Wajarkah Tengku Adnan Rob Malay Businesses ?


June 22, 2012

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

dinmericanby Din Merican

On  June 6, 2014, Utusan Malaysia exploded a story about Sultan Johor’s interference in the Johor State Assembly (Dewan Undangan Negeri) by seeking to have executive control over the Johor Housing Board. The headline was a simple “WAJARKAH?”:

Utusan Malaysia then unfolded the real story. The real disaffection with Sultan Johor was that His Highness was seen as getting involved in businesses including selling large valuable parcels of lands in Johor to Singaporeans and lately to developers from China. This was further incensed by the fact that Malaysian billionaire tycoon Tan Sri Francis Yeoh of the YTL Group had made very damaging and insulting statements against the Malay leadership in the government accusing it of crony capitalism whereas it was a public secret that the YTL Group was the biggest beneficiary of Dr Mahathir’s privatisation policy. The TNB Employees Union then exposed that Sultan Johor’s power company SIPP was the JV partner of the YTL Group in the Pengerang IPP (independent power producer) project.

The Sultan of Johore's sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point. BN upset with royal housing bill too 01 The deal pocketed the Sultan RM4.5 billion.  The Sultan of Johore's sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point. BN upset with royal housing bill too 01 The deal pocketed the Sultan RM4.5 billion.

The Sultan of Johore’s sale of 116-acres of prime land in Johor Bahru last December to China developers Guangzhou R&F last year as a major turning point.
BN upset with royal housing bill too.
The deal pocketed the Sultan RM4.5 billion. 

So, the whole thing was really about UMNO’s anger towards Sultan Johor’s perceived betrayal by selling out on Malay rights. UMNO may be justified to come out strongly against Sultan Johor. UMNO is justified to chide any Malay Ruler and any GLC that disregards Malay rights. UMNO can do that because it perceives itself as the protector and guardian of Malay rights as guaranteed by the Federal Constitution. That’s what UMNO’s existence is for, and that is what most Malays expect of UMNO. But, is UMNO really the champion of Malays and Malay rights? Or, must the Malays also be protected from the rogues in UMNO?

Beside Johor Sultan, UMNO via Khazanah Nasional Berhad owns one of the largest development land in Johor. And UMNO is selling land at equally crasy rate to foreigners, disguised under the name of “joint development”.

Beside Johor Sultan, UMNO via Khazanah Nasional Berhad owns one of the largest development land in Johor. And UMNO is selling land at equally crasy rate to foreigners, disguised under the name of “joint development”.

For UMNO to regard itself as the Champion of Malay rights, UMNO must also not allow its politicians, its leaders especially the UMNO Ministers to betray and rob legitimate Malay businesses. UMNO must not allow Ministers like Tengku Adnan Mansor who is the Federal Territories Minister to do what is reported in MKini in the story below.

Damai Kiaramas was set up in early 2009 to provide a long-term solution for the former estate workers living on prime land of currently TTDI after their estate was closed down 32 years ago.

Damai Kiaramas was set up in early 2009 to provide a long-term solution for the former estate workers living on prime land of currently TTDI after their estate was closed down 32 years ago.

So, just as Utusan Malaysia had rebuked Sultan Johor by that simple phrase – “WAJARKAH?”, these Malay businessmen would equally be entitled to rebuke Tengku Adnan and ask him : “ WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?”

I think it is time that UMNO admonish Tengku Adnan before UMNO loses Malay support in GE14!Now read what Malaysia kini reported below:

UMNO men’s firm gets injunction against Ku Nan

By Hafiz Yatim@www.malaysiakini.com

 A group of bumiputera entrepreneurs today obtained an injunction against Federal Territories Minister and UMNO Secretary-General Tengku Adnan Tengku Mansor and two others from being involved in a joint venture project involving a five-hectare plot of land in Bukit Kiara.

Last week, Damai Kiaramas Sdn Bhd, owned by UMNO members, filed a suit in the High Court in Kuala

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

WAJARKAH TENGKU ADNAN ROB MALAY BUSINESSES?

Lumpur against Tengku Adnan, also known as Ku Nan, for breach of contract. The company claimed it had fulfilled all the conditions set by the ministry to develop the land, including getting the agreement of those living in longhouses in the vicinity for 32 years, to be placed in a mixed development project on the land.

However, the company claimed, Tengku Adnan had favoured a company owned by the Pavilion group to be given the project. Today’s ex-parte injunction was granted by judicial commissioner Kamaluddin Md Said.

