6 June 2014

Pendapat

Pendapat Anda?

TMI

Prior to 2004, licences were awarded to the Independent Power Producers (IPP) by the Economic Planning Unit (EPU) on a directly-negotiated basis. It is a well-known fact that only the well-connected were awarded the licences which paved the way to raking in millions if not billions, due to “sweetheart” deals of the first generation IPP’s Power Purchasing Agreement (PPA).

That the first generation IPPs enjoyed mid-teen project’s IRR (Internal Rate of Return – a yardstick used to measure financial viability of a project) is an open secret. That this rent-seeking behaviour had ultimately contributed to higher cost of electricity is synonymous with the hey-day of privatisation ala-Mahathirnomics.

Needless to say, power plants are surely “gold–mines” where concessionaires lock in their cash-flows for at least the next 20 years.

The industry players in the power sector were relieved when the Najib administration embarked on a spate of reforms which were to see, among other core reforms, a competitive tender to be undertaken for the award of future IPPs.

Moving in that direction, MyPower Corp which was established in 2010, a unit under the Energy, Green Technology and Water Ministry, was to spearhead the reforms so as to ensure the cheapest cost of energy delivered to the consumer.

Since 2011, the EC has conducted four competitive biddings. Tenaga Prai power plant (capacity 1.071 MW) was awarded by the EC to Tenaga (TNB) after a stiff bidding process. It was reported that 18 participants submitted their bids. Tenaga outbid the rest, with a levelised tariff of 34.7 sen/kWh and a project IRR of between 6 and 7%. This price now seems to be an industrial benchmark.

The latest competitive bid was the project 3B that was to build a 2,000 MW coal-fired power plant. The EC controversially awarded it to 1MDB despite it not being the lowest but based on technical grounds.

Much to the chagrin of the industrial players in the power sector, the reform is now perceived as being placed on the backburner and the EC is ostensibly making a U-turn, a regression of sorts.

Project 4A is a combined gas-fired turbine plant with a 1,100 MW to 1,400MW capacity. Sources said that the decision on the direct negotiation would help finalise the contract quickly and speed up the delivery of the power plant to address capacity shortage, following recent “outages” in several states.

These reasons, however, were not well received by the power players as it also defied logical thinking. The EC can’t suddenly argue that the country is in dire need of electricity after the recent outages. Planning is an ongoing process. The EC must be transparent as to the real causes of the outages.

The installed capacity is currently at 21,000MW while peak demand comes to the range of 17,000MW. This provides a clear margin of 4,000MW. So taking account of anticipated outages and unplanned ones, there is a clearly a safe margin. There is no foreseeable surge in demands for electricity in the immediate future.

Different opinions prevailed between the EC and the industry players as to the “actual operating reserve margin”. Even after taking into account all scheduled (maintenance and repair) and unscheduled outages (due to lightning and mishaps like floods), industry players insist on achieving a 10% to 21% operating reserve margin.

They argued that gradual power planting would be pertinent and would also arguably avoid excess reserve margins which would only burden consumers.

TNB moreover has made it clear that another 7,000MW of electricity has been planned for commissioning for the next four years and will be coming on-stream by 2018. There is sufficient reserve capacity so as not to allow the repeat of 1992.

Hence, why the rush for an open-tender?

Despite the opposition, going by the latest turn of events, the EC has already offered “a conditional award” for the development of Project 4A to a “consortium that is made up of three prominent bidders” of the project, namely YTL, SIPP and TNB.

Now that the three supposedly top bidders have been asked to form a consortium, one wonders why you even called for an open tender in the first place!

The rakyat would surely want the EC to be transparent as to “what are the conditional offers”. What are the formulae and rates for the power produced by this plant that will be undertaken sold to TNB? One can’t help thinking that the involvement of TNB is an eye-washer of sorts. Considering this is a direct-negotiated deal, it is expected that bigger transparency would be demanded from the Malaysian public.

Be that as it may, such political interference doesn’t augur well for Malaysia and, in fact, damages our credibility in the eyes of the international business community. We shall perhaps be their last destination for further high tech industry since investors are afraid of flip-flopping and uncertainties in policies.

To make it worse, the recent comment by Tan Sri Francis Yeoh urging an end of “capital capitalism” seems both weird and unbecoming as well as hollow. Many perceive that he has outwardly contradicted his own rise in the power sector and, more importantly, his current attempt at securing the project deal 4A deal through connections with the royalty.

YTL International Power Berhad owns the majority share in the holding company of SIPP Power Sdn Bhd while SIPP Energy Sdn Bhd owns 30% share of the SIPP Power Sdn Bhd. For transparency and best practice, Francis should come clean to explain all these rather than simply pronouncing lofty ideals of battling “crony capitalism” in Corporate Malaysia.

Searches in Suruhanjaya Syarikat Malaysia (SSM) have shown that HRH Sultan Ibrahim Ibni Almarhum Sultan Iskandar, Sultan Johor, is the majority (51%) shareholder of SIPP Energy while the majority (3 out of 5) of SIPP Power directors are siblings of YTL International Power Bhd managing director Tan Sri Francis Yeoh and executives within the YTL Group.

In the final analysis, it is important to register that this U-turn and flip-flop in policy is certainly not doing good to Malaysia as an investment destination. The chairman of the EC must be reminded that he is placed in the EC to undertake this reform.

Should he insist on the “direct negotiation”, will he allow for a “Swiss Challenge” from the other equally competent bidders?

It serves the new EC well to do a “Tan-Sri Ani Arope”, ie to exit graciously as a protest to the Najib’s flip-flop policy. That will go down well in history as a commitment for change and reform.

6 June 2014

Pendapat

Pendapat Anda?

TMI

Despite Putrajaya’s multi-million ringgit marketing blitz to promote the goods and services tax (GST), a survey by a private university still found that a majority of Malaysians are against the consumption tax due next April 1.

