Malaysia’s summer of discontent: William Pesek

Investing 101 Means Looking Out the Windows More: William Pesek
http://www.bloomberg.com/news/2011-07-12/investing-101-means-looking-out-the-windows-more-william-pesek.html

Arab Spring, meet Malaysia’s summer of discontent.

That thought is surely on Prime Minister Najib Razak’s mind as the dust settles from Saturday’s botched demonstrations in Kuala Lumpur. By “botched” I mean the way Najib mishandled what should have been a ho-hum political-reform rally of little note by the international news media.

Public-relations experts would have told Najib to let the Coalition for Clean and Fair Elections have their day in the capital. Let them wave signs and wear their yellow shirts. Instead, he tried to stop the rally, increasing its size. Then, he cracked down. Police fired tear gas and detained 1,697 people, turning the event into a top cable TV news story.

The over-the-top response did something worse: It enraged Malaysians who weren’t all that interested in rallying before Saturday. It also underlined the rise in political risk sweeping Asia, something that investors would be wise to track.

No serious observer expects an exact Asian rerun of the Arab Spring movement that saw uprisings topple leaders in Egypt and Tunisia and threaten regimes in Syria, Libya and Yemen. But then neither do serious people argue that Asia has done enough to enhance its democratic credentials during the past 10 years.

Political Change

Malaysia’s protest was the biggest since 2007 — roughly 20,000 people. It came amid rising calls for political change from Thailand to China. What these nations have in common is that the overhaul in domestic political systems lags behind economic and financial reforms.

Take Thailand, where voters this month ejected the incumbent Democratic Party, which had used soldiers to disperse opposition protests in 2010, leading to more than 90 deaths. The party had promised to attack the corruption and undemocratic ways of the government run by Thaksin Shinawatra that soldiers ousted in 2006. Last week, fed up voters went full circle, making Thaksin’s sister premier.

Officials in China are pulling out all the stops to clamp down on political activists amid the so-called Jasmine Revolution. Nothing unnerves the Communist Party in Beijing more than the specter of social discontent. The winds of change are even sweeping Singapore; its ruling party in May won its narrowest election victory since independence in 1963.

Common Threads

Although the causes of such tension differ from country to country, there are a few common threads. One is the frustration of the have-nots as they watch the haves get richer. Another is rising global commodity prices, which make it harder for many to make ends meet. Finally, political modernization has been slower than critics hoped.

Malaysia’s case is especially complicated thanks to the inescapable issue of race. The conventional wisdom is that Saturday’s protests will delay Najib’s pledge to dismantle a 40- year preferential program that favors the Malay majority. The policy makes it harder for Chinese and Indian Malaysians to find good jobs, and its quotas scare away foreign investors. It holds Malaysia back in an increasingly competitive world.

To me, Najib wasn’t moving fast enough before Saturday. Foreign executives considering whether to build a factory in Malaysia want a clear schedule: By Jan. 1, 2012, we will do this, and by Jan. 1, 2013, we will do that. Instead, Najib offered vague intentions without meaningful or specific goals.

Misplaced Priorities

It’s no mystery why. All that matters to the United Malays National Political Organisation is clinging to its five-decade hold on power. Such misplaced priorities explain why Malaysia has been slow to streamline the economy and encourage the kind of entrepreneurialism that creates well-paid jobs. It’s also why leaders are timid about scrapping productivity-killing policies that only benefit portions of the population.

The question now is which way Najib turns. At this point, he may avoid calling an early election this year — there’s just too much risk for him. Which direction he takes in changing policy is an even bigger unknown. On July 10, the Guardian newspaper carried comments by Najib in which he cautioned protesters not to test his party’s will. “We can conquer Kuala Lumpur,” he said.

What can we make of a leader who promised reform and moderation and now sounds like a Roman emperor? Can a nation that arrests almost 1,700 people, some just for wearing yellow shirts, still be called a democracy? Najib’s response even had Malaysians feeling sorry for opposition leader Anwar Ibrahim, who was injured by flying tear gas canisters.

