The Deep Forces Preventing Reform in Malaysia
The Pakatan Harapan coalition general election victory almost a year ago was supposed to herald a new reform era in a country spavined by corruption, cronyism and racism.
Very soon after Mahathir Mohamed was returned as prime minister after a 15 year absence and in a new role, he quickly made good on Pakatan’s promises to eliminate the GST, re-introd15-year absence fuel subsidies, seek the immediate release of Anwar Ibrahim from jail and charge former Prime Minister Najib Razak over the 1MDB scandal.
However, public disenchantment of the new Pakatan government very quickly developed as the pace of reform appeared to slow. The government flip-flopped over child marriage, then backflipped over its intention to ratify the International Convention on the Elimination of all Forms of Racial Discrimination due to protests organized by the ousted United Malays National Organization and ultra-nationalist Malay groups.
Shortly afterwards, it backed down from ratifying the Rome Statute of the International Criminal Court due to criticism from the Johor Royal Family. The report completed by the Council of Eminent Persons (CEP) on reform was put under the Official Secrets Act, and has not been made public. More recently, Mahathir’s quick dismissal of the Suhakam Report finding that “state agents” where most probably responsible for the abduction and disappearance of religious leaders Amri Che mat and Pastor Anthony Koh disappointed many.
There is now a perception that the Pakatan government won’t deliver what it promised. The by-election result in the Semenyih constituency was an indication of this, confirming Medeka Centre polling that both the prime minister and Pakatan were rapidly losing popularity.
However those expecting the government to create a new Malaysia forgot about the complex nature of the Pakatan coalition itself, the electoral landscape and the institutional and attitudinal impediments to reform.
The Nature of the Coalition
The leading party, in terms of influence but not numbers is Parti Pribumi Bersatu Malaysia, formed by Mahathir in the run up to the general election to give himself a political vehicle. Although the party manifesto talks in terms of maintaining fundamental rights and fighting corruption, Bersatu is really a nationalist-Malay organization, believing in Islam as the state religion, upholding the Malay monarchy, maintaining Malay privilege and that of natives of Sabah and Sarawak, and keeping Malay as the national language.
Parti Keadilan Rakyat (PKR) has twice Bersatu’s representation in the Federal Parliament and supports the abolishment of the New Economic Policy, the instrument that provides special privileges for Malays and other indigenous groups. In practice however, the party most often reflects its leader Anwar Ibrahim’s views. PKR’s structure is very similar to UMNO’s, and is currently strongly factionalized between the Rafizi Ramli and Azmin Ali groups. Recent party elections brought accusations of vote buying.
Under the Pakatan agreement Anwar is due to take the reins of Power from Mahathir sometime in 2020.
The third member is a breakaway group from PAS called Parti Amanah Negara, primarily a Malay based party standing for progressive Islam. It has 11 members of Parliament, where its leader Mohamed Sabu is Minister of Defense.
Next, the Democratic Action Party (DAP) is primarily a Chinese based party, although it has sort to be multi-ethnic over the years. The DAP is based on social justice, democracy, and secularism. Its support comes from working class and professional urban voters, where the party played a major role in assisting Pakatan win the last general election.
The above coalition mix suggests that its orientation is going to be towards maintaining the current status quo, according to the various party manifestos and actions. Other than the fight against corruption and support of popular policies like the abolition of GST, the pressure for reform comes only comes from the DAP and some members of PKR.
Thus Pakatan is a paradoxical coalition where the push for reform comes from a minority. What’s more, Mahathir has dominated coalition, calling the major shots in terms of policy and administration.
If and when Anwar Ibrahim actually becomes the Prime Minister, it’s still very unclear as to whether he will follow the reform path or pursue his wishes to implement a more Islamic path in government administration and education.
Anwar’s Position a big unknown.
Analysts close to government say it is attempting to buy time on reform by blaming the previous government and economic situation. However, talking reform is one thing, achieving it another. If the Pakatan government is going to firmly commit to reform, it has to overcome many impediments, some rarely discussed.
