Singapore and Malaysia- A Tale of Two Nations

May 13, 2013

by Mariam Mokhtar@http://www.malaysiakini.com

The greatest fear of the Singapore government is a Malaysia that is better governed and less corrupt. The extraordinary events in Malaysia over the past few years, plus the courageous stand of her citizens in the last few days, has been closely monitored from across the causeway.

If the infection spreads, the pent up feelings of Singaporeans may be unleashed. The two nations have a shared history.

Singapore may be a first world nation, but when it comes to an outpouring of feelings, the Singaporeans still look up to their cousins in Malaysia.

Dictatorship could be described as the new democracy in our neck of the woods; UMNO Baru’s Najib Abdul Razak together with his Singaporean counterpart, Lee Hsien Loong, have every reason to be rattled by the ‘Anwar Ibrahim phenomenon’.

Not since independence has Malaysia been rocked by a political force which has captured the rakyat’s sense of frustration at the nation’s existing archaic order.

The older generation are weary of the wanton waste of resources, the lack of discipline shown by its leaders and the disintegration of society. The young yearn for a new order where their contributions are acknowledged, where everyone is treated as equals and where they are rewarded for hard work, rather than their connections or lineage.

Anwar has articulated their needs and galvanised the rakyat into action. Two weeks ago, some Malaysians residing in Singapore were cautioned by the Singapore Police for reminding Malaysians to return home to vote. A few days ago, some were arrested in Merlion Park for protesting about the fraud perpetrated during GE13. The Singaporean government does not like its citizens to have a mind of their own.

Najib wants Malaysia to be “the best democracy in the world”, but the hallmarks of his version of democracy are cheating, intimidation and bribery. In Singapore, the authorities also intimidate and take legal action against anyone who dares besmirch the characters of its leaders.

In Malaysia, insecure Malays reject the DAP because of the implied threat that Malaysia will be swallowed up by Singapore. Their fears are enhanced by some Chinese Malaysians, who look up to an idealised version of Singapore. Singapore absorbed many of them into learning institutions, gave them scholarships and jobs. These Malaysians forget that the price paid for Singapore’s transformation into a first world nation has been high.

‘Soulless inhabitants’

What use are towers that reach up to the sky when deep down, its inhabitants lack a soul?  Children suffer from mental health issues because of academic pressures. Adults complain of a poor work-life balance. Many Singaporeans are unhappy and a number of them have migrated.

When Anwar held a talk at the London School of Economics a few years ago, the event was oversubscribed and several hundred participants were accommodated in an adjoining lecture theatre to listen to him via video link.

The audience were mainly young adults in their early twenties, but the most amazing thing, was that a sizeable proportion were Singaporeans.

Many people disagreed with me, when in an article, I mentioned the possibility that Singapore feared a strong, successful and less corrupt Malaysia, and that the People’s Action Party (PAP) would prefer UMNO Baru to govern Malaysia, rather than an Anwar-led administration.

Without a doubt, Singapore is clean, its public transport is efficient, the entertainment and the promotion of the arts is good, English is widely spoken, it is very safe, local and international cuisines are easily available, and the island state is an important international transport hub.

In many ways, Singapore is like Malaysia. Both have state-controlled media, its Armed forces are dominated by one race, and they are ruled by autocratic governments. The cost of living is high, housing and car ownership are expensive.

Both Malaysia’s UMNO Baru government and the Singapore PAP have alienated themselves from the population.

Although change is within the grasp of the ordinary Malaysian, change in the near future is only a dream for many Singaporeans. Wasn’t it Lee Kuan Yew (left) who once said, “…I spent a whole lifetime building this, and as long as I am in charge, nobody is going to knock it down.”

Like Dr Mahathir Mohamad, will Lee ever relinquish his hold on the island?

Last month’s Global Witness exposé highlighted the flip-side of the financial world of Singapore. It appears that dodgy South-East Asian governments and drug barons find Singapore a convenient place to launder money.

To add to Singapore’s woes, there are the worldwide syndicated football rigging and sex scandals which have rocked the world.  Only the naive would think that corruption does not exist in Singapore – they are simply better at concealing their underhanded practices. An acquaintance who handled the Malaysian side of business for a Singapore firm, alleged that he was given a sizeable allocation to sweeten any business deals in Malaysia.

The Singaporeans like to project a clean image, but it is the Malaysians who gets the bad  reputation.

The government of Singapore is concerned by the moral awakening in their people, but they fear most the economic repercussions if UMNO Baru were to be replaced. If Anwar’s administration gave Malaysians meritocracy, and excellent learning institutions were open to all, the majority of Malaysians would not need to go to Singapore to study.

No more brain drain?

There are tales of children being woken up at 4am to travel to Singapore to go to school because their parents could not enrol them in a local Malaysian school. Bright children are deprived of scholarships because they belong to the wrong race or religion. Families are broken up when some family members moved to Singapore for employment.

Singapore has every right to be scared if UMNO Baru were ousted. The brain drain would stop. If working conditions in Malaysia were improved, the daily migration of workers to Singapore would be stemmed and Singapore might suffer a shortage of workers. If corruption was reduced, Malaysia would attract more foreign investment.

The feeling of xenophobia is high in Singapore, and is mostly directed at the Chinese from the People’s Republic of China (PRC). Singaporeans consider them to be loud, brash, arrogant and lacking in culture. They are wary of their government’s desire to attract more people from the PRC to increase the dwindling population, to take care of the elderly and to bolster the economy.

The recent wave of xenophobia in Malaysia was generated by UMNO Baru because it gave away identity cards (ICs) to foreigners – like the Filipinos and Indonesians – in exchange for votes to stay in power.

Leaders in UMNO Baru have lost valuable Malaysian land to the Singaporeans, such as the Pedra Banca island off Johor and the land swap deal involving Keretapi Tanah Melayu (KTM) land in Singapore.

To increase their land mass, Singaporeans have obtained sand from Malaysia, through legal and illegal means. The buying power of the Singapore currency means that they can buy property cheaply in Malaysia and in some places, have priced the locals out of the housing market.

In Ipoh, Singaporeans have built skyscrapers beside limestone hills and many locals fear that this has set a precedent and before long, the natural beauty of Ipoh will be marred forever. The Perak UMNO Baru seem oblivious to the concerns of the locals.

A clean and efficient government can improve our economy, but UMNO Baru will continue to hamper our progress. Without cronyism and corruption, Malaysia will emerge a stronger, richer nation, no longer the poor relation of Singapore.

Malaysian government-linked corporations crowd out private investment

May 1, 2013

April 25, 2013

by Jayant Menon, ADB and ANU, and Thiam Hee Ng, ADB

Private investment in Malaysia never fully recovered from the impact of the Asian financial crisis.

Foreigners have continued to shun Malaysia, but it now seems that even domestic investors are fleeing, with Malaysia becoming a net exporter of capital since 2005. One explanation for the sluggish performance of domestic private investment relates to the crowding-out effect of the growing dominance of government-linked corporations (GLCs) in many sectors. The influence of GLCs, however measured, is both widespread and pervasive.

The GLC share of operating revenue is approximately one-third in the aggregate, and they control more than half the industry share in utilities, transportation, warehousing, agriculture, banking, information communications and retail trade. GLCs employ around 5 per cent of the national workforce and account for approximately 36 per cent and 54 per cent, respectively, of the market capitalisation of Bursa Malaysia and the benchmark Kuala Lumpur Composite Index.

The pervasiveness of GLCs suggests they may present a formidable barrier to both competition and the entry of new private firms. This is also evident in their ability to exercise significant market power and use their special access to government and regulatory agencies to their advantage. Provisions in the government’s affirmative action program, the New Economic Policy (NEP) and its more recent incarnations also tend to favour GLCs, such as through government procurement restrictions.

Indeed, many GLCs were spawned as vehicles to achieve the redistributive objectives of the NEP. Since a key target was to increase the Bumiputera (Malay and indigenous peoples) share of wealth, rather than income, to 30 per cent, GLCs seemed the perfect instrument. While this target has yet to be met, the wealth share of Malays has increased at the same time that income inequality within the Malay community has worsened considerably. Many point to the rise of GLC-centred crony capitalism and a culture of corruption and patronage as contributing to this rise in inequality.

Recognising the problems with GLCs, and in a bid to improve the investment climate, the government launched its 10-year Transformation Programme in May 2004, with divestment of GLCs a key objective. With the deadline looming, progress has been lacklustre — of the 33 GLCs up for divestment, only 15 had been completed as of February 2013. Worse still, this limited divestment has been offset by new investments, with a spate of acquisitions by GLCs in private sector finance and property development for instance, making it more of a diversification than a divestment program.

So, are GLCs really crowding out private investment? For the first time, we provide empirical evidence on this relationship using a detailed dataset of 443 publicly listed firms covering the period 2007 to 2011 from Oriana. After accounting for the other determinants of investment, it is clear that a stronger GLC presence generally has a discernible negative impact on private investment. Also in question is whether there is a threshold effect when it comes to the share of GLC presence in an industry; that is, whether private firms tend to invest less to begin with if the share of GLC revenue in an industry is particularly large.

It would seem that when GLCs account for a dominant share of revenues in an industry, investment by private firms in that industry is significantly negatively impacted. Conversely, when GLCs do not dominate an industry, the impact on private investment is not significant. Even by varying the threshold by 10 percentage points in both directions, this change does not affect the original finding of a significant negative relationship between GLC share and private investment.

To revive private investment in Malaysia, the government must not only redress its growing fiscal deficit, but also expedite its program of divestment. While a growing fiscal deficit and the rising dominance of GLCs may both be crowding out private investment, a genuine privatisation program designed to reduce the role of GLCs would also address the fiscal constraint, providing a further boost to the investment climate. An improvement in overall governance and transparency would be an important, indirect, plus.

Jayant Menon is Lead Economist at the Office of Regional Economic Integration, Asian Development Bank, and Adjunct Fellow at the Arndt-Corden Department of Economics, the Australian National University.

Thiam Hee Ng is Senior Economist at the Office of Regional Economic Integration, Asian Development Bank.

The views expressed in this paper are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent.

http://www.eastasiaforum.org/2013/04/25/malaysian-government-linked-corporations-crowd-out-private-investment/

PKR queries 1MDB’s RM7bil transfer to the Caymans

April 23, 2013

PKR queries 1MDB’s RM7billion transfer to the Caymans

by http://www.malaysiakini.com

PKR has questioned the RM7 billion said to have been transferred by 1Malaysia Development Bhd’s (1MDB) to an allegedly “secret account” in the Cayman Islands.

