Malaysia elections, Mahathir back in power but my friend Wan Saiful lost

Last Wednesday, May 09, Malaysia held its 14th General Elections (GE14). My good friend Wan Saiful Wan Jan, co-founder and former CEO of Malaysia's first free market think tank IDEAS, resigned from the institute in February and became a politician by March to help challenge the political hegemony of Najib and BN Party, the ruling party for six decades.

Of course I hoped that Najib and party would lose because of his known big time populist and corrupt ways. His world-known corruption in the 1MDB scandal should have brought him down but because they seemed like a one-party state, his politician supporters bailed him out.

I found the Malaysia election a bit weird, at least compared to the PH. They hold it midweek, Wednesday. When people have work? I don't know if it was a holiday. In the PH, all local and national elections are held on a Monday, usually 2nd Monday of May. People can have an extended vacation when they go home to their province on a weekend then cast their votes Monday morning, then go back to Manila or other big cities in the afternoon.

I think Najib and party did it in order to disenfranchise many white collar workers -- who tend to vote for the opposition -- they will have difficulty going to their province to vote then come back the same day. 

Anyway, my friend lost. But given the fact that he campaigned for only 2 months and 1 week, he did well. 

Wan posted this in his fb wall, in Bahasa, I just copy-paste here a portion of it from fb translation. I think incoming PM Mahathir will invite him to serve in some govt agencies. Good luck, Wan.

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What a beautiful night for us!

May 9th 2018 is a historic date for Malaysia. All of us are among the people who have played a very important role in this change. Let us welcome a brilliant decision achieved by pakatan harapan.

I thank all of the friends who helped me in this election. This is my first election, and the trust that is given to compete in pendang is a heavy trust. But with the help given, we managed to run a healthy campaign….

We fought very well and very healthy. The country figures came to pendang to help us. The media also gave us good coverage. Even if we don't succeed in pendang this time, we need to arrange a step and arrange an organization to allow us to get up again to prepare ourselves for the next fight. I want to be together in the struggle for pendang future, with friends in pendang. I hope we'll all be together in that renewed agenda.

I wrote this message when I was in the same council with tun Dr. Mahathir Mohamad and tun asked me to say hello to all in pendang. The formation of the new empire is very close. It's a happy day for us and the whole country. The changes that we dream about are getting closer. Let's both celebrate this happy day!

Wan Saiful Wan Jan

Petaling Jaya

May 10, 2.14 in the morning

Free Trade 62, IDEAS supports TPP Agreement for Malaysia

The Institute for Democracy and Economic Affairs (IDEAS) released a new 12-pages report urging the Malaysian Parliament and the public to support and sign the Trans­ Pacific Partnership Agreement (TPPA). Good call. Why? Economic and governance considerations.

1. The TPPA will bring economic benefits and serve Malaysia’s best interests as shown by the two studies commissioned by MITI, one of which estimates Malaysian gross domestic product (GDP) gains of USD23­27 billion in 2027 in a baseline scenario, an increase in economic activity which will sustain 1­2 million new jobs by 2027. Most recently, a World Bank study predicted that Malaysia’s economy would swell by 8% and exports would rise by 20% as a result of the agreement, with Malaysian exporters having an advantage over regional competitors not part of the bloc.

2. The TPPA will improve governance problems, in particular:

1. strengthen Malaysia’s anti­corruption measures

2. help improve the governance of Government Linked Companies (GLCs)

3. encourage the government to be more accountable and predictable

4. help make the procurement system more transparent and accountable.

The paper starts with explaining the importance of economic freedom and how the TPPA will help improve it. Then it discussed those four points above to improve governance system of MY. The conclusion is pragmatic in saying that

While the TPPA may not be an ideal agreement, the socio­political benefits outweigh the shortcomings. The agreement is a step in the right direction in terms of economic and socio­political reform and to jump­start the currently stalled reform in the country.

It is in Malaysia’s best interest to sign and ratify the TPPA. If it fails to do so, we will miss a valuable opportunity to incorporate greater transparency and good governance measures into our political and economic systems.

Good job, Wan and team.

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See also:

Free Trade 58, TPP and its rabid critics, December 10, 2015

Free Trade 59, TPP membership expansion in SE Asia, January 16, 2016

Free Trade 60, PH Constitution vs. services liberalization, Malaysia in TPP, January 23, 2016 

Free Trade 61, Unilateral liberalization in Pakistan, January 29, 2016

Free Trade 60, PH Constitution vs. services liberalization, Malaysia in TPP

A friend asked me what is in the Philippine Constitution that can prevent the country from joining free trade agreements (FTAs) like the Trans Pacific Partnership (TPP). I said that it's the constitutional prohibition or restriction of foreign equity investments in certain sectors (ie, zero FDIs allowed); in other sectors, foreign equity investments are limited to 40% max. Or the 60-40%, Filipino-foreign equity restrictions.

Industries with no or zero foreign equity allowed include the following:
1. Mass Media except recording
2. Practice of professions: Engineering, Law, Medicine and allied professions, accountancy, architecture, criminology, chemistry,...

3. Retail trade with paid up capital of less than $2.5M, cooperatives, etc. other industries.. ., utilities (water, electricity distribution,...) others.

So it is not prohibition on joining the TPP itself, but the TPP provides for goods and services liberalization among member countries. So Filipino multinationals like Jollibee, SM, San Miguel, etc. can easily enter the other TPP member countries but those countries' companies cannot easily enter here. 

