The jews did it

8. The current financial crisis which is destroying the economies of the U.S. Britain and in fact all the countries of the world is due to manipulations of banks, financial institutions and the monetary system by Jewish supporters of Israel. (chedet.co.cc)

And why is this interesting? Because this isn’t just some random crackpot blogger. This is the man who led Malaysia for just about three decades and has been seen as one of the more prominent moderate voices of the Muslim world. This is the man who crossed the IMF and handled the previous finance crisis in ’98 in his own way. This is a man many still listen to.

How the financial crisis helps Israel is still somewhat unclear to me.

The finance crisis certainly took a turn for the unexpected today when the US House of Representatives turned down the $700 billion rescue package proposed by president Bush. Of course it was controversial for USA to consider this in the first place, given that they have been the largest driving force in pushing the International Monetary Fund to try and discourage other governments from doing the same in times of crisis. Wall Street seems to have expected them to go through with it this time though, as the news brought the biggest plummet in stock prices in American history. So how could they possibly risk the crisis getting even worse?

There are a lot of different reasons, possibly as many as the 227 congressmen that voted against. Here are a few. Off the top of my head I’ll try to point to a few.

USA would certainly lose some support for their great crusade for economic liberalization throughout the world if they had gone through with it. One of the demands the US has made through the IMF in former finance crises have been that they don’t bail out companies in trouble. The market is supposed to be allowed to weed out companies which have taken too great risks.

One blogger who took this view is former Malaysian Prime Minister, Tun Mahathir Mohamad. On his blog chedet.com, he’s pondering the current finance cisis, as do most of us who take an interest in what goes on in the world. And he’s got some quite understandable grievances. During the Asian finance crisis in the late 90s, he was among those exposed to great pressure to let failing banks go bankrupt, to restrain government spending and generally run a tight ship economically speaking. It’s not hard to feel cheated when USA faces a crise of similar proportions and congress seemed about to deal out an amazingly huge number of dollars to bail out companies on the verge of bankruptcy. And I suspect Tun Mahathir isn’t the only one to feel this way. A lot of world leaders dependent on the IMF in times of crisis would have legitimate reasons to refuse to be forced to take the same measures.

Another important reason could be that the American government doesn’t really have this money. According to IMF, the US government for example only has 72 billion USD in foreign currency reserves. That’s only one tenth of the money they proposed to spend on the rescue package. USA already owes a daunting 13 trillion dollars(!!) (according to the US Treasury) to other countries as a result of buying more from other countries than they sell each year. This certainly isn’t going to help…

Other than this, a lot of congressmen are ideologically opposed to the bailout to begin with. They believe very strongly in the market, and consider it completely wrong to stop the market from punishing the companies that have taken too big risks. Consequences be damned.

A more compelling reason to the man in the street would probably be that a lot of people have gotten extremely rich from managing the economy poorly. Banking exectuives and shareholders have reaped enormous profits from the buying and selling of debts people should never have been allowed to take out to begin with. And of course it’s unfair if the companies that have allowed them to do this are bailed out when their bluff is called.

Whatever the reason – not introducing any measures at all sounds really risky to me as well. As much as I’d like to see the greedy bastards who brought this crisis upon the world punished, it’s hard to see that happening without the rest of us getting punished too.

I’m lucky enough to be living in a country so rich our government will be able to cushion any blow to the world economy enough that nobody will starve. I fear for all those who live in countries who don’t. And the only ones who get a say are the Americans…

Other things written about this:

• The Monkey Cage: “Parallels“
• Voting while intoxicated: “The Fall“
• Chedet.com: “The United States“
• Political Animal on presidential impotence.

His analysis is for the most part sound. It makes sense that people would vote for a genuine opponent rather than a utopian third party candidate if what they wanted was to punish the BN. I believe he is right that at least a good portion of the opposition votes were the result of BN disillusionment. I do however think he underestimates the genuine support in Malaysia for reform, and most importantly I think he is mistaken with regard to his final point:

14. We cannot fault the BN concept and governance. We have to look elsewhere for the loss of confidence in the party.

For reasons I have discussed at much more length earlier, there are several things that make me believe that the very UMNO (and BN) system is unsustainable in the long run:

1. The system of patronage is dependent on prosperity continually increasing for the majority of the people. As the system presupposes that a class gets special privileges, there must be enough wealth to go around to make sure the remaining population also see things continually improving. Every fluctuation in the economy thus becomes a serious threat. If we are heading for another major recession, things could get ugly.

2. The effectiveness of media censorship is decreasing drastically. The internet has all but killed this. For example in the case of Malaysia Today, not only did the message still get out, but the actual censorship itself created much negative attention for the current leadership. The reason for this ineffectiveness is the massive amount of channels for alternative news now available. The difference is striking from how it was in the country when I lived there in ’98, and my friends in Europe were better informed than I was in Malaysia about certain currents event the government wanted to keep hushed up.

3. Economic globalization also excerts pressure on the Malaysian system. Even through the Malaysian economy has proved much more resilient to change than many less successful nations, and has shown that a third way is indeed possible, I think this will become harder and harder. The “Japanese model” of protectionism may still be a viable option, but if one for example wishes to attract internet-based industry, it will be hard to continue to try and censor media. It seems reasonable to expect that such pressures will continue to emerge.

4. A viable option to the current regime has been allowed to grow in credibility. For decades there was no realistic alternative to BN rule. The opposition was no more than a nuisance, and very few people actually believed in it. Now the opposition has been able build a base – not yet to rival the BN, but real enough that it migh potentially do so in the future.

