Malaysia gets top prize for football match fixing


April 14, 2014

http://www.freemalaysiatoday.com

Bolehland (Malaysia) gets top prize for football match fixing

 by Nicolas Anil

PETALING JAYA: “If there was a gold medal for football match fixing, Malaysia would win it.”

Declan Hill's bookThis is the damning verdict of Declan Hill, the Canadian journalist and academic who has been called the world’s foremost expert on match fixing and whose book, The Fix: Soccer and Organized Crime, is an international bestseller.

Hill has testified on the issue before the International Olympic Committee (IOC), the British and European Parliaments as well as the integrity units of the European Union of Football Associations. He has hard facts to back his claims.

Indeed Malaysian football has become synonymous with match fixing since 1994, when 21 players and coaches were sacked, 58 players suspended and 126 players questioned over corruption.

Two decades on, little has changed. In 2012, the Malaysian Football Association (FAM) suspended 18 President Cup players and banned a former Negeri Sembilan coach for life after they were found guilty of fixing matches.

Last year, five Kuala Lumpur players and three officials were slapped with life bans FBL-GERMANY-CANADA-CORRUPTION-HILLand 17 others were fined after FAM found them guilty on match fixing charges. A few months before that scandal, the Perak FA suspended its entire team for two weeks on suspicion of match fixing after they lost heavily in several matches.

In fact, according to Hill (right), match fixing has been spreading like cancer since the 1994 disgrace.“Malaysian match-fixers were not stopped in 1994,” he said recently. “They decided to keep local fixing under the radar and spread their activities throughout the world [instead], where the profit was much more lucrative.

“In 1994, we barely had the Internet. There was hardly any live coverage of European football and this was a massive change in Malaysian and Singaporean society. And so, gradually, Malaysians identified something that the rest of the world was just waking up to, which was globalisation.

“These people were really intelligent businessmen. They started to send their people around the world, proposing deals to dubious players, coaches and team owners to fix the games in their leagues.

Irresistible deals

“These Malaysians would propose the following to local fixers: ‘You fix the local game, and we’ll fix it on the Asian gambling market.’

“These deals were simply irresistible. They could make 10 times the profit because there was demand for it on the Asian gambling market. Now, suddenly, you have a second division game in Italy that could generate around a hundred thousand Euros.

“With this kind of money, more people could be bought and so it became a pattern. Malaysians have certainly become a household name on the match fixing market, having traces in Greece, Czech Republic, Slovakia, Bulgaria, Belgium, Italy and Germany.”

Hill has a suggestion on how to stifle Malaysian match fixers.“A special, independent unit needs to be formed to crack and clean this phenomenon,” he said.

Kj“Pressure must be put on the Malaysian officials, and pressure has to come from men like me.There is an expectation of corruption in Malaysian football amongst the fans, players, coaches and officials, because there is a bigger fish involved in this.So that is why an elite task force has to be formed, and they must have the guts to go after these fixers.”

Hill said that if Malaysia did not act soon, there would be ramifications that could damage the nation’s prestige.

“As I have testified before various Parliaments, we have to tell the IOC that if Malaysia doesn’t clean up this problem, they will be banned from international sports. Not being able to participate in the Olympics, for instance, would be a damaging blow to the country’s pride. So it may be just be the tonic for them to get down to the root of this problem.”

It is certainly hard to argue with Hill when Malaysian football keeps making the headlines for all the wrong reasons. Perhaps it is time for the Police and the Malaysian Anti-Corruption Commission to sit down and brainstorm a way to kill this cancer.

Nicolas Anil is a sub-editor with Sports247.

Tengku Razaleigh’s Speech at the launching of “Rich Malaysia, Poor Malaysians”


April 4, 2014

Tengku Razaleigh’s Speech at Sultan Sulaiman Club, Kg Baru, Kuala Lumpur, 8 pm on April 3, 2014 on the occasion of the launching of “RICH MALAYSIA, POOR MALAYSIANS”, authored by Anas Alam Faizli

Ku LiYBM Tengku Razaleigh Hamzah

I am honoured at having been invited by Anas Alam Faizli to launch his book, “Rich Malaysia, Poor Malaysians”, a collection of essays reflecting his thoughts on energy, the economy and education of our beloved country. I applaud Anas for his intellectual discipline to pursue writing which demands mental toughness, quiet tenacity and absolute patience. Indeed, he deserves our admiration.

He deserves our respect given that Malaysians are notoriously apathetic to reading, let alone writing. I respectfully submit that we do not write enough, both fiction and otherwise in comparison to, say, our sprawling archipelagic neighbour to the south. It is in this context that our author deserves our commendation – my commendation in particular – for a task well done, even though the themes are serious and difficult. Well done, Anas.

Book Launch on April 3, 2014Having skimmed through the book, I must admit that I have more than just a passing interest in it; and at least for two reasons. I am always interested in writings on the subject of energy, be they articles for lay reading or academic treatises. I feel especially close when oil and petroleum are discussed. This is because of my task previously to see through the legislation of the Petroleum Development Act, 1974; the negotiation of the production sharing contracts with oil majors whose roles were redefined as contractors to the national oil company in the post-PDA era; and, establishing and developing PETRONAS into a professionally reputable and internationally respectable national oil company.

Secondly, having been schooled in economics, I follow its development keenly, both at the national and international levels. This is strengthened further by my having once been the Minister of Finance charged with the financial and economic management of the country. And of course, given the collective responsibility of the Cabinet, national policies on such subjects as education interest me greatly.

Let us reflect, for a moment, upon the situation regarding the supply and consumption of petroleum in the country and the downstream role of PETRONAS in the retailing of this essential and strategic product. Given our continuous inability to guide the country out of the middle income trap into the high income bracket, we have been using, for long spells, petroleum subsidisation to solve the problem of its affordability by ordinary people in the lower strata of the economic chain. While the subsidising of consumer goods is not the most efficient of ways in managing the high cost of living, it is fairly understandable if the government extends a helping hand to the small man in that manner.

What is sinful and cannot be forgiven is the ease with which the power that be had been dishing out subsidies to such entities as the national power supplier, the independent power producers and some other non-power outfits. As has been pointed out by Anas, since 1997 this subsidy has amounted to RM136.5 billion. The sad part is that while these power producers continue to enjoy subsidised fuel price, petroleum subsidy to the consumers – which purportedly cost the government RM14 billion in 2011 – was partly discontinued recently.

It is glaringly obvious that the government has been treating PETRONAS as a cash cow. Anas continues to point out that over 37 years from 1974 – 2011, the government had been paid some RM529 billion in dividends, taxes, petroleum proceeds and export duties from the national oil company. The reliance on PETRONAS to help outfits with strong linkages to the government out of financial trouble has been going on from as far back as 1985. In that year it rescued Bank Bumiputera with a RM2.5 billion bailout and again in 1991 when it coughed up another RM1 billion. In 1997, Petronas had to rescue the financially ailing Konsortium Perkapalan Berhad for RM2 billion.

The national oil company was also made to underwrite the construction of the Twin Towers in the heart of the KL golden triangle for RM6 billion and the building of the extravagant Putrajaya for RM22 billion. In all, more than a half trillion ringgit have been spent. This amount could have been used more productively to fund a national pension programme for Malaysians as has been done by a certain Scandinavian country.

This extravagance that had been forced on to PETRONAS has also deprived the company from the much needed cash build-up for reinvestment which would ensure its business sustainability. Given the finite nature of hydrocarbon as a resource, it is important for PETRONAS to look further afield at investments in businesses outside of oil and gas.

Looked at from this perspective, it is all the more critical for the corporation to have a strong cash reserve for reinvestment purposes. It was this need for prudence that had led Tun Razak, the Prime Minister of the day, to impress upon me the need to ensure that Petronas would enjoy parity with such multinational companies as the once much touted seven sisters, two of which ultimately became its contractors.

Today PETRONAS is at par with the oil majors and it is ranked as one of Fortune 500’s largest and most profitable oil and gas companies. But sadly, it is being abused and treated as the piggy bank whenever the government needs cash in a hurry.

Ladies and gentlemen, why is this so? Why is there a discrepancy between what was visualised by the founding fathers of PETRONAS and what it has turned out to be 40 years on; that is, as a banker of sorts to the government.

The truth is that there had been consistent political interference and this had affected PETRONAS, even though it is a professionally well run corporation. There is a blurring of lines demarcating the party in power and government, and by extension, the party supremo and the head of government. Cynics would contend that it was done on purpose to facilitate the development of politics of patronage. This, in turn, led to the growth of crony capitalism.

This inter-ethnic dichotomy is no more than a duplication of effort which result in the inefficient application of resources. It is worsened by the economic disparity that continues to be persistently reflected along racial line, notwithstanding the efforts made to blur and wipe it out. As explained by Anas, the bottom 40% of Malaysia in economic terms is still made up of Bumiputera households.

Transpose this against the notion that about 90% of their incomes are made up of wages and salaries which are hardly commensurate with the relatively more rapid increases in living costs, this problem takes on a much darker hue. As an illustration of how low Malaysian income generally is, it is worthwhile noting that the EPF had been known to report that about 79% of its contributors earn RM3,000 or less a month.

This reality becomes more significant when we realise that disposable income contributes much to purchasing power, especially among the relatively poor as opposed to the wealthy where purchasing power is additionally sourced from assets other than salaries and wages. A report on the national human development goes further to say that the “Chinese has a higher purchasing power compared to other ethnic groups…” More problematic and easily a potential source of politico-economic problem is the assertion by the report that there is “homogeneity in the purchasing power gap.” It asserts that the super-rich, regardless of ethnicity, has about 18 to 20 times more purchasing power.

Purchasing power has a graver ramification from the standpoint of economic wellbeing. This has to do with the reality that a person who enjoys a high income is not necessarily guaranteed a better quality of life. Neither does the effort to improve the quality of life through high income mean much if the cost of living rises rampantly. Again, an observation by Anas is very illuminating here. He contends that a graduate who entered the job market for the first time, say, in 1978 on a monthly salary of RM1,000 could afford a lower-end car of RM12,400 or 12 months’ salary and take out a mortgage, perhaps, on a RM62,000 house in a fairly upscale Kuala Lumpur suburb.

Today, a fresh entrant into the labour market on a monthly salary of RM2,500, which is two and half times higher than his earlier counterpart, would find a roughly similar car costing him RM178,000, roughly 71 months of his salary. A house outside the Greater Kelang Valley area, in Nilai for example, would set him back by RM350,000. This situation could get worse in all probability.

Ladies and gentlemen, the challenge before us is to mitigate the socio-political issues and problems to a minimum. This will ensure that they do not become a part of our political culture and, by extension, our way of life. We must have the will to stop patronage and cronyism. In this way rent-seekers would be cut off. But herein lies the problem.

Political leaders are loath to upsetting the apple cart and disturb their cosy symbiosis with rent-seeking cronies. More often than not, these are the people whom they rely upon for political funds in their effort to continue to latch on to power.

What then could be done given this near-checkmate type of a situation? I say pressure must be brought to bear and it must be made known that we will not tolerate any more politics that is less than ethical. We must clearly and loudly make it known that politics must be practised with a high level of integrity. No, politics is not dirty but its practitioners, more often than not, are. In the longer run and in order to ensure that ethical politics of impeccable integrity is practised, we must overhaul our education system.