The Electoral Landscape
Although 65 percent of Malaysia’s population could be considered urban, cities’ parliamentary representation is well under that. About 70percentofy seats are rural based, thus heavily over-representing rural voters. Thus DAP and to some extent PKR representation are below what they should be, while UMNO, PAS, Bersatu, and Amanah are overrepresented, a legacy of decades of gerrymandering by the previous ruling coalition.
Thus any party or coalition group that wants to win a general election must win over a rural Malay electorate, making the politics of race and Islam of paramount importance. Until there is real electoral reform, race-based politics are crucial. Any reforms perceived as threatening Malay privilege would cost at the next election.
Does Pakatan really want reform?
The current anomaly benefits Bersatu over PKR and the DAP. This is especially the case if more UMNO defections come and the party expands into Sabah, as Mahathir has vowed. It is vital electoral reform takes place to place to bring in the concept of “one vote one value” through rearranging constituency boundaries and/or implementing some form of proportional representation before Pakatan can undertake any serious reform in the area of ethnic-equality of opportunity.
This is a major barrier to reform and will allow Malay-nationalist groups to dominate the national narrative, and sabotage any new initiatives.
The Civil Service
The Malaysian civil service is probably the most difficult barrier to overcome. There is an unspoken mission among offices and staff to protect the Malay agenda. Any policy or program is likely to be sabotaged if it is perceived to threaten Malay interests. The system has been built over the past 20 years on political nepotism, with civil servants clearly and openly aligned with the last government.
It is also a bloated service, employing nearly 1.8 million people, with duplicative ministries and agencies, wasting massive resources, built on job generation to keep ethnic Malays happy.
Although these problems have to be dealt with, retrenching staff would be politically costly. Thus it could take more than a decade to eliminate excessive numbers of employees, nepotism, and the culture of the Malay agenda.
Steep Learning Curve for New Ministers
Senior civil servants have been used to dealing with ministers who didn’t know their portfolios and were only interested in issues of personal benefit, swinging the balance of power from elected government to the bureaucracy. It is a daunting task for inexperienced ministers who don’t understand procedures and have little in-depth knowledge of their portfolios to manage their ministries.
The Royal Families
There are nine quite diverse royal families in Malaysia, and an Agong (king) who is selected by the Conference of Rulers every five years as head of state. The respective sultans and raja primarily act as constitutional monarchs, and traditionally had a close relationship with the former government. A few members of UMNO and a former Prime Minister had royal blood, and it has long been rumored that backroom deals and concessions were given for favors done for the government of the day.
Governments traditionally kept the royalty happy through bargaining. There were only a few ripples during the 22 years of Mahathir’s previous reign, in which he passed constitutional amendments to cut royal immunity from the law and eliminate veto powers over parliamentary bills.
Royalty have on a few occasions asserted their power independently, as when the Raja of Perlis refused to accept the Barisan Nasional nomination for Chief Minister of Perlis Shahidan Kassim and appointed Md Isa Sabu after the 2008 election. Sultans have sometimes been partisan as was seen in the Perak Constitutional crisis in 2009.
Mahathir’s current spat with Johor’s crown prince over appointment of a new chief minister for the state, Malaysia’s second most populous, shows that royalty remains a potential barrier to reform, especially on matters of Malay position, religion and their own survival. Continuing to placate the royalty will be at the cost of reform.
Just recently Foreign Affairs Minister Daifuddin Abdullah and Federal Territories Minister Khalid Samad talked about a “deep state” within Malaysia. They are referring to a network of royal family members, senior military personnel, senior police officers, GLC office holders, high ranking civil servants, politicians, intellectuals and business people who have a common interest and deep commitment in protecting the Malay position.
They are said to hold regular informal meetings around the country to deal with threats to the perceived order. This could be a discussion with someone who ‘needs to be pulled into line, ”taking action within the law, or even through extrajudicial action through ex-police or ex-military people loyal to the cause.