The information was revealed in 1MDB’s annual report and also questioned in a report in the business weekly The Edge, said PKR Strategic Director Rafizi Ramli.

“(Incumbent Prime Minister) Najib Razak needs to answer immediately on the RM7 billion transfer, as he has full authority over 1MDB,” he said in a statement today.

According to Rafizi (right), 1MDB had raised RM5 billion through government-guaranteed bonds for several investment ventures, for example Petro Saudi International (PSI) whose activities and origins he alleged were “dubious”.

“From business dealings with PSI that has been shrouded in mystery, RM7 bilion is reported to have been transferred to a secret account in the Cayman Islands,” he said.

Rafizi said the transaction “went against principles of transparency and best practices that ought to be observed by a government investment body like 1MDB”.

“I fear that should BN lose in the coming general election, the RM7 bilion will disappear without a trace, meaning the government would have to bear the loss for the RM5 billion bond by 1MDB.”

He added that BN politicians and its associates had been identified as holding offshore accounts, including former PM Dr Mahathir Mohamad’s son Mirzan Mahathir, incumbent Federal Territories Minister Raja Nong Chik (left) and a UMNO-linked businessman Michael Chia.

“Secret offshore accounts are only used for dealings that need to be hidden from view, because such countries have laws that protect businesses even if there are elements of crime or corruption,” he said.

Rafizi, who is PKR’s candidate for the Pandan parliamentary seat, said he plans to lodge a report with the Police and the Malaysian Anti-Corruption Commission (MACC) tomorrow and Thursday respectively.

He has called for the funds to be returned to Malaysia immediately and for the parties responsible to be “brought to justice”.

Najib’s zombie apocalypse

April 15, 2013

by Mariam Mokhtar@http://www.malaysiakini.com

In keeping with the unhealthy obsession with cerita hantu (ghost stories) and the supernatural, which is displayed by the rakyat – especially the Malays – caretaker Prime Minister Najib Abdul Razak should be applauded for converting some Malaysians into zombies.

The living dead are characterised by their lack of self-awareness and the inability to think for themselves. Najib’s zombies may not crave human flesh, but they do feast on cash handouts and freebies. In the zombie culture, human brains are considered a delicacy.

Perhaps UMNO has seized on the rakyat’s minds as a means to spread their evil. They have mentally enslaved us and used this exploitation to satisfy their greed for material goods, and hunger for power.

Six decades ago, Malayans had to decide – either continue to be ruled by the British, or accept change and take charge of running the country. The operative word was change.

We had to manage the nation’s finances, defend the country and administer self-rule. It was no mean feat. Malayan brains, intellect, and toil made Malaya (later Malaysia), a success story. Change to self-rule required the combined effort of Malayans, and not just one particular section of the community.

Change took place in 1957. It can happen again in 2013. Today, the word ‘change’ is anathema to our leaders. Our great-grandparents were more open-minded and embraced change more readily, but Najib and former PM Dr Mahathir Mohamad are trying to deceive us when they say that change is not necessary.

Najib may have promised to deal with corruption after GE-13, but why should we believe him? For years, we witnessed his failure to address problems in society.

If he was worried about graft, why did he employ leaders who were corrupt? Najib appointed Mohd Isa Abdul Samad as chairperson of FELDA despite objections from the public and criticism from Mahathir, who is no stranger to money politics.

Going to the Polls

In three weeks time, we go to the polls. What will happen then?  If we elect BN, aren’t we condoning a government which is corrupt, and which breaks the laws whenever it chooses? The corruption network involves people from the junior office boy to the PM. Those at the bottom make petty sums whilst those at the top amass huge rewards. There has been little enforcement despite plenty of evidence, but the complaints of the public have been completely ignored.

Restoring confidence in the Government?

If the Opposition were to win GE13, what steps should they take to restore confidence in the government? Anwar has reiterated that he will not go on a witch-hunt; but he cannot ignore the rakyat’s desire for justice. Many lives have been crushed, families destroyed, livelihoods devastated and communities ravaged, because of corrupt BN leaders.

Many people have painful experiences to relate. The business deal of one acquaintance was scuppered by allegedly dodgy people in the Defence Ministry. After years of maintaining a good working relationship with his American and Taiwanese partners, millions of ringgits were lost when the ministry supposedly reneged on a deal.

Despite spending vast sums on engaging lawyers and waiting at the court’s pleasure, this man learnt – after a brief appearance in court – that his case had been dismissed. He lost everything.  In Malaysia, justice goes to the highest bidder. There are presumably several cases of miscarriages of justice like this in the country as well.

So, should a new government purge all officials and businesspeople connected with the previous BN regime? To what extent should this process be continued? Should the top brass and business cronies only be punished? Should the crony business be made to cease operations?

It is easier to deal with those at the top, whose personal gain and lust for power broke several laws. Their unexplained wealth can be traced, by the paper trail, to offshore bank accounts and overseas properties.

Will the more educated among us adopt a different approach to the cleansing ritual? Mahathir’s brand of politics left deep trenches in the minds of many Malaysians.

How will the different sections of the community react to the purge post-GE13? How should we treat the junior civil servant, who in the old regime, took advantage of a crooked system?

Perhaps, the more obscure cases will be found in the private sector, where businesses helped prop up the UMNO government in deals that enriched both corrupt politicians and business people. How should the new regime resolve these cases? It would be naive to think that any government contract came without strings attached.

How should civil servants or businesspeople who denounced the corrupt practices of the old regime be dealt with in the new order? Should their positions be enhanced? What if their actions were entirely self-serving when they jumped ship?

How would you deal with the civil servants who refused to become involved in corrupt acts of the previous government? Do you promote them despite their lack of expertise and seniority? How would the new government deal with false accusations? How would they deal with politicians who are Trojan horses of frogs?

Not enough time, resources

After GE13, we cannot go after everyone whom we perceive to be corrupt because we do not have the time and resources to manage this laborious process. Anger and resentment will simply build and this will feed into the rakyat’s racial and religious prejudices, as well as accentuate other insecurities.

To add to the problem, our judiciary and police force have been corrupted by Mahathir. We will have to find a system to maintain law and order in the transition from the old guard until a just and effective police force and judicial system is formed.

We certainly must recover the large sums, several of which are said to be in excess of RM40 billions which have been allegedly stolen by several BN ministers and tycoons acting in collusion with them.

Najib’s incessant refrains of “I help you, you help me” to the rakyat has created a zombie apocalypse in Malaysia. Therefore, radical change is necessary to reclaim our souls and save the nation.

Fareed Zakaria on Maggie Thatcher

April 15, 2013

http://www.nst.com.my

I GREW up admiring Margaret Thatcher. It was obvious to many of us in India in the 1970s that socialist economics didn’t work and that Thatcher’s radical reforms were the right course, one we wished someone would advocate in India. (It took 12 years and a massive crisis for that to happen.)

Her plans to cut taxes, privatise industry and deregulate have been vindicated by history, but that doesn’t tell us much about what to do today.

Consider the world in 1979, when Thatcher came to power. The average Briton’s life was a series of interactions with government: Telephone, gas, electricity and water service, ports, trains and airlines were all owned and run by the state, as were steel companies and even Jaguar and Rolls-Royce. In almost all cases, this led to inefficiency and sclerosis. It took months to get a home telephone line installed. Marginal tax rates were ferociously high, reaching up to 83 per cent.

Britain was not unusual. In most European countries, the state had as large a role atop the “commanding heights” of the economy. And while the United States was always far more free-market-oriented, even top US tax rates in the 1970s were in the range of 70 per cent, and government tightly regulated telecommunications, transportation and finance.

Throughout the Western world, the consensus was that large-scale state intervention was needed to achieve growth and prosperity. That’s why a conservative Republican President, Richard Nixon, said in 1971, “I am now a Keynesian in economics”. (The phrase often misattributed to him, “We are all Keynesians now”, was actually written by the libertarian economist Milton Friedman, in Time magazine in 1965.)

Today’s world is completely different. Thirty years of privatisation and deregulation have swept through industries as varied as telecommunications, airlines and finance. In most sectors, it is hard to find a major state-owned company in the Western world.

Thatcher privatised 50 companies, and governments in Europe, Asia, Latin America and Africa followed the same course.

Taxes have been slashed everywhere. The top marginal tax rate in India in 1974 was 97.5 per cent. (Really.) Today, the top rate is 40 per cent. In the United States in 1977, taxes on capital gains and dividends were 39.9 per cent; last year, the rate was 15 per cent.

In 1977, corporate American tax rates were close to 50 per cent; now they are 35 per cent, and most companies pay a much lower rate.

These changes have taken place under conservative, liberal and even socialist governments. As Peter Mandelson, architect of the Labor Party’s rise in the 1990s, declared, “We are all Thatcherites now”.

(Note that Thatcher rolled back the regulatory state but not the welfare state.) During her 11-year reign of radical free markets, the state’s role in the overall economy grew.

She never spoke out against Britain’s nationalised healthcare. While cutting some taxes she substantially raised others (on consumption), ensuring that deficits didn’t grow too large.

Thatcher’s ideas resonated because they were an effective antidote to the problems of the times. In the 1970s, the Western world staggered under the weight of oil shocks, rising wages, rocketing inflation, slowing productivity and growth, labour unrest, high taxes and sclerotic state-owned companies. These are not the problems we face now.

Today, American and European workers struggle to keep up their wages as technology and globalisation push them down. Western economies face global competition, with other countries building impressive infrastructure and expanding education and worker training.

There is a two-track economy where capital does well but labour does not, where college graduates thrive but those without strong skills fall behind and where inequality is rising not just in outcomes but also in opportunities.

Against this backdrop, would a further round of deregulation do much? Would cutting taxes from around 40 per cent unleash growth, especially when it would mean even larger deficits?

The Simpson-Bowles plan, often seen as a practical solution to the US fiscal problems, raises tax revenue by US$2.6 trillion and hikes the rates on both capital gains and dividends.

Margaret Thatcher was, in her own words, a “conviction politician”, but she was successful because her convictions addressed the central problems of her time. The ideas that work now will be those that solve our problems, not those of the 1970s.

Why we are lagging behind!

April 14, 2013

by Koon Yew Yin@http://www.themalaysianinsider.com

My objective in writing this is to support Professor Datuk Dr Woo Wing Thye’s lecture on April 12 at the Syuen Hotel, Ipoh. In his lecture he listed 5 root causes for our poor performance in comparison with South Korea and Taiwan.

