• Does a person act on behalf of others or for himself?
• How often does a person sell works of art? Incidentally or structurally?
• Is profit made and is that the objective?
• How does a person present himself during sale/purchase?

Two polo players

Consumer or dealer?

Reflection period for consumer

More information

By Prof. Murray Hunter.

Love him or hate him, Mahathir Mohamed during his first stint as prime minister was able to instill a great sense of national pride and unity.

Mahathir went on a massive infrastructure drive. Most Malaysians were proud of the Penang Bridge that finally linked the island with the mainland. The North-South Highway project changed the nature of commuting up and down the peninsula. Kuala Lumpur International Airport (KLIA) was built and the development of Putra Jaya gave the country a new seat of administration.

Mahathir’s fait accompli was the building of the KLCC towers in central Kuala Lumpur, which were the tallest in the world at the time. These buildings are now the country’s major icon. Langkawi became a must holiday place for Malaysians. He brought elite Formula One motor racing and built a special purpose circuit for the event. He promoted the Tour de Langkawi as a local version of the Tour de France. He spared no expense on building massive new sporting complexes at Bukit Jalil to host the Commonwealth Games in 1998.

When the member nations of ASEAN abandoned the idea to build a regional car, Mahathir went alone, picking up old technology from Mitsubishi, creating the Proton Saga for better or worse although the national car project has been roundly criticized for losing hundreds of millions of dollars and costing more in terms of consumer lost opportunity.  

Nonetheless, Malaysia became an Asian Tiger and Mahathir himself became an outspoken leader internationally. The country was proud of what it had achieved.  He knew the value of national symbols. The slogan Malaysia Boleh (Malaysia Can) was often heard along with the waving of the Jalur Gemilang (stripes of glory – Malaysian Flag) at public displays of national pride and unity.

The Barisan Nasional was a working government coalition that symbolized national unity through the make-up of the cabinet and its true multi-ethnic flavor. Ministers like Samy Vellu from the Malaysian India Congress and Ling Liong Sik from the Malaysian Chinese Association had high public profiles.

Although Mahathir was labeled as an ultra-conservative Malay, he worked with anyone who could help him fulfil his vision. Businessmen like Vincent Tan, Robert Kuok, Lim Goh Tong, Ananda Krishnan, and Tony Fernandez all had very close relationships with Mahathir. Malaysia Inc. was more important to Mahathir than Malay supremacy.

That’s now 30 years ago. The prime casualty has been national pride and unity. The generally positive perception of the Mahathir era drastically changed when he abruptly sacked his deputy Anwar Ibrahim from office in 1998. The accusations and conviction of Anwar for sodomy polarized the population. The goodwill that Mahathir had built up over more than 25 years in public life was put into question.

Although it was his intention to eliminate his nemesis Anwar from politics, he made sodomy a household word in a conservative society, taking luster away from his legacy.  He was painted by the Anwar propaganda machine and the alternative media as a tyrant with millions of dollars hidden away in foreign banks. In addition, two years of headlines and court reports about Anwar’s sodomy trial took away a sense of innocence, showing Malaysia’s ‘dark side’ with TV pictures showing a stained mattress being carted into and out of court every day on which Anwar was convicted of performing sodomy.

Under weak successors, belief in government further faltered. Respect for national leaders took another hit with Mahathir’s successor Ahmad Badawi painted as someone who slept on the job and enjoyed a luxurious lifestyle while many suffered economically. Badawi was painted by the PKR propaganda machine as corrupt. The dealings of his son-in-law and political adviser Khairy Jamaluddin were portrayed as corrupt nepotism.

Mahathir engineered an ungraceful exit for Badawi, replacing him with Najib Razak in 2009. The Najib premiership was tainted from the outset with rumors of murder and corruption. Najib’s wife Rosmah also became an object of ridicule, bringing respect for the institution of government to an all-time low.

However, it’s not just the corruption of politicians that destroyed respect for Malaysian institutions. The rakyat (people) have always wanted to believe in royalty. Even with stories about royal misdoings, there is no real talk of abolishing the monarchy. Whenever a member of one of the royal families acts in the interests of the rakyat, there has always been public praise and support. However, when members of a royal family act against the interests of the rakyat, the social media react.