To recapture the confidence of the electorate who voted Pakatan into power in the last general election, reform is needed on the New Economic Policy which grants financial advantages to bumiputeras. The government must again attempt to put through constitutional amendments to restore the original position of Sabah and Sarawak in the Federation if it is to count on the support of Sabah and Sarawak voters. The electoral system must be overhauled so a future government will not be shackled by the Malay heartland on reform.
It’s very difficult to see the Pakatan Government dominated by Bersatu being too interested in reforming the NEP, or even seriously tackling the inequality of the electoral system.
The state of the civil service is dismissal and the problems haven’t even been defined yet, let alone solutions found. Ministerial experience takes time, some patience is needed here. However criticisms are increasing when Pakatan ministers are seen to behave just like their predecessors. When the sedition Act is now been used like Lese Majeste in Thailand, debate on the role of Royalty in Malaysia will be supressed. Expect a period of testing between the government and Royal Houses to continue until new boundaries are renegotiated. Finally the real secrets of government are still being kept secret. Reform begins with transparency and Mahathir himself doesn’t appear ready to step into that environment.
Author’s note: first published in the Asia Sentinel
Management of Nuclear Mining in Indonesia
Nuclear energy in its development is very rapid and plays a major role in improving the quality, as well as the added value of various products in various activities to improve people’s welfare. In accordance with its nature, nuclear energy has two impacts, namely: the side of benefits to realize welfare; and on the other hand, it has potential hazards that must be managed properly. Based on this, Nuclear Mining Material as one of the strategic natural resources is a vital commodity that controls the lives of many people, must be controlled by the state with optimal management in order to obtain the maximum benefit for prosperity and welfare of the people as mandated in the 1945 Constitution Article 33 paragraph (2) and paragraph (3). Therefore, the use of nuclear technology for human life needs to be monitored and regulated with regulations that consider the value of benefits and potential radiation hazards caused.
In order for the use of nuclear power to be optimized, it is necessary to make regulations that regulate utilization governance and prevent bad things from happening due to radiation hazards as a consequence of nuclear utilization containing radioactive substances and nuclear materials. Law Number 31 of 1964 concerning Basic Provisions of Atomic Energy is one of the first steps to strengthen nuclear power in Indonesia by means of Institutional Strengthening that utilizes (1) nuclear materials such as uranium and other radioactive materials, (2) reactor development and reactor utilization for electricity, and (3) utilization and development of radioisotopes in aspects of health, agriculture, industry, and others. Then, since 1978 has ratified several international agreements including:
- Law Number 8 of 1978 concerning the Ratification of the Treaty on the Prevention of the Spread of Nuclear Weapons;
- Law Number 9 of 1997 concerning the Ratification of the Treaty on the Southeast Asia Nuclear Weapon Free Zone ;
- Law Number 1 of 2012 concerning the Ratification of the Comprehensive Nuclear-Test-Ban Treaty.
- Law Number 10 of 2014 concerning the Ratification of the International Convention for Suppression Acts on Nuclear Terrorism.
Indonesia does have Law Number 10 of 1997 concerning Nuclear Power. However, there are still many provisions that have not been regulated and provisions that do not keep up with the times along with the development of nuclear power in the world of science and technology. In fact, the elements contained in nuclear have not all been used by Indonesia and there are still illegal buying and selling practices to date. Whereas nuclear elements, such as monazite, contains U (0.1-0.3%), Th (± 6%), LTJ (60%), and phosphate. LTJ has enormous benefits and its supply is currently dominated by China. Based on the records of the Ministry of Industry, every production of 1 ton of tin is estimated to produce 22 kg of monazite, which means that 34,000 tons have been produced monazite in the last 17 years (there are 2000 tons of thorium and 170 tons of uranium). If there is a regulation related to this, it will certainly ensure legal certainty and governance, and this can be a huge economic potential for the country.
