Freedom and Development go hand in hand, says UM’s Dr Lee Hwok Aun


September 10, 2014

Freedom and Development go hand in hand, says UM’s Dr Lee Hwok Aun

by Lee Shi-Ian

http://www.themalaysianinsider.com/malaysia/article/um-lecturers-reveal-why-freedom-is-a-sign-of-a-countrys-maturity

Dr Lee Hwok AunIn its journey towards being a developed nation by 2020, Malaysia appears to have forgotten that freedom is also another measure of development, said Universiti Malaya (UM) lecturer Dr Lee Hwok Aun.

Lee, the UM Academic Staff Union coordinator for the “Solidarity4AzmiSharom” movement, cited Norway, Sweden and Taiwan as examples of developed countries which also encouraged freedom.

“Do not judge development merely based on financial factors only. Freedom is also another measure of a Azmi Sharom 3country’s development and maturity,” Lee told a crowd of students after the lunchtime “hartal”, or strike, held to protest against the Sedition Act and the sedition charges against UM Law Professor Dr Azmi Sharom.

Azmi also spoke to the crowd of about 100 students, who braved the hot weather to listen to the “outdoor lectures” on freedom. Many of the students participated in the protest earlier.

Azmi said freedom of expression was very important as it played a vital role in a nation’s development, saying without conflicting ideas, there would be no good ideas.”If everyone was just a follower who agreed with what their leaders said, the nation would just chug along without any new ideas or creativity,” Azmi said.

dr-ahmad-farouk-and-din-mericanAmi is also President of the UM Academic Staff Union. Lee and Azmi were joined by another academician from Monash University, Dr Ahmad Farouk Musa (left pic with Din Merican)  who is also the chairman of the non-governmental organisation Islamic Renaissance Front.Farouk said people like Azmi were a rarity as they were bold and courageous enough to speak up instead of keeping silent.

“Academicians should also share their knowledge with the world, and not merely within the confines of a classroom or academic journal.”

Lee said countries which have more freedom such as Taiwan, Norway and Sweden have all achieved developed nation status, and this included freedom of the press.”The principles of Vision 2020 are not being adhered to by Putrajaya, which is using a colonial-era law in the Sedition Act 1948 more frequently than ever now.”

“Instead of there being more freedom as Malaysia approaches 2020, the nation seems to be regressing with more and more people falling afoul of the Sedition Act.”

Azmi said a developed country needed a strong and free press to report on corruption and abuse of power.“Otherwise, the public will remain in the dark,” he said, and warned that “a heavy price” will be paid by political parties which relied on oppressive laws during the general elections.

Azmi Sharom Hartal

Azmi  said “nobody was looking for absolute freedom of expression” in Malaysia. However, there appeared to be no curb on the restrictions imposed by Putrajaya. “That is the problem with Malaysia, there is no limitation on the limitations. Freedom is the ideal, you do not have to justify the freedom, you should justify the limitation.”Freedom is what gives us dignity as human beings. We cannot be dignified without freedom,” Azmi said.

Azmi pleaded not guilty to sedition charges on September 2 over comments made in an article on the 2009 Perak constitutional crisis while speaking about the current Selangor Menteri Besar impasse.

Dato’ Seri Nazri supports Lim Guan Eng on Foreign Cooks for Hawker Stalls


August 4, 2014

Dato’ Seri Nazri supports Lim Guan Eng on Foreign Cooks for Hawker Stalls

by Din Merican

nazri-aziz1Dato’ Seri Nazri is right to support Lim Guan Eng on the question of employing foreign cooks for hawker stalls in Penang. As Minister of Tourism he knows that tourists are looking for the famous authentic Penang food. To be authentic means that Penang food must be prepared and served by local hawkers employing local cooks. Otherwise, they will be eating  stuff made from Maggie, Ebrahim, Alagappa and other brands which are sold in supermarkets around the world. Why then come all the way from the respective countries to enjoy local cuisine prepared by foreign cooks at our hawker stalls. That is not authentic Masakan Pulau Pinang.