Among other things, the survey by UCSI of 700 respondents showed that they do not accept the consumption tax, do not think the government can implement it effectively and that they are satisfied with the present tax system.

In presenting the survey’s findings, UCSI poll research centre chief executive Dr Ngerng Miang Hong said that a significant number of respondents were also still uncertain about how the tax system would work.

The survey’s findings echo the results of a similar poll in April and could hamper Putrajaya’s efforts to get the public to buy into the new tax system, which it says is necessary to raise government revenue.

The survey’s most startling result found that 80% of respondents were not confident that the government would be able to implement GST effectively.

A huge majority of respondents also felt that the new tax system may be effective in other countries but may be abused by the Malaysian government.

A total of 41.7% strongly agreed with the assertion that GST “is more effective in other countries but may be abused by our government”, with 37.5% agreeing with that statement.

Some 66% of respondents felt that the new tax will not improve the economy, while more than 83% of them believed that it will burden low- and middle-income citizens.

And 59% did not feel that they could accept the GST, the survey showed.

At the same time, 49% wanted the current sales and service tax system to continue versus 32% who felt that it was time to switch to the GST.

To illustrate how people were still unsure about the effects of GST, Ngerng said about 45.9% said they were not sure how the tax affects their cost of living while more than 47% said they were sure.

Ngerng said the survey was conducted both online and at face-to-face meetings with both rural and urban respondents between the ages of 20 and 45.

Respondents were not identified according to ethnicity but claimed that they came from diverse backgrounds.

Ngerng announced the results at a forum titled “GST: good or bad” at UCSI in Kuala Lumpur last night.

The government plans to scrap the old sales and services tax system and replace it with a broad-based 6% GST tax that will be levied on almost everything except a list of essential goods in April next year.

Some of the goods exempted from GST include fresh food, public transport, healthcare, domestic water and education fees.

However, the tax has attracted wide public opposition with a May 1 rally against it attracting up to 15,000 people in Dataran Merdeka.

A few days later, independent pollster Merdeka Center released a survey which showed that 62% of its respondents being against the consumption tax.

The Merdeka Center survey also found that 33% of their respondents did not understand how the new system would work.

Its critics said the GST would hit disproportionately low- and middle-income earners but the Datuk Seri Najib Razak administration claimed it was necessary to trim the national deficit.

Putrajaya then announced it was spending RM250 million to explain the new tax to the public and to train businesses on how to use it.

A speaker at the UCSI forum from Barisan Nasional Youth, Neil Foo Seck Chyn, said that enforcement was key to ensuring that the new tax system did not lead to a sharp hike in prices next year.

Foo said according to the Finance Ministry, only 10% of a list of 689 common items were expected to go up in price once the GST was implemented.

“Many of the things we consume now, such as teh tarik, already have a 10% sales tax levied on it. It’s just that we don’t realise it because businesses include it in the final price they charge us,” said Foo, who is BN Youth strategist.

“But when we take away the 10% and replace it with 6%, the price should come down. But it is up to the government to enforce this so that businesses do not try to charge us 10% and add 6%.”

Another speaker, Ong Kian Ming of DAP, however, said businesses have no incentive to lower prices even if the prices of raw materials were lower because of GST.

Also, there is very little assurance that the government will be more accountable in how it uses the extra revenue earned from the system.

“If you collect more money without accountability, you will just end up wasting more,” said Ong, referring to wastage in government spending, highlighted in the yearly auditor general reports.

It was reported that in its first year, GST will earn the government an additional RM3 billion.

However, Pakatan Rakyat claimed that leakages in the BN government’s spending cost taxpayers between RM25 billion and RM40 billion a year.

5 June 2014

Pendapat

Pendapat Anda?

Malaysiakini

Unhappy with the lack of coverage he was given on the MH370 incident, PKR de facto leader Anwar Ibrahim has lashed out against local broadcasters on international radio.

He lamented that “not one minute of airtime on radio or television in Malaysia” was given to him, except over his links to MH370 Captain Zaharie Ahmad Shah (left).

“The only reference made was that I happened to know the captain and therefore there is this link that he was very passionate about reforms.

“He was very supportive of the democratic transition and he was disgusted in the manner that the Court of Appeal and the judiciary were used to convict me for five years,” he told the BBC World Service in an interview released today.

Anwar was referring to one of many conspiracy theoriessurrounding the MH370 mystery, which purports that Zaharie was disgruntled with the Court of Appeal decision on Anwar’s sodomy charge, and then went on to hijack the aircraft.

PKR had confirmed that Zaharie is a party member, but dismissed the allegation as “wild speculation” without any credible source.

The Boeing 777-200ER aircraft went missing without a trace on March 8 with 237 persons on board, just hours after the court decision.

In the interview, Anwar repeated his complaints that Malaysia is not being transparent in handling the tragedy.

He added that there is a “stark contrast” between the local media coverage of Malaysia’s handling of the crisis that highlighted praises and international accolades, and the international media coverage that is largely critical.

When pointed out that even other countries could not find the plane, Anwar explained that his complaints are directed at the outset of the incident and not the subsequent search efforts.

“That was deep into the mainland of Malaysia, it is our responsibility. I cannot condone the concealing of evidence,” he said.

He pointed out that MH370 had flew across five provinces of the peninsula after its disappearance.

“Until today, the government has not explained (how did this happen). No action has been taken against any incompetent guy dealing with the issue or radar,” he said.

5 June 2014

Pendapat

Pendapat Anda?

Bloomberg View

From missing airplanes to jail-bound opposition leaders, Malaysia has recently made international headlines for all the wrong reasons. Will the nation’s economy be next?