Damai Kiaramas named its joint-venture partner Yayasan Wilayah Persekutuan, Tengku Adnan and the Pavilion group-owned Memang Perkasa Sdn Bhd as defendants in the suit. They had since 2008 proposed to redevelop the five-hectare land, which was then part of the Bukit Kiara estate, large portions of which have become the Kuala Lumpur Golf Club and Kelab Golf Perkhidmatan Awam.

The displaced estate workers are staying in dilapidated longhouses on the five-hectare plot and pay monthly rental to the Kuala Lumpur City Hall.Damai Kiaramas claimed it had obtained the backing of the then federal territories minister Raja Nong Chik Raja Zainal Abidin and got the cabinet’s support.

Yayasan Wilayah Persekutuan agreed to appoint Damai Kiaramas as a joint-venture partner on December 17, 2012, after it obtained signatures from all the longhouse residents to support the project, in which they would be placed in their new houses there.

A draft of the joint-venture company was produced several weeks later stating the terms that included the company having to pay RM60.702 million in land premium to Yayasan Wilayah Persekutuan.

A meeting was held between Raja Nong Chik, Yayasan Wilayah Persekutuan and Damai Kiaramas on Feb 22, 2013, at which they all agreed to the terms of the agreement and also agreed to the signing of the formal agreement only after the 13th general election.

Several declarations, general damages sought

However, with Raja Nong Chik having lost in the last general election, Damai Kiaramas had to deal with Tengku Adnan, the new minister in charge of the Federal Territories, and they held several meetings, last year and this year.

At subsequent meetings, the statement of claim from the firm states, Tengku Adnan requested that the land premium and return to be paid to Yayasan Wilayah Persekutuan, be increased from RM60.702 million to RM96 million. Tengku Adnan allegedly asked that the amount be increased further to RM140 million and then to RM160 million, to which Damai Kiaramas is said to have reluctantly agreed.

The joint-venture agreement between Damai Kiaramas and Yayasan Wilayah Persekutuan was formally signed and a copy was sent to the foundation on Sept 17 last year. However, on December 5 last year, Damai Kiaramas obtained a termination notice from Yayasan Wilayah Persekutuan, which stated that there was never an agreement between them, that Damai Kiaramas failed to comply with the foundation’s demand and had not presented a detailed development plan.

Damai Kiaramas maintained that it briefed Tengku Adnan and the foundation representative on this on Sept 25 last year. The company claimed the reasons for the termination of the joint-venture agreement came as an after thought, and that it tried to revive the project by agreeing to pay the RM160 million that Tengku Adnan sought for the foundation.

The company also demanded, in April this year, that Yayasan Wilayah Persekutuan reveals whether it had entered into an agreement with other companies to develop the project.Damai Kiaramas claimed that all the defendants had hidded from its knowledge that secret negotiations had been carried out with Memang Perkasa and further claimed that there was interference from the firm.

Damai Kiaramas further claimed that because it had agreed to pay the RM160 million as demanded, the joint-venture agreement stands and that the action of the other party amounted to breach of agreement.

Hence, the company is seeking a declaration that the joint-venture agreement dated September 17 last year is constituted and continues, and wants another declaration that the termination notice is set-aside.

Damai Kiaramas also wants Yayasan Wilayah Persekutuan to continue with the joint venture and an order that any agreement that the foundation has with Memang Perkasa should be declared null and void. It is also seeking general damages and any amount the court deems fit for loss of profit and exemplary damages.

READ HERE: by Ida Lim@www.themalaymailonline.com

June 21, 2014

http://www.themalaymailonline.com/malaysia/article/developer-insists-has-funds-for-ttdi-project-labels-ku-nans-claims-prematur

June 19, 2014

http://www.themalaymailonline.com/malaysia/article/ku-nan-shrugs-off-court-injunction-by-developer-says-firm-could-not-perform

MH370: Questions for the US and its Intelligence Services


March 30, 2014

Disappearance of Malaysian Airlines Flight MH 370: The Trillion Dollar Question to the U.S. and Its Intelligence Services

Malaysian media should pose critical questions to the US and its Intelligence Services and not to the Malaysian Government

Let me state from the outset that I totally agree with the press statements by Malaysia’s Defence Minister and Acting Transport Minister, Datuk Seri Hishammuddin Hussein that “we have conducted ourselves fairly, responsibly and history will judge us for that.”

