http://www.minaret.org/anwar.pdf
I know its an old speech and a very long one but it will liberate your mind from the myths of modernity. It is my earnest request you read this. And maybe share a point or two that I may have missed to ponder upon.
The Importance of Free Markets to Islam and Muslims
Minaret of Freedom Institute Eighth Annual Dinner
With Anwar Ibrahim, Ph.D.
Oct. 23, 2005
[Edited Transcript]Minaret of Freedom Institute Eighth Annual Dinner
With Anwar Ibrahim, Ph.D.
Oct. 23, 2005
Dr. Imad-ad-Dean Ahmad:
We are very grateful to have Anwar Ibrahim as our speaker. As Finance Minister of
Malaysia he was one of the contributing factors to the success of the Asian Tigers, the
dynamic economic prosperity of a number of South East Asian countries, Malaysia one
of them. He deserves some of the credit for that. As an economist, he understands
economics, but he is one of those rare people who, in political life, wants to apply that
knowledge in a good way, not just seeing politics as a way of giving benefits to your
friends. Im going to ask my dear friend Aly Abuzaa`kouk to introduce formally our
speaker for tonight.
[APPLAUSE.]
Aly Abuzaa`kouk:
Salmu alaikum.
Audience:
Wa alaikum as-salm
Abuzaa`kouk:
May Gods peace be with all of you. It is my honor and a really special moment to
introduce to you Brother Anwar Ibrahim. If I tell you the first time we metyoull be
shocked, because in those days, in 1976, in Riyadh, Saudi Arabia, he came out of the
prison and I was also out of the prison. Since then I have been following the development
of Anwar Ibrahim as an individual, and also the development of Malaysia, as a country. I
can claim to be a student of Malaysia and student of the Muslim World in general and
when you look at the Muslim leadership, sometimes we are trying to find out who are the
individuals who can navigate the Muslim ummah through the difficult times we are
passing through. We are the ummah that really deserves more attention from its followers
and needs to get its act together. When Anwar worked as an official in the Malaysian
government, and he moved from Minister of Education to Minister of Finance and to the
Deputy Prime Minister, the Malaysian experience itself became the model of Muslim
renaissance in the 20th century. Unfortunately, things developed in a different way. God
has His own ways of telling us that you might dislike some events but in them there is
goodness for you. In His final wisdom we accept whatever God has prescribed for us.
Anwar has become one of the sound figures in a world filled with disillusionment; but
also he showed us during the situation through which he was tested that he was also a
man of patience. In this moment I think his wife, Sister Dr. Wan Azizah, deserves a lot of
credit for communicating the issues of the family and the issues of Anwar around the
world, and his issue can be explained in many ways. He is a voice of Muslim moderation,
a voice of Muslim modernity.
Today, we need to come together as Muslims out of this sad state of affairs. How we can
develop our understanding of revelation and apply it to our world today? Through his
efforts and through the efforts of International Institute of Islamic Thought (IIIT) group,
the International Islamic University (IIU) of Malaysia became a model in Islamic in
Muslim education. But today, Anwar is here, not to speak about democracy, not to speak
about the human rights, not to speak about justice, to speak about something that is so
dear to him, the issue of the importance of free markets to Muslims and Islam. And since
he worked more than 8 years as the Finance Minister, I can tell you that the issue of the
Malaysian tiger, he has made a lot of efforts to make that a real tiger, not a paper tiger in
economics.
In the days of the early Islam, one of the companions, Abdur-Rahman ibn Awf, migrated
from Mecca and left everything behind. When he came to Medina as an immigrant (and
many of us here are immigrants) he told the Prophet and his companions, Show me
where is the market? The market place, thats all he needs. It is written in the books of
the srah, that when Abdur-Rahman ibn Awf passed away, he left a wealth uncountable
in the days of those times. He was so capable as a merchant, as a businessman as we say
today, that he made great wealth in a manner known today as a model of individual work
and individual entrepreneurship. I think its time for you and for us to listen to the words
of our dear brother who really honored us by coming today with his beautiful wife Sister
Wan Azizah to talk to us about the topic that we have chosen that is so close to the
Minaret of Freedom mission. Let us welcome all together Brother Anwar Ibrahim.
[APPLAUSE.]
Dr. Anwar Ibrahim:
Assalmu alaikum wa rahmutallahi wa barkatu ladies and gentlemen. [Praise to God
and blessings upon the prophet.] Thanks to Imad and Aly for this brilliant introduction
but all I require is service back in the USA to campaign on my behalf of a certain
employer [LAUGHTER]. Now, congratulations to the Minaret of Freedom Institute.
Personally it means a lot to me because I share your vision that the issue of freedom or,
precisely, freedom deficit, is a major issue in the Muslim World. When you talk about
market economics, it has a lot of relevance, my dear Aly, to the issue of freedom and
justice. There is no market economics without freedom and justice, because we are not
talking exploitation of resources devoid of societal concerns. We are not talking about
growth and development ignoring the issue of al `adl and ihsn, of justice and virtue. So,
when we talk about market economicsfree marketwe are talking about a choice, a free choice, the right to choose, and to acquire wealth without constraints and inhibitions,
except in the defense of the rule of law and justice.
So, you have encouraged us. I have been associated with a number of Muslim
organizations, and not many have the courage to promote a free market philosophy. Now,
free market philosophy is not a mainstream idea in the Muslim community or in the
Muslim world. There is a lot of resistance; there is a lot of misunderstanding of the issue
of free market. Im not necessarily criticizing the general perception or vision of many
Muslim organization and movements because the Zeitgeistthe trend of the timesin
the 60s, 70s of course was not free market. It was a socialistic vision: we are against
imperialism, we are against American domination, you have to be a socialist to the extent
that even Mustafa Shabani, the great scholar wrote about Islam and Socialismalthough
he did amend his views at a later stagethen was trying to articulate a vision of the
times. Although that socialism was certainly not Marxism, still socialism was the
narrative of the period.
