KE MANA HALA TUJU DASAR PEMBANGUNAN EKONOMI NEGARA?

KE MANA HALA TUJU DASAR PEMBANGUNAN EKONOMI NEGARA?







PROF. MOHD NAZARI ISMAIL
FAKULTI PERNIAGAAN DAN PERAKAUNAN
UNIVERSITI MALAYA











Kertas pembentangan di Persidangan Meja Bulat “Jawapan Ummat Islam Kepada Keruntuhan Sistem Ekonomi Kapitalisme” pada 26 April 2011 di Dewan Besar IKIM, Kuala Lumpur.
Pengenalan
Semenjak sebelum merdeka lagi, kerajaan telah merangka rancangan-rancangan pembangunan ekonomi untuk pembangunan negara.Perancangan terawal telah dilakukan oleh kerajaan penjajah British.Objektif utama usaha rancangan pembangunan ekonomi negara pada masa itu adalah untuk mencapai pertumbuhan ekonomi dalam rangka membentuk satu sistem ekonomi pasaran bebas di negara kita.Tambahan pula sistem ekonomi pasaran bebas yang diperkenalkan kepada masyarakat negara kita oleh penjajah adalah diimportterus dari Britain. Sistem tersebut adalah berdasarkan falsafah liberalisma, iaitu satu falsafah yang membenarkan ahli masyarakat menganut agama tetapi pada masa yang sama menghadkan amalan agama tersebut kepada beberapa perkara ritual sahaja. Oleh yang demikian, sistem ekonomi yang diperkenalkan kepada masyarakat Malaysia adalah langsung tidak berdasarkan prinsip-prinsip ‘Maqasid Syariah’.Di samping itu, peraturan-peraturan Islam dalam aspek muamalah seperti pengharaman amalan riba, gharar dan lain-lain langsung diketepikan di dalam sistem ekonomi negara.
Dasar dan objektif pembangunan ekonomi negara yang membelakangkan prinsip dan peraturan Syariah Islam ini diteruskan dalam dekad-dekad berikutnya walaupun kemerdekaan negara telah dicapai.Walaupun pemimpin kerajaan silih berganti, namun dasar dan objektif pembangunan ekonomi negara ini terus dikekalkan. Kalaupun wujud beberapa perbezaan dalam rancangan-rancangan pembangunan ekonomi negara dari masa ke semasa, namun perbezaan-perbezaan tersebut bukanlah dalam aspek dasar tetapi hanyalah dalam bentuk cara pelaksanaan sahaja.
Dalam kertas ini saya akan berusaha untuk menerangkan secara ringkas, dari perspektif Islam, sejarah dasar dan rancangan pembangunan ekonomi negara dari awal sejarah Malaysia sehingga kini serta implikasinya. Saya juga akan membentangkan beberapa kes berkenaan keadaan ekonomi dan sosial negara-negara maju dan berpendapatan tinggi untuk dijadikan pengajaran bagi kita. Saya akan seterusnya berhujah bahawa dasar pembangunan ekonomi negara perlu dikaji semula kerana selagi hala tujunya membelakangkan prinsip dan ajaran Syariah, maka sebenarnya perancangan pembangunan ekonomi negara tidak akan berjaya menghasilkan suasana yang sejahtera untuk rakyat Malaysia dalam jangka panjang.

Sejarah Pelaksanaan Dasar Pembangunan Ekonomi Negara
Sejarah pelaksanaan rancangan pembangunan negara pada umumnya boleh dibahagikan kepada 3 fasa seperti berikut;
1. Zaman sebelum merdeka
2. Zaman selepas merdeka sehingga 1970
3. Zaman selepas pelaksanaan Dasar Ekonomi Baru bermula 1971
Zaman sebelum merdeka sebenarnya adalah zaman perletakan ‘batu asas’ kepada pelaksanaan program perancangan pembangunan negara.Ianya bermula dengan satu perwakilan dari Bank Dunia membuat beberapa perakuan kepada kerajaan tentang rancangan pembangunan ekonomi negara. Perakuan-perakuan ini telah digunakan oleh kerajaan untuk menghasilkan ‘Rancangan Malaya Pertama (RM1: 1956-1960)’. Matlamat utama rancangan pembangunan tersebut ialah untuk membangunkan ekonomi dengan memberikan penekanan yang lebih kepada sektor luar bandar .
Rancangan Malaya Pertama (RM1) ini disusuli dengan Rancangan Malaya Kedua (RM2:1961-1965).Walaupun negara kita sudah pun merdeka semasa rancangan ini digubal dan dilaksanakan, namun pemikiran dan pendekatan yang digunakan oleh pihak penjajah untuk menentukan dasar pembangunan RM1 terus dikekalkan di dalam Rancangan Malaya Kedua (RM2).Apa yang membezakan antara RM1 dan RM2 hanyalah jumlah peruntukan yang diberikan serta wujudnya proses kajian yang lebih menyeluruh dalam proses perancangan. Namun dari segi dasar dan matlamat, RM1 dan RM2 adalah tidak banyak berbeza.Prinsip-prinsip dan peraturan Syariah masih juga diketepikan.
Sebenarnya sikap membelakangkan prinsip Syariah dalam proses perancangan pembangunan ekonomi negara tidaklah menghairankan. Ini kerana hampir kesemua kakitangan tertinggi kerajaan yang terlibat di dalam aspek perancangan ekonomi negara pada masa itu adalah mereka-mereka yang tidak terdedah kepada pendidikan Syariah.Sebaliknya hampir kesemua mereka telah dididik di dalam institusi pendidikan yang dibangunkan oleh pihak penjajah sama ada di peringkat awal, menengah dan juga tinggi. Ramai juga pemimpin dan kakitangan kerajaan kita telah meneruskan pendidikan tinggi mereka di universiti-universiti di Britain dalam bidang undang-undang dan ekonomi. Mungkin kerana itulah, persoalan sama ada sistem kewangan dan ekonomi negara selari atau tidak dengan Syariah Islam langsung tidak menjadi isu kepada perancang-perancang tersebut. Sebagai contoh, tidak langsung wujud perdebatan sama ada sistem perbankan berasaskan amalan riba yang telah diperkenalkan dan dilaksanakan di negara kita semasa era penjajahan patut dikekalkan atau tidak di dalam sistem ekonomi kita walaupun amalan riba adalah jelas haram dan dianggap sebagai satu dosa yang besar dari perspektif Islam.
Rancangan Malaya Kedua (RM2: 1961-1965) disusuli pula oleh Rancangan Malaysia Pertama (RMP: 1966-1970).RMP ini sebenarnya juga tidaklah berbeza dari rancangan-rancangan sebelumnya dari segi dasar.Sekali lagi, perbezaan yang wujud hanyalah berkenaan jumlah peruntukan yang lebih besar di bawah RMP.Di samping itu terdapat juga penekanan aspek integrasi di kalangan rakyat Malaysia dari berbagai kawasan geografi seperti integrasi rakyat Semenanjung dan rakyat dari Sabah dan Sarawak.
Pada Mei 1969, rusuhan perkauman telah berlaku yang melibatkan ramai jiwa terkorban.Akibatnya, kerajaan telah menggubal Dasar Ekonomi Baru (DEB) yang menjadi asas kepada Rancangan Malaysia Kedua (RMD: 1971 -1975). Aspek terpenting yang ditekankan oleh DEB ialah usaha perpaduan negara melalui strategi serampang dua mata, iaitu membasmi kemiskinan dengan meningkatkan pendapatan dan menambah peluang-peluang pekerjaan untuk semua rakyat Malaysia tanpa mengira kaum; dan menyusun semula masyarakat supaya dapat mengurangkan dan seterusnya menghapuskan pengenalan kaum mengikut fungsi ekonomi.Walau bagaimana pun, pada dasarnya, dari kacamata Syariah, DEB tidak berbeza dari dasar-dasar di dalam rancangan-rancangan sebelum ini iaitu menjadikan pembangunan ekonomi sebagai objektif utama usaha pembangunan negara. Dasar ini diteruskan di bawah Rancangan Malaysia Ketiga (RMT: 1976-1980), Rancangan Malaysia Keempat (RME:1981 -1985) dan Rancangan Malaysia Kelima (RMK:1986-1990).
Terdapat sedikit keunikan Rancangan Malaysia Kelima (RMK) berbanding dengan rancangan-rancangan sebelumnya kerana pada tahun 1985, kerajaan Malaysia telah memperkenalkan satu dasar baru yang dinamakan `Dasar Penerapan Nilai-Nilai Islam Dalam Pentadbiran’.Dasar ini telah dilaksanakan kerana kerajaan pada masa itu merasakan terdapat kesedaran baru di kalangan masyarakat tentang `kemurnian Islam dan peranan yang boleh dan patut dimainkannya dalam hal ehwal negara dan peribadi’. Ini telah mendorong kerajaan persekutuan untuk mengambil usaha-usaha baru mengenai hal ehwal Islam termasuklah penubuhan sekolah-sekolah menengah agama berasrama penuh, Universiti Islam Antarabangsa, Bank Islam, Syarikat Insurans Islam dan pengukuhan Bahagian Hal-Ehwal Islam, Jabatan Perdana Menteri. Namun dasar ini langsung tidak merubah dasar dan pendekatan negara dalam aspek pembangunan ekonomi.Sistem perbankan berasaskan amalan riba terus dikekalkan dan pembangunan ekonomi masih menjadi matlamat utama usaha-usaha pembangunan.
Tempoh DEB telah berakhir pada tahun 1990 dan telah digantikan dengan beberapa initiatif pembangunan lainseperti berikut:
i) Wawasan 2020
ii) RRJP2 dan Dasar Pembangunan Nasional (DPN) dan
iii) Rancangan Malaysia Keenam (RM6: 1991-1995).
Di dalam kesemua inisiatif di atas, pertumbuhan ekonomi sebagai objektif utama usaha pembangunan negara masih lagi dikekalkan.Cuma ianya diperincikan lagi menurut sektor. Disamping itu juga, terdapat penekanan kepada sektor pembuatan dimana sumbangan sektor ini kepada KDNK diunjurkan meningkat dari 27% menjadi 37% pada tahun 2000 dan juga penekanan kepada usaha penswastaan dan pengurangan sektor awam. Seterusnya Rancangan MalaysiaKetujuh, Rancangan Malaysia Kelapan dan Rancangan Malaysia Kesembilan juga meneruskan perkara-perkara di atas.
Di bawah pentadbiran Datuk Seri Najib Tun Razak, dasar pembangunan ekonomi negara diterjemahkan melalui dua bentuk inisiatif iaitu Model Ekonomi Baru (MEB) dan Rancangan Transformasi Kerajaan (Government Transformation Program – GTP). MEB dikatakan berbeza dengan rancangan-rancangan yang lepas kerana memberi penekanan kepada perkara-perkara berikut:
a) Memfokuskan kepada kualiti pelaburan dan modal insan
b) Memberi penekanan kepada inisiatif dari sektor swasta
c) Proses yang lebih ‘decentralised’
d) Membenarkan pertumbuhan yang tidak seimbang dari segi geografi
e) Menawarkan insentif hanya kepada sektor yang boleh menambah nilai
f) Memperkukuhkan hubungan dengan negara rantau Asia dan Timur Tengah
g) Menarik minat pekerja asing yang berkemahiran
GTP pula adalah suatu usaha untuk membuatkan kerajaan lebih efektif dengan mengenal pasti beberapa National Key Result Areas (NKRAs). Dari aspek ekonomi, matlamat GTP adalah jelas iaitu menjadikan Malaysia sebuah negara kaya atau berpendapatan tinggi dengan pendapatan per kapita sebanyak USD15,000 atau RM48,000 pada tahun 2020.
Jelas kepada kita bahawa walaupun terdapat beberapa perbezaan kecil dari segi penekanan diantara rancangan-rancangan pembangunan ekonomi kerajaan semenjak sebelum merdeka sehingga sekarang, namun matlamat serta dasar dan pendekatan pembangunan ekonomi negara adalahtidak berubah.Objektifnya ialah untuk mempertingkatkan jumlah pendapatan negara secepat mungkin supaya negara boleh dikategorikan sebagai sebuah negara membangun dan berpendapatan tinggi.Dasar dan pendekatan yang digunakan ialah melalui pasaran bebas dan berpandukan amalan liberalisma.