We need to shift our education paradigm from a system that emphasises regurgitating what is learnt by rote to amass distinctions to one that puts a premium on logical and critical thinking in which source as well as general reading is a major activity in providing the primary material. We must revisit our educational philosophy in order that we may give equal importance to classroom and off-classroom activities in educating the young Malaysian into a potential leader material for the public or private domains. Of course, this is a huge and important subject that needs proper addressing at, perhaps, another forum.

Ladies and gentlemen, in the last several minutes I have shared with you my thoughts on the subjects addressed by Anas in his book. I hope it has generated enough interest to trigger off your critical thoughts on the subjects or other related subjects. In the process it is hoped that some of you will go a step further to put pen to paper as Anas had done. On that note, I take this opportunity to congratulate the author for making the book available to the public which I have much pleasure in introducing. Thank you and I wish you a pleasant day ahead.

*This speech was delivered by former Finance Minister Tengku Razaleigh Hamzah at the launch of the book “Rich Malaysia, Poor Malaysians” by Anas Alam Faizli.

Anas Alam Faizli speaks in Bahasa Malaysia on his book, “Rich Malaysia, Poor Malaysians at Kelab Sultan Sulaiman, Kg. Baru. Kuala Lumpur, Malaysia on April 3, 2014 (below):

Book, Rich Malaysia, Poor Malaysians

Yang dihormati dif-dif jemputan yang terhormat,

YBM Tengku Razaleigh

Dr Syed Husin Ali, YB Saari Sungib, Tan Sri Kamal Salih, TokSu Norizam,

Pak Chong, Siraj, Azlan, Dato Din Merican, Sharaad,…

Para hadirin-hadirat yang dihormati sekalian,

Assalamualaikum warahmatullahi wabarakatuh dan salam sejahtera,

 Saya ingin merakamkan setinggi-tinggi penghargaan kepada YBM Tengku Razaleigh yang sudi merasmikan buku Rich Malaysia, Poor Malaysians dan Malaysia Kaya, Rakyat Miskin. Kredibiliti Tengku tidak dapat dipersoalkan – pengalaman Tengku sebagai Founding Chairman dan CEO Petronas yang juga pernah memegang tampuk kementerian kewangan dan perdagangan antarabangsa serta mantan pengerusi Bank Bumiputra.

Dalam pendidikan pula, Tengku pernah mengatakan pada bulan Julai yang lalu bahawa “Sistem pendidikan negara kita gagal dan kita tidak boleh mempertahankannya lagi. Tambah beliau, satu tindakan yang ikhlas, berani dan radikal diperlukan bagi mempercepatkan proses pembaharuan dalam pelajaran dan pembelajaran.”

Buku kerdil ini juga telah diangkat nilainya ke tahap yang lebih tinggi kerana sumbangan dua orang pemimpin yang saya sangat kagumi dan hormati- pemimpin yang mewakili gen-Y dan juga generasi veteran. Terima kasih yang tidak terhingga diucapkan kepada YB Nurul Izzah dan Senator Dr Syed Husin Ali yang telah mencurahkan pemikiran mereka seterusnya menyuntik kehebatan permulaan kepada buku kerdil ini. Terima kasih juga buat barisan panelis yang sangat tersohor, En Mohamed Siraj, En Azlan Awang, Dato’ Din Merican dan juga moderator Mr Sharaad Kuttan.

Anas Alam FaizliBuku ini merupakan himpunan esei yang telah ditulis dalam tempoh setahun. Manuskrip versi Inggeris dan Bahasa telah siap serentak tetapi versi Inggeris diterbitkan dahulu untuk menilai sambutannya. Walaupun ia merupakan himpunan esei tetapi Alhamdulillah berjaya disusun dalam satu bentuk kronologi yang mempunyai kekuataan tersendiri. Sebuah himpunan esei yang berbicara tentang isu-isu nasional dan global seperti isu tenaga, ekonomi, pendidikan dan kesukarelawan, yang saya harap mampu mencetuskan wadah bicara kritis dan berguna untuk semua.

 Penulisan dimulakan dengan berkongsi amanat almarhum Atok saya, Mohd Zain bin Abu dengan tiga prinsipnya iaitu:

1-  Pendidikan ialah perkara paling penting dan akan sentiasa menjadi keutamaan

2- Elakkanlah seberapa banyak permusuhan dengan orang lain

3-  Dan jadilah orang yang memberikan banyak manfaat kepada orang lain

Buku ini antara lainnya satu usaha untuk memenuhi wasiat Atok, dengan kerendahan diri, satu percubaan kecil untuk menjadi seorang yang bermanfaat.

Idea utama buku ini ialah satu penerimaan bahawa , Malaysia ialah sebuah negara kaya dengan hasil mahsul bumi.  Beratus tahun di jajah dan hasil kekayaan di larikan penjajah,  kita kembali memegang daulat sebuah tanah yang kaya dan mewah. Maka kerana itu,  sebaik sahaja merdeka, tanah ini tidak pernah  putus memberi sumbangannya baik daripada bijih timah, getah, kelapa sawit, bijih besi, bauksit, kayu balak dan terkini minyak dan gas yang menyumbang 40% hasil pendapatan negara.  Semua ini ialah sumber tidak ternilai yang perlu dihargai dan digunakan sebaik mungkin.  Oleh itu,  adalah sangat penting masyarakat umum memahami sebanyak mungkin mengenai industri yang menjadi “cash cow” negara ini.

Bahagian sumber petroleum Malaysia ini dimulakan dengan persoalan adakah kisah Petronas ialah kisah si tanggang? Beberapa soalan penting seperti – bilakah minyak akan habis? Dimanakah industri perkhidmatan tempatan dan isu-isu yang lain telah dikupas malah diakhirnya turut diberikan beberapa cadangan penyelesaian. Kemudiannya, satu penerangan mengenai sejarah Petronas, bagaimanakah ia beroperasi dan sistem fiskal Malaysia diperjelaskan. Konsesi vs PSC. Persengketaan Royalti Minyak juga telah disampaikan secara terperinci daripada perspektif semua negeri yang terlibat. Bahagian ini ditutup dengan cadangan pemberian ekuiti Petronas kepada negeri pengeluar minyak berbanding penambahan Royalti.

Bahagian Sosio-Ekonomi pula dimulakan dengan merungkai 8 realiti Malaysia dan mengapa pendidikan tinggi wajar dibiayai oleh kerajaan. Saya ambil jalan berbeza dan tidak membandingkan dengan negara lain tetapi melihat perspektif kaca mata Malaysia itu sendiri dan menyimpulkan mengapa kita perlukan pendidikan tinggi. Slogan saya dalam buku ini, 1 Keluarga 1 Graduan.

Esei berikutnya menghuraikan dengan panjang lebar apa yang dimaksudkan dengan Negara Berpendapatan Tinggi, Rakyat Berpendapatan Rendah. Malaysia Kaya, Rakyat Miskin.

Ilustrasi disampaikan dengan fakta dan diterangkan secara halus. Kemudiannya saya membuka kisah Mitos Si Kaya dan Si Miskin diikuti dengan penerangan bagaimana sebuah Negara Berkebajikan akan meluncurkan Malaysia kearah masa depan yang jauh lebih baik.

Menuju kearah demokrasi yang lebih kukuh dengan dua parti dominan negara, saya juga menulis bagaimana kaedahnya untuk memahami dan membuat analisis kritikal ke atas manifesto yang dijanjikan oleh parti-parti bertanding.

Bahagian ini ditutup dengan penjelasan panjang mengenai perjanjian TPPA yang sedang dirunding oleh Malaysia.

Seterusnya,  saya mengupas isu pendidikan dengan analisis pencapaian ranking antarabangsa Malaysia. Saya kemudiannya menyeru membina budaya membaca buat menuju mentaliti negara dunia pertama. 1996 – 2 muka surat, terkini 2 buku berbanding Jepun Perancis 10, AS dan Kanada 17 buku. Kemudiannya saya menyeru kepada penyemaian budaya berfikir dengan beberapa cadangan. Saya juga mempersoalkan jika sekolah moden itu satu pengkhianat kepada pendidikan. Bahagian ini ditutup dengan cadangan mendefinisikan semula falsafah pendidikan negara dengan cadangan Cinta sebagai Pedagogi dan FPN yang baru.

Saya percaya pendidikan boleh dijadikan penyelesaian kepada semua masalah yang dihadapi negara.

Bahagian terakhir menyentuh mengenai kesukarelawanan dan satu penulisan panjang yang menghuraikan mengenai bagaimana kesukarelawanan boleh berjaya dan menyumbang kearah pendidikan yang lebih baik. Saya juga nukilkan konsep kuasa ketiga dan bagaimana kesukarelawanan boleh menjadi agen menyubur demokrasi dengan memberi ruang suara kepada semua pihak.

 Buku ditutup dengan epilog bahawa gerakan massa Reformasi adalah milik semua  dan rakyat perlukan satu Rejuvenasi.  Seperti yang saya sering utarakan, penulisan ini adalah milik umum, dan saya seru warga umum untuk mengulas, mencabar dan memperkembangkan idea-idea di dalam buku ini. Usul-usul kritis yang padat di dalam buku ini saya mohon diperhaluskan dan semoga dapat dimanfaatkan oleh semua.

Akhir kata, Baca, Faham, Fikir dan Bertindak. Berjuanglah!

Terima Kasih.

 

Inside Singapore’s Socio-Economic Success


April 2, 2014

Singaporean Finance Minister Tharman Shanmugaratnam  on Singapore’s Socio-Economic Success

port-of-singaporePort of Singapore

Rich Guys Pay Taxes, says Tun Dr. Mahathir Mohamad. Do You Agree?


March 22, 2014

Rich Guys Pay Taxes, says Tun Dr. Mahathir Mohamad. Do You Agree?

by Lawrence Yong (March 20, 2014)

@http://www.malaysiakini.com

TDM--21 MarchFormer Prime Minister Mahathir Mohamad today said that Malaysia needs rich people who can pay taxes, and this is not cronyism even if some of them are now his friends.

Mahathir said that since the British left in 1957, Malaysia has mostly taken a ‘pragmatic’ approach to its economy – neither free-market capitalist nor socialist – and he therefore shot down critics who said he enriched only an elite class of people during his 22 years as prime minister.

He said that while government borrowed some socialist ideas – backing affirmative action for Malays, created state enterprises and gave land away, it also gave businesses a free hand to profit
handsomely.

He was giving the primary lecture for the Centre of Poverty and Development Studies at the Universiti Malaya campus in Kuala Lumpur.

After his talk which was titled ‘Poverty issues in Malaysia’s economic development’, human rights activist and lawyer Haris Ibrahim stood up to grill Mahathir for letting Malaysia’s inequality get out of hand.

Haris (left) pointed out that some households now live on RM29 a day amidst Kuala Lumpur’s famous Twin Towers, while just one percent of the richest Malaysians control over 10 percent of the country’s wealth. This is despite Malaysia’s oil wealth which has flowed since 1974.