5. To some extent none of these things are new, and the BN regime has been able to live with all these things before. Why should it not continue to do so? The main reason, I believe, lies at the very heart of autocracy: It is greatly dependent on its leader. An autocratic regime must necessarily lean for a great part on the authority of its leader. When temporary failures of the system (as are bound to appear from time to time) appear, the leader must be able to lend his authority to gloss things over until the problem can be fixed. For the regime to be able to prevail in the long run, it therefore needs to have a continuous string of great leaders. And I believe the job is getting tougher and tougher as much of the world are pushing stronger for liberalism.

6. Abdullah Badawi is no Mahathir Mohamad. I may never have liked Mahathir and his rule, but no one can claim he wasn’t successful for decades. All the way up til ’98 he managed to steer the country with a firm hand, beating down crisis after crisis and keeping the rickety structure of the system standing. I see little of that strength in Mohamad Badawi. He has at several times appeared as an insecure and desperate man trying to copy the policies of Mahathir with no where near his skill. He also fails to be innovative and adapt to changing realitites the way Mahathir did. A perfect example is how Mohamad Badawi tries to censor Malaysia Today, while an 83-year-old Mahathir Mohamad sees which way the wind is blowing and has become an active Facebook member.

To sum things up: Mahathir is right about the fact that a weaker leadership is threatening to break the BN system apart. I do, however believe that it is a series of inherent weaknesses in the system that allows it to do so. The benefit of a liberal democracy is that the system is able to work independent of failing leaders. The essentially autocratic Malaysian regime will need to reform itself into a more robust form if it isn’t to come crashing down.

…then again I might not mind all that much if it were to happen.

To many, Anwar Ibrahim’s arrest and conviction on charges of corruption in 1998 was seen as a decisive victory by then prime minister Mahathir. Likewise, it was by many (my self included) seen as a decisive crackdown on the call for democratic reform by the power of Malaysian autocracy. Anwar’s real return to politics this week turns that short term victory into a long term setback. Not only has Anwar personally been able to return to a position of leadership, but his political ideas of “reformasi”) are still alive, represented by his party Pakatan Rakyat (People’s Justice and are now strongly represented in the parliament. Strong enough to take away the parliament 2/3 majority that the government coalition Barisan Nasional (of which UMNO is the most prominent member) has held since the country’s independence in 1957.

The weakened power of the Malaysian autocracy has further been demonstrated by the fact that new charges of sodomy have been launched, so far without costing Anwar his election. As a member of the governing party, he was easily discharged from the parliament in 1998. As leader of the opposition that might prove significantly more difficult.

As the blog Unspun has commented, it’s not entirely clear whether the election victory comes on behalf of opposition to UMNO or a genuine support for Anwar. This may of course be significant in the long term, but for now it has served Anwar’s and Pakatan Rakyat’s cause. And whatever the real reason – Anwar’s decisive reelection provides renewed hope and energy to all those who still fight for democratic reform in Malaysia.

More about this:

• Far Eastern Economic Review: “A ‘people’s victory’ in Malaysia” by Colum Murphy
• Proud 2B Malaysian: “Final words on Permatang Pauh“
• Unspun: “Anwar’s victory or UMNO’s defeat?“

It’s been 10 years since the great power struggle between Mahathir Mohamad and Anwar Ibrahim, then Prime Minister and deputy in Malaysia. In 1998 it ended with Anwar being accused of sodomy, arrested, expelled from the party and the parliament. He was cleared of those charges by the court, but convicted for corruption after trying to pressure the police to drop the investigation. I live in Malaysia at the time, and like everyone else around me, didn’t believe much in the charges. At least the part about sodomy.

Anwar was released from prison in 2004, and earlier this year had his ban from political activity lifted. Then he went on to lead his party to their best election ever, for the first time breaking the 2/3 majority of the Barisan Nasional coalition that has ruled Malaysia since the country’s independence from Great Britain.

Mahathir Mohamad resigned after 22 years as Malaysia’s Prime minister in 2003, at age 78, and finally handed the reins over to his successor, Mohammad Badawi. Although few expected drastic changes in Malaysia, there was at least a hope that Badawi might gradually move Malaysia in a less authoritarian direction.

In this previous post I presented a paper I wrote on the struggle between Mahathir and Anwar and how the interplay between domestic politics and international economy forced Mahathir to desperate action. Is what we’re seing now, 10 years after the events described there, a case of history repeating itself in a slightly less dramatic way? Is this Badawi’s counter-move to the serious threat posed by an Anwar that once again has the winds of politics in his sails?

Politically, it is at least very convenient. As several sources (for example this one) have reported, there are rumours of neotiations between UMNO (Badawi’s ruling party) and the islamist PAS party. It certainly seems to be suited to strengthen ties between UMNO and PAS if the main figure of the more secular opposition is once again accused of something an islamist party could never allow itself to be associated with. What other options than cooperation with UMNO does PAS have now?

I don’t know if the allegations against Anwar are true or not. And as a morally liberal non-muslim, I wouldn’t really mind if they were. But in a throughly muslim country like Malaysia this is no minor accusation. He could face 20 years of imprisonment, and certainly once again being ostracised from the political community. But whether or not the allegations against Anwar are true, they are certainly publicised in a very convenient manner at a very convenient time for Badawi. And we’ve seen this pattern before in Malaysia.

I’ll be following the news with interest…

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UPDATE: Related articles from the web

• Audie61s blog: “Believe me Anwar: Your best friend is Abdullah”
• Proud 2B Malaysian “Sodomy vs. economy – who cares for us Malaysians?”
• Thestar.com.my: “Syed Hamid on why Saiful wasn’t charged”
• Thestar.com.my: “Anwar to be opposition leader on Aug27″