Adakah Berpendapatan Tinggi Menjamin Kesejahteraan Negara?
Satu persoalan yang mungkin ditanya oleh mereka yang mengkaji sejarah negara ini ialah kenapakah perancang dan pemimpin negara Malaysiabegitu gigih sekali berusaha untuk memastikan negara kita mencapai taraf ‘negara membangun dan berpendapatan tinggi’?Jawapan kepada soalan tersebut agak mudah iaitu kerana mereka berkeyakinan penuh bahawa kesejahteraan negara dan rakyatnya hanya akan terjamin apabila negara kita mencapai taraf ‘negara membangun dan berpendapatan tinggi’. Oleh kerana itulah maka dasar pembangunan ekonomi negara kita dari dulu hingga sekarang langsung tidak berubah.Namun sebenarnya dasar dan strategi pembangunan ekonomi negara kita bukanlah unik.Sebenarnya hampir kesemua negara di dunia mempunyai dasar dan matlamat yang sama.Cuma ada yang telah berjaya mencapai taraf ‘membangun dan berpendapatan tinggi’ dan ada, termasuk negara kita, yang masih belum walaupun sudah berusaha selama lebih dari separuh abad setelah merdeka.
Negara-negara yang telah mencapai taraf tersebut adalah kebanyakannya dari benua Eropah Barat, benua Amerika Utara (kecuali Mexico) dan beberapa negara di Asia iaitu Singapura, Jepun dan Korea Selatan.
Persoalan yang harus ditanya ialah adakah kesemua negara-negara tersebut sedang menikmati keadaan politik, sosial dan ekonomi yang sejahtera? Di bawah ini saya akan bincangkan beberapa negara yang termasuk di dalam kategori ‘membangun dan berpendapatan tinggi’ tetapi pada masa yang sama telah melalui krisis dan masalah ekonomi. Adalah diharapkan agar kita mendapat beberapa pengajaran dari pengalaman mereka.
Jepun
Jepun adalah negara pertama di Asia yang mencapai taraf negara maju dan berpendapatan tinggi dan juga negara Asia pertama yang menjadi ahli kelab OECD (Organization of Economic Cooperation and Development iaitu kelab negara-negara kaya) dan juga G7.Mungkin ramai yang menyangka bahawa Jepun adalah negara yang ‘berjaya’ dan layak dicontohi. Namun sebenarnya Jepun telah mengalami masalah kemelesetan ekonomi yang sangat teruk semenjak tahun 1989 lagi.Masalah tersebut masih lagi berterusan sehingga sekarang.
Keadaan kemerosotan ekonomi yang dialami oleh Jepun ini sering disebut sebagai ‘The Lost Decades’ (Dekad-dekad yang hilang). Ianya bermula apabila pasaran aset terutama sekali dalam sektor hartanah dan pasaran saham jatuh menjunam pada tahun 1989.Apa yang paling penting untuk diberi perhatian ialah bahawa salah satu faktor yang menyumbang kepada masalah Jepun ialah ‘kejayaan’ ekonominya sendiri selama dua dekad sebelum itu. Pada tahun 1970an Jepun mula mencabar negara-negara Eropah dan Amerika dalam bidang pembuatan. Pada tahun 1980an Jepun adalah negara pengeskpot yang paling berjaya di dunia dan dengan itu, sistem kewangan negara tersebut telah menerima dana dalam jumlah yang sangat besar dari luar.
Dana yang masuk ke negaraberkenaan terus mengalir masuk ke dalam sistem perbankan kewangan Jepun dan ini menggalakkan sektor perbankannya memberi pinjaman yang sangat besar kepada individu dan syarikat-syarikat di Jepun.Akibatnya, Jepun mengalami pertambahan mendadak di dalam aktiviti-aktiviti spekulasi terutamanya dalam pasaran hartanah dan saham.Harga aset melambung tinggi dan jumlah hutang dikalangan individu dan organisasi perniagaan juga turut meningkat berkali ganda. Ini kerana bank-bank Jepun teleh memberi pinjaman sebanyak 353 trillion yen kepada syarikat-syarikatJepun dalam sektor-sektor pembinaan, peruncitan, hartanah, dan perkhidmatan kewangan.Keadaan ini seterusnya telah menghasilkan satu ‘bubble’ atau belon kewangan yang besar.
Keadaan sebegini tidak dapat dikekalkan dan apabila pasaran menyedari bahawa harga yang tinggi itu sebenarnya hanya cerminan aktiviti spekulasi dan bukannya permintaan sebenar maka harga hartanah dan saham telah jatuh menjunam. Inimenyebabkan ramai penghutang tidak dapat membayar hutang mereka sehingga banyak syarikat dan individu-individu diisytiharkan menjadi muflis. Keadaan ini akhirnya telah menyebabkan ekonomi Jepun mengalami proses pengecutan sehingga sekarang.
Amerika Syarikat
Di dalam kes Amerika Syarikat pula, sebuah negara kaya yang berada di kedudukan ke-5 dan GNP per kapita lebih dari USD33,000 (lebih kurang 10 kali ganda Malaysia) telah menghadapi beberapa kali krisis ekonomi dalam sejarahnya semenjak kurun ke-18 lagi. Krisis ekonomi yang paling masyhur ialah pada tahun 1930an dan juga yang berlaku baru-baru iniiaitu pada tahun 2008. Kisah krisis pada tahun 2008 sama sahaja, iaitu negara tersebut telah mengalami prestasi ekonomi yang baik pada awal dan pertengahan tahun 2000an. Hakikat sebenar yang berlaku pada masa itu ialah kewujudan spekulasi yang besar dalam sektor hartanah di negara berkenaan.Namun yang anehnya ialah walaupun semua mengetahui bahawa spekulasi itu sedang berlaku tetapi oleh kerana harga hartanah sedang meningkat naik, kebanyakan syarikat dan individu telah tidak dapat menahan diri dari terjebak sama di dalam aktiviti spekulasi tersebut. Sikap tamak ini didorong oleh kemudahan dana yang senang diperolehi dari sektor perbankan. Penggunaan instrumen kewangan yang canggih telah membantu membuat keadaan ini bertambah teruk dan apabila ianya berakhir, lebih dari USD16 trillion telah hilang dari pasaran saham dalam tempoh di antara 1 September 2008 hingga 25 Oktober 2008.Jumlah hutang dikalangan masyarakatnya juga begitu tinggi. Ekonomi Amerika jatuh merudum dalam tahun 2008 dan kes muflis di negara tersebut pada tahun 2008 melepasi jumlah 1 juta kes.
Iceland
Bagaimana pula dengan Iceland, yang mempunyai GNI per kapita sebanyak USD27,473 atau lebih dari 9 kali ganda GNI per kapita Malaysia?
Menurut satu laporan, ekoran dari krisis kewangan yang melanda negara itu pada tahun 2008, sistem perbankan Iceland sudah ranap dan GNP negara itu merosot sebanyak 65%. Banyak syarikat dinegara tersebut muflis dan ramai ahli perniagaannya yang bercadang untuk memindahkan operasi mereka ke negara lain. Hampir satu pertiga rakyat juga bercadang untuk berhijrah ke negara lain. Pada masa ini kerajaan Iceland sedang menghadapi tekanan kuat dari kerajaan Britain dan Belanda untuk membayar pampasan kepada rakyat mereka yang telah meletakkan duit mereka di dalam bank-bank Iceland yang telah muflis.
Greece
Bagaimana pula dengan Greece yang mempunyai pendapatan GNI per kapita hampir 4 kali ganda Malaysia?Pada 23 April 2010 kerajaan Greece terpaksa meminta bantuan kewangan dari EU dan IMF. Bantuan itu berjumlah USD61 billion.Pada bulan Mei 2010 pula, kerajaan Greece mengumumkan langkah berjimat cermat supaya dapat meyakinkan kerajaan German agar dapat memberi pinjaman kepada Greece.Langkah jimat cermat ini telah dikutuk oleh rakyat Greece dan pada 5 Mei 2010 satu mogok awam di seluruh negara telah diadakan.Mogok itu dilaporkan menjadi ganas dan menyebabkan 3 nyawa terkorban.


