New Year Message - Tengku Razaleigh Hamzah

Tengku Razaleigh Hamzah, Member of Parliament Gua Musang

It  has been a sad and horrible 2014 for all Malaysians. The news, of economic trends, man-made (the two MH and the latest Air Asia airplane crashes, and the Cameron Highlands landslides) and natural disasters (the floods), and of political and ethnic relations setbacks, all made last year our annus horribalis. Little wonder Malaysia, long tiring of being bogged down by negativities, is overdue for some positive and lifting news in 2015.

Doubtless we have made great strides since Independence. Our people are invariably better fed, more educated and on the whole more prosperous. But we are seemingly not that happy, much less satisfied. Relative to our potential as a people, goaded on by our very own diversity, many think we can do more towards a new vision of development. And in comparison with our neighbors, we are some years behind some of them. As we enter the New Year, we are reminded of how far we have deviated from the original path of economic, political and social development set by our founding fathers six decades ago. Some of the more serious developments, such as the increasing polarization in race relations, the narrowing of perspectives on religion and religious practices long accepted, the many intractable and new imbalances and inequalities in our economy, and a politics that clouds the vision of a maturing democratic system, seem to have set everything back by a few decades.

We have to find solutions to our current economic troubles, whether these involve the negative impact of falling oil prices on government finances, or the rising cost of living and household indebtedness, or the profound social consequences of corruption, or inequalities in income and wealth in terms of access to proper housing, high-paying jobs, or helplessness of new poverty. We need to improve the quality of our health and education system and make better use of the public dollar. We need to stabilize our political system by reaffirming the Federal Constitution, reform of how politics is funded, and clean up our electoral and party system so as to establish more consistent and fairer electoral outcomes in order to protect our emerging democracy. We need also to secure our borders, and guarantee the safety of our citizens at home, at work or on the streets. To achieve a new deal for our nation and its people, we also need our systems of law and governance to be put right.

With a determined leadership, I think these negative trends can and must be reversed. Let us reset the economics, unchain the politics and release the common energy locked in our collective hearts diminished by everything that tries to differentiate us. Let us put all things right, and do the right thing by us, everyone of us: Malays, Chinese, Indians, Dayaks, Muruts, Kadazan Dusun, Bidayuh, Orang Asal, Penan, all. And let us not leave anyone behind. Let us not envy the successful, but honour them; let us not let down the downtrodden, but lift them; and let us not succumb to disappointment, but give them hope.

I call on all Malaysians, of every colour, creed and religion, to caste aside our differences and come together as one true Malaysian people. Let us all pray to God for guidance and deliverance.

I would like to wish everyone, young and old, a Happy and Prosperous New Year.

Tengku Razaleigh Hamzah

Member of Parliament Gua Musang

Kuala Lumpur, January 1st 2015.

China Steps In as World's New Bank by William Pesek

Thanks to China, Christine Lagarde of the International Monetary Fund, Jim Yong Kim of the World Bank and Takehiko Nakao of the Asian Development Bank may no longer have much meaningful work to do.

Beijing's move to bail out Russia, on top of its recent aid for Venezuela and Argentina, signals the death of the post-war Bretton Woods world. It’s also marks the beginning of the end for America's linchpin role in the global economy and Japan's influence in Asia.

What is China's new Asian Infrastructure Investment Bank if not an ADB killer? If Japan, ADB's main benefactor, won't share the presidency with Asian peers, Beijing will just use its deep pockets to overpower it. Lagarde's and Kim’s shops also are looking at a future in which crisis-wracked governments call Beijing before Washington. 

China stepping up its role as lender of last resort upends an economic development game that's been decades in the making. The IMF, World Bank and ADB are bloated, change-adverse institutions.  When Ukraine received a $17 billion IMF-led bailout this year it was about shoring up a geopolitically important economy, not geopolitical blackmail.

Chinese President Xi Jinping's government doesn't care about upgrading economies, the health of tax regimes or central bank reserves. It cares about loyalty. The quid pro quo: For our generous assistance we expect your full support on everything from Taiwan to territorial disputes to deadening the West’s pesky focus on human rights.

This may sound hyperbolic; Russia, Argentina and Venezuela are already at odds with the U.S. and its allies. But what about Europe? In 2011 and 2012, it looked to Beijing to save euro bond markets through massive purchases. Expect more of this dynamic in 2015 should fresh turmoil hit the euro zone, at which time Beijing will expect European leaders to pull their diplomatic punches. What happens if the Federal Reserve’s tapering slams economies from India to Indonesia and governments look to China for help? Why would Cambodia, Laos or Vietnam bother with the IMF’s conditions when China writes big checks with few strings attached?

Beijing’s $24 billion currency swap program to help Russia is a sign of things to come. Russia, it's often said, is too nuclear to fail. As Moscow weathers the worst crisis since the 1998 default, it’s tempting to view China as a good global citizen. But Beijing is just enabling President Vladimir Putin, who’s now under zero pressure to diversify his economy away from oil. The same goes for China’s $2.3 billion currency swap with Argentina and its $4 billion loan to Venezuela. In the Chinese century, bad behavior has its rewards.

If ever there were a time for President Barack Obama to accelerate his "pivot" to Asia it's now. There's plenty to worry about as China tosses money at rogue governments like Sudan and Zimbabwe. But there’s also lots at stake for Asia's budding democracies. The so-called Washington consensus on economic policies isn't perfect, but is Beijing's model of autocratic state capitalism with scant press freedom really a better option? With China becoming Asia's sugar daddy, the temptation in, say, Myanmar might be to avoid the difficult process of creating credible institutions to oversee the economy.

There could be a silver lining to China lavishing its nearly $4 trillion of currency reserves on crisis-plagued nations: It might force the IMF, World Bank and ADB to raise their games. Competition, as Lagarde, Kim and Nakao would agree, is a good thing. But more likely, China's largess will encourage bad policy habits and impede development in ways that leave the global economy worse off.

To contact the author on this story:
William Pesek at wpesek@bloomberg.net

To contact the editor on this story:
Mary Duenwald at mduenwald@bloomberg.net

(Sources - http://www.bloombergview.com/articles/2014-12-25/china-steps-in-as-worlds-new-bank)