At this time nuclear energy has contributed about 11% of the world’s energy and there are 452 nuclear reactors actively operating and spread across 31 countries in the world with a total capacity of 399,354 MW. Each year it is estimated that more than 66,883 tons of uranium are needed to run these reactors. Now as many as 54 new reactors are being built in 19 countries, and it is estimated that by 2035 the world’s uranium demand will increase by about 30% to 72,000-122,000 tons. The existence of NZE (Net Zero Emission) targets by many countries, mostly by 2050, and only a few countries by 2060, causes the possibility of projected nuclear power plant construction to increase.
Indonesia is one of the countries that has committed to achieving the Net Zero Emission (NZE) target by 2060 through Presidential Regulation No. 98 of 2021 concerning the Economic Value of Carbon based on the principles of welfare and the principles of sustainable development. The consequence of setting this target is that Indonesia must gradually reduce the use of fossil energy sources and replace them with clean energy sources derived from new and renewable energy, with the aim of national interest and preservation of national functions for the sustainability of future generations.
Based on exploration data that has been carried out by BATAN (National Nuclear Energy Agency which has now merged into the National Research and Innovation Agency, Indonesia has the potential for Uranium and Thorium (elements of nuclear used) in the Kalan and Ketapang (West Kalimantan areas), Kawat (East Kalimantan), Katingan, Mentawa and Darab (Central Kalimantan ), Singkep (Kepulauan Riau), Bangka Belitung, Sibolga (Sumatera Utara) and Mamuju (Sulawesi Barat). If Indonesia can take advantage of the opportunity for these natural resources for national development and community welfare, then Indonesia can contribute as a supplier of nuclear mining materials later. The International Energy Agency (IEA) 2021 projects that by 2040 there will be an increase in the number of nuclear power plants that are likely to exceed the projected supply of uranium in the same period (World Nuclear Association, 2021). This is likely to have an impact on competition among nuclear power plant managers to get a guaranteed uranium supply.
Based on data owned by BAPETEN (Nuclear Energy Supervisory Agency), export and import activities for nuclear materials, in 2017 there were imports of 28.08 kg, in 2018 as much as 28.14 kg, and in 2019 as much as 41.69 kg. In Law No. 7 of 2014 concerning Trade there is no specific regulation on trade related to nuclear power. Whereas in the field of nuclear power also cannot be contained export and import activities, as well as their prohibitions and restrictions. Given that the Indonesian state has limited fulfillment of the needs of nuclear materials and radioactive substances that must be met from domestic production, export, and import activities, as well as the possibility of re-export of used sources are very potentially needed as a gateway to traffic between countries. In Law Number 6 of 2023 concerning the Stipulation of Government Regulations in Lieu of Law Number 2 of 2022 concerning Job Creation into Law, there are regulations related to the mining of nuclear-excavated materials. This arrangement partially deleted several articles of Law Number 10 of 1997 concerning Nuclear Energy, partly added new articles and partially replaced existing articles. However, unfortunately, the two laws have not explained specifically related to regulations regarding the licensing of exports and imports of nuclear-excavated materials directly related to nuclear materials and radioactive substances.
The problem faced by Indonesia today is that there is no positive law that can reach the development of scientific and technological advances related to nuclear power and has not been able to meet the needs of nuclear power safety, security, and facility arrangements. Then, there is no special criminal regulation to ensnare all forms of action faced related to the misuse of nuclear materials, radioactive substances, and ionizing radiation plants that can threaten the life of the nation, state, and society.
If the legal legitimacy of the management of nuclear mining already exists, it is not impossible that the use of nuclear power will increase in various sectors, especially in mining, radioactive mineral processing, nuclear energy, energy storage, and radioactive mineral-based batteries. National competitiveness as a positive impact of nuclear technology can also be stronger. In addition, Indonesia’s radioactive mineral-based natural resources can be utilized optimally, then business actors are potentially increasingly interested in investing in the nuclear industry, and public safety and security from radiation hazards are guaranteed. Absolutely, taking into account the balance of existing living environments, while maintaining the environment despite nuclear mining activities. This is also a demand against nuclear mining companies that must meet the provisions in Law No. 32/2009 on Environmental Protection and Management.
