Businesses should be more active in engaging the public.

Kuala Lumpur, 26 Aug 2015 – IDEAS Chief Executive Wan Saiful Wan Jan this morning delivered the keynote speech at the “US-Malaysia Commercial relations” conference. This conference is jointly organized by the American Malaysian Chamber of Commerce (AMCHAM), the National Chamber of Commerce and Industry of Malaysia (NCCIM), and the U.S. Chamber of Commerce. The conference was held in conjunction with ASEAN Economic Minister’s meeting, aimed at gathering key Malaysian Government leaders, prominent private sector personalities from the U.S. and Malaysia to promote and strengthen economic integration, particularly through the ASEAN framework and the Trans-Pacific Partnership Agreement (TPP).

The conference was held at the Grand Hyatt Hotel, Kuala Lumpur. Further information can be found attached.

The full text of Wan Saiful’s keynote speech can be found below.

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Keynote Speech by Wan Saiful Wan Jan
Chief Executive of IDEAS

at the conference on
“U.S.-Malaysia Commercial Relations: Enhancing Economic Integration

Wednesday 26 August 2015

Organised by AMCHAM, NCCIM, and US Chamber of Commerce

Good morning,

Thank you to the organisers for giving me the opportunity to speak here today. When I first received the invitation, I thought they made a mistake. Compared to the many luminaries in this room, I am a nobody in the world of big corporations. But I thought I would give it a go. So let’s see if the organisers would live to regret their invitation.

Let me start by making a few points to introduce what we do at IDEAS. IDEAS is a pro-market think tank. Not pro-business. But pro-market. It is important to make that distinction because businesses are not necessarily pro-market. Just look at the many monopolies that exists in Malaysia today, mostly creatures created or supported by the government, and you will realise why I distinguish between being pro-market and pro-business. Not all businesses like free markets.

Since I am talking at an event involving the American Malaysian Chamber of Commerce and the US Chamber of Commerce, maybe the easiest way to introduce ourselves is by saying that we are very friendly with organisations like the Cato Institute, the State Policy Network, the Manhattan Institute, the Global IP Centre, and many more. So now hopefully you know where I am coming from.

In terms of the work that we do, we run activities similar to many think tanks around the world. We conduct in-house researches, we publish policy briefing papers, we hold events, we conduct media campaigns, and we talk to policymakers. Today, we work on issues related to the political economy and governance, education as well as ASEAN integration. Small team. Just 21 people on our payroll.

Ladies and Gentlemen,

My topic is the TPPA: Seizing the opportunities, losing the myths.

Let me get straight to myth number one.

Many people in Malaysia today, when they look for people who support the TPP, they come to us. The assumption is that we support the TPP. I want to make it clear that this is a myth. We do not support the TPP. How can we support something that we do not fully know about and has not yet been finalised.

My real position is that I support Malaysia’s participation in the TPP negotiations. I think it is extremely important that we continue to negotiate. It is important that we stay all the way to the end. It is important that we do not lose this once in a lifetime opportunity to shape a landmark global trade agreement. We must not let others shape this agreement, but we must be part and parcel of the whole process.

And once we have come to the end of the negotiation process, then only we can evaluate if the compromises that have been made by all the countries are good enough for us as a country. Only once the full text is known can we decide whether we should support, or we should oppose the TPP. That is a major decision to make and we certainly cannot make that decision without knowing the full and final text.

This is why I think those who oppose the TPP are wrong to demand that Malaysia withdraws from the negotiation now. They make these claims under the assumption that our negotiators are incompetent, stupid and want to sell off our country to America. This is typical paranoia from those who lack confidence in the ability of their own people. They don’t think our negotiators can extract the best possible outcome from the negotiating table. I completely disagree with this assumption and I think this is insulting to the intelligence of our negotiators.

So if we, Malaysia, really want to seize the opportunity, then we must persist in the negotiation and make the most out of it. Yes we have to give, but I am sure we will also take. That is the nature of negotiations. And once everything is known, then we can decide. Until we know the full content of the agreement, I suggest you too should not blindly support or oppose.

The second myth I want to address is the idea that it is in the full interest of our political leaders to sign the TPP. In reality, if you look at the developments today, it is actually not in the interest of people like Minister Mustapa Mohamed or Prime Minister Najib Razak to sign the TPP. It is a myth that the TPP is good for them.

To explain that, we have to understand the current political scenario.

It is a fact that the Prime Minister and his whole government is facing a major crisis at the moment. The ringgit is tanking. The level of trust in government is probably at its lowest. Many people are talking about how it would be better for the country if Dato Sri Najib resigns today. But at the same time they are also uncertain if they really want that to happen because it is not clear who could be the replacement and the replacement could be an even bigger disaster. In short, we have a political crisis that is slowly and quietly boiling in the background, threatening to bring about an economic crisis. But the underlying problem is a crisis of confidence in government.

