Monday, October 6, 2008
GIMME THREE MONTHS MORE
Posted by Dr. Mahathir Mohamad at October 6, 2008
1. The UMNO General Assembly which will this time elect the members of the Supreme Council has now been postponed to March 2009, three months later.
2. This, I am told, is at the insistence of Dato Seri Abdullah Ahmad Badawi. He is said to need this time in order to put the country right. This includes eradicating poverty, judicial and legal reforms, social reforms and something about Islam Hadhari.
3. He had had five years to do all these but everyone knows nothing has been accomplished by him. Now he says he will do all these in three months. Can we believe he can? Can we believe these are the real reasons why he will not go until March 2009, only three months after the originally scheduled General Assembly?
4. I may be biased but I do not think these are the reasons he wants to stay on as Prime Minister three months longer.
5. It is said that on 9th October, the day before the divisions are to hold their meetings, he will announce that he will not stand for election as President of UMNO. The question is, will he announce it? I have this suspicion that he will not. If he does not it would not be surprising. He is not a man of his words.
6. There really is no reason for this extension unless it is because of a possibility to influence the divisions into countering the Supreme Council and its demand that Abdullah steps down. In which case the extension may be further extended. Already SMS messages are denouncing Najib.
7. The leaders of UMNO must realise they need a long and painful campaign to win back the estranged UMNO members and supporters. They will have at most four years to do this. They will need the time. Every month of delay will mean less time for rehabilitation.
8. Neither UMNO, MCA, Gerakan nor MIC can aspire to become the Government of Malaysia on their own. Abdullah has emasculated all of them. To rehabilitate UMNO alone is not enough. The other parties in Barisan Nasional must also be rehabilitated, if the Barisan Nasional is again to become a force in Malaysian politics.
9. All the parties need time to do this. It does not help to have Abdullah delaying the process of rehabilitation even if it is only for three months.
10. The spurious reasons for the delay must be rejected. UMNO should hold its meeting as scheduled i.e. in December. That over, whoever gets to lead UMNO and the Barisan Nasional should immediately go down on the ground to explain things to the people. Hopefully the renegades from all the component parties will come back. If they return it is necessary to consolidate each party and the Barisan Nasional itself. These are herculean tasks especially as the country will have to also face turbulent times in the domestic and international economy.
11. I am still not an UMNO member but I will nevertheless pray for Abdullah to step down soonest and for a new leader to be elected to rehabilitate UMNO and the BN.
Saturday, October 4, 2008
Thursday, September 25, 2008
Pegging
1. I am not in the business of advising the Government. When I mentioned the advisability of pegging the Ringgit, it was in answer to a question posed by a reporter. If the Government noticed the report I would feel flattered.
2. Pegging currencies is not as easy as it sounds. The whole thing must be studied very carefully. Even getting agreement by a select panel is not easy. A decision made on the spur of the moment that pegging is not possible cannot really reflect the assessment made together with experts in consultation.
3. Pegging need not be always with the US Dollar. But the fact that the US Dollar is currently not stable is no reason why the idea should be summarily dismissed.
4. There can be other options. Other more stable currencies can be used or a basket of currencies may be used to reduce extreme volatility.
5. The US Dollar is backed by nothing, not even reserves in foreign currencies and gold which other countries hold in order to back their own currencies. The US is a bankrupt nation which means it is not in a position to provide foreign currency backing for its money.
6. The gold in Fort Knox has been depleted long ago and the pegging to gold of a certain amount as agreed to at the Bretton Woods has been done away with by President Nixon. No more gold standards. Yet the US Dollar still commands a certain value in the market. It is still being used for trade payments. This in fact gives the US Dollar a certain value even though the value, in exchange rate terms may change.
7. If the US Dollar is not used in international trading, it will have no value at all. This will of course hurt a lot of countries including Malaysia which carry substantial sums of US Dollar as reserves. Countries like China, Saudi Arabia and tiny Singapore would want to support trade payments made in US Dollar. They do not want their huge reserves of US Dollar to become worthless.
8. What we see here is the importance of international trade payments in sustaining the value of a currency.
9. Long, long ago I suggested the use of a special currency for trade. The currency should be equal in value to a fixed amount of gold. It should not be used domestically as each country would have its own currency pegged to the special trading currency.
10. The price of gold may go up and down but we know that the price of gold today is more than, say, 30 years ago. If we keep gold long enough we will eventually see it appreciating. It is not as volatile as currency notes.
11. So gold is an ideal standard for a trade currency. Effectively we would be going back to the Gold Standard, both for the trading currency and the domestic currency. For the domestic currency the rate against gold can change in keeping with inflation.
12. It was suggested that we call this trading currency the "dinar". Transactions would of course not be in solid gold dinars but with equivalent papers. It is not practical to carry around so much gold dinars but this will not be necessary if a country's export to another country and its import from that country is fairly balanced and only the difference need to be paid.
13. I am not an expert in this area but we can get experts to study whether pegging or the gold dinar are feasible. I would not dismiss the eficacy of these so easily.