And to a mischievous and presumptuous question from a correspondent of the Financial Times, Datuk Seri with confidence and integrity rightly said without any fear of contradiction that, “I don’t think we could have done anything different from what we have already done.”  Well done!

What technological innovation would prompt the Pentagon's military intelligence agencies to electronically interdict a civilian airliner in mid-flight, while disposing of the collateral passengers as shark bait?

What technological innovation would prompt the Pentagon’s military intelligence agencies to electronically interdict a civilian airliner in mid-flight, while disposing of the collateral passengers as shark bait?

The Financial Times, CNN and other foreign media ought to pose similar questions to the US and its intelligence services and stop insinuating that Malaysia has not been transparent and/or engaged in a cover-up. Foreign media should stop engaging in dirty politics!

 It is my hope that following the publication of this article, Malaysian mass media will focus on questioning the integrity of the US’s assistance to Malaysia in the first three weeks of the SAR mission, notwithstanding its recent offer of more assistance.

I take comfort that my reservations about the US and its intelligence services as well as other intelligence services closely linked to the US, especially British secret service, have been more than vindicated by Reuters in its news report on 28th March, 2014 entitled Geopolitical games handicap hunt for flight MH370

The search for flight MH370, the Malaysian Airlines jetliner that vanished over the South China Sea on March 8, has involved more than two dozen countries and 60 aircraft and ships but has been bedevilled by regional rivalries.

… With the United States playing a relatively muted role in the sort of exercise that until recently it would have dominated, experts and officials say there was no real central coordination until the search for the plane was confined to the southern Indian Ocean, when Australia largely took charge.

Part of the problem is that Asia has no NATO-style regional defence structure, though several countries have formal alliances with the United States. Commonwealth members Malaysia, Singapore, New Zealand and Australia also have an arrangement with Britain to discuss defence matters in times of crisis.

As mystery deepened over the fate of the Boeing 777 and its 239 passengers and crew, most of them Chinese, it became clear that highly classified military technology might hold the key.

But the investigation became deadlocked over the reluctance of others to share sensitive data, a reticence that appeared to harden as the search area widened.

“This is turning into a spy novel,” said an envoy from a Southeast Asian country, noting it was turning attention to areas and techniques few countries liked to publicly discuss.

Ultimately, the only country with the technical resources to recover the plane – or at least its black box recorder, which could lie in water several miles deep – may be the United States. Its deep-sea vehicles ultimately hauled up the wreckage of Air France 447 after its 2009 crash into a remote region of the South Atlantic.

While Putrajaya has been forced to reveal some of the limits and ranges of its air defences, the reluctance of Malaysia’s neighbours to release sensitive radar data may have obstructed the investigation for days.

At an ambassadorial meeting in the ad hoc crisis centre at an airport hotel on March 16, Malaysia formally appealed to countries on the jet’s possible path for help, but in part met with polite stonewalling, two people close to the talks said.

Some countries asked Malaysia to put its request in writing, triggering a flurry of diplomatic notes and high-level contacts.

‘It became a game of poker in which Malaysia handed out the cards at the table but couldn’t force others to show their hand, a person from another country involved in the talks said.

As in the northern Indian Ocean, where Chinese forces operate alongside other nations to combat Somali piracy, current and former officials say all sides are almost certainly quietly spying on and monitoring each other at the same time. (emphasis added)

WantChinaTimes, Taiwan reported,

The United States has taken advantage of the search for the missing Malaysia Airlines flight to test the capabilities of China’s satellites and judge the threat of Chinese missiles against its aircraft carriers, reports our sister paper Want Daily.

Erich Shih, chief reporter at Chinese-language military news monthly Defense International, said the US has more and better satellites but has not taken part in the search for flight MH370, which disappeared about an hour into its flight from Kuala Lumpur to Beijing in the early hours of March 8 with 239 people on board. Shih claimed that the US held back because it wanted to see what information China’s satellites would provide.

The above is the reality which we have to confront. Therefore, desist any attempt to label the above mainstream media articles as a “conspiracy theory”. Reuters has let the Genie out of the bottle!

Malaysia’s Minister of Transport Datuk Seri Hishammuddin gave hints of Malaysia’s difficulties (as his hands were tied by intelligence protocols and or refusal by the relevant foreign intelligence services and diplomatic reluctance) but our local media failed to appreciate the nuances of his statements by not directing their questions at those parties that have failed Malaysia as their neighbour and in their duties under various defence treaties and arrangements.

