Trade war's twrist: US and EU gang up deal against developing countrries?

IN the past few days, there has been a new twist to the global trade war. The United States, which had threatened to impose a 25% additional tariff on European cars, made a deal with the European Union.

US President Donald Trump suspended the automobile tariff plan and may exempt the EU from the earlier US tariffs on aluminium and steel.

In exchange, the EU countries will buy more soybean and energy products from the US, and the two giants will work to eliminate tariffs and subsidies in all industrial pro­ducts traded between them.

Trump and European Commis­sion president Jean-Claude Juncker also agreed to work to reform the World Trade Organisation (WTO), and to tackle China’s market abuse, according to a Reuters report.


“If it holds, the US-EU pact could allow both to focus on China, whose economic rise threatens both,” added the report.

Trump’s economic advisor Larry Kudlow said that, “US and EU will be allied in the fight against China, which has broken the world trading system, in effect”.

Thus, the US-EU deal appears to be both good and bad news. Good because there is a cooling off on one front of the global trade war. Bad because the traditional Western allies may gang up to attack not only China but also the rest of the developing countries.

The US and EU may now jointly pressurise China on various issues. A bigger aim is to hinder China from its Made in China 2025 plan to upgrade its domestic industry in 10 high-tech areas including robotics, autonomous and electric cars, artificial intelligence, biotech and aviation. They do not want Chinese firms to emerge as world-class cham­pions that rival American and European companies.

The US, EU and Japan last December signed an understanding to jointly act against China on trade issues, including steel overcapacity, technology transfer, and the role of subsidies, state financing and state-owned enterprises.

Over the years, the EU has turned to some developing countries as potential allies when it has a conflict with the US but eventually it strikes a deal with the US and then the two Western powers unite and take aim at the developing countries.

This famously happened in the early 2001-2003, when the EU fought the US in the WTO over agriculture subsidies. Then they reached an understanding to protect their own subsidies while pressurising developing countries to open up their agricultural markets.

Today, developed countries continue to spend many hundreds of billions of dollars in subsidies, as well as maintain high tariffs, to keep their farms in business.

The US and EU also flood the world market with their artificially cheapened farm goods, while insisting that developing and poor countries open their markets through lower tariffs for both agricultural and industrial products. This hypocritical practice is at the heart of the imbalances and inequities of the world trading system.

Now, as part of their deal, the US and EU seem to want to continue maintaining double standards. They agreed to cut indus­trial tariffs and subsidies to zero, but to leave alone their agriculture tariffs and subsidies.

Moreover, they agreed to work on reforming the WTO, without spelling out what this means. At the WTO, the US and EU have recently moved to change the way the system has differentiated between developed and developing countries.

Recognising the weaknesses of developing countries, the WTO long ago adopted the principle of special and differential treatment (SDT) for developing countries.

Under this principle, in talks to cut tariffs, developed countries have to cut by a higher percentage than developing countries, and the least developed countries (LDCs) need not reduce tariffs at all. In various rules, developing countries and especially LDCs are mandated to take on less obligations.

However, the developed countries are now challenging the SDT principle.

“Developing and least-developed countries are facing the worst crisis yet at the WTO due to the sustained assault by the US along with the EU and Japan,” according Ravi Kanth in the Geneva-based South-North Development Monitor (SUNS) on July 4.

“Using Trump’s aggressive trade demands as a pretext, some major developed countries such as the EU and Japan have been attempting to deny the SDT flexibilities to deve­loping countries,” SUNS added, quoting a trade envoy from a major developing country.

 “The entire system of the WTO is under threat following the Trump administration’s trade initiatives based on reciprocal market access as well as the attempt to foist plurilateral outcomes without multila­teral consensus, and intensified moves to undermine the SDT flexibilities by industrialised countries, particularly the EU.”

Meanwhile, the US actions of unilaterally raising tariffs on alumi­nium and steel, and on US$250bil (RM1 trillion) of Chinese products, violate the WTO’s main principles, threatening the creditability and viability of the organisation itself.

But Trump is not worried or sorry at all. At the beginning of July, he said: “The WTO has treated the United States very badly and I hope they change their ways. They have been treating us very badly for many years, many years and that’s why we were at a big disadvantage with the WTO.”

Said the SUNS article, “In short, the developing and least-developed countries face the prospect of their hard won SDT flexibilities being taken away once and for all to ensure the US stayed at the WTO.”

When the US and EU were locked in a big conflict over auto tariffs, the main enemy of the EU, China and other countries would have been the US.