14. Perhaps I can make a ridiculous suggestion. Why not make all Malaysian trade payments in Malaysian Ringgit?
15. We are a big trading nation. We export more than 200 billion Ringgit worth of raw material and manufactured goods and we import slightly less than that. Traders cannot just ignore us or boycott us. They need our exports and they need to sell their products to us.
16. All we need to do is to demand payment in Malaysian Ringgit for our exports. We can require payment for our imports in Ringgit according to the current value in an international trading currency or gold.
17. If we do this there will be a constant demand for Ringgit and this will keep the value of the Ringgit at a certain level which we can fix, taking into consideration factors which influence its value.
18. This may sound like a ridiculous suggestion. But not being a trained economist or financier I can allow myself the privilege of unorthodox thinking.
A STUDY IN SPINNING
By Dr. Mahathir Mohamad at September 17, 20081. Spinning is a method of making thread from cotton wool. But today, spinning has an entirely different meaning.
2. I was told about the spin doctors used by Tony Blair very soon after he became Prime Minister. I did not know what spin doctors do. And so I rejected the suggestion that I should employ spin doctors for press relations.
3. Now we all know all about spin doctors, the chief of whom is Kalimullah. He decides how to spin any report on Abdullah. Reporters often apologise to me because their reports on what I said at press conferences are quite different from what they wrote. But they claim they have no say on what appears in print from their reports.
4. Spinning is the art of making all reports, especially the bad ones, look good for the subject concerned and vice versa. Even the picture can be spun by choosing the ones that will make the subject appear masterly and talking down to his companion. In the case of the Prime Minister the pictures chosen would show him to be dominant in relation to whoever he is talking to, other Prime Ministers, or even Presidents. Never mind if he is junior to his partner but well chosen pictures will make out that he is more senior. Don't publish a picture of him falling asleep or with a vacant look in his eyes.
5. Readers would be taken in by the spin. If on the other hand, the subject is not liked by the spin doctors, then publish his picture scowling or cringing before whoever was talking to him.
6. Spinning may include misreporting, or excluding certain parts or twisting the sentences to convey another meaning.
7. Once I was asked about the reduction in petroleum price. I said "It is good for the people. We should have more by-elections (the Permatang Pauh by-election was on at that time), then the Government would reduce the price of petrol some more".
8. What appeared in the press was "Dr Mahathir says the reduction in the price of petrol is good for the people".
9. I cannot say I did not say it. But the newspaper publisher, by omitting the rest of my statement made it sound as if I was praising the Government for reducing oil price.
10. Sometimes the spinners do not coordinate with each other. The result is to make their reports negate each other.
11. On 15th September, The Star reported with the headline "Muhyiddin wrong to seek PM's resignation". The report stated that Dato Seri Rais Yatim, Foreign Minister said that UMNO Vice President Tan Sri Muhyiddin Yassin should not have asked the PM to step down as Malaysia practised democracy.
12. According to the report Rais said, "In a democratic country such action should not take place because we need to respect each other's views".
13. The next sentence seemed a bit confused as Rais was reported to have said (sic) urged Abdullah to act against Muhyiddin who had said that Abdullah should rethink his transition plan to step down by 2010 as the time frame was too long.
14. "If the PM thinks the minister (Muhyiddin) is not qualified or clashing with him and that action should be taken against him, then he should do it", he (Rais) said.
15. For a Foreign Minister I thought this stand taken by him is odd, to say the least. Only recently, Blair the war criminal, PM of Britain was forced by Gordon Brown to resign, which he did. And Britain is an older democracy than Malaysia.
16. Then I read the Utusan Malaysia. I was startled by this paper's report on Rais under the heading "Tidak wajar gesa Muhyiddin letak jawatan - Rais" (Not right to urge Muhyiddin to resign - Rais).
17. It reports Rais, member of the Supreme Council of UMNO as saying "finger pointing at other people and demanding the individual concerned to step down should not be done."
18. Rais then said "Jadi tidak wajar anggota Kabinet lain menggesa rakannya supaya berhenti atau diambil tindakan. Itu satu gesaan yang tidak harus dilayan atau dilaksanakan kerana kuasa itu hanya ada pada Perdana Menteri." (Thus it is not right for other members of the Cabinet to urge his colleague to step down or for action to be taken (against him). That is a demand that should not be entertained or implemented because the power rests only with the Prime Minister).
19. Clearly the two reports are about the same incident but the difference is remarkable. One chastises Muhyiddin and the other defends Muhyiddin.
20. Which report is right? I am inclined to think The Star has spun the report so as to look bad for Muhyiddin. Why the spin? Is it because of a desire to please the powers that be? It does seem likely because today everyone seems anxious to please Dato Seri Abdullah. Or is it because the reporter did not understand what Rais was saying? I wonder.
21. The Utusan report seems to be more in keeping with the attitude of Rais. He had always been outspoken and never hesitates to criticise even Government action, or Dato Seri Abdullah himself. Anyway, I hope the Utusan report is the more correct one.
22. In my time the papers did self-censor themselves. But they did not spin. Now spinning is blatant.
23. The bloggers have attracted a huge number of supporters with Rocky Bru having more than six million hits. The popularity of the blogs is obvious. It must be because people no longer believe or even read certain papers nor watch the Government controlled TV stations.