Sunday, December 26, 2010

Playing into the hands of Barisan

Pakatan Rakyat has totally misread the people's mood and views in its latest confrontation with the Federal Government over 1Malaysia posters in Selangor.

The Pakatan-led Selangor government had banned the usage of the 1Malaysia logo in advertisements and signboards in the State.

1Malaysia, of course, is the concept of racial and religious harmony and cooperation championed by the Prime Minister Datuk Seri Najib Tun Razak.

The decision by Selangor Pakatan has not even been well-received by other Pakatan leaders and the entire episode seems to be another case of Pakatan playing into the hands of Barisan Nasional whose leaders are, to be expected, making full use of the opportunity to hammer some more wedges into the Pakatan coalition to prise it apart.

Pakatan Rakyat's leaders, especially those helming Selangor, must realise that at the grass-root level, the people want - desire - racial and religious harmony.

Whether the 1Malaysia concept is a political gimmick or not is immaterial - the fact is the people - of all races and religious beliefs - want to live in peace.

They do not want violent clashes between racial and religious communities, they do not want blood spilt on the streets.

I believe Pakatan Selangor's move to ban the 1Malaysia logo in its state has not gone down well with the people - they view it as irresponsible politicking by Pakatan. They view it as a Pakatan denial of the need for racial/religious harmony.

Such ill-conceived and politically-immature moves surely do not reflect well on a coalition touted to be able to form an alternative government at federal level.

At the rate things are going, Pakatan Rakyat would lose the general election before it is even called. 

Sunday, December 12, 2010

Anwar was caught in a set-up job

From Sydney Morning Herald:

Malaysian opposition leader Anwar Ibrahim's sodomy charges are the result of a ''set- up job'' which the politician ''walked into'', according to an assessment by Australia's peak intelligence agency. A leaked US state department cable reveals that Singaporean intelligence officials told their Australian counterparts that Dr Anwar engaged in the conduct for which he is accused, a claim he has steadfastly denied.

Australia's Office of National Intelligence also states the conduct was the result of entrapment by Dr Anwar's enemies.

The cable is one of several that deals with the highly explosive private views of senior Singaporean officials, including claims that:

>Thailand's political elite are dogged by ''corruption'' and the country's crown prince is ''very erratic and easily subject to influence'';
>Japan and India were struggling to deal with China's influence due to their ''stupid'' behaviour;

> and some Asian leaders wanted the junta to retain power in Burma to ensure the country's stability.

The cable that deals with Dr Anwar's sodomy case, dated November 2008 and released exclusively to The Sun-Herald by WikiLeaks, states: ''The Australians said that Singapore's intelligences services and [Singaporean elder statesman] Lee Kuan Yew have told ONA in their exchanges that opposition leader Anwar 'did indeed commit the acts for which he is currently indicted'.''

The document states the Singaporeans told ONA they made this assessment on the basis of ''technical intelligence'', which is likely to relate to intercepted communications.

The ONA is also recorded as saying that Dr Anwar's political enemies engineered the circumstances from which the sodomy charges arose.

''ONA assessed, and their Singapore counterparts concurred, 'it was a set-up job and he probably knew that, but walked into it anyway','' the cable states.

Sodomy is illegal in Malaysia and carries a jail sentence of up to 20 years.

Dr Anwar, a former Malaysian deputy prime minister, was jailed in 1999 on charges of corruption and sodomy after a falling out with then prime minister Mahathir Mohamad.

He later had his sodomy conviction overturned and was freed from jail in 2004.

In 2008 he was charged again with sodomy. Dr Anwar has maintained the case against him is fabricated and trumped up by his political enemies who fear his political resurgence.

The case against Dr Anwar has drawn widespread international criticism and has included some bizarre twists. Earlier this year, a prosecutor in the sodomy trial was dropped after she was accused of having an affair with the star witness.

The witness, 25-year- old Mohamad Saiful Bukhari Azlan, worked as an aide in Dr Anwar's office. He has accused the 62-year-old of sodomising him in an apartment in Malaysia.

Earlier this month, Australian politician Nick Xenophon travelled to Malaysia to observe Dr Anwar's ongoing court proceedings, which were adjourned.

In December 2009, a month after ONA's brief assessment of Dr Anwar's case, the Malaysian criticised Kevin Rudd for not meeting him during his visit to Australia. He accused Mr Rudd of appeasing Malaysia's ''corrupt leaders'' by snubbing him.

''He [Mr Rudd] was too obsessed with interests of getting the two countries together [and therefore] appease Malaysia's corrupt leaders,'' Dr Anwar said at the time.

Tuesday, November 9, 2010

Najib watches with glee as PKR implodes

Prime Minister and Umno president Datuk Seri Najib Tun Razak's best Deepavali present did not come in the form of the by-election victories in Galas and Batu Sapi.

Rather, it comes in the form of PKR imploding slowly but surely by in-fighting among its top leaders.

One can imagine Najib still trying to resist to scratch the itchy pock marks left by his bout of chicken pox, but gleefully reading all about the mud-slinging between PKR's Datuk Zaid Ibrahim, who was contesting the deputy presidency, and Datuk Seri Anwar Ibrahim, the de facto leader.

Today, Datuk Zaid, who was a former Minister of the Barisan Nasional government and member of Umno, held a press conference and blamed Azmin Ali and Datuk Seri Anwar Ibrahim for the allegations of fraud and malpractices plaguing the party’s ongoing elections.

He said both of them should leave PKR.

“I would like to say, if PKR wants to move, Anwar and Azmin must go... because they are the source of the problem," he added.

Yesterday, he sensationally announced that he was pulling out of the PKR deputy presidential race, claiming that there were fraud and malpractices.