Now the EU and US have agreed to “reform the WTO” as part of their bilateral deal. It is likely that such an initiative would attempt to reduce the rights of the developing countries, and even to entirely remove the principle of special treatment or even the status of “developing countries” in the WTO.

The trade war could thus have huge collateral damage. All the more reason for the developing countries’ political leaders to pay close attention to what is happening in the trade negotiating and policy­-making arena.

Global Trend by Martin Khor

Martin Khor is advisor of the Third World Network. The views expressed here are entirely his own.


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Has Penang Island’s growth & development become a hazard to life?

Malaysia’s Penang Island has undergone massive development since the 1960s, a process that continues today with plans for transit and land-reclamation megaprojects.

The island is increasingly facing floods and landslides, problems environmentalists link to paving land and building on steep slopes.

This is the second in a six-part series of articles on infrastructure projects in Peninsular Malaysia.

GEORGE TOWN, Malaysia — Muddy carpets and soaked furniture lay in moldering piles on the streets of this state capital. It was Sunday morning, Oct. 29, 2017. Eight days earlier, torrents of water had poured off the steep slopes of the island’s central mountain range. Flash floods ripped through neighborhoods. A landslide killed 11 workers at a construction site for a high-rise apartment tower, burying them in mud. It was Penang Island’s second catastrophic deluge in five weeks.

Kam Suan Pheng, an island resident and one of Malaysia’s most prominent soil scientists, stepped to the microphone in front of 200 people hastily gathered for an urgent forum on public safety. Calmly, as she’s done several times before, Kam explained that the contest between Mother Earth’s increasingly fierce meteorological outbursts and the islanders’ affection for building on steep slopes and replacing water-absorbing forest and farmland with roads and buildings would inevitably lead to more tragedies.

“When places get urbanized, the sponge gets smaller. So when there is development, the excess rainwater gets less absorbed into the ground and comes off as flash floods,” she said. “The flood situation is bound to worsen if climate change brings more rain and more intense rainfall.”

Five days later it got worse. Much worse. On Nov. 4, and for the next two days, Penang was inundated by the heaviest rainfall ever recorded on the island. Water flooded streets 3.6 meters (12 feet) deep. Seven people died. The long-running civic discussion that weighed new construction against the risks of increasingly fierce ecological impediments grew more urgent. George Town last year joined an increasing number of the world’s great coastal cities — Houston, New Orleans, New York, Cape Town, Chennai, Jakarta, Melbourne, São Paulo — where the consequences are especially vivid.

The empty apartment construction site where 11 men died in an October 2017 landslide. Image by Keith Schneider for Mongabay.

Penang’s state government and Chow Kon Yeow, its new chief minister, recognize the dilemma. Three weeks after being named in May to lead the island, Chow told two reporters from The Star newspaper that “[e]conomic growth with environmental sustainability would be an ideal situation rather than sacrificing the environment for the sake of development.”

But Chow also favors more growth. He is the lead proponent for building one of the largest and most expensive transportation projects ever undertaken by a Malaysian city: a $11.4 billion scheme that includes an underwater tunnel linking to peninsular Malaysia, three highways, a light rail line, a monorail, and a 4.8-kilometer (3-mile) gondola from the island to the rest of Penang state on the Malay peninsula.

The state plans to finance construction with proceeds from the sale of 1,800 hectares (4,500 acres) of new land reclaimed from the sea along the island’s southern shore. The Southern Reclamation Project calls for building three artificial islands for manufacturing, retail, offices, and housing for 300,000 residents.

Awarded rights to build the reclamation project in 2015, the SRS Consortium, the primary contractors, are a group of national and local construction companies awaiting the federal government’s decision to proceed. Island fishermen and their allies in Penang’s community of environmental organizations and residential associations oppose the project, and they proposed a competing transport plan that calls for constructing a streetcar and bus rapid transit network at one-third the cost. (See Mongabay –https://news.mongabay.com/2017/04/is-a-property-boom-in-malaysia-causing-a-fisheries-bust-in-penang/)

For a time the national government stood with the fishermen. Wan Junaidi Tuanku Jaafar, the former minister of natural resources and environment and a member of Barisan Nasional (BN), the ruling coalition, refused to allow the project. “The 1,800-hectare project is too massive and can change the shoreline in the area,” he told reporters. “It will not only affect the environment but also the forest such as mangroves. Wildlife and marine life, their breeding habitats will be destroyed.”

The state, and Penang Island, however, have been governed since 2008 by leaders of the Pakatan Harapan coalition, which supported the transport and reclamation mega projects. In May 2018, Pakatan Harapan routed the BN in parliamentary elections. Former prime minister Mahathir Mohamed, the leader of Pakatan Harapan, assumed power once again. Island leaders anticipate that their mega transport and reclamation projects will be approved.