That’s the thrust of new report from Sarah Fowler of U.K.-based Oxford Economics, which ranks Malaysia the “riskiest country in Asia of those we consider,” more so than India, Indonesia and even coup-happy Thailand. On the surface, she points out, all’s well: Growth is zooming along at 6.2 percent, the external balance is reasonably sound and political stability reigns. But all’s not what it seems. “Prompted by its high levels of public debt, rising external debt and shrinking current account surplus, there has been a shift in the perception of risks towards Malaysia and away from Indonesia,” Fowler explains.

Malaysia wasn’t included in Morgan Stanley’s “fragile five” list of shaky emerging economies last year, as were India and Indonesia. But Fowler scratches at a number of Malaysian vulnerabilities that deserve more attention: external debt levels that in recent years have risen to close to 40 percent of gross domestic product; a higher public debt ratio than India; the biggest short-term capital flows among the 13 major emerging markets Oxford tracks, including Indonesia; and a shrinking current-account surplus.

This last point is still somewhat of a positive. As the mini-crises in developing nations last year demonstrated, a balance-of-payments surplus is a very good thing to have. Also, Malaysia’s use of so-called macroprudential policies has succeeded in preventing huge property bubbles of the kind afflicting Singapore and Hong Kong. ButMalaysia‘s current-account surplus is dwindling, from 16 percent of GDP in 2008 to 3.7 percent last year. And household debt is, to use Fowler’s words, “worryingly high” at more than 80 percent of GDP compared to less than 60 percent in 2008.

What really concerns Oxford, and myself, is the complacency factor in Putrajaya. Malaysia is effectively a one-party state, having effectively been ruled by the same party for six decades. Its 40-year-old, pro-Malay affirmative-action program chips away at the country’s competitiveness more and more each passing year. The scheme, which disenfranchises Malaysia’s Chinese and Indian minorities, is a productivity and innovation killer. It also has a corrupting influence on the political and business culture.

“A climate of entitlement amongst the Malay community limits entrepreneurialism and vested interests within the United Malays National Organization still resist change,” Fowler argues.

The need for change is becoming acute, though, as China’s dominance grows and neighbors like the Philippines get their acts together. Indians just elected the party of reform-minded Narendra Modi and Indonesians will soon choose a successor for Susilo Bambang Yudhoyono in a contest that’s all about reducing corruption and improving governmental efficiency. And Malaysia? Well, Prime Minister Najib Razak’s lackluster party is clinging to power. Meanwhile, opposition leader Anwar Ibrahim may soon be in jail again on sodomy charges many see as politically motivated.

The government’s handling of Malaysian Air Flight 370 said it all. Its deer-in-the-headlights response to the plane’s disappearance was the product of an insular political culture. The trouble is, that insularity is holding back a resource-rich economy that should be among Asia’s superstars, not its weakest links.

5 June 2014

Pendapat

Pendapat Anda?

Malaysiakini

I can’t say I was surprised to hear the admission by US and Australian authorities that the electronic ‘pings’ they assumed were coming from the black box of missing flight MH370 in the southern Indian Ocean have proven to be red herrings.

The allegedly mysterious disappearance of the Boeing 777 and its 239 passengers and crew two months ago has been deeply fishy from the very start.

First and foremost, of course, because anything whatever involving Malaysia’s criminal BN regime inevitably involves corruption, deception, incompetence or a complex mix of all three of these curses, and thus stinks to high heaven.

And then there’s the fact that the government with more of its citizens aboard MH370 than any other, the so-called ‘People’s’ Republic of China (PRC), is even more on the nose, if possible, than the Malaysian regime.

It was the PRC, as we all well recall, that in 1989 notoriously employed its laughably-titled ‘People’s Liberation’ Army to slaughter countless people peacefully calling for their political liberation in Tiananmen Square.

And it is the same, utterly unrepentant ‘People’s’ Republic of China government that alone enables the atrocious Kim dynasty to keep the people of North Korea in its death-grip; and that, in concert with Vladimir Putin’s neo-Stalinist Russia, constantly vetoes and otherwise thwarts United Nations efforts to save people from the depredations of corrupt, kleptocratic and murderous despots in Syria and elsewhere.

So it seems highly suspicious to me that just as the US and Australia announce that they have been ding-a-lings to be misled by what they believed were black-box pings, and thus all the waiting, watching world is left with is the pong of the BN regime’s MH370 wrongs, the Chinese and Malaysian regimes are happily playing diplomatic ping-pong.

If China’s initial outrage at Malaysia’s slow, confused, incompetent and comprehensively lying response to the disappearance of MH370 was genuine, it seems surpassingly strange that all has been so quickly forgiven and forgotten that Malaysian Prime Minister Najib Abdul Razak has been welcomed on a state visit to Beijing, and China has simultaneously sent a pair of its preciousgiant pandas to Malaysia.

A conspiracy of fiendship

It’s tempting to see these moves as not so much an outbreak of unaccountably sudden China-Malaysia friendship despite the ongoing MH370 fiasco, as a conspiracy of fiendship designed to cover up something deep-dark.

Why else would the PRC deliver a pair of pandas into the care of a Malaysian regime that has not only carelessly ‘lost’ well over a hundred Chinese citizens, but also has an appalling record of deaths in its agencies’ custody, and a disgraceful history of demonising and demeaning its own citizens of Chinese descent.

And why, for its part, would Malaysia’s BN regime indulge in an exercise so rich in self-destructive symbolism as to play host to a pair of pandas?

Surely I was just one of countless government critics whose first thought the other day on seeing pictures of Najib, Hishammuddin Hussein and sundry BN accomplices on a visit to the panda enclosure was that this guilty group rather than the innocent animals should by rights have been behind bars.

Similarly, I must have been only one of many who couldn’t help wondering whether, as long as Feng Yi and Fu Wa are supposed to be in quarantine, it might be a threat to their health to allow them to be visited there by a bunch of BN government and media germs.