Actually, the situation is rather simple - Anwar prefers (or wants) Azmin to be the new deputy president of PKR simply because he is a trusted and loyal confidant whom he can trust not to reveal his darkest secrets that perhaps only the two of them know.

Furthermore, Anwar is preparing for the day when - not if - he is sent back to jail for the sodomy case that he is still fighting in court. He would rather have Azmin effectively in charge of PKR than Zaid.

And to ensure that Azmin wins, if the allegations are to be believed, there are some rumours of irregularities in the election process.

Sadly, Anwar does not realise that his maneouvres to back his favourite confidant may ensure that his man gets to lead the party, but his image as a highly-principled leader fighting for "Reformasi" and "Justice" has been smeared very badly.

It would appear as if PKR itself needs "Reformasi" while Zaid deserves "Justice".

That is why Najib is probably rubbing his hands with glee after tucking into a thosai or two and watching as PKR implodes.

It is even more satisfying for Najib and his Umno (and Barisan Nasional) leaders because they do not have to do anything at all - they just have to tuck into the Deepavali delicacies, burp with satisfaction and watch the interesting events unfold.

Come to think of it, all Najib and gang need to do is simply make some snide remarks - like any other normal spectator - and speed up the PKR implosion.

Monday, November 8, 2010

Anwar Ibrahim's worst enemy is Anwar Ibrahim

The on-going PKR elections have revealed one thing - PKR is just like most other political parties.

It has its fair share of shady deals, vote manipulation and cronyism - in fact, it seems to be a mirror image of Umno, its sworn enemy.

Some people say it is due to PKR having too many ex-Umno members and leaders who brought with them the so-called Umno culture of money politics and politicking.

On Monday, Datuk Zaid Ibrahim, who was from Umno, quit the PKR deputy presidential race saying the party "leadership actively condones malpractices and electoral fraud to achieve its designed objectives."

"I wish to announce my withdrawal as a candidate from the contest of deputy president of Parti Keadilan Rakyat and my resignation from all posts held in the party," said Zaid in a statement.

Zaid also resigned as the party's political bureau member, Federal Territory chief and Wangsa Maju chief.

He said he decided to pull out of the No 2 due to blatant vote manipulation, The Star reported.

PKR leader Datuk Seri Anwar Ibrahim, who was also from Umno, countered that Datuk Zaid should provide evidence of fraud - which actually sounded very much like a typical reply from any Umno leader.

He said PKR secretary-general Saifuddin Nasution had on Sunday explained that it was impossible to cheat due to the internal security features embedded in the ballot papers and process would not allow cheating to occur, The Star reported.

"I have read Zaid's statement (on his resignation) and the leadership feels that whatever accusations and allegations there are, can be forwarded (to us)," Anwar told reporters at the Parliament lobby Monday.

Anwar said accusations which appeared in Haris Ibrahim's blog on Saturday had also been explained that they were unture.

In his blog, Haris said an informant had showed him a stack of ballot papers for sale and the informant could produce more of the papers.

The informant allegedly indicated Azmin Ali, Zaid's rival for deputy president's post, as the culprit behind the vote rigging.

On whether the leadership would accept Zaid's resignation, Anwar said they had not received any resignation letter from him.

"We need the contribution and participation of all leaders, including Zaid," he said when asked if he would urge Zaid to reconsider his decision (to resign from all party posts.)

Anwar added that Haris' allegations had no basis and Zaid should not make allegations without producing the evidence.

On whether Zaid is still in the running for the PKR deputy presidential race, Saifuddin said Zaid's name "is still in the ballot paper" and he had not received any resignation letter from him.

It is common knowledge that Anwar is backing Azmin - his favoured confidant - for the deputy presidency. The talk is that Anwar would rather have Azmin, his loyalist and favoured one, take over leadership of PKR when - rather than if - he goes to jail for the sodomy charge that is still being heard in court.

But Anwar must realise that he carries on his shoulders the hopes of hundreds of thousands, if not millions, of Malaysians who are convinced - rightfully or wrongfully - that he has the right stuff to take over the helm of the country.

Anwar must realise that his cries for "Reformasi" and "Justice" had fired up a generation of rebellious and impressionable youths who have become staunchly anti-establishment. They have been converted to his cause and are blind to his faults.

And if PKR is indeed guilty of "vote manipulation" and "electoral fraud" as alleged by Datuk Zaid, then the political struggle of the brigades of youths would be in vain. Anwar would have betrayed those who not only supported him, but believed him.

If the PKR elections become even more shambolic and disgraceful, it does not augur well for Pakatan Rakyat in the general election which is likely to be called next year.

Sadly, the dreams of those who had desired a change in government would be dashed. Ironically, the blame would be on the very person who could have brought about that change.

Sunday, November 7, 2010

Controversial skyscraper

The 100-storey Warisan Merdeka building to be constructed in the former Tunku Abdul Rahman Park area near Stadium Negara in Kuala Lumpur has become a most controversial project with hundreds of thousands of Malaysians opposing and ridiculing it in FaceBook, Twitter, blogs and online news portals.

The points raised mostly involved money - "Sheer waste of money", "Money could be better used elsewhere", "Where is the money coming from?", "Can the government afford it?", etc.

Other points involved the location - "It'll create even more traffic jams", "The place is congested enough", etc.

I agree on the point involving the location and that it'll create even more traffic jams, but I shall take a contrarian view on whether it should be built.

The skyscraper will be built by Permodalan Nasional Bhd (PNB) and its president and group chief executive Tan Sri Hamad Kama Piah Che Othman held a press conference to explain that the development costing RM5bil would also have a shopping complex and condominiums.

The 100-storey tower – touted to be the country’s tallest – will cost RM2.5bil to RM3bil and will have gross floor space of 3 million sq ft and 2.2 million sq ft of net floor space .