It is plain, though, that last year’s floods opened a new era of civic reflection and reckoning with growth. Proof is everywhere, like the proliferation of huge blue tarps draped across flood-scarred hillsides outside of George Town’s central business district. Intended to block heavy rain from pushing more mud into apartment districts close by, the blue tarps are a distinct signal of ecological distress.

Or the flood-damaged construction sites in Tanjung Bungah, a fast-growing George Town suburb. A lone guard keeps visitors from peering through the gates of the empty apartment construction site where 11 men died in the October 2017 landslide. About a mile away, a row of empty, cracked, expensive and never-occupied hillside townhouses are pitched beside a road buckled like an accordion. The retaining wall supporting the road and development collapsed in the November 2017 flood, causing expensive property damage.

A row of empty, cracked, expensive and never-occupied hillside townhouses are pitched beside a road buckled like an accordion. The retaining wall supporting the road and development collapsed in a November 2017 flood, causing extensive property damage. Image by Keith Schneider for Mongabay.

Gurmit Singh, founder and chairman of the Centre for Environment, Technology and Development, Malaysia (CETDEM), and dean of the nation’s conservation activists, called Penang state government’s campaign for more growth and mega infrastructure development “a folly.”

“It exceeds the carrying capacity of the island. It should never be approved,” he said in an interview in his Kuala Lumpur office.

Singh, who is in his 70s and still active, was raised on Penang Island. He is an eyewitness to the construction that made much of his boyhood geography unrecognizable. “Everything built there now is unsustainable,” he said.

It’s taken decades to reach that point. Before 1969, when state authorities turned to Robert Nathan and Associates, a U.S. consultancy, to draw up a master plan for economic development, Penang Island was a 293-square-kilometer (113-square-mile) haven of steep mountain forests, ample rice paddies, and fishing villages reachable only by boat.

For most residents, though, Penang Island was no tropical paradise. Nearly one out of five working adults was jobless, and poverty was endemic in George Town, its colonial capital, according to national records.

Nathan proposed a path to prosperity: recruiting electronics manufacturers to settle on the island and export their products globally. His plan emphasized the island’s location on the Strait of Malacca, a trading route popular since the 16th century that tied George Town to Singapore and put other big Asian ports in close proximity.

Sea and harbor traffic on the Strait of Malacca. Image by Keith Schneider for Mongabay.

As a 20th century strategy focused on stimulating the economy, Nathan’s plan yielded real dividends. The island’s population nearly doubled to 755,000, according to national estimates. Joblessness hovers in the 2 percent range.

Foreign investors poured billions of dollars into manufacturing, retail and residential development, and all the supporting port, energy, road, and water supply and wastewater treatment infrastructure. In 1960, the island’s urbanized area totaled 29.5 square kilometers (11.4 square miles), almost all of it in and immediately surrounding George Town. In 2015, the urban area had spread across 112 square kilometers (43 square miles) and replaced the mangroves, rubber plantations, rice paddies and fishing villages along the island’s northern and eastern coasts.

There are now 220,000 homes on the island, with more than 10,000 new units added annually, according to National Property Information Center. George Town’s colonial center, which dates to its founding in 1786, was designated a UNESCO World Heritage site in 2008, like Venice and Angkor Wat. The distinction helped George Town evolve into a seaside tourist mecca. The state of Penang, which includes 751 square kilometers (290 square miles) on the Malay peninsula, attracts over 6 million visitors annually, roughly half from outside Malaysia. Most of the visitors head to the island, according to Tourism Malaysia.

Nathan’s plan, though, did not anticipate the powerful ecological and social responses that runaway shoreline and hillside development would wreak in the 21st century. Traffic congestion in George Town is the worst of any Malaysian city. Air pollution is increasing. Flooding is endemic.

Blue tarps drape the steep and muddy hillsides in George Town to slow erosion during heavy rain storms. Image by Keith Schneider for Mongabay.

Nor in the years since have Penang’s civic authorities adequately heeded mounting evidence of impending catastrophes, despite a series of government-sponsored reports calling for economic and environmental sustainability.

Things came to a head late last year. Flooding caused thousands of people to be evacuated from their homes. Water tore at hillsides, opening the forest to big muddy wounds the color of dried blood. Never had Penang Island sustained such damage from storms that have become more frequent, according to meteorological records. Rain in November that measured over 400 millimeters (13 inches) in a day. The damage and deaths added fresh urgency and new recruits to Penang Island’s longest-running civic argument: Had the island’s growth become a hazard to life?