Ireland
Bagaimana pula dengan Ireland, yang mempunyai GNI per kapita lebih dari 7 kali ganda Malaysia?Pada awal dan pertengahan dekad pertama abad baru ini, Ireland telah menunjukkan prestasi yang begitu membanggakan.Ireland dikatakan ekonomi yang paling berjaya di Eropah.Malangnya kejayaan ini tidak kekal.Pada tahun 2008, Ireland telah mula mengalami krisis ekonomi yang teruk yang memaksa kerajaannya mengumumkan secara rasmi pada bulan September 2008 bahawa negara itu sedang mengalami kemelesetan ekonomi. Kadar pengangguran naik mendadak pada bulan-bulan berikutnya.Ramai pekerja hilang pekerjaan dan perasaan marah terhadap kerajaan Ireland meluap-luap.
Namun demikian, kerajaan Ireland terpaksa mengumumkan langkah penjimatan kerana keadaan kewangan kerajaan terlampau lemah. Jabatan kewangannya melaporkan bahawa defisitnegara berjumlah €4.5 billioniaitu 6.6% dari belanjawan kerajaan. Bank pusat negara berkenaan juga melaporkan bahawa negara itu sedang mengalami penguncupan keluaran yang tidak pernah dialami dalam sejarah negara itu dengankadar kejatuhan GDP sebanyak 6% serta kadar pengangguran sebanyak 11%. Pada 21 Februari 2009, sejumlah 100,000 orang telah mengadakan tunjuk perasaan di ibukota Dublin dan pada 22 Januari 2011 Perdana Menterinya telah terpaksa meletakan jawatan.
Bagaimana pula dengan negara-negara berpendapatan tinggi lain di rantau Asia seperti Korea Selatan dan Singapura? Korea Selatan mempunyai GNI per kapita berjumlah USD19,231sementara Singapura mempunyai jumlah GNI per kapita sebanyak USD20,000.Adakah mereka negara-negara contoh untuk kita?
Korea Selatan
Dalam kes Korea Selatan, pada tahun 1960an negara tersebut adalah jauh di belakang Malaysia dari aspek prestasi ekonomi dan pendapatan per kapita.Pada tahun 1962, GNI per kapitanya hanya USD87 sementera GNI per kapita Malaysia adalah USD304.Namun demikian di bawah pentadbiran Presiden Park Chung Hee, negara tersebut telah mengalami pertumbuhan ekonomi yang sungguh pesat. Purata kadar pertumbuhan GNI negara itu dari tahun 1962 hingga ke 1989 ialah lebih dari 8%. Pada tahun 1989, GNI per kapita Korea mencecah USD4,830 berbanding USD2,071 dalam kes Malaysia.Sektor pembuatan negara tersebut juga berkembang pesat dari 14.3%GNP pada tahun 1962 menjadi 30.3% pada tahun 1987. Akibat dari pertumbuhan ekonomi yang pesat itu, kerajaan Malaysia di bawah pimpinan Dr. Mahathir telah berusaha untuk mencontohi KoreaSelatan dan telah merangka ‘Industrial Master Plan’nya pada tahun 1986 dengan dibantu oleh seorang perunding dari Korea Selatan.
Walau bagaimanapun, pada tahun 1997 Korea Selatan telah mengalami krisis ekonomi yang teruk yang mengakibatkan negara berkenaan terpaksa memohon pinjaman dari IMF yang akhirnya berjanji membekalkan USD60 billion untuk membantu negara tersebut mengatasi masalah yang dihadapi. Apa yang telah berlaku ialah di dalam proses membangunkan ekonominya, Korea Selatan telah meminjam dana dari luar negara dengan banyak. Apabila matawang Korea Selatan iaitu won jatuh pada tahun 1997 semasa krisis ekonomi melanda Asia Tenggara dan Korea Selatan, hutang tersebut telah meningkat dan ini menyebabkan syarikat-syarikat Korea Selatan yang berhutang telah tidak dapat membayar hutang tersebut. Jika syarikat-syarikat tersebut tidak mendapat bantuan kewangan, sudah tentu mereka akan jatuh muflis dan ini akan menyebabkan jutaan pekerja akan kehilangan kerja dan seterusnya besar kemungkinana akan mengakibatkan masalahsosial. Bagi mengelakkan dari berlakunya keadaan ini, Korea Selatan telah terpaksa memohon pinjaman dari IMF sebanyak USD60 billion dan menerima syarat-syarat ketat yang dikenakan oleh institusi tersebut termasuk membenarkan pemilikan ekuiti lebih dari 55% dan beberapa syarat-syarat lain. Walaupun mendapat pinjaman dari IMF, namun jumlah pengangguran di Korea Selatan tidak dapat dielakkan dan pada tahun 1998, kadarnya meningkat dari 2.5% sebelum krisis ke 6.5 % selepas krisis .Satu lagi aspek yang membimbangkan tentang Korea Selatan ialah peningkatan jumlah hutang dikalangan rumahtangga (household debt).Pada tahun ini, hutang rumahtangga berbanding dengan pendapatan tolak cukai (disposable income) ialah 150%, iaitu yang tertinggi di dunia selepas Britain. Pada tahun 2008, kadar hutang rumahtangga berbanding GDP di Korea Selatan ialah 300% (berbanding 76% pada tahun 2009 di Malaysia). Tekanan sosial akibat dari krisis ekonomi serta peningkatan kadar hutang di dalam negara dapat dilihat daripada kenaikan dalam kadar bunuh diri dikalangan rakyat Korea Selatan. Diantara tahun 1990 sehingga 2006, jumlah bunuh diri dikalangan lelaki Korea Selatan dilaporkan bertambah tiga kali ganda dan sekarang ini Korea Selatan adalah negara yang mempunyai kadar bunuh diri tertinggi bukan sahaja di Asia bahkan juga di kalangan negara-negara kaya OECD.
Singapura
Satu lagi negara yang tinggi dari aspek kadar bunuh diri di kalangan negara-negara Asia ialah Singapura. Pada tahun 2006, adalah dilaporkan bahawa kadar bunuh diri di Singapura adalah 10.3 per 100,000, iaitu kadar yang tertinggi di kalangan negara-negara Asia Tenggara. Perlu diambil perhatian juga bahawa Singapura adalah negara pertama di kalangan negara-negara Asia Tenggara yang mencapai taraf negara membangun.GNI per kapita negara tersebut adalah lebih dari USD20 ribu.Satu lagi fakta yang menarik berkenaan Singapura ialah terdapat agak ramai dikalangan rakyatnya yang hendak meninggalkan negara tersebut. Sebagai contoh, satu kajian yang dilakukan pada tahun 2002 menunjukkan sebanyak 20% rakyatnya, kebanyakannya dari kumpulan professional dan berkelayakan dan berpendapatan tinggi, mahu meninggalkan negara tersebut. Peratus ini telah meningkat secara mendadak berbanding hanya 14% berdasarkan kajian yang sama yang dilakukan hanya sembilan bulan sebelum itu. Hasil kajian berkenaan, yang tidak berbeza dengan kajian-kajian lain yang dilakukan sebelum itu, menunjukkan bahawa faktor utama ialah kos kehidupan yang tinggi serta sistem pendidikan yang terlampau ‘menekan’ (stressful) yang dihadapi oleh anak-anak mereka. Satu kajian yang dilakukan pada tahun 2010 pula menunjukkan bahawa 1 dari 2 orang dikalangan golongan muda di Singapura berniat untuk meninggalkan negara tersebut di masa hadapan. Di antara alasan-alasan yang diberikan termasuklah kos kehidupan yang tinggi, cara hidup yang terlampau cepat (hectic) dan tidak wujud keseimbangan dalam aspek kehidupan dan kerja (work-life balance).