Woo (left), possibly because of the election fever, tried to be politically correct and made little mention of the New Economic Policy in our failure to keep up with our neighbours. In fact, it is not only Woo who is silent on the NEP; most analysts appear to have sidelined this policy in the election debate to date.

This is a mistake as the real policy culprit explaining our failure to develop as quickly as our neighbours is the New Economic Policy (NEP) and the abuse of power in the BN government’s implementation. As a result, our neighbours are doing much better than us in spite of the fact that they all did not have the natural resources such as oil and gas.

The culture of corruption in this country is systemic and built into the policy framework of the NEP. Over the years, this ethnic-based policy has been abused to benefit only a select group of Bumiputera, although the policy was originally targeted at helping the larger community of poorer Bumiputera.

Despite the government’s strong defence of the NEP and its attempt to demonise those who are critical of it, no less an authoritative source than the government appointed National Economic Advisory Council has admitted that although ethnic-based economic policies have worked by reducing poverty and addressing interethnic economic imbalances, its “implementation has also increasingly and inadvertently raised the cost of doing business due to rent-seeking, patronage and often opaque government procurement,” which “has engendered corruption.”

This analysis is the same as the one that I have been making in my public writings and speeches. In the profession in which I have worked for many years, a system where contractors get jobs because of their ethnicity will invariably breed a culture of ethnic-based cronyism and inefficiency.

For example, IJM Corporation Bhd, of which I was a founder, did most of their highway contracts as sub-contractors to some Bumiputera Concessionaires. Yet IJM could win a few highways toll concessions on open competitive tenders in India. It is ironic for IJM, with a market capitalisation of more than RM7 billion, to work primarily as a sub-contractor in our own country.

The same applies in the procurement policies of PETRONAS. Because of this race-based requirement, contracts and concessions were awarded to Bumiputeras who do not have the expertise to carry out and complete the projects. As a result project costs balloon due to the number of layers of sub-contractors required to complete the job.

The percentage of mark-ups imposed by each layer is, in essence, a leakage in itself. This has created an underground economy of rent-seekers, which the government has finally acknowledged. However, it still refuses to discuss this matter in an open and transparent manner or seek solutions to it.

Hence, it is not surprising that the culture of corruption has become the norm rather than the exception. Malaysians are accustomed to the culture of having to pay a sum of money (or in kind) to complete a certain transaction, whether in business or in other sectors.

Large-scale corruption as mentioned above is rarely caught by the authorities. The Malaysian Anti- Corruption Commission (MACC) prefers to target lower-level corruption and harass opposition members instead of going after the big fishes who enjoy immunity because of their political affiliation with the ruling elite.

It is frustrating for many Malaysians that the BN government has not learnt from the past mistakes and persist in making decisions that bleed the nation of increasingly scarce resources.

Hopefully the Pakatan Rakyat will do better. For them to get the country out if its deep hole, they must recognise that the NEP is a crucial road block in our road map to development that must be redressed immediately.

We cannot become a fully developed nation by even the 22nd century let alone 2020 if the NEP remains the main policy framework , corruption continues on the same scale and if corrupt leaders keep abusing their powers for self-gain.

Malaysia’s Najib Unveils Poll Manifesto Similar to Anwar’s

April 8, 2013

By Barry Porter & Manirajan Ramasamy – Apr 8, 2013 10:22 AM GMT+0800

Malaysian Prime Minister Najib Razak pledged to fight corruption, bring down living costs and build a pan-Borneo expressway if his coalition retains power in elections due in a matter of weeks.

These were all policies mooted by opposition leader Anwar Ibrahim in his manifesto released six weeks earlier than the one Najib’s governing National Front unveiled at a weekend rally in Kuala Lumpur. The Election Commission meets this week to set a date for polls after the Prime Minister dissolved parliament on April 3.

Malaysian Prime Minister Najib Razak promised more specialist graft courts and greater public disclosure of government contracts if the National Front is allowed to extend its 55 years of unbroken rule.

“They had the benefit of time to study our manifesto over the past month and incorporate some elements,” Ong Kian Ming, a political analyst at Kuala Lumpur’s UCSI University and an Opposition election strategist, said by phone. “Unlike us, there’s nothing in there about electoral reform. That’s something a lot of people are concerned about.”

In the lead-up to the polls, Najib has boosted government spending, distributed a second round of cash handouts to the poor, and raised salaries of civil servants, police and the military. He also delayed implementing a goods-and-services tax and froze plans to wind back state subsidies on essential items. The manifesto offers increased handouts for the poor, and lowered car costs and broadband fees.

“My sincere apologies to all Malaysians if we have done anything wrong,” the Prime Minister said in a speech at the rally, broadcast live on national television. “At the end of the day, we are ordinary humans. If we are given a strong mandate, I can assure you that we will do better in the next five years.”

Housing, Health

Najib promised more specialist graft courts and greater public disclosure of government contracts if the National Front is allowed to extend its 55 years of unbroken rule. Among the pledges are more affordable housing, and improved health care and transportation, including a high-speed rail link between Kuala Lumpur and Singapore.

“A lot of the ideas have already been mooted by the opposition, like lowering car prices, cheaper Internet and a pan-Borneo highway,” James Chin, professor of political science at the Malaysian campus of Australia’s Monash University, said by phone yesterday. “Najib talked mostly about things that are popular with the people. He didn’t give details on macro- economic issues like implementing GST and cutting state subsidies.”

Worst Performer

To stay in power, Najib, 59, must see off a resurgent opposition led by Anwar, a former Deputy Prime Minister. Brokerages including Bank of America Merrill Lynch and Citigroup Inc. expect an even closer election result than in 2008, when the National Front retained power by its narrowest margin since Malaysia’s independence from Britain in 1957.

The risk of the ruling coalition losing seats in the election has helped make the FTSE Bursa Malaysia KLCI Index Southeast Asia’s worst-performing benchmark in 2013. The stock gauge is down 0.3 percent this year, compared with a 14 percent gain in the leading index in Indonesia and a 7 percent increase in Thailand’s benchmark gauge.

The KLCI was trading 0.2 percent lower as of 9:58 a.m. in Kuala Lumpur today, while the ringgit was little changed to the dollar at 3.0564.

Najib, who inherited a country in recession when he replaced Abdullah Ahmad Badawi as leader mid-term in 2009, wants a mandate to complete his economic and government reforms started less than three years ago. He’s focusing on his track record in boosting investment and improving incomes as he seeks a popular mandate for the first time.

Fighting Corruption

Malaysia’s economy has shown resilience in the face of the global slowdown, expanding by more than 4 percent for each of the 13 quarters to the end of 2012, according to data compiled by Bloomberg. Private investment has tripled since Najib began his economic-transformation program in September 2010, rising 25 percent last year to 139.5 billion ringgit ($46 billion), according to government data.

Almost half of the voters surveyed in a poll by the Merdeka Center for Opinion Research said fighting graft is a more pressing issue for the next government than taming inflation or boosting foreign investment. The survey of 1,021 voters was conducted from January 23 to February 6 on the country’s peninsula and had a margin of error of 3.07 percent.

While Malaysia moved to 54th from 60th place among 176 countries in Transparency International’s Corruption Perceptions Index last year, it was ranked last for bribery among 30 nations surveyed. About 3,000 executives from 30 countries were asked whether they’d lost a contract in the past year because competitors had paid a bribe. In Malaysia, 50 percent said yes, the Berlin-based advocacy group said.

Anwar’s Allies

The National Front is “committed to doing much more to combat the scourge” of corruption, according to its manifesto, which emphasized its experience in government and urged voters not to “gamble away” the future.

Anwar’s three-party People’s Alliance (Pakatan Rakyat) Opposition coalition comprises his own multiethnic People’s Justice Party, the Chinese-majority Democratic Action Party, and the Pan-Malaysian Islamic Party, which wants to expand Shariah law.

The People’s Alliance won control of five of Malaysia’s 13 states in the 2008 election. The National front later won back Perak state when several lawmakers defected.

The opposition currently holds 75 of 222 parliamentary seats, while Najib’s alliance has 137, according to the Malaysian Parliament website. Anwar predicted a minimum 10-seat majority for his alliance in a March 8 interview.

Najib’s manifesto said Malaysia would seek a non-permanent seat on the United Nations Security Council to play a greater role in regional peace, promoting moderate Islam and inter-faith harmony. A National Front government would support the establishment of a Palestinian state, and humanitarian efforts in Gaza, the West Bank, southern Thailand and Mindanao in the Philippines, it said.

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To contact the reporter on this story: Manirajan Ramasamy in Kuala Lumpur at rmanirajan@bloomberg.net

To contact the editors responsible for this story: Stan James in Hong Kong at sjames8@bloomberg.net; Rosalind Mathieson in Singapore at rmathieson3@bloomberg.net

State Your Policies On National Finances UMNO-BN and Pakatan Rakyat told

April 8, 2013

Malaysia’s Prominent Economists and Political Scientists to UMNO-BN and Pakatan Rakyat: State Your Policies On National Finances

Recent financial crises have visited economic calamity upon ordinary citizens in the countries of the East and West alike. Experience tells us that there can be no complacency about a nation’s financial state.

Concerns voiced in various reports and the media call for special attention to Malaysia’s finances and their management. These concerns are:

A record-breaking capital flight out of Malaysia.

Financial watchdog Global Financial Integrity (GFI) reported that a total of RM880 billion of funds were illegally transferred out of the country between 2001 and 2010.

A sharply rising trend in government debt.

This debt almost doubled from RM274 billion at the beginning of 2008 to RM502 billion at the end of 2012. International Monetary Fund (IMF) statistics expect it to grow by RM277 billion to RM779 billion in 2017.

Incomplete information about the Malaysian government’s full exposure to debt.

The official figures for government debt exclude debts that are called contingent liabilities. These include off-balance-sheet borrowings and the debts of banks, government-linked companies and other private-sector enterprises that the government has guaranteed to pay off in the event that these entities default. One estimate of these hidden debts in 2011 placed it at RM117 billion.

Rapid growth of the share of total government debt owed to foreign holders. This has soared from 0.1% in 2003 to 6.7% in 2006, 11.8% in 2009, and 26.8% in 2012. Although 97% of this debt remains Ringgit-denominated, this trend is a cause for concern, and compromises future policy autonomy as well as heightens exposure to capital flight in the event of financial panic.