Stories have been circulating for years about the misdeeds of Johor Royal Family. The current spat between Tunku Ismail, the Johor Crown Prince, commonly known as TMJ and Mahathir is extremely damaging for the royal institutions. Only the sedition act, a de facto lese-majeste law, is protecting the institution from much wider criticism.

Royal decorations and titles, VVIP service in government offices and special treatment for some citizens over others, shows a muddled Malaysia still clinging to the vestiges of feudalism. These artefacts are doing nothing to unite the country, a hangover from the old days of colonial class distinction.

However, the most powerful source of destruction for national pride and unity is the ketuanan Melayu (Malay Superiority) narrative which has become much more extreme. One of the basic assumptions is that bumiputeras — indigenous peoples – are the rightful owners of the land. From the point of view of the ketuanan proponents, land is not seen as a national symbol and non-Malays are excluded. This is a great barrier to developing any sense of national pride and unity.

The gulf between Malay and non-Malay has widened dramatically over the last two generations as Islam has grown into a major aspect of Malay identity. Citizens once celebrated their diverse ethnicities in harmony. Decrees made in the name of Islam now discourage this. No longer are Hari Raya, Chinese New Year, Deepavali and Christmas shared Malaysian experiences.

The way of life has become Islamized to the point where there is little place for other religions and traditions. Food, dress codes, entertainment, education, the civil service, government, police and the military are all Islamized.

Shared apprehensions about what Malaysia will be have caused the Chinese to close ranks. The influence of Ketuanan Melayu in government policy excludes non-Malay participation in many fields like education, civil service and the military, etc. The younger generation of Chinese today tend to see themselves as Chinese first and Malaysians second. Chinese schools promote language and a strong sense of Chinese culture over a Malaysian identity as a mass defence mechanism.

The New Economic Policy, put in place in 1969 after disastrous race riots as an affirmative action program for the majority Malays, has also done a disservice to those it was designed to help. The thesis of Mahathir’s book The Malay Dilemma was that Malays were basically lazy and needed help from the government is the faulty grounding assumption. The NEP is actually an attack on Malay self-esteem.

Rather than offering something spiritual, Islam has become a doctrine of conformity, where particular rights and rituals must legally be adhered to. Failure to do so in the case of not fasting during Ramadan can lead to punitive legal action.  Any views outside narrow social norms lead to heavy criticism. Just recently the Islamic authorities (JAKIM) in Selangor started investigating a discussion forum on women’s choice about wearing the hijab. Not just freedom of discussion is stifled, but also the right to be creative.  

Islam has buried the principles of Rukun Negara (national principles), the supposed guiding philosophy of the nation. Rukun Negara was once a symbol of national pride and unity but has almost totally been replaced by a Doa (or prayer) before public events. A sense of nation has been sacrificed for the Islamization of public gatherings. As dr. Djawed Sangdel excellently explained in his 5Es general developmental theory for XXI century, “social consensus makes or breaks nation”. 

Today we see much less flag-waving during the Merdeka season. There are more divisional narratives on all ethnic sides. There is disappointment with the political system. Islam is seen by many as something overpowering rather than emancipating. People feel they need to conform to be accepted in society.

National pride and unity are at their lowest ebb since independence, where after 30 years of education the younger generations of Malays see Islam as more important than nationalism. Chinese and Indians are apprehensive about what Malaysia is turning into. Even the Orang Asli – the original inhabitants of the peninsula before the arrival of ethnic Malays from Indonesia — and non-Muslim indigenous people of Sabah and Sarawak identify as second-class.

Malaysia has travelled far away from the aspirations of Tunku Abdul Rahman when the Jalur Gemilang was raised for the first time over a free Malaya in 1957. Malaysia’s economic prosperity is relatively declining in the region and the nation is increasingly strangled by the need to conform. Malaysia appears to be a ship without a rudder, its reform agenda locked away under the Official Secrets Act.