Pengajaran dari Pengalaman Negara Kaya
Apakah yang boleh kita pelajari dari kisah-kisah ekonomi di negara-negara di atas yang hampir kesemuanya telah melalui krisis ekonomi yang teruk, bahkan lebih teruk dari negara kita?
1. Kekayaan sesebuah negara tidak menjamin kesejahteraan.
Apa yang telah kita lihat dengan jelas dari pengalaman negara-negara tersebut di atas ialah walaupun mereka kesemuanya mempunyai kadar GNI per kapita yang lebih tinggi dari negara kita, namun mereka telah tidak dapat mengelak dari mengalami krisis ekonomi yang teruk yang melibatkan jutaan rakyat mengalami kesengsaraan. Masalah kemiskinan dikalangan golongan bawahan di dalam masyarakat akan bertambah dan ini bermakna jutaan kanak-kanak kecil, wanita dan orang-orang tua yang berada dalam keluarga miskin tersebut akan hidup di dalam keadaan yang tertekan dan perit. Jurang perbezaan antara miskin dan kaya akan bertambah dan ini akan menghasilkan berbagai masalah sosial seperti perceraian dan jenayah.
2. Negara yang beramal dengan sistem kewangan berasaskan riba akan menghadapi kemelut kewangan
Hampir kesemua negara yang disebutkan sebelum ini menghadapi krisis ekonomi yang teruk kerana mengamalkan sistem ekonomi riba. Bahkan jika dikaji, kita akan mendapati bahawa amalan riba yang berleluasa di dalam masyarakat merekalah yang menjadi faktor penyumbang utama kepada krisis yang berlaku. Dalam erti kata yang lain, jika sesebuah negara mengalami pertumbuhan ekonomi yang pesat serta berjaya meningkatkan pendapatan berkali ganda sekali pun, tetapi jika ekonomi negara tersebut adalah berdasarkan amalan riba, maka lambat laun negara tersebut akan tetap mengalami krisis.
3. Kadar pertumbuhan yang memberansangkan adalah petanda akan berlakunya krisis
Di dalam sesebuah negara yang mengamalkan sistem riba, prestasi ekonomi yang bagus langsung tidak bermakna bahawa krisis ekonomi tidak akan melanda negara tersebut pada masa hadapan. Bahkan seperti kita lihat di dalam kes negara-negara di atas, khususnya Iceland dan Ireland, prestasi ekonomi yang memberangsangkan adalah faktor utama kepada krisis ekonomi mereka. Dalam erti kata yang lain, prestasi ekonomi yang memberangsangkan adalah seolah-oleh petanda kepada suasana krisis yang akan menyusul.
4. Suasana kesejahteraan sesebuah negara besar kemungkinan diganti dengan suasana kacau bilau dan kesengsaraan dinegara-negara yang mencapai GNI per kapita yang tinggi melalui polisi ekonomi yang bertunjangkan kepada amalan riba
Pengalaman negara-negara tersebut di atas jelas menunjukkan bahawa kesejahteraan yang dialami adalah sementara dan lambat laun akan diganti dengan suasana kesengsaraan yang dasyat apabila suasana pertumbuhan ekonomi diganti dengan suasana kemelesetan ekonomi yang mendadak. Apa yang membuat keadaan lebih teruk lagi ialah apabila kemelesetan ekonomi itu berkait rapat dengan fenomena tahap hutang yang tinggi di kalangan organisasi dan individu. Ini semua adalah perkara yang pasti akan berlaku jika polisi pembangunan negara dilaksanakan dalam sistem sistem ekonomi yang bertunjangkan kepada amalan riba.

Rumusan
Pada masa ini kepimpinan negara kita sedanggiat melakukan usaha mentransformasikan masyarakat. Salah satu dari usaha yang dilakukan dan menjadi fokus utamanya ialah mentransformasikan ekonomi negara kita supaya ianya menjadi negara kaya atau negara berpendapatan tinggi dengan GNI per kapita mencapai USD15,000, iaitu 5 kali ganda GNI per kapita sekarang. Namun hakikatnya, seperti yang terbukti di dalam beberapa kes contoh negara kaya lain di atas, kesejahteraan jangka panjang masyarakat langsung tidak akan terjamin dengan usaha-usaha yang berbentuk itu. Bahkan apa yang mungkin berlaku ialah negara akan menghadapi krisis ekonomi yang teruk di masa hadapan.
Ini adalah kerana model pembangunan yang digunakan oleh negara kita adalah sama dengan yang telah digunakan oleh negara lain yang telah mengalami krisis ekonomi dan kewangan yang teruk. Salah satu faktor penyumbang kepada masalah mereka ialah wujudnya unsur riba yang kuat dalam sistem ekonomi mereka.Akibat dari itu timbullah masalah hutang yang teruk di pelbagai peringkat iaitu individu, organisasi perniagaan dan juga kerajaan. Negara-negara tersebut masih tidak sedar bahawa dasar dan matlamat pembangunan ekonomi mereka adalah di atas landasan yang salah dan oleh itu mereka tidak akan dapat menyelesaikan masalah yang mereka hadapi. Kalaupun ada ‘improvement’ di dalam ekonomi mereka, keadaan itu sebenarnya adalah bersifat sementara sahaja. Lambat laun negara-negara tersebut akan menghadapi masalah kembali dan mungkin dalam kadar yang lebih teruk.
Sebenarnya nasib yang sama akan melanda negara kita jika kita terus menggunakan dasar dan matlamat pembangunan ekonomi yang sama. Kemelesetan ekonomi yang telah kita alami dengan teruk pada tahun 1997 akan datang kembali. Satu perkara yang kita harus sedar ialah di dalam negara kita yang berbilang bangsa dan kaum, suasana politik adalah sangat berkait rapat dengan semangat perkauman.Oleh itu kemelesetan dan kesengsaraan ekonomi mempunyai potensi yang kuat untuk menjadi pencetus kepada konflik perkauman yang dasyat dan berdarah.Oleh itu, adalah sangat penting bagi kita mencari model pembangunan yang betul-betul boleh menjamin keharmonian dan kesejahteraan yang berpanjangan.
Oleh kerana majoriti penduduk negara kita adalah beragama Islam yang yakin akan kebenaran Islam dan kebijaksanaan Allah s.w.t., sepatutnya tidaklah menjadi masalah untuk mencari model pembangunan tersebut. Sepatutnya semua dikalangan majoriti penduduk Islam dari berbagai lapisan sedar bahawa caraatau model atau pendekatan sebenar untuk mentransformasikan negara bagi mencapai kesejahteraan masyarakat jangka panjang ialah dengan cara yang telah diajarkan dan ditunjukkan kepada kita oleh Ar-Rasul s.a.w. Mungkin salah satu sebab kenapa ianya tidak berlaku ialah kerana ramai dikalangan penduduk Islam di negara kita tidak betul-betul sedar tentang perkara ini. Jika itulah punca masalahnya, maka tidak ada jalan lain yang mesti kita tempuhi melainkan meningkatkan kefahaman dan ilmu di kalangan umat Islam di negara ini tentang ajaran Islam yang sebenar. Semoga kertas ini dan kertas-kertas lain yang akan dibentangkan di dalam seminar ini akan menyumbang ke arah usaha-usaha berkenaan dan akan diberi ganjaran oleh Allah s.w.t..
Akhir sekali, saya ingin mengingatkan kita semua kepada dua potong ayat di dalam Al-Quran yang merujuk kepada tajuk yang kita bincangkan iaitu:
لَا يَغُرَّنَّكَ تَقَلُّبُ ٱلَّذِينَ كَفَرُواْ فِى ٱلۡبِلَـٰدِ (١٩٦) مَتَـٰعٌ۬ قَلِيلٌ۬ ثُمَّ مَأۡوَٮٰهُمۡ جَهَنَّمُ‌ۚ وَبِئۡسَ ٱلۡمِهَادُ (١٩٧) لَـٰكِنِ ٱلَّذِينَ ٱتَّقَوۡاْ رَبَّهُمۡ لَهُمۡ جَنَّـٰتٌ۬ تَجۡرِى مِن تَحۡتِہَا ٱلۡأَنۡهَـٰرُ خَـٰلِدِينَ فِيہَا نُزُلاً۬ مِّنۡ عِندِ ٱللَّهِ‌ۗ وَمَا عِندَ ٱللَّهِ خَيۡرٌ۬ لِّلۡأَبۡرَارِ (١٩٨)
Maksudnya :
Jangan sekali-kali engkau (wahai Muhammad) terpedaya oleh usaha gerakan orang-orang yang kafir di dalam negeri (yang membawa keuntungan-keuntungan kepada mereka). (Semuanya) itu hanyalah kesenangan yang sedikit, (akhirnya akan lenyap), kemudian tempat kembali mereka Neraka Jahanam dan itulah seburuk-buruk tempat ketetapan. Tetapi orang-orang yang bertakwa kepada Tuhan mereka, mereka beroleh Syurga-syurga yang mengalir di bawahnya beberapa sungai, mereka kekal di dalamnya, sebagai tempat sambutan tetamu (yang meriah dengan nikmat pemberian) dari Allah dan (ingatlah) apa jua yang ada di sisi Allah adalah lebih bagi orang-orang yang berbakti (yang taat, yang banyak berbuat kebajikan). (Surah Al Imran 196-198)