Malaysian media, please read at the minimum three times, the sentences in bold AND WAKE UP TO THE REALITY that our country has been badly treated even though our country put all its national security cards on the table so that countries whose nationals are passengers on flight MH 370 could come forward with sincerity to assist in resolving this unfortunate tragedy which is not Malaysia’s making.

Malaysia is but a victim of this tragedy whose plane, MH 370 was used for a hidden agenda for which only time will reveal. 

On the 27th March, 2014, I exposed how Israel is exploiting the tragedy to create public opinion for a war against Iran, a Muslim country that has close ties with Malaysia.

At the outset of the SAR Mission, all concerned stated categorically that every scenario, no matter how unlikely would be examined critically with no stones left unturned – terrorist hijacking, suicide mission, technical failures, inadequate security, criminal actions of the pilot and or co-pilot etc.

Given the above premise, families of the passengers and the crew of MH 370 have every right to ask the following questions of the US and other countries that have sophisticated technologies to track and monitor airplanes and ships in all circumstances.

Such questions should not be shot down by those who have a hidden agenda that such queries amount to “conspiracy theories”. Far from being conspiracy theories, we assert that the questions tabled below and the rationale for asking them are well founded and must be addressed by the relevant parties, failing which an inference ought to be drawn that they are complicit in the disappearance of MH 370.

Let’s us begin.

1)        Was the plane ordered to turn back, if so who gave the order?

2)        Was the plane turned back manually or by remote control?

3)        If the latter, which country or countries have the technologies to execute such an operation?

4)        Was MH 370 weaponised before its flight to Beijing?

5)        If so, what are the likely methods for such a mission – Biological weapons, dirty bombs?

6)        Was Beijing / China the target and if so why?

7)        Qui Bono?

8)        The time sequence of countries identifying the alleged MH 370 debris in the Indian ocean was first made by Australia followed by France, Thailand, Japan, and Britain via Immarsat. Why did US not offer any satellite intelligence till today?

9)        Prior to the switch of focus to the Indian ocean, was the SAR mission in the South China seas, used as a cover for the deployment of undersea equipment to track and monitor naval capabilities of all the nations’ navies competing for ownership of disputed territorial waters? Reuters as quoted above seems to have suggested such an outcome.

10)     Why was there been no focus, especially by foreign mass media, on the intelligence and surveillance capabilities of Diego Garcia, the strategic naval and air base of the US?

11)     Why no questions were asked whether the flight path of MH 370 (if as alleged it crashed in the Indian Ocean), was within the geographical parameters of the Intelligence capabilities of Diego Garcia? Why were no planes deployed from Diego Garcia to intercept the “Unidentified” plane which obviously would pose a threat to the Diego Gracia military base?

12)     The outdated capabilities of the Hexagon satellite system deployed by the US in the 1970s has a ground resolution of 0.6 meters;  what’s more, the present and latest technologies boast the ability to identify objects much smaller in size. Why have such satellites not provided any images of the alleged debris in the Indian Ocean? Were they deliberately withheld?

13)     On April 6th, 2012, the US launched a mission dubbed “NROL-25” (consisting of a spy satellite) from the Vandenberg Air Force Base in California. The NROL-25 satellite was likely rigged with “synthetic aperture radar” a system capable of observing targets around the globe in daylight and darkness, able to penetrate clouds and identify underground structures such as military bunkers.

Though the true capabilities of the satellites are not publicly known due to their top-secret classification, some analysts have claimed that the technology allows the authorities to zoom in on items as small as a human fist from hundreds of miles away. How is it that no imagery of MH370 debris was forwarded to Malaysia, as this capability is not classified though other technologies might well remain classified? (Source: Slate.com)

14)     Could it be that the above capabilities were not as touted?

15)     However, in December, 2013, the USAtlas V rocket was launched carrying the spy satellite NROL-39 for the National Reconnaissance Office, an intelligence agency which is often overshadowed by the notorious National Security Agency (NSA), only it scoops data via spy satellites in outer space. The “NROL-39 emblem” is represented by the Octopus a versatile, adaptive, and highly intelligent creature. Emblematically, enemies of the United States can be reached no matter where they choose to hide. The emblem boldly states “Nothing is beyond our reach”. This virtually means that the tentacles of America’s World Octopus are spreading across the globe to coil around everything within their grasp, which is, well, everything (Source: Voice of Moscow). Yet, the US with such capabilities remained silent. Why?