The MCA criticises the Minister for supporting Penang’s Chief Minister.Can’t the MCA do anything better than this? I think it should be more constructive. http://www.malaysiakini.com/news/270452

BOOK REVIEW: Shankaran Nambiar’s The Malaysian Economy: Rethinking Policies & Purposes


July 30, 2014

BOOK REVIEW: Shankaran Nambiar’s new book, The Malaysian Economy: Rethinking Policies & Purposes 

by Tricia Yeoh@ http://www.thesundaily.com.my

FEW writers and analysts are able to both identify precisely the challenges facing the Malaysian economy as well as communicate these in a manner easy to digest. Shankaran Nambiar’s new book, The Malaysian Economy: Rethinking Policies & Purposes does so with bold and relevant commentary. Dating from 2003 to the present, this compilation of writings focuses on six broad themes including the need to strengthen institutions, the importance of competitiveness, regional trade, fiscal reform and finally, the reality that is the influence of elections and politics over economic policy.

?????????????????????What is prevalent throughout the book is the clear economic position he takes, arguing for a more open and free economy, one in which companies and traders would be able to compete without the shackles of a large and interventionist government. He takes cognisance that our neighbours are moving at a rapid pace, and mentions specifically China in its ability to out-compete many in the region, but that Malaysia would need to “develop our human capital and readjust our institutional framework to align it with global requirements.”

Of course, on the economic ideological continuum, criticisms often abound of the far-right leaning liberal position. More specifically, public sentiment in Malaysia has weighed heavily against the free market and privatisation. This is not surprising, since the Malaysian version of “free market” and “privatisation” is anything but. It has been but a muddied example of what a free market could actually do to improve the quality of goods and services.

Nambiar does not shy away from this oftentimes-controversial debate. He states explicitly, “privatisation, in theory, implies giving markets a bigger role … privatised companies have to be efficient … and cannot rely on the government to bail them out.”

Theoretically, yes. But in the execution of it – and Malaysia has done a poor job at this – privatisation has not been done in a fair, competitive way. In fact, what took place in our context is that when public entities were privatised, instead of improving efficiency, things got worse. Again, Nambiar hits it squarely on the head: “What was once a government monopoly now becomes a private monopoly. One form of inefficiency is substituted with another.”

Reading the book, one would initially conclude that he is a hard-hitting liberal – libertarian in American circles – and based on many principles, indeed this is so: his firm belief in competition, economic freedom, strong institutions and a legal framework, property rights and so on.

But what is refreshing to note is that he does not blindly accept what would typically be a liberal’s position, but views all subjects with a critical mind. Instead, he agrees with the need for a minimum wage because based on empirical research, this would transform the economy into one that is technologically advanced and contribute towards high value-added growth. A hardcore liberal economist would usually argue against the minimum wage as it is a false and forced imposition by government, which does put many small and medium companies out of business.

 

Finally, as many things seem to be in Malaysia, economic policy is subject to political influence, and this is evident in the many examples Nambiar provides, such as how the federal government transfers revenue to individual state governments, Najib’s electoral position determining whether or not the goods and services tax is introduced, and other “inappropriate policies” that are introduced “because of the polls”, which is “as if we have an economy balancing on the tip of a pin”, which is dangerously accurate.

Many proposals have been expressed elsewhere, on the need for fiscal reform and discipline, addressing structural issues (income distribution, corruption, crime, education), and so on. But the book’s beauty lies in its concise and deft articulation of problems and solutions. The commentaries are candid, and arguments tight. He also comes across as rational and fact-based, criticising or praising whenever necessary. This neutral, non-partisan position of analysing economic (or any other) conditions in the country is rare and must be valued.

As Malaysia enters into its final year of the 10th Malaysia Plan in 2015, and draws up its next set of policies for what would be the last five-year plan before the year 2020 – the 11th Malaysia Plan (2016 – 2020) – it is certainly worth examining Nambiar’s publication that spans the last decade or so. Where exactly are we going? Will the problems raised in his book 10 years ago start to manifest themselves in the next 10? What happens to an economy that pays little attention to such recommendations, and fails to strengthen its institutions?

Policymakers, politicians, academics and students ought to pick up this slim and thoroughly readable volume to gain a historical perspective of good and bad policy. History may not repeat itself, but its leaders may very well do – so it is up to the electorate like us to know which pressure points to press, well before the alarm bells start ringing.

The Story Behind CIMB’s Mega Islamic Bank Deal


July 13, 2014

The Story Behind CIMB’s Mega Islamic Bank Deal

by Yvonne Tan@www.thestar.com.my (07-12-14)

cimbmontagenazirzetishahril1207With Islamic finance gaining global acceptance, it’s only natural to set up the biggest Islamic bank in Malaysia.