Choko Abniroto started the first Muslim chamber of commerce in the world in modern
times. A great thinker, a great doer, he was responsible in initially bringing all petit
traders together, strategizing quietly, building an economic forcea free market strategy,
approach, to build up enough economic resources with the battle against the Dutch
colonial rule. He was a very strong advocate against Dutch colonialism, but focusing his
attention, initially, purely on Islamic chamber of commerce of Indonesia. But even then,
while fighting the communists and fighting the Dutch, he still used the term Islamic
socialism, although, having the privilege of reading most of writings when I was in prison
(thats the advantage of being in prison- you have all the time in the world to read
[LAUGHTER]), there was certainly no inkling of his liking or tolerance of Marxist
philosophy.
Now, I was reading in an article, a speech given Mohammed Ali Jinnah, who in a way
was appealing for a sort of welfare state with a very strong inclination toward a socialistic
sort of order. We are talking about very poverty stricken countries, so you can understand
that. So that is why these figures that I mention are certainly not socialist in the term that
we understand, the ideological divide, but it strengthens my earlier assertion regarding
the courage of the Minaret of Freedom Institute who articulate this view.
This infatuation with socialism is well understood, because when I was in the university,
it was nationalistic and at the same time very Islamic, but also in a way quite socialistic,
because we saw all these capitalist barons exploiting and squandering public wealth and
working with the colonial power, so that was understandable reaction. And listening to
the speeches of Sukarno, he always made reference to exploitation lhomme par
lhomme?], in the French language, about exploitation of man by man. It became
virtually a slogan for the Indonesians, including those who barely understand the
meaningbut it is something bad that relates to his understanding of socialism. So Ill
not go into that because I think its getting to be very which is relevant, but mind you in
the university Paul Barans Political Economy of Growth was the standard text. Unlike
many so called free market ideologues like Imad, I still believe there is a great relevance in
understanding Paul Baran or Ernest Feders Rape of the Peasantry, or even Karl
Marxs Das Capital, because it gives us a fair balance in our thinking, because sometimes
it become euphoric and an obsession, until we have a WorldCom and a Tyco, and what
elseIm not American, I dont know.
Audience:
Enron?
Ibrahim:
Enron. [LAUGHTER.]
Now, we accept as a failure the disaster of the socialist experiment. And the Chinese have
changed course after Deng Xiaoping. The Soviet Union crumbled critically and
economically. The case of Libya is much more confusing in my mind because it is
difficult to place, but we will have to move on.
My limited experience as finance ministeralthough I didnt fight Mahathir, he fought
me severelybut I had the latitude to steer the economic policies in Malaysia,
particularly in the boom period in the 1990s. But to give credit to my predecessors, at
least Malaysia was critically stable. It is a multi-racial, multi-religious country, but
politically it is still stable. With a politically stable in a country you can then chart an
economic program. Without that there would be major problems.
People are very kind to look at the East Asian economic miracle, citing the World Bank
report, but with some humility I must admit that it was possible because the regionafter
the Vietnam Warwas stable, peaceful. But we also had the correct economic
prescriptionsthe concern for a more balanced development, which was not necessarily
a pure market economic proposition at that time. It was a market economy because
without growth there cannot be equity. We had big battles with some of my old
colleagues in the campus, in the faculty, particularly, because they were talking about
equity: Anwar, we cant forget the fact that we must have equitable distribution of
income. The issue of distributive justice must be the main thrust of our economic
program. I said, You dont have growth, you dont have wealth, what do you
distribute? You distribute poverty! [LAUGHTER.]
So, we realize therefore that you must have and introduce economic prescriptions and
policies that generate wealth in the country. This means we have to introduce policies,
not necessarily completely to our liking; in an area and period where there is so much
poverty and difficulty, here you are promoting growth and promoting business and
development. You will have a problem because, as a matter of conscience, how do you
solve the problem of public housing and abject poverty in your midst? So we will have
then to employ the economic policies that firstly promote growth. I dont believe that we
have a way out of that. The policy prescriptions are that to promote growth through
free market philosophy, you must have the rule of law. The rule of law: the
regulations must be in place, it must be transparent, and those responsiblethe
authoritiesmust be accountable. It reminds me of the chief minister of the government who is a close colleague of the
Prime Minster who said, after a big fiasco privatizing the water dam in his state (massive
losses, inefficiency, because it was awarded to his cronies), so when the disaster was
made known to the public, he came out to the public statement, Yes, I am responsible
but I am not accountable. [LAUGHTER.] You see? You cant have a market economy
without the rule of law and the principle of accountability in place. That is why I relate
the issue of the free market to freedom. If you dont have a free media, where can you
expose the irregularities and corruptions and mismanagement? Im not saying or
suggesting that America is an ideal systemyou have a lot of flaws and limitations; you
have Enron; you have Karl Rove, but you still have a free media that chooses to expose
them (although at the time of the Iraq War or after 9/11, they didnt because was a
consensus against Muslims). The free media is a precondition for a vibrant market
economy and growth policies. So you must have in the institutions of civil society in
place. Failing that, you will not have the policy prescriptions implemented in the right
manner.
Now, this brings us to Hayeks The Road to Serfdom. I know it is controversial,
particularly in the Muslim World, but I believe this is a standard text that we have to
reread. Criticize by all means, but have a clear understanding and have the courage like
The Minaret of Freedom Institute to articulate and debate these issues, because I believe
that there is a deficit when it comes to such discussions. Look at the UNDPs Arab
Development Report, there are flaws, there are limitations, fair enough, but the fact
remains, the economic policies have been a disaster. Again, economic policies relate to
the issue of governance and the rule of law.
I come to the issue of, the writings of Adam Smith, because Ive read a number of
writings by Muslim economists during the period of the 60s and 70s talking about this
obsession with growth without ethical consideration and moral consideration and the rule
of law and etc. But if you look at Adam Smith, you must not only read Wealth of Nations,
but also The Theory of Moral Sentiments. I think Adam Smith is certainly much more
ethical and moralistic in his considerations, than what is generally perceived by many
economists that I know [who would promote] growth and policies that will generate
development without any ethical or moral considerations. Thats not Adam Smith that I
know. I believe that we need to be fair given a lot credit in this issue of moral sentiment
after Amartya Sen, the Nobel laureate for economics, has taken a lot of effort to expound
the theories of Adam Smith, relating to the Wealth of Nations and Theory of Moral
Sentiments.