Possible massive losses by 1Malaysia Development Bhd.

Recent revelations indicate that this strategic company, wholly owned by the government of Malaysia and tasked to lead in market driven initiatives to help transform the Malaysian economy, may have incurred losses of as much as RM4 billion through mispricing of its bond issue.

Inconsistencies in Bank Negara reports regarding Malaysia’s total debt.

While one portion of Bank Negara’s statistics tallies with the official total debt of RM695.4 billion for 2011 and RM737.6 billion for 2012, elsewhere in its reports it is implied that Malaysia’s total debt is more than twice larger, at about RM2.025 trillion for 2011 and RM1.743 trillion for 2012. The latter would ordinarily be considered crisis-level figures.

Fears of an imminent credit bubble in Malaysia and other East Asian countries.

Households in Malaysia have amassed a consumer debt in excess of RM600 billion according to an IMF country report. Various financial analyses claim that Malaysia, Thailand, Singapore and Taiwan are at risk of a household debt crisis.

The lack of sustainability of Malaysia’s GDP growth.

Rapid liquidations of natural capital such as petroleum and forests to finance deficit spending or to fulfill debt obligations have adverse economic and ecological implications for present and future generations. Moreover, unproductive investments and expenditures are recorded as positive GDP in the national accounts even if they yield returns that do not cover borrowing costs.

A lack of discipline in adhering to Malaysia’s statutory ceiling for debt. The ceiling has been raised on the debt limit from 40% of GDP set in 2003 to 45% in 2008 and subsequently to the present 55% in 2009.

The above details signal an alarming trend. Decisive action is required to safeguard Malaysia’s development potential and forestall a crisis situation such as in Greece.

In line with public interest, therefore, and as a first step towards democratising the management of government finances, we, the undersigned, call upon Barisan Nasional and Pakatan Rakyat, the main contenders for government in the 13th Malaysian general elections, to openly lay out detailed policy positions on how they intend to manage the nation’s finances.

In their policy briefs on national finance and debt, the two political coalitions must provide the following minimum feedback:

1. Justify the projections for the borrowings that they anticipate making in the coming five years under their respective watch;

2. Spell out plans for tackling fiscal deficits and ballooning government and household debts;

3. Explain how their election manifesto promises on government spending will be consistent with sustainable debt and resource management;

4. Declare their commitment to investigating illegal financial outflows and repatriating these monies as prescribed by the United Nations Convention against Corruption;

5. State explicitly whether they will support the foundations of public transparency and accountability in our national finances by

(i) establishing a continuously updated ‘debt register’ that will be publicly available on the Internet, which records the stock of debts, the sources of these debts, interest/dividend payments made on these and details of the uses made of these borrowings;

(ii) establishing a multi-partisan parliamentary committee for debt oversight and approval;

(iii) holding public fora and referenda on spending or debt decisions of great import; and

(iv) other possible measures.

We urge the two major political coalitions to produce their national finance and debt policy briefs focusing on the proposals set out above as soon as possible.

The voters of this country deserve to go to the voting booths with better knowledge of what to expect in the management of Malaysia’s finance and debts from the new government in power.

Signatories

Dr Cheong Kee Cheok

Dr Fatimah Kari

Dr Terence Gomez

Dr KJ John

Dr Cassey Lee

Dr Lee Hwok Aun

Dr Lim Teck Ghee

Dr Rajah Rasiah

Pak Sako

Dr. Rozilini M Fernandez- Chung

Dr. Yew Siew Yong

ASEAN needs to remain on course for integration by 2015

April 1, 2013

by Farish A. Noor@http://www.nst.com.my

DEALING WITH FUTURE CHALLENGES: Southeast Asia needs to remain on course for integration by 2015

IN the space of a week, several worrying developments have taken place close to our Southeast Asian region which merit our attention.

It was reported that a flare-up occurred in the South China Sea when a Chinese vessel fired flares at a Vietnamese fishing boat. China has since stated that the clash was due to the fact that the Vietnamese vessel was fishing in Chinese territorial waters — though China’s claim on vast areas of the South China Sea is precisely the issue that has to be resolved in the first place.

Then came the news that North Korea has decided to cut off its military hotline to South Korea, coming at a time when North Korea has demonstrated an increasingly bellicose stance towards the South, and its allies.

North Korea’s threats of engaging in war with its neighbour, and the even more serious threat of taking its confrontation further afield, has stirred anxiety among other countries in East Asia that wish to de-escalate the potential for conflict in the region.

While all of this is happening, we in ASEAN need to remain on the course towards ASEAN integration by 2015. For, whether we like it or not, and whether we are ready for it or not, the pace and momentum have been set by developments that have accumulated over the past decade.

ASEAN today is more integrated than ever before, with ASEAN countries spreading their investments far and wide across the region, and building floating economies where their capital has been dispersed overseas as well: a smart strategy of not putting all of one’s eggs in one basket, and to link our economies closer with the awareness that what-ever happens to one Asean country in the future will impact on the rest of ASEAN as well.

It is with these factors in mind that we need to retain faith in ASEAN and ASEAN’s capacity to absorb changes and contingency whenever they arise.

The recent security crisis as a result of the incursion by some armed Filipinos into Malaysian territory cannot, and should not, be a reason to stall the process of ASEAN integration in the near future.

I raise these concerns now as I feel that we need to do more to boost the level of inter-ASEAN contacts and co-operation in the years to come as we will be dealing with some real challenges in the decade ahead.

For a start, ASEAN needs to come together to deal with the very real shift of power that we will see soon.

China’s forays into the South China Sea have to be understood in the context of its internal regional politics, and the need to feed the country’s massive population.

The relative decentralisation that has taken place in China over the past decade means that the southern provincial governments have been left to fend for themselves when dealing with the challenge of food production and food distribution.

The growth of China’s fishing fleet and their increased visibility further south of the Chinese coast is an indication of China’s growing need to feed itself, and the changing demographics of China’s southern cities and coastal regions.

Like it or not, ASEAN has to find a way to cater to its own food security needs while not antagonising a powerful neighbour like China.This can only happen if ASEAN can work in cooperation with one another, and not when some ASEAN countries are harbouring long-held primordial historical claims on other parts of neighbouring countries.

To put it bluntly: ASEAN cannot continue to bicker about historical claims of the past when the pressing needs of the moment are more urgent.Then there will be the challenge of dealing with the waning of American power, as well as the decline of Europe as an economic partner.

Here, too, ASEAN needs to come together to adjust to the new realities on the ground and to work together rather than against each other.

The decline of American power, coupled with the rise of China’s economic power, entails a shift in the polarities of regional power as well. But for ASEAN to adjust to these changes, and to benefit from them as a region, it has to behave like a regional pact in the first place.

In the recent past, some ASEAN countries have opted to deal with either the US or China unilaterally.The Philippines, for instance, cooperated with China when it came to the survey of the South China Sea, without inviting its other ASEAN neighbours (though Vietnam was later brought into the project as well).

Ideally, ASEAN states should recognise that what is good for the region is good for them as well, and the spirit of ASEAN cooperation needs to be upheld and further strengthened all the time.

As the countdown to ASEAN integration in 2015 continues, it is hoped that the ASEAN spirit and its culture of inter-state dialogue will be further enhanced.

ASEAN has come in for a bit of criticism over the past decade, and accused of institutional inertia and group-think among elites.

But this does not mean that more meaningful people-to-people contact cannot be enhanced as well, or that ASEAN cannot think out of the box to deal with complex issues such as diaspora communities, overlapping communities and our complex past.

What is needed, however, is faith in the ASEAN dialogue process; and also the awareness that apart from the European Union, ASEAN is the only other multi-state body that has prevented wars between states since 1967.

Anyone who doubts the importance of that can simply look at the deteriorating situation between the two Koreas and learn to appreciate the value of dialogue and cooperation.

Who is the Enemy?: Certainly not us Malaysians

March 28, 2013

by Dr. Kua Kia Soong@http://www.malaysiakini.com

COMMENT: As the Global Day of Action on Military Spending, GDAMS 3.0 (April 15, 2013) approaches, it is time for Malaysians to ask: Who are Malaysia’s enemies and what appropriate weaponry do we need?

One would think this is the first question the Ministry of Defence should ask in the multi-billion decisions to procure armaments now that the arms merchants are here again for LIMA 2013. Yet our National Defence Policy has never even been properly debated in Parliament.

Just a few months ago, the Ministry of Defence would not have said that Malaysia’s enemies were among the Suluks who have been coming back and forth between Southern Philippines and Sabah all these years.

After all, hadn’t we helped to train MNLF fighters there against Marcos in the seventies? Wasn’t this the reason why the Home Minister Hishamuddin Hussein(right) said that the invaders at Lahad Datu were “neither militants nor terrorists” during the two or three weeks that they were already there?

And haven’t we got a “Rapid Deployment Force” (10 Paratrooper Brigade) ready to be dispatched to any flashpoint? One wonders what flashpoint scenarios they are trained for?  Are they ready to be deployed only when there are secessionists fighting to take East Malaysia out of the federation? They certainly hadn’t been prepared for the Sulu Sultan’s army to “turn”.

Don’t be surprised if the “defence analysts” in the Ministry have now shredded all their previous analyses about Malaysia’s perceived “enemies”. With the new-found enemies of the Malaysian state, the arms lobby has at last found a raison detre for their fabulous arms procurements.

Heck, didn’t we finally get the chance to use our F18 fighter bombers and Hawk 208 fighter jets against this so-called “rag-tag army”? Wouldn’t armoured cars and tanks and mortars have sufficed in that four square kilometer area of land against that motley crew? In the end, were Malaysians given a clear picture of the efficacy of those fighter jet sorties?

Whatever the reasons for sending in the fighter bombers and jets, the international arms merchants have now come to town to peddle their wares. The French have started advertising their ‘Rafale’ fighter jets in our mainstream newspapers, alongside bargains by ‘Giant’ and ‘Tesco’ for the attention of Malaysians.

BAE are also desperately trying to flog their ‘Typhoon’ jet fighters in a RM10 billion deal they hope to clinch with a “Buy 1 – Get 1 free” gambit. They lost out recently to the French when the Indian government opted to buy 126 Rafale fighter jets instead, and are still fuming.

But do we need any fighter jets at all, considering their cost is spiraling way out of control and they so quickly become obsolete? They will be even more obsolete when future air wars are fought using drones (Unarmed Aerial Vehicles)!