If you are a Prime Minister grappling with a major trust deficit, what would you do? Well, the first option is to fix that trust deficit by admitting the problems, telling the truth, and reconciling any differences you may have with your adversaries in a calm and rational way, so that you do not push the country into further abyss.

But that is not what’s happening in Malaysia today. Malaysian politics is built on populism and loyalty, not intellect. To quote our dear leader Mr Prime Minister, on 1 August in Seremban he was reported to have said“I will evaluate people based on their loyalty. There is a lot of smart people around but to find those who are loyal is rare.” So loyalty over intellect is the mantra of the day. This is most unfortunate but I am afraid this is true when you talk about politics, not just in Malaysia but everywhere. And I want to add that another important factor is popularity.

Unfortunately in Malaysia today we are in a situation where, if the Prime Minister and his cabinet want to regain a little bit trust from the people, and want to be a bit more popular than where they are now, one of the things they can do is to reject the TPP.

Let us make no mistake. The opposition to TPP is very strong and they come from many vested interest groups. Most of the arguments are circumstantial and emotive. The main argument among the lay critics centres around how the TPP is a tool of American imperialism. You bring that to the grassroot level in rural areas, the argument transforms into the TPP being a tool to remove the special privileges enjoyed by the Malays and Muslims in the country, engineered by America. Yes, I know that is a silly argument and it pains me even to say it. But to many people that is a red line that must not be crossed and therefore anyone who fights off this threat is a hero.

Unfortunately, this brings us back to the problem of the trust deficit suffered by Prime Minister Najib. If he wants to regain the trust and become popular again, one of things he could do is to go to the people and say “I have listened to you and I will not sign the TPP.” Just imagine how many critics can be silenced by that action and how popular he will become. It might be bad for the economy but it is good for survival.

So, ladies and gentlemen, the reality from a political perspective is, with the current political scenario, it is in the political interest of Najib and his administration to surrender to the critics and withdraw from the TPP. He may know that economic liberalisation and further integration into the global supply chain is better for the country, but it is a myth that politicians always have the interest of the country as their top priority. For any successful politician, the top priority is to survive. And looking at the environment in Malaysia today, survival may mean withdrawing from the TPP. Sad.

That brings me to third myth, and that is the myth that, you, as businesses can get what you want simply by talking to the government.

Before setting up IDEAS in 2010, I lived in the United Kingdom for 18 years. The last 4 years of my stay in the UK, I worked in the Research Department of the British Conservative Party. And there I saw how active businesses are in engaging the public.

There, businesses through their trade associations and lobbying organisations actively campaign in the media. They regularly organise events to tell the public their concerns and lay down their suggestions. They work with think tanks to conduct studies on particular issues. They support various civil society organisations campaigning for reform and improvements. They meet with political parties and political leaders of all sides to voice their opinions. And many more.

In short, businesses in more developed countries know that in order to shape public policy, it is not enough to just talk to government. They must actively go out there and challenge the anti-market sentiment, because they know all politicians respond to public pressure. In more developed countries, businesses know that politicians very rarely lead, because politicians are really followers of public sentiment.

But when the same businesses come to developing countries, they suddenly change their views on politicians and change their strategies on how to shape public policy. They don’t engage the public and they don’t speak up. But they request private meetings with politicians and senior civil servants. Somehow, on the flight from Washington DC to Kuala Lumpur, they transform from believing in the power of public pressure to believing in the benevolence of the dictator.

So let me tell you this. It is a myth that politicians here are different from politicians there. They are just the same. They respond to public pressure too, and the best way to create sustainable permanent betterment of public policy is by convincing the public first. Or at the very least convincing the public parallel to convincing the policy makers.

The TPP has suffered from this failure of the business community to engage with the public. It is extremely frustrating that we are IDEAS are almost the only voice calling for liberalisation and the opening up of our economy. I have no idea why I continue doing it when the people who would benefit from it, i.e. many of you here, seems not to care. But what we see is huge public pressure against the TPP, and no one strategically countering those pressure. What we tend to do is to talk among ourselves rather than going out there to persuade and debate the “other side”. And then we pretend to be curious about why is there so much misunderstanding about the TPP. The answer is because we have not actively gone out there to provide the people with real information.

So, ladies and gentlemen, if there is one lesson that can be learnt from the TPP saga, it is that you as a business community must very quickly change your strategy when dealing with public policy and policymakers. It is no longer enough to just talk to those in Putrajaya. You need to do what you do in Washington DC, in London, in Berlin and so on. You need to engage the public and you need to support the growth of pro-market campaigners. I am not saying you need to support IDEAS (although of course that would be good too), but what I am saying is that I really hope there will be more organisations like us, complementing our work and filling in where we are weak. Learning from this TPP saga, that is the true opportunity that can be seized by businesses.

Thank you.

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The agenda of the event can be found US – Malaysia Commercial Relations Conference Program

1 Comment

  • KE 2015 Aug 27 / 00:39

    Bullshit! Wan Jan needs to stop bullshiting Malaysian as Najid does!

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