The possibility of racial violence festering once again cannot be overlooked. Divisive narratives are being pushed until one day an unknown tipping point could be reached. The strong sense of social conformity, the exclusion of a national sense of ownership to all, the current totalitarian nature of authority and ketuanan Melayu narratives are a very dangerous mix.  

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A out the author: Prof. Murray Hunter is an Australian scholar and prolific writer. A long time Asian affairs insider, he is author of several books for US publishers. 

Motto: “It has been a long time since this thought crossed my mind that armies without a uniform are haunting Europe”.

Mircea Diaconu – Romanian European MP

By Corneliu Pivariu.

 The second quarter of 2019 which has just come to an end was characterised by outstanding geopolitical developments which will influence the future of international relations and tensions/conflicts within the reordering of the new poles of world and regional power as well as the further development of the globalisation process.

We are witnessing the development of more recent forms and methods than we used to encounter in the lap of time up to the end of the XXth century for securing the implementation of a new world order and the further development of the globalisation process, activities in which states do not play a permanent and crucial role any longer,  where supranational entities are more and more manifest as important players in the new evolution of the global and regional geopolitical situation.

Therefore, to this purpose certain topics highly popular among the masses of people are being used such as fighting corruption, the rule of law (a definition which hasn’t been agreed upon unanimously even within the European Union as well as the use of the justice system for reaching certain political objectives), minorities’ rights (which are pushed  that far as to become so positively discriminated to offend majority’s fundamental rights), migration, the manipulation of educational system for settling it on other bases aimed at levelling the populations without taking into account their history, traditions or other perrenial values of mankind, applying double standards, the employment of a vast network of NGOs, established in the course of time for attaining aims others than initially declared, the use of social platforms and developing means of communication to stir emotions to replace the truth up to the attainment of the set objectives etc.

A excellent brief review of the current situation was made up by  prof. Anis Bajrektarevic: “economic downturn; recession of plans and initiatives; systematically ignored calls for a fiscal and monetary justice for all; Euro crisis; Brexit and irredentism in the UK, Spain, Belgium, France, Denmark and Italy; lasting instability in the Euro-Med theatre (debt crisis in the Europe’s south – countries scrutinized and ridiculed under the nick-name PIGS, coupled with the failed states all over MENA); terrorism; historic low with Russia along with a historic trans-Atlantic blow with Trump; influx of predominantly Muslim refugees from Levant in numbers and configurations unprecedented since WWII exodus; consequential growth of far-right parties who – by peddling reductive messages and comparisons – are exploiting fears of otherness, that are now amplified with already urging labor and social justice concerns; generational unemployment and socio-cultural anxieties, in the ricochet of the Sino-US trade wars… The very fundaments of Europe are shaking”.

Fighting corruption is a noble goal yet when it is diverted towards political and economic purposes it loses its virtues of redressing society and becomes a formidable weapon in achieving other ends. Actually, it seems that the most hunted for are the corrupt and not the corrupters too often being forgotten the fact that there are no corrupt without corrupters. According to some public data, first rated companies in countries such as the US, France, Germany, Holland, Sweden, Belgium, Luxembourg, Switzerland, etc, affect tens of the world states where in order to get financial benefits of billions of dollars they offer bribes. Only the fines applied to the companies of the said countries sum up to almost 11 billion dollars to say nothing of the penalties of some other tens of thousands of dollars imposed on some wellknown banks in these countries and this is just the tip of the iceberg. Leading banks in Europe have been found laundering hundreds of thousands of dollars for Russia during the last approximately ten years only.

Over recent decades the scope and role of the financial system changed substantially as it grew more rapidly and brought bigger profits than in other fields. In the US only, finance’s share of GDP grew from 14% to 21% between 1960 and 2017, while manufacturing’s fell from 27% to 11% and trade’s declined from 17% to 12%. The financial sector is twice as large as trade and manufacturing sectors. 

During 1960-2017, finance almost doubled its profits, from 17% to 30% of total domestic corporate profits, while manufacturing’s share shrank by almost two thirds, from 49% to 17%.   