Malaysians should be aware that the latest (US) F35 fighter jets cost at least half a billion ringgit a piece? Can we keep up with the race? What race? Who are we racing against? Who are our enemies?

Appropriate vessels for RMN

When the bombardment finally began at Lahad Datu, it was mentioned that the navy had formed a cordon to prevent the intruders from getting away. It became clear that there has never been a cordon to prevent any intruders from getting INTO Sabah all these years.

Looking at the geography of the area, it is evident that our two submarines (costing more than RM7 billion) sitting pretty in Sepanggar Bay and our six New Generation Patrol Vessels (costing RM9 billion) were not the most suitable vessels in such circumstances.

This mismatch raises the question of the need for our navy to prioritise the deployment of appropriate alternative vessels.  As part of the RM5 billion arms deal signed between Dr Mahathir and Margaret Thatcher in 1989, we procured two corvettes built by the Yarrow shipbuilders costing RM2.2 billion. (NST, Novembe 11, 1991).

At the time, the Royal Malaysian Navy said they required sixteen offshore patrol vessels but due to financial constraints, the RMN could only afford four or five of these locally-built OPVs. Mindef had budgeted RM85 million per OPV. (NST, November 25,1991).

Now, in the light of the latest incident at Lahad Datu, Malaysians will be in a better position to see the appropriate vessels that would be more suitable to secure the Sabah coastline.

Before the Lahad Datu incident, the main “enemies” testing the capacity of our armed forces were the pirates in the South China Sea and the Straits of Malacca.

There were no bigger “enemies” than those seafaring marauders. Are state-of-the-art fighter jets and submarines the appropriate defence equipment against pirates? These would likewise be inappropriate if “international terrorists” and suicide bombers choose to target Malaysia.

So, exactly how are decisions made in the Ministry of Defence to purchase the submarines, the corvettes, the frigates (costing billions) instead of more effective patrol boats to guard our coastlines?

ASEAN needs to take ZOPFAN more seriously

There is no end if we choose to embark on an arms race with our neighbouring countries. We simply cannot afford such an arms race and it is time ASEAN countries seriously talk about disarmament and joint defence agreements instead of an arms race within ASEAN.

Our economic priorities need to be diverted away from military production toward production for human needs, and public expenditure diverted to more and better social services throughout ASEAN.

Any disputes over territories should be settled through international arbitration as was done over Pulau Batu Putih with Singapore. The dispute of the Spratly Islands should be resolved the same way.

M’sian people not the enemy

The Lahad Datu incident should act as a wake-up call for the Malaysian government that seems preoccupied with treating its own people as the enemy. When we bear in mind that throughout the tenure of the Internal Security Act since 1960, more than 10,000 people had been incarcerated for being “threats to national security”.

But hardly any have been charged for any crimes involving violence against the state. Then again, there have been at least two cases of Malaysians who have been killed in neighbouring countries for alleged terrorist activities. Yet, none of them were ever arrested under the ISA!

This goes to show that our intelligence service has been focusing on the wrong suspects. As a former ISA detainee who was incarcerated for being a “threat to national security”, I can vouch for the wanton wastage of security personnel on Malaysians who are simply not “enemies of the state”.

When I think of the number of state operatives who had been spying on me, arresting me, guarding me, interrogating me, accompanying me on family and hospital visits, I immediately wonder how they could be better deployed to prevent crimes being committed and watching out for the real enemies of the state.  And when we multiply the cost 10,000 times since 1960, we will realize the enormous waste of human resources that could be better put to use!

It was recently reported in the New York Times (March 13, 2013) that Malaysia is among 25 countries using off-the-shelf spyware to keep tabs on citizens by secretly grabbing images off computer screens, recording video chats, turning on cameras and microphones, and logging keystrokes:

“Rather than catching kidnappers and drug dealers, it looks more likely that it is being used for politically motivated surveillance,” security researcher Morgan Marquis-Boire was quoted by NYT as saying.  This is what I mean when I say our intelligence service is not focused on the job but wasting valuable resources spying on and apprehending the good guys!

Indeed, if the Malaysian state had only focused on the job of catching the real criminals, Malaysia would be a much safer place instead of being the “nation of guarded communities” it has become today.

Militarism serves ruling class

Apart from the huge commissions that can be creamed from multibillion ringgit arms contracts, the ruling class requires militarism to contain the oppressed and disgruntled sections of the population.

A strong military is necessary to prop up the ruling class. At the same time, the military-industrial complex promotes the development of a specially favoured group of companies engaged in the manufacture and sale of munitions and military equipment for personal gain and profit. These armaments companies have a direct interest in the maximum expansion of military production.

Arms production is a green issue

Military spending and arms production are very much green issues. The military- industrial complex not only produces toxic products, they produce weapons that kill indiscriminately. LIMA and other defence fairs are certainly not congruent with Malaysian leaders’ stated commitment to peace and spiritual values.

The green movement has a responsibility to work toward an end to the culture of war. This involves re-ordering our financial priorities away from wasteful and destructive arms production and procurement to the social well-being of the people.

Ultimately, working towards a culture of peace is a vision that is only attainable in a society that respects human dignity, social justice, democracy and human rights.

The Oracle of Jalan Syed Putra speaks: Part 2

March 25, 2013

“Okay, my answer to Anwar — I’m no Cassius. I maybe thin but I don’t have the hungry look. And definitely, I’m no Brutus…

I have always maintained, the danger with Anwar is that Anwar is more Sukarno than anything else. All fiery speeches, completely economical with the truth and an instigator at his best.”–Daim Zainuddin

THIS is final part of the interview with former Finance Minister Tun Daim Zainuddin, who helped the Malaysian economy survive the 1997 Asian financial crisis.

Without mincing words, Daim discussed with New Straits Times journalists A. JALIL HAMID, RASHID YUSOF and HARIZ MOHD and photographer ZAHARI ZAKARIA the key events during the “Mahathir Years”, including the events which led to Datuk Seri Anwar Ibrahim’s downfall.

Question: Media reports suggested at the time of your departure from the cabinet in 1991 that Tun Dr Mahathir Mohamad had three names in mind as the new Finance Minister — Tan Sri Sanusi Junid, Tan Sri Rafidah Aziz and Datuk Seri Anwar Ibrahim. Was this indeed the case?

Answer: Rafidah was then the Minister for Trade, having been appointed to the post after the Team A versus Team B split in 1987. Sanusi was Minister for Agriculture.

Dr Mahathir wasn’t too sure about Anwar. He said, “I don’t think Anwar can handle the Ministry of Finance” given his academic background. He was a graduate in Malay studies.

My counter argument went along this line — “I think if you want him to be your successor you have to groom him.I can help him and guide him, give advice.”In the end, I managed to convince Dr Mahathir.

Anwar used to come to my house very often to seek my advice on matters related to the ministry of finance.He would also bring me to to his house for lunch very often. His aunt cooked my favourite dishes.

Question: Given that Anwar had later named you as the “chief conspirator” leading to his sacking from the cabinet in 1998, when did things actually turn sour?

Answer: There was no fallout between us until he started accusing me of being a chief conspirator. This is an old story. No one is interested in the whys and wherefores. It is the now and the future that people are interested in.

Really, we should not waste time with Anwar. He is past his use-by date. His time had come and gone.

I also think that you should not give so much news space to him. That’s what he likes. He does not like to be ignored, so ignore him I say. He should be left to be the entertainer that he is, dancing and singing at ceramahs. As I said his time is gone, like a burung punggok merindukan bulan, (a dog barking at the caravans, and the caravans have moved on).

But as you keep insisting, I will answer. The best person to speak about Anwar is Sanusi. They were in school together. They were in ABIM (Angkatan Belia Islam Malaysia) and in the cabinet, and Sanusi was Ssecretary-general of UMNO. Anyway, I promised to answer so I will answer.

Okay, my answer to Anwar — I’m no Cassius. I maybe thin but I don’t have the hungry look. And definitely, I’m no Brutus.

When Anwar claimed that I was the conspirator, he knows the truth that I played no part, no role whatsoever. I knew nothing about the case until I was told about it. I might be a busybody, but I do not interfere with people’s private life. I don’t want people to know about mine either. I don’t want to know what people do behind closed doors. I’m not interested. People whispered to me, but I said, “Look, we are all human, we all have weaknesses.”

But I understand he was under pressure, it was his political survival and he was a drowning man, clutching at whatever to keep himself afloat, plus he knew that I would never answer any allegations thrown at me. I thought I was his friend and he was in trouble, and I let it be.

I also thought that it was so farfetched that it was laughable. Anwar, for example said I took out RM2 billion cash by plane. I must be an idiot, and any way how much is RM2 billion cash? Probably a few lorries to transport!

At the end of the day, truth will always prevail. You can’t hide it. If not today, one day, the truth would be told. In the case of his supporters, even if he were to do all that he is alleged to have done, right on the carpet in front of their eyes, they will not believe. To them, everything is a conspiracy.

Anwar’s problem was that his image was whiter than white. When stories got around because he got this image, it’s difficult for people to believe. In life, some things are too strange to be true but they are true.

As Sherlock Holmes said, “When you have eliminated the impossible, whatever remains, however improbable, must be the truth”.

There was a myth about Kennedy, too, but people did not talk about it during his lifetime. After his death, you read about him and what he did behind closed doors.

Question: There was talk back then that your motivation in ousting Anwar was that you were anxious about protecting your business interests?

Answer: That was his line, that he was this super hero fighting crime and corruption and, therefore, had to be brought down. If you know the things about him that I know, that line of his is hilarious, and the cheek of it all, to claim righteousness.

I had then retired and what business interests did I have? I had to sell all my assets before joining the government in 1984. But later on, after I had left, when I was made chairman of the northern triangle, there was a clause in the agreement that I would be able to venture into business. I was not a member of the cabinet anyway.

I ventured overseas after my retirement. I didn’t want to do my business in Malaysia. But after my banks overseas became successful I needed to have a bank locally, I bought a bank. You can check, it was very expensive, I paid higher than anybody else. At that time, the highest anybody ever paid for a bank. This was a one-branch bank. Later, I sold this bank, too, when I rejoined the government at the last financial crisis. I really should stop buying banks in Malaysia. Every time I buy one, I’m made Minister of Finance and have to sell them.

Immediately after my retirement, I went away to Harvard University, in particular to the Kennedy School of Government as a visiting scholar.

Anwar kept calling me in Boston. (He asked) why I stayed there and asked me to come back. He needed me to help him, but I said I was enjoying my stay. I met a lot of people.