George Town is far from alone in considering the answer. The 20th century-inspired patterns of rambunctious residential, industrial and infrastructure development have run headlong into the ferocious meteorological conditions of the 21st century. Coastal cities, where 60 percent of the world’s people live, are being challenged like never before by battering storms and deadly droughts. For instance, during a two-year period that ended in 2016, Chennai, India, along the Bay of Bengal, was brutalized by a typhoon and floods that killed over 400 people, and by a drought that prompted deadly protests over water scarcity. Houston drowned in a storm. Cape Town is in the midst of a two-year drought emergency.

George Town last year joined the expanding list of cities forced by Nature to a profound reckoning. Between 2013 and mid-October 2017, according to state records, Penang recorded 119 flash floods. The annual incidence is increasing: 22 in 2013; 30 in 2016. Residents talk about a change in weather patterns for an island that once was distinguished by a mild and gentle climate but is now experiencing much more powerful storms with cyclone-force winds and deadly rain.

Billions of dollars in new investment are at stake. Apartment towers in the path of mudslides and flash flooding rise on the north shore near George Town. Fresh timber clearing continues apace on the steep slopes of the island’s central mountain range, despite regulations that prohibit such activity. Demographers project that the island’s population could reach nearly 1 million by mid-century. That is, if the monstrous storms don’t drive people and businesses away — a trend that has put Chennai’s new high-tech corridor at risk.

The urgency of the debate has pushed new advocates to join Kam Suan Pheng at the forefront of Penang Island’s environmental activism. One of them is Andrew Ng Yew Han, a 34-year-old teacher and documentary filmmaker whose “The Hills and the Sea” describes how big seabed reclamation projects on the island’s north end have significantly diminished fish stocks and hurt fishing villages. High-rise towers are swiftly pushing a centuries-old way of life out of existence. The same could happen to the more than 2,000 licensed fishermen and women contending with the much bigger reclamation proposals on the south coast.

“How are they going to survive?” Han said in an interview. “This generation of fisherman will be wiped out. None of their kids want to be fisherman. Penang is holding a world fisherman conference in 2019. The city had the gall to use a picture of local fisherman as the poster. No one who’s coming here knows, ‘Hey you are reclaiming land and destroying livelihood of an entire fishing village.’”

“We all want Penang to be progressive. To grow. To become a great city,” he adds on one of his videos. “But at whose expense? That’s the question. That’s the story I’m covering.”

Andrew Ng Yew Han, a 34-year-old teacher and documentary film maker whose “The Hills and the Sea” describes how big seabed reclamation projects on the island’s north end have significantly diminished fish stocks and hurt fishing villages. Image by Keith Schneider for Mongabay.

Another young advocate for sustainable growth is Rexy Prakash Chacko, a 26-year-old engineer documenting illegal forest clearing. Chacko is an active participant in the Penang Forum, the citizens’ group that held the big meeting on flooding last October. Nearly two years ago, he helped launch Penang Hills Watch, an online site that uses satellite imagery and photographs from residents to identify and map big cuts in the Penang hills — cuts that are illegal according to seldom-enforced state and federal laws.

Kam Suan Pheng and other scientists link the hill clearing to the proliferation of flash flooding and extensive landslides that occur on the island now, even with moderate rainfall. In 1960, Malaysia anticipated a future problem with erosion when it passed the Land Conservation Act that designated much of Penang Island’s mountain forests off-limits to development. In 2007, Penang state prohibited development on slopes above an elevation of 76 meters (250 feet), and any slope with an incline greater than 25 degrees, or 47 percent.

Images on Penang Hills Watch make it plainly apparent that both measures are routinely ignored. In 2015, the state confirmed as much when it made public a list of 55 blocks of high-rise housing, what the state called “special projects,” that had been built on hillsides above 76 meters or on slopes steeper than 25 degrees. The “special projects” encompassed 10,000 residences and buildings as tall as 45 stories.

Rexy Prakash Chacko, a 26-year-old engineer who helped launch Penang Hills Watch, an online site that uses satellite imagery and photographs from residents to identify and map big cuts in the Penang hills. Image by Keith Schneider for Mongabay.

“There is a lot of water coming down the hills now,” Chacko said in an interview. “It’s a lack of foresight. Planning has to take into account what happens when climate change is a factor. Clearing is happening. And in the last two years the rain is getting worse.

“You can imagine. People are concerned about this. There was so much lost from the water and the mud last year.”

