Excerpt #5 (Last): Two
Black Swans and Many More Dark Crows
Already one
component of the toxic triad – Abdullah Badawi – is gone and no longer heaping
his share of trash upon the nation. As for UMNO, despite being the largest
party and a ruling one at the federal level for over the past half a century,
it never gets a foothold in Sarawak. Of the nine states in the peninsula, UMNO
is permanently wiped off in Penang, Kelantan, and Selangor. If the federal
territory of Putrajaya and Kuala Lumpur were also a state, UMNO would be wiped
out there too. At one time it was also out in Perak, Kedah, and Trengganu.
That leaves
only Najib. My earlier prediction of his premature ending as prime minister
notwithstanding (see “Priority of Packaging Over Performance’” page 119), he is
now secure at the top of the UMNO rubbish heap. To be the unchallenged skipper
of the Titanic is no job security; it
could very well undermine your well-being.
I am always
amazed at the ability of one person to initiate transformational changes. Often
those individuals are the ones we least expect. There is no rhyme or reason for
such individuals to emerge except that they somehow appear at the right time
and place, with all the right people to help him or her do the right thing in
the right manner; in short, the confluence of all the elements and the
alignment of all the stars.
In the
1990s Indonesia was threatened to be ripped apart by its bewildering
centrifugal forces. Today it celebrates its peaceful democratic transition with
a new and promising leader in Joko Widodo. Further east, who would have
predicted back in the 1970s that a diminutive, uninspiring and uncharismatic
Deng Xiaoping would dismantle the handiwork of the colossal but destructive Mao
Zedong?
Further
east across the Yellow Sea, in the 1950s the South Koreans depended entirely on
the spending of the hundreds of thousands of American GIs stationed there. Then
came General Park; today Samsung, Hyundai and LG are global household brand
names.
At the same
time I do not underestimate the ability of one idiot to wreck untold damage
upon a nation while its citizens stand by and let it happen. Nearby there was
Indonesia’s Sukarno, further away Zimbabwe’s Mugabe, and in the not-too-distant
past, Iraq’s Saddam.
Thus I do
not underestimate Najib Razak to do likewise to the great nation of Malaysia if
Malaysians let him. I hope they would not.
Malaysia
suffered through two horrific man-made disasters in the span of just a few
months in 2014. The disappearance of Malaysia Airlines Flight MH370 over the
South China Sea remains a mystery to this day. While we know what happened to
Flight MH17, the question remains of why a MAS plane? After all, a Singapore
Airlines jet had earlier flown a similar route while an Air India one was only
a few kilometers away.
When a
“black swan” (rare, unpredictable) event occurs, it is natural for people to
look beyond the realm of the rational for an explanation. This is not an
affliction of only the uninformed and poorly educated. In part this reflects
the universal recognition that there is a greater power governing us all that we
have as yet to fully comprehend.
When 9-11
struck, many religious leaders insensitive to the pain of the victims’
relatives and friends called it divine retribution for America’s tolerance of
homosexual ways; likewise when Katrina broke the levees of New Orleans.
At the
other end of the world, when the Asian tsunami hit northern Sumatra at
Christmas 2004, the iconic image that was seared into everyone’s memory was of
the lone mosque standing forlornly and unscathed amidst the sea of destruction
around it.
Those with
even an inkling of science knew that the tsunami was caused by a shift in the
earth’s tectonic plates deep in the floor of the Pacific Ocean off the coast of
Sumatra. That knowledge has profound consequences; it led to the creation of
ocean sensors that could detect those earth and giant wave movements well ahead
to warn those that may be affected. Along the coast of Japan and western North
and South America there are already early warning systems and clearly marked
evacuation routes. Indonesia did not have them then.
The
science-challenged Indonesian peasants saw things differently. To them, the
lone standing mosque was Allah sending them a message. The peace treaty that
ended the generations-long civil war in Aceh was signed soon after. Their
metaphysical interpretation of events too had a fruitful consequence.
Before we
dismiss or belittle the Indonesians’ belief, there is still the question of why
the tectonic shift had to occur there and at that particular time and not at
some remote uninhabited part of the Pacific. That defies science, at least as
we know it. Modern science offers only probabilities.