Haris then asked Mahathir to explain “What went wrong?” and insisted that the elder statesman apologise for failing to eradicate poverty.

The audience cheered and applauded before waiting in anticipation for Mahathir’s expected comeback.

“You will find that the rich people are useful people. We were a business-friendly government and I told these people, when you make money, 28 percent belongs to us (through taxes)… that’s why we were helping them.

“Now suppose these people are absent… who are you going to tax? You can’t tax the poor. We need the rich!” Mahathir said, reading from his little notebook which he used to busily take notes when Haris spoke.

Mahathir also then quickly answered Haris’ three questions: “Do I ever drive in KL? I drive every weekend because I love driving. In the past, I used to drive around the check the construction sites.

“What went wrong? You don’t expect every prime minister to follow what the previous prime ministers have done… that you will have to ask them.”

And then he finished off with: “As for apologising… I should expect the questioner to apologise to me!” The audience erupted in applause. Mahathir’s solution was modernisation. In his speech earlier, Mahathir noted that when Malaysia gained independence, more than half were living in poverty.

He added that this disparity, which was marked along racial lines, was one of the reasons for the May 1969 racial riots.

Multiracial and multireligious Malaysia could not survive with such instability, said Mahathir, whose most famous economic writing was the formerly banned book ‘The Malay Dilemma’.

“How do we solve that problem? Dole out money like BR1M (Bantuan Rakyat 1Malaysia)? But we didn’t have money back then,” Mahathir said, adding that his own solution was modernisation to expand the economic pie.

“In fact, we grew the economic cake so large that people who were poor at one time are now rather rich.”

Looking around at international students and undergraduates who were among the attendees at the lecture, the octogenarian medical doctor who became a politician ended his speech with this advice for fighting poverty.

“Reject ideologies. We are pragmatic people – do what we think will give results,” he said.

Later, a law undergraduate also stood up to ask the doctor for his solutions to the perceived crony capitalism and the middle-income trap problems.

He cited the recent study from The Economist which put Malaysia as one of the top three countries in the world for rent-seeking behaviour which let the rich get richer.

Mahathir again defended his past economic policies, saying that students who wanted income equality had no idea what they were really asking for.

“Who are these cronies? They were unknown people… for example, I didn’t know these people until they were successful. Now supposing I have a million dollars to give as capital and I give it to a trishaw rider – what does he do with the money? He will spend the money.

“But if I give it to someone who understands business, he will succeed – the moment he succeeds… ahh, he is a crony! So in order to avoid this accusation that there is cronyism, you must ensure that everyone in this country fails.”

Pointing to Malay entrepreneur Syed Mokhtar Al-Bukhary (right), who is said to be the government’s most preferred business partner, Mahathir applauded the billionaire for giving jobs to over 120,000 people through his huge chain of enterprises which spans from carmakers to post offices and book shops.

“But he wasn’t always that. He started off selling cows and sugar and rice and now he’s a billionaire. What’s wrong with that?

“You want him to be a rickshaw puller? That’s easy… just take away all the opportunities from him and he will become a rickshaw puller but what good does that do? You can’t tax a rickshaw puller and you will have no money,” Mahathir said.

On the middle income trap, Mahathir said that it isn’t so bad as it could be worse. Malaysia could be stuck in a “poor income trap”, and the audience laughed politely.

Water Deal between Selangor and Putrajaya: Time to Come Clean, Khalid Ibrahim


March 1, 2014

Water Deal between Selangor and Putrajaya: Time to Come  Clean, Khalid Ibrahim

Commentary by the Malaysian Insider

UAE had written to Prime Minister Datuk Seri Najib Razak and Selangor Mentri Besar Tan Sri Abdul Khalid Ibrahim last April 12, seeking their intervention on the dispute, but no reply was received, lead counsel Rosli Dahlan said last month.

What’s the real deal, Mr. Khalid Ibrahim?

The Putrajaya-Selangor memorandum of understanding (MOU) for the acquisition of state water assets and construction of a RM1.2 billion water treatment plant does not seem to pass the smell test.

And if something does not smell right, it is not right.First off, Deputy Prime Minister Tan Sri Muhyiddin Yassin today described the MOU signed on Wednesday as a binding agreement, although PAS central committee member Dr Dzukefly Ahmad pointed out it was not, unlike a memorandum of agreement (MOA).

Lawyers have chipped in too on the matter, saying MOUs are not legally binding as they just reflect an intention to work together to a common goal.

“It is normally signed when two parties want to work together, but do not want a legally binding agreement with each other,” lawyer Syahredzan Johan told The Malaysian Insider.

“However, I am speaking from the perspective of not having seen the contents of the MoU signed between the Selangor state government and the Federal government.”

“What is important is the contents of the document, not the labeling. One can have a perfectly legally binding document and still call it a MoU,” Syahredzan said.

The lawyer zoomed in on the main contents of the MOU, saying, “I think in the instance of the current MoU signed by Selangor and Putrajaya, it is in relation to buying over the water concessionaires and the approval for the Langat 2 water treatment plant.”

For the two components to conclude, he said there would be legal agreements to acquire the water concessionaires and also to build the RM1.2 billion water treatment plant in Langat, Selangor.

Would the MOU expire if any of the two components do not take off? Does the MOU have a time-frame for each component? The only thing that is public knowledge is that the Selangor government must approve Langat 2 once the tender is issued for the construction.

Is it just about water supply or who will benefit from the construction contracts, one wonders.

While connected businessmen can shout with glee that they would get RM9.65 billion for the four concession holders, others will be happy that there is another infrastructure project to profit from after five years of haggling.

Media reports last year said three companies — Salcon Bhd, MMC Corp Bhd and Ahmad Zaki Resources Bhd (AZRB) — have been shortlisted to build the RM1.2 billion Langat 2 water treatment plant project.

The Pahang-Selangor interstate water transfer tunnel is being built with a soft loan of RM2 billion from the Japanese International Cooperation Agency (JICA). There is a 40-year repayment period for the 45km tunnel through the Titiwangsa mountain range.

Apart from that, the project entails the building of a dam and a pumphouse in Pahang, and a water treatment plant in Selangor with the total value said to be about RM7 billion.

While those living in Selangor and Kuala Lumpur will benefit from the project once it is completed as early as 2017, critics say the Langat 2 water treatment plant can only provide water capacity until 2025, and the government would require more plants and dams built after that in the country’s most densely populated area.

That would mean more projects in the future, and higher costs. Unless Putrajaya and Selangor insist that the water concessionaires take steps to cut down leaks that lead to a higher portion of non-revenue water (NRW).

There is a need for more treated water to cater to the rising population, but in the rush to provide that, the government should look into more ways to conserve water because more projects just means the taxpayers will have to bear the burden of underwriting the deals, while companies show the profits.

Muhyiddin also said today, “The MoU between the federal and state governments are for the benefit of the people to alleviate the water crisis in the Klang Valley with the construction of the Langat 2 treatment plant.”

This would take another three years. Nowhere does the MOU talk about ways to stop leakages and NRW. If PKR and Barisan Nasioanl (BN) politicians think they are doing Selangor a favour with the deal, they have to think again. The only ones benefitting appear to be the contractors. — February 28, 2014.

 

Malaysia in 2014–A Perspective from Singapore


February 22, 2014

Malaysia in 2014–A Perspective from Singapore

For Singapore, due to history, geography, demography, economy and recent political experiences, Malaysia has perpetually been its lynchpin concern and preoccupation. In the past, S Rajaratnam, the Republic’s first foreign minister, had described Singapore’s relations with Malaysia as ‘special’ and there is nothing to suggest that this has changed in anyway. If anything, the ‘specialness’ has been intensified and further reinforced due to a whole array of factors, not least being the imperatives of national, regional and international economics. A weakening United States, an assertive China, an unstable Thailand and a new nationalistic leader in Indonesia can change the political and security architecture in the region to the detriment of both states and hence, their bilateral ties.

MALAYSIA-SINGAPORE-DIPLOMACYIn the 1950s and 1960s, culminating in Singapore’s expulsion from Malaysia in August 1965, the emotive dimension of Singapore’s view of Malaysia was dominant. Even though this has largely dissipated, it is not totally absent. Still, the pragmatism with which both states have moved forward is definitely a milestone achievement in bilateral ties in Southeast Asia.

For Singapore, continuity rather than change remains its key perspective on Malaysia. This was especially true after the May 2013 general elections where the Barisan Nasional (BN: National Front) was returned to power albeit with a weaker majority. Still, Prime Minister Najib, the United Malay National Organisation (UMNO) and the BN are in power and that is what matters even though the winds of change must also be disconcerting. The disquiet would be more, not so much from the economic aspect as it would be from the rising racial and religious polarisation of Malaysia in the last few years that was brought to the forefront during the last general elections.

The ‘Allah’ issue has not been helpful and the recent firebombing of a church in Penang has merely raised the ante of what this will mean for Malaysia and possibly, even multiracial and multi-religious Singapore. All that aside, the single most important development of late has been the rising warmth in Singapore-Malaysia bilateral ties under Lee Hsien Loong and Najib Tun Razak. While past imperatives of history, geography and demography remain relevant, most dominant in the new narrative has been the personal warmth of the two Prime Ministers (Lee and Najib) and the strategic nature of their bilateral ties.

Most of the past issues have been addressed or settled such as relocation of Customs and Immigration Complex, land reclamation and even water. Most importantly, has been the breakthroughs that both leaders have made vis-à-vis two issues, namely, the resolution of the Tanjong Pagar Railway Station and the land exchange deal as well as Singapore’s support for the Iskandar Development Project in Johor. Other positive developments in ties include the holding of annual leader’s retreats, re-establishment of links between both countries’ stock exchanges, Malaysia’s agreement to sell electricity to Singapore, the agreement to build high speed train link from Kuala Lumpur to Singapore, the amicable post-Pedra Branca technical talks to resolve legacy issues over the islands’ dispute and finally, the establishment of a Singapore consulate in Johor Baru.

If there is one key factor that has brought bilateral ties to a new height, it is the cooperation in the Iskandar Project. Not only is the Singapore Government supporting investments in the project through Government-linked companies such as Temasek Holding but also playing an important role in encouraging the private sector to invest in the project. Additionally, thousands of Singaporeans are expected to be permanently based in the Iskandar region and Johor as a whole, bringing interdependence to a level that was never seen before. To that extent, Iskandar has been the key game changer in Singapore-Malaysia bilateral ties of late.

The breakthrough in bilateral ties was a function of a number of factors. First, the decision by both sides to adopt a new approach to bilateral ties in order to garner win-win results. Second, the personal warmth of the top leaders was extremely helpful. Third, the calculation of the mutual benefits that would be gained by both sides in view of the increasing regional and global competition. Fourth, over the years, there has also been increasing economic interdependence with Singapore as one of the top investors in Malaysia over the last two decades or so. Two-way trade and investments are among the highest between the two states. Fifth, there is also the realisation of increasing security indivisibility of both states. Finally, the ideological pragmatism of both sides has also helped in boosting bilateral ties.

