Far right politicians in Europe are learning the wrong lessons from Australian immigration policy.
Category: Uncategorized
My piece on the 2018 Malaysian elections now available at the Griffith Asia Institute blogs.
Millions of ordinary voters in Malaysia mustered moral courage and harnessed a yearning for change to oust the incumbent government led by Najib Razak. His regime was thoroughly tainted by corruption scandals and allegations of creeping authoritarianism. In bringing about a peaceful transfer of government through the ballot box, Malaysian voters have created two historically unprecedented outcomes. First, the new government will be represented by a multi-party coalition under the auspices of Pakatan Harapan (PH) rather than the ruling Barisan Nasional (BN) coalition that has held power since Malaysia became an independent nation in 1957. Second, it marks the return to Prime Ministership of Mahathir Mohamad who ruled as Prime Minister for 22 years under the BN banner. At 92, Mahathir will be the oldest elected head of government in the world. He also demonstrated an uncanny ability to abandon his previous party, overcome past political enmities and embrace PH.
Yet, as the world celebrates the collective wisdom of ordinary voters in Malaysia, ‘markets’ representing the nebulous community of bond stockholders, currency traders and credit rating agencies are hesitant to join in the celebrations. Reuters reports that ‘Malaysian markets are leery over Najib’s defeat, Mahathir’s return’. CNBC proclaims that bond markets are experiencing ‘shockwaves’. Bloomberg writes that ‘investors are bracing for further market jolts’. The Wall Street Journal warns of ‘turbulence’ following the unanticipated election results. These publications uncritically cite the concerns expressed by credit rating and sovereign analysts.
What are these concerns? The new government has pledged to overturn the highly unpopular goods and services tax and replace it with a fairer indirect tax system. It will restore fuel subsidies and increase minimum wages. The aforementioned analysts argue that these populist pledges, if implemented, are likely to have a negative fiscal impact with adverse consequences for Malaysia’s sovereign credit rating and hence borrowing costs. Indeed, even Mahathir felt obliged to assure markets that the new government will not do anything to disrupt investor confidence.
In feeling obliged to respond to the concerns of ‘markets’, Mahathir does his own record of economic management a great disservice and inflates the importance of credit rating agencies. These bodies have a highly dubious track-record in assessing the creditworthiness of both companies and countries. Furthermore, careful empirical scrutiny suggests that despite a great deal of media hype about fiscal issues, ‘…growth has a more significant impact on sovereign default risks than debts and deficits’ in the formal evaluations of credit agencies. This is consistent with common sense. What is the point, after all, of assigning a high credit rating to a country simply because it has a balanced budget and low public debt while it is afflicted by low growth, high incidence of material deprivation, social and political tensions and poor quality of governance?
Mahathir’s own record of economic management shows that his government was able to defy economic orthodoxy and the dire warnings of credit rating agencies during the Asian financial crisis of 1997. His government spurned advice and assistance from the IMF, instituted selective capital controls and allied measures and nursed the Malaysian economy back to health. The World Bank has paid a glowing tribute to these policies in its latest report on the Malaysian economy.
As the previously cited World Bank study notes, subsequent administrations have built on the critical legacy of the policies crafted during the turmoil of the late 1990s. Today, Malaysia is poised to become a high-income economy between 2020 and 2024. Both its fiscal deficit and public debt are low by international standards and are likely to remain so. The economy is growing in excess of 5 percent which is line with its growth potential; inflation is subdued; extreme poverty is virtually non-existent; unemployment is around 3 percent; the labour force participation is about 68 percent. Malaysia is a substantially diversified economy and a major exporter of electrical and electronic goods.
In sum, the credit rating agencies should stop being fixated by fiscal issues and consider the broader economic and social context of countries on which they pontificate. They should exercise due humility by recognizing their fallibility. They should shed their inhibitions and join others in celebrating the triumph of electoral democracy in Malaysia.
‘We have gone from a world of isolated communities to one global community and we are better off for it’, so proclaims Mark Zuckerberg, founder, and CEO of Facebook. Has this promise of Facebook been fulfilled or in the process of being fulfilled?