And of course the pandas’ cute black eyes were, and will continue to be, a vivid reminder of what happened to Anwar Ibrahim during his first term in BN custody. While the very word ‘panda’ inevitably evoked the painfully obvious punning perception that the BN regime ceaselessly contrives to cling to power by pandering to its members’ and supporters’ lowest lusts, greeds, ignorances and racial and religious prejudices.

Such typical pandering being everywhere evident in the campaign for the Teluk Intan by/buy-election, with Umno Wanita chief Shahrizat Abdul Jalil pandering to the sectarianism that the regime works tirelessly to foment through the agency of fake ‘NGOs’ like Perkasa and ‘newspapers’ like Utusan Malaysia by calling DAP candidate Dyana Sofya Mohd Daud a “traitor” to her race and religion, and Home Minister Ahmad Zahid Hamidi damning Chinese and Indians who fail to support the BN regime as “ingrates”.

This followed Ahmad Zahid’s (left) not just pandering to the already inflated sense of self-importance of Rela members by promising them new uniforms and a RM1 million ‘constituency allocation’ in the event of a regime victory, but also going so far as to threaten them with dire if unspecified consequences if they failed to help BN win Teluk Intan.

“Don’t play with me. I know who has voted and didn’t vote,” he ranted, in reference to the 2,000 of 8,000 Rela members who he claimed had failed to cast ballots in last year’s general election, “so this time make sure that BN wins this parliamentary seat. I’m watching over the Pekan Baru ballot boxes.”

EC’s customary pandering

This gross abuse of power and blatant breach of the Electoral Act predictably drew a storm of criticism from the opposition and its supporters, at which point Electoral Commission (EC) chief Abdul Aziz Mohd Yusof indulged in its customary pandering to his masters in the BN regime by declaring that the home minister’s threats were “mere advice”, and that his promises of new uniforms did not constitute an offence “because Rela is already in the process of changing its uniform”.

So it is clear that, as far as the EC is concerned, BN is as free as ever to keep pandering to Teluk Intan voters with everything from promises of a gazillion-ringgit new highway to “gifts” of hampers and presumably its traditional handouts of petty cash on election day.

Meanwhile, the home minister has claimed that he had been only“joking” when he said that he knew which Rela members had failed to vote in the last general election, before proceeding to pander to the sexism of his audience with the comment that in any event the young, smart and attractive DAP candidate for Teluk Intan, Dyana Sofya Mohd Daud, is “not very pretty, merely photogenic.”

But most Malaysians can clearly see that Dyana is a symbol of Malaysia’s bright future, and that the plug-uglies of BN are the past. And that all the pandas and pandering in the world won’t save them much longer from getting pinged for the pongs surrounding MH370, Altantuya Shaariibuu, Teoh Beng Hock and literally countless other unforgivable wrongs.

5 June 2014

Pendapat

Pendapat Anda?

TMI

Tan Sri Francis Yeoh does protest too much for someone who has benefited from being part of the system.

Listening to him, you would think that YTL Corporation became financially strong only on the back of astute decision-making and the innovation of company executives; that the raft of lucrative projects from the lopsided IPP concession contract to the lucrative 1Bestarinet project just landed on the company’s books through the competence of company executives.

This is what Francis said in a statement to clarify what he allegedly said at a talk at Pemandu, the government agency famous for blowing its own trumpet with mind-numbing statistics.

Francis was quoted as lamenting the culture of crony capitalism in Malaysia and added that cronyism and the current penchant for racial and religious rhetoric was holding back Malaysia on the global stage. He also allegedly said that the bulk of YTL’s business was now in Singapore, the United Kingdom and Australia – jurisdictions where there was meritocracy and rule of law and where a businessman did not have to kow-tow to the prime minister.

A pretty harmless statement in most countries. On any given day, thousands of businessmen in Malaysia are saying the same thing – more or less the same thing, with only a couple of caveats. Ninety-nine percent of them do not have the cushion of multi-billion ringgit business in Singapore, the UK and Australia. Or whose business entities have received some favourable deals by the government.

In any case, Francis was prompted to issue a clarification, taking issue with a report published in a news portal that he said inaccurately portrayed what he told the audience at the Pemandu talk.

He said that during the presentation he attempted to dispel the notion that crony capitalism was rife in Malaysia. He even denied that YTL received the IPP concession because he was a crony of former prime minister Tun Dr Mahathir Mohamad.

It is the right of Francis to say whatever he wants and to believe whatever he chooses to say.

But it our right as Malaysians to look at the whole picture, to examine the facts and to look at the nuts and bolts of the IPP deal and just shrug our shoulders and laugh at Francis’s protest.

The only thing going for Francis is that he is not alone. More than 80% of Malaysia’s richest businessmen owe a significant portion of their wealth and success to who they know, instead of what they know. It is a fact. And many owe their big break to that champion of skewed privatisation, Dr Mahathir.

They owe their big break to Dr Mahathir, whether it was road toll concessions or an opportunity to buy and re-develop choice pieces of property in downtown Kuala Lumpur.

But ask them about their success and wealth and it is always about coming up the hard way, about their know-how rather than their know-who.

Many of them have earned colossal profits from concessions at home and pumped those funds abroad. Good for them. Money makes money.

But we Malaysians can choose our own narrative about them and their businesses.

4 June 2014

Pendapat

Pendapat Anda?

NYT

Last Friday afternoon, The Financial Times released an expansive report accusing Thomas Piketty of doing shoddy analysis of data on wealth inequality for his best-selling book, “Capital in the Twenty-First Century.” In the six days since, economists and writers around the world have produced many thousands of words on the controversy. Outsiders have weighed in on the newspaper’s case, the newspaper responded, and Mr. Piketty, on Thursday, provided his first detailed defense.

So where do things stand? How much do the criticisms by The Financial Times hold up, and should “Capital” continue to be viewed, as many reviewers have argued, as a definitive volume on inequality of income and wealth in advanced nations?

Here, we review the claims and counterclaims and conclusions one can draw about L’Affaire Piketty.