INDIRECTLY, the seeds of the proposed merger between CIMB Group Holdings Bhd, RHB Capital Bhd (RHB Cap) and Malaysia Building Society Bhd (MBSB) were sown not in Kuala Lumpur but in the world’s financial centre – London.

When CIMB got the mandate to be one of the book runners for the first Islamic finance sukuk raised by a sovereign in the Western world, it was a sure sign that Islamic finance was gaining wider acceptance. Upon returning to Kuala Lumpur, CIMB’s Chairman Datuk Seri Nazir Razak spoke to a group of journalists during Invest Malaysia about how Islamic finance was at the tipping point for growth, considering that the Western world was embracing it.

 Malaysia has the cutting edge in Islamic finance but there have been no takers for a proposal by Bank Negara Governor Tan Sri Dr Zeti Akhtar Aziz to establish a mega Islamic bank with a capitalisation of US$1bil (RM3.2bil).

It’s easy to fathom why.

No bank would want to fork out US$1bil to establish a mega-Islamic bank as the returns are not there.But the landscape is fast changing and Nazir seized the moment.

On Thursday, he proposed the setting up of a mega-Islamic bank as part of a merger with RHB Cap and MBSB that would possibly create the largest bank in the country and one of the largest in the region. “The merger fulfils Bank Negara’s objective of the creation of a mega Islamic bank,” says an investment banker.

RHB Cap’s decision last month to call off its Indonesian PT Bank Mestika Dharma proposed buy, which it had been pursuing since 2009, as well as Nazir taking over as chairman effective September 1, were the telling signs of a much bigger plan that was brewing.

The three financial institutions announced this week that they had received the green light from Bank Negara to start exclusive talks for the proposed merger, which includes the formation of a mega-Islamic bank.

In this respect, MBSB, an Islamic financial institution, is slated to fill that role in the merger.Nazir says Islamic finance is at the tipping point for growth, considering that the Western world is embracing it. The parties have 90 days to decide on the pricing, structure and other relevant terms and conditions. Bank Negara’s approval is valid for six months from Thursday.

Amidst this, questions are being raised as to why there is an exclusivity clause in the 90-day agreement, which essentially means that there will not be any competing bids for RHB Cap during this period, suggesting that shareholders may be missing out on more competitive bids.

“There are two reasons for this. One is that RHB Cap is not being sold; it is a merger candidate, and secondly, it is to minimise disruptions,” says an official close to the Employees Provident Fund (EPF).

CIMB Deal

The fact that Bank Negara gave the three institutions approval in less than 24 hours after they wrote to it is a sure sign that it is not against the merger.If the mega-bank materialises, then it will not be difficult to see why it will easily give the country’s current largest bank – Malayan Banking Bhd (Maybank) – a run for its money.

Based on latest figures, the merged entity’s asset size is expected to be more than RM600bil, market value close to RM90bil and combined profits exceeding RM7bil.It will surpass Maybank, which had an asset size of RM578bil as of March 31.

CIMB has a strong commercial presence in Indonesia which is a major contributor to the group’s earnings. Operationally, RHB Cap and CIMB’s resources combined will give a boost to the merged entity’s regional presence.

For one, RHB Cap, which has a full banking licence in Singapore enabling it to venture into diverse businesses – consumer banking, business banking, corporate banking, treasury and investment banking – intends to grow this aggressively over the next few years. This will complement CIMB’s Singapore operations.

CIMB, meanwhile, has a strong commercial presence in Indonesia – something which RHB Cap is lacking – via its PT Bank CIMB Niaga Tbk, which is a major contributor to the group’s overall earnings.

Valuations

There is no doubt that the merged entity will be huge.Its market capitalisation will be more thanOctopus RM90bil, assuming the deal is concluded at about 1.70 to 1.75 times book value.

According to a source, the deal is likely to be done at 1.75 times book value based on CIMB’s current valuation of almost 1.70 times book and unlikely to be transacted at anything less.Recall, in 2012, RHB Cap had paid 1.77 times book value for OSK Investment Bank, lower than the 1.9 times book value Maybank had paid for Kim Eng Securities.

In this current merger deal, the EPF is said to be the main driver because it has significant stakes in all three entities.It is the major shareholder in RHB Cap with a 40.76% stake. The other major shareholders of RHB Cap are Aabar Investments PJSC with a 21.43% stake and OSK Holdings Bhd with a 9.91% stake.