It cannot be said that it is not within the realm of probabilities that the US may not want the plane MH 370 to be recovered if rogue intelligence operators were responsible for the disappearance of MH 370.

If the above questions have been posed to the US and other intelligence agencies and answers are not forthcoming, I take the view that the Malaysian government ought to declare publicly that our national sovereignty and security have been jeopardized by the disappearance of MH 370 and that the relevant intelligence agencies have been tacitly complicit in the disappearance of MH370.

 By coming out openly to explain the predicament faced by our country, Malaysia may prevent a hostile act against a third country.

 I therefore call upon Malaysian mass media to be courageous and initiate such queries as only the US and other intelligence agencies can give definitive answers to the above 15 questions.

It is futile to demand answers from Malaysia as we are not in any position to supply the information as we do not have the capabilities of the global and regional military powers.

 Malaysians must unite behind the government so that our leaders need not feel that they are alone shouldering this enormous burden.      

Matthias Chang is a prominent Malaysian lawyer and author, who served as political secretary and adviser to former Prime Minister Dr. Mahathir Mohamad.

http://www.globalresearch.ca/disappearance-of-malaysian-airlines-flight-mh-370-the-trillion-question-to-the-u-s-and-its-intelligence-services/5375780

 

 

Dr. M’s unbearably convenient memory


March 30, 2014

Dr. M’s unbearably convenient memory

by Terence Netto@http://www.malaysiakini.com

Predictably,(Tun) Dr Mahathir Mohamed cannot quite remember whether he was in the country when the Memali incident occurred in November 1985, four years and four months into his 22-year premiership.

His Deputy then, Tun Musa Hitam, said in Kota Baru last Thursday that Mahathir was in the country, not just when the incident occurred on November 19, but also up to four days after the episode in which 14 police personnel and four villagers were killed in Mukim Siong, Baling. At that time, the Malaysian public was given to understand that their Prime Minister was abroad – in China, to be sure.

Mahathir held the customary press conference at the airport upon his return from abroad. He took questions on the Memali incident in which Police opened fire on a house where religious cult leader Ibrahim Libya was holed up with several villagers. The ensuing shootout became a cause celebre.

Pressed for a response to what Musa had said about him being in the country during that incident and then affecting to show he was not, Mahathir (right) parried his former Deputy’s implied attack on his probity with, “I can’t remember.” Mahathir pleaded his advanced years (he will be 89 in July): “Since this happened a long time ago, I need to check back to see what he [Musa] said is true.”  Mahathir has a convenient sense of recall: he remembers what it is expedient for him to remember and trots out pleas of amnesia when it suits his purpose.

At the Royal Commission of Inquiry into the Lingam videotape in January 2008, Mahathir not infrequently responded with “I don’t remember” to critical questions on his role in the matter in which a senior lawyer was captured on video attempting to fix the appointment of judges during the period of Mahathir’s tenure as Prime Minister (1981-2003).

At that time Mahathir’s infamous chiding of Malays – “Melayu mudah lupa” (The Malays easily forget) – for their supposed ingratitude came back to haunt him.

“Dr M mudah lupa,” (Dr M easily forgets) became his critics’ catch-phrase of raillery against him when it was seen that the former PM’s powers of recall were conveniently self-serving.

Musa’s motive

Musa HitamPolitical observers are wondering about the motive of Musa, a one-time ally-turned-opponent of Mahathir’s in raising a matter that took place almost 29 years ago. They ought to wonder no more.

Musa (left) is attempting a block. He knows Mahathir wants Prime Minister Najib Razak out as PM. The incumbent PM is beleaguered by the disappearance of flight MH370, now three weeks into the greatest mystery in civil aviation’s history.

The circumstances of the plane’s mysterious disappearance with 239 people on board places Najib, Home Minister Zahid Hamidi and Defense Minister Hishamuddin Hussein on notice of grave lack of fitness to hold office. Incidentally, all three of the abovementioned individuals are stalling points in the career path of Mukhriz, the Menteri Besar of Kedah, regarded as inheritor of the Mahathir mantle of national leadership.

In most countries in the world, North Korea excepting, an incident like MH370’s disappearance would have had the trio of Najib, Zahid and Hishamuddin with their necks on the chopping block. Not Malaysia where the 47 percent of the voters who endorsed the ruling BN coalition in the general election last May are embodiments of the validity of the philosopher George Santayana’s dictum: “Those who forget history are condemned to repeat.”