Now, Ive read Imads paper on this issue where he made a reference also to the 14
the century theory of Ibn Khaldun, and also Ibn Taymiyyabut that doesnt make him a
Wahabbi[LAUGHTER.].
Now, the issue of importance of trade and commence, to my mind, is a fact. I mean there
is no need to debate or continue with this course on that. Prophet Mohammed (saaws)
also traded, Abdur-Rahman ibn Awf was the key Sahabah- keen on trade and business,
and was encouraged to do so. But its not only a matter of trade, but of free market
philosophy in the Prophetic Hadith of Rasul Allah (saaws): at the time when the city of
Medina had encountered some problems about the lack of food and goods and there were
attempts by the Sahabah to advise him to fix prices, the answer was emphatic, Only God
fixes prices. Now this is an unequivocal endorsement of the market at the time, even at
the time when there was a relative shortage of food. Of course there was a law against
hoarding, the law of against excessive profit directed against imperfections in the market,
in the economic system. The thrust of this economic policy is a free marketfair and just
market operations. This of course is strengthened and elaborated on by Ibn Khaldun and
Ibn Taymiyyah. But it is interesting that, recently, John Hicks, the Nobel laureate in
economics, stated that he was amazed by the unequivocal endorsement of the free market
by Prophet Mohammed (saaws). On a humorous note, he stated that Prophet Mohammed
must have been eligible for membership in the Mont Peleron Society. [LAUGHTER.]
Now, let me then move on to the experience I was talking about: when the World Bank
published this report, The Asian Economic Miracle, (there was an initiative by Lester
Pearson, if Im not mistaken, completed during the time of Jim Wolfenson, leaders in
East Asian were gloating, Look we are the shining example of progress and
development, etc, etc. I was the only Minister of Finance in the region that gave a word
of caution. I said, Look, why do we consider ourselves a miracle? Why consider
economic development a miracle? A miracle, particularly in the Islamic or Muslim
context, is something miraculous. We become lulled into complacency because we
think that it is a great event. I thought it was a mistake for the World Bank to conclude
that that was a miracle. Yes, the growth was between 8% to10%. Yes, hundreds of
millions of people were saved from poverty. Yes, it was a free market policy. But, no, we
were in abject poverty. There was no free media. There was no rule of law. There was no
economic empowermentI mean, the issue of empowerment wasnt there. (Of course, I
was articulating it in a more moderate sense, because [LAUGHTER] otherwise I would
have been sacked then!) [LAUGHTER.]
Well, of course, you can see this sort of a tension, but not that I thought I would be
dishonest, but everybody praised excessively, particularly in the Muslim world. The
Muslim world considered this a major success compared to Senegal, Mali, Bangladesh.
At that time I was Deputy Prime Minister and Minister of FinanceI wouldnt say that
we should be condemned, but I was looking at the figureslook at the corruption index,
from then and now. Now, we are still number 39, not as bad as many Muslim countries
[LAUGHTER.] Look at our freedom index, particularly media freedom: we are number
151close to Libya. [LAUGHTER]. I was asking the President of the Party (because I
am just an advisor), check the facts: Of the 151 Muslim countries that you know, with the
exception of 1 or 2, they are still controlled by tyrants. Now, certainly this is not
something that you can gloat about!
In the competitive index, we have plunged. Investments: now, we have China and we
have India. We are lucid. At that time, I did question, not to condemn Malaysia, but to
say, Look, we should have humility. (Always I quoted at nauseam T.S. Elliots
reference to the issue of humility when he said, The only wisdom one could hope to acquire is humility; humility is endless.) I remember when the International Islamic
University had to confer this rare honor to Dr. Muhathir, so everybody was praising him,
so I said yes, he is a great leader, articulating for the behalf of the Muslim World,
attacking the Americans and the West, fair enough. But I referred to this quote on
humility by Elliot, and I think he understood that: I was sacked. [LAUGHTER.]
Regarding criticism of America, who in the Muslim World, had the toughest position vis-
-vis the Americans? Saddam Hussein. Does it make him a hero or a person who can be
considered a credible leader, who can represent the sentiments of the Muslims or the
conscience of the Muslims? No, because, while Im clearly opposed to the war in Iraq
and the American occupation in Iraqthere is no question, no compromise on thatbut I
know for a fact that Saddam was responsible for killing of hundreds and thousands of
Muslims in Iran, in Iraq, and in Kuwait. This cannot be forgotten. But people are gullible.
You can be forgiven for the crimes, as long as you are anti-American; and this is also a
disease.
Im not using this to deflect criticism of Washington by Muslims (or non-Muslims for
that matterand, you know, many, many non-Muslims are taking a tougher position on
this; its not a purely Muslim issueits an issue of justice; its the issue of peace; its an
issue that affects humanity at large). What I resent (and this is a reference to my position
vis--vis the Malaysia equation and whole Mahathir matter) is that people are allowed to
squander billions of dollars and go on with impunity, just because they take a position
against the West. This shows the utter gullibility, inconsistency and hypocrisy not only of
that particular leader but also the Muslims at large, their shallowness, their ignorance of
the situation. It is our duty, including our friends in The Minaret (because a minaret is
something very high up) to have this understanding so that you emit enough light and
knowledge to the masses.
What then? What did we do? We were registering, at that time, 9% growth. At that time,
in the budget speech in which I started a massive program toward public housing
(because to my mind, when a country is doing well, we cant have the poor not having
any houses, like I saw in New Orleans) We cant have it; it is untenable; it is
unacceptable. And a massive amount for poverty eradication program (like what the
Europeans or the UK governments do in their duel sort of mentality where your
unemployed, I dont believe in that, because affirmative action policies must be designed
to make people work and earn, except if they happen to be disabled or very old, or
whatever. Otherwise they are poor and entire affirmative action program needs to be
reviewed. I mean, Im talking about from my limited experience in Malaysia.
Now, in the budget speech, I mentioned, this was the time the world looked very well.
When I started we had a small deficit budget. Then in two years, I balanced the budget.