Ignoring rules restricting development has consequences, as Kam Suan Pheng has pointed out since getting involved in the civic discussion about growth in 2015. After the October 2017 landslide, she noted that local officials insisted the apartment building where the 11 deaths occurred was under construction on flat ground. But, she told Mongabay, an investigation by the State Commission of Inquiry (SCI) found that the apartment construction site abutted a 60-degree slope made of granite, which is notoriously unstable when it becomes rain-saturated.

“State authorities continued to insist that development above protected hill land is prohibited,” Kam said in an email. “There is little to show that more stringent enforcement on hill slope development has been undertaken. Hopefully the findings of the SCI will serve as lessons for more stringent monitoring and enforcement of similar development projects so that the 11 lives have not been sacrificed in vain.”

The market for hillside residential development is strong in George Town despite the more intense storms. Image by Keith Schneider for Mongabay.

By Keith Schneider

Mongabay Series: Southeast Asian infrastructure

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The rich are becoming richer

They are becoming richer at a faster rate too

DON’T the rich always grow richer, while the poor well, remain poor.

If you’re already disheartened, it gets worst. The rich are getting richer, and at a faster rate too.

A 36-page report released by the Boston Consulting Group (BCG) last month showed that global personal financial wealth grew by 12% in 2017 to US$201.9 trillion.

This total, roughly 2.5 times as large as the world’s gross domestic product (GDP) for the year (US$81 trillion), more than doubled the previous year’s rate, when global wealth rose by 4%.

It also represented the strongest annual growth rate in the past five years in dollar terms.

“The main drivers were the bull market environment in all major economies, with wealth in equities and investment funds showing by far the strongest growth and the significant strengthening of most major currencies against the dollar,” said BCG in the report.

The increasing millionaires and billionaires now hold almost half of global personal wealth, up from slightly less than 45% in 2012, says BCG. In North America, which had US$86.1 trillion of total wealth, 42% of investable capital is held by people with more than US$5mil in assets. Investable assets include equities, investment funds, cash and bonds

In terms of asset classes, US$121.6 trillion (60%) of global wealth took the form of investable assets – mainly equities, investment funds, currency and deposits, and bonds, with the remaining US$80.3 trillion (40%) held in non-investable or low-liquidity assets such as life insurance, pensions funds, and equity in unquoted companies.

Residents of North America held over 40% of global personal wealth, followed by residents of Western Europe, with 22%. The strongest region of growth was Asia, which posted a 19% increase. All wealth segments grew robustly, but high growth rates were especially prevalent in the uppermost wealth segments.

The market sizing review encompasses 97 countries that collectively account for 98% of the world’s gross domestic product.

The personal wealth bands are generally measured as such:

1. Retail: below US$250,000

2. Affluent: between US$250,000 to US$1mil

3. Lower High Net Worth (HNW): between US$1mil and US$20mil

4. Upper HNW: between US$20mil and US$100mil

5. Ultra HNW: above US$100mil

Everybody is getting richer

The US is home to the largest number of people with more than US$20mil. Globally, the classes of the ultra-rich are expected to reach 671,000 by 2022.

Meanwhile, the Middle East is the region with the greatest share of wealth held in investable assets US$3.1 trillion of a total US$3.8 trillion. Western European residents held 56% in currency and deposits, while in North America the attention was on equities and investment funds, with 62% of US$47 trillion of investable wealth parked in those assets.

Should personal wealth creation continues at the rate of the past few years, BCG forecasts a compounded annual growth rate of about 7% from 2017 to 2022, in US dollar.

Events like stock market corrections and geopolitical uncertainties could knock that down to 4%.

In a worse-case scenario, such as a major economic crisis, global wealth might produce a compound growth rate of only 1% over five years, the study found.

BCG says opportunities abound for wealth managers seeking to increase their focus on different client segments.

For example, despite being far apart on the wealth spectrum, both the above US$20mil segment (upper HNW and ultra HNW) and the affluent segment are attractive because they represent very large wealth pools with high growth rates.

In 2017, the upper HNW and ultra HNW segments held more than US$26 trillion in investable wealth.

US residents held over 30% of this wealth, making the US easily the largest country of origin.

Other economic areas with large pools of ultra HNW investable assets include developing markets such as China (in second place), Hong Kong, India, Russia and Brazil, and developed markets such as Germany (in third place), France and Italy.

The share of wealth held by upper HNW and ultra HNW individuals varies widely aong the top 15 countries, ranging from 47% in Hong Kong to 8% in Japan.

Over the next five years, the upper HNW and ultra HNW segments wealth is likely to post the highest growth across all regions.

“Financial institutions looking to acquire and serve these segments will need to bring a broad international skill set to the table,” said BCG.