Certainly, Facebook has become a global behemoth – well over a billion users and rising. It has made ‘Zuck’ the founder of Facebook among the world’s richest individuals. Developing countries have become the newest and most profitable markets. Various strategies – such as ‘free basics service’ in 37 countries – have been put in place to woo the next billion users.
Yet, these are also countries where Facebook is finding itself ensnared by pitfalls and perils. It is much more than ethical and legal issues surrounding data theft and citizens’ privacy as is the current preoccupation in the West. It goes well beyond the well-founded concern that Facebook diminishes individual well-being among profligate users. As the recent cases of Myanmar and Sri Lanka show, it appears that Facebook has unwittingly become an enabler of murderous communal strife. ‘Zuck’ and his associates that run Facebook could not have imagined facing the stigma of being held responsible for fomenting inter-communal hatred rather than connecting isolated communities. This is indeed a reversal from the heady days of Facebook and other social media platforms when they were credited with inspiring democratic social movements, such as the Arab Spring.
Recent research – see here, here and here – has shown that in Buddhist-majority Myanmar and Sri Lanka, false rumours fanned by zealots through Facebook and WhatsApp (which Facebook owns) have set Buddhists against Muslims with murderous consequences. In Myanmar, which was isolated from the international community for decades, Facebook took off in the most unanticipated way, accounting for the vast majority of internet traffic. In a country of low media literacy, Facebook-driven ‘newsfeeds’ became the primary source of information. One researcher claims that ‘Facebook definitely helped certain elements of society to determine the narrative of the conflict in Myanmar’. The UN has added its growing chorus of critics of Facebook. As the UN Myanmar investigator Yanghee Lee warned ‘Facebook has become a beast’ unwittingly allowing itself to become a tool of ultra-nationalist Buddhists who could incite hatred and violence against Rohingyas. As is well known, thousands of Rohingyas have been left dead and maimed, with about 700,000 having to flee to neighbouring Bangladesh.
In Sri Lanka, the government and civil society associations have blamed Facebook for failing to control rampant hate speech. They are convinced that this contributed to anti-Muslims riots in March that left several people dead, forced the authorities to temporarily shut down social media platforms and declare a state of emergency.
Of course, it would be naïve to suggest that Facebook is solely responsible for inter-communal tensions that are historically entrenched. Terrible communal riots have, after all, occurred in the pre-Facebook era as the Indian experience testifies, with the print media at times playing the role of enabler. In Myanmar, the Rohingya crisis goes back decades. Anti-Muslim sentiment among the more militant sections of the Sinhalese majority has always been prevalent. But, ‘where countries are tinderboxes’, Facebook can turn out to be ‘a match’.
So far, the response from Zuckerberg and his associates has been hesitant and even evasive As a global icon with the ability to affect the well-being of billions, Facebook bears a critical responsibility for being much more proactive in dealing with the unintended consequences of its global expansion. The world is a community of fragile and fractious societies which have to be carefully nurtured rather than a mere collection of markets that need to be connected.
On 11 April 2018, the Australian Human Rights Commission released it report on cultural diversity. According to the report, the Australian population comprises 58% Anglo-Celtic, 21% Non-European (including Asian, Africans, Middle Eastern, Latin American), 18% European, and 3% Indigenous. However, Australians of Anglo-Celtic and European backgrounds continue to dominate the senior leadership roles in Australian public and private organisations by as much as 97%. Race Discrimination Commissioner Dr Tim Soutphommasane has rightly pointed out, “It also challenges Australia as a nation whose prosperity relies upon international trade, capital inflows and mobility of people.” Needless to say, if you don’t look like the Anglo-Celtics or the Europeans, your chances of reaching to the top in Australia are pretty slim.
Research into diversity tells a different story. There is a business case for cultural diversity. Culturally diverse leaders can bring in international experience, alternative perspectives, and skills that can complement the skills of the dominant population group. But breaking the glass ceiling is not an easy task. Corporations choose their leaders through networks and informal processes. When you look different and talk differently, it might be difficult to get into those “inner” networks.
Reflections on development and governance 