So when
Malaysia suffered through two eerily similar “black swan” tragedies in the two
passenger-jet crashes, it was not a surprise that many looked for some
explanations beyond science. To be sure, a plane disappearing or crashing is
not a black swan event, but MH370 disappeared without leaving any trace,
incredulous in this day of round-the-clock ubiquitous satellite surveillance. That
tragedy still baffles the experts. As for the ill-fated MH17, while we all knew
what happened (it was shot down), still the question remains why a MAS plane
was the unfortunate victim.
When an
obscure village alim says that the calamities were caused by MAS serving
alcohol, he can rightly be scoffed at and be ridiculed. By that theory Emirate
Airlines would have been a top casualty. However, when thoughtful commentators
like Kadir Jasin, the former editor-in-chief of The New Straits Times, and Zaid Ibrahim, a former cabinet minister
and successful corporate lawyer, alluded to bala
or divine retribution, then we are compelled to pause and reflect. This is
especially so when their views resonated with the general public.
In reality,
many had taken figurative pot shots at MAS in the past. Stated differently,
long before these two black swans, the airline had had many dark crows. MAS
would long ago have been grounded, and many times too, had it not been for the
government coming in with expensive rescue bailouts.
Profitable
units of the airline, like catering and maintenance, had been siphoned off to
UMNO cronies, and then MAS was forced to buy back those services at inflated
prices, converting what were once revenue-producing units into revenue-draining
ones. On another front, instead of pampering its customers, MAS was pampering
its employees, from ramp handlers to top executives. They all happily hogged
the company’s trough at the customers’ expense, and with taxpayers ultimately
paying the bill.
While other
airlines were getting substantial discounts for their new planes and passing
those savings back to their companies, MAS was paying full retail price, with
the discounts going into the pockets of crony middle men “consultants” in
cahoots with top executives. Then there was that “brilliant” idea of selling
its headquarters in a prime Kuala Lumpur location and then renting space back
from its new owner. It’s akin to selling your house and then paying rent to the
new owner, adding another expense. This was what Pan Am Airlines did in 1970.
We all know what happened to that company.
Then there
was that wonderful scheme of financial engineering scheme dubbed WAU
(Widespread Asset Unbundling) where MAS sold its planes and then leased them
back. Again it was like selling its headquarters. Not owning your own planes is
a smart and effective strategy for a start-up airline; it conserves capital
that could be diverted to expanding its market. It is however a dumb move for
an established company to do so as that would only add another layer of costs.
The only ones wowed by that WAU scheme were the new owners of the planes and
the investment bankers who arranged the deal. That deal was also a cute play on
words as “wau” is Malay for kite, the
airline’s logo.
If MAS
shares serve as a metaphor for Malaysia, then what happens to MAS the company
mirrors what happens to Malaysia the country. Previously reliable services like
power and water that were provided by competent public entities are now
privatized, sold at heavily discounted prices to favored political cronies.
These ersatz capitalists, pseudo entrepreneurs, and rent seekers came out like
bandits, but the pipes often run dry, and when they do flow, the water is not
fit to drink. Likewise with electrical supplies; they are erratic and with ever
escalating prices.
The
government cannot forever protect MAS from the reality of an increasingly
competitive world. The price for bailouts keeps escalating and is no longer
sustainable. For MAS, the skid was greased by the entry of Air Asia at one end,
which cannibalized MAS on the domestic and regional front, and Singapore and
other Asian airlines like Cathay Pacific that chipped away at MAS’s long-haul
destinations.
The first
black swan, MH370 disappearance, exposed the incompetence of Malaysian leaders
on the world stage. Malaysians of course have been fully aware of this for a
long time. These leaders could not handle even simple queries from journalists
and the public. The astute political cartoonist Zunar captured well the
bumbling Najib. His biting cartoon depicting a “Too Weak” Najib “Two Weeks”
after MH370 was carried by The Washington
Post.
Like MAS,
Malaysians too have been exposed to the reality of a highly competitive
globalized world. They now realize that the “education” they had received at
local institutions has been nothing more than indoctrination. Their low English
proficiency and abysmal communicating skills and critical thinking faculties do
not serve them well in the new marketplace.
I hope Malaysian
leaders would heed the wisdom of Zaid Ibrahim and Kadir Jassin, that is, treat
the two black swan events as the Indonesians treated their black swan of the
Asian tsunami. Keep the Malaysian house pure and in good order, free of what
displeases Allah, not to please Him but to please Malaysians.
If Najib
and others in UMNO fail to heed this message, then Malaysians are duty bound to
remove them and give others the privilege to lead the nation