The implication is that we must amend our constitution to remove the restrictions on foreign investments, the restrictions in the practice of profession. Filipino doctors can practice in the US, Canada, UK, etc., but foreign doctors cannot practice here. Filipino consumers and the public in general are deprived of more choices, more freedom, because of trade protectionism imposed by governments.

Meanwhile, I am reposting this well-written piece by a good friend, on Malaysia being a part of the TPP. The photo I got from the web and just added here, not part of the original article.
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TPPA: we should prioritise consumers

By Wan Saiful Wan Jan

Thinking Liberally, The Star, 19 January 2016

As we get closer to the parliamentary Trans Pacific Partnership Agreement (TPPA) debate next week, the anti-liberalisation campaigners have upped their ante to oppose the mega trade deal.

I disagree with their anti-liberalisation views but I admire their tenacity to mobilise a vocal campaign. The movement is spearheaded by Bantah TPPA. It is fascinating to watch how they work. They have been so efficient to the extent that many look at them for objective views.

But they are far from objective. Their sole purpose of existence is to oppose the TPPA and they will be silent on anything good. By being persistently vocal and by starting their campaign early they created the false impression that they are objective observers. Today they have a created a groundswell and you can expect politicians to follow their lead.

When Bantah TPPA started their campaign in 2013, I almost signed up too. As an advocate of unilateral liberalisation, I am ideologically driven to oppose the bilateral and multilateral nature of free trade agreements (FTAs).

I prefer unilateral liberalisation because it allows you drive your own reform agenda. The multilateral nature of the TPPA, just like all other FTAs, dilutes the impacts you can gain from liberalisation.

Free Trade 58, TPP and its rabid critics

I am reposting these two papers below, published this week in Kuala Lumpur. The first is a well-written piece (as usual) by a good friend, the second is a press statement by IDEAS. The image I got from the web and just added here.

(1) Be wary of anti-TPP ideologues

by Wan Saiful Wan Jan 

(CEO, Institute for Democracy and Economic Affairs (IDEAS), Malaysia)

I am usually very keen to take part in discussions about the benefits and challenges of trade liberalisation.

The Trans-Pacific Partner­­ship (TPP) agreement is one of the steps towards further li­­beralisation and I have been taking part in many events with those who oppose it lately.

But I am losing steam very fast and I have been asking myself many times if it is actual­ly worth the effort to debate the TPP cri­tics.

The anti-TPP activists have been campaigning for many years. I remember reading some material from them back in mid-2013.

The text of the TPP was released on Oct 5, 2015, but they have been opposing since mid-2013.

That means, at the very least, they have been opposing the TPP more than two years before they even knew what the TPP is.

In other words, when they started campaigning against it, they did not even know what it is.

To make it easier to understand, let’s turn that into a political analogy. If someone comes to you and says that Party A is bad news, a rational person would react by asking for the evidence.

If the only evidence is based on hearsay and assumptions, it is very likely that the person is talking from ideology and sentiment instead of rational thinking. It is also likely that he is a supporter of Party B trying to badmouth Party A.

That is exactly what has happened to the TPP. If anyone pretended to know the content of the TPP before Oct 5, he was either a bomoh or an ideological activist.

There is no other way to explain the pretentious behaviour of claiming to know something that was not even released yet at that time.

The reality is, those who have been campaigning against the TPP are mostly ideolo­gical anti-liberalisation activists. They be­­lieve that a paternalistic government must protect us forever because we will never grow up as strong adults.

Their opposition to liberalisation is driven by the ideological belief that Malaysians are too weak and too stupid, and therefore, they as the clever ones, must protect us from competition.

Over the last few months I did try to engage with some of them. But I found them impossible to engage with because they jump from one point to another without any desire to take in answers to the issues they complain about.

And they will dismiss any answer you provide, accusing you of not knowing enough because only they have the superior ability to grasp complex issues.

They usually start by saying the TPP was negotiated in secret and therefore it must be bad. It does not matter how many times you explain to them that it is normal practice to negotiate the final deal before making it public.

They are not interested in the answer and before you know it, they would jump to a dozen more complaints, all of which are plucked from the Internet way before the true text is released.

If you tell them that the complaints are not in the actual text, they will say it may not be in now, but there is no guarantee it cannot be inserted in the future.

How do you talk to someone who refuses to accept the fact but is very quick at bringing into the conversation all future possibilities? Since there is no guarantee that driving a car is safe, should we ban all cars?

The main point here is that their opposition is driven by blind anti-liberalisation ideology. It does not matter that two cost benefit analyses have been released to say that the TPP would bring many benefits to the rakyat.

They would scramble to find faults with the studies, and I wouldn’t be surprised if they will soon accuse the two studies as biased just so that they can ignore the data and stick to their own opinions.

When it comes to ideology, data and facts are irrelevant.

Having said that, some of the complaints against the TPP deserve to be analysed further.

There are concerns about the potential impact of the extended copyright and patent protection on pricing of the protected items. Many parties have expressed concern about the potential risks behind the investor-state dispute settlement mechanism (ISDS), the government’s ability to conduct public health measures, impact on labour rights, domination of big powers especially the United States, and so on.

The concerns should indeed be addressed by our Government. The rakyat deserves to be told the real picture.

Unfortunately, and I choose my words carefully here, the Government has been very lousy at providing explanations on these issues.

After five years of negotiation, we see today a Government that seems to be clueless how to conduct the necessary public education exercise.