It was at Harvard that I met Francis Seow (who once served as Singapore’s Solicitor-General). He was writing books. Interesting books. You should read his books. We became good friends and often exchanged views over lunch.

Then it was about the so-called “Daim Boys”.They were also very close with Anwar after I left.Most were Malay College old boys. They were in school with Anwar.

Yahya (the late Tan Sri Yahya Ahmad) was his head boy and Halim (Tan Sri Halim Saad) was at the Malay College.

Anwar, through his accusations, repeated the lie that I wanted this contract and that contract, and that because he was in the way, I got rid of him. A lie repeated many times, unfortunately, becomes a truth.

What contract? I want to ask, which contract did I or my family secure? Show me.Show me one single contract I got from the government.

So I have always maintained, the danger with Anwar is that Anwar is more Sukarno than anything else. All fiery speeches, completely economical with the truth and an instigator at his best.

Question: Was there a turning point, one that had caused a fall- out?

Answer: There was no particular fallout. I was his scapegoat, among many other scapegoats. I was his friend. Dr Mahathir defended him. I told him not to open the Pandora’s box by making a police report but he thought he was clever.

I’ve told you earlier that you should not waste news space on Anwar. But you insist and I’m answering only to make the point that if you have Pakatan and him leading Pakatan, then we are heading down the road to disaster. He was tested during the Asian financial crisis and he failed. I also think that he failed not just because of his policies, but also of his motivation.

Dr Mahathir, for example, was totally offended by the crisis. He could not bear to see what he had taken time to build destroyed because of the greed of speculators and financial vultures, and he wanted to make sure the country was safe again.

Question: Some commentators had pointed out that Anwar at the time of the crisis did not help by raising interest rates to such a high level?

Answer: In the case of Anwar, at that time, he was really badly advised. Because all along we know, Anwar on his own did not know what to do.

He has to get people to advise him and that was OK so long as you get good advice.And of course at that time he really liked (Michel) Camdessus of the International Monetary Fund (IMF) and James Wolfensohn of the World Bank.

And he was also close to Robert Rubin (secretary of treasury of the United States).All these people later came to endorse him.But you see, different countries have different environments, different stages of development, different conditions.

It’s not the same.You look at what happened during that crisis to South Korea, Thailand, Indonesia and us.

There’s Singapore, China and Japan.During that time, Anwar’s stance was “follow what was advised by the IMF and World Bank”.

That would be a normal reaction — in a crisis like this, you need some big fellows to come and advise.Because if there’s any trouble, the IMF and World Bank will come and assist.And if America backs you, you are also okay. And America has big influence over the IMF and World Bank.

In the case of South Korea, it wanted to borrow from Japan so that it would not go down. But America refused to help. America told the Japanese not to help, so it went down and mind you, South Korea was close to the US. Don’t expect the US to support us.

At that time, Robert Zoellick, who was Deputy Secretary of State, made it known that the doors were open for the American companies to go in to pick up companies at fire-sale prices.

This was the case with Indonesia when they came in and took almost everything they wanted.They killed Thailand, too.We saw what was happening. Dr Mahathir understood.He said: “What we built… will be destroyed”.Years of growth and stability will be wiped out.

And if we are not careful, there might be riots like in Indonesia, South Korea and Thailand.Probably worse.So, he had to think how to stop it.

Question: Based on your articulation on the political scenario, you are troubled not by Anwar’s so- called misconduct but more of his character?

Answer: I’m worried that he has not got the depth on economics. If he again becomes the Finance Minister or Prime Minister, his inclination is to take the American line. America is in crisis, Europe is in crisis.

He likes to identify with Europe, America and Australia.He tried to get Australia to support him, to condemn and say our election will not be fair, etc.

He talks of Arab Spring, but he said the Arab Spring here is not a revolution but through the ballot box. He had been telling the world that he will win this election.

If PR were to lose, it would be because of unfair practices and mobs could then go to the streets to protest. He promised to form the government in September 2008. Everybody got jittery and many believed him. That is his style. He is all talk and promises. Now, he tells the world he will win.

But the government isn’t even responding. There has never been riggings in elections here. Last election, they formed five state governments. Otherwise, how did the opposition win so many seats if the government rigged elections?No election is perfect in this world.But he has started this, and the government must respond.

Anwar is conditioning the minds of the people here and telling the world PR will win but he knows he cannot win. As I said earlier, I question his (and also Pakatan’s) motivation. His personal ambition is so overriding and an obsession that he does not care that it will be at the expense of peace and stability in his country.

Can you imagine the scenario if Pakatan does not get to Putrajaya? He will go on to claim that it is rigged and then bring on the Arab Spring here. Instigate the people that under Barisan Nasional, their votes were stolen and they have to go out to the streets to reclaim their votes.

This will cause havoc and he won’t care because his ambition overrides all other considerations. And Pakatan doesn’t care, too, because they are on the same ride.

Global Witness rebuts Sibu Lawyer Huang

March 22, 2013

Global Witness rebuts Sibu Lawyer Huang with release of a new video

http://www.malaysiakini.com

Global Witness, the international NGO behind the release of alleged video evidence on abuse of logging licences by the family of Sarawak Chief Minister Abdul Taib Mahmud released another video today to rebut the claim of a lawyer implicated in the initial video.

Sibu lawyer Huang Lung Ong had told The Malay Mail on Wednesday that he was trapped by the undercover investigator sent by Global Witness who posed as a foreign investor, claiming that their conversation was merely “coffeeshop” talk.

“I was trapped. I was consulted on legal matters regarding land… Why should I speak about the chief minister?

“I may have uttered some words out of frustration as he (the investigator) kept on asking me many questions. I was pressured,” the partner of law firm Huang & Co was quoted saying.

However, the latest three-minute edited video showed Huang apparently introducing Billion Venture Sdn Bhd, the company owned by prominent Sarawak timber tycoon Hii Yii Peng, to the investigator in a cafetaria.

“This one belongs to my relative. He is about 78-years-old. He is willing to sell it.

“At the moment the China group is looking at these. You know Chinese… (inaudible) So, still available. We call it Licence for Planted Forest,” he says slowly, while showing documents to the investigator.

“Issuing in 2000… the licence number… the company name is Billion Venture Sdn Bhd… It was issued in 2002, expiry date 2062…” he continues.

The Hii family have extensive and enduring commercial interests with Taib and his immediate family in sectors including joint-ventures and common shareholdings in the palm oil, timber and hospitality industries.

Billion Venture has been issued by the Sarawak state government a 60-year licence for oil palm and commercial tree plantations covering an area of 32,000 hectares of natural forest in Limbang district, bordering the Gunung Mulu National Park.

In the second part of the newly-released video clip (below), believed to be secretly filmed in a hotel room, Huang answers the investigator’s questions on the mechanism to purchase Billion Venture.

“The permit can be overseas or Sarawak, up to you…

“Purchase(r) I believe that like you coming here, as a foreigner, I believe that you should not hold 100 percent, 70 is the most, to keep him (Hii) there.

“He will contribute the money proportionally and then he will help you in our governmental businesses, and with the local people, if there is any… is it easier, you will not get into problems…,” he explains.

Video shows the contrary

Huang also assures that Taib, as the state minister for resource planning and environment, will give the approval for the ‘foreign investor’ to own 70 percent of the company’s share.

The video shows the contrary to Huang’s claim that he was merely consulted by the “Englishman” who introduced himself as Andy Stewart on matters regarding Malaysian land laws.

At no point was Huang seen as acting “under pressure” in the video – as claimed by the man. He had also said on Wednesday that the “unfair” allegation has tarnished his reputation, and that he is considering legal action against Global Witness.

In the initial video released by Global Witness on Tuesday, Huang states that Hii is his uncle and that the tycoon is very close to Taib. Huang also divulges that Hii would be expected to pay Taib a kickback of approximately 10 percent of the licence value in return for the directive from Taib’s ministry to issue the logging licence.

The 17-minute video, uploaded on Youtube in both English and Malay versions, have received over 880,000 views in total since it had been published on Tuesday.

Huang is one of the two lawyers who were implicated in the video. The other lawyer is Alvin Chong Chee Vun of Alvin Chong & Partners, Kuching, who has represented the Sarawak government, government-linked companies and prominent public listed companies with close links to Taib’s family.

Allegedly engaged by Taib’s cousins to sell another piece of land to the ‘foreign investor’, Chong was caught in the video proposing mechanisms to evade tax and circumvent the government’s requirement of 51 percent local shareholding ownership.

Chong’s firm has dismissed the allegations and denied that Chong had acted on behalf of Taib’s cousins. Taib has also denied the allegations on Wednesday, claiming that the NGO is using its “big power to blacken his name”.

In another related development, the Advocates’ Association of Sarawak has officially referred Chong and Huang to the inquiry committee this afternoon.

CIMB Chief endorses Najib Tun Razak as Prime Minister

March 21, 2013

by Chong Pooi Koon@http://www.bloomberg.com

Nazir Razak, Head of Malaysia’s second-largest bank, is speaking out for his brother to be returned as Prime Minister amid concern the ruling alliance could lose more seats in polls that must be held within weeks.

“The present Prime Minister has a very clear path forwards in terms of the transformation of the economy,” Nazir, the chief executive officer of CIMBGroup Holdings Bhd., said in a Bloomberg Television interview with Susan Li in Hong Kong. “If there’s a change there, it would disappoint investors and they would have to relook at their view of Malaysia.”

Elder brother, Najib Razak, is facing the most competitive general election in Malaysia’s history after the National Front coalition won the last poll in 2008 by its narrowest margin in more than five decades. The Opposition, campaigning on an anti- corruption platform, is heading for victory, its leader Anwar Ibrahim, said this month.

The benchmark FTSE Bursa Malaysia KLCI Index has fallen 3.7 percent after closing at a record on January 7, the worst performing major gauge in Southeast Asia this year, according to data compiled by Bloomberg. The ringgit has slumped 2 percent this year.

CIMB has been Malaysia’s biggest debt arranger and most prolific underwriter of initial public offerings for the past four years since Nazir’s brother became Prime Minister, according to data compiled by Bloomberg. The stock more than doubled in value between Najib’s inauguration in April 2009 and the end of 2012. It has since slumped six percent as polls approach, the worst performing lender on the KLCI, Bloomberg data show.