The author hopes that this paper can contribute to the preparation of laws and regulations on the management of nuclear mining materials so that Indonesia immediately has a legal rule for nuclear mining activities, as well as complementing Government Regulation Number 52 of 2022 concerning Safety and Security of Nuclear Mining which was published earlier.
Behind the cancellation of Tesla’s investment in Indonesia
Authors: Yeta Purnama and Wulan Fitriana*
In April 2022, the issue of Tesla’s interest in investing in Indonesia attracted the attention of the domestic public, following a meeting held by Elon Musk, the owner of a prominent electric car company, with the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan. The meeting discussed nickel raw materials for the electric car supply chain.
This was then followed up directly by President Jokowi during the implementation visit to SpaceX in May 2022. During the visit, they also did not reach an agreement, although in August 2022 Luhut said the value of the nickel purchase contract from Tesla reached US$ 5 billion or the equivalent of IDR 74.5 trillion. However, until mid-2023, an official agreement on Tesla’s investment plans had not yet been announced.
Instead of setting investment in Indonesia, recently Tesla was even rumored to be opening an electric car factory in neighboring Malaysia. Even though Indonesia has been intensively lobbying with a nickel concession offer to Tesla, the offer does not seem convincing enough to involve Indonesia in fulfilling the supply chain for battery raw materials at the company. For Tesla, a sustainable company comes first Environmental, Social, and Governance (ESG) is the main reason to be considered. However, on the other hand nickel companies in Indonesia are still far away from being sustainable. This can be interpreted that one of the reasons for Tesla canceling its investment is because the company’s concern for ESG is still low.
Battery production ecosystem which is not sustainable
As a company that owns track record Pretty good ESG with shoes total 65/100 according to disclosure Refinitiv, there are at least two reasons why Tesla has not provided further information or even thwarted its intention to make Indonesia an investment destination. The first reason is regarding the poor production ecosystem. Several nickel mines in Indonesia have not even been included in the ESG rating agency which is an important aspect to attract international investors concern to climate change.
Second, half-hearted regulations in an effort to reduce emission reductions. For example, by perpetuating nickel mining companies meet energy needs by using coal-fired power plants to support smelter activities. The emission footprint in fulfilling the electric vehicle supply chain is a false solution for the government to reduce greenhouse gas emission reductions.
This is exacerbated by company non-compliance with regulations, one example is the downstream policy. It is known that illegal export of nickel ore occurred due to the export ban and required the process of refining nickel in the country. This fraud was also influenced by differences in the price of nickel ore at home and abroad. Miners tend to choose exports because the price of nickel ore in the domestic market tends to be lower than the export price.
This activity is known to have caused losses to the state due to loss of royalties and export duties from companies.
Even though the government has issued regulations as stated in the Minister of Energy and Mineral Resources Regulation Number 11 of 2020 concerning the Third Amendment to the Regulation of the Minister of Energy and Mineral Resources Number 07 of 2017 concerning Procedures for Setting Benchmark Prices for Sales of Metal Minerals and Coal. However, this has not been implemented properly in the field.
Based on the results of the 2021 evaluation, it shows that among the 73 companies, there are smelters, miners, and trader, there are as many as 65 companies that have been assessed according to the HPM, the rest are still not in accordance with the stipulated HPM and are even still under international regulations.
What needs to be done in the future
Inviting Tesla to become a net investor in the country is a fairly good effort from the government in diversifying cooperation partners, despite its dependence on investment from China which is quite problematic in the environmental and governance sectors. However, there are several things the government needs to do in the future to attract foreign investment, especially in maximizing the management of nickel resources in the country. First, it is necessary to carry out policy reforms that are truly serious in the energy transition effort.
One of them concerns the application of Risk-Based Licensing mandated by the Job Creation Law. This bill is not supported by the availability of a database on risk mapping, while environmental permits have been abolished, resulting in threats to environmental quality degradation.