“PNB’s existing headquarters, Menara PNB will be 30 years old by the time the new tower is completed. We are looking for strategic positioning for the future and will need new office space for the expanding PNB group of companies. The Warisan Merdeka tower will become the new PNB headquarters while Menara PNB will be upgraded and leased out for recurring income,” Hamad told The Star.

He said PNB had the capability to finance the project through internally generated funds but he did not discount resorting to borrowings “if the interest rates are attractive.”

On the rationale for PNB’s decision to undertake the project, Hamad explained: “We have been planning to develop the land since 2004 after acquiring it in 2000. After holding the land for so long, we decided it is now the right time to move ahead with the project. As an investment house, our intention is to optimise returns from the development.”

He said the project was expected to yield reasonable returns of between 8% and 10%.

PNB paid RM310mil or RM220 per sq ft to buy the 36-acre land from Pengurusan Danaharta Nasional Bhd in 2000. Hamad said the market value of the land was estimated at RM800 per sq ft today.

Of the 36 acres, around 17 acres are occupied by Stadium Merdeka and Stadium Negara, which have been identified as a national heritage buildings. Conservation works have been undertaken to restore their heritage characteristics and the two stadiums are now being managed by the National Heritage Trust.

The overall Warisan Merdeka development on 19 acres would have to complement and blend with the heritage theme, and together with the restored stadiums, the site was set to be another major landmark in Kuala Lumpur, The Star reported.

The issue of financing was answered by Tan Sri Hamad - it would be internally financed. So government funds would not be utilised. This is a vital point as many of the detractors seem to be confused over government funds and PNB funds - they are not the same. PNB's funds belong to PNB; if PNB resorts to borrowing money, PNB has to repay the loan, not the government. PNB has to generate revenue through its investments and business activities to get the cash to repay the loan.

Now to discuss the location. Property developers would salivate when told where the land is - hundreds of meters from the Petaling Street Chinatown tourist attraction, a short walk from heritage stadia where events/concerts are still held, two monorail stops from the Imbi/Bukit Bintang shopping district and smack in the middle of Kuala Lumpur.

It seems to be a nice prime location, but - there's always a but - the detractors are right about the area being congested enough.

Recently, I drove in town during the peak hour at 5pm along Jalan Tun Perak and I was stuck in a horrendous traffic jam for around 45 minutes. I was at a traffic-light junction near the Maybank headquarters and the traffic lights changed a few cycles and I did not move even an inch.

The leaders of the nation, City Hall officials and town planners should take a drive in the middle of Kuala Lumpur during peak hours to find out for themselves just how bad the traffic jams can be. The problem is the leaders and VIPs have police escorts who shoo away other motorists with their sirens and flashing lights so that their journeys would be smooth.

I recall a former Transport Minister who had never taken a ride on the LRT before and when he did for his first time, it was a major media event. It was also probably his first and last time on the LRT.

Building a 100-storey skyscraper would mean increasing the daytime population of the area by tens of thousands and also increase the number of cars by the thousands. Building condos in the area would mean increasing the night-time population of the area by the thousands and, yes, there will be hundreds of cars being driven back to the condos when offices close.

The roads in the vicinity of the proposed Warisan Merdeka project such as Jalan Hang Jebat, Jalan Hang Tuah, Jalan Maharajalela and Jalan Sultan are already very busy and congested at any time of the day. You can imagine what the traffic situation would be like when the Warisan Merdeka project is completed.

If PNB decides to go ahead with the project - and chances are it will - there will have to be much planning done to solve the traffic congestion in the area otherwise it would be another of KL's great town-planning disasters.

The project would be rendered worthless if getting in and out of the Warisan Merdeka skyscraper, shopping mall and condos means getting stuck in an hour-long jam.

Perhaps the project can be downsized to reduce the impact.

In that case, the 100-storey skyscraper can be built in a greenfield location where proper town planning can be done, highways built and LRT lines constructed. The skyscraper could then be the central development of a township (like Cyberjaya) and tens of thousands of people (and their cars) can be lured to live and work away from the crowded and congested centre of Kuala Lumpur.

And one final point to consider - why build a 100-storey skyscraper when you can build a taller one? A 100-storey skyscraper is a neither-here-nor-there structure. It will be just another skyscraper, just another building, just another phallic symbol.

My view is this - if you want to be build a 100-storey skyscraper, you might as well just add a few more storeys and make it the world's tallest.

Still an uphill battle for Barisan

As expected, Barisan Nasional cruised to victories in both by-elections in Galas, Kelantan, and Batu Sapi in Sabah.

The mood in the Barisan Nasional camp is obviously buoyant and everybody seems to be in the mood to celebrate especially since the victories coincided with the Hindu festival of Deepavali, which marks the victory of good over evil.

But just because of that coincidence, Barisan should not treat the by-election victories as victories of good over evil.

To treat the Opposition as evil would be the downfall of the ‘good’ guys.

This is simply because the victories are not reflective of the situation in other parts of Malaysia.

In Galas, which was a Barisan stronghold and a state seat within the Parliamentary constituency of Gua Musang where Umno veteran and Kelantan prince Tengku Razaleigh has reigned as king for many years, it was Ku Li’s charisma, influence and stature that won over the Orang Asli and Chinese voters (and some Malay voters too) that resulted in the Barisan victory.

Barisan’s Abdul Aziz Yusoff polled 5,324 votes against Dr Zulkefli Mohamed from PAS who obtained 4,134 votes.

In Batu Sapi, some observers say it was the emotional factor that pulled in the sympathy votes since fielding the widow of the late Batu Sapi MP, Datuk Edmund Chong Ket Wah, ensured that voters would be sympathetic to her cause (if at all she had a cause).

Barisan candidate Datin Linda Tsen Thau Lin of PBS won the Batu Sapi Parliamentary seat - she polled 9,773 votes to defeat PKR’s Ansari Abdullah (3,414 votes) and SAPP president Datuk Yong Teck Lee (2,031 votes).