All the burden seems to be placed on Datuk Seri Mustapa Mohamed and his Ministry of International Trade and Industry. This is wrong because the TPP was negotia­ted by the Government as a whole, involving 16 agencies.

By right they should work together and pool resources to educate the public.

But we only see silence from almost all the other agencies. In fact some, including go­vernment-linked companies that were represented in the negotiation, are publicly hinting that the TPP should be rejected even though they were involved at the negotiation stage.

If this is not incoherence, should we call it irresponsibility?

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(2) Results of TPP cost benefit analyses validate need to liberalise Malaysia’s economy

PRESS STATEMENT

Kuala Lumpur, 7 December 2015 – The results of the two cost benefit analyses on Malaysia’s participation in the Trans-Pacific Partnership conducted by the Institute of Strategic and International Studies (ISIS) and PriceWaterhouseCoopers (PWC) were released last week.

“Making an informed decision about Malaysia’s participation in the TPP requires a systematic and rational approach utilising the best possible evidence and analyses,” stated Wan Saiful Wan Jan, IDEAS Chief Executive Officer. “These two reports allow our parliamentarians, decision makers and civil society stakeholders to get answers on their concerns and then to make informed decisions.”

Wan Saiful added that: “I am glad that both reports did not play down the many concerns raised by various parties about the TPP. The fact that the two studies concluded that Malaysia would, overall, benefit from joining the TPP validate what we have been saying all along that liberalisation is good for the rakyat.”

“I want to emphasise that the government needs to get their act together to inform the public about the benefits of this trade agreement. So far it has done a lousy job at explaining the TPP despite having five years of negotiating it. It is unacceptable that the burden is piled on MITI alone, while other ministers behave as if they are unconnected to the process. All the ministries involved need to speak up as one government and there must be a coherent strategy to communicate with the public.”

“At the same time, I am worried about those who oppose the TPP because they have been unduly influenced by anti-liberalisation activists. These activists will oppose the TPP even when studies say it is good. They have been opposing it for years, before reading the actual text of the agreement or digesting the conclusions from the two studies. Even now, they will continue to oppose it regardless of these recent developments.”

“It is shocking how much coverage these anti-liberalisation activists have received and how many people have been influenced by their scare tactics. I expect that they will now be scrambling to find faults and attempt to discredit the two studies in order to save the little credibility that they have left. We must not be fooled and allow ourselves to be terrified. I urge everyone to read the two studies and decide based on the facts. We must ignore made-up accusations thrown by those who are driven by ideology rather than facts.”

“On the other hand, the two cost benefit analyses documented that Malaysia has obtained various exemptions and carve outs from the TPP, such as in the areas of Bumiputera policies and GLCs. I understand the short term political needs for these exemptions. But from the perspective of the longer term welfare of the rakyat, these exemptions will blunt the full benefits of the TPP. It would mean that Malaysia will not gain the maximum benefit from this round of liberalisation,” said Wan Saiful.

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See also:

Free Trade 54, Eco-protectionism at APEC 2015 meeting, September 28, 2015 

Free Trade 55, TPP Agreement, finally, October 06, 2015

Free Trade 56, Trade, investments and taxes in APEC countries, November 08, 2015 

Free Trade 57, Growth, IPRI 2015 and the TPP, November 28, 2015

Energy 49, Malaysia's and Singapore's bright nights and nat gas power

I was in Kuala Lumpur, Malaysia, last Sunday-Tuesday, for the IPRI 2015 launching + other visits arranged by IDEAS and SEANET. It was my second visit in KL this year, I was there last April for another SEANET event.

My 5+pm return MAS flight to Manila (arrival should have been 9:20pm) on Tuesday was cancelled, should be due to additional APEC security measures in Manila. I needed to go back home, so IDEAS got a new ticket for me, KL-SG-Mla via SG Air. Left KL Tuesday at 9:45pm, left SG at 12:20am, Manila by 4:30am.

So, I was able to see KL and suburbs at night from the air as I took the window seat. Again, like what I saw in Thailand last month when I arrived Bangkok at midnight (see Thailand's bright nights and nat gas power), Malaysia has a wide, huge area of well-lighted roads, houses and buildings.

This photo I got from the web, not from my camera. It shows KL center and suburbs. The dark areas are the many urban forest in KL.

The bright and well-lighted areas go beyond KL and suburbs. Stretched to other urban centers further down, to Johor and other cities bordering with Singapore.

Below, Singapore at night; again, this photo I got from the web, not from my camera. It simply captures the well-lighted city-state, from the shorelines to other sides.

I am glad that like Thailand, Malaysia and Singapore do not believe in mandatory switch to unreliable, intermittent wind and solar power made "cheaper" only because of various subsidies. They rely on the old, dependable coal and  natural gas, for their electricity needs.

In 2012, these countries and economies were dependent on the following energy sources:

Thailand: 20% coal + 70.3% nat gas + 1.5% oil = 91.8% fossil fuel.
Malaysia: 41.5% coal + 46.6% nat gas + 4.5% oil = 92.6% fossil fuel.
Singapore: 84.3% nat gas + 13% oil = 95.3% fossil fuel.

Indonesia: 48.7% coal + 23.2% nat gas + 16.7% oil = 88.6% fossil fuel.
Vietnam: 17.9% coal + 35.8% nat gas + 2.7% oil = 56.4% fossil fuel.
Philippines: 38.8% coal + 26.9% nat gas + 5.8% oil = 71.5% fossil fuel.

