by scam artists, experts at inducing the rich but not so bright to part with their hard-earned cash. Corruption must have been a major factor, for the Minister of Education at the time, Najib Razak, was able to run a well-financed and successful campaign for the UMNO leadership.

Nonetheless there were a few respectable institutions like Monash University and the University of Nottingham that responded. Their success in turn spurred or forced local public universities to make the necessary reforms. The expanded use of English was one such consequence. Local employers (except the government) were favoring graduates of private universities, a severe embarrassment for the government and a bitter disappointment for those mostly Bumiputra graduates of public universities.

These private universities are more tolerated than welcomed. As such their full potential to benefit the nation has yet to be fully maximized. There are many barriers put in their way by officialdom, like being subjected to selective accreditation and difficulties securing visas for their foreign lecturers.

The industry too cannot escape blame for it has not done much to rid itself of the black sheep amongst its members. The leading private universities should take the leadership and form their own organization with strict criteria for membership. The standards should reflect academic as well as financial criteria, a synthesis of both the American Universities Association and Moody, as it were. The government should encourage such self-regulations. Institutions meeting those stringent criteria should be rewarded with ease of recruiting foreign lecturers, reduced or no taxes, guaranteed loans for capital expansion, and government scholarships and loans for their students. That last move would enable more Bumiputras to attend these good private universities.

In return for direct and indirect governmental support, these private institutions must agree to certain basic and sensible rules, one being that the domestic enrollment must reflect the general society. This would enhance the learning environment as well as prevent the dangerous racial segregation that we see today. The other is that all students must take a year of Malay unless they have graduated from national schools (which have Malay as the language of instruction). Once the nation has a critical mass of these international schools and foreign universities, it would effect changes to the system. That would be the surest and only way to force reform upon the system.

Meanwhile attempts at reform of public universities involve nothing more than tinkering at the edges, the latest being the Zahid Noordin Report, “Steps Towards Excellence.”13 It was submitted to the minister in charge on July 2005, and made public ten months later. Meanwhile the minister had been fired. There was no reason for the delay except that it reflected the usual lack of a sense of urgency as well as the penchant for secretiveness among civil servants.

The committee was heavy on administrative people; there was only one academic, a retired professor. The committee did not do wide research as evidenced by the papers it cited. It did not examine the large and successful public university systems of California, Virginia, and the Mid Western states. The committee members looked at individual campuses but not the system as a whole. Nor did the committee examine more recent efforts at reforming higher education in Britain and US. In particular, it did not examine the very useful National Science Foundation Report on revamping undergraduate science education.

The committee failed to define clearly the missions of the various tertiary institutions. Elsewhere I recommended that Malaysia follows the California tiered model. At the top is the University of California (UC) system, consisting of nine research universities offering doctoral, professional, and a wide variety of undergraduate programs. Next is the 23-campus California State University (CSU) system, offering only Bachelors and limited Masters, but no professional or doctoral degrees. Then there are the community colleges that offer technical as well as diploma and Associate degree programs. Despite the distinct systems, there are mechanisms enabling students to transfer from one to the other. The UC takes the top 1/8 of high school graduates, CSU the top third, while the community colleges take in everyone.

Malaysia could have a similar tiered system, with the full university offering UC-like programs: a breadth of undergraduate studies as well as doctoral and professional degrees. Next would be the University Colleges (equivalent of CSU), offering only bachelors and some limited masters programs. The polytechnics and community colleges should offer diploma-level courses only.

Private institutions should also follow this criterion. For Monash University in Malaysia to maintain its label of “university,” it must offer a breath of undergraduate as well as professional and doctoral programs. Give them a phase-in period of 5–10 years. If they do not offer professional and doctoral programs within that time, they will lose their university status and be termed “University College.” Similar rules should apply to public universities. If within ten years its academic faculty does not produce scholarly output and academic programs worthy of a full research university, then it should be rightly called a university college. Half of the current public universities should more accurately be called university colleges.

The university colleges should focus primarily on teaching rather than research, and spare themselves the added burden and complexities of running graduate and professional programs. America has many excellent degree-granting colleges (Amherst, Williams) whose academic quality and reputations far surpass many full-fledged universities.