وَيَـٰقَوۡمِ ٱسۡتَغۡفِرُواْ رَبَّكُمۡ ثُمَّ تُوبُوٓاْ إِلَيۡهِ يُرۡسِلِ ٱلسَّمَآءَ عَلَيۡڪُم مِّدۡرَارً۬ا وَيَزِدۡڪُمۡ قُوَّةً إِلَىٰ قُوَّتِكُمۡ وَلَا تَتَوَلَّوۡاْ مُجۡرِمِينَ

Dan wahai kaumku! Mintalah ampun kepada Tuhan kamu, kemudian kembalilah taat kepadaNya, supaya Dia menghantarkan kepada kamu hujan lebat serta menambahkan kamu kekuatan di samping kekuatan kamu yang sedia ada dan janganlah kamu membelakangkan seruanku dengan terus melakukan dosa! (Surah Hud: 52)

The Causes of Greece’s Economic Troubles and Lessons for Malaysia

The economic travails currently being experienced by Greece make interesting reading for economists, finance experts and laymen alike. Greece is somewhat in a humiliating situation. Some German leaders have openly suggested that Greeks should spend less time sleeping and more time working, that is, to be more like Germans.

There are diverging opinions in Europe as to whether economic assistance should be extended to Greece or not. Some are of the opinion that regardless of who is to be blamed, Greece still needs to be helped because failure to do so will result in more problems for everybody in Europe. Others feel that assisting Greece will establish a dangerous precedent whereby the bail-out of a profligate EU member country will only encourage others to be profligate in future.

What is not at issue is the root cause of Greece’s problems which is the Greek government's spendthrift policies over the last decades. In order to be popular with its citizens, it made their life as comfortable as possible. There are many stories of the good life in Greece. Education up to tertiary level is completely free. Employees are paid 14 months' salary for 12 months' work. Civil servants can retire after only 20 years of service with a full pension. As a result, many Greeks spend 30 to 40 years of their life enjoying life in retirement and contributing nothing to the economy.

The Greek civil service sector is also oversized and unproductive. This is because it is a common practice for political parties, after being voted into office, to reward key supporters with jobs in the civil service. Many ended up doing nothing productive because their posts were not necessary in the first place. The bloated public sector created unnecessary bureaucracy leading to a high level of corruption. Many businessmen , fed up with bureaucratic delays , preferred to pay bribes to speed things up . Greece is now widely seen as being among the most corrupt countries in the world. Transparency International Corruption Perception Index ranks Greece at number 71, i.e. among the worst in Europe. Even Ghana in corruption-rampant Africa is perceived to be less corrupt than Greece. Transparency International also estimated that in 2008 alone Greek citizens made 900 million Euros in bribery payments.

The worst aspect of the situation was the fact that the money being used to make life comfortable for everyone was actually borrowed money. The Greek government had been borrowing massively from European commercial banks. Their sovereign bonds were snapped up by the banks because these banks were able to borrow at a cheap rate, around 1%, from the European Central Bank (ECB) and lend to the Greek government at about 3-6%. These banks would then deposit the Greek government bonds at the ECB as collateral for more cheap loans. They were able to do this as long as the bonds were highly rated . Unfortunately this could not last forever and the massive amount of debt accumulated by the Greek government (almost 300 billion Euros by the end of 2009 and more than 120% of GDP) resulted in a downgrading of its bonds by rating agencies. This in turn increased borrowing costs tremendously for Greece since lenders are now worried about her ability to repay her huge borrowings, accumulated over the years. Moreover tax revenue collection in Greece is also very poor. A finance ministry report stated that a third of all economic activity in Greece do not yield any tax revenue to the government. It is a common practice for Greeks to pay cash for transactions in order to avoid paying tax. Revenue from income tax was 4.7 percent of GDP in 2007, compared to an EU average of 8 percent. The Greek government recently estimated that they were losing more than 1.2 billion Euros due to lax collection.

The only reason Germany and the rest of Europe may not want to see Greece default on her massive debts is the fear that many of the shareholders of the lender banks will lose out and this fear may be enough to persuade them to lend some more to her at a rate lower than that offered by the market. This indeed seems to be the case because on 12 April the finance ministers of the 16 Euro zone nations agreed to provide up to 30bn Euros ($41bn) in loans to Greece.

But this does not mean that Greece is out of the woods. It is simply a postponement of the day of reckoning. In the meantime there will be lots of pain for ordinary Greeks in the coming years as government expenditures will have to be radically reduced. Massive amount of job cuts and pay reductions are unavoidable. Many social services provided by the government such as free education and subsidized health care will also disappear. These severe economic pains, if not handled well, may very well lead to social and political chaos. Already there have been violent riots. More will take place as anger and resentment boil over as a result of the expected sudden rise in unemployment as well as radical reduction in the quality of life for everybody.

For us Malaysians the most important question to ask is what is the possibility that the Greek experience will be repeated in Malaysia? To answer that we need to consider the following questions. What is the trend of Malaysian government debt? Is it increasing or decreasing over the years? Are the political parties, in trying to woo Malaysian voters, promising more comfortable life for them, promises which inevitably will result in the growth of public expenditure and public debt? Or are they willing to be honest and explain to voters that our massive public sector debt of more than RM350 billion (and growing) is evidence that we are living beyond our means and that we need to sacrifice short term comfort and cut public expenditures before the debt spins out of control? To me, the answers to those questions are obvious and therefore the prognosis for Malaysia is worryingly also very obvious.

Don’t Blame It on Capitalism

On 27 January 2010, the International Labour Organization, a U.N. agency announced that 27 million people lost their jobs in 2009. Most of the job losses took place in Europe and the US. President Obama, in his recent state of the union address to Congress, said that… “One in 10 Americans still cannot find work. Many businesses have shuttered. Home values have declined. Small towns and rural communities have been hit especially hard. For those who had already known poverty, life has become that much harder.”
It is not difficult to imagine the extent of the suffering that is being experienced by the people affected. Lost jobs mean lost income. Since many families now have large personal debts in the forms of home loans, car loans, study loans etc., the consequences of a job loss can be very devastating. People who are affected may suffer both physical and psychological illnesses. The resulting stress and strain can cause families to fall apart. In many communities there will also be a spike in the crime as well as suicide rate.
Although these terrible and heart-rending implications of unemployment are well known and understood and even though governments after governments pledged to get rid of this modern day `scourge’, the sad stories of job losses and plant closures keep appearing in newspapers every other day.
What is ironic and interesting to note is that in many cases, the main reason given for the massive job cuts is the need to save the companies involved from going under. The most recent example is Japanese Airlines (JAL). Burdened with an unpaid debt of US$25.6 billion, it made history by being Japan's largest nonfinancial corporate failure. But instead of allowing the company to die its natural death, the Japanese government decided to give it a new lease of life. However, there was a condition attached. The company had to accept radical restructuring plans which involved the cutting of more than 15,000 jobs, or about 30% of its workforce by the end of 2013.
The same situation applied at General Motors in 2009. Its debt burden at the end of November 2009 was a whopping US$66 billion. The reason GM is still alive was because the Obama administration decided to rescue it by injecting public funds. But as in the JAL’s case, GM also announced a radical cutting of its workforce. Its salaried workforce was cut by 10,000 in 2009 under a restructuring plan that calls for the elimination of 31,000 employees by 2012 from its workforce of 96,000.
It is therefore difficult not to have the impression that the focus of governments is not really to save jobs but to save companies. Highly indebted companies must be kept alive, usually by using the financial version of an artificial respirator i.e. bankruptcy protection laws or by cash injections using public funds. What is now obvious is that protecting the interest of a small number of wealthy investors and lenders is more important than protecting the welfare of tens of thousands of often poorly paid loyal and long serving employees.
Many people mistakenly think that this is the price to pay for having capitalism as the basis for running a society’s economy. This is actually not true. The most common element in all definitions of ‘capitalism’ is that of an economic system based on the private, as opposed to public, ownership of capital. And this system of private ownership of capital has been around since time immemorial and yet, notably, did not cause misery of the scale that we are witnessing today.
After all, many civilizations had practiced economic and business systems that allowed private ownership of capital and free market. One example is the Muslim civilization which allowed private ownership and free market for more than 1,400 years. However, its history was never replete with stories of massive job losses and high unemployment. True, there were occasions of economic crises due to adverse weather conditions, plagues or other natural disasters. However, there was no instance of financial crises where economic players ended up bankrupt with massive loans and forcing job losses of tens of thousands.
No, this is not about capitalism but rather about the growth of one particular industry – the lending for profit industry. With the legalization of `interest-charging’ loans in Europe circa the 15th century, European Christians who previously considered interest-charging activities as evil and associated largely with `greedy Jewish money lenders’, began to join the financial industry in earnest. Soon the industry grew by leaps and bounds, helped by innovations such as the creation of the joint-stock companies.
In the centuries that followed, the Western world experienced rapid economic growth. Of course there were hosts of problems during these periods, mainly in the injustice and exploitation of workers by debt-laden industrialists who wanted to cut costs in order to earn higher profits and service their debts. Those problems eventually led to the birth of communism as an ideology. But the collapse of communism in Soviet Russia and Eastern Europe in the 1989 meant that the Western financial system was able to continue to thrive. However the world is now beginning to eventually realize that there is a major flaw with it. The increasingly serious and severe financial crises associated with the global debt problem are now spreading economic havoc and catastrophe to all corners of the world.
Unfortunately, some are wrongly pointing accusing fingers towards capitalism or the private ownership of capital as the main source of the problem although the equally devastating failures of communism should have been proof enough that public ownership of capital is not the answer. In reality, if the current suffering associated job losses are to eliminated, the requisite thing that needs to be undertaken is a proper diagnosis of the main causes of the problem. Sadly, many are either unwilling to be honest and truthful in their diagnosis or are simply intellectually incapable due to a lack of exposure to genuine alternative viewpoints.