While Singapore expects Malaysia in 2014 to have a largely ‘normal’ year barring any unexpected events – all the more to be the case as the UMNO annual assembly has opted for status quo – the Republic is also mindful of the many uncertainties that can unexpectedly crop up to affect bilateral ties. While 2014 can expect the warming of ties to continue, this cannot be taken for granted. First, the warm ties of two Prime Minister, both of whom are sons of two former prime ministers  who were not close, may not survive personalities if a more nationalistic prime minister takes over in Singapore or Malaysia. Second, tensions could surface if the promised cooperation proves futile or produces one-sided benefits, say in Iskandar Project. Finally, growing domestic tensions in Malaysia, especially among the Malay and Chinese communities in Johor or in Malaysia could spill over into Singapore-Malaysia relations.

Hence, for Singapore, while Malaysia in 2014 is expected to continue ‘good business as normal’, there are also potential minefields that might explode, and hence, the need for caution. ‘Special relations’ are important but can never be taken for granted, and this also holds true of Singapore’s view of Malaysia in 2014.

Bilveer Singh is Associate Professor at the Department of Political Science, National University of Singapore, adjunct senior fellow at the S Rajaratnam School of International Studies and President of the Political Science Association of Singapore.

Sorry Riza Aziz, your Mom’s Money can’t buy everything


January 23, 2014

Sorry Riza Aziz, your Mom’s Money can’t buy everything

http://www.malaysiakini.com

Buying over the rights and financing a film does not actually qualify one as a producer. At least not according to Hollywood’s premier motion picture body, the Academy of Motion Picture Arts and Sciences.

In what the industry views as a “rare move”, the Academy yesterday dropped Prime Minister Najib Abdul Razak’s stepson Riza Aziz from the Oscars nominations list for best picture nominee, Wolf of Wall Street.

Instead, in the list of producers nominated for the US$100 million film are director Martin Scorcese, lead actor Leonardo DiCaprio, Riza’s business partner Joey McFarland and Scorsese’s partner Emma Tillinger Koskoff.

The list of nominated producers for the ‘Wolf of Wall Street’ was finalised by the Academy yesterday, a week after the other nominations were announced.

This marks a departure from the Producers Guild Association, that nominated Riza as producer but not Scorsese and DiCaprio, for the controversial film about debauchery in the world of finance.

According Deadline Hollywood, DiCaprio had worked to get the film to screen as producer for six years and had roped in Riza and McFarland’s fledgling production company Red Granite Pictures, that fully financed the venture.

Red Granite then purchased the rights from Warner Bros and was caught in a legal battle with the original producer Alexandra Milchan for compensation. The matter has been resolved out of court.

Responding to the Academy’s announcement, Red Granite, in a media statement, said it will not contest the decision and that Riza is honoured to have been part of the project. Riza is the son of Najib’s wife Rosmah Mansor from her first marriage.

The movie has been banned in Malaysia, and his financing of the film has drawn scorn from right-wing Malay supremacists Perkasa.

Hollywood disdain

Meanwhile, whistleblower Sarawak Report as part of its expose on Riza cited “Hollywood insiders” as saying that the decision to dump Riza follow industry concerns over financiers “attempting to claim producer credits for films they bankrolled but did not make”.

“They are greener than green,” one “experienced producer” told Sarawak Report of Riza andRiza and J Low McFarland, whom the portal reported previously acted as party planned for Malaysian wheeler dealer Jho Low (right).

They are financiers, but have also taken producer credits. The producer credits have gone to Riza, Joey and some other producers, but the actual work is being done by people working for Red Granite and the other producers,” another unnamed “senior Hollywood producer” is quoted as saying.

Those in the know credit Milchan as the main driver for the film, having procured the rights to the Jordan Belfort (the jailed financier played by DiCaprio) story and commissioned the script before the project was taken up by Warner Bros.

Insiders say it was her who roped in DiCaprio and Scorsese, despite the Red Granite duo claiming to have done so in media reports, citing their friendship with the Hollywood heartthrob. They also claim that that Milchan “came back and took over” after Warner Bros dropped the film and then sold it to Red Granite.

“It’s common knowledge. That is what producers do, but Red Granite just bought over a done deal. They aren’t what I would call producers, they are financiers and money men,” one insider said.

Industry professionals told the website that while the film cost US$100 million, publicity and marketing would have cost an additional US$35-40 million. The film has grossed US$80 million so far, the insiders said, but producers only get a fraction of the takings.

“The threatre keeps 60 percent and the studio 40 percent, then there are all the payments before the producers get anything back,” one Hollywood professional is quoted as saying.

Deep pockets

Insiders also revealed that the film was not “pre-sold” for three months after it started production, and everything was on Red Granite’s expense. Sarawak Report noted that the new kids on the block’s deep pockets have also set tongues wagging, with seasoned professionals questioning the rookies’ ability to raise so much funds.

It also reported that there is speculation that Riza was cut by the Academy over comments by “close friends” in Malaysian media which could be viewed as anti-semitic.

The Malaysian Gazette, a portal run by a journalist close to Riza’s mother Rosmah Mansor, quoted these “close friends” as saying that Riza should be celebrated for “breaking the monopoly of Jews in Hollywood”.

Riza, it reported, has never made any overt statements of bigotry but such sentiments by Riza’s “close friends” and his failure to “disown” the remarks have “appalled the liberal and egalitarian community in Hollywood”.

“Many of Hollywood’s high flyers are indeed rightfully proud of being Americans of Jewish heritage. However, America is passionately committed to success through merit, unlike in Malaysia, where it is increasingly complained that only certain well-connected families can expect to monopolise money-making opportunities.”

Sarawak Report had earlier exposed that Riza had purchased a US$17.5 million ((RM58.21 million mansion) in Hollywood, after purchasing a US$33.5 million (RM110 million) apartment in New York in 2010.

It reported that Riza, 36, worked with HSBC Bank in London for three years before making his Hollywood bid.

 

 

The Malaysian Consumer and the Fight against Inflation


January 21, 2014

The Malaysian Consumer and the Fight against Inflation

by Tan Sri Dr. Mahboob Sulaiman@www.nst.com.my

As a society, we too have a role to play in ensuring that inflation is controlled. Let us exercise our power, as consumers, to control unreasonable price increases by judicious spending and economising on our energy use as well as changing our consumption spending pattern.–Dr. Mahboob Sulaiman

THE interest on inflation is reactivated now with the Consumer Price Index (CPI) approaching  three per cent.

Dr Mahboob SulaimanMalaysians are used to price stability for a long time, except for a few years, such as in 1973/1974, 1998, and in 2008. The inflation in 1973/74 and in 2008 was caused by an increase in oil and rice prices at the same time.

Some agitators recently conducted a demonstration on the eve of this new year, using the rising prices as an issue to air their grievances.I wonder what would they do if the country was experiencing an inflation rate of eight to 12 per cent annually as is being experienced for many years in China and India, given the countries’ rapid economic growth.

Blaming the authorities alone for the price pressure reflects a poor understanding of market forces. There is a market involving producers and consumers out there whose total effect determines the prices of products. This is the famous Adam Smith’s invisible hand or the market forces. The government’s policy to control prices only covers essential goods and services, enforced especially during festive seasons.

Inflation and high prices are two different things; inflation is a rate of change in general price level. One can have low inflation despite prevailing high prices of goods and services or high inflation at low price levels. It is the rate of annual price increase that is defined as inflation. Nevertheless, high price increases will invariably be translated into inflationary pressures.

High prices can be caused by high level of aggregate demand (demand-pull factor) when the economy grows beyond its sustainable levels. Our current rate of economic growth is still below our growth potential of about six to seven per cent per annum. Hence we cannot say that our current inflation is caused by excessive demand. There are also other contributing factors, such as rising cost of production including high wages, high cost of imports, and supply shortages as well as market imperfection.

One factor that may also cause increase in price level is declining rates of exchange which result in rising cost of imports. The Malaysian ringgit declined recently, with the rising value of the dollar under the impetus of the tapering policy of the Federal Reserve which led to outflows of fund from the region back to the United States, thus strengthening the US dollar vis-a-vis other currencies.

Hopefully, the decline in the ringgit will spur increases in exports thus helping our balance of payments position again. An improved external demand will help the nation to increase industrial production and a higher rate of economic growth.

The current increase in price level has not pressured our central bank to undertake monetary policy measures, such as raising interest rates and initiating open market operations. The bank is therefore still monitoring the price development.

Inflationary expectations by consumers and suppliers may result in price increases, too, as the nation is deliberating on toll increases, wage increases, increases in local government assessment rates and revision in electricity tariffs. Suppliers may have also increased the prices of certain goods now that the government has raised fuel price (RON95) and reduced sugar subsidy.

Powerful supply chain organisations can indeed raise prices much higher than the expected increase brought about by the 20 sen increase in RON95 fuel price and doing away with sugar subsidy. Analysing the supply chain using the input-output technique, tells us that supplies account for the bulk of costs of products and services. Thus, market intermediaries have a lot to explain the price increases if the resultant price adjustment after subsidy rationalisation appears unreasonable.

As usual, we as consumers are again at the disadvantage with price increases because of our weaker position as well as the lack of information on price conditions to enable us to exercise our purchasing power effectively and contribute to price stabilisation. However, this should not be the case. Consumers must exercise their power to ensure suppliers do not willy-nilly increase prices.

A detailed and comprehensive study of the causes of the current high prices needs to be donenajib-razak1 immediately so as to enable an accurate policy prescription to be implemented.

If supply is the cause of price increase then policy prescription may include import liberalisation and reducing domestic supply bottlenecks to increase domestic production and supply. In such a case, the policy response to increase KR1M (Kedai Rakyat Satu Malaysia) outlets therefore appears quite right.

Given the above explanation, one should not jump into conclusion that public policies have failed to arrest price increases. As a society, we too have a role to play in ensuring that inflation is controlled. Let us exercise our power, as consumers, to control unreasonable price increases by judicious spending and economising on our energy use as well as changing our consumption spending pattern.

Pak Kadiaq: Talking Tough on Najib


January 8, 2014

Pak Kadiaq: Talking Tough on Najib

by V. Anbalagan, Assistant News Editor@www. themalaysianinsider.com

kadir_jasin_350_238_100Pak Kadiaq

Pro-government supporters should realise that Prime Minister Datuk Seri Najib Razak is not above criticism for Putrajaya’s cost-cutting measures which had resulted in price hikes, says a former editor of an UMNO-linked newspaper.

Veteran journalist Datuk A. Kadir Jasin  wrote that Najib and his advisers were not above criticism when the public reacted to Putrajaya’s way of managing the national economy.

“It was Najib and his advisers during the general election who promised the people that prices will not be raised. So, who is going back on their word?” he asked in a posting in his The Scribe blog yesterday.

He also questioned whether the Prime Minister was an absolute monarch who could not be criticised or questioned. Or is he a living saint who is free from any kind of slip-ups?” asked Kadir, who was the Group Editor-in-Chief of the New Straits Times when Tun Dr Mahathir Mohamad was the Prime Minister.

Since September, Putrajaya has introduced a series of cost-cutting measures to rein in a chronic budget deficit which includes a reduction of fuel subsidies, removal of subsidy for sugar, allowed an increase in power tariffs and confirmed the introduction of the goods and services tax (GST). Putrajaya is also mulling a revision of toll rates while the 20% rebate offered to frequent users of tolled roads in the Klang Valley is being scrapped.