Deputy Prime Minister Tan Sri Muhyiddin Yassin was quick to state that while the wins in Galas and Batu Sapi could bolster the coalition’s chances in the next general election, it should not take things easy.

“Barisan can’t take things for granted, we still have a lot to do,” the Deputy Prime Minister said at the MIC Deepavali open house at the Putra World Trade Centre in Kuala Lumpur on Friday.

He is right - Barisan cannot take things for granted. Two victories in battles (in rather remote battlefields) do not mean Barisan can win the war.

Can Barisan win the battles in the urban areas? Can Barisan win the battles in Chinese-majority seats? Can Barisan win back the States and seats now controlled by Pakatan Rakyat?

Can Barisan win over the support of impressionable, rebellious and disenfranchised Malaysians? Can Barisan win over the support of the young voters who have grown up from adolescence to adulthood in an atmosphere of cynicism, skepticism and disbelief?

Despite the easy victories in the two by-election battles, it will still be an uphill battle for Barisan in the next general election.

Sunday, October 17, 2010

Commonwealth Games and bumiputra privileges

In the New Delhi Commonwealth Games that just ended, Malaysia did commendably well. Malaysia won 12 golds, 10 silvers and 14 bronzes and finished seventh overall.

Traditionally, in the Commonwealth Games, the 'white' nations like Australia, England and Canada would be among the top few. It was the same this time; but Malaysia was ahead of other 'white' places like New Zealand, Scotland and Wales.

So it has been proven that Malaysians can do better than some whites.

Among the Malaysian medallists were several Malays who excelled at shooting, archery, cycling, lawn bowls and weightlifting.

As everybody knows, there is no such thing as a handicap in such games - only the best in the Commonwealth nations (of the former British Empire) must compete on equal footing in a level playing field.

There is no such thing as bumiputra privileges in such championships, no such thing as special handicaps for Malays, no such thing as favoured treatment and privileges based on race.

In the Commonwealth Games (and the Olympics, Asian Games, SEA Games and other world meets), performance is based on merit regardless of race.

It just goes to show that the Malays are able to compete with the best in the world .

They are able to win gold medals, set new records and conquer new frontiers - without having to depend on the crutch of bumiputra privileges and rights.

I am bringing this up because former Prime Minister (now) Tun Dr Mahathir Mohamad in his latest blog posting ( wrote: "The non-politically educated Malays feel ashamed that they have to be helped. They would like to be recognised as people who succeeded on their own. If we study these people almost invariably they have benefited from the NEP. They appear to be ashamed of this.

"They are ashamed to admit that they were unable to compete with the other races. I am not ashamed to admit that I cannot compete with the Chinese and Indian students when studying medicine. They had much better results than me and the other six Malay students for entry into the Medical College. Even at that time the British promised to the Rulers to help educate the Malays. I had my chance because of the affirmative action then. On pure merit I would not be a doctor today, not because I was not qualified, but my qualification was lower than others.

"One has to remember that the Chinese civilisation is more than 4000 years old. No other civilisation has lasted that long. Naturally they have developed a culture better able to survive under all conditions. It is my belief that if the percentage of Chinese in the United Kingdom for example is the same as in Malaysia, UK would be better developed than it is now. It is not surprising that the Chinese excel in developing Malaysia (for which they are amply rewarded).

"It is not shameful to lose out against them. Simply to catch up with them we need handicaps. To be given handicaps is to ensure fairness, not discrimination. That is why in golf you have handicaps. That is why in all contests there must be equality between the contestants.

"It is selfish if having benefited from the handicaps you want to deny others from having them.

"But when all is said and done, those who are given the benefits of handicaps must make honest efforts to use them properly. If they don't then they must forfeit the handicaps in the future."

Tun Dr Mahathir used the analogy of handicaps in sports when he talked about competing with the Malaysian Chinese in education and business.

He said that "to be given handicaps is to ensure fairness, not discrimination".

And he goes on to assert that in golf there are handicaps given to level the playing field.

Fair enough, but for him to say "that is why in all contests there must be equality between the contestants" reveals a logic that is skewed to support his argument for continued affirmative action for the Malays in education and business.

Any contest cannot be fair if an athlete (or student or businessman or educationist or worker) is given a handicap. In any contest, there must be equality among the contestants in the form of them being given support, training, exposure and opportunity. How they perform would depend on their skills, form and, perhaps, a bit of luck.

The question is this: Why is it that the Malays can excel in athletic competitions at world-level without affirmative action, handicaps and privileges?

The next question is: Why is it that the Malays need affirmative action, handicaps and privileges in 'competitions' against Malaysian Chinese in education and business?

Tun Dr Mahathir should ponder on these questions. He himself admitted that he failed to change the mindset of the Malays when he was Prime Minister.

Perhaps he can do so as a retiree.

Saturday, October 16, 2010

Galas: Barisan victory imminent

Barisan Nasional is likely to win the Galas by-election in Kelantan on Nov 4, but that victory should not be interpreted as a sea change in the sentiment of Malaysian voters in general.

This is simply because Galas is one of the three state seats within the Gua Musang Parliamentary constituency which has always been a Barisan stronghold with Kelantan prince Tengku Razaleigh Hamzah lording over the area like a king.

It was simply the 'Political Tsunami' of the general elections in 2008 that resulted in lots of voters swinging over to support Pakatan Rakyat resulting in PAS' Che Hashim (whose death on Sept 27 resulted in the by-election) getting 4,399 votes and winning by a mere 646-vote majority. Tengku Razaleigh himself won the Parliamentary seat with a smaller margin of victory - 4,394 compared with 6,548 in 2004.