Hong Kong: 70.3% coal + 27.3% nat gas + 2.1% oil = 99.7% fossil fuel.
S. Korea: 44.8% coal + 20.9% nat gas + 4.0% oil = 69.7% fossil fuel.
China: 75.8% coal + 1.8% nat gas and oil = 77.6% fossil fuel.

Source: ADB, Key Indicators for Asia and the Pacific 2015, Table 6.1

So when people say they dislike or hate fossil fuels yet also dislike or hate frequent brownouts and expensive electricity, they proudly and openly exhibit their hypocrisy and double talk.

In one fb thread of a friend, he commented that during the APEC meetings, US President Obama posed climate change (CC) as a challenge that government and business leaders must take action.

I commented that the main reason why we have electricity in M.Manila for the APEC and similar events, the reason why many people can do fb and attack "man-made" CC, is because of those power plants that run on fossil fuels.  Frequent brownouts and candles are NOT nice to "save the planet." Watch more fires because of more candles. Watch more crimes and road accidents because of dark streets.

There are many people who advocate or support the "anti-fossil fuel movement." We can assume that they have no car or motorcycle, that they do not take a jeepney or taxi or bus, does not ride an airplane -- ALL of these run on fossil fuel.

The anti-fossil fuel movement is notorious for hypocrisy and double talk. The Paris meeting in less than two weeks will have thousands of petroleum-bashing planet saviours who reach Paris via fossil fuel-fed planes and cars.

CC is natural, it is nature-made, not man-made. It is cyclical, warming-cooling-warming-cooling, endless cycle, not "unprecedented". CC is true, it happened in the past even if humans did not even ride a bicycle or invented shoes. It is happening now, and it will happen in the future.

As I told my friend in the past, climate alarmis, ss("it is man-made, period!") will never be interested in dialogues or even debates. The big ones and leaders are interested only in climate money, something like $100B a year, or $500B a year, or $5 trillion a year, take your pick. The non-big ones are interested only in spreading alarmism.

The Pope, ahh, when he came to Manila, his plane was using water, or it was being towed by hundreds of witches on flying brooms or carpets.

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See also:

Energy 45, Thailand's bright nights and nat gas power, October 19, 2015 

Energy 46, Dominance of coal power worldwide, October 31, 2015 

Energy 47, Low capacity factor of wind, solar and biomass plants, November 04, 2015 

Energy 48, US energy subsidies and global energy consumption, November 06, 2015

IPR and Innovation 25, Malaysia's IP Monetization strategy

There is a report this week about Malaysia's "IP Monetization" program as articulated by PM Najib Razak.  From that news,  "We need to be competitive in our bid to become a high-income nation that is not dependent on traditional and physical resources but is based on new sources of wealth such as intellectual property.

"To ensure the country's continued momentum in making intellectual property a new source of wealth, we have a responsibility to be more innovative and creative as well as to constantly create value added in order to come up with high-impact products and technologies for the local and global markets," he said at the National Intellectual Property Awards 2015 today.

Najib, who is also finance minister, said the effectiveness of initiatives to strengthen the national intellectual property ecosystem was shown by the 6% average annual rise in applications.

This shows the potential of intellectual property to contribute to national economic growth, he said, adding the government had agreed to consider providing an allocation to encourage intellectual property rights applications as part of efforts to raise the number of registrations. Some 42% of intellectual property rights applications are from within the country. 

Well and good. Kuala Lumpur is just 4 hours away by car from Singapore, the center of IPR protection and the richest economy in the ASEAN. The interdependence between  the two  in  trade and investments, both physical and non-physical/intellectual commodities, is high.

More and more, the world is moving towards high value products and services production and trade. New mobile  phones, flat or curved tv, other appliances and  furnitures with sleek, modern  or exotic designs, etc. are all guided by new ideas that were non-existent  and  unimaginable just a few decades ago. And these ideas are protected by various forms of IP protection -- patent, copyright, trademark, service mark, industrial designs, circuit designs -- to protect the innovators and inventive people and enterprises from copycat ones.

The program or strategy is good, except that PM Razak is still embroiled in a huge corruption scandal that greatly diminishes his credibility and effectivity in initiating new programs.

On a related note, I saw from a World Intellectual Property Organization (WIPO) website the various IP laws and IP-related laws of Malaysia.

They have a law for each type of IP. Being a non-lawyer, I am not sure if this is better than a single, big and long law that covers all types of IP that we have here, the IP Code of the Philippines (RA 8293) enacted in 1997. One advantage of one law for each type of IP perhaps is that if we revise or amend in the future one aspect, say only the patent system or copyright system, it will not affect the whole big law -- and cause some confusion.

Nonetheless, establishing clear property rights for the people, physical or non-physical property, is one of  the most important functions of any government. More important than endless welfarism and  political populism.
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See also:

IPR and Innovation 21: Recent News + IPN Assistance to Asian Think Tanks, February 15, 2015 

IPR and Innovation 22, The USTR 301 Report 2015 and the Philippines, July 10, 2015  

IPR and Innovation 23, Letter to WIPO by 85 think tank leaders from 51 countries,July 21, 2015 

IPR and Innovation 24, The US-China IP cooperation dialogue, August 18, 2015

AEC 14, SEANET-ABAC Meeting, IDEAS-OBG Partnership

The ASEAN Economic Community (AEC) will materialize in just six months, at end-December 2015. Many people both within and outside the region are excited about this common market project, composed of some 630 million people. Free movement of people and commodities, free mobility of goods and services within the 10 member-countries. That is economic freedom. 