Affluent individuals

Afluent individuals is a segment whose population is burgeoning, hold a large and increasing amount of the world’s personal wealth at US$17.3 trillion or 14% of investable assets in 2017. (see chart)

This group of about 72 million people represents the growing middle class and many of its members will become the millionaires of tomorrow.

“We expect the wealth of this segment to post a compound annual growth rate (CAGR) of around 7% over the next five years, increasing its pool of wealth to nearly US$25 trillion. To successfully tap into this segment, wealth managers must have at their disposal an efficient service model and significant skill in and innovative digital technologies,” said BCG.

Entrepreneurs

The entrepreneur segment represents another attractive opportunity for wealth managers to tap into money in motion and provide needed services.

“We expect these individuals, who have equity in their own companies – recorded as unquoted equities (non-investable wealth) – to significantly increase their pool of investable assets, by liquidating some or all of their equity through sales and by earning new wealth through their entrepreneurial activities. The largest pools of entrepreneurial wealth are in the US, France, Italy and Japan.  

Asia

Personal wealth in Asia grew by 19% to US$36.5 trillion, with residents of China holding nearly 57% of that amount, and the region registered per capita wealth of US$13,000. Although the asset allocation share of equities ad investment funds has grown over the past five years (from 22% in 2012 to 31% in 2017), Asia remains a cash-and-deposit-heavy region, with 44% of personal wealth held in this asset class. We project regional wealth to grow over the next five years at a CAGR of 12%.

Meanwhile Switzerland remains the largest offshore centre, domiciling US$2.3 trillion in personal wealth in the country. The next largest booking centres are Hong Kong (US$1.1 trillion) and Singapore (US$0.9 trillion) which have grown at yearly rates of 11% and 10% respectively – more than three times the rate (3%) of Switzerland over the past five years.

Over the next five years, BCG feels off

By Tee Lin Say, Starbiz

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Judged on merit and nothing less

It’s official: The Yang di-Pertuan Agong Sultan Muhammad V presenting the letter of appointment to Malanjum at Istana Negara. Looking on is Prime Minister Tun Dr Mahathir Mohamad. — Bernama

Judicial diversity and meritocracy are inseparable in order to win the faith of society. The appointment of Tan Sri Richard Malanjum, a Sabah-born Kadazandusun, as the top judge is a first for a non-Malay Malaysian and is welcomed as a major step towards winning greater confidence in the Judiciary, CHELSEA L.Y. NG writes.

IT’S a fairy tale come true for some Malaysians banking on a better Judiciary grounded on merits when news of Tan Sri Richard Malanjum having been sworn in as the ninth Chief Justice of Malaysia started to trickle down to the media late Wednesday evening.

Just several hours before that, the witty Malanjum had brushed off talk of him being selected as the next top judge.

“Itu cerita dongeng (It’s a fairy tale),” he told reporters in Kuching before walking off quickly.

But by then there were already some pictures of him attending an alleged rehearsal session being circulated among a few privileged ones.

Well, going by some of the not-so-welcoming responses from those who thought that the position was reserved for only Malay judges, the initial hush-hush circumstances were understandable.

But we cannot really fault those who think the positions are reserved purely for Malays. If you have only been exposed to Chief Justices (CJ, top post) and Chief Judges of Malaya (CJM, top three) after 1994, then you might be forgiven for thinking that the posts are for Malaysians of Malay origin only (see lists of LPs and CJs).

In the last two decades, top posts had been taken by Malay judges but if we look further back, the situation was much different prior to 1994. There used to be a good mix of judges from different races at least for the CJM post, which was then known as the Chief Justice of Malaya (a No.2 post then and not to be confused with the current CJ post, which is a top post). The top judge was known as the Lord President (LP) then or Lord President of the Supreme Court in full.

The LP position was created after the abolition of appeals to the Judicial Committee of the Privy Council in 1985.

Below the LP were the Chief Justices of the High Courts of Malaya and Borneo.

In 1994, the LP was renamed CJ when the Supreme Court reverted to the name of Federal Court, which was the name used prior to 1985 but with the Privy Council as the highest authority.

In 1994, Parliament amended the Federal Constitution and approved a reorganisation of the court system and significantly set up the Court of Appeal as the second highest court and renamed the highest court Federal Court (previously Supreme Court). After 1994, there was a new No.2 position created called the President of the Court of Appeal. The CJM hence moved to the third position.

For senior lawyer Datuk Roger Tan, judicial diversity is an essential element.

“It is pivotal in creating confidence in a multi-racial society. Diversity can be on the grounds of race, religion and gender.

