Interview #1: Presidential politics and Indonesian palm oil

We've been chatting with Malaysia and Singapore palm oil industry specialists and noticed significant interest in the upcoming Indonesia Presidential vote. Early in the week, we had the opportunity to talk to a Khor Reports reader who was interested to talk about it, and so we present to you this interview. 

Political changes can bring major shifts in resource development policies as well as a different approach to NGOs such as seen in Australia. On the buy side, in major consuming countries, we should note the rise of right wing nationalistic parties who gained more power especially in the European Parliament.

Interviewee #1: Indonesian voter, palm oil industry senor manager, who was part of the student demonstrations in the 1998 ousting of Suharto. A Jokowi supporter.
What do you think of the recent poll numbers?
What's an important issue in Indonesia elections?
What is Prabowo's plaftform?
What does Jokowi stand for?
How did the 9 June debate go?
What are the implications for Indonesia palm oil?
So there's concern in Indonesia about foreign influence amidst nationalistic feeling?
 

Johor-Iskandar & Malaysia power shifts (update 1)

I was seated at the window seat on a flight from KL to Singapore. Over southern Johore, the plane made a nice flyover from the western part over Tanjung Pelepas toward the eastern end of that part of the state. Just east of Syed Mokhthar's container port (and a bulking terminal across from it) was a lot of red-brown earth cleared areas for property development in the core Iskandar area. The same could be seen in the Danga Bay area between that and Johor Bahru town. Just north of that was suburbia with lots of homes laid out.

Just east of Johor Bahru were some red-brown earth scars of land leveled for building (but a lot less than in the core Iskandar zone) and further east were palm oil plantations and replantings of those areas. Toward the far eastern area was again large areas opened for development - presumably for RAPID. It was a great fly over, I wish the airline would have allowed me to take more than a few shots, but the policy is to switch off devices for the landing. 

It looks like Johore development is proceeding to complement 
Singapore's need for more northern space and arguably in competition with ports and oil and gas infrastructure.


 Flying over core Iskandar - Medini zone and Johore suburbia


What's hot in the news in Malaysia are some interesting moves for more participation in state administration by the Sultan of Johor. Other Malaysia states are in the news with recent kerfuffles in Terrengganu, about increased oil royalties and on East Malaysia. 

Some commentators are wondering about an apparent shift in state versus federal negotiation power. In opposition land, there are also questions on its leadership power over Selangor issues on water, controversial road construction, religious administration and more. At the recent Teluk Intan byelection, Chinese ruralfolk delivered a massive negative 15 percentage vote swing in a political revolt against the efforts of the DAP leadership. 

It would seem that traditional political leaders have lost some of their powers to state and local actors at this point of the political cycle. What next?


News links

Johor housing Bill to be amended; Updated: Sunday June 8, 2014 MYT 5:11:38 PM; http://www.thestar.com.my/News/Nation/2014/06/08/Johor-housing-Bill-to-be-amended/
NUSAJAYA: The Johor Housing and Real Property Enactment Board Bill 2014 will be amended to include a provision that the Sultan is to act on the advice of the Mentri Besar.... The amendment, which reads “role of the Johor Ruler is on the advice of the Mentri Besar”, was announced by Mentri Besar Datuk Mohamed Khaled Nordin during the state assembly sitting here, Sunday... Khaled said that other clauses in the Bill which mention the Johor Ruler would be changed to “state authorities”.... The Bill is expected to be tabled at the state assembly sitting on Monday....It had been reported that the Bill would empower the Sultan to appoint JHRPB members, oversee its accounts and also dissolve the board.... It is understood that the Johor Ruler would also be able to determine the remuneration of board members, approve the appointment of a director and pass the estimated expenses for each following year before seeking the state government’s approval for the allocations....

ECB unprecedented move on negative interest rates

This seems part of the "low political cost" policy recommendations from Krugman and others to take strong unorthodox measures to boost aggregate demand, to get the economy going back to growth from its rut. Read my posting on the Krugman talkbi attended here: /khoryuleng/2014/05/krugman-on-need-for-growth.html. Thus this might seem a belated move to many such economists.

I just had dinner with a friend who's a senior KL banker. She's a bit worried in the shorter term that the VIX volatility index is low, indicating market complacency. We talked about how it seems necessary to boost aggregate demand for employment creation and such; but the low rates policy of the last few years has just fed into non-productive sectors such as financial trading and investment, property and the like with nary a curb on the property sector in many countries. Thus, in Malaysia it seemed a good thing that BNM has been trying to curb the property sector - albeit with some major developers trying to be exempted e.g. in Iskandar Malaysia (here, there is talk of higher price hurdle for foreign buyers but I wonder if big property project owners will allow that).