But not full mobility yet, there are still pockets of protectionism especially in services, in almost all member countries. But the trend is towards gradual phase out of those non-tariff barriers (NTBs) in  goods and protectionism in services.

Yesterday, the team of South East Asia Network for Development (SEANET)  met with Tuan Syed Nabil Aljeffri, the Secretary General of the ASEAN Business Advisory Council (ABAC). Photo below, from  left:  Mr. Yohannan "Yogi" Nair of SEANET, Mr. Aljeffri, and Ms. Fareeza Ibrahim, also of SEANET.

In its facebook page, SEANET reported that the discussion focused on the various challenges and prospects that ASEAN and regional small and medium enterprises (SME's) face, and the necessary steps that must be taken to ensure that economic integration is equitable and sustainable in the long run.

See also the network's first newsletter, http://seanetwork.asia/index.php/seanet-newsletter-2/

On a related note, our ally and fellow free market think tank based in Kuala Lumpur, the Institute for Democracy and Economic Affairs (IDEAS), has partnered with the global publishing and consultancy firm Oxford Business Group (OBG). The two think tanks will produce a report about Malaysia and the ASEAN economic integration.

IDEAS is the "mother entity" of SEANET. It is also a member of the Economic Freedom Network (EFN) Asia. Photo below, IDEAS CEO Wan Saiful Wan Jan and OBG’s Regional Manager for Asia Lauren Denny.

From IDEAS Press Release today,

The Report: Malaysia 2016 will provide detailed analysis of what the launch of the ASEAN Economic Community at the end of 2015 signals for both the regional and global economy. The publication will chart ASEAN’s drive to ensure people and their needs remain the top priority in the nations’ efforts to promote regional cooperation and solidarity.

Other issues set for coverage include ASEAN’s push to boost the part played by small and medium-sized enterprises (SMEs) in regional economic development and its efforts to promote more public-private sector partnerships (PPPs).

In other analysis, The Report: Malaysia 2016 will explore the achievements of the 10th Malaysia Plan, as well as the launch and goals of the new 11th Malaysia Plan which will lead the country to Developed Nation status by 2020.The publication will also shine the spotlight on the Malaysian states of Sabah and Penang, where there is evidence of significant economic potential; as well as the opportunities for foreign direct investment (FDI) emerging across many of the sectors of the country’s economy.

The Institute for Democracy and Economic Affairs (IDEAS) has signed a Memorandum of Understanding (MOU) on research with OBG for its forthcoming report on the country’s economy. Under the first-time MOU, OBG will work with the leading think-tank, which promotes market-based solutions to public policy challenges, to compile and produce The Report: Malaysia 2016.

Wan Saiful Wan Jan, Founding Chief Executive of IDEAS said he is excited to contribute to The Report especially this year as IDEAS has just started their project on ASEAN.

"This is an exciting time for Malaysia and for the region. The birth of the ASEAN Community and the ongoing negotiations around the TPP hold huge potential for growth in this region and if done correctly Malaysia will certainly benefit from them. The government too has introduced some important structural changes in our economy which shows their commitment to improve the investment climate. My team has been looking into these issues and we are very keen help OBG capture these important developments in The Report."

OBG’s Regional Manager for Asia Lauren Denny said she was delighted that the Group’s team in Malaysia would benefit from IDEAS’ local knowledge in what marks its ten-year anniversary of analysing the country’s economy.

“Oxford Business Group has long recognised the importance of working closely with local partners who bring on-the-ground insight and expertise to the table,” she said. “The Institute for Democracy and Economic Affairs and Oxford Business Ground share plenty of common ground when it comes to areas of research, especially in the fields of economics and education. I am thrilled that our team will benefit from the institute’s contribution to our forthcoming report, which we’re sure will be a valuable tool for investors.”

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See also:
AEC 10: Indigenous Rights, Labor and Human Rights in the ASEAN, April 21, 2015 
AEC 11: Trade and Economic Development is Social Development, April 25, 2015 
AEC 12: Workshop on Trade Liberalization at the APF 2015, Kuala Lumpur, April 27, 2015 
AEC 13, SEANET Website, AFAS in Financial Services, June 18, 2015

Free Trade 46: Debate on TPPA and Liberalization in Malaysia

Last Saturday, the Institute for Democracy and Economic Affairs (IDEAS) and the South East Asia Network for Development (SEANET) co-sponsored a debate in Kuala Lumpur.

I am reposting the Event Report: TPPA and Economic Liberalisation –Good or bad for Malaysia 

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IDEAS and the Southeast Asia Network for Development (SEANET) organised a public debate on the TPPA and Economic Liberalisation on Saturday, 28 March 2015. The TPPA, Trans-Pacific Partnership Agreement, is a free trade agreement that Malaysia is currently negotiating with eleven countries including the United States of America, Mexico, Chile, Brunei Darussalam, Singapore, Vietnam, Japan.

The debate featured Dr Razeen Sally, IDEAS Chair in Political Economy and Governance, who argued for positive impacts of the trade agreement and YB Charles Santiago, Member of Parliament from Klang, who argued the opposite. Sharaad Kuttan of BFM moderated the debate.

The impact of trade agreement on the provision of health care including the price of medicine and state’s sovereignty and ability to protect its interest against companies is among topics that were hotly debated on the forum.

YB Charles Santiago who argued against the TPPA maintained his position that the trade agreement will impact negatively on the price of medicine and the ability of the state to protect itself against corporation. He mentioned cases of dispute between a tobacco company and Australian government.