Events in Kuala Lumpur remind us that geopolitical risks are on the rise in Asia. Yes, growth rates are healthy even as the U.S., Japan and Europe limp along. The establishment of democratic institutions has been far less robust, though, and entrenched leaders may pay a considerable price. Maybe not in the Hosni Mubarak-sense, but the potential for upheaval shouldn’t be underestimated. There really is a bull market in the desire for political change.

Investors looking for places to put their money tend to lock themselves in offices combing through statistics, bond spreads, stock valuations and central-bank policies. In Asia’s case, more success might be had by looking out the window at the street demonstrations below.

(William Pesek is a Bloomberg View columnist. The opinions expressed are his own.)

10 Comments (+add yours?)

  1. klm
    Jul 13, 2011 @ 16:05:25

    You know. One bad article in Bloomberg can sink 10 Najib foreign junket, a 100 Idris Jala transformation presentation and a 1000 Malaysia Truly Asia ad.

    Like

  2. chanjoe1
    Jul 13, 2011 @ 16:40:53

    Some organisation should start a signature campaign to ask all the Board Of Directors of Tung Shin Hospital to resign for telling a lie in collaboration with Healh Minister Leow TL. This is very unhealthy of the board. They are looked up to keep the good name and the running of the hospital but they can tell a big white lie openly and how on to trust them to run and look after the hospital whihc survives on public funds?
    Lets get together to kick all these so called notable respectable people who can tell such a big white lie when all the evidences are there that Police had done eveil to the hospital on last Saturday.

    Like

  3. petestop
    Jul 13, 2011 @ 18:34:08

    http://www.facebook.com/pages/Malaysian-Lady-Of-Liberty/227295033969781?sk=wall

    Even 65-years old ex-teacher also standing up for her rights, what about the rest of young Malaysia ??

    What is Gerakan and MCA doing, when the rest of Malaysia is fighting for their rights ? Do you sincerely believe that you still have a chance comes the next GE-13 ?

    Like

  4. monsterball
    Jul 13, 2011 @ 22:40:59

    hi Doc….a group of senior doctors in Tung Shin Maternity Hospital blasted that MCA Deputy Min. Of Health ..left and right …talking cock when he was not at the rally at all.
    All these BN puppets and lap dogs of UMNO b only know how to carry balls for personal benefits.
    I told you…not all doctors are noble and dignified like you.

    Like

  5. monsterball
    Jul 14, 2011 @ 08:04:18

    Good doctor ..Jeyakumar arrested and detained…saying he is a threat to society.
    He even built a bride with his own money for the public and was decorated and is recognized worldwide.
    Bad doctors…all in BN bringing shame to the Medical profession.
    So are BN lawyers and policemen.

    Like

  6. Dr Hsu
    Jul 14, 2011 @ 10:47:58

    Dr Jeyakumar is the son of Dr Devaraj, the consultant in Penang. I worked under Dr Devaraj, and he was one of the most respected doctors then, principled and hardworking.

    Dr Jeyakumar should be released immediately and unconditionally. As I have mentioned, no one in his right mind would want to revive communism… Why chasing shadows ?

    Now that 11 doctors have voiced out, i think the honourable thing for any health minister and home minister to do is to resign from their jobs.

    Like

  7. petestop
    Jul 14, 2011 @ 11:15:15

    I reproduce the article from Malaysiakini here:

    Docs blast authorities over Tung Shin assault
    Jul 13, 11 9:43pm

    A group of senior medical officers have issued a statement condemning the authorities for the police’ attack on participants in the Bersih 2.0 rally last Saturday that had violated universal recognition of hospitals as places of sanctuary.

    In a statement issued to the media late today, the doctors – among whom were a number who were on duty at the Tung Shin and Chinese Maternity hospitals on Jalan Pudu when these were set upon by the police – said they are ready to issue affidavits to back their assertions.

    Saying hospitals should be “safe sanctuaries for all” and “consecrated places of refuge and protection” even during war times, the eleven doctors and surgeons also condemned the police for entering the hospital buildings in search of some protesters trying to escape from the police crackdown on the peaceful march.

    “What was most frightening and witnessed by many was the unprovoked violent assault within the hospital compounds and apprehension of several protesters who had merely ran into the hospitals to seek shelter from the tear gas and the water cannons!” the doctors said in the jointly-issued statement.