‘Election proxy’

“CIMB is seen as a direct election proxy because of the relationship of the CEO to the Prime Minister,” Alan Richardson, a Hong Kong-based fund manager who helps oversee about $110 billion for Samsung Asset Management Company, said by phone. “If the election result is seen as comfortable for Najib and Barisan Nasional, that stock will go up.”

The Kuala Lumpur-based lender helped to arrange the country’s three biggest share-sales last year. Palm oil producer Felda Global Ventures Holdings Bhd. raised $3.3 billion, IHH Healthcare Bhd. sold $2.1 billion of stock and Astro Malaysia Holdings Bhd. issued $1.5 billion of shares.

Malaysia’s IPO market grew to become the world’s fifth largest last year, up from 14th in 2011, according to data compiled by Bloomberg. It overtook more established financial hubs, raising $6.8 billion, the data show.

Najib, 59, has streamlined bureaucracy and opened up more industries to foreign investors. Private sector spending has tripled since 2009, with government revenue at a record last year and the budget deficit shrinking, according to a government report released this week.

Corruption, monopolies

Najib’s National Front coalition is seeking re-election after holding power for more than five decades in the face of a resurgent opposition led by Anwar. The prime minister took over mid-term after Abdullah Ahmad Badawi stood aside to take responsibility for the 2008 election result. The Premier must dissolve parliament by April 28 for vote to be held within 60 days.

Anwar’s People’s Alliance (Pakatan Rakyat) has promised to clamp down on corruption, abolish monopolies and bring down living costs if it comes to power, according to its manifesto.

“If there’s a change in government, it’s actually an opportunity for investors to gain more in the long term,” Ong Kian Ming, a political analyst at Kuala Lumpur’s UCSI University and an opposition election strategist, said by phone. “In the short term, yes, there would be some jitters. Significant structural reform would lead to better economic policies that would make the country more competitive in the long run.”

ASEAN expansion

CIMB has also grown abroad through acquisitions, most recently buying some of Royal Bank of Scotland Group Plc’s Asia- Pacific investment banking interests and a controlling stake in Bank of Commerce in the Philippines.

Southeast Asia will see more investment banking deals this year, albeit smaller in size compared to 2012, Nazir said.

“Thailand will be very active this year and Indonesia too will be interesting,” the 46-year-old said in yesterday’s interview. “The action in ASEAN will be more broad-based. Last year was more like Malaysia leading the show.”

The nation’s $288 billion economy grew at the fastest pace in 2 1/2 years last quarter as Najib boosted spending ahead of the election. GDP rose 6.4 percent in the three months through December from a year earlier, after a revised 5.3 percent gain in the previous quarter.

Transformation plan

Najib’s government has identified $444 billion of private- sector-led projects, including a mass-transit railway and oil storage, to steer growth in the current decade under an economic plan unveiled after he came into power in 2009. He also aims to cut Malaysia’s budget deficit to 3 percent of gross domestic product by 2015 from 4.5 percent last year, according to the government report this week.

“I totally understand why the market can be a little bit edgy,” Nazir said. “Relevant to many markets, the role of government in the Malaysian economy is important.” The election outcome is “important to the future direction of the country economically.”

-BLOOMBERG

Najib sees early achievement of Vision 2020 Goals

March 20, 2013

by Barry Porter@http://www.bloomberg.com

Prime Minister Najib Razak said the nation may reach high-income status two years ahead of target, as he seeks to convince voters of his economic achievements before elections due within weeks.

Gross national income could rise to RM1,931 per capita (US$15,000) in 2018, earlier than a target of 2020, Najib said in a televised speech late yesterday. The measure has increased 49 percent since 2009, to RM12,838 (US$9,970) last year, the government estimates. Najib also pledged to give annual cash handouts to low-wage earners.

“The time has come for Malaysians to make a decision and I hope you make the right choice,” said Najib, 59, without indicating when the election will be held. He must dissolve Parliament by April 28 and hold a vote by the end of June.

Najib, who inherited a country in recession when he replaced Abdullah Ahmad Badawi as leader in 2009, is focusing voters on his efforts to boost investment and improve incomes as he seeks a popular mandate for the first time. The ruling National Front coalition won the last election in 2008 by its narrowest margin in more than five decades, prompting Abdullah to hand over the leadership mid-term.

A nation is considered high income when GNI per capita meets or exceeds RM16,066 (US$12,476), according to the World Bank. In 1991, former premier Mahathir Mahathir laid out a 30-year plan known as Vision 2020 aimed at earning Malaysia high-income status by the end of the current decade.

Investment rises

Malaysia’s total investment grew 19.9 percent in 2012 compared with 6.5 percent in 2011, accounting for 26.7 percent of gross domestic product, according to a report on the nation’s so-called Economic Transformation Program released by the Prime Minister yesterday. Private investment climbed 22 percent to 139.5 billion ringgit (US$45 billion) in 2012, driven by spending on manufacturing, services and mining, according to the report.

“Najib’s comparative advantage is to try to portray himself as an economist and an economic success, which may hit home in middle-class areas,” Bridget Welsh, Associate Professor of political science at Singapore Management University, said by phone. “He’s mostly concerned about a public relations image. The Opposition tends to focus on ordinary people and micro issues, like wages and the cost of living.”

Infineon Technologies AG, Europe’s second-largest maker of semiconductors, said in May it will spend 4 billion ringgit over 10 years to expand its wafer-fabrication facilities in Malaysia’s north. Germany’s Evonik Industries AG plans to start a specialty chemicals manufacturing venture with Petroliam Nasional Bhd. within a US$20 billion refining and petrochemicals complex in southern Johor state.

‘Track record’

Najib can use the economic program to argue that “the current administration has got a track record in organizing big public projects and getting the private sector involved,” said Gerald Ambrose, who oversees the equivalent of RM5.31 billion (US$1.7 billion) as managing director of Aberdeen Asset Management Sdn in Kuala Lumpur.

Since taking charge, Najib has streamlined bureaucracy and opened up more industries to foreign investors. His government identified RM1,389 billion (US$444 billion) of private-sector-led projects to help champion in the current decade, ranging from oil storage to a mass railway, under the economic plan.

Malaysia’s economy grew at the fastest pace in 2 1/2 years last quarter as Najib boosted spending ahead of the election that will test his grip on power. GDP rose 6.4 percent in the three months through December from a year earlier, after a revised 5.3 percent gain in the previous quarter.
Poverty, education

“We must not rest on our laurels,” Najib said in the report. “Malaysia must continue to address issues such as poverty, labour productivity, environment sustainability and education, while factors in the external economy are likely to remain demanding in the foreseeable future.”

The architecture, engineering and quantity-surveying services sub-sectors are expected to be ready for liberalisation exercise this year, Bernama reported, citing Pemandu’s report.

Southeast Asian nations from Indonesia to the Philippines have shown resilience to the faltering global economy as local demand rises. Najib has increased government expenditure, extending cash handouts to low-income families and raising civil servants’ salaries in the lead-up to voting.

Government revenue was the highest on record last year at an estimated 207 billion ringgit, enabling the government to afford socio-economic programs and give money to the poor, according to the report by the government’s Performance Management and Delivery Unit, or Pemandu.

The budget deficit narrowed from 6.6 percent of GDP in 2009 to 4.5 percent last year and is expected to shrink to 4 percent this year as the government seeks to balance the budget by 2020, according to the report.

Resurgent Opposition

Najib’s National Front coalition is facing a resurgent Opposition led by Anwar Ibrahim, which currently holds 75 seats in Malaysia’s 222-member parliament. The prospect of an even closer election result has helped make the FTSE Bursa Malaysia KLCI Index the worst performing Asian benchmark this year, Citigroup Inc. said in a report this month.

The benchmark stock index has dropped 4.1 percent since closing at a record on Jan 7. It ended 0.3 percent higher yesterday before the report. The ringgit climbed 0.2 percent to 3.1255 per dollar. Its 2.2 percent drop this year makes it Asia’s fifth-worst performing currency among 11 tracked by Bloomberg.

Najib is more popular than his government, according to the Merdeka Center for Opinion Research. His approval rating slipped to 61 percent last month from 63 percent in December, according to a survey of 1,021 voters conducted January 23 to February 6 on the country’s peninsula. By contrast, 48 percent of respondents said they were “happy” with the government, according to the poll published February 26.

-BLOOMBERG

http://www.kinibiz.com/story/corporate/9933/gtp-etp-2.0-target-can-be-achieved-by-2020.html

The Taib Mahmud-Global Witness Saga takes a bizzare turn

March 20, 2013

by Pearl Lee, The Malay Mail

A lawyer in the centre of an explosive video expose that implicates the family of Sarawak Chief Minister Abdul Taib Mahmud in alleged shady land deals has claimed he was trapped by an international activist organisation.

Huang Lung Ong told The Malay Mail by phone from Sibu yesterday: “I was trapped. I was consulted on legal matters regarding land,” he said.

“Why should I speak about the Chief Minister?” A partner of law firm Huang & Co fumed. “I may have uttered some words out of frustration as he (the ‘foreign investor’) kept on asking me many questions. I was pressured,” he said. Huang claimed that what he had said to the “foreign investor”, who he referred to as Andy Stewart, was mere “coffeeshop” talk.

Posed as investor

The lawyer said he was unaware that he was being filmed and that he has not seen the video which was filmed last May. Huang was one of two lawyers interviewed by an undercover Global Witness (GW) investigator in what the London-based NGO claimed was an “investigation revealing corruption and illegality” in Sarawak.

GW activists investigate and campaign against environmental and human rights abuses. The investigator was sent to Sarawak last year to pose as a “foreign investor” looking to buy land to set up oil palm plantations. Reports allege the investor was offered four land leases during the covert investigation.

GW captured on video discussions with Taib’s cousins and several other intermediaries to acquire thousands of hectares of forest land in the state. The almost 17-minute video Inside Malaysia’s Shadow State was posted on YouTube on Monday.

Uncle from wife’s side

In the video, Huang is seen speaking casually to a Global Witness investigator in a hotel room.  At one stage, Huang said that the land deal they were negotiating involved his “uncle from his wife’s side” and implied Taib was involved.

Relating his side of the story, Huang said he was informed of a potential investor by one Jacky Ling, a Sibu-based broker and a friend.  “Jacky has helped my firm in the past as I did sale and purchase agreements for several small deals including the sale of semi-detached and terrace houses.

“He told me there was a big land deal coming up and the buyer wanted to consult on some legal matters. Jacky introduced me to Stewart in May last year about 4pm in my office. Stewart said he was from England and I briefed him about Malaysian land law matters.