Dr Sally on the other hand, while having reservation on some parts of TPP, argued that the trade agreement can help in inculcating domestic culture of good governance through competition. Coupled with domestic liberalisation and reform, the TPP can make Malaysia become more economically competitive. On the impact of trade agreement on state sovereignty, he argued that instead of assault to sovereignty, trade agreements are way for countries to mutually agree to improve their economies and trade. Cases of dispute between some countries with companies should not be used to make general points. On concerns on the price of medicine, Dr Sally said that some of the problems in medicine prices are related to domestic issues.

While the speakers differed in their evaluation of TPPA benefits, both were concerned about the dismal state of Malaysia’s judiciary.

The questions posed by the audience touched not only technical issues of the agreement, but also touched on some philosophical questions such as who is more tyrannical: government or company?

In addition to posing questions to the speakers, the audience also participated in the debate through casting their votes on whether the TPPA and Economic Liberalisation is good or bad for Malaysia. The initial votes before the debate resulted in 53% votes for good, 19% for bad, and 28% are unsure. The second round of voting, after the debate, resulted in 68% voted Good, 26% voted bad and the remaining 6% voted unsure.

Around 80 people attended the debate. Among them are prominent individuals such as Tan Sri Yong Poh Kon, Former President or Federation of Malaysian Manufacturers, Dato’ Satinah Syed Salleh, Former Director of Private Education Division at the Ministry of Education and Dato’ R. Thillainathan, Former CEO of Genting Berhad.

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See also:

Free Trade 42: ASEAN Trade and Unilateral Liberalization Challenge, January 23, 2015 
Free Trade 43: On PH-Germany or PH-EU FTA, February 16, 2015 

Free Trade 44: The Gravity Model, March 06, 2015 

Free Trade 45: Protectionism in Services, Peering at the ASEAN, March 12, 2015 

AEC 5: Aviation, Telecom, Mobile Money and Retail in the ASEAN, March 23, 2015

IDEAS 4: Photos of Wan Saiful's Talk on the Politics and Economy of Malaysia

Before Wan Saiful Wan Jan, CEO of the Institute for Democracy and Economic Affairs (IDEAS) in Kuala Lumpur, gave his talk, I introduced him. No notes intro, I focused on Wan leaving his 17 years career in London and go back to Kuala Lumpur along with his wife and 3 kids, all born in London, to start a free market think tank there, when "free market" and "limited government" are strange concepts for many people in Malaysia and many other Asian countries given the huge role and presence of the government in the economy.

I met Wan in Atlanta, USA in middle of 2008 during the Atlas Liberty Forum. Then I would meet him and other Asian leaders of free market think tanks almost every year, usually during the Economic Freedom Network (EFN) Asia annual conferences. Last May, we were in Seoul then Jeju, S. Korea for the Jeju Forum for Peace and Prosperity. This coming October 21-22, we will meet again for the EFN Asia 2013 conference in Bangkok.

Wan's talk was hosted by our club, the Rotary Club of Taguig Fort Bonifacio, RI District 3830, headed by First Class President Meann de Leon. Our think tank, Minimal Government Thinkers, Inc., has no financial resources at the moment to organize fora and similar events. Our rotary club, of which I was a club Past President in RY 2006-2007, is a good host as we meet weekly anyway, often with a guest speaker. There is a "captive audience" already who are willing to listen to various speakers with various backgrounds and unique stories and ideas to share.

I posted the invite to Wan's talk to several free market facebook groups. Four came, from the Filipino Libertarian camp -- Francis, Philip, Harry and Ginny. Thanks guys.

After Wan discussed the politics and economy of Malaysia, including the result of the 13th General Elections (GE13) last May, the discussion shifted to the philosophy of free market, rule of law, limited government, and individual freedom and responsibility. This is where the Filipino libertarian guests asked several questions and gave also their own understanding of those concepts. 

Wan discussed the level of "compromise" that he and his free market think tank take in engaging both the government and the political opposition, along with other NGOs and media in Malaysia, without abandoning its core advocacies. IDEAS after all, belongs to the minarchy or limited government side of libertarian philosophy, not the zero government or anarchy side.

Wan was also asked what is Malaysia's experience under a Parliamentary form of government, if it us true that a Parliamentary government is more "flexible, easy to reform, less corrupt" etc as the pro-Parliamentary camp would endlessly suggest. Wan said the form of government does not matter. Rater, it's the size and degree of interventionism of government that matters a lot to the people and the private enterprises. In a parliamentary set up for instance, the Prime Minister can appoint himself as the Finance Minister at the same time, so he can talk to himself, propose a budget to himself and have it approved by the Administration Parliament.

And here's what he said that can slam dunk persistent claims that a parliamentary government is "more stable and more predictable". Wan said that "under our Westminster-style parliament, our Constitution has been amended over 7,000 times since independence in 1957." They can change the Constitution more frequently than they can create new laws or amend existing laws, wow.

President Meann giving the Certificate of Recognition to Wan.

"You can't compare Christianity to christians. You can't compare Islam to Muslims. You can't compare Capitalism to capitalists." This was his reply to a question regarding the monopolistic behavior of some businessmen and capitalists. Wan emphasized that their advocacy for free market is not a stand alone philosophy, but in conjuction with the three other principles -- rule of law, limited government, and individual freedom and responsibility. Free market does not mean zero government, there is a role for government, mainly to implement the rule of law, and to protect individual freedom (from aggressors, bullies, thieves, etc.) and respect or encourage more individual or personal responsibility in running their own lives.