I'm just a bit concerned about the unintended consequences of what is seemingly the extension of a well-intended policy. Policy making seems controlled by political-rich business interests. They have seemed hardly inclined to put in holistic policies to funnel all the QE money into the right direction. Are they doing things any differently this time with negative rates? The market neo-liberal hegemony is pretty strong.

I've been reading the latest Michael Lewis book, "Flash Boys" that talks about how smart people in the financial sector play and direct regulations to their benefit. I've been analyzing sustainability certification in commodity supply-chains - this is also another regulation that gets linked up with commercial interests. Regulations of increasing complexity benefit those who are able to figure them out and work them to their benefit i.e. mostly the richer companies. Do we end up with a better world as a result of this? In food regulation, I just read a Time.com piece that said that business interests have managed to get pizza defined as a vegetable in the US! Read this: How Sugar Went From a Condiment to a Diet Staple http://time.com/2812756/how-sugar-went-from-a-condiment-to-a-diet-staple/.

The common feature in all of this: well-intended policies seem to just keep getting hijacked by interest groups and big business. The outcomes end up rather unexpected if not even paradoxical.

I wonder whether this extension of a less than successful economic policy will get us nice job creation for the man in the street or whether it's just another round of asset price pumping for the rich. If the policy has not been well implemented, does escalating it work? Is the policy itself wrong? Is there a structural problem in policy making and more?

Hope it works out successfully in short time so we can get back to regular policy. Time for you all to go out and spend and invest in property, art, wine or whatever... just take your money out from the bank and get it moving ! Just so long as you're not an ageing pensioner...

Update, comment from reader who is from the Asian business sector: "yup.. we are in a crazy crazy world... borrowing money is now better than savings... the world's best brains are telling us all."

................

ECB Announces Measures to Boost Bank Lending
The European Central Bank said it will introduce a series of measures designed to boost bank lending and head off dangerously low inflation, after announcing a series of interest-rate cuts.
Among the initiatives announced by ECB President Mario Draghi were targeted long-term refinancing operations, which will give banks access to low-interest-rate loans.
The euro plunged to a four-month low against the dollar after the ECB announced the package, falling 0.7% to $1.3503 from above $1.36 before the central bank's rate cuts, while European stocks rose to a fresh six-and-a-half-year high.

source: Bloomberg.com
Bloomberg.com news links:

Interview: Wong Chen on electoral politics in rural Malaysia and Teluk Intan

An exclusive interview with Wong Chen, Parti Keadilan Rakyat*, Member of Parliament for Kelana Jaya, Selangor, 5 June 2014.

Some background and other views on Teluk Intan by-election here: /khoryuleng/2014/05/dap-suffers-loss-at-teluk-intan-by.html

*Parti Keadilan Rakyat is led by Anwar Ibrahim, the de facto leader of Pakatan Rakyat, the opposition coalition that includes the Democratic Action Party (DAP) and Parti Seislam Malaysia (PAS). DAP has long been Chinese controlled and oriented, and is strong in the urban sector, benefiting from malapportionment just as BN-UMNO benefits in the rural sector. PAS is an Islamic party and it is strong in NE Peninsular Malaysia. In the 13th General Election (GE13) on 5 May 2013, the opposition won the popular vote but BN-UMNO retained power, particularly by falling back into its semi-urban and rural strongholds, substantially losing power in the urban sector.

Q: Teluk Intan; what is your take on the semi-urban and rural voters?
First off, I wasn’t in Teluk Intan for the by-election. So my comments here are mostly based on news and feedback from politicians who were there. I also speak from my experience campaigning in rural Bentong, Pahang. 

I spent a year and half, from 2011 to 2012, working the ground. Bentong is about one hour north of Kuala Lumpur by highway. This is a semi-urban and rural constituency with similar demographics to Teluk Intan, with 47% Chinese voters, 42% Malay voters, 8% Indian voters and 3% Orang Asli voters. It is a large parliamentary seat with four state seats (DUNs) and several FELDA settlements. The bulk of the Chinese are in Bentong town along with a sizeable Malay population of civil servants. In addition there were also a lot of small rural Chinese villages. Indians were mostly living in rubber estates and in towns.
I campaigned everywhere, getting to know the imams, village heads, estate workers, Chinese local tai-kors. I organised friendly football games to get to know the youth in the Felda settlements. This attracted the entire village to come out to watch the game. I also attended weddings and funerals. I like to believe that I got to know the social structure of the place quite well. The first six months was exploratory and I fumbled around, but subsequently the villagers believed that I was there for the long haul and started to welcome my visits.
 