This article was published by Star newspaper on April 8, 2010. Please click on this link for the online version: http://biz.thestar.com.my/news/story.asp?file=/2010/4/8/business/6010350&sec=business

The Dubai Debt and Financial Crisis: A Case of the Inevitable

Dr. Mohd Nazari Ismail

Following recent headlines on Dubai’s billion-dollar debt problem, there has been a spate of analyses. Some were very detailed and contained a list of lessons to be learnt by other countries. One recent and notable analysis emphasized the need for predictable, sustainable, clear and certain policies and argued that it is because of the lack of all those factors that Dubai is currently facing problems. In other words, the writer is saying that not only is it possible for countries to avoid financial crises, it is also very simple since what is needed is to make sure that the countries’ policies are not unpredictable, not unsustainable, not unclear and not uncertain.
The question that springs to mind will then be: How come all those brilliant Ivy League-educated policy-makers in countries that have experienced debt-related financial crises in the past such as Iceland, Britain, Korea, Indonesia, Thailand, Argentina, Brazil and of course the US itself (which boasts of having the top universities in the world and the most number of Nobel laureates in the field of economics and finance) have not figured these simple rules in the past?
And come to think of it, if avoidance of financial crisis is so simple, why do people bother so much in carrying out detailed research in order to prevent their recurrence? Maybe we should also not be too agonized with the fact that Malaysia has not produced any Nobel Prize winner in the field of economics or finance. The experience of the US has shown that having the best economics brains in the world is not going to help a country avoid the occurrence of financial crises.
Coming back to Dubai, it is worth pondering why financial crises continue to occur even though there had been so many crises in recent years which ought to have yielded important lessons. These include the 1987 Black Monday Crash, the 1994 Mexican Financial Crisis, the 1997 Asian Financial Crisis, the 1999 Brazilian Financial Crisis, the 2001 Argentina Financial Crisis and the 2007 US Sub-prime Financial Crisis. Surely policy-makers have had enough data, facts and information at their disposal to help them prevent the occurrence of financial crisis, especially if it as simple as coming up with policies which are predictable, sustainable, clear and certain.
To be sure, financial crises are not a new phenomenon. They have been taking place for hundreds of years. One of the most famous was the Tulip Crisis in Holland which took place in the 1630s. What happened was that many highly indebted people could not repay their debts, enough to cause a crisis in the Dutch economy. While the Tulip Crisis was caused by over-speculation in tulip bulbs, in the case of Dubai, the cause is over-speculation in the property sector. But the essence of the two stories is the same: people got excited with the booming price in a particular sector. They then borrowed heavily to engage in speculative transactions causing further increase in the size of the speculative `bubbles’. Eventually the bubbles burst and many people became financially unstuck causing a downward spiral of price and more trouble to the economy which eventually led to financial and economic crises.
Strangely enough however, it seems that this simple lesson on the importance of having predictable, sustainable, clear and certain policies was not easily learnt because well after that episode, financial crises continued to erupt in Europe and the US. The most famous ones include the 1720 South Sea financial crisis in London, the US panic of 1873, and the Great Depression of the 1930s. They all have one thing in common. Many people borrowed money in order to engage in speculative transactions in a variety of assets such as property and stocks. These activities led to asset bubbles which eventually burst, resulting in widespread financial insolvencies and, thereby, economic crises.
One notable fact is that these financial crises during the 17th, 18th and 19th centuries took place mostly in Europe or America and not in places such as the Middle East or South East Asia. So a question worth asking is whether in these regions, predictable, sustainable, clear and certain policies were in place to regulate their financial sectors? Well, obviously that is not true for the simple fact that these regions, in those eras had no financial sector to regulate. In other words, the main reason they did not experience any financial crisis was simply that they did not have any significant financial sector to start with. Of course eventually they began to develop their own financial sectors and soon they too experienced financial crises. The most serious one for South East Asian countries was the 1997 financial meltdown and just as in the case of other financial crises, it was also a story of debts, speculation and the bursting of asset bubbles.
Truth be told, once a country developed a lending-for-profit sector of its own, there is no avoidance of a financial crisis even if predictable, sustainable, clear and certain policies are in place. Britain and America are the best examples of this. As is well known to many, these are two countries which are models to others in terms of financial regulations and supervision. Nevertheless the fact remains that the same two also happened to be among the ones which are experiencing the worst financial crises in the world. One very important, maybe the most important, lesson we should learn is that the occurrence of financial and debt crisis is an inevitable outcome of the existence of a lending-for-profit sector. And the more `developed, sophisticated and advanced’ the sector is, the bigger and more serious will the crisis inevitably be.

No need for excitement over temporary recoveries

Those familiar with Jalan Universiti near Universiti Malaya (UM) will remember that some time ago, rush hour traffic jams in front of the Sultan Abdul Samad Secondary School were horrendous. The main reason was that at the intersection of Jalan Universiti, Jalan Kemajuan and Jalan Dato' Abu Bakar, there was a roundabout. Any traffic expert can tell you that a roundabout is suitable only for those places where the traffic volume is not too high. But if the volume is high, a roundabout will only worsen the traffic flow. Only a systematic method of alternating the rights to transverse the roads could prevent a gridlock. The traffic problem was therefore unavoidable as long as the roundabout was there and this had little to do with whether road-users were ethical or civic-minded or otherwise in their attitude. Mercifully, the local authority had the common sense to replace the roundabout with a traffic light junction and a fly-over. Now traffic jams aroundthe location has lessened drastically even during peak hours.


This is similarly the case with the economy. When the financial system is flawed due to its predication on the lending-for-profit industry, there is no avoidance of periods of crises. The nature of the system creates conditions very similar to those of traffic jams. Certainly there will be periods of economic growth, just as there were periods of smooth traffic flow on Jalan Universiti. But that would be around 6.00am when the day has just started. But as more road users enter the road on their way to work, the flow would start to slow down. At 7.00am the first sign of a gridlock would appear. In the context of the US and the global economy those early signs of economic gridlock were around late 2007. At 7.30am the gridlock would be obvious to all. Transposing that to the US economy, this was in 2008 when the sub-prime problem was in full swing. Between 7.30am and 9.00am, the traffic situation around Sekolah Sultan Abdul Samad at Jalan University would be almost at a standstill.

And that is the state of the US economy from 2008 up to now when the credit situation caused the financial system to seize up. Operations at thousands, if not millions, of firms were brought to a stand-still. A large percentage of these firms will also be experiencing insolvency problems, as is the case with General Motors, Lehman Brothers, Freddie Mac and Fannie May in the US. Stimulus packages may get the economy moving again but only temporarily. Eventually the system will seize up again and the problem will get worse and worse, due to the worsening credit problem and increased level of indebtedness as the stimulus packages are also carried out using borrowed funds with interest charges attached. Stimulus packages, as economists are only too aware, merely serve to postpone the problem to a later time. Any growth in the economy due to stimulus packages will not be permanent. They will replaced by another period of slow-growth and recession.

In other words, the recovery situations are not unlike the temporary periods of smooth traffic flow at Jalan Universiti. It provides no reason for us to celebrate just as the daily commuting motorists at Jalan Universiti saw no real reason for joy when traffic jams eased up around 11 am. This was because they realised that as long as the roundabout was not removed, traffic congestion and gridlock could occur at any time. In fact they were also very sure that the problem would repeat itself every day between 5 pm and 8 pm and between 7.00 am to 10 am.

Back to the economy, we are now seeing some signs of apparent recovery. Strangely enough, we are now hearing excited comments by some economists who, for reasons best known to them, seem to completely ignore the temporary nature of these recovery periods. They seem to be behaving more like politicians rather than professional economists. Of course we can understand why politicians have to put a positive spin on any news as their political fortunes are dependent on whether the electorate feels good about the economy or not. But why are some economists behaving the same way? The only plausible explanation is that the fortunes of these economists are also probably contingent on those of the politicians.


In any case, we should remind both the politicians and those economists that despite the positive signs in the Malaysian economy, the Japanese economy, which is the second largest in the world, is still mired in a deep slump. In August Japan's exports shrunk by 36%, especially in the auto and steel industries. Much of Japanese exports go to the most important economy in the world - the US. But Japan's export to the U.S. fell by 34.4% this year with the largest decline being in the metal sector which fell by 82.2% in August. The weak Japanese domestic economy is reflected by the fact that its imports fell by 41.3% compared to that of August of 2008. All these reports indicate to us that as far as the world economy is concerned, the traffic jam has not eased up. Furthermore, if we bear in mind that the `roundabout' has not been replaced, it is far wiser for us to be thinking more on how to eventually remove it rather than to waste our time standing by the sides of Jalan Universiti and cheering the temporary easing of the traffic jams. Otherwise the students at Sekolah Sultan Abdul Samad will look at us and think that we are all a bunch of idiots.