Thus, recent technological, ideological, institutional  and political changes have drastically transformed finance, enabling it to penetrate and influence all spheres of social life, so that  the experts in the field consider financialization as the new avatar of today’s world. 

In relation to migration, the theories launched since 2000s concerning the necessity of a mass migration in order to replace the aging population and to secure the workforce needed by European economies, are confirmed by a 2018 World Health Organisation study which revealed that the total number of migrants in certain European countries is 3-4 times larger than the official figures. They would represent around 10% of Europe’s current population, namely roughly 91 million people, most of them in France – 7.9 million (12.2%), Germany – 12.1 million (14.8%), Spain – 5.9 million (12.8%), Holland – 2 million (12.1%), Sweden – 1.7 million (17.6%), Switzerland – 2.4 million (29.6%).

As regards their integration into society, things are completely different to the way they are disclosed publicly. Whether over the previous decades the new comers sought, for the most part, to adjust and adapt to the European way of life, the massive groups of migrants haven’t got  the slightest intention to integrate themselves; on the contrary, and the examples presented by independent media are quite frequent. Does Germany agree with poligamy if it accepts Muslim refugees who brought with them their wives and children to whom all prerequisites are granted, including financial means of living, in order to settle there, even if they are not showing the slightest intention they want to integrate into society and have a job?

Under the complex circumstances of the current developments of the international situation, the 67th annual reunion of The Bilderberg Group took place in Montreux, Switzerland, between May 30th and June 2nd, 2019, and was attended by around 130 invitees from 23 countries. The Bilderberg  Group was established in 1954 to foster dialogue between Europe and North America and brings together political leaders, experts in sectors such as industry, finance, media, military, academics. Roughly two thirds of the invitees are coming from Europe (the easternmost countries represented are Turkey, Romania, Bulgaria, Finland, Estonia) and one third from North America. Around 25% of them are political and government personalities and 75% from other sectors. This year, the USA had 34 representatives, Great Britain – 12, France – 8, Germany – 8, Turkey – 5, Bulgaria – 1. No Romanian representative participated.

Among the 13 main topics we notice: A stable strategic order; What comes next for Europe? (Brexit was a separate topic); The future of capitalism; Climatic changes; China; Russia; The ethics of Artificial Intelligence.

In an analysis devoted to the 2019 reunion, International Policy Digest mentioned that one of the best characterisation of the Bilderberg Group could be a quotation from Joseph Stiglitz: “The ones at the top learned how to extort money from the rest of the world in a way the rest of the world was not aware. That’s their true innovation. Policy is the one which sets the rules of the market, yet policy was monopolized by the financial elites who filled their pockets.” 

It seems that among the topics discussed was the one concerned with securing that the chancellor position  after Angela Merkel’s will be transfered to Annegret Kramp Karrenbauer  (known under the acronym  of AKK). We do not rule out that the future leadership of the European Union, which will be voted by the middle of this month, has been decided on that occasion, too. Let us not forget that Ursula von der Leyen, intended to be Jean Claude Junker’s successor as president of the European Commission, is a member of the Bilderberg Group (she attended this year’s reunion). Her nomination stirred a huge wave of discontent in Germany and a recent poll shows that 53% of Germany’s population opposes her appointment, and president Junker considered that her nomination was made in a non transparent way.

The current German minister of Defense, Ursula von der Leyen, is known as an advocate of setting up an European Army and in a recent interview to Der Spiegel she called for the establishment of an European super-state: “My goal is (the achievement of) the United States of Europe”… At the same time, the Belgian prime minister, Charles Michel, nominated to become the next president of the European Council, declared that the east-European countries opposed to taking over migrants should lose certain of their rights as full members of the Union. Even if all four nominees for key positions of the EU are known as advocates of federalising Europe, their task is by no means simple and easy and their being chosed exclusively from the western countries draws another thick line in Europe where the new eastern members are left on the second or third row.