“The Englishman passed me a name card and it was stated Andy Stewart. I didn’t bother looking at other details.”

‘This is unfair to me’

Stewart had apparently invited Huang for a drink several days later at a hotel where the discussion was recorded.

“He began by saying how much he loved Sarawak and its people, but towards the end he started asking me questions about the land and the Chief Minister.How can I answer all those questions? I’m just a lawyer protecting the broker’s interest.”

Asked if the landowner was in fact his “uncle”, Huang said; “He is a distant relative. I respect everyone elder than me by calling them uncle or aunty.”

When suggested that as a lawyer he would be used to grilling witnesses in court, and he would know if he was being pressured to answer questions, Huang kept mum.

He said: “People don’t understand and this is unfair to me. This has certainly tarnished my reputation. We cannot be bullied by NGOs who want to thrash our country. I’m a very frank man and I’ve got a family to take care.

“I will not rule out the possibility of lodging a report with the authorities and sue Global Witness if I have the means,” Huang said.

Another Lawyer

The other lawyer is Alvin Chong who told the undercover investigators how to dodge taxes and to acquire the 51 per cent of shareholdings that by law should be held by Malaysian citizens.

The subtitles in the video in one of  Chong’s remarks read: “…You do it (not holding shares in trust) in Singapore, then it wouldn’t surface and the nominee’s not going to keep a shred of paper…”

Chong who has reportedly represented the Sarawak Government was not available for comment but the end of the GW video carries a statement from his law firm, Alvin Chong and Partners:

“We categorically deny our Mr Chong acted as legal spokesperson for the alleged party.We deny any discussions to allegedly evade tax and if there were any purported discussions these were strictly hypothetical.”

Pehin Sri Taib Mahmud’s Response

No Corruption, Only Commissions,Thank You, MACC

March 20, 2013

Najib’s Malaysia: No Corruption, Only Commissions, Thank You, MACC

http://www.malaysiakini.com (03-19-13)

In response to the explosive video evidence of how Sarawak Chief Minister Abdul Taib Mahmud’s family members and business associates abuse logging licences, an Australian scholar commented that Prime Minister Najib Abdul Razak has “failed spectacularly” in fulfilling his anti-corruption promise.

Greg Lopez, Visiting Fellow of the Department of Political and Social Change, Australian National University, made the scathing remark during his interview with Al Jazeera after the influential international news TV channel reported on the video evidence.

“Well, I think there is sufficient evidence in the public sphere that Prime Minister Najib Razak has failed spectacularly in trying to curb corruption,” he replied when asked about Najib’s track record in fighting graft.

To back his argument, Lopez cited the RM250 million National Feedlot Corporation (NFC) scandal that hit the family of former women, family and community development minister Shahrizat Abdul Jalil.

“The Prime Minister merely asked her to step down and did not take any action. That is just one example to show that corruption is entrenched in the political system and Prime Minister Najib Razak has failed to actually make any dent in corruption,” he said.

The video evidence of Taib’s family members’ involvement in land graft was obtained by Global Witness, a London-based NGO that investigates and campaigns against environmental and human rights abuses.

In the discreetly filmed video, two of Taib’s first cousins, a family member of Taib’s key business partner and a lawyer who represented the cousins, were caught abusing logging licences given by Taib’s government to enrich themselves, and explaining the mechanisms of circumventing existing laws to profit from the scheme. However, Taib’s lawyer has dismissed all the allegations as “entirely untrue”.

The video also showed that one of his two cousins, Fatimah Abdul Rahman, defending Taib during her meeting with an investigator sent by Global Witness who posed as a foreign investor.

“I am not making any excuses or whatever, but you know, I mean if you look at the good he’s (Taib) done for the state, it outweighs all the things that people have said about him.

“I know people are talking about him being corrupted and all but I think who isn’t in this world, when they’re leaders (laughs),” she says.

‘Land under logging licences encroached into ancestral land’

Global Witness found that the land under the logging licences issued to Taib’s family members encroached into the ancestral land of the indigenous people. They were, however, never consulted by the government or companies on plans to clear their land for plantations.

“We will fight on at all cost. We let them take timber in the past. We had no idea they are planning to take our land,” Vincent Balingau, a farmer in the land affected, told Al Jazeera.

Villagers at Long Napir, a settlement of Penan and Kelabit indigenous people, blamed their plight squarely on Taib.

“He lives, the rest of us suffer,” Tamin Sepuluh Ribu, a former village headman, said during an interview with Al Jazeera.

“We have no land to farm, our rivers have become muddy, there’s hardly any fish left any more.”

Despite historical documents having proven their land rights, Fatimah and Norlia, in the video, described the local folk as “naughty people”.

“They are pretty naughty people… they try to make money. So the minute they hear… they have people in the Land and Survey Department who will tell them, look this land has been given, has been titled to this company to do palm oil and what-not, they’ll plant themselves there. Technically they cannot claim at all but they could make life difficult if you don’t accommodate them,” Fatimah says.

Norlia added that, “They may harass you, that’s all. They are actually squatters on the land, because the land doesn’t belong to them. It’s government land. So they’re squatting.”

One of them was quoted in another part of the video as saying, “You know they’re very very poor. When leaders come they look at leaders like their kings and they always expect some handouts and things like that, you know.”

Embrace Change, not Fear It

March 12, 2013

by Anwar Ibrahim@http://www.malaysiakini.com

COMMENT: The present UMNO-BN government of Najib Abdul Razak isliving on borrowed time. It doesn’t want to admit it but its legitimacy is now totally in question because constitutionally, its full term has expired.

The people’s patience is tested to the limit here by the audacity of a government that goes on ruling without a mandate.

A number of bogus analysts and self-appointed doomsday prophets, especially those driven by very personal agendas, have warned that Malaysia will descend into political and economic chaos in the event of a Pakatan Rakyat victory.

On the other hand, the more genuine and independent observers have expressed greater optimism. For instance, the original ‘Dr Doom’, Prof Roubini, says that our economy will stay robust even with a change in government.

We know that a mandate for change is not limited to the political sphere though it is true that without that mandate, economic management itself will be off to a false start.

When Indonesia made that break from military autocracy to constitutional democracy, much of the focus of the free world was on how its economy would weather the transition. And in their case, transition would stretch for years and indeed the fruits of that initial process of political upheaval are for all to see.

In the case of the Arab Spring, the major worry remains the lack of clearly defined policies that would set the road map to economic recovery and growth. They are still finding their way and it won’t be an easy way but that is no excuse for rejecting freedom and democracy.

Certainly, political stability is a key factor, and I might just emphasise the most crucial factor in setting the direction and objectives of economic management.

False logic

But let me stress that this is not to be confused with the argument that, because political stability is so crucial, therefore there should be no change in government.

This is false logic because the test of political stability is in fact the ability of a nation to experience a change of government peacefully through the ballot box. In this regard, no matter what the UMNO-BN propaganda says, we, the Pakatan Rakyat, believe in this peaceful process and we are confident that the people are matured and ready for this change.

Now, the question that needs to be answered first is what are the likely economic consequences of a peaceful political transition? I think the obvious response is that number one, the status quo may be maintained i.e. nothing exciting, the same policies are intact and no one wants to rock the boat.

The economy may worsen or remain stagnant, or it may improve marginally but lacking in lustre.

Or number two, things could head south i.e. go downhill. The new government has no clue how to run the economy and throws caution to the wind. They try to outdo the previous government’s fiscal irresponsibility and take the country down to even greater depths of deficit.

Or finally, a third scenario is possible: the new government seizes the day and carries out the economic policies and reforms it has laid out in its election manifesto.

If things are done properly and with full commitment to achieve broad-based and sustainable growth, we may well see economic transformation.

This is the road we will take. In other words, a mere change of government will not lead to chaos in the economy. Certain conditions precedent must be met of course.

There must be due democratic process and, to my mind, this is best translated as good governance and the rule of law.

Ending rent seeking

No doubt the question of policy clarity takes precedence. Economic management must be based on sound policies -not knee jerk reactions.There must also be continuity but this is subject to a major caveat: only bona fide, above board undertakings, ventures and enterprises will be continued.

Rent seeking and other crony driven schemes will meet their Maker sooner than later.We know that the Najib administration has been taking our economy down the deficit path. And now, as the elections draw nearer, with the kind of money that would have been doled out we would inherit an economy which would be in even greater deficit.

So, efforts must be geared towards arresting this trend with the longer term objective of finally turning it around. There will be no continuity of the UMNO-BN model which has prevented Malaysia from attaining to higher-income status. What we have lost over the years in terms of “strategic advantage” we must strive to gain back.

We are a nation blessed with resourceful people. We must not allow this to drain away. In this process, it is of the greatest importance that there is good governance.

We can talk till the cows come home or till our faces turn dark blue or pay millions to consultants to come up with dazzling charts and models about transformation but, without good governance, that will just be public relations and empty rhetoric.

Failure in governance would include corruption in high office, lack of transparency in government dealings, and breakdown of accountability. There must be meaningful structural reforms that will change the dynamics of how we want the nation’s economic pie to expand.

Investments in new sectors must be encouraged but allowing this to be monopolised by the elite few is a definite ‘no’.  In other words, we will encourage fair competition and the spreading of the economic pie.

We have nothing against big corporations but the priority is job creation and how these corporations fare in the overall scheme of social justice which indeed will be inseparable from the principles of economic management.

Another crucial area of concern is the balance between state-dominated ventures and private investment. We have enough examples of private ventures particularly those in providing basic utilities which act more like oppressors of the people.

Because they are protected by Putrajaya they are not responsive to the people’s call for better service, let alone for more reasonable rates.

Crucial stage

In the international arena, our competitiveness must surely be another key area of focus for economic management not just in the transition period but for long-term sustainable growth.

The list is indeed long as to what we can do and what we must do at this crucial stage of our nation’s destiny.

Suffice it to say that in these deliberations, we are not just looking at pie charts, numbers and data, important as they are, but at the fundamental issues of governance.

In all these, we must remain steadfast in being guided by the safeguards and best practices of a vibrant constitutional democracy. Economic management is not a game of one-upmanship but a duty of the highest calling to be discharged by those of the highest integrity for the well-being of the nation and the welfare of the people.

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These remarks were made by Opposition Leader ANWAR IBRAHIM at the opening of the forum titled, ‘Economic Management during Political Transition’ held on March 12, 2013 in Kuala Lumpur.