Q. It sounds like you were intended as potential “parachute” candidate. How did the local politicians take to that?
I was asked by PKR HQ to contest in Bentong, to take down the MCA leader (then deputy leader) Liow Tiong Lai. They chose me because I am a Chinese with a Kelantanese background. Liow himself is from Melaka. My Kelantanese creds was supposed to give me a swing of Malay rural voter support.

However, I found myself spending 60% of my time fighting local PKR and local DAP politicians who really disliked the fact that I was “parachuted in.” I was even physically threatened by some PKR people. It was all a bit funny, in retrospect. DAP and PKR in Bentong had been fighting tooth and nail for years over which party should contest in Bentong. My presence had united them. For the first time ever, they worked together- but to get rid of me!
In contrast, the PAS team was supportive and proved to be genuine ally in my efforts to engage with the people of Bentong. Eventually, this 2008 PKR seat went back to DAP in 2013 and Wong Tuck (not a relation) stood as the candidate and lost. I was sent to Kelana Jaya and won. I am happy to be serving in an urban area and I still have fond memories of my time in Bentong.
 

Q. How were you able to engage with Malay and Chinese voters in Bentong?
First, you need local introducers to take you to the people of influence. You need to make deep connections with them. Not just superficial ones. This can only be done by spending time to dine with them, attend their functions, and by talking to them one-on-one. Once you convince this person - be it the village head or local boss - that you are genuine, they will then take you to meet the village. It takes about three visits to break the ice.

Malay rural folk are shy at first. They are wary of strangers, more so than urban people. They have their own way of doing things – certain mannerisms and etiquette. They shake hands in a gentle way. I had to relearn a few basic things – to speak in a softer manner, not to be so direct, to eat with my hands, and to greet people in the proper manner. Since I am unable to talk much about Islam, I chose to socialise with them by playing football.   
In the rural Chinese villages, the local guys are quite rough, and I used a different approach. For the Chinese kampungs, I will walk into the local coffee shop and start debating. You need to have a straight forward approach when dealing with them. You need to swear, spit and laugh. On my second visit, the folks there bought me drinks. The bantering is crude but they liked the fact that I was extremely direct and unpretentious.
 

Q. What political logistical issues do you see in a semi-urban / rural constituency?
Time. You need a lot of time. And you need to use of a 4-wheel drive vehicle to get around. You need a driver and a team. Getting to a rural Felda settlement in Chemomoi took me 3.5 hours from KL. To-and-fro, that’s 7 hours travelling and you have 3 hours to do some work to engage the public there. So, when I didn’t have the support of Bentong local PKR politicians – it was hell. I was coming home way past midnight because the Malay kampong ceramahs start at 9pm, after prayers.

Clearly, you also need money – for the driver, car and team. Moreover, rural folks expect you to come with an entourage (“rombongan”) to prove that you are a big man and hence, electable. This means that you have to pay for three cars to accompany you. Initially I advanced money for fuel and food and nobody showed up! It is imperative to build a reliable local team. It took me close to a year to get the team together. So in the Teluk Intan case, and everywhere else, you cannot parachute in for two weeks and hope to win over the hearts and minds of the people.
 

Q. What do you think drives non-urban Chinese voting behaviour?
Chinese folk in Bentong are worried about their illegal land status. They worry about the prices of rubber and palm oil. Most are relatively comfortable – that’s why they haven’t left the village. They make decent income and they await the return visits of their children from the cities during holidays. They hardly interact with other races. And when they do, it is mostly on a friendly basis. They do not see national issues, such as Hudud to be a reality in their life. Conceptually they understand, but they do not see it as part of their world. Hence, I don’t think it is a deciding factor in their voting. More important to them are basic economics and wanting to maintain a peaceful life. They wile away their time with minor vices – mah jong and illegal 4D betting. Some like to fish. Most like to talk about politics – contrary to their laidback life, they are very well informed. So I would say economics first then other issues. In a non-contentious economic cycle year, then it all boils down to whether they like you or not.


Q. What are important issues for non-urban Malay voters?
In a candidate, they seek someone who is one of them – a local, a Malay of some standing and from a good family. I leveraged on the fact that my father is a Datuk. Therefore, they assume that I must come from an important family. A candidate with a large network of family ties will guarantee a rural win. So, if you don’t come from there, you better be the best friend of the guy there with the biggest family network.