Now that Tengku Razaleigh has been appointed director of operations of the by-election, it is widely expected that his charisma and influence in the area will convince those who had switched camps, expecially the Chinese, to switch back.

The feeling is that the wave of discontent of the 'Political Tsunami' will not be as strong as it was in 2008, at least in that remote part of Kelantan, and Galas will revert to being a Barisan stronghold.

Observers had pointed out that the swing in Chinese votes ensured a PAS victory in 2008. The Chinese make up 22 per cent of the registered voters there.

Tengku Razaleigh has not lost touch with the grassroots especially the Chinese and the Orang Asli, who have always held him in high regard.

But that is the situation in that patch of land in rural Kelantan and it is not reflective of the situation in the other parts, especially urban areas, of the nation.

In these areas, the flood waters left by the 'Political Tsunami' have not been drained away yet and the anti-Barisan, anti-establishment sentiment is still very strong.

And these pools of political unrest are still the breeding grounds of even more discontent.

Saturday, September 25, 2010

Numismatic oddities

The release of dinar and dirhams minted from pure gold and silver by the PAS-led Kelantan state government recently can best be described as a political ploy to convince Muslim voters that PAS is serious about reviving the glory days of Islam.

In those great days when Goldman Sachs was not in existence and Wall St was probably some muddy field, dinars and dirhams were the media of exchange of the Muslim world.

In Kelantan, the initial run of coins worth about US$640,000 (RM1,978,880 based on US$1 = RM3.092) ranging from one dirham - containing about US$4 (RM12.3680) worth of silver at current prices - and one dinar - worth US$189 (RM584.388) - to an eight-dinar coin worth US$1,518 (RM4,693.66) were issued and were sold out, ironically bought by buyers using the ringgit, Malaysia's official currency, to pay for them.

While the idea of reviving a currency from the time of the Prophet is romantic, it is also rather simplistic.

For any currency to be worth anything today - without the backing of gold - its value relative to other currencies has to be determined via trading on the foreign exchange markets. Thus the value of the ringgit is determined on a daily basis by the forex market (it is on a real-time basis for the traders).

And for a currency to be traded on a foreign currency exchange, it has to be recognised as the official currency of a nation.

This is where the weakness of the Kelantan dinar and dirham lies - how does one determine their value in ringgit or, say, US dollar terms?

Its proponents may say that it is very simple - just base it on the value of the precious metal it contains. Thus the gold dinar and silver dirham would be worth what the metals are worth in the metal exchange.

If that is the case, then the values of the dinar and dirham will be affected by fluctuations in the metal markets due to supply, demand and speculation and are unstable in value like any other paper currency.

If the price of gold shoots up, then the eight-dinar coin would be worth more than its current value of US$1,518 (RM4,693.66).

Thus to say that "1,400 years ago, a chicken cost one dirham. Today, it still costs approximately one dirham" ( does not compute.

Today's Kelantan one-dirham coin has about US$4 (RM12.3680) worth of silver in it. Assuming silver doubles in value ceteris paribus, the one-dirham coin should be worth US$8 (RM24.736). Would a chicken cost US$8 (RM24.736) then or would it remain at US$4 (RM12.3680)?

Of more importance is the fact that those who authorised the issuing of the Kelantanese dinar and dirham have not heard of Gresham's Law, a concept that is found in any A-Level economics textbook.

The turbaned ones wearing Arabian robes and stroking their beards of wisdom obviously have not heard of the phrase "bad money chasing out good money".

According to, "the proposition known as 'Gresham's Law' is often stated baldly as 'bad money drives good money out of circulation.' Ancient and medieval references to this tendency were informed by circumstances in which lightened, debased, or worn coins had assigned to them the same official value as coins containing greater quantities of precious metal. In this context the tendency, which had yet to be elevated to the status of an economic 'law,' was one in which 'bad' coins alone, that is, coins possessing a relatively low metallic content ('intrinsic value'), continued to be offered in routine payments, while 'good' coins were withdrawn into hoards, exported, or reduced through clipping or 'sweating' (that is, purposeful erosion by chemical or mechanical means) to an intrinsic value no greater than that possessed by their 'bad' counterparts."

According to wikipedia: "If 'good' coins have a face value below that of their metallic content, individuals may be motivated to melt them down and sell the metal for its higher intrinsic value, even if such destruction is illegal. As an example, consider the 1965 United States half dollar coins, which contained 40% silver. In previous years, these coins were 90% silver. With the release of the 1965 half dollar, which was legally required to be accepted at the same value as the earlier 90% halves, the older 90% silver coinage quickly disappeared from circulation, while the newer debased coins remained in use. As the price of bullion silver continued to rise above the face value of the coins, many of the older half dollars were melted down. Beginning in 1971, the U.S. government gave up on including any silver in the half dollars, as even the metal value of the 40% silver coins began to exceed their face value."

Economists have noticed the tendency for people (of all faiths) to cut/shave off bits of gold or silver from coins made from these precious metals which they would amass, melt down and sell off for a tidy profit. The debased or smaller and lighter coins would remain in circulation even though their content of precious metals would be worth less than their face values.

Some experts have opined that this led to the issuance of paper currencies and coins made of cheaper metals like copper, nickel and zinc.

In fact when the prices of copper and zinc shot up in 2006, the United States government banned the melting or mass exportation of nickels and pennies as the melted-down coins were worth more than their face value.

According to Islamic Law, the Islamic Dinar is a specific weight of 22k gold (917.) equivalent to 4.25 grams while the Islamic Dirham is a specific weight of pure silver equivalent to 3 grams.

These specifications were established by Umar Ibn al-Khattab based on their weights: "7 dinars must be equivalent to 10 dirhams." Umar reigned as Caliph from 634-644.

Gold and silver dinars and dirhams were in use in the Muslim world till the fall of the Caliphate. Later, they were replaced - as in many other parts of the world - with paper currency which is still in use today.