“In Britain, they just had the first female President of the Supreme Court in hundreds of years,” said Tan.

Lawyer Fahri Azzat said there is nothing in the Constitution that demands that a Chief Justice, President of the Court of Appeal or the Chief Judge of Malaya must be of Malay heritage, or dictates that the racial composition of the Federal Court or even the Court of Appeal contain a majority of citizens of Malay heritage.

In fact, Article 123 of the Federal Constitution which deals with the qualifications to be a High Court judge and above provides the following:

A person is qualified for appointment und

er Article 122B as a judge of the Federal Court, as a judge of the Court of Appeal or as a judge of any of the High Courts if – (a) he is a citizen; and

(b) for the 10 years preceding his appointment he has been an advocate of those courts or any of them or a member of the judicial and legal service of the Federation or of the legal service of a State, or sometimes one and sometimes another.

For Fahri, that a persistent racial pattern at the appellate courts continues in the Judiciary suggests that race is a more influential factor than abilities or merits when it comes to the appointment and promotion of a judge.

Fahri even wrote about it in 2010 on the LoyarBurok website about the racial composition of the Judiciary.

“Any litigator who is in the thick of litigation practice in our civil courts will acknowledge that at the level of top senior counsel, the composition is the opposite of the nation’s racial population.

“Where top senior legal counsel are concerned, the ratio of Malaysians of Indian heritage are highest as compared to those of Chinese heritage who come in second as compared to those of Malay heritage who have the lowest numbers. That is how I know it to be from experience and conversation,” Fahri wrote then.

However, on Malanjum’s appointment, Fahri has this to say: “I think it is a step or start in the right direction. Whether it closes the gap in terms of judicial diversity and meritocracy remains to be seen with subsequent appointments of both the top judges and the High Court judges.

“I think it will be the starting point for the public to renew its faith in the Judiciary but that again remains to be seen from their judgments, judicial statements and the Judiciary’s actions collectively.

“Just as a swallow does not a summer make, a few judicial appointments do not guarantee rejuvenation of the Judiciary,” he said, adding that these positive developments if seen through over the long term will help foster faith and trust in the Judiciary and the administration of the justice system as a whole.

Retired Federal Court judge Datuk Seri Gopal Sri Ram said the appointment is definitely a welcome move and expected to improve the Judiciary.

“This is the first time we have a non-Malay being made a top judge. Prior to this we had non-Malay judges being appointed to the second highest positions. But that was before 1994.

“From the time of independence until then, no one had looked at the appointments on racial or religious angle. Only in recent times did people start to do so.”

He named a few prominent top judges then such as Tan Sri H.T. Ong, Tan Sri S.S. Gill and Tan Sri Gunn Chit Tuan.

“Richard’s appointment verifies the oneness of Malaysia. That there is only one Malaysia. That there is no East Malaysia or a West Malaysia,” said Sri Ram.

Sultan of Perak Sultan Nazrin Shah had in his special address at the book launch of Tun Arifin Zakaria last year mentioned a valuable quote by his father Sultan Azlan Shah, who was also a respectable Lord President.

“I quote, ‘The rules concerning the independence of the judiciary ... are designed to guarantee that they will be free from extraneous pressures and independent of all authority, save that of the law. They are, therefore, essential for the preservation of the Rule of Law,” he said.

The Sultan hit the nail on the head. Justice and judges should be free from any extraneous pressures and everything has to be based on the merits of the law.

The Ruler had on the same occasion called on Federal Court and Court of Appeal judges to write dissenting judgments if they do not agree with the majority of the Bench.

“Sometimes, the brave dissenting voice is transformed into law. A classic case is that of Brown v. Board of Education 347 US 483 (1954) when the US Supreme Court gave weight to the spirit of Justice Harlan’s dissenting voice in Plessy v. Ferguson 163 US 537 (1896).

“As a result, and in a historic judgment, then-chief justice Warren held that racial segregation in public schools constituted a violation of the US constitutional guarantee of equality of rights,” he said.

The Sultan added that judges should be free to express reasons in their judgments as they thought fit, and in other words, for the Rule of Law to flourish, courts and their participants should be allowed to express a variety of ideas and principles.

In the case of Malanjum, some critics even brought up the point that he was not qualified to be made the Chief Justice because of his dissenting judgments in the case of Lina Joy and the use of the Allah word in the Bible.

In Lina Joy, she lost a six-year battle in 2007 to have the word Islam removed from her identity card after the Federal Court dismissed her appeal in a majority decision.