Malay voters are also worried about palm oil and rubber prices. About 30% are religious and the rest are just normal folks. Most are also well-informed about national politics. A typical Malay Felda smallholder is in his early late 50s to 60s. He has Indonesian workers that he will send to work on his farm from 8am and pick up at 2pm. He is free to chat with other 60 year olds from 9am to 2pm every day. They are professional conversationalists. When I was there, the biggest topic was Sharizat’s cow scandal. They loved to hear my views and bought me drinks. They are generally a happy lot. They were earning around RM3,000 per month. Palm oil and rubber prices were good. The biggest impact that I made on them was to show them a video of the Bersih 2.0 rally with the police beating the protestors. At a ceramah, they requested that I replay the 3-minute video in a continuous loop, about 10 times. I believe they are not prone to sensational images, but I really connected with them on the basic issue of fairness and justice. They will elect you if they like you, and they will tell their friends to elect you. They liked a Chinese who could speak Kelantanese and could eat with his hands.
 

Q. Given your knowledge and experience of the above, how do you interpret the Teluk Intan by-election outcome?
Teluk Intan was a gamble by DAP. They have a national agenda to attract Malay members and voters en masse, contingent upon Dyana winning. Mathematically with a 7,300 majority, DAP should not have lost. The unintended consequence of this election is DAP had given a new lease of life to Gerakan, giving them a ministerial post to their president. 

Based on my own experience in Bentong, my suspicion is the local DAP team were not fully on board. They probably did not do enough to ensure her victory. This doesn’t mean that this was deliberate, but likely that there was not enough local buy in. Local folks are also suspicious of snooty urbanites telling them what to do. I suffered hell in my early months in Bentong only to find out 6 months later that I had not “asked permission” from local warlords in the proper manner. I was accused of “tak beri salam” before starting work in Bentong.
I personally believe that the DAP election team would have performed better under the guidance of the likes of YB Liew Chin Tong, who is humble, hardworking and understands rural folks. In GE13, he proved himself by capturing several Chinese rural seats in Johor.  

Being a parachute candidate, Dyana shouldn’t be supported by a parachute election team. Only the locals could introduce her and get her the needed support. She had a national image campaign and became a media darling. Unfortunately, the media fawning did not translate to localized support. So, the campaign team will have to bear responsibility. I thought she worked hard, kept her composure and smiled a lot. To really ensure rural victory, you just have to clock in the time with a slow-slow approach and you have to work on the personal touch. In other words, was Dyana embedded there months earlier, when YB Seah became very sick?

Q. Some people ask if rural Chinese are unable to vote for a young Malay girl. What do you think?
Sadly, racism and racist attitudes define Malaysia. The Chinese do not have an absolute moral high ground on this matter. It is pretty clear from the numbers that race was a factor. The Chinese majority seat will prefer a Chinese representative. Is that racism? If we turn the tables around, we have to ask if a Malay majority seat would want a non-Malay candidate.

But I don’t think rural folk are more prone to racism than urban folk. If DAP had fielded a well-regarded local Malay personality, someone from Teluk Intan, I suspect the results would have been better. Whilst the “local boy” factor does not mean much in the urban setting, it means the world in a rural setting.
I will venture to guess that Dyana’s Achilles heel emerged at the very late stages of the election campaigning – Perkasa. Her mother was exposed as a founding pro-tem committee member of Perkasa and Dyana herself helped her mother with memberships. I suspect that her initial denial and subsequent admission let a lot of DAP loyalists down. There was talk that the revelations shook the core cadre of the local machinery. After all, many KL-ites were also questioning her past and asking why no thorough background checks and/or early disclosures were made.
 

Q. Was Hudud a factor?
Hudud is being pursued by both PAS and UMNO via the so called joint study committee. Dyana was against Hudud. So if Hudud was a factor, logically she would have gotten more Chinese votes. For the Malay campaign, I was told that DAP relied heavily on PAS’s machinery. There was talk that PAS did not really want to support an anti-Hudud and non tudung wearing candidate. However, the numbers do not support this theory because the Malay votes actually increased a bit. I was told that the projected percentage Malay swing was 6% but she only managed half at 3%. I think it is somewhat unfair to blame PAS for this shortfall. Ultimately the DAP election team has to plan and execute according to the political landscape.

Rural folks and Hudud? Are Malay rural folks more religious? I really don’t think so. It is true that religion is a very big part of their lives but it does not necessarily translate to votes. If all rural folks were religious, PAS would be in Putrajaya today. Rural folks are primarily and largely economic driven. Whilst they are not buying Bursa stocks and pondering about derivatives, they worry about real economic issues of inflation, the price of fertilisers and what their rubber and palm oil will get them.