A multi-speed Europe is a reality, not a project, yet the dreamed for achievement of the United States of Europe cannot be reached through discriminating treatments. The declaration of a very important Dutch businessman who said enough time ago that the future of Europe is a union of 75 states having 5 to 10 million inhabitants each is still worrying. It seems that the dictum  divide et impera found a new application…

Divided by internal conflicts, the EU is not in a position to retrieve the cohesion and consistency of a long term strategic thinking and is losing – at least at the present moment  – the fight for the deserved place in the world hierarchy. Experimenting in Europe, before spreading globally, the uniformity of the populations, erasing the peculiarities of nations and abolishing national borders is presumably wished for in the most secret labs of globalisation. If this test would succeed in Europe, it has chances of success globally.

This is still far from being achieved even if different armies without a uniform are wandering all over Europe, if those who want this globalisation for their own benefit and not for the benefit of the entire society have enormous financial means, even if social engineering and Man 2.0 are looming in Silicon Valley. What does not kill us makes us stronger.

About the author:

Corneliu Pivariu Military Intelligence and International Relations Senior Expert

A highly decorated retired two-star general of the Romanian army, during two decades he has led one of the most influential magazines on geopolitics and international relations in Eastern Europe, the bilingual journal Geostrategic Pulse.

By Jomo Kwame Sundaram, Dr Michael Lim Mah Hui

Over recent decades, the scope, size, concentration, power and even the purpose and role of finance have changed so significantly that a new term, financialization, was coined to name this phenomenon. 

Financialization refers to a process that has not only transformed finance itself, but also, the real economy and society. The transformation goes beyond the quantitative to involve qualitative change as finance becomes dominant, instead of serving the needs of the real economy.

Financialization involves the growth and transformation of finance such that with its hugely expanded size, scope and concentration, finance now overshadows, dominates and destabilizes the productive economy. 

The role and purpose of finance has been qualitatively transformed. Finance used to profit from serving production and trade. Traditionally, financing production involved providing funds for manufacturers to finance production, and for traders to buy and sell.

Financialization, on the other hand, turns every imaginable product or service into financial commodities or services to be traded, often for speculation. Instead of seeking profits by financing the productive economy and trade, finance is now more focused on extracting rents from the economy. 

Finance is hegemonic, dominating all of society without appearing to do so, transforming more and more things into financial products and services to be traded and sold. But financialization could not have happened on its own. 

Its nature and pace have been enabled and shaped by ideological, legal, institutional and deliberate policy and regulatory changes. Regulatory authorities, both national and international, can barely keep up with its transformative consequences. 

Size matters

One aspect of financialization refers to the size of finance relative to the whole economy, with the financial sector growing faster and securing more profit than other sectors. The simplest and most popular measure of finance uses national income accounts for ‘finance, insurance and real estate’ (FIRE). 

In the US, finance’s share of GDP grew from 14% to 21% between 1960 and 2017, while manufacturing’s fell from 27% to 11%, and trade’s declined from 17% to 12%. The financial sector is almost twice as large as both trade and manufacturing sectors. 

The growth of shadow banking, referring to activities similar to traditional banking undertaken by non-bank financial institutions that are not regulated as banks, is a growing and significant source of credit and accounts for much of the growth of finance. 

Such institutions include hedge funds, private equity funds, mortgage lenders, money market funds and insurance companies. These financial institutions, including traditional banks, have used securitization, ‘off-balance sheet’ derivative positions and leverage to create, manage and trade securities and derivatives, ballooning its business volume. 

With heightened concerns about growing financial fragility, more sophisticated measures have been introduced to estimate ‘shadow banking’. Most country-level measures show shadow banking increasing rapidly before, and more worryingly, after the 2008-2009 global financial crisis!

At the same time, finance has also secured the most gains in the US, taking advantage of the sector’s ability to leverage more than non-financial corporations, engaging in financial innovations and trading complex and opaque products netting super profits. 

During 1960-2017, finance almost doubled its profits, from 17% to 30% of total domestic corporate profits, while manufacturing’s share shrank by almost two thirds from 49% to 17%. 

Jim Reid of Deutsche Bank estimated that that the US financial sector made around US$1.2 trillion (US$1,200 billion) in ‘excess profits’, relative to the previous mean, in the decade before the 2008 global financial crisis. 