The increasing cost of goods and services had also triggered a protest on New Year’s Eve by an undergraduate non-governmental organisation, Turun, which attracted more than 10,000 people.

In defending his strident criticism of Najib, the veteran journalist also rebuked his critics who had claimed that he only lambasted the Prime Minister on “economic management but did not offer advice and pointers”.

Kadir felt his critics did not read his long “advice” to Najib and his government through his blog and also through his writings elsewhere.Abdullah Ahmad Badawi was the Prime Minister following drastic hike in the price of fuel and cooking gas which resulted in the price increase of essential items and services.

“I had written several articles then to remind the government on the implication and ways to reduce the burden of consumers,” said Kadir, who owns Berita Publishing which produces the Malaysian Business magazine. He added it was not his responsibility to teach Putrajaya economic management for that was the responsibility of ministries, government agencies and the advisers of the Prime Minister who were learned.

“My job is to offer feedback. However, there are those who equate that to going against the establishment. This is the result of a society who are not critical and extremely partisan,” he said.

Kadir also said that he had repeatedly stated that subsidy was unsustainable, distorted the market and led to the people to rely heavily on the government. “But I only questioned the way the government, especially under Abdullah dan Najib, managed the subsidy, price control, distribution of savings from the subsidy and ways to reduce financial wastage,” he added

Respect the Girl


January 7, 2014

Respect the Girl for Talent and Ability

by Naomi Wolf

wolfCLICHED: Language is used to deny women credit, power and agency when it comes to attributing their success

WHEN Mary Barra was named Chief Executive Officer of General Motors  early last month –  the first woman to head a major American automaker — it seemed to many to be a milestone in women’s struggle for equal rights and opportunities. But, in a climate in which, as Catalyst, the feminist glass-ceiling watchdog, points out, only 4.2 per cent of US Fortune 500 CEOs are women, is Barra’s promotion really a victory?

One way to answer that question is to consider who is doing the judging. In the United States, by one count, two-thirds of professional journalists are men, and men account for almost 90 per cent of bylines in economics and business reporting in traditional media. In fact, the reflexive worldview of male-dominated business-news coverage invalidates all talk of a victory, whether for Barra or for the rest of us, including impressionable 15-year-old girls seeking role models and a message of empowerment.

GM's Mary BarraGeneral Motors’ Mary Barra

Feminist analysts of language and media in the 1970s, notably the critic Dale Spender, examined how language is used to deny women credit, power and agency when their successes are noted. That critique remains valid today.

Many news stories about female CEOs and other high-achieving women are coded with a set of reliable clichés: they lucked into their new roles (and thus do not deserve them), inherited them from male relatives or spouses (and thus do not really hold the reins of power) or will not be there for long. If all else fails, coverage concentrates so narrowly on gender that a woman’s very leadership is weakened.

These clichés not only undermine successful women’s reputations; in the case of CEOs, they also reduce their value to their companies. And, all of these clichés were reproduced in the coverage of Barra’s appointment at GM.

For example, CNN covered the story by referring to Barra’s “knack for climbing the corporate ladder” — a phrase with some suggestive undertones and one that would never be used with a man at the top, for whom, presumably, hard work, talent, ambition and dedication constitute more than a “knack”. It concluded by suggesting that Barra will have succeeded when people no longer call her “car girl” but “boss” — though the report offers no evidence that anyone is in fact calling Barra “car girl” rather than “boss”.

Likewise, the New York Times led with Barra’s father, and its headline suggested that she was “born to” her role, as if ambition and hard work had nothing to do with her ascent. It notes the car her husband drives and describes her as “soft-spoken”. And, it includes an excruciating quote from her predecessor, Daniel F. Akerson: “Mary was picked for her talent, not her gender.” Promoting Barra, he goes on to say, “was almost like watching your daughter graduate from college.”

It is difficult to imagine a black male middle-aged CEO (Barra is 51) being introduced to reporters with the assurance that “he was not picked for his race”. And, it is difficult to imagine his white colleague telling the national press that watching this 51-year-old man lead is like watching a 22-year-old “son” receive his BA.

Then, there is the “Potemkin CEO” approach, which implicitly assumes that powerful men would never really choose a woman to lead an important institution. According to this cliché, Barra’s promotion must be a public relations ploy, with men retaining the real power behind the façade.

So, we get this headline from Fortune magazine: “Is GM’s board setting up Mary Barra to fail as new CEO?” The article goes on to explain that being surrounded by male rivals for her job may fatally weaken Barra, as if male CEOs were not also surrounded by would-be rivals.

Perhaps that is because she really is just a lady first, not a manager. An interview in The New York Times’ business section manages to focus the entire discussion on how things have changed for women at GM rather than on what Barra intends to change at GM as CEO, or even on how things have changed in the car industry — surely an important question.

The interviewer even asks at the end whether her husband is a GM employee. With coverage like this, news becomes more than news; it becomes a real-world outcome that negatively affects a company’s bottom-line.

Why would a major corporation, especially one like GM, which suffered a serious crisis that led to a massive government bailout in 2008, risk appointing leaders, no matter how talented, who are bound to generate devaluing news coverage such as this?

I cannot fathom why serious journalists commit such egregious breaches of basic professional norms of fairness and impartiality. When they do, they are performing the role of guard dogs of an endangered patriarchy, defending, and thus strengthening, the glass ceiling.– Project Syndicate/www.nst.com.my

English Proficiency in Malaysia: Time for Urgent Action


January 7, 2014

English Proficiency in Malaysia: Time for Urgent Action

by BA Hamzah*

ba-hamzahEnglish proficiency in Malaysia has reached a critical level that it can undermine the well-being and international prestige of this country in the absence of genuine efforts to curb its decline. It is impossible, for example, to conduct diplomacy and commercial relations without a strong command of English.

In 2011, more than forty- thousand Malaysian graduates from public Universities could not get jobs in the private sector because they were not proficient in English. A large number of them were Malays from the rural areas. Their “unemployability” puts a drag on the country’s economic growth.

The poor, especially those living in rural areas, will suffer from the lack of proficiency in English. Not only English has become the world’s lingua franca, it is also the language for science, mathematics, finance, diplomacy, trade as well as in other fields of humanities and social science.

English proficiency provides access to the international job market, which can help the poor get a decent, good paying job.

Since the Asian financial crisis (1997-1998), economic growth in Malaysia has not recovered fully. Whether the country can achieve a more robust economic recovery if the workforce has higher proficiency in English is debatable.

There are, however, empirical studies, which correlate proficiency in English with higher economic productivity.To move out of the middle- income trap Malaysia needs a work force with innovative skills to take nation to the next level.

Higher proficiency in English could probably increase the much-needed innovative skills to handle the ever-complex enabling technologies.

According to the Economist Intelligence (2012), 70 per cent of the executives surveyed said to expand their corporate vision they needed more than fifty per cent of their work force to be proficient in English. The same study shows a positive relationship between employability and English proficiency, worldwide.

The strong correlation between gross national income and proficiency in English is now an accepted dictum. Many maintain that the correlation between English proficiency and gross national income is a virtuous cycle, each mutually reinforcing each other. One study shows that proficiency in English can increase job employability and better salaries.

English proficiency among the poor can level the uneven playing fields and close the income gap between the ethnic groups in this country. It could even unite the diverse communities, which have been gravely polarised by narrow ethnic interests.

Admittedly, language can be emotive as it is cultural specific. This essay does not suggest that we do away with vernacular schools and the national language. On the contrary, the essay calls for the nation to embrace a productive global language that can complement the national language.

The decline of English proficiency in Peninsular Malaysia is traceable to the Razak Report in 1956, which recommended Malay as the medium of instruction. Had our political masters adopted the recommendations in Barnes Report (1951) to use Malay in primary schools and English for secondary and tertiary education, we could have avoided the current predicament.

The recently proposed changes to the teaching of English in the National Education Blueprint are too shallow, myopic and cosmetic in nature; no real structural changes, such as reinstating English schools, for example.  Without deep structural changes to the teaching and application of English, more people will just lose confidence and trust in our education system. Such cosmetic changes are insignificant; good only for cheap publicity.

In fact, poor command of English has begun to erode academic excellence in public Universities. Before 1971, when English was the medium of instruction, our public Universities were highly rated for their academic scholarship. They were at par with the best in the British Commonwealth.

Today is a different story altogether. Universiti Malaya, the pride of the nation, managed 156th place in the QS World University ranking for 2013. Compare this with the National University of Singapore (24), Seoul National University (35) and Nanyang Technological University (41). Surely, something is amiss with our education system for the international academic community to rank our public Universities so lowly.

The Government must do more to reverse the decline in English proficiency, and has to do it with utmost urgency. Do it now in the national interest.

*BA Hamzah is a keen student of political pedagogy. He can be contacted at bahamzah@pd.jaring.my

Tsunami of Price Hikes


January 2, 2014

Tsunami of Price Hikes In Malaysia Truly Asia

by Balan Moses@http://www.thesundaily.my

Balan MosesTHE pain that many fear will envelop them from a prospective tsunami of price hikes has yet to kick in but rest assured that the inevitable will take place.

I am sorry to start the year on a pessimistic note but false optimism will get us nowhere. We, the people at large, have to discuss the matter and collectively work with the government and private sector to get us out of this veritable pickle that we find ourselves in. Malaysians are bracing for increments ranging from power rates to tolls that have crept up on us all of a sudden leaving many afraid that their slender financial resources may not be able to weather the storm.

How is it that everyone (I exaggerate, of course) is rushing, in concert it appears, to charge us more? Has fair play (and fair prices) been thrown out the window? In reality, higher charges for a myriad goods and services have been our constant companions since last year with many not really feeling the pinch due to the manner in which prices went up intermittently by a fraction.

Much like the proverbial frog in water that grew warmer gently but surely until the heat became unbearable. In truth, our ringgit buys less today than it did last year. And it appears that this will very much be the trend in the foreseeable future.

What then is the fate of the ordinary wage earner whose purchasing power is diminishing at a faster rate than the annual increase in income? Not exactly encouraging news given the warning a couple of days ago that some employers may be giving smaller bonuses and salary increments this year.

At Dataran Merdeka--Price Hikes Protest -31-12-13Price Hike Protest-December 31, 2013

And certainly not palatable information to the many retirees from the public and private sectors. Government pensioners are not exactly ecstatic every time there is an across the board hike in public sector salaries as pensions do not appear to keep pace with price hikes.

As for those who retired from the private sector, the outlook appears rather bleak as jobs become increasingly hard to come by at their age.

Some of those depending on Employees Provident Fund savings to get by fear that their money may not last them for too long with medical exigencies making their unhealthy presence felt and old age imposing its costs in so many other ways.

So where does that leave the average consumer? I think it is time that consumers organise themselves better to avoid getting a raw deal from traders at all levels.

I am not besmirching the honest traders who make reasonable profits by giving the consumer a fair price for a product or service. Not for a moment do I begrudge traders their fair profit as they too have families with all attendant costs. My beef is with profiteers who use any excuse for a better profit.