I would remove matrikulasi programs from universities and put them either at community colleges (preferable) or university colleges. It is a waste of expensive resources of a research university to offer matrikulasi.

The committee targeted a goal of 100,000 PhDs in ten years. This too is ambitious and a recipe for failure. I would focus on a much lower figure and concentrate on the sciences, technology, English, economics, and other desperately needed disciplines. Unless focused, there would the temptation at the end should the goal not be reachable, to produce a glut of Malay and Islamic Studies PhDs. If today there are 80,000 unemployable bachelor’s degree holders, ten years hence it will be unemployable PhDs in Malay and Islamic Studies.

The report recommended greater academic autonomy. There should be total autonomy to include budgetary and management. As Azmi Sharom, a law professor at the University of Malaya, rightly observed in his open letter to the new Minister of Higher Education Datuk Mustapa, “If you love your universities, you must set them free.”15

Universities should manage themselves independent of the ministry. They should get a global budget based on the number of defined goals, like the number of students and programs. There could be differential funding based on the number of Bumiputra students in the sciences, and other selected criteria.

How the university would spend its money should be up to its management and governing board. Likewise, the board would hire and fire the VCs, deans, and departmental heads.

In addition to the global operating budget, there should be a separate capital one for new programs and expansions. The minister exerts control only at the macro level through the budget process. That would be much more effective. If a university were to deviate from government policy, it would risk jeopardizing its funding. The government could further exert control by not reappointing the board members and or putting in individuals who share the government’s view. The level of autonomy would be less for university colleges, and even less for community colleges.

The ministry would manage common administrative programs like staff pensions and central processing of students. Each university should however select its own students, faculty, and staff.

The committee recommended no new campuses be built until the present mess is cleared up. It then diluted its message by recommending that the Maritime Institute in Malacca be upgraded to a university and a Palm Oil University be set up! There is a difference between a university and a trade or technical school, and between a university and a research institute. A Palm Oil University sounds very much like a “souped up” trade school rather than an academic institution.

There should be enrollment limits per campus. Once it exceeds 25,000, there is a quantum leap in the complexities of managing it. Staff resources would be diverted just to run the institution. The same applies to branch campuses. Discontinue and convert them into independent universities or colleges. That would ease the administrative burden.

While there should be close collaborations between universities and research institutes like PORIM (Palm Oil) and RRI (Rubber), nonetheless their mission should remain separate. Their PhD researchers could however be appointed as adjunct professors so they could supervise students and undertake part-time teaching. If you convert research institutions like PORIM into universities, you risk destroying their research capabilities, as their personnel would be overburdened with teaching.

Similar adjunct appointments could also be given to private professionals like lawyers, physicians, and accountants. That would augment the teaching staff and give the curriculum a much-needed practical relevance.

Likewise, the mission of the Maritime Institute is to produce professional captains and seamen, not the academic study of the ocean. If you want to award degrees for such programs, make it into a university college, not a research university. The report devotes over 18 pages to details of ICT on campus. This is a rapidly changing field, and the committee members lack technical expertise in the area. Why not have fully “wired campuses” and put the contract out to open bidding. Let the professionals in the private sector solve the problems of security, redundancy, and others. The committee should have recommended that faculty members get free laptops with wireless access. If the university were to buy them in bulk, it would be very cheap (under US$500.00 each).

“Wiring” the campuses should be the highest priority. Once students have broadband, they could access the world’s libraries. They could attend virtual lectures at leading universities. MIT is putting its entire course materials on-line and free! Better yet, give every student a laptop. Of course to benefit from that, the students must be conversant in English, but more on that later.

The undergraduate curriculum must be liberalized. The committee suggests students be well versed in at least three languages. Again, that is too ambitious, although many non-Malay students are already trilingual (mother tongue, Malay, and English). I would be happy if our students are bilingual in Malay and English. Broad-based liberal education means that students must be exposed to the sciences and mathematics as well as the social sciences and humanities. There is no need to make Islam Hadhari compulsory; Malaysians already have enough religious instructions in schools.