Who is Thomas Piketty, and why should anyone care about this book?

He is a French economist who has done groundbreaking work parsing old tax data and other historical records to try to discern the (very) long-term trends around inequality of wealth and income. He and other scholars, notably his frequent collaborator Emmanuel Saez, have helped answer questions that society previously had few good answers to. Namely, how much of the wealth in various advanced nations has been held by the top 1 percent at various times in history?

Photo

Thomas Piketty in his office at the French School for Advanced Studies in the Social Sciences.CreditCharles Platiau/Reuters

The book’s argument in a nutshell is this: Capitalism has a natural drift toward high inequality, as assets like real estate and stocks disproportionately held by the wealthy (capital) rise faster than the economy (growth). This process was temporarily reversed by the world wars of the first half of the 20th century, but now inequality in the United States and Europe is rising back toward pre-World War I levels. This is a bad thing, which should be fought through radical policy measures like a global tax on wealth.

In “Capital in the Twenty-First Century,” published in the United States in March (and in France last year) Mr. Piketty combined that data work with some literary criticism, philosophy, theory and prognostication for a sweeping look at the past, present and his expected future of inequality of wealth and income. It has been on the New York Times best-seller list for six weeks, including three in the No. 1 spot. This is not common for a book about economics, and this one happens to be 696 pages.

One thread that has run through many reviews has been praise for Mr. Piketty’s work with historical data, paired with disagreement concerning some of his conclusions about what it all means for the future. Mr. Piketty’s reputation for careful analytical work has increased the authority of his broader conclusions and policy recommendations. So he would have much to lose if a consensus developed that his analytical work was shoddy.

What is in dispute?

Plenty of people have taken issue with Mr. Piketty’s more philosophical and predictive conclusions. But last Friday, The Financial Times published a collection of articles by its economics editor, Chris Giles, accusing him of flawed and sloppy techniques for analyzing historical data. (The Financial Times’s critiques are summarized here and described at length by the newspaper here).

Some of its critiques centered on what the newspaper characterized as mistakes and modifications to data that appear arbitrary and without consistent justification — but do not undermine the core findings of his work.

A response from Mr. Piketty, published on his website on Thursday, said that these were not in fact mistakes, but choices he made to try to make the data more accurate, and which were cataloged (along with his reasons for making them) in technical notes accompanying his data.

Another line of criticism is that Mr. Piketty cherry-picked a source of data for British inequality that gave a distorted picture of the trend there in recent decades. The data source Mr. Giles argues would be more reliable paints a very different picture, indicating that the share of wealth held by the top 1 percent in Britain is 44 percent, not 71 percent, and has been flat in recent decades.

Mr. Giles takes issue with Mr. Piketty’s use of estate tax data from British authorities, writing that the authorities producing that data explicitly say it is best not used for purposes of comparing wealth trends over time. He argues instead for a survey of wealth in Britain, which he concludes is more reliable evidence.

If the data Mr. Piketty relies on for Britain is indeed deeply flawed — and Mr. Giles’s preferred approach more accurate — it would undermine Mr. Piketty’s broader argument.

It is on that basis that The Financial Times states “there is little evidence in Prof Piketty’s original sources to bear out the thesis that an increasing share of total wealth is held by the richest few.”

Mr. Piketty acknowledges that the data he used to measure British inequality, from estate tax returns, is imperfect. But he says that using Mr. Giles’s preferred data source isn’t a good way to go, because it is not comparable to data from earlier periods. The data for decades past are based on estate tax data, not surveys. Moreover, he notes that other research using different methods has also pointed to rising inequality in Britain in recent decades, making the result from Mr. Giles’s approach inconsistent with other evidence.

What can we be comfortable in concluding about wealth inequality?

The evidence for one of Mr. Piketty’s key points is overwhelming: Income inequality has risen significantly in the last few decades in both the United States and Europe. Data on the concentration of wealth is less reliable, and that is the crux of the dispute. Even with wealth, though, we can be reasonably confident that it is becoming more concentrated in the hands of the top 1 percent in three of the four countries Mr. Piketty studies most closely (the United States, Sweden and France). It is British wealth inequality that is in dispute.

Has Mr. Piketty acknowledged any errors?

Not really. Mr. Piketty concedes no outright errors in his original work, though he acknowledges that many of his choices can and should be subject to debate and are worth refining further.

And he says he could have done a better job disclosing his methods and reasons for data adjustments. For example, in addressing one piece of early 20th-century Swedish inequality data that Mr. Giles argued was in error, Mr. Piketty wrote, “I agree that this adjustment should have been made more explicit in the technical appendix and Excel file.”

What broader lessons can be drawn from this controversy about the nature of social science, historical research and the search for truth?

Quite a few! But this is the biggest one: The work by Mr. Piketty and others trying to study economic history is challenging for a lot of reasons, not least that good economic data is generally unavailable for anything more than the most recent few decades. So researchers must use whatever sources available, frequently old tax filings, to try to come up with some estimate of how things were in an earlier era.

The problem is, to make that data useful — and particularly to make it comparable to more recent data that is collected in a rigorous and transparent way — scholars have to make hundreds of adjustments to account for various factors that could throw off the numbers. To cite one of many adjustments that was at issue in the recent controversy: If you want to know what the level of wealth inequality was in 1930s France based on estate tax data, you must use some mechanism to deal with the fact that the people paying the estate tax are, well, dead, and probably don’t precisely line up with the wealth trends of all people who were alive at the time.

Because scholars must make countless assumptions to find useful data, there are countless opportunities for either conceptual error or willful manipulation. In that sense, the casual reader is trusting the researcher to make those judgments in a consistent, logical way that is not intended to tilt the data one way or another.

Any other points?