Malaysians have to identify the areas where they spend the most and seek to keep costs at reasonable levels. I use the word “reasonable” as I am cognizant of the fact that we do not live in a vacuum with international price trends directly affecting our economy.

Be that as it may, the time has come for middle Malaysia (the rich may not arguably feel the pinch like the middle class and poor do) to sit up and take an active interest in the mechanics of price hikes. I am sure there are retired economists, entrepreneurs, consumerists, academics, statisticians and managers with a reservoir of experience who can join hands to identify the way in which prices are increased.

They can also point out to government areas of unjustified increases in prices for the executive to act on. They can also work with the private sector to rationalise price hikes. I am curious about how much profit traders make in any sale or transaction.

Is there any authority that keeps tabs on these things or is it a laissez-faire system where everyone makes as much profit as they want? The argument may be made that no one is forcing anyone to buy at a particular shop or outlet. Willing buyer, willing seller as the saying goes.

And therein lies the rub as unwilling buyers are now forced to buy at willing outlets that don’t mind inflating prices as they have a captive audience.

Is there a choice available to consumers? Not really. Those in housing estates are at the mercy of sundry shops that charge 20-30% more than some supermarkets which in turn charge 20% or more than hypermarkets.

Can we have a directory of enterprises for the consumer to refer to for fair prices? Can someone get this going on the internet for the public good? There are a whole raft of things that the consumers can do if we put our collective mind to it. Remember. We are a potent force who can make or break businesses.

Even as I delve into the litany of woes facing the average consumer, I want to highlight the plight of the poor who earn meagre salaries and are struggling to make ends meet. The poor will always be with us and it is incumbent on everyone else to come to their aid, irrespective of their race or religion.

Poverty strips everyone of their dignity and right to a decent life. As Alexander Pope’s immortalised saying “hope springs eternal in the human breast” resonates in my mind, I want to end on a similar note.

I pray that Malaysians journey through this year as best as they can given the strength of human spirit which can rise to the occasion as and when necessary. Happy New Year.

I RETURNED from abroad last Saturday, landing at the Low Cost Carrier Terminal (LCCT) in the wee hours of the morning. As three flights landed at almost the same time, the pedestrian lanes were busy with passenger traffic.

The joy of returning home was, however, marred by a number of things that could have been avoided if those in charge of the airport had done their job that day. The first hurdle was the fact that the escalator was out of service. I saw old men and women struggle with their hand luggage as they climbed the flight of steps with no one to help them.

Malaysia 2014

As we stood in line at the immigration checkpoint, the manual line seemed to move faster than the autogate when logic dictates that it should have been the other way around. We later found that only one gate had been opened for three plane loads of exhausted people.

The baggage carousel area was another disaster as hundreds of weary travelers tried to keep their cool as they tried to negotiate around a sea of trolleys. Clearly the place was not made for a large crowd. If anyone thought that this was the end of their woes, they were sorely mistaken.

The taxi line was overflowing with passengers, some with children, with nary a taxi in sight. The attendant on duty told me that this had been the case the whole day. I know that the LCCT is a no-frills area but please have a heart for those who use it. We are not second class travelers and deserve the same conveniences available at the Kuala Lumpur International Airport (KLIA).

Not that some of those landing there are not complaining either. A friend flew in the other day with an aged relative and was unable to find a single trolley. The other problem was that not one premier taxi was available.

I believe we have the infrastructure in place at our airports. It’s just that monitoring is below par. Let’s hope that Visit Malaysia Year 2014 will not be marred by these hiccups in an otherwise good system.

Balan Moses, theSun‘s executive editor (news), like many other Malaysians, feels for the poor, the underprivileged, the disabled and those barely keeping their nose above water. He wants to galvanize Malaysians to put their best foot forward to help the underclasses live decently with pride and dignity even as those blessed more in every respect do their bit for their lesser Malaysian cousins. Feedback: bmoses@thesundaily.com

Time for Malays to take a good look at themselves


December 22, 2013

Tengku Razaleigh: Time for Malays to take a good look at themselves

by Lee Shi-Lan@http://www.themalaysianinsider.com

Ku LiInstead of wailing, lamenting and demanding more Bumiputera participation in the economy, Malays should take a good look at themselves and ask why they have been left behind, said veteran politician Tengku Razaleigh Hamzah.

Tengku Razaleigh, or known as Ku Li, noted that the number of Malays holding key positions in the corporate sector had decreased compared with previous years.

While Felda Global Ventures (FGV) has spread its wings to other countries and boosted trade, it did not involve many Malays. “The halal product industry is sadly controlled and dominated by non-Malays. The most disappointing thing is that several Malays, who founded local businesses, are no longer the owners but workers of the companies,” Ku Li said when opening the 4th PERKASA General Assembly in Kuala Lumpur today.

“Let me make it clear, these developments are not related to racial issues or the special rights of Malays being ignored.The core of the issue is that Malays have lost their edge in an increasingly competitive business arena.”

Malays can no longer blame others for monopolising economic wealth in Malaysia because they have been given numerous opportunities and aid.It is time for them to equip themselves with the necessary knowledge to succeed in the business arena.

Ku Li said the Malays should be taught skills and knowledge so that they would learn how to be independent instead of constantly relying on the Government.He said if Malays continued to be dependent on Putrajaya, they would be swallowed by globalisation.

Ku Li also said PERKASA should take a good look at itself and ask why it has beenPerkasa mocked and ignored by the Malay community whose rights the party professes to struggle for.He said PERKASA was perceived by many as the cause of splits between the various ethnic communities in Malaysia. He said this was a damaging view of the party as national unity was prized in Malaysia.

“Hopefully, this is not a common perception and only the view of a few extremists,” he said. He said when reports emerged that he would be officiating the PERKASA general assembly, many questions were raised.He said he has typically been viewed as a veteran politician who was contemporary, liberal and open-minded, which was the opposite of PERKASA.

“The way in which we think is not a vital factor. What is more important is that every PERKASA member understands the rationale and reason for the formation of this Malay rights group and what it stands for. We must not act rashly based on our emotions, more so when we are angry. Our actions should be based on logic and common sense rather than irrational behaviour,” Ku Li said.

He added that everything should be balanced and taken into consideration before acting.

Sunday Weekend is more convenient and productive


November 27, 2013

MY COMMENT: I agree with Tun Dr. Mahathir on theDin MericanX Weekend issue. But obviously, there are many others, especially Muslims who prefer Friday as a day of rest for Malaysia. They attach religious significance to it, just as Christians believe that the Sabbath  is a weekend break for them to go to church.

This matter cannot be resolved unless there is a conscious and brave decision by our Government in consultation with the Conference of Malay Rulers to have a common weekend for our country. I believe people will accept whatever the decision is. If it is Friday, so shall it be.

For commercial considerations and since we are a trading nation with the ambition to be one of the financial centers in our part of the world, it, however, makes sense to have a Sunday weekend. Your views, please.–Din Merican

More convenient and productive to have a Sunday Weekend, writes former PM in memoirs

By EMILIA GAZALI (11-26-13)@http://www.nst.com.my

KUALA LUMPUR: FORMER Prime Minister Tun Dr Mahathir Mohamad  wrote about his failure to establish a standard Malaysian weekend in his memoirs A Doctor in the House, which was published in 2011.

DR MHe wrote on why Malaysian states have different weekends, and why he was unable to set a standard weekend until the end of his term as the longest serving prime minister.

He also wrote that the reason he preferred to have a Sunday weekend, as he felt it would be an advantage in the globalised world.

“I prefer a Sunday weekend because working while nobody else is in their office in the rest of today’s globalised world is inconvenient and unproductive, a definite disadvantage. It would be better to conform to world standard practice.”

In his memoirs, he said that since the time of the British, the non-Federated Malay states had their weekends on Friday.

“This, I think, was a reaction to the introduction of Sunday as a rest day in the colonies of Penang, Malacca and Singapore, and the four Federated Malay States.

“The British, being Christians, would go to church on Sundays. The Malay Sultan naturally assumed that weekend should be a holy day, a day for prayers.

“Since Muslims have their congregational prayers on Friday, they chose Friday as their weekend and Thursday replaced Saturday when work stopped at midday,” Dr Mahathir wrote.

He also emphasised that nowadays Sundays no longer carried any religious significance or connotation. It has become just another day-off. Hence many non-Christian countries also adopted the Sunday weekend without problem.

“Malaysians, too, generally regard Sunday as part of the weekend without religious associations.When independent Malaya decided to retain the Sunday weekend, the five former unfederated states retained Friday as their day off. Where Sunday is the weekend, Muslims are given time off to go for Friday prayers,” he wrote.

He also stated that in the Quran, it was made very clear that Friday was not the Muslim Sabbath as after congregational Friday prayers, they (Muslims) should continue with their work.

“Unlike Jews and Christians, they are not forbidden to work. If they do not have a work-free day on Friday, it is not a sin.

“Choosing Friday as a day of rest was a decision made by people, who wanted to emphasise the difference between Islam and Christianity,” he wrote.

He also wrote that out of the original five states that refused to make Sunday as their weekend, Johor and Perlis decided to adopt Sunday as their weekend towards the end of his term in office, leaving Kedah, Kelantan and Terengganu which still refused to fall in line.

Proficiency in English Language and Nationalism


November 25, 2013

Proficiency in English Language and Nationalism

by BA Hamzah and Din Merican

The great enemy of clear language is insincerity. …–.George Orwell, “Politics and the English Language”, 1946

BA HamzahWe spent endless hours together debating the English language issue and are  extremely concerned that many Malaysians still question the importance of English in this era of science, Google and globalization.

As our nation strives to achieve the status of a developed country envisaged in Vision 2020 (1989 document), we need to be more rational and stop making excuses in the name of pseudo-nationalism, or as the Malays put it menegak benang yang basah (to stand a wet thread). We must accept the reality that we live in globalised world and English is the global language. Don’t believe us, just ask the Chinese, Japanese and South Koreans.

English proficiency in Malaysia has reached a critical level that it can undermine the well-being and international prestige of our country. Failure to deal realistically with this matter is a real tragedy. We could end up spending billions of ringgit more in consulting fees to have foreign consultants negotiate for us, prepare our policy and research papers and speak at international conferences on our behalf.

George Orwell is right

We are reminded of the essence of George Orwell’s masterpiece “Politics and the English Language”, written in 1946. The author of 1984, Animal Farm, Homage to Catalonia and other fine works had chastised many of his contemporaries who abused (by politicising) the modern English language, most evident in their political writings.

In a slightly different context, since 1971, politics has also undermined with the wider use of English in Malaysia after the Barisan Nasional Government downgraded the use of English.

Historically, the decline of English in our country can be traced to the Razak Report in 1956, which recommended Malay as the medium of instruction. Had our political masters adopted the recommendations of an earlier Barnes Report (1951) to use Malay in primary schools and English for secondary and tertiary education, we could have avoided the current embarrassment.

George Orwell once wrote, “in our time, political speech andGeorge Orwell writing are largely the defense of the indefensible”. Does not this sound familiar in our current setting? Orwell further noted in his essay “the great enemy of clear language is insincerity”. Of course, he was not only complaining about the insincerity in the use of grammar but also insincerity in the general sense of the word

We sense an element of fear and insincerity among many, especially Malay politicians, in Malaysia when it comes to English. Rather than acknowledge its usefulness in almost every sector of human endeavor, they use English as a bogey to accuse those with a different view of English as being anti-national, and worse still anti-Malay. In such a hostile environment, it is impossible to conduct a rational debate.