Q. What has the Opposition learned from Teluk Intan and how do you move forward?
We need to go back to basics. We need to defend our urban seats. This means good governance and better delivery. Walk the talk. Selangor needs to buck up. Most importantly, Pakatan Rakyat needs to stick together and not take divisive positions. It is crazy that having won the popular vote, we are now acting as if we had failed miserably in GE13.

Moving forward, to win Putrajaya, we need to win some 30 rural seats. Teluk Intan taught us a few things. Local candidates are best. Try not to parachute in a candidate for a rural seat. If you do, you need ample time to settle in. You need local support and in lieu of that, you need resources to build up a fresh election team. There are no real vote banks in Peninsular rural areas. That being the case, it means that all seats are in fact winnable. The team that plans well, works well and works hardest will win.
An exclusive interview with Wong Chen, Parti Keadilan Rakyat, Member of Parliament for Kelana Jaya, 5 June 2014.

Some background and other views on Teluk Intan by-election here: /khoryuleng/2014/05/dap-suffers-loss-at-teluk-intan-by.html

Khor Yu Leng has researched and written about the political economy of Felda and Johor-Iskandar and voting outcomes in GE13 (with a focus on rural voting behaviours). Some highlights here: /khoryuleng/2014/04/malaysia-political-economy-of-felda-and.html. These works will be published in an academic journal and two books in 2014-2015. She was Visiting Fellow at the Institute of Southeast Asian Studies in 2013. She is married to Wong Chen.

Political news on anti-globalisation trend?

In Europe

In UK, the big vote for Ukip in the European elections is notable:

France: Front National's success not surprising to heartland supporters; http://gu.com/p/3ph95

European Stocks Brush Off Election Results - WSJ.com; http://m.us.wsj.com/articles/SB10001424052702304587704579585273906888720?mg=reno64-wsj

Video - The Rise of the Euroskepti​c Right in Europe - WSJ.com; http://live.wsj.com/video/the-rise-of-the-euroskeptic-right-in-europe/2D6EF382-F8C0-4FB7-B379-DCA54004482D.html?mod=djemTEW_h#!2D6EF382-F8C0-4FB7-B379-DCA54004482D


In Southeast Asia

Singapore: New Singapore political party to be announced; https://sg.news.yahoo.com/new-singapore-political-party-to-be-announced-002557100.html; Ex-presidential candidate Tan Jee Say will be announcing the registration of a new Singapore political party on Sunday.The 60-year-old will be unveiling the 11 founding members, party logo and manifesto, according to an email to the media. More members might be recruited before the next election.  Tan ran for the general election in 2011 under the Singapore Democratic Party. He was also the principal private secretary to the then Deputy Prime Minister Goh Chok Tong.....  Tan's Radio Australia interview: http://www.radioaustralia.net.au/international/radio/program/asia-pacific/singaporeans-first-aims-to-be-a-political-force-for-the-people/1317288



Malaysia: Discovery that new young Malay candidate of the DAP (Chinese-controlled party in opposition coalition) has previously, while her mother was involved with Perkasa# helped out at this important ultra-right Malay nationalist group; http://www.themalaymailonline.com/malaysia/article/daps-dyana-admits-helping-mum-with-perkasa-drive. Thus, her apparent swing from Perkasa to DAP is apparently a remarkable political epiphany. Here's an almost advertorial-looking piece on DAP's Dyana Sofya: http://www.malaysia-chronicle.com/index.php?option=com_k2&view=item&id=290171:a-new-political-star-in-malaysia-dyana&Itemid=2#axzz32sMqzfjB with a super slick photo (below) to go with it. The Malaysia media has up till the Perkasa revelation been extremely good to her. Dyana Sofya: From UMNO supporter roots to DAP rising star (2013; Lim Kit Siang's political secretary): http://www.youtube.com/watch?v=8s5AXfXx9t8. She is expected to win and become the new (opposition) MP for Teluk Intan, Perak. 



#http://en.wikipedia.org/wiki/Perkasa: "Perkasa is a non-governmental Malay supremacy organization that was formed by Ibrahim Ali in the aftermath of the Malaysian general elections in 2008. This conservative, extreme-right, ethnic Malay organisation is led by its president Ibrahim Ali, with Tun Dr. Mahathir Mohamad, the former Prime Minister of Malaysia, as advisor. The group claims to have a membership of 420,000, though outsiders estimate the actual figure to be much lower. There are substantiated allegations that more than 60% of its membership consists of UMNO members." Accessed, 27 May 2014.