Command and control

Twice in the recent days Mahathir has talked about matters that bespeak a desire to return to a command and control role in Malaysian politics. First, he advised that the government should get ready to tackle a financial crisis and trotted out his expertise at prescribing for just such a malady.

Days after this advice, analysts toted up expected losses to the economy from the suspension of the Visit Malaysia Year 2014 because of flight MH370’s disappearance, and from the anticipated further bleeding of our already loss-hobbled national carrier, MAS. They said it would be RM4 billion at the very least.

The second alarm Mahathir sounded was even more unsettling. He said that if he were to return as PM, he would censor the internet which would be a clear violation of the bill of rights he vouchsafed cyber practitioners when inaugurating the Malaysian Multimedia Corridor in 1996.

Well, no prizes for guessing what the former PM would say if reminded of his promise of no restrictions on freedom to publish on the internet: “I can’t remember.”

It has become a mantra of the man who had ruled the country for 22 years (1981-2003) during which he built it up physically and emasculated it morally. The country’s problem is that it has enough masochists who may want more of the same. Not Musa Hitam, though.

 

MH370: Really, who’s in charge?


March 12, 2014

MH370: Really, who’s in charge?

With over 10 nations joining in the search for the MH370 missing Boeing 777-200ER, the absence of a command centre is perplexing.
COMMENT

MH370Ten nations, including the United States and Australia, have mobilised aircrafts and ships to locate MH370, which vanished off the radar early Saturday with 239 people on-board, including the crew.

The MAS Boeing 777-200ER had taken off from the Kuala Lumpur International Airport half-hour after midnight and was scheduled to land in Beijing at 6.30am. But slightly more than an hour into flight, the plane disappeared, prompting an unprecedented search.

The search covering almost the whole of Southeast Asia, from the Bay of Bengal to the South China Sea, is being participated by 34 aircrafts, 40 ships and a battery of search and rescue technologies. Hundreds of fishing vessels have also been mobilised to find traces of MH370.

About two-thirds of the 227 passengers and 12 crew aboard the plane were Chinese. The airline said other nationalities included 38 Malaysians, seven Indonesians, six Australians, five Indians, four French and three Americans.

The Boeing 777 has one of the best safety records of any commercial aircraft in service. Its only previous fatal crash was on July 6 last year when Asiana Airlines Flight 214 struck a seawall on landing in San Francisco, killing three people.

To add drama to the whole matter is the presence of two passengers on the flight who possessed fake passports. Neither Malaysia’s police, the agency leading the investigation locally, nor spy agencies in the United States and Europe have ruled out the possibility that militants may have been involved in downing of MH370.

But Malaysian authorities have indicated that the evidence thus far does not strongly back an attack as a cause for the aircraft’s disappearance, and that mechanical or pilot problems could have led to the apparent crash.

MAS, at a press conference earlier this week, said two passenger in the flight had fake passports and this had led to more talk that the plane could have been subjected to acts of terrorism. There was also talk that five passengers had missed the flight.

But yesterday Inspector General of Police Khalid Abu Bakar clarified that one of the two passengers was an Iranian teenager on his way to Frankfurt in Germany and would have been in transit in Beijing. The identity of the other person is yet to be ascertained.

The Malaysian top cop also revealed that only one person, a lady, missed the flight as she mistook the date of her flight to Beijing and not five as earlier reported. While the Malaysian side has been coming out with press conferences on a daily basis, little is explained on how the searches are being conducted.

Standard Operating Procedure

With over 10 countries in the fray one wonders, if the Malaysians have set up a command centre for these rescuers to operate from. Conflicting statements from the Chinese side have made things worse. Chinese authorities are seething over the lack of information on the search.

Setting-up a command centre is the duty of Malaysia. Presently the Malaysia Airlines is taking the main role in informing of its efforts to locate its aircraft. This is supported by announcements from the Department of Civil Aviation (DCA) and the Malaysian police.

Efforts taken by search and rescue teams from other nations are not elaborated in these press conferences. The Malaysian DCA had been entrusted to take the lead. But the question arises: Is it the duty of the DCA (Department of Civil Aviation (DCA) to oversee such search and rescue efforts?