The committee has no clear faculty development strategy. Universities should strive for all it faculty members to have terminal qualifications; university colleges should aim for at least half. For faculty development, all deans and department heads should seek out their top graduates and coach them to sit for the American Graduate Records Examination and apply for graduate schools abroad. The committee did not address the important aspect of matriculating students. There is much debate on the quality and unfairness of the present matrikulasi versus Sixth Form. This issue is made worse by the fact that the former is essentially for Bumiputras. I would re-institute Sixth Form with its separate entrance examination early in the year so the results would be known by December, with the successful students continuing their studies right away the following January.

The committee took less than six months to complete its work, and the ministry took nearly a year to digest its recommendations. I see nothing in the committee’s recommendations that would give me reasons to be optimistic.

Next: The Civil Service

Invest In Our People!

Sunday, March 1st, 2009

Invest In Our People!

M. Bakri Musa

Millions of Chinese had a rude awakening when they returned last month from celebrating their Lunar New Year in their villages. They discovered that the jobs they had in the cities before they left only a few weeks earlier had now disappeared. Tragic though that may be to them individually, the aggregate loss pales in comparison to that suffered by their government through its massive investments in the stocks of American companies and other paper assets like bonds and Treasury Notes.

If only the Chinese government had invested in its people, imagine the good that would do to them, and to China. If their government had spent the funds to build better schools, Chinese schoolchildren would not have dangerous physical facilities that collapse with the slightest tremor. Had those funds been used to build affordable apartments, the Chinese people would have been better housed. That would at least help alleviate their miserable existence.

The Chinese people suffered twice. First, they worked incredibly hard under intolerable conditions and insufferably meager wages so the West could enjoy inexpensive consumer goods. Then the foreign currencies earned by their government from the exports created through their hard work vanished with the downward spiral of Western economies.

When Western consumers could no longer afford to spend, the Chinese were forced to work under even harsher conditions so the products they make could be sold cheaper still. This is just a modern twist to the old “coolie” concept. In the early part of the last century, millions of indentured Chinese were brought to America to work on the gold mines and railways. Today the coolies remain in China; America brings in only the products of their hard labor.

China is not alone in engaging in this folly of investing abroad instead of in their people, so is the rest of Asia. Singapore lost a hundred billion dollars on its American investments. On a per capita basis, Singapore’s loss is massive and readily dwarfs that suffered by China.

Granted, Singaporeans live in a different universe from those folks in China, at least with respect to the creature comforts of life, though not in personal freedom. That notwithstanding, imagine how much better off Singaporeans would be if only their government had invested in them instead of being enamored by the fancy financial papers hustled by those Ivy League-educated white boys on Wall Street.

A Singaporean friend who owns a subsidiary in Silicon Valley lamented that the secretary to the head of his American company enjoys a lifestyle far better than his: larger home, a decent car, more social amenities, and better opportunities for her children. Meanwhile back in Singapore my friend has to make do with one of the pigeon holes of a home in those monotonous urban high-rises, and his children have to spend what little spare time they have in “cram schools.”

On another level, had Singapore invested those billions in nearby giant Indonesia instead of faraway America, imagine how much good it would do to the poor Indonesians. More pragmatically, a developed Indonesia would be a more high-value market for Singapore’s products and services. Besides, imagine the gratitude and goodwill created through such investments. You cannot put a monetary value to that. Indonesia desperately needs those investments; America could easily do without Singapore’s dollars.

Malaysia Fortuitously Spared

Fortunately in this current global crisis Malaysia is spared this tragic fate of losing its investments abroad. This is not the result of any brilliant foresight on the part of the nation’s leaders, rather the consequences of our own harrowing experience with the Asian economic crisis of 1997. For one, Malaysia has not yet fully recovered from that trauma and thus does not have the extra cash to be investing in any new and exotic financial instruments concocted in the West, those acronym-filled papers that are the “assets” of what former Finance Minister Tun Dain Zainudin derisively termed the “cowboy economics.”

For another, the capital controls implemented by Mahathir, though now largely dismantled, have left a deep impression on Malaysian economic managers, immunizing them against future meddling in such poorly understood foreign “investments.”

That has not always been the case. Prior to 1997, agencies of the Malaysian government were active players on the London Stock Market, as well as the London Metal Exchange and the Foreign Exchange Market.