Some politicians worry about losing Malay votes if they were to embrace English. Nothing could be far from the truth because English has never featured as a prominent issue in the last thirteen general elections.

There is a sense of contradiction and double standard too. Among the most vocal critics of English are those who have benefited greatly from an English education, whose offsprings attend private English schools abroad and locally. They seem to do it on purpose: to perpetuate their own political survival and to deny the others, the majority who cannot afford an expensive English education, the rite of passage. This is a classic case of using the pedagogy to suppress the poor, mainly Malays.

As an open economy that is highly dependent on international trade and the services sector, Malaysia can benefit from a work force that has a strong command of English, a critical advantage in a competitive world.

Studies have shown that proficiency in English is critical to international trade, diplomacy, foreign investment and understanding of science and technology. English is the language of the industry, to cite Tun Dr Mahathir. It is key in attracting foreign investment and international tourists.

Malay Language Champions are self-serving

The corporate world relies heavily on English for their networking and advancement. Top and middle management in PETRONAS and Sime Darby, for example, conduct their business deals in English. To progress the nation has adopted science and technology, relied on foreign investment and international trade for its well-being, for example.

If the Malay language champions and other critics are sincerely concerned with the well-being of the nation,they should be less self-serving, more open-minded and supportive of any policy to reintroduce English, crucial for the development of science and technology, promotion of trade and foreign investment.

Real nationalists would do everything to promote the national well-being. Like it or not, the destiny of this nation is tied closely with good governance which provides the objective conditions for greater economic productivity and higher economic growth trajectory; since the Asian financial crisis (1997-1998), economic growth in Malaysia has not recovered fully from its nosedive. Whether a more robust economic recovery could have been achieved with higher English proficiency is debatable, there are studies, which correlate proficiency in English with economic development.

Corporate World needs English Language proficient workers

According to a survey conducted by The Economist Intelligence (2012), 70 per cent of the executives said they need English to expand their corporate vision and more than fifty per cent of the work force need to be proficient in English. According to another report workers with very good command of the English language tend to garner 30-50% higher salaries than “similarly qualified candidates without English knowledge.”

The same study shows a positive relationship between employability and English proficiency, worldwide. Statistics (2011) show that more than forty- thousand Malaysian graduates from public Universities with low proficiency in English find it difficult, year in and year out, to get jobs in the private sector. Their lack of employability puts a drag on the country’s economic trajectory.

The strong correlation between gross national income and proficiency in English is now an accepted mantra. Many maintain that the correlation between English proficiency and gross national income is a virtuous cycle, each mutually reinforcing each other. According to one study, proficiency in English can increase job employability and better salaries. It can also remove some of the accumulated deficits in education affecting students, especially those in the rural areas with limited access to English education.

English proficiency can level the uneven playing fields and close the income gaps between the ethnic groups in this country. Admittedly, language can be emotive as it is cultural specific. However, here we are talking of a productive language and at no time, anybody has even suggested that it should replace or supplant the national language. Today is English as it was Latin in the era of the Roman Republic and early years of the Roman Empire.

Move with the Times

We must move with the times. If Malay has been the lingua franca for science, trade, technology and diplomacy, for instance, the entire world will gravitate to our shores learning our language. Unfortunately, this has yet to happen. While we have raised the standard of teaching and proficiency in Malay, we still lack behind in the number of textbooks on science, technology and public policies written by locals. Until we have our own references, lecturers have to rely on references in English language to conduct advanced research and for knowledge. This requires proficiency in English.

Some take solace in countries that have done very well without English. The comparison with the Netherlands, Germany and the Nordic countries, to mention just some, is misplaced, like comparing oranges with apples. Contrary to some perception, the standard of English proficiency in these countries is very high. They benefit from proper teaching of English where grammar and literature are emphasized. It will be a long way, if we continue on this trajectory, before we can achieve their status. At one time, we had this advantage but we squandered it in the name of pseudo nationalism, which many have we now regretted.

Our failure not to empower English for knowledge will put Malaysia at a disadvantage in almost all fields of mainstream human interaction.

One immediate remedial action is to acknowledge the positive role of English, for example, in nation-building, economic well-being and diplomacy. The Government of the day should reinforce the acknowledgement by reviving English schools in all districts as a matter of urgency. Give the rakyat a choice by leveling the playing field. They deserve equal opportunity to advance themselves intellectually.

Din MericanXUnder the current arrangement, only the children of the elite will have access to English schools, mostly in urban areas. Those who live in the rural areas are likely to suffer most from the policy of downgrading the use of English. It is unfortunate that the poor Malays have become the victims of UMNO-dominated Government policies.

A Critique of the 2014 Budget Speech


November 7, 2013

MY COMMENTThe National Budget is a very importantDato Din Merican document which merits serious discussion, but not in Malaysia. The Prime Minister himself does not set the example. Immediately after announcing his budget proposals, he took the first flight out of the country to the City of London to attend a conference on Islamic Finance when Parliament is in session.

The mainstream media has nothing better than sing praises of Budget 2014 while our attention is being diverted by the Sungei Limau by-elections and its aftermath, and other political issues. Even debates in Parliament on the budget lack substance. In short, Budget 2014 is taken too lightly by all. That is disappointing to say the least.

I find this critique useful and hope that readers on this blog will comment on it. It raises a number of serious issues which need to be addressed by policy makers,including how to deal with the “less than robust external environment” and how to cope with prospects of lower oil and gas prices, which will impact on government revenues,  and higher interest rates when the Federal Reserve abandons its quantitative easing monetary policy and its effects on interest rates at home. –Din Merican

A Critique of the 2014 Budget Speech

by Budget Analyst

najib-frowningA careful analysis of the 2014 Budget Speech by the Prime Minister-cum-Finance Minister, Datuk Seri Najib Razak is most revealing and disappointing as there is little by way of an exposition of the challenges the economy faces.

The customary presentation of data on the performance, in the current year and prospects in the year ahead, are matters that are dismissed in a few perfunctory sentences.

The speech gives little information on basic macro-economic assumptions used in basing the revenue and expenditure forecasts that make up the Budget.

The speech gives no hint of how the Government proposes to deal with the less than robust external environment in which the key Malaysian export markets – China, US, the EURO zone – will continue to record sluggish demand.

The price for Malaysian oil and gas are likely to be weaker because of increasing supply from US shale oil and the re-entry of Iranian oil into global markets. With greater supply and lower demand, prices are likely to be lower. Malaysian oil and gas exports will undoubtedly feel the impact.

The speech provides no insights into policy changes and measures to counter the impact of the US “tapering” on interest rates and its effects on Malaysian borrowings and debt management.

Higher interest rates in global markets will have several implications for the domestic scene. Bank Negara will need to set higher rates which in turn will burden the Government by way of higher interest charges on its huge debt obligations; households with a debt burden of over 80% of GDP will inevitably face a larger burden and or face insolvency.

The recently announced reduction of the subsidy on petroleum products and the removal of the subsidy on sugar, announced in the Budget, appear to be driven by the pressure from markets and the Rating Agencies.

The net contribution of these adjustments is not likely to significantly contribute to reducing the deficit but will in all probability contribute to inflationary pressures. The latter are likely to be heightened in any event by a weaker Ringgit that will push up the cost of imports in general.

Various Ministers and officials have made claims that the GST would be revenue neutral as it would replace the existing sales services taxes.

In a seminar, reported in the New Straits Times on October 28, some light was thrown by the Secretary General of The Treasury on the incidences of the GST and the change in income tax rates.

The government is expected to collect RM23.1 billion in goods and services tax (GST) from April to December in 2015 and RM32 billion for the whole of 2016. Were the sales and services tax remain in place it would yield RM 14.8 billion.

Thus the GST turns out to be far from revenue neutral but would represent an almost doubling of tax on consumption.However, no information has been released as to how much of a reduction would result as a consequence of the lowered income taxes on individuals and corporations. The benefits these reductions will largely accrue to high income tax payers and large GLCs and crony corporations.

These are a few but glaring examples of the pathetically weak framework on which the 2014 Budget is constructed.

Parliament and the electorate are being kept in the dark about the true state of affairs. It would appear that the Prime Minister has departed decidedly from any respect for the concepts of Accountability and Transparency.

In overall terms the budget as tabled boils down to imposing new burdens on the low and middle income groups given that they will bear the greater part of the clearly regressive GST and the removal of subsidies.

The upper middle and higher income earners will however benefit from a lowering of the marginal rates of income tax.The corporate sector stands to benefit from a lower of income taxes and the various new rebates and exemptions offered ostensibly to encourage investment. The tax changes will lead to a further widening of income disparities.

Taken as a whole, the Speech does little beyond giving in great detail the multiplicity of programs and projects and the outlays that will be made.

A cynical view would be that the Prime Minister was indulging in a characteristic manner – spreading funds to placate his shrunken electoral constituency, factions in his divided party while keeping at bay those in the market that demand responsible and credible leadership in the management of the economy.

It is appropriate to delve a little more into certain parts of the Speech to further illustrate the befuddled state of mind that the Prime Minister displays. Even a cursory review leads to the conclusion that the Prime Minister has many illusions and appears to be out of his depth in addressing the challenges that confront the nation.

In his opening remarks he makes the claim that the National Transformation Policy is the bedrock and catalyst for achieving Vision 2020. It is indeed strange that this amorphous set of policies now occupies center stage.

The New Economic Model, developed with inputs from the World Bank, and announced with great fanfare has now been apparently cast aside. It is also interesting that the recently proclaimed BEE (Bumiputra Economic Empowerment) policy hardly merited a mention in the Budget.

The latter policy has neither been discussed nor approved by Parliament. This was an incomplete policy framework as it did not touch on the macro-economic issues, the broader policies, but had a narrow focus on the Malay and Bumiputra agenda.

The Prime Minister’s speech then goes off on a tangent about the demographics of Malaysia with focus on the Malay and Bumiputra agenda. This discussion appears to suggest that the concept of 1Malaysia launched at the cost of millions is no longer a part of the political rhetoric of the Prime Minister.

He appears to be moving towards an ethno-centric agenda espoused by PERKASA and its Patron. It is somewhat puzzling that Datuk Najib took to providing the ethnic breakdown of the population but chosen to overlook the existence of some 8.2 % the population who are non-citizens!

The use of statistics selectively appears to be a special feature used in the speech. Reference is made to the FBMKLCI index and the level is described as: “….. underscores the increasing local and foreign investors’ confidence in the economy”.

He failed to point out that the buoyancy of the market reflected inflows of speculative funds seeking a refuge. He has chosen to ignore the massive outflows of illicit capital or the weak performance of the Ringgit or the recent pressures in the bond markets.

The claims about FDI flows cannot be substantiated as they are based on nebulous statistics about “approvals” rather than “actual” flows. The statement concerning International reserves is equally slanted.