The following year, there was a budget surplus. Because I had to deal with my boss then,
who wanted to spend for the tallest building in the world, longest bridge in the world,
biggest city in the world, the best airplane for him in the world, I had to hide intelligently
a lot of funds. How did I do that? I put it under contingencyto be there in the future. 5
billion under special fund for the future generation. We put a special trust for the future generation. Now, you have a surplus. You increase your allocation for health and
education. You have a surplus. You keep some for the future generation, under special
fund that cannot be touched. Now, after I was sacked, the entire money was done away
with: they have squandered everything; theres nothing in the budget. We are back to a
very serious deficit of more that 4% today.
Yes, and of course, I am annoyed, because we had to work very hard. I didnt reduce
education and health; I increased for education and health. Again, we were in an
advantage because we didnt need to buy too many MIGs and Phantoms and submarines,
whatever, because we didnt have nasty neighbors. But if you are in Iran with Saddam as
your neighbor, you better get yourself prepared; or if you are Palestine, with Israel as a
neighbor, you better be prepared; because Palestinians are not in a position to do much.
But that was it.
How do I then caution, I use the experience of Sayyidina Yusuf, (as) to talk about 7 years
for preparation for 1 lean years. I remember many of my colleagues say Anwar, what is
the relevance of the Quran to the modern economics and free market? I said, Precisely
because theres no certainty that the boom will continue forever, however smart and
responsible or accountable you are, you have to have humility to accept that there are
events that is beyond your control. So the best thing that we could do based on the
experience of the Prophet Yusuf (as) in the Quran and in the Bible, is to prepare. So that
was why I started siphoning fundsnot to pocket it and keep it in Swiss banksbut
siphoning them for a special trust fund for the future. And that was why, in 1997 and
1998 when we faced the economic crisis, because of the surplus, because of the big
reserves, and because of the special funds we were able to withstand. So, the allegations
that we, I in particular, had to resort to the IMF and World Bank is a lie. We did
not. At no time did we apply or appeal to the World Bank or IMF for funds, because we
had the funds. It was not easywe were already in bad shapebut not disastrous
compared to Indonesia or South Korea, or China, or Mexico, or Argentina before that, or
even Russia after that. No, we were not. Although at that time, I was already a chairman
of the Development Committee of the World Bank and IMF, so by association, and
because the media in Malaysia, as you know, is number 151 in freedom, is controlled by
the ruling party and the government, I had no recourse to explain my position. So, this is
my flaw that Im explaining.
So, I also made reference to reducing taxes because I believe in the thesis, founded by
Abd ar-Rahman Ibn Khaldun. Ibn Khaldun said that with low taxes people will be
encouraged to work harder and go to school; and ultimately the government earns more.
That was precisely what happened! You know, when you are Minister of Finance, in
1993-1994 talking about Ibn Khaldun in the 14th century, then some of these jokers, these
bankers and their analysts, Is this guy a Wahabbi or what? There is a difficulty in
comprehending; and I am at the World Bank, where they are extremely unpopular in the
developing world. So, I took a stand, and because they are a number of Chinese in
Malaysia, I made also reference to a Chinese reformer, during the period of the northern
Tsung dynasty, whose name was [inaudible]. This reformer, about the same period of the
14th century, took a similar position that the government, the king, or the emperor,
should not be thinking in terms of increasing taxes, because when you lower tax, you encourage
people to work harder and in the process, in terms of volume, you generate much more
revenue for the country. So with this, what is termed now as the optimum road of
taxation and if you are familiar with the Laffer Curve, it is precisely that point: you
lower the tax and therefore you increase the revenue. Yaqub [Mirza, in the audience] is
familiar with this. Hes a businessman; businessmen want lower taxes.
Lets [ia] the point. Here, because you talk about market economic, Imad, I must remind
you, because I was a practitioner, now Im trying to be good professor at Georgetown,
but as a practitioner, there is a big difference between a theoretical prescription and the
action oriented programs. Now, you talk about market economics or free market, or free
market philosophy, then what are the mantras then? The mantra or the dhikr of the
economists was deregulation, privatization, what else? Basically that.
Audience:
Lower taxes.
Ibrahim:
No. You lower taxes, you deregulate; you privatize, ok, its all done, right? That is not the
answer or what needs to be introduced or implemented as part of the entire program,
because you do it packages. I remember a country; I wont mention the name to you
because some of you come from that country, where the World Bank or the IMF insisted
you must have a stock marketstock exchange. But the systems not mature, so the stock
market is abused to enrich a few cronies. The systemthe regulations, the laws, an issue
of governance must be there. Then you privatize, because the government was controlling
too much.
Youve got to imagine the situation in developing countries. In Malaysia I was finance
minister, there were a thousand some hundred companies controlled by the government
or were under the Minister of Finance. If I take one thousand per company, I am a
millionaire in a month. [LAUGHTER.] That is precisely what the chief ministers were
doing. I mean, here was a chief minister of a state who was chairing all these
committeesthough he knew nothing about business; but, he knows a free allowance:
meeting allowance, hardship allowance, thinking allowance. [LAUGHTER.] Well, hardly
any thinking is involved; actually, it is squandering allowance!
Now, that is why to my mind we need to privatize. These are Washington prescriptions,
and we have a problem. Every time we want to do something, Oh, you see, you listen to
the World Bank and the IM. That is a problem. You have to deal with this, so you have
one sector or group that wants to preserve or protect the status quo. When they maintain
the status quo, they are chairman of these companies. The moment you privatize or you
deregulate, there is also a criticism because they see the flaws. What are the flaws? The
flaws were that the companies being privatizedwere privatize to their children and their
cronies. You see, this is the flaw of the Muslim world. If you are an American, you by all
means criticize America, but I am a Malaysian, I want to make sure that we do not repeat
the blunders of others and condemn our people, by allowing the few cronies to squander
as long as possible.
Now, mind you also, the economists wrote regarding this phenomenon, talking about
bandits. Under a feudal system, or the warlord system, either in Afghanistan or the tribal
chiefs in the Middle East, they took, fair enough, but thats it. They were bandits; I mean,
in real terms it was direct robbery. Now we have this new regime, very sophisticated,
democratic, they conduct elections far from being free and fair because they were 99%
under Saddam and 99% under the Americans. You know if Prophet Mohammed (saaws)
were to contest elections in this World, today, he wouldnt get 99%. And this is a bad
example, because
Audience:
Because he is the Prophet.