The usual group photo after the talk.

Another group photo, for the boys :-)

Thanks Wan for imparting lots of useful information and observations about Malaysian economy and government, and elaborating the philosophy of free market, limited government, rule of law and individual freedom and responsibility.

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See also:
Think tanks for liberty 1: IDEAS Malaysia, February 02, 2011
Welfarism 21: Is Malaysia a Welfare State?, July 18, 2012 
IDEAS 2: Wan Saiful Talk in Manila, September 9, September 07, 2013 
IDEAS 3: Wan Saiful's Presentation in Manila, September 11, 2013

IDEAS 3: Wan Saiful's Presentation in Manila

Wan's talk last Monday night here in Manila was great. Will post photos in my next blog post. Audience were mainly my clubmates in Rotary, plus friends in the free market movement here in Manila.

It's good that Wan briefly introduced what the Institute for Democracy and Economic Affairs (IDEAS) is. He said that often people look at free marketers as not too concerned with high inequality and the poor, so they made it clear that their goal is to "make markets work for the poor."

Both the administration and the opposition in Malaysia know that IDEAS is free marketer and hence, not exactly their ideological ally. But they see IDEAS as truly independent, receive no money or funding from the government, so they entertain the 3rd party engagement of IDEAS in various policy discussions. 

Wan showed also a map of Malaysia. You may also view the presentation in slideshare, here.

One principle in Malaysia before was the New Economic Policy (NEP). When Prime Minister Razak Najib came, he introduced the New Economic Model (NEM) and it is pretty liberal and free market leaning, to correct or reduce the distortions of heavy state involvement and welfarism in Malaysia. Wan gave examples of how Malay-bias the government policy is, at the disadvantage of non-Malays like the ethnic Chinese and Indians in the country.

The 13th General Elections (GE13) result last May however, has threatened the liberalization reforms that PM Najib wants to introduce. And even though the elections were conducted rather unfairly. When IDEAS released the result of their findings of the elections, their website crashed for more than a week due to heavy online traffic, people downloading the report, reading articles and interviews of Wan and other think tank leaders.

Business 360 5: Reducing Construction and Electricity Bureaucracies

* This is the article I sent to B360 for their March 2013 issue, published in Kathmandu, Nepal.
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Reducing various business bureaucracies is one important policy by any government, local or national, to encourage more entrepreneurship and job creation and hence, effectively fight poverty and high unemployment.

One good source to measure the extent of business bureaucracies worldwide is the annual Doing Business reports (www.doingbusiness.org) jointly published by the World Bank and the International Finance Corporation. The latest is the Doing Business 2013: Smarter Regulations for Small and Medium Size Enterprises published in October 2012.

The annual report covers several areas of entrepreneurship like starting a business, getting construction permit, getting electricity, registering property, getting credit, protecting investors, paying taxes, international trade, enforcing contracts, resolving insolvency. It shows the number of procedures to get certain permits, how many days or hours, and the cost to enterprises in complying with those taxes and permits.

For brevity purposes, we chose only two areas, (a) dealing with construction permits and (b) getting electricity as Nepal continues to endure long hours of power blackouts everyday.

To compare the data with Nepal, we chose two Asian countries: Malaysia because it has a similar population size as Nepal,  about 29.6 million and 27 million, respectively, and Hong Kong because it is a good free market model for many economies around the world. And here is the result:

In dealing with construction permits, Nepal and Malaysia have similar global rank, 97 and 96, respectively. Shorter procedures but high cost in Nepal, equivalent to 654 percent of per capita income,  while longer procedures but lower cost (17.5 percent of per capita income) in Malaysia. In Hong Kong, the procedures are short and the cost is low, for a company to get a construction permit.

In getting electricity, not only that it takes long but it is also very costly in Nepal, requiring the equivalent of 1,763 percent of the per capita income. Compare that with just 54 percent in Malaysia and 1.6 percent in Hong Kong.

These data, freely available online worldwide, are good benchmark to prod certain government agencies to do something to improve things for all – ordinary citizens, private companies, and the government. Highly bureaucratic governments tend to get low esteem not only from their own citizens but also from other people abroad. Reducing these bureaucracies therefore, would greatly improve public perception and esteem of such governments.

For Nepal in particular, reducing the bureaucracies in building new power plants, transmission lines,  electricity distribution network and offices of these companies would encourage more private enterprises to slowly enter the power sector and its sub-sectors. In the process, frequent power blackouts and electricity rationing can be slowly addressed.

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See also:
Busiiness 360 1: Nepal and the Philippines, November 26, 2012
Business 360 2: Free market means free individuals, December 28, 2012
Business 360 3: Fiscal Cliff and Government Irresponsibility, January 23, 2013
Business 360 4: Brownouts and Power Deregulation, February 26, 2013
Business Bureaucracy 7: Penalizing Small Businesses, February 01, 2013

EMHN 3: Penang Workshop Report

* This is my article in the online magazine yesterday,
http://www.thelobbyist.biz/perspectives/less-gorvernment/1349-healthcare-competition-and-government.
I also wrote a longer version in interaksyon.com.
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Penang, Malaysia – The seminar that I attended here on “Promoting Markets in Healthcare” ended yesterday. It was another learning experience listening to various speakers and fellow participants from free market think tanks and groups from India, China, Malaysia, Indonesia and the Philippines. The activity was sponsored by a new global think tank, London-based Emerging Markets Health Network (EMHN) and the Kuala Lumpur-based Institute for Democracy and Economic Affairs (IDEAS), and was held in Red Rock Hotel.