    This is the first public statement made by medical officers following the police denial that personnel had shot tear gas into hospital compounds on July 9.
    The assertion was followed by Health Minister Dr Liow Tiong Lai’s (middle, in photo) claim that the police shot neither tear gas nor chemical-laced water cannon into the Tung Shin Hospital and the adjacent Maternity Hospital compound as some quarters have purported.

    The police meted out the same treatment to participants of the Bersih rally elsewhere in Kuala Lumpur last Saturday.

    Numerous photos, videos and eye-witness accounts, however, contradict Liow’s statements and support reports that water cannon and tear gas canisters were, in fact, shot into the premises, acts that placed patients in the hospitals in danger.

    Among the latest to vouch for the latter version of events was the Bar Council, which issued yesterday a report of the observations of its monitors during the rally on Saturday and confirmed the incident.

    Signing the statement today were doctors Musa Nordin, Sheikh Johari Bux, Ng Kwee Boon, Ng Swee Choon, Ronald Mcoy, David Quek, Mary Cardozo, Farouk Musa, Mazeni Alwi, Pixie Low and Steve Wong.

    All of the doctors blasted the authorities for “shamelessly” denying the occurrence of these incidents in spite of photo, video and eye-witness accounts.

    “It is repulsive that the authorities entrusted with policing the nation and protecting the weak and needy, have shamelessly denied publicly, the occurrence of these incidents in spite of countless photos, videos and eye-witness accounts of what was evident to all independent observers.”

    Saying they did not wish to join the polemics in the aftermath of the massive rally called by the electoral reforms group Bersih, the doctors, some of whom were actually visiting or working at the Tung Shin hospitals at the time of the events, said they are ready to provide sworn affidavits “if required, as to the veracity of the incidents.”

    They also also reminded public office holders to discharge their duties with “moral integrity, dignity and transparency”.

    “Their failure to do so raises the public’s doubt in their competence and credibility as much as it demeans those in the high offices.”

    Like

  8. petestop
    Jul 14, 2011 @ 11:17:50

    So, do you think we can trust Liow Tiong Lai words over these doctors.

    Liow Tiong Lai is a political creature, whose only purpose is to do anything
    to stay in power.

    While, from a poll I read, doctors are the most trusted person.

    Liow Tiong Lai does not have any credibility at all, and My God! he is in charge of our public health !!

    Like

  9. monsterball
    Jul 14, 2011 @ 11:27:06

    MCA President Dr.Chua Soi Lek said….concerning Tung Shin Hospital…it is a matter how you look from which angle of the photos.
    He is trying very hard how to carry Najib’s balls…. better than Dr. Ling Liong Sik …to Mahathir.
    11 doctors working in Tung Shin Hospital blasted Deputy Health Ministers…Dr.Liow Tiong Lai talking through his nose. He was not there..yet he concluded no tear gas bombs …fired at the hospital. Such is the mentalities of MCA puppets to Najib.
    Suddenly….doctors are brave to voice their opinions…and the 11 from Tung Shin Hospital must be considered …traitors to Malaysia by Najib.
    Traitors are piling up and up by the millions!!
    I guess Dr.Hsu is watched by Home Minister closely too……hahahahahahahahaha
    I recalled the movie..”Ben-Hur” where the Roman Tribune asked his childhood friend …a Jew…to name all the Jews against Rome….to betray his own kind and be richly rewarded by Ceasar. He did not co-operate and was falsely accused….sent off to be a slave and his mother and sister in prison for life….by his good dear friend.
    Now in Malaysia….dear friends are labeled as traitors….if you do not bow down to UMNO b whims and fancies.
    BERSIH 2 fought back and what a fight it was.
    Now 11 doctors fighting for Malaysians openly.

    Like

  10. alice cc ang
    Jul 16, 2011 @ 13:09:26

    Home Minister Kerishammuddin Hussein, where are you hiding? You are supposed to protect your tainted cousin, Najib. Order the police to arrest Queen Elizabeth II for wearing yellow.

    Queen for Bersih? Maybe yes, maybe no (if one wishes to find out, one needs to ask Her Majesty), but it doesn’t matter what the answer is.

    Like

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