Ibrahim:
Yes, but even he wouldnt get 99%! So, while the warlords robbed and became bandits,
so were the modern sophisticated leaders, while appealing to the West. The Westerners
were impressed. Karen Hughes was in Malaysia and said is a great Muslim country.
Im going to stop there because Karen Hughes is more sophisticated than President Bush.
[LAUGHTER.] But according to Mancur Olson, he said, In fact, modern sophisticated
robbers and bandits are all the same; in fact, they are more effective. They squander
more because after taking what the warlords used to take, and they continue to take, they
use deregulation and privatization, who did they privatize to? To their children and their
cronies. And I saw this for I was Minister of Finance. What do I do?
I started by introducing in the new legislation, the anticorruption act, when I was acting
Prime Minister. Then they charged mewith corruption. And you know, they didnt use
the law, the anticorruption act that I introduced; they used an emergency ordinance to
charge me with corruption. For what? For talking to a policeman! The charge was trying
to influence this policeman. That was 6 years jail, for trying to influence the policeman
under the emergency laws on corruption.
Its a small thing. I mean, at least I wasnt shot like our friends in Iraq or many other
countries. I was just assaulted, which means Malaysia is getting better. They only assault
you and kick you; they dont shoot you. Its very pathetic actually. The threshold for the
Muslim is so poor. You know, because, the situation is so pathetic that in the kingdom of
the blind, the one eyed man is king.
So, dont forget Mancur Olson, because I used to quote him a lot and many of my friends
didnt quite like him. People are talking about privatization and World Bank says, Good,
these countries are now privatizing the companies. But I say: to whom? According to
which rules? You mean to say only your children are qualified, and your cronies?
What happened? These companies failed, almost without exception, including the
company privatized to Mahathirs son or sons failed. Then, the World Bank or the
IMF talked about a scheme, a sophisticated scheme called The Capitalization for Banks and
for Real Estate Companies. So poor me, I have to introduce it in the parliament. We
have to have this mechanism, because otherwise you just hand things over to your
children. So, by a very sophisticated mechanism and rules, two billion ringgit (700
million dollars) was given to the son. You see, you squandered first by privatizing; you
take the money; then you lose the money; the government will save the money; take over
the government. We have Malaysian Airlines; we have umpteen companies. Im not just
using this to site the Malaysian example, but Im talking from a practical experience that
this is not unique to Malaysia. That is why you have children of all these so called leaders
in the Muslim world are all, virtually allwithout exceptionbillionaires; and you will
have to swallow this because that is the rule of the game.
May Allah give us the strength and the resolve to do something about it. My concluding
statement, or remark, is to suggest that ultimately it the free market philosophy that
works. Ultimately, its only through growth that you can have equity and you must have
clear policy prescriptions. It has to be accountable. It has to be well regulated, because
without that and without the rule of law, you will just use a different economic
philosophy but you allow the plundering and the squandering to continue. As-salmu
alaikum.
[Applause]
Ahmad:
I want to thank our speaker very much for addressing these issues in this interesting and
provocative way. I will open up this session to questions and answers, your comments
and give everybody a chance to participate and to learn more.
Br. Habib Ghanim:
Assalmu alaikum. A very excellent lecture. Have you read anything about the
importance of the free media and free trade and a government that is probably
democratically elected, or whatever. I would like for you to properly tell us what you
think about the government in the United Arab Emirates without Shiakh Zayd (may Allah
have mercy on his soul), who did a lot to help these people even though its not
democratic or they dont have these kinds of freedoms that probably we are talking about
here. I have seen a lot of development in Dubai and the UAE, Abu Dhabi that surpasses
anywhere else in the world. Does he have any ideas or comments on that?
Ibrahim:
There is no certainty that only democratic state would allow for development to take
place or a fundamental shift in economic progress. China is not a democracy, but it is
considered to be one of the fastest growing areas in the World, around Shanghai, if not
the whole country. It has elevated hundreds of millions from poverty. The UAE is
another example. Dubai, in particular, it is considered to be one of the fastest growing
cities in the World. But when we talk about economic development, we talk about
sustainability in the immediate and the long term. It is best to my mind, in terms of pure
economic prescription, that when we talk about development, we talk about progress,
we talk about the development of man. That is why I maintain, as a Muslim, even in the
context of a Maqasid ash-Shariah, what is the maqasid, what is the aim, if it is not the
freedom, the hurriyyah, of expression and sanctity, as Imad said? How do you ensure
freedom if one is not able to express himself or herself? Life, property, free expression of
their views, including the issue of freedom of religion must be protected under a clear
provision of the law.
Of course, you have benevolent dictatorship. You have different brands of dictators or
authoritative rule. I would agree with you to the extent that Sheikh Zayd, of course, takes
a bit more open view, more liberal view compared to many of his colleagues around the
region; but we are talking here about the ideal prescription. What entails the future for the
Muslims in the present context? You cannot run away from the principle that is close to
mutawaha, that relates to our faith and belief that free market, free expression and the
issue of freedom is part and parcel of the Muslim belief system. I think we have to work
on that protection. How you personalize it is of course for each community to decide for
itself. What is the best option? That is why I cannot agree, for example, for the
prescription to be determined by Washington and be compelled because when you do that
it becomes a disaster. Whether in Turkey or in Indonesia, the largest Muslim country in
the World, you have transition to democracy without the presence of foreign occupation
force or the army, but with the decision taken by the Indonesians, themselves. They make
it very clear in the constitutional framework; it is not only free and fair elections that is
important. Prior to free and fair elections, you must have the rule of law; you must have a
free media; you must have a commission or system that guarantees free and fair elections.
Ahmad:
I have a follow up on that thought, because, in his question he used the word democracy
and I think that sometimes people confuse democracy with the things you have
mentioned: the rule of law and free expression and so on. Whereas democracy can also
just mean elections, hopefully free and fair elections, I think that the kind of freedoms
and rule of law that you talk about are more important than elections. Im not knocking
elections. Im in favor of elections, but I think that beauty of elections is that they provide
a nonviolent means of resolving issues that in the absence of elections are resolved by
violence, whereas the things youre talking about are actually things that are, at least,
helpful, if not necessary, for a free market. Your comment?
