Thursday, October 25, 2012
Monday, October 1, 2012
There is an increasingly pressing need for the government to be decisive in implementing deep cuts and structural reforms, that while painful now, will save the country from traumatic pain further on especially as dark clouds drift over the economic horizon. These are essentially politically unpalatable but economically necessary measures that hopefully will be carried out by the government after the elections.
Monday, September 3, 2012
Monday, August 13, 2012
Monday, July 16, 2012
Tuesday, June 5, 2012
In recent days, with more immediate and practical concerns over a possible “Grexit” and Spain’s floundering banks, Iran may have slipped out of the global media spotlight for a while.
Just as fickle – and oftentimes cruel – as the media spotlight, is the expedient and capricious nature of global power interests and foreign policy-making, made painfully apparent as in Iran. Nowhere else has America’s supposedly benign and benevolent foreign policy been so brutally exposed. Above all, it has failed miserably, unless some Machiavellian machination of creating a convenient bogeyman has secretly been the goal of American foreign policy in the Middle East all along.
First things first - it is not a push to say that the Americans had a hand in creating the Islamic Republic. The call for democracy against an autocratic and repressive regime in Iran may be a genuine plea, but one also cannot selectively ignore facts and history. It has been the Americans that propped up the highly unpopular and increasingly autocratic Reza Pahlavi, Shah-an-Shah, King of Kings (a hardly democratic title) against his democratically-elected premier Mohamed Mossadegh in a blatant coup, Operation Ajax, during the tumultuous days of the Cold War. Perhaps then we should not be so surprised that the populist backlash came in the form of Ayatollah Khomeini’s Islamic Revolution.
Further along the timeline, which most of the developed world and its policy-makers have conveniently forgotten, there is the horrific Iran-Iraq war, where the Americans, along with other major Western powers, backed Iraq – the aggressor.
In more recent years, most have also forgotten the US-led invasion and occupation of Afghanistan and Iraq with no clear mandate from the rest of the international community, and, in the latter, on false claims.
It is perhaps only reasonable that Iran would feel threatened - the encirclement of Iran by American military interests in Afghanistan, Iraq and the Naval Fifth Fleet in the Persian Gulf at Bahrain, and the close proximity of nuclear-armed Israel is enough to make anyone jittery. Why should we then feign surprise, misunderstanding, or even outrage when Iranians start to think, ‘we’re next’, and start taking precautionary measures? As an old Chinese strategist, Wu Zi mused, even animals when cornered will fight savagely – how much more still will man?
The recent tightening of international sanctions, besides forcing Iran further into a corner, would also have hurt ordinary Iranians the most, while authoritarian regimes and their cronies more often than not have comfortable nest eggs carefully squirreled away.
Intervention may also not always be the best solution - NATO’s opportunistic adventure in Libya which ousted Gaddafi, who has been the most progressive and reform-minded of the so-called ‘rogue states’, has merely forced others to adopt a hardline approach – it may be just speculation, but Syria’s Assad no doubt realised he had no other way out than a brutal crackdown and a further shift towards countries of similar ilk, who are willing to look the other way. It comes as perhaps no surprise that Syria, Iran and Syrian-proxy Lebanon are now best friends in the Middle East. This demonisation by sanctions or direct intervention certainly does nobody any favours, not least the people living under such regimes, besides de-stabilising the Middle East even more and affecting innocent trade partners.
One cannot approach the Iranian issue without understanding the historical backdrop and local geopolitics – everything happens within a context, as sociologists have always stated. While politicians may come and go, and the priorities and whims of foreign policy may prove fickle, the people often have longer memories than that. The American public may not understand Eye-ran, but most Iranians still do remember the Americans.
One thing that has struck me while travelling in these states with authoritarian regimes and less-than-sterling human rights records is that their people are often able to draw a clear distinction between the government-of-the-day and the people – just as they hate their own oppressive governments, they expressly dislike the American government for its hypocrisy, and still the few Americans travelling in Iran after dark are often unable to get home – often they are accosted in the streets and invited back to someone’s house for dinner.
Whereas, most of us may have failed to see the difference between the Iranian government, and the Iranian people, and maybe this is why chanting the perennially popular foreign policy mantra of ‘engagement’ has not been as successful as if it had been done with a better understanding of historical contexts and the genuine grievances and needs of the local populace. After all, if we are indeed sincere about democracy, basic liberties and human rights, any real change has to come from within, and not as the collateral by-product of fickle superpower interests and power-plays.