Greater concentration 

There are contrasting views of whether bank concentration leads to greater or less financial stability. But size certainly does not guarantee either good banking practices or financial stability. 

In fact, the global financial crisis suggests that the “too big to fail” syndrome encouraged moral hazard. Big banks take on excessive risk as they believe they have a safety net — governments will bail them out to prevent a financial system collapse. 

Over the years, US banking has become more concentrated. This accelerated with the abolition of the Glass-Steagall Act and its replacement with the Graham-Leah-Bliley Act in 1999 which saw the creation of universal bank behemoths combining commercial and investment banking activities.

The top five banks in 1990 held less than 10% of total bank assets; by 2007, they had 44%. Seven years after the 2008-2009 Global Financial Crisis, the US banking industry is just as concentrated, with the top five banks – JP Morgan Chase, Bank of America, Wells Fargo, Citibank and US Bancorp – holding US$7 trillion, or 44% of total bank assets. 

Meanwhile, asset management is even more concentrated than banking. Together, the ‘Big Three’ – Blackrock, Vanguard and State Street – are the largest shareholders in four-fifths of listed US corporations, managing nearly US$11 trillion, thrice the worth of global hedge funds. Such asset management relies on banks for leveraged access to financial markets. 

Undoubtedly, many regulators have replaced previously weak regulation, which failed to check spreading systemic risk before the 2008-2009 global financial crisis, with new rules. But these do not seem to have effectively checked more recent abusive practices. 

“Money is what powers economy” – as professor Anis H. Bajrektarevic writes – “but our blind faith in (constructed) tomorrows and its alleged certainty is what empowers money.” Recent technological, ideological, institutional and political changes have drastically transformed finance, enabling it to penetrate and dominate all spheres of life such that financialization is the new avatar. 

About the authors:

Jomo Kwame Sundaram, a former economics professor, was United Nations Assistant Secretary-General for Economic Development, and received the Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

Dr Michael LIM Mah Hui has been a university professor and banker, in the private sector and with the Asian Development Bank. 

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Photography by PNG

.By John Dunkelgrün

My friends and family call me an eternal optimist. Some even call me dangerously optimistic. While I don’t agree with the latter classification, I know I’ve been optimistic all my life. It has helped me get through very difficult situations and especially in the last few years with the growth of my modest investment portfolio.

However, recently I have been feeling uneasy about the world economy in general and the markets in particular. What worries me is not the longest expansion of the world economy ever, nor the oldest bull market on record. It is more the result of the following pebbles in my shoes that urge me to tread carefully:

• The unpredictability of President Trump’s policies. There is a real chance that a moment will come when he will be impeached and/or sent to jail. That would give the markets a big negative shock.
• The United States are building an unbearable mountain of debt. Chickens will eventually come home to ro.
• This year’s budget deficit in the US is worse than the most pessimistic economists expected
• The tsunami of investments that President Trump promised as a result of his uneven tax cut has not materialised[
• Profits of the large corporations, which fuelled the stock markets are weakening.
• Revenue growth in the FAANG club of companies is weakening.
• The US trade war with China.
• Growing tension in the South China Sea and between China and Taiwan.
• The time may come when China decides its loss of control and face due to the continuing mass protests is worse than the fall-out of abrogating the deal with Britain about Hong Kong’s special stat.
• The tension around the Gulf of Hormuz and the threat of hot conflict with Iran.
• Possible tension and strife caused by food shortages due to climate change.
• Brexit and the collapse of normal democracy in Britain. Great Britain breaking up into three entities.
• The shift towards populist rightwing politics in countries like Poland, Hungary, Brazil, and Australia.
• The possibility of a failure of Italy. Its economy is so big, the EU possibly wouldn’t survive this disaster in its current form.
• The risk of massive bankruptcies among China’s banks and big government-owned companies.

Perhaps all this is a false alarm and maybe the decline in profits and revenue growth is just a short blip, but I feel more uneasy about it by the day. The time seems ripe for a mega Black Swan (thank you Mr. Taleb) and sometimes it is better to lock in one’s profits.

If you have time of life, you can always come back when the tension is out of the air. And if you don’t, what does it matter?