The EPF has a 64.73% stake in MBSB and is the second-largest shareholder in CIMB with 14.46% after Khazanah Nasional Bhd.

It has been learned that the exercise would possibly involve a share swap between CIMB and RHB Cap at a book value of 1.75 times and an outright buyout of MBSB. The eventual merger will see the EPF emerge as the largest shareholder in the mega-bank, with a stake estimated to be more than 25%.

RHB Cap had been a takeover target as far back as three years ago, with both CIMB and Maybank being its suitors. However, the deal fell through because Aabar wanted a higher valuation. Nevertheless, RHB Cap has always been viewed as a takeover target even with the entry of OSK two years ago. This is because the block in RHB Cap that belongs to Aabar from Abu Dhabi has always been viewed as being up for sale and could be used as a launch pad to take over the bank.

Even in May, Taiwanese financial group Mega Financial Holding Co Ltd was reportedly in talks to buy into RHB Cap, leading to speculation that the interested seller was Aabar.

Aabar acquired its stake in RHB Cap from its sister company, Abu Dhabi Commercial Bank PJSC, for RM5.9bil or RM10.80 apiece in 2011, valuing RHB Cap at a hefty 2.25 times its book value then. The transaction between the two related companies was done to set the price for RHB Cap, should there be a takeover.

However, RHB Cap’s share price has never reached that price over the past few years.The counter was traded at RM8.72 on Wednesday before suspension.

Assuming the deal is concluded at 1.70 times, RHB Cap’s share will be worth RM11.40 per share, a 5.6 % premium to Aabar’s cost of RM10.80. But would Aabar be agreeable, or would it seek higher valuations?

Past Deals

RHB Cap, currently the fourth-largest banking group, is no stranger to banking deals.The latest is its merger with OSK Investment Bank that was completed about two years ago. However, its merger and acquisiton history goes back much further than this.

The RHB Banking group assumed its current name only in 1997.It came about via a merger between Kwong Yik Bank Bhd and DCB Bank Bhd (formerly known as Development and Commercial Bank Bhd) in 1997. That year saw entrepreneur Tan Sri Abdul Rashid Hussain emerge as the group’s executive chairman. The bank’s current initials are based on his name.

Kwong Yik Bank was founded by the Chinese community led by Wong Loke Yew, or better known as Loke Yew, in July 1913, while DCB Bank was established in 1966 by the-then Finance Minister Tun Sir Henry H S Lee.

In the aftermath of the 1997/98 Asian financial crisis, the troubled Sime Bank Bhd (formerly known as UMBC Bank) was merged into the RHB Banking group in 1999.Four years later, when Kuching-based Bank Utama Bhd, the banking arm of Cahya Mata Sarawak Bhd, became the latest bank to be merged into the RHB Banking group, Rashid made his exit from the group.

CIMB is also the result of a merger between CIMB, Bumiputra-Commerce Bank and Southern Bank Bhd which was completed in 2006. Both the RHB and CIMB groups have gone through more than their fair share of mergers. But this merger, if it happens, will probably be the last stop for RHB Cap, a bank founded by Rashid Hussain.

Between the two, CIMB Group has a bigger franchise in the region, a larger pool of tested managers and is likely to take the lead.This is something the EPF is not likely to object because it will enable the pension fund to go back to its role as a passive investor in financial institutions.

Gotta’ keep on learning


July 13, 2014

Schumpeternomics: Gotta’ keep on learning

by (Tan Sri) Dr. Lin See-Yan@www.thestar.com.my (07-12-14)

Lin See-YanI JUST returned from the summer meeting of the board of governors (on which I am a long-standing member) and the board of trustees of the Asian Institute of Management (AIM) in Makati, Manila. It celebrated its 45th anniversary…

To mark the occasion, AIM held its second Asian Business Conference against the backdrop of an emerging ASEAN Economic Community (AEC) by 2015. It was well attended by a wide cross-section of Asian businesses, research institutes and universities, under the banner: “2015 Approaching: Priming for ASEAN Integration.”

I spoke at the strategic session on banking and finance with particular focus on the need for Asia (and indeed ASEAN) to keep on innovating to create a truly learning society, in order to maintain its competitive edge and remain relevant in an increasingly hostile and uncertain world. To survive, we just gotta’ keep on learning!