In his dissenting judgment, Malanjum said the department responsible for issuing identity cards should have just complied with Lina Joy’s request to remove the word from her IC. He accused the National Registration Depart­ment of abusing its powers.

“In my view, this is tantamount to unequal treatment under the law. She is entitled to an IC where the word Islam does not appear,” Malanjum said.

In the second case, the Federal Court was divided again with Malanjum dissenting and arguing that the Constitution must remain the supreme law of the land.

In his column, constitutional law expert Prof Dr Shad Saleem Faruqi had also written about Malanjum’s boldness in voicing out his stand and daring to dissent.

According to Dr Shad, in PP v Kok Wah Kuan in 2008, the Federal Court had in a majority judgment “mocked the doctrine of separation of powers as having no legal basis” in the Constitution.

The judgment went further to say that the power of the courts was limited to whatever Parliament bequeathed.

“Fortunately, there was a bold dissent from Malanjum, our Sabah and Sarawak Chief Judge, who insisted that separation of powers and judicial independence are firm pillars of our constitutional edifice.

“He rejected the view that ‘our courts have now become servile agents of a federal Act of Parliament and that the courts are now only to perform mechanically any command or bidding of a federal law’.

“Justice Malanjum was eminently correct on both scores. A Consti­tution is not mere words written on paper,” Dr Shad wrote in his column.

These words by the eminent professor were enough to back Malanjum as a strong guardian of the rule of law and is definitely fitting for the grand position of a Chief Justice.

Enough said, time will tell if we have taken the right path.

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Malaysian policy changes and new initiatives soon

Putting our house in order

WITH the announcement of the new Housing and Local Government Minister, Zuraida Kamaruddin, there have been a lot of news and interviews on her proposals to put our housing industry in order.

Her new plans will help create a new housing environment in our country if well executed. I particularly like the minister’s assurance that there won’t be any political intervention in decision-making, especially in housing development matters.

The key objective of the ministry is to synchronise all affordable housing schemes under one roof with the establishment of the National Affordable Housing Council, which is expected to be announced in August.

The streamlining will involve four agencies, Syarikat Perumahan Negara Bhd, 1Malaysia Civil Servants Housing Programme (PPA1M), Rumah Mampu Milik Wilayah Persekutuan (RumaWIP), and 1Malaysia People’s Housing Scheme (PR1MA).

With this prompt move, the housing ministry will have better control over the construction of affordable houses, and will attempt to resolve the mismatch between market supply and demand in certain housing segments.

Apart from the new supply, we should also look at our current housing supply. As at end-2017, we have 5.4 million houses, of which 21% or 1.15 million were low-cost houses and flats. This should be sufficient to accommodate the critical housing needs of our Rakyat if they were allocated to the right group of people.

In my last article, I mentioned that there were potential leakages in our previous distribution system that had caused the failure of qualified applicants to buy or rent a low-cost home.

In early June 2018, the new Housing Minister requested owners of People’s Housing Projects (PPR units) who were renting out their units to foreigners to evict their tenants within 90 days.

It is important for the authorities to carry out surveys on residents of low-cost housing after certain grace period to ensure the ownership and tenancy of government housing fall into the right hands.

By addressing the current leakages and with the identification of the right target audience, the issue can be quickly resolved.

Our new government plans to set up an online platform for application of affordable housing in the future. This would be an effective way to gather market demand based on the actual requirement and ensure greater transparency in the allocation process.

In addition, the government promises to build one million affordable homes within 10 years. It also suggests the housing price for the B40 group (with a median monthly household income of RM3,000) to be around RM60,000, and equipped with basic facilities such as a park and a community hall.

Based on the contributing factors of housing development which include land, the approval process and resources, only the government can build houses at the price of around RM60,000.

Only the government can gather land bank through compulsory land acquisition of agriculture land, then to convert the land for housing development, and increase housing projects with public funds.

As taxpayers, I believe we are more than happy to help elevate the living standards of the B40 group knowing very well that our money is well-spent in making a difference for the future of our nation.

I applaud the new government for taking the bold measures in putting things in order, and walking the talk by planning for more affordable housing.

Offering affordable housing and a comfortable living environment are essential criteria in building a sustainable future for our country. Whenever the government announces more constructive measures and makes things more transparent, the market environment becomes more optimistic. With this confidence, the Rakyat will be more than willing to do our part as taxpayers to achieve the common goals for the benefit of all.

Food for thought Alan Tong

Datuk Alan Tong has over 50 years of experience in property development. He was the World President of FIABCI International for 2005/2006 and awarded the Property Man of the Year 2010 at FIABCI Malaysia Property Award. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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