Several Muslim nations still call their legal tender paper currencies dinar.

As for the gold dinar and silver dirham in Kelantan, it is unlikely for them to gain legal tender status and replace the ringgit as the medium of exchange. They will also not revive the glory of the Muslim world during the Caliphates.

At best they will be numismatic oddities.

Monday, September 13, 2010

Mexico and Malaysia

I just read a story (posted below) about Mexico celebrating its bicentennial even as many Mexicans say there is nothing to celebrate.

After 200 years of independence, Mexico is still struggling with inequality - it is home to the richest man in the world while half its population (107 million) are stuck in poverty - and corruption, which has become a way of life.

Drug traffickers rule parts of the nation like warlords even as the people lose faith in their political leaders.

A majority of Mexicans are not satisfied with the country's direction and the oil that once financed the nation's growth is running out. Mexico is slipping behind the Emerging Markets and its influence in the region is weakening.

A Mexican director made a movie for his nation's 200th anniversary and named it "Hell".

After reading the story, I realised that there are a lot of similarities between Mexico and Malaysia although Malaysia is a much younger nation.

Is corruption a way of life in Malaysia? Is there great inequality? Are the majority of Malaysians satisfied with the nation's direction? Is Petronas' oil running out? Is Malaysia slipping behind in global competitiveness? Is Malaysia losing its regional influence?

Though drug warlords are not controlling segments of Malaysia, other criminals are - just look at the Ah Longs (moneylenders) who paste their phone numbers all over phone booths, signboards and Tenaga Nasional power distribution boxes and the number of prostitutes from China, Russia and Central Asia who ply their trade in the red-light districts of Malaysian cities and towns. Look at the amount of smuggled cigarettes and liquor flooding the market. Look at the number of people selling pirated and porn DVDs.

These criminals are contributing very much to the black economy and the authorities don't seem too bothered about their activities. If you believe the rumours, some people in positions of power are partners in these 'grey' market 'business ventures'.

And, finally, how many Malaysians at this moment feel that Malaysia is 'heaven'?


MEXICO CITY - The movie that Mexican director Luis Estrada is putting out for his country's bicentennial is bluntly named "Hell."

Like many Mexicans, Estrada says there is little to celebrate in Mexico today, with its violence, corruption and inequity. Yet in another way, the harshly critical movie shows how far the country has come - it was made with government funding, and nobody tried to censor it.

"I think this should be seen as enormous progress," Estrada says.

As Mexico limps into the bicentennial of its 1810 independence uprising, it is battered and full of self-questioning, but with more openness and debate than perhaps at any other time in its history.

The bicentennial marks the 1810 uprising led by Catholic priest Miguel Hidalgo, who gathered a band of Indians and farmers under the banner of the dark-skinned Virgin of Guadalupe. He was caught and executed soon afterward, but by 1821 the movement he started ousted the Spanish, a feat Mexicans celebrate Sept. 15-16.

"A bicentennial should inspire and generate hope, and this one hasn't," notes longtime environmental and consumer activist Alejandro Calvillo. "It comes at a time of deep crisis."

Why couldn't it have been in 1977, when Mexico was flush with oil money? Or in 1993, when Mexico negotiated the North American Free Trade agreement with the U.S., portrayed as a ticket to prosperity? Or in 2000, when the country experienced the first democratic transition of power in its history?

But all those "victories" proved hollow. The oil is running out. NAFTA failed to lift Mexican wages or stem migration. And democracy - in a country with no ballot initiatives, independent candidates or open city council meetings - has only strengthened the grip of the three main political parties.

A Pew Research Center poll released in August shows 79 percent of Mexicans are dissatisfied with the country's direction. Even U.S. Secretary of State Hillary Rodham Clinton jumped into the fray last week, saying that Mexico, plagued with drug-running and violence, is looking more and more how Colombia looked two decades ago.

Mexico seems to be slipping behind: Chinese auto workers who once earned wages their Mexican counterparts wouldn't stoop to take now earn more. Mexico's cherished role as defender of Latin America's right to self-determination has largely been taken over by Brazil and Venezuela. And Mexico's view of itself as the protector of refugees was badly shaken when drug cartel gunmen massacred 72 mainly Central American migrants in the north in August.

"We are a generous and hospitable people, without doubt, but now we are realizing with shock and shame that we have become a corrupt and murderous country," the Catholic Archdiocese of Mexico wrote in an editorial.

Perhaps what Mexicans have to celebrate is their own endurance - the real glue that's held the country together for centuries.

"We won't migrate, and we won't allow ourselves to be defeated," says Victor Suarez, 57, who started a national farm cooperative movement in 1995, right after NAFTA opened the door to imports of U.S. grain. Suarez' group now negotiates better prices for about 60,000 small farmers, and has built 200 grain warehouses.

"Farmers are the country's future," he says. "We are fighting to save something that is key to the national identity."

Yet in the past 15 years, Suarez says he's seen increasing numbers of poor farmers migrate to the United States, or be recruited by drug gangs to work as hitmen or lookouts, or to plant marijuana or opium. In a country where roughly 10 percent of the population has migrated abroad - and a Pew Research Center poll shows another 33 percent would like to do so - merely remaining is often a statement in itself.

That's especially true in Ciudad Juarez, where drug violence has killed more than 4,000 people since 2009, making it one of the deadliest cities in the world. The violence is so bad that the city canceled its Independence Day celebration for the first time since Pancho Villa raided towns along the border during the 1910-1917 Revolution.

A restaurant owner in the violence-wracked border city - he asked for his name not be printed to avoid reprisals - isn't leaving, even after gunmen barged into his eatery one year ago to demand protection money. He moved his family to El Paso, Texas and opened another eatery there, but he remained in Juarez to keep his business open and continue providing jobs for his 10 employees.