In short, we have to balance between respecting the genuine security concerns of Iran, the fact that the cleric-led government has a poor rights record and is autocratic, and the fact that most Iranians do not quite see eye to eye with their government and yet suffer the most from isolationist policies and sanctions imposed by the US-led international community. Nobody said it was going to be easy task, but it at least represents a more genuine attempt at engagement, as opposed to the current trajectory we are on, which only portends war.
Tuesday, May 15, 2012
Or would you say nothing, but pocket it anyway, just because – everyone else, even the chief, is doing it? And there is simply no better alternative?
Monday, March 12, 2012
People often look to big businesses with a mixture of awe and distaste. While it is always impressive the way a huge company or brand name comes to exist, it seems that you can’t get huge without stepping on more than a couple of toes. Growth strategies of huge corporations that involve gobbling up the little guys have led to negative impressions in the minds of the public. It also certainly did not help their reputations when the massive banks got taxpayers shelling out wads of cash (that a lot of them did not have) during the banking crisis. So actually, you can’t really blame the public can you?
However, with our economy stuttering along, is big business what we need? Small firms have often been lauded for their high creativity, flexibility and adaptability whereas big firms are often criticized as being cumbersome and clunky. While there are indeed some big firms that do live up to that, there are also a lot of big businesses out there that should be better supported for the good of the economy.
Despite being unlikable, many big firms have gotten big by being highly efficient. Well-run big companies know how to fully utilize their resources, which is a skill that this economy seriously needs to learn. They have plenty of advantages – the ability to reap economies of scale, bringing a greater variety of products to consumers at lower prices (hence improving standards of living) and for having the cash clout to invest in R&D that eventually leads to innovations and further growth for the economy.
Even though big firms have a lot of advantages over small ones, they have a lot to learn from the little guys. It is true that when a company grows in size, it naturally becomes more bureaucratic and ungainly. This is where the small firm mentality comes in. The leadership of the firm must continue to think like a small firm in terms of being creative and fluid in doing business. There should be a cultivated company culture that thinks on its feet and is deft in maneuvering. Impactful and truly inspiring companies like Apple and Google are well-known for maintaining a small business attitude internally despite being massive entities, and I daresay that it has contributed greatly to their incredible success.
If big firms were able to develop that sort of spunky attitude, it would be adding an incredibly powerful weapon to their already impressive arsenal of business weaponry. By taking advantage of that, hopefully they will be able to kick-start this stubborn economy and wake it up.
Wednesday, February 22, 2012
If you have a largely captive market, generous and vociferous government support, and handicapped competition, you are expected to perform, at least relatively, well. It is like having to run a race, where you are given a generous head start, and where competitors have to have their legs bound together.
Well, one is likely to win such a race and trounce the competition, right?
However, what defies common sense is that this is mostly untrue when it comes to Proton, the Malaysian national carmaker launched by Dr. Mahathir Mohammed to much fanfare in 1983. To provide a sense of perspective, one could look at how far Hyundai-Kia and the Korean auto industry have come, having started off on an equal footing in young, developing nations.
What, then, is the problem with Proton? How can one not succeed, with a captive market and strict protectionist policies against foreign interlopers? It almost takes effort to do so.
Perhaps the easiest and most expedient answer we can turn to is complacency, and this certainly helps account for some of the failings at Proton. Generally, one understands that some element of competition is beneficial for the growth and development of a company. Companies – and people – do not evolve and grow in a sheltered, sterile environment that does not reward creativity, risk-taking and innovation, but political connections and manipulations – the know-who economy instead of the know-how economy. This results not in the survival of the fittest company, but the most connected, which is detrimental to the health of the market and the national economy – and not least the ordinary Malaysian consumer.
A healthy dose of competition does make one stronger, and make for more efficient markets, which will benefit more people, more. But is that not the aim of any well-meaning government attempts to set up government-linked companies (GLCs) in the first place? To benefit the people of the country? Then why the exorbitant tariffs, channelled to a select few businessmen in the form of “approved permits” to own a foreign vehicle, so that ordinary citizens end up paying top-price for poorly produced cars, and indirectly subsidising an uncompetitive company? Who benefits from it?
Perhaps here we can also see how Proton has become too much of a political entity, than an economic one. When politics, not economics, have to influence the running of a company, you’ll most likely end up with a mess, and an entrenched political elite benefitting from it. Proton’s continued evasion of ASEAN free trade agreements with official government support, though inevitably still losing market share to its gradual implementation, and her failure to find a foreign technology partner points rather incriminatingly to this.
The end result it that Proton has become uncompetitive domestically, and internationally. As Malaysians see it, the ‘jaguh kampung’ (village champion) has now become so bloated and uncompetitive after years of generous support from the government, that it can no longer even compete in its own heavily-tilted domestic market. It cannot even win the race, 20 years on, when the other competitors are running with their legs bound.
