Johari:High time our quake experts like Tony Pua’ stop armchair theorising

“Of course, if you talk about emotion and all that, we want to take action. But at the end of the day, the government doesn’t run on emotional strategies. We need to be very sure of what we want to do,” he said.

The fact that this was not really spotted and widely accepted points to a larger disturbing trend in which ‘experts’ hold forth on complicated and unprecedented issues instantly without analysing any data whatsoever with a theoretical grounding. Most opinions remain outcomes of armchair theorising, where the ‘theory’ is developed based on anecdotal evidence gathered sporadically.The proverbial talk with the taxi driver or the tea vendor is touted as ‘evidence’. Any random data point —ranging from car sales of a particular company to box-office collections of a movie — serves as ‘hard evidence’. Difficulties involved in extrapolating from small, unrepresentative samples to make conclusions about the broad population are completely ignored. Statistical biases of various kinds are not even considered.We must recognise that it is dangerous to extrapolate to all experiences from quake experts like Tony Pua’ As Nobel prizewinning research in behavioural economics by Daniel Kahneman demonstrates, the personal experiences of even the most rational individuals shape their ‘theories of life’. Such smallsample evidence cannot substitute for systematic empirical evidence.
The broader purpose is to call for more rigour in the discussion of critical issues in the public domain. Sadly, excessive subjectivity and instant expertise are at display in most public discussions. For example, the same ‘experts’ who had no clue about the magnitude of the BJP’s victory 24 hours before the results became known are now ready with an exhaustive list of reasons for the same.
Finance Minister II Johari Abdul Ghani said whatever has been made public about 1MDB is only half the story and that a full picture is needed before any charges are made, The Edge Daily reported today.

“Even the PAC (Public Accounts Committee) and AG (auditor-general) were unable to specifically tell what went wrong.

“The transfer of the money to the accounts and so on, it’s not that. That’s only half the story. If you want to charge people, you need the complete story,” Johari said at a luncheon talk organised by Malaysian Industrial Development Finance Bhd yesterday.

The minister was responding to a question on the perceived lack of effort from the local authorities in investigating 1MDB, as compared with several prosecutions and convictions in Singapore related to the state fund.

The actions taken by Singapore against several bankers were due to governance offences, which took place in the city state and not in Malaysia, the finance daily quoted Johari as saying.

“The governance issue happened in Singapore, not in Malaysia. And those characters are actually Singaporeans. These people were charged for not knowing their client. How can you receive money without knowing your client?

“Singapore realised that they had to charge these people because if they don’t, it will be damaging to the financial institutions in Singapore,” Johari said.

‘Investigations must be completed first’

The ongoing investigations by the various authorities must be completed first as Malaysia is relying on these evidence before any further actions are taken, he added.

In addition, Johari said, any action taken during the arbitration process between 1MDB and Abu Dhabi’s International Petroleum Investment Co (IPIC) would weaken Malaysia’s position.

1MDB and IPIC are currently in arbitration over the US$6.5 billion dispute at the London Court of Arbitration.

“Of course, if you talk about emotion and all that, we want to take action. But at the end of the day, the government doesn’t run on emotional strategies. We need to be very sure of what we want to do,” he said.

Later, responding to recent comments by opposition legislator Tony Pua that the Finance Ministry is bailing out 1MDB, Johari explained that when the ministry took over the assets, they came attached with their respective operating loans.

“When we take the land, it comes with the loans. The loans turned out to be RM2.4 billion and RM800 million – the operating loans – which we cannot exclude if we acquire the assets. The loans will be serviced by all the developments that we are going to do.

“If the assets remained under 1MDB, no potential investor would want to come in and help develop the land,” he said.

However, Johari said, the ministry would not take over 1MDB’s other debts, namely the RM5 billion sukuk, the US$3 billion bond and two tranches of US$1.75 billion.

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