A Case of a `Double Whammy’

Back in 1997, world leaders drew up a protocol in Kyoto, Japan to implement the United Nations Framework Convention for Climate Change. After several years of debate, it officially became an international treaty on 16th February 2005. The protocol represents one of the most serious collective attempts by the world’s political leaders to tackle the various grave environmental problems facing humanity.

As of February 2009, 183 states have signed and ratified the Kyoto Protocol. Sadly, the US which is the producer of the world’s largest amount of greenhouse gas per capita till now refuses to ratify the treaty. One of the main reasons for this refusal is her concern that abiding with the agreed limits will harm its economy.

The US government obviously realised that it was impossible to achieve environmental targets, as stipulated by the Protocol, and economic growth targets at the same time. This fear is not unfounded as total US greenhouse gas emissions in 2004 actually went up by 15.8% compared to 1990 levels. But to castigate the US over this single statistic may be unfair as global greenhouse emissions had also increased by 38% in the period 1992 to 2007.

In any case, the issue of climate change has not been consigned to the back-burner. The world’s political leaders agreed in 2007 to come up with a successor to the Kyoto Protocol. At the 33rd G8 summit, G8 nations agreed to reduce carbon dioxide emissions by half come 2050. In December 2009, global leaders are going to meet again in Copenhagen to discuss a framework to solve the problem of climate change.

Is there a basis then to anticipate significant improvements in the control of greenhouse gas emissions in future years? Sadly, the prognosis is not that good and the reason is very simple. The more important and immediate task in the minds of almost all political leaders around the world nowadays is on achieving economic growth rather than on reducing emissions of greenhouse gases. Political leaders are experienced enough to know that generally the electorate is nowadays concerned more about the economy than the depletion of the ozone layer. Due to their impact on jobs and income, political leaders’ management of economic issues rather than environmental issues will significantly determine their political fate. If we study the history of many countries including Malaysia, it is quite remarkable that compared to previous leaders, current political leaders’ are very much more concerned with the economy. For example, in the case of Malaysia, Datuk Seri Najib six months into his prime ministership has made more statements on the economy than Tunku Abdul Rahman during his thirteen years in the same office. Moreover, the statements nowadays are almost always, in one form or another, the reassurance to Malaysian voters that the country’s economy will continue to grow.

This need to reassure is because, unlike before, there is a very high level of `financial leverage’ or indebtedness among many private and public sector organizations, indebtedness which carries interest charge, often of the compounding type. To illustrate, the total US debt which includes households, business and financial sector debts is now estimated to be around USD57 trillion compared to only about USD5 trillion in 1957. Highly leveraged firms carry higher risk of becoming bankrupt if sales slow down. So the pressure to generate sales revenue and profit is very high or intense in order to ensure the ability to meet debt commitments. Any lateness in repayment will simply be penalised by additional interest charges. And once major players in any industry engage in financial leveraging, it is difficult for their competitors not to follow suit. Soon almost all firms in all industries cannot avoid becoming leveraged or highly indebted. For them revenue growth is essential. The alternative is bankruptcy or insolvency. Hence, the growth imperative for all economies regardless of the implications for the environment. In the case of the US, when the economy grounded to an almost complete halt in 2008, the US federal government, despite its own enormous public debt of more than US$11 trillion, quickly stepped in to ensure credit will continue to flow to business organizations and for the economy to continue to grow. The cost to the environment due to these measures is hardly discussed.

Humanity is currently facing two extremely serious problems. The first is the global climate problem which is getting worse. The second is the very serious problem of underpaid employees everywhere having to work harder to generate more revenue for their firms. In a way present day employees are now being enslaved. In the past, slaves are physically chained. Modern day slaves are chained by their nation’s indebtedness, their firms’ indebtedness as well as their own personal indebtedness from housing, car or credit card loans and the like. So for most people nowadays, there is no choice but to work if they are to avoid losing their personal possessions and avoid bankruptcy. Pay and working conditions considerations are now not as important as getting secure employment itself.

There are social costs to be borne in all these. For many families, both parents will work day and night. Many have hardly any time for their children’s upbringing. For those who can afford it, maids will do the task for them. It is not a wonder that we are witnessing increases in cases of juvenile delinquencies and family breakdowns. Tackling these problems should be the priority for our political leaders if the fate of our future generations is of the utmost concern. Global warming undoubtedly is a serious problem for it is said to be responsible for many ecological disasters including storms and floods. But it is arguable that the more serious problem is the debt-generated phenomena of modern-day human slavery and oppression and all its attendant negative social consequences. Humanity is now drowning in floods of water and floods of debt. It is a classic but tragic case of a `Double Whammy’. Sadly, these are also all man-made problems caused by making debt an industry integral to the modern economy.

The Perils of Hyper-competition

On Monday June 1^st, General Motors, the doyen of the American auto industry filed for bankruptcy. Shockwaves went through not only the US but also the world economy. Commentaries abound on the cause of the demise of such a big and powerful player in the global auto industry. Hopefully for Malaysians we can learn some important lessons, not the least on how to prevent our own national car company from meeting the same fate.

Angela Merkel, the German Chancellor, put the blame squarely on `mismanagement’, which may mean anything you want it to. Others attribute GM’s fall to its inability to come up with effective strategies against low-cost auto manufacturers from overseas, namely from Japan and Korea. Some put the blame on the unions which allegedly was the stumbling block against efforts to reduce huge labour costs which included pension liabilities and health-care costs. Some blame the American government for not supporting the company in its tough battle against foreign competition, through either greater subsidies or the imposition of higher tariff barriers. And yet others blame the American consumers for fickle-mindedness and lacking in patriotism in their buying decisions.

However, on deeper examination, one will realize that the aforesaid ‘causes’ are rather simplistic and does not address the complexity of the problem. For example, if we put the blame totally on management, we ignore the fact that the GM management has been trying for decades to increase the company’s competitiveness. It took measures such as absorbing Toyota's manufacturing methods, improving car styling and design, investing in hybrid technology, integrating the company’s operations and centralizing management to reduce costs and persuading the United Auto Workers (UAW) to agree to cost cuts. So much so that by early 2008, analysts concluded that GM had successfully transformed itself.

And the unions? Are they responsible for making GM uncompetitive by their demands for improved pay, working conditions and benefits? Who else would do this for the workers if not their unions? Moreover, many of the requests put forward were inarguably reasonable and necessary in order that members get living wages which are able to meet life’s basic needs.

Blaming the American government for not helping GM in its struggle against foreign competition betrays a lack of understanding of the nature of international business. US trade policy seeks to ensure that international trade remains free from both tariff and non-tariff barriers. Tariffs on imported cars or subsidies to GM will undermine US government’s efforts to encourage other countries to remove trade barriers. Furthermore, member countries of the WTO are agreement-bound to refrain from taking protectionist measures. Breaching the agreement can damage trading links with other nations.

Also, if the American government is considered obligated to rescue GM, the next logical question is why only GM needs to be supported and not another company or another industry which is also suffering from international competition. This is why Malaysians must be very careful when they call on their government to support Proton.

The essential truth is that GM actually is a victim of `hyper-competition’ in the car industry. Competition is good to the extent that it leads to the efficient operation of the market mechanism resulting in benefits such as the efficient use of resources and improvements in goods and services being offered to the customer. However, beyond a certain level where competition gets too intense, dysfunctional outcomes will follow. Competitors will behave ruthlessly and the losses suffered by the losing parties will no longer be optimal to society.

As an analogy, let us imagine two men wrestling in a ring according to the rules of Greco-Roman wrestling. They will do their utmost to defeat each other but at the end of the match, there is no physical injury to either wrestler other than a bruised ego. But what if the spectators decided they want a more exciting competition between the fighters and decided to throw swords and knives into the ring and force the fighters to use them? Greco-Roman wrestling will turn into mortal combat like those of the ancient Roman gladiators in the coliseums. The defeated one dies whilst the winner survives but with serious injuries.

The fatal mistake was to give competitors weapons which they in the first place did not need. The weapons of modern day corporate competitors come in the form of loans obtained from the lending industry. A few hundred years ago, business concerns competed using their own money and therefore the level of competition was relatively low. The overall outcomes of the forces of competition were positive and that was the main reason Joseph Schumpeter came up with the notion of `Creative Destruction’ in describing the benefits of competition regulated by a functioning market system. But with the legalization of usury by the Europeans, the financial industry began to grow. Thus began the throwing of `knives’ into the hands of business competitors. The lending industry is now huge and they are now throwing samurai swords, axes, and even bazookas and RPGs into the ring for business competitors to use to fight each other. So it should not surprise anyone to see GM lying on its back in the ring, mortally injured, whilst in the other corner we can see Toyota sitting on the floor looking dazed with horrific body wounds and some limbs missing. For those who are unaware, Toyota recently announced its worst ever annual loss of 436.94 billion yen for the full 2008 fiscal year and a projected a net loss of 550 billion yen for the following fiscal year.