Maybe that people doing heavy-duty social science might consider using programming languages that allow more clearly disclosed and notated series of steps that outside researchers can more easily check and second-guess, instead of Microsoft Excel or other simple spreadsheets. Here’s our own Austin Frakt arguing just that. That said, Mr. Frakt notes that Mr. Piketty’s analysis is ultimately relatively simple mathematically, and so using simple spreadsheets — and then opening them up for the world to see and second-guess — may have been the best way to go.

Is this debate over?

We hope so. The Financial Times vs. Piketty back-and-forth began last Friday afternoon, and now has spanned about a dozen separate articles, posts and ripostes. That doesn’t even count the commentary on their dispute around the Internet (including here at The Upshot). The point of diminishing marginal returns of further debate around these relatively narrow issues seems to have set in.

So who won? Is “Capital” a reliable guide to the past, present and future of global inequality, or is it a schlocky polemic based on cherry-picked data?

If we had to summarize the consensus that has emerged on L’Affaire Piketty, it goes something like this. Mr. Giles raised worthwhile issues about Mr. Piketty’s methods that are fair to debate. But Mr. Piketty’s response also makes clear that Mr. Giles’s approach has flaws of its own and shows less inequality in Britain than there actually is.

Indeed, Mr. Giles’s results point to a world at odds not just with Mr. Piketty’s data, but also with that by other scholars and with the intuition of anyone who has seen what townhouses in the Mayfair neighborhood of London are selling for these days. That doesn’t mean Mr. Giles is wrong — the whole point of academic research is to gain something more solid than intuition — but the idea that the whole of Mr. Piketty’s argument rests on a few shaky assumptions seems unfair to the Frenchman.

4 June 2014

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Al-Jazeera

Her poetry of self inspired the oppressed across the world to believe that they could reveal their personal experience.

A brilliant writer, a fierce friend and a truly phenomenal woman.”

So said US President Barack Obama of Maya Angelou, leading tributes from around the world after the news was posted by her family on Facebook that she had died at the age of 86. In 2011, Obama presented her with the Presidential Medal of Freedom, the highest award for a civilian in the United States. As he said at the time, she was many things – author, poet, playwright, actress, director and composer – but “most of all, she was a storyteller – and her greatest stories were true”.

Angelou is a great American writer, studied in schools and universities across the country and hailed by politicians – former US President Bill Clinton said that she was a “national treasure” and he and former US Secretary of State Hillary Clinton had lost a “beloved friend”. Hers was an American story: Rags to riches, overcoming prejudice and misfortune to touch the American dream. But her impact was worldwide; she was more than a national writer. Her poetry and stories were translated into dozens of languages. She taught the world about the power of language – and how words could change the world.

Where she had the greatest impact was her autobiographical fiction. Her blend of memoir, autobiography and fiction created incredible, powerful stories – and opened up the potential of the intimate, no-holds-barred memoir to readers and writers across the world.

Feted and influential

For the young Marguerite Johnson to become so feted and influential would seem impossible. She was born to a nurse and navy dietician in St Louis, Missouri in April 1928 – a second child in a disastrous marriage. At four, she was sent to live with her grandmother in Arkansas, along with her brother. He called her “Maya”, while trying to say her name – and it stuck.

While staying with her mother at the age of seven, she was sexually abused and raped by her mother’s boyfriend. The rapist was imprisoned briefly by the authorities – and killed when he came out. Maya was struck dumb by the experience. As she said, “I thought my voice had killed a man and so it wasn’t safe to speak.”

For the next five years, she was silent – choosing to be mute, as she put it. She poured all her energy into reading, devouring books enthusiastically whenever she had a spare moment. Finally, a friend of her grandmother’s persuaded her to speak – telling her that poetry could only be truly understood when read aloud.

Angelou moved to San Francisco to live with her mother when she was 14. In the years that followed, she had a son at 17 and went deep into the city’s nightlife as a dancer, singer and brothel madam.

She moved to New York and became active in the Civil Rights Movement. Devastated by the assassination of Martin Luther King in 1968, she began trying to write her life from the age of three to 17, with encouragement from the author James Baldwin. The book was published as I Know Why the Caged Bird Sings.

When I Know Why the Caged Bird Sings burst into the literary scene in 1969, its raw honesty and incredible intimacy was shocking.

The revelations about girlhood, family abuse and poverty made it a bestseller, spending two years on the New York Times bestseller list. At the same time, she challenged the form of the autobiography, using techniques of dialogue, scene setting and plot development usually associated with fiction.

An inspiration for writers of autobiography and fiction alike, I Know Why the Caged Bird Sings also showed that the most personal experience could have a huge political ramifications. It opened up new possibilities for black women writers to explore subjugation and marginalisation – and pointed new directions for African-American and black writing by women and men. Thanks to  the book, the stories of the young and oppressed would never be overlooked or ignored again.

In 1993, Bill Clinton chose Angelou to recite her poem, On the Pulse of Morning at his inauguration. In the weeks after, sales of her books rose 500 percent across the world – and one reviewer called her the “black women’s laureate”.

Her poetry was a revelation

To writers, particularly women in Africa and those struggling under oppression, her poetry was a revelation; in contrast to complicated words and imagery fashionable in many western poems, she combined straightforward and powerful images to expose the pains and joys of her experiences. Thanks to her, the poetry of self became newly important – and the oppressed across the world were emboldened to believe that they could reveal their personal experience.

Many found Angelou’s work hard to stomach – the American Library Association listed I Know Why the Caged Bird Sings as one of their top 10 books most likely to be banned from high school classrooms. But nearly 50 years on, it is rated by many writers as the most influential memoir of the 20th century.

Angelou went on to write six more books of memoir, three volumes of poetry, essays and books of poetry, as well as television and film scripts and two cookery books. Her last volume of autobiography, Mom & Me & Mom came out in 2013.

Even at the end, earlier this week, she was busy writing a new book – and tweeting. In a world where many still suffer from discrimination, prejudice and children are still exploited by adults, her work speaks to millions. Her last tweet from @DrMayaAngelou was: “Listen to yourself and in that quietude, you might hear the words of God.”