Technological progress

I learned early as a Harvard graduate student in the 1970s from no less than Nobel laureate Robert Solow at the Massachusetts Institute of Technology (MIT) down the Charles, that rising output and incomes can only come about in a sustained way from technological progress (TP), not from mere capital accumulation. Put simply, Solow repeatedly emphasised that TP comes from learning how to do things better; indeed, there’s always a better way.

As a practising banker and economist at Bank Negara after my PhD, I quickly undertstood that much of the productivity increases we see come from small incremental changes – they all add-up, other than the lumpy gains arising from dramatic discoveries or from unpredictable phenomena. It all starts with nurturing our education system and the process of its development to ensure youths are properly educated, not just in terms of literary, quantitative and scientific skills, but also with the right moral values and civic outlook.

Broadly, along what Nobel laureate Joseph Stiglitz (pic) has been advocating – it always makes goodJ Stiglitz sense “to focus attention on how societies learn, and what can be done to promote learning, including learning how to learn.”

Innovation and creative destruction

The seeds of the critical role of innovation in economic growth were first planted about a century ago by Harvard economist and political and social scientist Joseph Schumpeter, a contemporary of John M. Keynes. His economics (hence, Schumpeternomics) is based on the ability and capability of the market economy to innovate on its own.

I recall reading his 1939 book Business Cycle: A Theoretical, Historical and Statistical analysis of the Capitalist Process, where he wrote “Without innovations, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion. The atmosphere of industrial revolutions – of “progress” – is the only one in which capitalism can survive.”

So, Schumpeter went about challenging conventional wisdom in three areas: (i) misplaced focus on competitive markets. He contended that what matters was “competition for the markets, not competition in the markets,” as rightly pointed out by Stiglitz. It is competition for the markets that drives innovation. Sure, this can (and do) result in the rise of monopolies; still this would lead to improved living standards over the long haul (eg. Microsoft, Nokia – acquired in 2013 by Microsoft). (ii) undue focus on short-run efficiency which can be detrimental to innovation over the long-term – classic example is helping “infant industries” learn.

But governments should not be in the game of picking winners; the market can do this better (witness Obama’s failed “clean energy” projects or Malaysia’s wasteful car-maker Proton). Sure, there are exceptions where government invests in research that has since led to development of the Internet and discovery of DNA with enormous social benefits.

Schumpeter

(iii) Innovation leads to creative destruction – it can (and do) wipe out inefficient industries and jobs. The Internet has turned businesses from newspapers to music to book retailing upside down. In their place, more efficient businesses have popped up. In his biography of Schumpeter – Prophet of Innovation, Thomas McCraw wrote: “Schumpeter’s signature legacy is his insight that innovation in the form of creative destruction is the driving force not only of capitalism but of material progress in general. Almost all businesses, no matter how strong they seem to be at a given moment, ultimately fail – and almost always because they failed to innovate. Competitors are relentlessly striving to overtake the leader, no matter how big the lead. Responsible business people know that they ignore this lesson at their peril.”

In 1983, the 100th anniversary of the birth of Schumpeter and Keynes, Peter F. Drucker proclaimed at Forbes that it was Schumpeter, not Keynes, who provided the best guide to the rapid economic changes engulfing the world, according to McCraw.

Higher education

The business of higher education has changed little since Plato and Aristotle taught at the Athenian Lyceum. With government patronage and support, close to 4 million Americans and 5 million Europeans will graduate this summer. Emerging nations’ universities are expanding even faster. I was told in Shanghai last month that China has added 30 million university places in the past 20 years.

Indeed, I do see a revolution coming for three main disruptive reasons:

  •  Rising costs – Baumol’s disease has set in, i.e. soaring costs reflecting high labour intensity with stagnant productivity; for the past two decades, costs have risen 1.6 percentage points above inflation annually.
  •  Changing demand – a recent Oxford study contended that 47% of occupations are now at risk of being automated and as innovation wipes out jobs and drastically change others, vast numbers will be needing continuing education.
  • Fast moving TP will change the way education is packaged, taught and delivered. MOOC (Massive Open Online Course) today offers university students a chance to learn from the world’s best and get a degree for a fraction of today’s cost. Harvard Business School will soon offer an online “pre-MBA” for US$1,500 (RM4,778)! The reinvention of universities will certainly benefit many more than it hurts. Elites like Harvard, MIT and Stanford will gain from this creative destruction process. Education is now a global digital market.