Second, the government needs to retire dependence on fossil energy as early as possible, by starting a mix of energy transitions more quickly, including overcoming over supply electricity must pushed with policy. Because, currently the policies made by the government in making a road map for the transition of new energy and renewable energy in the EBET Bill are still half-hearted and there are still many fake solutions in the bill, for example such as geothermal and coal gasification which are actually efforts to extend the life of dirty energy in Indonesia. domestic.
Third, the government needs to carry out strict supervision and proper regulation. Especially regarding environmental and governance issues which are important aspects to create a more sustainable corporate ecosystem. Because of ideals net zero carbon will not be achieved effectively without involving a number of parties and stakeholders.
*Wulan Fitriana, Researcher at CELIOS.
ASEAN needs to walk a tightrope
The Quad leaders’ statement clearly reiterated the importance of the Association of South East Asian Nations (ASEAN) in the context of the Indo-Pacific. Said the statement:
“Today we reaffirm our consistent and unwavering support for ASEAN centrality and unity. We are committed to ensuring the Quad’s work is aligned with ASEAN’s principles and priorities and continues to support implementation of the ASEAN Outlook on the Indo-Pacific (AOIP)”
The statement also referred to Indonesia’s chairmanship of ASEAN in 2023.
This statement is important for several reasons. First, there have been differences between ASEAN and the US with several ASEAN leaders expressing concern over the consistent deterioration in ties between China and the US. Countries like Singapore have repeatedly reiterated, that they would not like to make choices between Beijing and Washington, since they share robust economic ties with both countries.
At the Boao Forum, often referred to as China’s Davos, held in March 2023, the Singapore PM again underscored the global ramifications of strained ties between China and the US. The Malaysian PM, Anwar Ibrahim perceived to be pro-US, expressed concern over US’ ‘decoupling’ from China.
Second, ASEAN countries which also share close economic links with the US have recently begun to speak about ‘De-dollarisation’ which refers to reducing dependence upon the US dollar for trade. The Malaysian PM, Anwar Ibrahim also spoke about Asian Monetary Fund (this idea was initially mooted by the Malaysian PM in the late 1990’s when he was Malaysia’s Finance Minister). Like many other regions, ASEAN is wary of US’ increasingly insular economic policies in recent years. While seven Asean countries — Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam – are part of the US led IPEF (Indo Pacific Economic Framework) they have complained about IPEF not having a trade component.
Third, Indonesia has taken a different stance from the west on the Russia-Ukraine war. Like India, which is the current chair of G20, Indonesia too has pointed to the need for addressing disruptions caused to the global supply chains by the Russia-Ukraine war. Yet, it is an important stakeholder in the Indo-Pacific and is also important in the context of the goal of reducing economic dependence upon China and altering global supply chains. Apart from Vietnam and India, Indonesia has been one of the favoured countries for companies seeking to re-locate from China.
In spite of all the above differences, several ASEAN states have begun to show greater interest in the Free and Open Indo-Pacific. ASEAN came up with its first Indo-Pacific vision in 2018, but it has clearly stated that it’s approach vis-à-vis the Indo-Pacific is different from that of the US and not targeted at China. In recent months however, some ASEAN countries have begun to express their discomfort with regard to China’s increasingly aggressive behaviour on the South China Sea issue. Philippines, a US ally, which had in recent years been trying to strike a balance between US-China, has once again strengthened security ties with US. In February 2023, Philippines provided the US military access to four more military bases in the ASEAN nation. The US defence department while commenting on Philippines decision to grant access to four more military bases said that this:
“will make our alliance stronger and more resilient, and will accelerate modernization of our combined military capabilities,”
In conclusion, the ASEAN grouping is very important in the current geopolitical context and while it needs to walk a tightrope between China and the US it is an important player in the context of the Indo-Pacific for several reasons. As mentioned earlier, ASEAN countries are especially important in the changing economic architecture, where many western countries are seeking to reduce their dependence upon China and many US firms are expanding their operations in ASEAN countries – especially Vietnam. Apart from this, several ASEAN nations do not want to adopt a confrontationalist stance with Beijing due to their economic interests as well as geographical proximity but are not comfortable with China’s assertive behaviour and thus need to find common cause with the Quad.
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