4 June 2014

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KPRU

Semalam pada 3 Jun 2014, Perdana Menteri Datuk Seri Najib Razak dan Setiausaha Kerja UMNO, Datuk Ab. Rauf Yusoh telah menyerahkan writ saman terhadap portal berita Malaysiakini susulan penyiaran dua artikel pada 14 Mei lalu yang mengumpul pandangan pembaca berhubung isu krisis Terengganu baru-baru ini, yang dikatakan berunsuran fitnah. Penerbit Malaysiakini, Mkini Dotcom Sdn Bhd, Ketua Pengarang Kumpulan, Steven Gan dan Ketua Pengarang, Fathi Aris Omar masing-masing dinamakan dalam saman tersebut.

Secara kebetulan, Perdana Menteri di Negara jiran Singapura, Lee Hsien Loong turut buat pertama kali memfailkan saman terhadap seorang blogger bernama Roy Ngerng pada 18 Mei 2014, bahawa dia telah menerbitkan artikel yang berunsur fitnah terhadap Lee pada 15 Mei 2014.

Badan pemikir Kajian Politik untuk Perubahan (KPRU) berpendapat tindakan Perdana Menteri Najib itu bukan sahaja berganjak daripada konsep ‘wasatiyyah’ atau kesederhanaan yang sering diuar-uarkan beliau, malahan sekali gus mencomot mekap dan solekan beliau sebagai seorang “reformis” yang begitu susah payah cuba “dicipta” di arena antarabangsa.

Sesungguhnya, sebagai pemimpin tertinggi dalam pentadbiran kerajaan yang menguasai hampir kesemua sumber dan jentera Negara, termasuklah saluran media arus perdana, Najib berkemampuan memberikan respons atau sanggahan mahupun teguran secara serta-merta dan seluas mungkin sekira adanya keperluan. Pihak Malaysiakini juga mengalu-alukan Perdana Menteri Najib dan UMNO untuk menyatakan pandangan mereka untuk disiarkan dalam Malaysiakini. Walau bagaimanapun, Najib dan partinya membuat keputusan mengambil tindakan melalui prosiding fitnah terhadap organisasi media terbabit itu.

KPRU mengamati tindakan yang diambil oleh seorang Perdana Menteri, bukan ahli politik sembarangan, terhadap Malaysiakini, yang kononnya merupakan suatu tindakan yang cuba mempertahankan reputasi kerajaan yang diterajui Najib, sebagai tindakan sebuah rejim yang sering dikritik sebagai tidak menghormati demokrasi lagi menindas kebebasan media.

Saman yang difailkan oleh Najib ini bukan sahaja menimbulkan kontroversi, tetapi juga suatu langkah yang kurang bijaksana dan berpandangan sempit demi kelangsungan hayat sebuah rejim.

Lazimnya, Kementerian Dalam Negeri yang memainkan peranan “antagonis” bagi mengambil tindakan terhadap mana-mana media yang dilihat tidak mengakuri atau cuba mencabar arahan kerajaan UMNO dengan membatalkan atau menggantung lesen percetakan dan penerbitan media tertentu pada bila-bila masa sahaja. Kes saman Malaysiakini pada kali ini boleh dikatakan mewujudkan legasi negatif sebuah rejim memandangkan buat kali pertama Najib, atas nama Perdana Menteri, mengambil jalan undang-undang dengan memfailkan saman terhadap portal berita atas talian.

Sewajarnya, Najib harus bersikap demokrasi dalam isu dasar media dan membenarkan penerbitan akhbar harian Malaysiakini di bawah Akta Mesin Cetak dan Penerbitan 1984. Mkini Dotcom pernah memohon permit di bawah akter tersebut untuk menerbitkan akhbar harian untuk dijual di Lembah Klang tetapi ditolak permohonannya pada tahun 2010 oleh Kementerian Dalam Negeri tanpa memberi maklum balas berkenaan alasan permohonan ditolak.

Syarikat berkenaan kemudiannya terus mencabar keputusan tersebut. Pada hakikatnya, keputusan Mahkamah Tinggi yang dibuat oleh panel tiga hakim Mahkamah Rayuan pada 1 Oktober 2013 telahpun membatalkan keputusan menteri yang menolak permohonan permit Malaysiakini dan memutuskan penerbitan akhbar sesungguhnya hak yang dijamin di bawah Artikel 10 dalam Perlembangaan Persekutuan, bukannya hak istimewa yang ditentukan oleh Putrajaya.

Jikalau Najib benar-benar berpegang teguh pada pelan transformasi beliau, KPRU menggesa Perdana Menteri dan UMNO menarik balik saman yang difailkan terhadap Malaysiakini sementara permit penerbitan akhbar Malaysiakini dalam empat Bahasa, iaitu Bahasa Melayu, Bahasa Inggeris, Bahasa Cina dan Bahasa Tamil dikeluarkan.

Lantas, KPRU menyeru seluruh rakyat Malaysia berdiri bersama-sama dengan Malaysiakini bagi memberikan sokongan teguh kepada portal berita tersebut dalam masa sukar. Memandangkan blogger yang disaman oleh Perdana Menteri Lee Hsien Loong di Singapura itu berjaya mengumpul jumlah yang melebihi $55,700 melalui pendanaan orang ramai (crowdfunding) bagi membiayaai kos guamannya, rakyat Malaysia khususnya pembaca Malaysiakini juga harus menunjukkan sokongan kepada portal berita tersebut yang sering memberi ruang kepada suara alternatif bagi mempertahankan kebebasan media dan kebebasan bersuara.