What then, are we to do

Corporate giants come and go in a competitive economy. Microsoft and Nokia used to rule the digital world. Now they don’t. No monopoly is permanent, unless enforced by government, which as everyone knows hardly changes, even as the rest of the world passes it by. In the United States, it is reported that the administration wants to prevent Apple’s iTunes and AppStore from abusing the network “lock-in” created by Apple’s tech ecosystem. But the judge has since ruled that “I want Apple to have the flexibility to innovate.” That’s something, isn’t it?

economics-poster-smallMy professor at Harvard, Nobel laureate Kenneth Arrow, used to extol about the importance of learning by doing. So, those who want to innovate, let them just do it – hopefully with no government intervention even though there is a compelling “infant” argument for industrial protection, which can be a double-edged sword when it comes to learning and innovating.

Most of the time, the infant seldom grows up. But reinventing the ancient institution of higher learning will not be easy. EdX, a non-profit MOOC founded (and funded) in May 2012 by Harvard and MIT, is now a consortium of 28 institutions worldwide. No one knows how big the online market will eventually be. It’s more akin to online airline-booking services – expanding the market by improving the customer experience.

Still, innovation at MOOC will definitely reduce the cost of higher education, grow market size but with widespread creative destruction collateral damage, and turn inefficient universities on their heads. MOOC estimates that university employment can fall by as much as 30% and 700-800 institutions can shut-down. The rest have to reinvent themselves to survive. Our learning society will change forever, whether we like it or not.

Former banker, Dr. Lin See-Yan is a Harvard educated economist and a British chartered scientist who writes on economic and financial issues. Feedback is most welcome; email: starbizweek@thestar.com.my. The views expressed are entirely the writer’s own.

“Friendly” Advice to Najib on Leadership


July 12, 2014

“Friendly” Advice to Najib on Leadership

by Nigel Aw@www.malaysiakini.com (07-11-14)

Taking a shot at Prime Minister Najib Abdul Razak’s comparison between Brazil’s devastating defeat in the World Cup semifinals and the need for strong leadership, Tun Dr Mahathir Mohamad offered some pointers.The former premier said a strong leader would reject the Trans-Pacific Partnership Agreement (TPPA).

“I think it is Najib himself who said we need strong leaders. What is the qualification of a strong leader? It is the ability and willingness to stand up against foreign pressure and protect the interest of this country. If you don’t do that then you cannot be considered a strong leader,” he told a press conference in Shah Alam.

Tun Dr. MahathirMahathir was speaking to reporters after launching a book entitled ‘TPPA: Malaysia is not for sale’ by the Malay Economic Action Council (Mtem). Asked if he thought Najib was a strong leader, Mahathir, who celebrated his 89th birthday yesterday, replied: “I don’t know.” “Because it all depends on the test or challenges he faces and how he handles it,” he said.

Asked if Najib’s stance last Friday that Putrajaya intends to go ahead with the TPPA but on Malaysia’s terms was assurance enough, Mahathir insisted the agreement should be scrapped altogether.

“In the first place, why is it (TPPA) done in secret if it is not to cheat people? I think the mark of a goodThe Silent One leader is the ability to reject what is not good for this country,” he said.

Earlier in his speech, Mahathir repeatedly made references to Najib’s statement on the need of strong leaders in making his case against the TPPA. He added that the country had been able to develop well even without free trade agreements in the past.

Mahathir was also asked about Pakatan Rakyat’s leadership in Selangor but he appeared to have mis-heard the question and instead commented on BN’s leadership in the state.

“I’m sorry to say, we should have done better in the last election but we did worse in 2008.There is a lack of leadership there or the system we used was all wrong and we should not continue to do wrong things,” he said.

Abide by the Constitution

On another matter, Mahathir said the country should abide by the constitution which provides for a constitutional monarchy and parliamentary democracy.

“If you break that, people will break other parts of the constitution then there will be chaos,” he added. He was asked to respond to readers’ comments in his latest blog posting which raised concerns about the Johor royal family’s involvement in the Iskandar region.

In the blog posting, Mahathir had weighed into the rapid development in southern Johor but expressed concern that it might become a region of foreigners like Singapore.

Asked what he thought about the comments to his posting on the royalty’s involvement in business, he replied: “If people feel we are a free country, we are very liberal, people can speak their mind, no more ISA so people can say what they like.