Ibrahim:
Precisely, because the problem with the American prescription, although they have
devised and clarified their position enough, is that elections are the determining factor.
You have elections in a period of virtual civil war. You have elections when under the
threat of fear. And you cant have electionselections means a free choice but a
democracy is not determined only by electionsyou talk about democracy in America;
they talk of it habits of the heart. I mean, people feel free and are motivated by even
purely ethical sorts of considerations and a moral imperative to express themselves. So
you must have the rule of law. People must be free to express their view. You may have
numerous constitutional guarantees that you can work on. Clear ground rules are made
known to you and these are of course, enshrined, and should be enshrined, in clear
provisions of the constitution and this must be present. If not there is also a fear.
They talk about the experience of Algeria. They say, Well, if you allow for elections
then the Islamists will takeover and hijack. So there are all these problems that freedom
and elections is for everyone except Islamists. This is also a problem, but if you have the
institutions in place as seen in Indonesiathere are very strong Islamic parties; there are
even Islamic parties that call for the formation of an Islamic state and the application of
Shariah; they were allowed to contest. I wouldnt agree with their position, but I must
respect their right to espouse their view. Who, who are we to say, Well, these groups
cant contest because they are Islamic and therefore does not conform to our thinking? I
mean, you are suppose to be a liberalyou talk about democracyyou allow them. But I
believe that if you have institutions of civil society in place, clear constitutional
provisions, and have a free media and have an open discourse, people will decide. In the
Indonesian experience, people have decided for a moderate system of governance, wisely
so. Even in the worst-case scenario (not necessarily to me), if an Islamic Party takes over
power and applies some provisions of Islamic Law, you have a clear constitutional
provision that allows for a latitude; beyond that it is transgressing the constitutional
framework, which you cannot do. But even if they do it, then the next time aroundthe
next 4 yearsthere will be elections where the people can endorse their rule or can
topple their rule. Why must we have this phobia, as many Americans have? I fail to
understand. Im not saying that I support the other position; but I think to call yourself a
liberal democrat as long as there is a free market, theres freedom of expression, theres
freedom of religionthat is not to be compromised. Then it should be ok.
I do not represent the military attitude of Turkey. I think it is mockery of the principle of
democracy. If you say, the people decide, then the people should decide. But clear
constitutional provision must be there on the issue of freedom of religion, the issue of
free media, of the rule of lawwhich means any government takes over there is latitude
given, and you cannot cross beyond that. That is my position.
Audience member:
Thank you very much for the informative speech. The fact of the matter is that if you ask
the rulers of most Muslim countries to give freedom of speech and transparency, its like
asking him to step-down. [LAUGHTER.] And in fact, if there were some Muslim like
you, they would be kicked out. Obviously, you and I, and all of us, we dont agree with
the extent of the intervention but what are the ways really to get those?
Ibrahim:
Yes, thank you. First, we must build this consensus. I mean, the Muslims must make their
position clear. Do you want freedom and democracy for the Muslim World or not? If you
have that, clear ambition, then I think they will be enough pressure. Whatever the
limitations you can say about the elections in Egypt (and I dont endorse that), it would
not have happened without this sort of international pressure, including American
pressure. This is where I disagree with many of our colleagues who say that the
Americans should not raise their voice. I say, to the contrary, the Americans must express
themselves. Where we differ the Americans is on the issue of sending troops, and where
we differ the Americans is their inconsistency. Why cant you talk to the Iranians or the
Syrians? You can disagree with them. Why cant you talk with the North Koreans? So
how do you go and talk to them and say, Look, you are inconsistent. You can talk with
North Koreans, but you cannot talk to the IraniansI mean, what explanation can be
given? Oh, but they are rogue states! But you have a bigger rogue you are discussing
with! So there is a problem here. Does that mean, therefore, that I want to preclude the
possibility of Americans raising their voice? No, I think Americans must express their
view. Im not saying from my personal case because even on my personal case of being
in jail it is very difficult for Muslim countries to speak up because their own opposition
members are in jail, so they didnt want to say anything lest it be insisted that their
governments act in the same manner that the Americans teach (particularly at the time of
Madeleine Albright). Notwithstanding that, I would like to say that the Syrians would not
withdraw from Lebanon if not for American pressure, but I would also have said the
Syrians must withdraw Lebanon, America must withdraw from Iraq, Israel must
withdraw from Occupied Territories. [APPLAUSE.] That is consistent, but the
Americans say, we will start with Lebanon. Fair. We will start at least. [LAUGHTER.] I
mean there must be some amount of pressure. I agree it is not easy because people dont
legislate away their wealth.
A friend of mine in the opposition, the late leader of the Islamic party, when I introduced
the legislation, whispered to me, Anwar, be careful because I think you have done
something which is very, very daring; very courageous, to introduce the anti-corruption
act. He said, You know these guys are not ready to legislate away their wealth. So,
when they are compelled to do that, they will do everything to strike against you. Now, I
must therefore suggest that America, Muslims in America in particular, has this unique
role because once you are good American citizens you wield some influence and you
need now to start focusing on Egypt, then Malaysia, or Indonesia, Iran, whatever. When
you take position, take a fair, just position. I dont mean to suggest you agree with
everything about the Iranian government; certainly you will not. You have every right to
your views; but to endorse the administration policy in regard to their attitude and
intolerance of the regime, that is to my mind, not acceptable. I mean, to extent you can
argue that these people are extreme, these people are Islamist, I think it is not
acceptable.
This leads me to the issue of the proper immediate crises in Iraq. The best option is still
to bring all the Muslim countries neighboring Iraq to engage. There is no optionyou
dont have an option. You cant have a decision taken in Washington to try to resolve the
problem without involving the neighbors, whether you like them or you dislike them.
You learn to be civil and negotiate with them.
[Applause]
Ahmad:
I wanted to bring home the point that Anwar has just made about the importance of
building a consensus. In the case of, for example, of Iran, when their previous President [Khatemi]
asked for a people-to-people meeting, unfortunately, our government
prevented that from happening. I think that if people like us could have gone and met
with the kinds of people I know are in Iran, that it would have had a very salutary effect
on developments there. Professor Atilla Yayla will let you know if Im flattering myself
or our role, but he invited me three times to come to Turkey and I dont know that maybe
that had a positive influence in the work they were doing there and was helpful to them. It
would not have been helpful, obviously, to send American troops to Turkey. And I would
like to call next on Mauri Saalakhan because we have a brother who has come a long
way to be with us tonight and I want him to know I appreciate it.