"My dad started this place on a shoestring," he says, amid the warm smell of his family's turkey burritos. "I want to stay here, I'm from Juarez, and I'm going to stay and help my employees' families as long as I can....I'm not going to let some bastards run me out."

Mexicans are losing faith in many institutions. After the hero in Estrada's movie bursts into a bicentennial celebration and mows down corrupt figures - a drug lord, a mayor, police chief and local priest - with an assault rifle, audiences in Mexico City clapped.

But the search for new values is somewhat disorienting. For most of its 200 years, Mexico was dominated by three institutions, whose buildings loomed over hundreds of town squares: the church, the city hall and the house of the most prominent family.

The church - whose falling number of priests can hardly serve their flocks anymore - now strives to be relevant in a country where most still list themselves as nominally Catholic, but hardly ever attend mass anymore.

Rev. Alejandro Solalinde runs a shelter for Central American migrants in the southern state of Oaxaca, where he has braved threats from corrupt officials and drug gangs. Even Solalinde questions his church and his country's direction.

"I think that nationalism isn't much help any more," he said. "I think what we need is new humanism, that places value on the individual human being."

Today, one of the buildings on a Mexican town square is likely to be an evangelical temple. Evangelical and Protestant groups provide involvement and a sense of revivalism, holding "prayer meetings for peace" in places like Ciudad Juarez.

Other aspects of life are changing; today, a Mexican town square is likely to hold an Internet cafe, a money exchange for migrant remittances, and a store selling plastic Chinese sandals instead of leather huaraches.

The family remains a bulwark, albeit one that is often split by mass migration. But the enormous, close-knit Mexican family may be a thing of the past; Mexico's birth rate has fallen from about 7 children per woman in the late 1960s to 2.1 today.

Upper-middle class Mexicans today are firmly implanted in the developed world, with iPhones, modern apartments, high education levels and small families. They sometimes feel ignored amid all the talk of violence: Mexico's nationwide murder rate, after all, is a relatively low 14 per 100,000, well below the average for Latin America.

"The dangerous, violent, tragic, corrupt and cynical Mexico is not the country most Mexicans belong to," philanthropist Manuel Arango wrote in an open letter in August. "The millions who go to work everyday, despite street protests that often block traffic, who work to get ahead and support their families ... this invisible Mexico is the real Mexico."

Today, Mexico has strong civic movements on issues like crime, human rights and environmental protection that didn't exist 25 years ago. And despite suffering the most severe recession since the 1930s in 2009, the country has sound government finances and growing accountability. There is also now a truly independent Supreme Court.

Yet a few rich still hold the reins of the country's highly concentrated economy, where one or two firms dominate key sectors like television, telephones, cement, and food distribution. Half of the country's 107 million people live in poverty. Mexico is home to both the world's richest man, Carlos Slim, whose fortune is estimated at about US$53.5 billion, and about 20 million Mexicans who live on less than US$3 per day.

"Closing the gap that separates these two Mexicos is a commitment we owe to the heroes of the past, and to Mexicans of today and tomorrow," Calderon said in Sept. 1 speech.

In the meantime, social activists are trying change Mexico in various ways. Mothers whose children disappeared in counterinsurgency or police campaigns have taken to washing the Mexican flag in a tub of water outside the steps of the country's Supreme Court in the weeks leading up to the bicentennial. They say the flag has been stained with blood and needs to be cleaned.

A quasi-military group, the Pentatlon Deportivo, believes military-style discipline, personal development and an ardent, nationalist love of Mexico are the cures for the country's ills. In Mexico City, teenage Pentatlon recruits jog down the tree-lined main boulevard, dropping to calisthenics and chanting "I will train very hard, because I'm no coward/I will give my life for my country ... to end all the evil."

Others, like Calvillo, are trying to organize consumers to pressure the country's powerful, highly monopolized business sector, with campaigns to stop big corporations from selling junk food in schools in Mexico, where children simultaneously suffer from malnutrition and one of the world's highest obesity rates.

And some are trying to use the courts to introduce class-action lawsuits taking on big business. But activism can only do so much; for example, antiquated labor laws make union organizing nearly impossible, and wealth and power often prevail in Mexico's bureaucratic, opaque court system.

"It's a contradictory situation, because on the one hand, people are a little desperate and want to participate, but the lack of democratic processes discourages that," Calvillo said. "Because of the situation, people ... kind of retreat into their private lives and try to solve their own problems."

This year also marks the centennial of the 1910-1917 revolution, when the old heroes like Emiliano Zapata and Villa overthrew the dictatorship of Porfiro Diaz on behalf of small, impoverished farmers.

One hundred years later, most farms remain small and impoverished, and the "revolutionary" rhetoric that helped keep the Revolutionary Institutional Party in power for 71 years - a paternalistic government that would hand out subsidies, housing projects and sports complexes - has faded just like the paint on government-built apartment blocks.

The 2000 presidential elections - won by President Felipe Calderon's conservative National Action Party - marked the first peaceful transition of power in the country's history. Embarrassingly, Calderon's administration has had to delay a park and a commemorative arch for the bicentennial, because some of the work had to be done abroad.

Today, Mexicans are looking less to the government than ever before; they have largely tired of the official version of what it means to be Mexican.

At Mexico City's alternative music market every Saturday, Mexican Goths in black robes and white face powder mix with punk and rock fans known as "skaters." With shaggy hair, ripped jeans and skateboard, graffiti artist and high-school student Antonio Yanez, 19, likes U.S. bands like the Red Hot Chili Peppers and Flaming Lips, but defines his Mexican identity as something that strikes to the ageless core of the country.