The focus was how to free from politics, or how to minimize political interventions and the various inefficiencies associated with it, in the delivery of healthcare to the public, with greater role to be assumed by civil society and the private sector. In short, healthcare provision at the least politics, least taxation and borrowings possible.

Among the speakers yesterday were the following.

Liew Chin Tong, a member of the Malaysian Parliament. He noted that the main role of a government is to provide equal opportunity to the people, to be an enabler of the less privileged so they can improve their lives later on. But the Malaysian federal government has been acting like a big businessman, owning many banks and hospitals, even private hospitals with substantial share ownership in them.

Frank Largo, the head of the Economics Department of the University of San Carlos (USC) in Cebu City. Frank has a unique role because he teaches Economics not only to Econ majors, but also to Nursing and Pharmacy majors who are required to take a subject on health economics. He said that while there are lots of emotions involved in the discussion of health policies, not all health cases are emergency. That the gap between curative and preventive healthcare is big, public resources is heavily focused or biased on curative health.

On a side note, Frank’s graduate Economics students organized a forum about the Cheaper Medicines Law in USC about two years ago, and I was one of the speakers there. I talked about “Property right and policy left” of the law.

Prof. Yu Hui of the Chinese Academy of Social Sciences (CASS) and Prof. Feng Xingyuan of the Rural Development Institute and Vice-Director of Unirule Institute of Economics, made a joint presentation entitled “Development of Private Hospitals in China and Lessons for Other Countries”.

In their presentation, they showed some data like as of 2011, there were 457,000 private healthcare providers including private hospitals or 48 percent of total. But these private enterprises comprise only 10 percent of total hospital beds.

Below are some data regarding the dominance of government hospitals despite public pronouncements of encouraging private hospitals and other healthcare providers, as well as the reforms they think should be done.

Dr. Debashis Chakraborty, a Professor of Economics at the Indian Institute of Foreign Trade in Delhi said there is an important role for public-private partnership (PPP) in providing healthcare services.

Philip Stevens, the founder of EMHN, narrated how the UK government healthcare monopoly, the National Health Service (NHS), is one proof of the problem of centralizing and politicizing healthcare provision. Long waiting period for patients, insufficient supply of certain medicines in some government hospitals, lack of innovation and cost-cutting measures, are among the ills that plague the NHS and other government-nationalized or centralized healthcare systems.

Dr. Chua Hong Teck, Director of the Healthcare and Low Income Households, Performance Management and Delivery Unit (PEMANDU) under the Office of the Prime Minister, presented a number of interesting of data on Malaysia’s healthcare system.

Government healthcare expenditure is growing at an average of 11 percent per year, with the Ministry of Health (MOH) spending alone rising at 12 percent per year on average. Since 2009, total healthcare spending comprises about 5 percent of GDP and 55 percent of it is from public sources.

The number of beds in private hospitals is rising from eight percent of total beds in 2000 to 24.5 percent in 2011, but the number of health professionals is declining from 67 percent of national total in 2000 to only 29 percent in 2011. This suggests to me that health professionals in private hospitals are over-worked or simply are more efficient, while those in government hospitals are underworked or bloated.

Tables below, healthcare spending is led by MOH at 43.7 percent of total, followed by out of pocket (OOP) or private spending at 35.6 percent, then the Ministry of Higher Education (MHE) at six percent, and the other agencies have small or minimal shares. The Ministry of Defense also has its own hospital and they treat not only its own personnel and their dependents, but even ordinary citizens can go to their facilities and get free or subsidized healthcare.

As of 2011, 42 percent of all dentists, 40 percent of all pharmacists, and 33 percent of all nurses, are working in the private sector healthcare providers.

Can healthcare, especially those provided by the government, national and local, be depoliticized? Can real competition happen between public and private healthcare enterprises?

From my observation in the Philippines and other countries, the answer I think is No. Government being a regulator and a player at the same time already gives undue advantage to public health institutions. Besides, they get subsidies from taxpayers while private enterprises are being taxed.

When a commodity or a service is provided for free or at highly subsidized rate, we can expect that the demand will be larger than the supply, always. For instance, someone who has a headache might demand a CT scan or MRI tests to find out if there are other hidden causes of the headache. And why not demand, it is free or heavily subsidized anyway. This will put heavy pressure and use on the facilities and personnel of the public healthcare sector, resulting in high costs, healthcare rationing like long waiting period for non-emergency cases patients, or poor quality delivery or provision of a service.

Healthcare competition among different service providers – national government, local government, civil society and charity organizations, corporate and for-profit businesses – will result in better health service provision to the public at lesser cost. Competitors are always under pressure to give value for money to their clients as the latter have the option to opt out and go to another service provider.

On another note, I enjoyed the food and local cuisine here. There are many food shops and stalls almost everywhere, selling Malaysian, Chinese or Indian food. Our local hosts told us that if one is busy, it is much cheaper to eat outside than do groceries and cook food in the house.

The food competition in Penang and other parts of Malaysia, and almost elsewhere in the planet, is perhaps the best and solid proof that depoliticizing an important service like healthcare is best for the public, whether in the short- or long-term.
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See also:
EMHN 1: Forum on Promoting Markets in Healthcare, IDEAS-Malaysia, June 23, 2012
EMHN 2: IDEAS Forum in Penang, Malaysia, September 01, 2012