Mauri Saalakhan (Peace and Justice Foundation):
Assalamu alaikum. The views of former Prime Minister Mahatir have received a lot of
attention of late because of his strong criticisms of the West, and in particular, of
American foreign policy. Many of these criticisms have resonated in parts of the Muslim
world. What is your view on Mahathir's criticisms, and on the myriad of responses that
these criticisms have received?
Secondly, I would be interested in knowing what your view is on the concept of Islamic
government?
Ibrahim:
The questions are getting more difficult. [Laughter]
Ahmad:
Theyll get worse [Laughter]
Ibrahim:
Now, you are right. I dont have any agreement/disagreement with Mahathir in terms of
his criticism of America or Western governments. Although, I think sometimes, it gets
too extreme. When we encountered the monetary crises of 97-98, Prime Minister
Mahathir attacked Soros, but I know for a fact, that at that time, Soros did not use the
funds to speculate on our currency, the ringgit. At that time I was in the position to advise
him, Look, we check through the figures, the Soros fund was not involved in that. He
must have been involved earlier, but not at that time, a period of crises. But you know,
Mahathir is smart, he wanted to deflect from the issue. He knows the Muslims are angry
so people are gullible. You are actually lying. What was he hiding from? Its the issue
of corruption, his weak economic fundamentals. It is a massive squandering of funds for
these mega-gigantic projects at the expense of responsible public spending. We had big
battles on that. Is it 2 billion ringgit for his son? This was hidden. Mind you, at that time
before I was Finance Minister, we were involved in these major speculative funds, in
Tutsila that resultedwhen I became Finance Ministerin the loss of billions of dollars
that we had to recover. Until now, every year it takes 500 million dollars just to cover the
losses of the billions and billions of dollarstwenty billion ringgit, which is about ten
billion dollars losses at that time. These are facts generally known in Malaysia, but
because the media there is fully controlledyou dont have a free media, only one
controlled by the government and the ruling party in Malaysiathe facts could only
be found on the Internet. Even then, from time to time, the police or the Mukhabart, the
Intelligence, would go and attack and sack these offices and confiscate laptops and
computers etc. And Im saying this on the record and they cant counter to my argument
because we have the dates when these people were being persecuted or when these police
barged in and confiscated these items.
So, the other thing I want to explain to you is: dont be too gullibleevery other Muslim
can be critical of the United States, but dont allow ourselves to be an apparatus or agent
of these corrupt people. Take a position. We should take a position where we differ with
the United Statesthe war in Iraq for example, but we dont need to call them terrorists
and they call us terrorists because I think that would frustrate any efforts towards
engagement. My standard example is Abu Ghraib prison. We condemn the atrocities in
Abu Ghraib prison, but why do we keep silent and muted when it comes to prison
conditions in our own countries? I was assaulted in our prison. I was assaulted in Kuala
Lumpur Prison when Mahathir was Minister of Home Affairs and the doctor, the
government forensic specialist, said that that was either to cripple me or to cause death.
Was there any charge? No. Finally, because of the international media outcry, they
charged the police chief and sentenced him 1-month jail. I got 6 years! Not that I have
qualms about itits oklets move on. It would not give me some satisfaction for him
to spend another 6 years in jail; I hope we makes tauba and behaves himself; that is all. I
want to move with my life; but this should not recur. If I was Acting Prime Minister and
could be treated in that manner, what about the poor man in the street? What about rural
villager and the village headman? Who cares about him? You see this is the point that I
think needs to be emphasized.
Now, do I, then, oppose Islamic State or Islamic governance? Normally, I avoid this
discussion. I say everybody has the right to espouse whatever their views are. You asked
my position, I am for a democratic system of government. I am a Muslim. I preserve my
right to adhere to Islamic principles, and I believe in the rule of law, freedom of religion,
freedom of expression, and a free media as well. These are guarantees that I am prepared
to sign and give my stamp of approval. If at all, Im given the position to influence the
government these position and that cannot be compromised because this is a seal that is
not negotiable. However, what about the application of specific principles of Islamic law
and Islamic State? Islamic State means so many things to so many people. Mahathir,
when he was in government, in order to counter the Islamic State argument by the Islamic
Party, called Malaysia an Islamic State. He says Malaysia is now an Islamic state, with
this messy corruption and the denial of basic freedom of expression. That is why I think
this term is very much abused. You ask me; I say, it depends on what you mean by
Islamic State. If it is fair, if it is just, if it respects freedom of people, freedom of religion,
freedom of expression, I dont mind you calling it an Islamic State. When you have an
Islamic state where there is so much exploitation, where people squander money, where
they are so intolerant, where they arrest people without reasons, and detain without trial,
then dont call it an Islamic Statecall it a Shaitan [Satanic] State, whatever you want.
So I think the proper thing is to[applause]. Now, do I, as a Muslim, question Islamic law?
No, what it says in the Quran, Im not here to argue. I accept it. But the issue is, do I,
and can I, given the present global international scenario, and the multi-racial, multi-religious country of Malaysia or with
all the problems we have, do I think it is a priority? Do I think it is implementable? I say,
No, Im not in the position to do that. What I can show is that I will try to be a good
Muslim, I will try with Azizah to create, build, and to educate my children to become
good practicing Muslims, but Im not in a position to compel and apply strict adherence
to the Quranic principle in governance given the present scenario.
Ahmad:
Im going to state the remaining questions in abbreviated form to Brother Anwar and he,
being an economist, will respond in a very economic manner. [Laughter]
The first, was from Frances Johnson, she wanted to know basically what are the elements
in the rule of law, in particular, that you would emphasize?