The truly sad thing is to realise that the Proton story in large mirrors the Malaysia story – resource-rich, full of potential and promise, but somehow managing to squander such advantageous head starts away – while tiny, resource-less Singapore down south has already surpassed Malaysia in GDP.
To be fair – and quite optimistic - this ponderous, lumbering village champion can yet still recover, and be more streamlined, more lean and mean. It will be painful (but isn’t anything ever worth achieving always so), there will be reluctance and resistance, especially from those who benefit from such a system, but there is a possibility.
The solution is a simple one - there just has to be the political will, by the government of the day, to wipe out entrenched interests and political patronage and cronyism in all its forms, and nurture free and fair competition and healthy markets. The rise of a viable two party political system in Malaysia is a promising start, adding much needed checks-and-balances against abuses of political power, and yes, only through injecting a healthy dose of competition.
Indeed, in modern international trade and relations, nothing is ever a fait accompli. Even Burma is seeing reforms now, and already reaping some of its fruits. The lesson here cannot be more clear – or harrowing, for Malaysia. Once one of Asia’s most promising countries, it has taken only a few years of mismanagement and iron-fisted rule for Burma to plumb the full depths of the abyss of international isolation and condemnation.
The village champion will have to compete on an equal footing against other challengers from the same village, and then, once he has proven his mettle, against those from other villages and other seas. Complacency, closed-door policies and patronage will ultimately only harm a country, while benefitting its ruling politicians. This is where we can see if a government works in the broad interests of its citizens, or its pampered political elite, allowed to grow bloated feeding parasitically on the sweat and blood of its fellow, less-privileged citizens.
In a pro-market, pro-competition environment, Proton, like Malaysia, will have no choice but to streamline, consolidate, reform, and compete. Uncompetitive suppliers and contractors will have to be shed, no matter their political affiliations. Quotas and preferential treatments will have to be implemented correctly and not abused, and then gradually phased out.
Malaysia, like Proton also needs a new equation – she can no longer compete on cost. There has to be more value-add, a shift towards more knowledge and skills-intensive sectors (again, areas greatly stimulated by fair competition and meritocratic practises) - both Proton and Malaysia cannot afford to live in denial, to be the proverbial frog under a coconut shell, the Malaysian spin on the well-known frog in the well, who thought his well a mighty ocean.
For the world has changed. And in a globalised world, Malaysia needs to move fast. She has already fallen far behind Singapore. Vietnam and Indonesia are poised to take over as the new Asian economic tigers while Malaysia basks like the veritable fat cat purring contentedly over its supposed successes. Even Burma has started on the long but sure road to reform.
We should conclude with the very apt statement the World Bank made in a recent report: The world will not wait for Malaysia.
Thursday, February 16, 2012
With the global financial crisis still lurking in the background, you would expect the upcoming Budget 2012 to dole out some fiscal measures to support companies with their businesses. You would think that it would be the most ideal way of helping businesses raise productivity and cope with the rising business and labour costs. Which is exactly why the recent comments of Budget 2012 focusing on intensifying long-term economic restructuring efforts surprised even myself.
Amidst the uncertain global outlook, the upcoming Budget 2012 plans to help Singapore businesses stay focused on its long-term strategy of raising productivity. I recognize that budgets in the past have implemented tax relief schemes to help small and medium-sized enterprises (SMEs) to invest in R&D and human capital. With the downbeat forecast of the global economy, the government should not simply abandon these SMEs in this time of uncertainty, but rather continue to offer such schemes in a plain, straightforward manner. Surely companies would like to utilize these schemes put in place by the government, but lack the proper information and time to take advantage of them. This can only be attributed to the strict criterions and complicated application processes that come along with these assistance schemes. What I’d like to see is more flexibility in these assistance schemes in order for more businesses to reap the actual benefits.
In the government’s defense, there is a danger of SMEs becoming overly dependent on them to hand out reinforcements every time a slowdown in the economy occurs. Yet it is hard for me not to expect the government to ease the burden of rising costs of businesses. Singapore’s economy is not fully recovered from the major economic downturn and the government prospectus of the economy rebounding has yet to materialize with its subpar growth of 3% this year. Relative to the circumstances of the global economic climate, uneven growth patterns in the US, turbulence in euro zone, coupled with faltering growth in Asian economies; clearly, one can only imagine the future outlook to be more unpredictable.
Come Budget Day, I expect that businesses concerns should be properly addressed. In order for Singapore to continue to be a competitive hub for businesses in the Asian region and compete with regional economic hubs, it needs to be able to retain the growth of its companies.