It was at the London Stock Market that Malaysia executed its famous (or infamous, at least to the Brits) “Dawn Raid” on September 1981 that effectively nationalized the huge British plantation company, Guthrie. That was hailed as a brilliant move that also satisfied our national pride. It proved that we natives were fast learners and could be just as agile as those pros in the City, a much-needed confidence booster for those who require it periodically.

Malaysia’s brash attempt to corner the world’s tin market at the London Metal Exchange also involved mega sums. This time however, there was no rush to accept responsibility for this squandering of citizens’ precious funds. There were other colossal losses, including Bank Negara’s forex debacle, as well as the now defunct Bank Bumiputra’s many expensive foreign misadventures.

Again, I could only imagine the immense good had our government invested those precious funds in our people instead. Although average Malaysians have it considerably much better than the average Chinese, nonetheless our quality of life could always be improved.

Contrary to the soothing but misplaced assurances from our leaders, Malaysia cannot insulate itself from the current global economic storm. There is no “comfort zone.” Yes, Malaysia was fortunate enough not to have been entangled in those highly deceptive newfangled financial instruments with such fanciful acronyms. However, when our biggest trading partner and consumer of many of our commodities is in economic difficulties, rest assured that Malaysia will also inevitably be roped in.

Invest In What You Know

Like other countries, the Malaysian government has also introduced its own economic stimulus in an attempt to deal with the crisis. Our economists too have read Maynard Keynes and understood the rationale for counter cyclical public spending in a downturn.

Understanding the concept is one thing, translating it into reality in our local context is entirely another matter. The challenge is to make sure that our economic stimulus does indeed work, meaning it does spur the economy, and that our investments are indeed investments, meaning they would produce returns in excess of the capital expended.

At the height of the dotcom boom, the legendary American investor Warren Buffet was asked why he was not investing in that sector. He answered, “I invest only in things I know!”

I live in California and know that the real estate dynamics in San Francisco is radically different from that of San Bernardino, so I invest only in my community. I can at least follow the trend. Yet we have bankers in Singapore and Beijing pretending to be knowledgeable about real estate in the entire United States. That is the only explanation for their readily investing billions in securitized American mortgages!

Follow Warren Buffet’s maxim: Invest only in what you know. What do Malaysian leaders know? For one, more than any Western banker or Nobel prize-winning economist, our leaders know our people, their daily needs and living conditions. So invest in them, our people. For another, the economic “multiplier” of such spending is considerable; there is no such local multiplier when we invest in foreign stocks and other paper assets.

Our leaders are aware of the deplorable conditions of our schools especially in rural areas. They also know that these children risk their lives daily in crossing rickety bridges to get to schools. When they return home, their houses are flimsily built and in an unhealthy environment. They also have poor access to healthcare. So why not invest in building new schools, bridges, clinics, and affordable public housing?

Similarly we all know that those rural children could not get good teachers. So why not invest in teacher training and provide greater incentives for teachers to serve in rural areas?

The beauty of such investments is that they generate values way over and above the capital and other efforts we put in. The benefits are also enduring, and indeed “recession-proof.” Should there be an economic downturn, the superb education those children had received would still be with them; likewise their good health. Indeed a populace that is healthy and better educated, and thus productive, is the best weapon against a downturn.

In the last budget, and also in the proposed additional stimulus, considerable sums were devoted to investing in the local stock market and in furthering the government’s already considerable involvement in the private sector. Come another recession or a market misjudgment, such “investments” could easily evaporate. We have already squandered hundreds of billions on Bank Bumiputra, State Development Corporations, and the myriad GLCs. All we have to show for such investments are some old, tattered letterheads. We have not even learned any useful lessons from those debacles.

Let the investment bankers, brokers and other middle men and paper shufflers invest in exotic financial assets; governments should invest in their people, and in infrastructures that would enhance their lives. Those are the only investments that are properly the purview of governments, not company stocks, foreign bonds, or fancy derivatives.

Investing in our people is also the only effective way to prepare them for the increasingly competitive world. More significantly for leaders, that would also ensure that come election time when citizens would make decisions about their future, our leaders would not be rudely awakened to find themselves without jobs.