The truth of the matter is that reserves are customarily expressed in US Dollars whereas Najib has chosen to use the amount in depreciated Malaysian Ringgit. Furthermore, it is wholly disingenuous to provide a single point estimate given that over the past year the Reserves in US Dollar terms have dipped somewhat.

The Prime Minister makes the claim that the economy is expected to expand by between 4.5% and 5%. and that it would be supported in part by private and public consumption which are expected to grow at 7.4% and 7.3%, respectively mainly supported by strong domestic economic activity.

What he fails to indicate is that private consumption over the period under review was fueled by cash transfers (BRIM and other handouts), salary increases to 1.4 million public servants, the rapid increase in private household debt to finance over-priced homes, education loans, and over-priced transport equipment. These transfer are not sustainable and should not be counted in projecting private consumption.

The International Monetary Fund (IMF) Report following the annual consultations pointed with some concern to the rapid increase in loans extended to households by the banking sector.

The Report noted that total household debt exceeded 80 % of GDP. Thus, sustained growth in private household consumption is unlikely with slower growth in global trade that will impact incomes of commodity producers.

These developments will have a negative overall impact on incomes and consumption. Given, the limited head room, it will be virtually impossible to take counter-cyclical measures.

The Prime Minister continues to play fast and loose with the per capita GNI figures. He has chosen to use GNI in domestic current prices to calculate a period growth rate. This is wholly erroneous as growth rates are never calculated based on current price series.

He has then plucked a figure of US$ 15,000 as the bench mark for “developed country status.There are several flaws in the approach. In the first place the World Bank does not have a “developed country status”. It does have a cut-off for determining “High Income Countries”.

Secondly, the methodology for calculating this level is done annually using a unique methodology that takes account of inflation rates, and incorporates moving average exchange rates etc. The methodology has no provision for projecting the cut-off points. Thus the entire presentation in the speech on this theme is spurious and misleading and builds false expectations.

In any event, the figure of RM 46,500 as the Ringgit level for reaching the “High Income Country” status by 2018 let alone 2020 is out of reach given the current and projected growth rates for Malaysia.

The Prime Minister indicated that in 2014, the Federal Government revenue collection will amount to RM224.1 billion, an increase of RM4 billion over the 2013 level.

It is a cryptic figure as no details are provided about how this level will be achieved. It also highly puzzling why the increase in revenue will only amount to RM4 billion, an increase of 1.8 percent, a rate well below the growth of GDP. This would imply that either the tax “give-ways” by way of rebates and exemptions are large or that there are other leakages in the system.

The Prime Minister made a number of points about reducing the size of the fiscal deficit. The most critical comment was that the Government is committed to achieving a balanced budget by 2020.

This indeed is a remarkable admission that deficits will continue to be a feature of fiscal policy until the end of the decade.

This addiction for spending beyond its means on the basis of borrowed money is a mind-boggling statement. Markets will undoubtedly take note and react in predictable ways and mete out punishments.

It is also most audacious on the part of the Prime Minister to state that the Government will ensure that the Federal debt level will remain low and not exceed 55 per cent. He fails to take account of the Contingent Liabilities which are estimated to amount to 15% of GDP.

The latter cannot be dismissed – they certainly will not be ignored by the markets and Rating Agencies. Fitch Rating has served notice that it will take note of Contingent Liabilities.

The KLCI performance on Monday October 28th was sobering and indicative of the market’s initial reactions.The benchmark FTSE Bursa Malaysia Kuala Lumpur Composite Index gained 0.82 points, or 0.05 per cent, to settle at 1,818.39.

What was more telling were the reactions of the two principal Rating Agencies. Fitch Ratings, in a carefully worded statement, noted the introduction of the GST as a potential constructive step but indicated that it was keeping the sovereign credit rating on Negative Outlook, pending “a track record of budget management.”

It pointedly reminded that the down grade in July was due to the deterioration in public finances and a perceived weakening of prospects for fiscal consolidation and budgetary reform.

Fitch made additional observations that highlighted its reservations. Fitch noted: “One is the restated commitment to the existing objective of a Federal Government deficit of 3.5% of GDP in 2014, and 3% by 2015, signaling a potential intensification of efforts to consolidate government finances.”

It noted that this was despite the Government’s weakened political position following the May 2013 general elections.

A second observation was that it noted a budgeted reduction in subsidy expenditure. However, Fitch noted that the steps to achieving this outcome had not yet been fully identified, and remained subject to external shocks.

Fitch took note of the proposed introduction of the long-mooted GST in April 2015, at an initial rate of 6%. It recognized that this was a key reform that could strengthen the credit profile by broadening the revenue base and lessening the budget’s dependence on petroleum-derived revenues.

The statement however went on to make the following observation: “We will look, however, for a track record of implementation towards the stated goal of deficit reduction (as a percentage of GDP), backed by subsidy rationalisation and GST introduction over 2014-2015. Hence the ratings remain on Negative Outlook.”

According to Fitch, another increasingly important issue was whether Malaysia could avoid the emergence of twin public and external deficits.

“As we have previously highlighted, the rapid erosion of Malaysia’s current account surplus has been driven partly by a drawdown of public-sector savings as well as by increased investment. The slippage of the current account position into deficit could increase Malaysia’s vulnerability to renewed market tensions when Fed tapering becomes more likely.

“Beyond the budget, Fitch has previously highlighted the rapid rise in federally guaranteed debt as a source of pressure on the credit profile. Guarantees rose to 15% of GDP by end-2012 from 8% at end-2008.”

Fitch warned that said this was an area of the public finances that it would be monitoring beyond the budget.

“The upshot of all this is that budget deficit reduction is heavily reliant on expenditure restraint, and a track record of sound budget management and implementation will be integral to our assessment. Moreover, the avoidance of a domestic savings/investment imbalance, which forestalls a weakening of Malaysia’s funding strengths, is also important,” it concluded.

Standard & Poor’s Ratings Services issued a statement stating that the Malaysian government’s proposed 2014 budget would have no impact on the sovereign ratings and outlook on Malaysia.

S&P has Malaysia on foreign currency A-/Stable/A-2; local currency A/Stable/A-1; axAAA/axA-1+.The ratings agency said the budget’s target deficit of 3.5% of GDP for 2014, from 4% in 2013, was in line with its expectations of a gradual fiscal consolidation over the medium term.

It said the Goods and Services Tax, which will take effect in April 2015 at 6%, would allow the government to diversify its revenue base, but noted that the revenue impact would be neutral in the first few years because of other revenue-reducing measures announced in the budget.

“In our view, Malaysia’s slow fiscal consolidation stemmed from its relatively weak revenue structure and an inability to reduce high subsidies”.

These are no ringing endorsements of the Budget unveiled by Najib. The two Rating Agencies have signified that Malaysia would remain under watch. They have seemingly greater expectations for expenditure restraints and a more prudent fiscal policy.

The Government will inevitably need to make hard choices between adopting more stringent expenditure controls to convince the Rating Agencies and markets that it was truly embarked upon a path of comprehensive reforms to put its house in order.

A credible set of reforms would need to incorporate reining in runaway expenditures, tax reforms for rational distribution of tax expenditures, policies that remove impediments to growth and result in the elimination of policies that contribute to economic distortions.

It is evident from the tone of the statements from the two Rating Agencies that “business as usual” is not a viable option. The Government has to bite the bullet and take on the task of implementing true reforms.

It is starkly clear that the Budget that was unveiled does not address the ailments that afflict Malaysia. The Budget demands belt tightening on the part of households: household incomes will stagnate and household consumer debt will impact on consumption patterns.

The Budget however makes no attempt to introduce an element of austerity as the Operating Expenditure of the Federal Government continues to remain high; Development spending has not been reined in nor have lumpy projects been extended over time. The consequences of these inactions are that despite the extra revenues the Government will reap, the deficits will continue for the rest of the decade. The size of the debt under these circumstances will grow.

The Government and the Minister of Finance have a duty to act responsibly. There are lessons to be learnt from the crisis that the European countries – Portugal, Ireland Greece and Spain (PIGS) –endured.

That crisis was brought about by excessive debt, sluggish growth and fiscal imbalances. Policy remedies adopted were not painless. Austerity measures scaled back public expenditures, taxes were raised, and private consumption took a hit.

There are lessons for Malaysia. The Budget for 2014 and the policies that it incorporates sadly miss the opportunity to avoid the economic cliff.

http://blog.limkitsiang.com/2013/11/05/a-critique-of-the-2014-budget-speech/#more-25633

Victims of Embezzlement protest


October 29. 2013

Victims of Embezzlement protest

by Kristina Mariswamy

PETALING JAYA (Oct 29): The British Victims of Investing in Malaysia will be protesting tonight outside the 9th World Islamic Economic Forum (WIEF) in London, to be attended by Prime Minister Datuk Seri Najib Razak.

Azim Zabidi of UMNOThe group, made up of 60 British families, have been allegedly embezzled of an investment amounting to £2.5m in a Malaysian company called Doxport Technologies Sdn Bhd. The chairman and director of the company at that time was Datuk Abdul Azim Mohd Zabidi, former UMNO Treasurer (left).

According to a statement issued by their lawyers, Kamarul Hisham & Hasnal Rezua, a police report was lodged at the Bukit Aman Police Headquarters two years ago.

“There are 60 British families who invested in Malaysia and have been allegedly defrauded and yet, the criminal case that they filed in Malaysia, which is still being investigated after two years, has yet to come to any conclusion by the Malaysian Attorney General’s office and Public Prosecutor.

“The British Victims of Investing in Malaysia have been highlighting their case and asking if British investment is safe in Malaysia and if the Malaysian law process is different for British citizens,” they said in the statement.

Investors who 'lost RM12mil' fume at Najib in London

Investors who ‘lost RM12mil’ fume at Najib in London

They said the group has been officially given permission by the Metropolitan Police to protest outside the WIEF to be held at Excel, London.

In 2008, through Fiscal City Capital Sdn Bhd, funds were invested into Doxport Technologies to purchase six VOIP Telecom Switches (costing $2,040,000 total) and the company’s equity.It is claimed that the company solicited these investment funds using fraudulent invoices and documents on a false basis.

The group has also filed a report with the Malaysian Communications and Multimedia Commission on September 30 and Companies Commission of Malaysia on September 29 in 2011.

Meanwhile, those said to have invested in the country and made to wait for the outcome of case have questioned whether the Malaysian authorities and laws will give them the justice they deserve.

Among the quotes shared in the ‘victims stories’ section in a website created to highlight their plight include: “I cannot put in to words how I feel or how me and my family have suffered since investing in Malaysia. I am not a rich individual so all my investment was saved over a number of years for our children’s future and then to see it all disappear is heart breaking.”

“Having to break the news to my wife after finding out was one of the hardest things I ever had to do. But what hurts even more is when you look for help and justice you find the political establishment of Malaysia is prepared to turn a blind eye to our plight,” reads one comment.

Another victim talked about how the saga left him feeling betrayed by Malaysia.”I had been to Malaysia several times on package tours and loved the place and the people and felt that it was somewhere I could invest.

“So, rather than leave my life-savings in the bank, I decided to invest in Malaysia and in this company with many other people … How wrong I was about Malaysia. It is so disheartening, now I do not trust anyone, I really feel let down.”