 

Nota:

Writ saman terhadap Malaysiakini difailkan menerusi Tetuan Hafarizam Wan & Aisha Mubarak pada 30 Mei 2014 — http://b.mkini.net/mkini-doc/najib-sue-malaysiakini-summons.html

2 June 2014

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by Emad Shahin
30th May 2014

Egypt’s presidential election is another blunder on the road map. The first was the trumped up results of the constitutional referendum that the military-backed regime set at 98% approval, a clear reminiscent of the old authoritarian ways. The current presidential election too has been geared to ensure the victory of the July coup leader Abdel Fattah al-Sisi.

The process misses basic requisites of credibility: meaningful competition, free environment, neutrality of state institutions, and disappointedly to Sisi – a necessary turnout to confer legitimacy on the new regime and provide him with a strong mandate to rise as Egypt’s new pharaoh. As expected, he received a landslide victory, but a bitter one.

The military backed regime and its one-sided media machine did its best, including begging people to vote, extortion and threats of fines, to convince Egyptians to make an overwhelming turnout. This message was directed more to the US and the EU to prove the popularity of the coup leader and facilitate their full recognition of the new regime.

Egyptians, particularly the country’s youth and opponents to the return of an authoritarian police state, boycotted the election. They disappointed Sisi, who expected 40 million people to vote. Instead he got less than 15% turnout as confirmed by independent observers. The low turnout set the pro-coup media machine up in arms calling hysterically upon all Egyptians to save the day and the “beloved” general. More importantly, the low participation rate sends five strong messages to Sisi and his regional and Western backers.

1. Inflated popularity

The low turnout in the first two days of the elections revealed that the Sisi-mania that has swept Egypt for the past 10 months since the military coup was nothing but an orchestrated and inflated media stunt that does not reflect the realities of the country’s political landscape. Whatever popularity Sisi possesses, it does not rest on a solid constituency, but on diverse social segments with contradictory interests.

These include remnants of the old regime, segments of Christian Copts, and primarily citizens who initially supported him in hope for “stability” and economic recovery, but couldn’t care less about democracy or freedoms. It is now clear that Sisi has lost a good number of these elements who were not moved to go and vote for him. In short, his base of support might have been loud, as the media made them, but not large or committed enough.

2. Questionable legitimacy

The low turnout sends a clear signal that the field marshal’s legitimacy is going to be challenged no matter what his winning percentage will be. The alleged 30 million Egyptians who have participated in the 30 June demonstrations and the similar figure who took to the streets on 26 July in response to Sisi’s request for a “mandate” to fight potential terrorism vanished leaving everyone wondering where they went.

The wide boycott or apathy for the elections is yet another indication of the deep polarization the coup has inflicted on Egyptian society. The boycott went beyond the Muslim Brotherhood or Islamists to include youth, the revolutionaries and average Egyptians. The empty polling stations have succeeded in proving beyond doubt that the consensus narrative Sisi’s supporters have been relentlessly working to propagate to the world is nothing but a myth.

3. Unsupportive deep state

The first two days of elections raises questions about the extent of control Sisi has over the deep state. TV satellite channels exposed the low turn out and didn’t attempt to cover up the shocking lack of support, contrary to what they used to do during Mubarak’s time. Pro-coup TV show presenter, Ibrahim Eissa admitted that Sisi does not have a “political body” and that his campaign failed to run an effective electoral machine.

The Presidential Electoral Commission extended the voting period by a third day, thus shedding doubts on the credibility of the process and on Sisi’s expected victory. State institutions, the wide network of the former National Democratic Party and related businessmen who were believed to support Sisi appeared weak, unwilling or unable to deliver on their promises of mobilizing large numbers of voters as they did with Mubarak’s former PM Ahmed Shafeeq during the 2012 presidential elections.

Many attribute that to internal power struggles between the state’s different institutions, while others believe that Sisi lacks the experience and skills to efficiently run the system to his benefit. In either case, the efficacy of state institutions in the electoral process was undoubtedly a blow to the field marshal’s hopes.

4. No economic vision…No votes

Since the military takeover in July, Egypt has been witnessing a drastic economic deterioration. With the worsening economic situation and the decline in the standard of living of most Egyptians, many became increasingly disillusioned by Sisi’s repeated assertions that “he has nothing to offer” and may have reached the conclusion that nothing is likely to change with Sisi’s official inauguration.

It seems the field marshal’s “ingenious” suggestions for solving the unemployment crisis by providing the youth with vehicles to transport vegetables to “poorer areas,” exhorting Egyptians to divide the loaf of bread into four portions to save on wheat consumption, and using energy-efficient light bulbs to solve the electricity crisis have left many unimpressed.

5. People power

Egyptians have proved over the past three years that they will not allow a new pharaoh to emerge. The defiant slogan they raised during their popular uprisings in Tahrir 2011 “Down with the Next President” still holds and the phenomenon of “president for life” is a thing of the past. As they have previously done through mass mobilization and peaceful protests, they have once again established, by silence this time, that they, and not Sisi’s regional or international backers, have the final word.

The low turnout sends a strong message to the military establishment and its design to continue controlling the political process. It eventually needs to take one or two steps back and allow for a reset of a true democratic system and civilian control over the political process.

Egypt needs to build a rational state that respects the rule of law, pluralism, human rights and the fundamental basis of democracy. The alternative may not fall short of a third revolutionary wave. This time it will make sure to dismantle the police state and its authoritarian institutions.

- Emad Shahin is Professor of Public Policy, the American University in Cairo (AUC) and Editor-in-Chief, The Oxford Encyclopedia of Islam and Politics. He is currently a Public Policy Scholar at Woodrow Wilson Center and a Distinguished Visiting Scholar at Columbia University.

- See more at: http://www.middleeasteye.net/columns/five-messages-sisi-must-hear#sthash.uDGrLsKN.dpuf

27 May 2014

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25 May 2014

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Anwar Ibrahim today said that an insult to Umno is not an insult to Malays. Calling them thieves, he questions why Umno should be allowed to get away with hateful speech if others can’t.

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