The combat is unending as other gladiators from Korea, who during the 1997 crisis also nearly died from horrific injuries but were given mouth-to-mouth resuscitations, are now back, looking energetic, with new financial `weapons’ in hand. So don’t be surprised if in the coming rounds we see Toyota meeting the same fate as GM. The question to ask of ourselves is how much weaponry are Malaysian taxpayers willing to supply to our own gladiator Proton and when it eventually succumbs to vicious competition, what will be the extent of the injuries i.e. how much money and how many jobs will be lost? Or should we start telling humanity that the competitive situation is unsustainable, untenable and dysfunctional and that we should go back to organizing Greco-Roman wrestling rather than allowing the gladiatorial fight-to-the-death series to continue?

Lurching Towards Disaster: Between Ignorant Masses and Self-Interested leaders

On 24th May 2009, Robert Zoellick, the President of the World Bank, issued a warning that the current global economic crisis could very well lead to serious social upheavals. Mr. Zoellick is highly concerned with the increasing levels of unemployment in many countries around the world, especially in Eastern Europe where some countries are registering double digit decline in their economies.

Mr. Zoellick is actually not alone in having this worry. Many others also share the worry. However, the fact that it is being highlighted by such an important figure is very significant, especially so when political leaders in many countries are trying to re-assure their voters that the worst may already be over and that they are going to see an upward economic trend in the not too distant future.

Obviously, Mr. Zoellick, unlike politicians in many countries, is genuinely concerned with the future welfare of people. He is therefore asking governments to formulate appropriate policies in preparation for this impending grave and gloomy scenario.

Many political leaders on the other hand are more concerned with their short term political positions rather than with the long term welfare of their societies. As a result they tend to underplay the seriousness of the future economic and unemployment scenarios, fearing that it may negatively affect the perception of the public towards themselves.

To be fair, the reason why politicians behave in this manner is largely due to the expectations of the voters themselves who are more concerned with their own short-term well-being compared to the long term welfare of their societies. In their minds, the bottom line is that politicians must be able to guarantee job security so that they can continue to have money in their pockets and bread on their dinner tables. In other words, their main demand on their political leaders is that they must be able to keep the economic engine moving regardless of what is going on in the world economy.

As a result governments around the world are busy formulating economic stimulus packages despite the fact many of them are actually financially strapped and simply cannot afford them.

Take the case of Britain, one of the countries worst affected by the current financial crisis. The advanced financial system and practices of Britain made it possible for the country’s financial sector to grow relatively faster than others. But an advanced financial system is a double-edged sword. Economic growth that results from such an advanced system also brings with it a high level of indebtedness. In Britain, the debt to GDP ratio was recently estimated to be around 67%. However, due to the policy of the British government which wants to spend itself out of the crisis, the country may need to sell 220 billion pounds ($334 billion) worth of bonds. Budget deficit next year may rise to 175 billion pounds or 12.4% of GDP and the overall debt to GDP may rise to 100%. Largely as a result of this likely scenario, the rating agency Standard & Poor’s has lowered its debt outlook for Britain from “stable” to “negative”, thereby increasing the country costs of borrowing. According to many economists, Britain is in danger of becoming a bankrupt country in the manner of Iceland if its policy makers are not careful.

However, politicians in Britain have little choice if they want to remain in office come the next general election. The current crisis is causing a rapid increase in unemployment. Hundreds of thousands have lost jobs and millions of families are suffering from reduced income. For those still holding jobs, there is a high degree of uncertainty as to whether their jobs are really safe. During this difficult time, voters pin their hopes on government, thinking, falsely of course, that it can take the necessary measures to improve their job security. The politicians themselves, for fear of being voted out of office, are reluctant to admit the reality that, in this respect, they are actually quite powerless. What makes it worse is that opposition politicians are also making false promises that they can do a better job at securing voters’ future.

Under the circumstances, it is therefore unsurprising that governments around the world are unable to resist from behaving irresponsibly and indulge in policies that are extremely risky in the context of the long term future of their countries. Stimulus packages in their billions are announced to reassure the voters that the governments are doing their best to ensure that their countries’ economies are not heading for the doldrums. In reality they are just playing for time by staking the welfare of future generations. The present generation is being hoodwinked into thinking that measures that are being undertaken to solve the crisis do not have risks or costs. In the case of Britain, only the most educated are aware of the magnitude of these risks. But sadly they will never be able to change the direction of policy-making because the short-term position of political leaders is not determined by this small group of educated people but rather by the ignorant masses. Sadly, it is also an undeniable fact that this scenario holds true for many other countries.

But the saddest aspect of the current crisis is the failure by all to recognise the fact that all the measures being undertaken, even if they temporarily succeeds in slowing down economic decline, will not prevent a similar type of crisis from happening again. Moreover such a crisis will likely be on a much bigger scale, just as the current crisis is proving to be much bigger than the great depression of the 1930s. As long as the overall system remains, we all will inexorably lurch towards economic and financial destruction with all the attending consequences.

Is Obama being reckless?

This article appeared in the Star newspaper on Tuesday February 10, 2009

Is Obama being reckless?

By DR. MOHD NAZARI ISMAIL

The president’s proposed stimulus package may worsen US’ indebtedness

LESS than a week after the departure of arguably the worst president of the US, the new president appointed Tim Geithner as his new Treasury Secretary.
During the swearing-in ceremony, Barack Obama expressed his optimism that his appointee will be able to solve the current economic crisis.
His optimism is based on the fact that not only is Geithner very experienced, being a past president of the Federal Reserve Bank of New York, he is also being assisted by very experienced economists including former Treasury Secretary Larry Summers.
Many Americans and probably many more people around the world are hoping that Obama’s optimism will prove to be justified.
They are sadly oblivious to the fact that if Geithner is able to solve the current crisis, it will simply mean that Geithner has only succeeded in postponing the full brunt of the crisis to a future period.
It will also mean that Geithner has prepared for them or for their children pain and suffering on a much bigger scale in that future period.
Obama’s expectation of Geithner is actually very monumental.
Geithner is not only expected to solve the current economic problem but he is also expected to come up with a mechanism to prevent the problem from recurring.
Obama’s discussions with his economic advisory team must have been cursory so far.
Otherwise he would have been informed that no economist has ever dared to promise that his or her suggested policies will prevent future economic crises from happening again, not even Nobel laureates in economics.
Actually the step needed to solve an economic crisis is not rocket science at all.
Every one who has studied basic macro economics knows the concept of “economic cycle”.
As the name implies, the economy will always go through periods of ups and downs.
In other words, regardless of how bad the economy is, it will eventually bottom out and slowly go through a recovery period.
After all, at the core of all economic crises, the problem is over-indebtedness or over-borrowing.
All Geithner needs to do is to wait for the over-indebted firms or individuals to disappear from the system and then allow new players to come into the economy and soon it will slowly move.
However, the problem facing Obama is that the American public is impatient and expects him to solve the problem before he seeks re-election in 2012.
One very important aspect of the US economy is its size. It is HUGE.
As a result it behaves not very differently from a huge ocean-liner. To make it change direction requires lots of effort and resources, especially if the change needs to be done quickly.
For Obama, he has no choice but show the American public, in less than four years, that the economy is picking up.
Otherwise, his name will appear alongside Jimmy Carter, George Bush Sr and others on the list of one-term presidents, a prospect that he obviously will not relish.
And that is exactly the reason why from an economic perspective, I foresee Obama is going to be the most reckless president in the history of the United States.
He has pushed for Congress’ approval for his US$825bil stimulus package.
The problem is, as stated earlier, the US economy is huge and therefore nobody really knows whether that amount is enough or not.
What we do know is that since December 2007 till now, the US government has spent US$3.3 trillion of the allocated US$7.8 trillion.
Unfortunately, so far there has been no discernible positive outcome.
In fact, the situation is getting worse.
On the same day that Geithner was sworn in, CNN Money reported announcements of over 71,400 job cuts by US firms.
Clearly if Obama is serious about being re-elected in four years, he needs to spend more – much more than what has been announced.
Just as nobody really knows when the economy is going to rebound, nobody also really knows the total amount that needs to be spent to turn the US economy around.
One thing is for certain, it is going to be massive.
As is well known, the current problem of economic crisis is mainly due to over-indebtedness of companies and individuals. This indebtedness is yet to be resolved.
Therefore, the huge stimulus package being rolled out by Obama in order to secure his re-election is going to worsen the indebtedness situation.
Moreover this time it is going to involve both the public and private sectors.
By the time the US economy turns around due to the efforts of Obama’s administration, the amount of debt hanging around each taxpayers’ neck will be too scary to imagine.
The United States at the moment is being choked by a huge amount of indebtedness and that is why it is suffocating.
By the time all spending has been undertaken to get the US economy to move, American taxpayers will be completely wrapped up by debt to the point of being “mummified”.
The truth of the matter is, as long as the debt-based system does not change, there is no solution to the problem.
Henry Paulson, the previous Treasury Secretary, left his post without solving the problem even though he tried his level best.
But he should be happy because he will not be remembered as the person who recklessly worsened the US economic crisis by increasing the debt burden of the US taxpayers to unmanageable levels.
That dubious honour is likely going to be Geithner’s.
If Geithner is lucky, the honour may go to the person who appointed him.

Dr Mohd Nazari Ismail is a professor at the Faculty of Business and Accounting, Universiti Malaya. His latest book is “The Globalisation Debate: A Case of Barking up the Wrong Tree” published by University of Malaya Press.