"Being a Mexican is about working hard, getting ahead by your own efforts," Yanez says. "It's like, looking for some way to get ahead, even when there is no way, and just hoping to find it." - AP

Sunday, September 5, 2010

Dinars and Dirhams

Here's a story on Malaysia that appeared in the respected financial newspaper Wall Street Journal. However, I'm not sure if it's for the right or wrong reason...

The Wall Street Journal

KOTA BHARU, Malaysia: Umar Vadillo bounds into a hotel room here in northern Malaysia with several stacks of gold and silver coins in his hands and slaps them down on a coffee table. "This," Mr. Vadillo says, "is what it means to be free."

A quarter century ago, this Spanish-born Muslim convert set to work with other European Muslims to find a substitute for the U.S. dollar and other paper currencies.

State minister Nik Abdul Aziz presented certificates to local traders who accept dinar as payment.

Pricing goods in greenbacks, they argued, was unfair. Many countries earn their income from finite resources like oil and other minerals, they said, while the U.S. and other countries can crank up their printing presses to pay for them—especially after Richard Nixon helped break the Western world's historical dependence on gold as a measure of value by taking America off the gold standard in 1971.

Last month, Mr. Vadillo's solution took shape when the local Muslim-led government in Malaysia's Kelantan state joined forces with Mr. Vadillo to introduce Islamic-style gold dinar coins as alternative currency.

Mr. Vadillo and the Kelantan government have persuaded more than a thousand businesses here in the state capital, Kota Bharu, to paste stickers in store windows saying they accept the coins.

Ordinary people can also pay taxes and water bills in gold and silver instead of paper money.

"Our lands are being subjugated," says Mr. Vadillo, a powerfully built 46-year-old with a shiny suit, swept-back hair and a tidy goatee. "Today, in Kelantan, we're fighting back."

Plenty of people have their doubts about the dollar, as well as other currencies that aren't backed by gold or silver.

American libertarians such as Ron Paul frequently call for the reintroduction of a gold-backed currency, arguing that the Federal Reserve's ability to print money causes inflation and destroys savings.

Gold bulls have developed a cult following among investors who worry that precious metals are the only reliable store of value during rocky economic times.

If there's a utopia being formed for the globe's gold bugs, though, it's happening in a few unexpected outposts in the Muslim world like Kelantan.

Mostly that is because some Islamic thinkers teach that using currencies whose value is declared by governments is a form of usury. A piece of paper, they say, is just an IOU.

But with the global economy showing fresh signs of faltering, some believers think there's also a strong financial incentive to switch to gold dinars or the silver coins, known as dirhams.

At the Peter Libly tailor shop in central Kota Bharu, proprietor Ariffin Yusof reckons the new dinars "save people from exploitation."

Husam Musa, Kelantan state's economic policy chief, says he saves half his salary in dinars and believes it to be a good investment. "Its value is stated not by the World Bank, but by Allah," Mr. Husam says.

An initial run of coins worth about US$640,000 and ranging from one dirham — containing about US$4 worth of silver at current prices — and one dinar — worth US$189 — to an eight-dinar coin worth US$1,518 sold out quickly, prompting Malaysia's political leaders to say the paper-based ringgit, worth around 32 U.S. cents, is still the country's legal currency.

"Gold is money because people make it money. Paper money is money because governments make it money," says Peter Schiff, President of Euro Pacific Capital Inc. in Westport, Conn., and a notable dollar bear. "But what happens if people lose their faith in governments, and the U.S. government in particular?"

This latest quest to wean the world off dollars actually began in Adam Smith's homeland, Scotland, when an aspiring actor named Ian Dallas left his home near Glasgow to seek out the bright lights of London in the 1960s.

Mr. Dallas, now 79 years old, fell into the hippie circuit and played a telepath in the Federico Fellini movie "8½" before ultimately converting to Islam in Morocco.

Mr. Dallas took the name Abdalqadir al-Sufi and set up his own sect, the Murabitun—or "the people of the outposts"—before settling into a wind-blasted mansion named Achnagairn near Inverness in the Scottish highlands.

There, Mr. Dallas and his followers surrounded themselves with banks of computers and began work on creating an Islamic currency to replace the dollar and help speed up the collapse of the West's credit-driven financial system.

When Mr. Vadillo joined the mission, the Murabitun fine-tuned their thinking and began minting gold dinars—the same currency used in the early days of Islam.

The first coin was stamped in 1993 with a Jacobite sword in honor of one of Mr. Dallas's Scottish ancestors who fought against the English army at the Battle of Culloden in 1746. A silver dirham was minted with the Dallas family crest.

"People laughed at us," says Mr. Dallas, who now lives in South Africa and dressed up in an Afghan cap and navy blazer in a video recently released to mark the arrival of the new dinar in Malaysia. "People thought we were going back to the past. Now, the whole atmosphere has changed."

"1,400 years ago, a chicken cost one dirham. Today, it still costs one dirham," Mr. Vadillo says.

Mainstream economists are skeptical about how quickly Malaysians will take up dinars.

Tim Condon, chief Asia economist at ING in Singapore, says he regards gold enthusiasts as "monetary cranks."

He points out that central banks around the world have by and large managed to contain the worst ravages of inflation.

Paper money can also help economies avoid tough periods of deflation, which some economists associate with rigidly backing currencies with gold.

Either way, getting people to use dinars and dirhams regularly isn't easy, and already there are some teething problems in Kota Bharu.

Some people see dinars as a way to save rather than a means of exchange. Others aren't sure what to do with them or worry about how to store them safely.

Snack vendor Ros Abdul Rashid confesses she wouldn't know what to do if somebody tried to buy a bag of peanuts with gold or silver. "I'm not sure how it's supposed to work yet," she says.

One white-robed dinar dealer, 68-year-old Awaludin Mohal, has to offer paper bank notes as change when customers buy his gold and silver coins.

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