Ibrahim:
Now, with the rule of law, I mean, it is clear to my mind when it comes to the sanctity of
contracts, property rights, freedom of expression, this can only be realized with the rule
of law. Otherwise your private property can be just taken away by the government or
expropriate by the authorities. So it is quite clear. Again, Iqbal made this reference to the
habits of the heart. How, then, do you educate? I think the role of education is paramount
here. You must allow for creative thinking. You must allow for free expression. You
must allow an intellectual tradition that is more vibrant and open, and this is whats
lacking in Muslim countries. Probably also in the West, but from what I know, in Muslim
countries its a basic flaw in our system of education. It is parochial; it is closed. Today,
writing on the historical analysis of our struggle for independence in Malaysia, its so
parochial that you deny even the role of every other segment. I think, on the contrary,
history is not a myth, its not propaganda, it has to be told and facts have got to be
represented. You can, of course, choose to express your opinion and allow for rest to also
express their views.
Now, Anwar Haddam talks about this Islamic State. Yes, Muslim movements are not
homogenousfact. Im representing my personal view in the context of the country that I
lived and with the problem with how one expound the concept of Islamic State. You see,
unless it is clear, it is better not to talk about Islamic State but to explain what we mean in
terms of its policies or principles or concepts, because if you do that there is some clarity.
Otherwise it can be very misleading and confusing. I know people who talk about Islamic
State who can be so authoritative in nature, which, I think, runs contrary to the whole
notion of Islamic State. I know about people who talk about a fair and democratic
government which is so Islamic in his views, like many of the corporate entitiesthey
refer to themselves as an Islamic bank, but so exploitative in nature. There are some who
talk about the issue of accountability, social responsibility, of Qadr Hasan principles. So
therefore, I think, you do not necessarily avoid, but if you want to use the term, explain it;
otherwise it is better to just confine yourself to the issues.Now, you are correct
when we talk about rule of law in the nation-state, it does not mean
that we can agree with whats happening in the WTO and international community,
because I think it is a mockery of the principle of justice that there are so many
contradictions. I was involved some of the negotiations with the international financial
architecture in the 1990s due to my involvement with the World Bank and IMF. I totally
disagree with the position taken by the IMF on that because they are not in the position to
wield enough influence to correct the basic flaws in inequities and injustice in the
international financial architecture, and similarly the WTO. The Americans and
Europeans are dictating in the battle between America and Europe and all the other
countries just have to submit.
Now, Tony Sullivan, you talk about Baghdad and the ideal situation of the
Bank alHikma over there. And Cordoba, mind you, I used this argument as far back as 10-15
years ago. Its a classic example of living together, having Ibn Rushd. And you know
whos one of the major students of Ibn Rushd? It is Maimonides, the great Jewish
philosopher and thinker. And so you made it a system that could allow for the
mushrooming of ideas and intellect of Ibn Rushd, and a system under a Muslim
government that can produce people like Maimonides. I mean, it is unthinkable in our
societies, however democratic we claim to be! There were, of course, some aberrations
and flaws, but to imagine that Christian scholars and Muslims and Jews working
together! There were top civil servants who were Christians; there were great advisors
who were Jews; and then there were Muslim rulers at that time in Andalusia. So I think
that this needs to be well understood and well researched. And, of course, Ill have to
look at Maria Rosa Menocals Ornament of the World on the advice of Tony Sullivan.
Yes, on the issue of democracy and liberty, that is why when we talk democracy we have
to talk about institutions and civil society, which denotes the essence of liberty in
question.
Now, Sharmin Ahmad talks about the empowerment of women. And I thinkI dont
know whether Azizah concurs with me on thatbut I take great pride because even when
I was minister of education (this was about 15 years ago), the number of female students
in our universities in Malaysia were 50% or slightly more at that time. Now, more, but at
that time, 50% purely according the issue of merit. However, when I was minister of
education there was a problem because we were then selecting teachers and according to
the men, 75% were women, I went to discuss with the women principals and teachers to
appeal to them can you agree to sacrifice 10% for the men? [Laughter] They were all
on merit, there were 75%, purely on merit. But we thought we have to deal with the
problem of discipline among the male students (the boys) so we had to allow for
additional teachers. Of course the ladies were kind enough to say, We keep our 65%, we
can give to you the 10%. So in a way, it was good. BUT, does it mean that there is
enough justice and equality for women? No, Azizah disagrees, because she tells me,
Factif you say 50% of the top students are women, how is it then that in the civil
service, only 10% of the heads of departments are women? I mean, she is too smart for
me. It means that we need to be more flexible and give more latitude and allow for women to succeed. How is it that political leaders, 10% of women, parliamentarians 12% are women, there is a point.
Aly Abuzakouk:
Even here in the States.
Ibrahim:
Yes, even here in the States. The States are never my example of the modernits
completely irrelevant. [Laughter.]
Now another question from Aly is this: how then do you stop children of these leaders
from squandering money and becoming billionaires. They are in their 20s. What can be
done to prevent, or at least minimize this. Do we disqualify them outright? Look at the
the period of Khalifa Umar Ibn Abdul Aziz. When his wife comes to visit him in the
office, he had to switch off the light because the wife wanted to discuss family matters.
Frankly, I couldnt do that because it was central air conditioning, [laughter] but that
message was important to show the issue and to prove that to be a leader, the issue of
accountability is very important. So we talk about Islam, we talk about government, we
talk about democracy, but we dont apply. That has been our problem. So I made it clear
that none of my family members can have any interest, contracts, or shares or dealings
with the treasury, because I was Minister of Finance. Then I realized everything under the
Malaysian system goes through Ministry of Finance, even Eid al Fitr in the village, the
entire family met, with my father, then my eldest brother became the spokesperson and
said, Do you mean to say just because you are Minister of Finance, we are all denied of
our livelihood? It was really an experience because I had to battleAzizah was there.
But I had to say well, Im sorry but you have to find other alternatives, because even if it
is clearly transparent Im not prepared to face the public, because public will say, You
are like them! You are as corrupt as they are! So I was unprepared; so Im sorry Im not
able to do anything. My instructions to the Central Bankto the Treasuryis that [they
are to get] nothing. So, thats why, when all these allegations came up, I said
Wallahul-adhm, if I get one share from the government in all my eight years as Minister of
Finance or one plot of land (government land) that I took for myself or family, it is
harm, and I need to be condemned if you have any evidence to that effect.
But alhamdu-lillah, we managed to do that. [Applause]