Hishamuddin HusseinThe Malaysian Defence Forces, which is working behind the scenes, is also mum on the matter except press conferences held by Minister Hishammuddin Tun Hussein. At the same time, those hungry for the latest news on the plane’s disappearance have to follow Twitter or Facebook to exchange information.

After news broke of the aircraft’s disappearance, there were reports from the Vietnamese Navy that the plane had crashed off the waters of Vietnam. But this has yet to be verified. The Chinese on the other hand are combing the South China Sea and are coming out with statements of their own that they have yet to find any debris.

Based on past experience, in a disaster or an untoward incident of this magnitude, the first Standard Operating Procedure would be to set up a command centre. The command centre should be in touch with all involved in the operation and they are required to report back if they had found anything.

Participating nations usually do not hold media conferences but convey their finding to the command centre. The command centre must also inform the media where all respective participating countries are searching and the type of equipment used in the search.

The lack of a central command will only fuel more speculative reports. These are still early days. The search for the jet could run into weeks if not months.

Malaysia must do more to show to the world that it can handle a disaster. Confusing the people is not a way to tackle the issue. There is a dire need to streamline information. This can only be done through experienced public relations experts, which is now sorely lacking.

Malaysian must not just fault the Chinese for wanting prompt answers. Efforts must be taken to explain how the search and rescue mission is being conducted in detail. No stones must be left unturned.

All issues must be addressed. All questions must be answered. This could be a long haul which can last for not days but weeks or even months.

Malaysia Truly Asia


January 2, 2014

Malaysia Truly Asia

Malaysia, where dreams come true and nightmares too. Promoting Malaysia as a land of paradise is fine, but we are short changed when we consider the politics. Religion and race are being used to divide and rule us. I like this video but how I wish that it is  the real thing. –Din Merican

Sharia and skyscrapers: Malaysia’s artificial wonderland


September 28, 2013

Sharia and skyscrapers: Malaysia’s artificial wonderland

Malaysia Truly Asia

Impressions from an eight-day visit to a country of massive towers and Russian architecture, where Israel is put on mock trial and Muslims and Chinese coexist.

By

KUALA LUMPUR − Two hardscrabble Malaysian fishermen, wearing wide-brimmed straw hats, were busy repairing their traps this week. Made out of twigs, their contraptions each consisted of a cage designed to catch fish and other marine creatures, which are supposed to enter it through a narrow sleeve, never to escape again. A warm tropical sun hung overhead, and the low tide exposed a wide stretch of beach. Thousands of tiny crabs scampered across the sand while the fishermen were fixing the primitive cages.

The beach was deserted. Behind it stood the gleaming new buildings of the Malaysian Military Academy for Officers, also deserted. On the horizon, one could see dozens of oil tankers and cargo ships as they passed through the Strait of Malacca, through which commercial vessels sailing between India and China, and East and West in general, have been passing for centuries.

At the bar of the Thistle Hotel in Port Dickson, on one bank of the Strait, just south of Kuala Lumpur, dozens of employees of the Malaysian offices of Hewlett-Packard were enjoying their annual summer party. ‏(In fact, there is neither summer nor winter in this country with its equatorial climate, only one long season.‏) Tablet computers were being handed out to the outstanding HP employees, as they drank gin-and-tonics and danced to the sounds of Lady Gaga.

Suria-KLCCAn hour away, by way of a fast toll road lined with plantations of green oil-palm trees, the Suria KLCC shopping center, located at the base of the huge, twin Petronas Towers, was teeming with shoppers. There is hardly any international brand name that cannot be found at the center, situated in the heart of Kuala Lumpur. It is but one of many upscale shopping malls in a city of malls. ‏(By comparison, our luxurious Ramat Aviv mall looks like a collection of marketplace stalls.‏) The IDF Spokesman’s blog recently “relocated” the Suria KLCC center after inadvertently describing photographs of it as pictures taken of a mall in the Gaza Strip. But Gaza is not here. It couldn’t be further away.

Malaysia is in the midst of an economic boom. Fifteen years ago, it decided to build a huge new federal government center, and this has now been achieved. There are few more impressive, megalomaniacal or artificial cities than this one, called Putrajaya. It contains intimdating public buildings, including a royal palace for a king who doesn’t even like coming here. ‏(Malaysia is a federation of 13 kingdoms, the respective hereditary rulers of which choose a supreme king every five years.‏) There is also a Prime Minister’s residence that could rival any royal one, and a Prime Minister’s office that is supposed to resemble the Kremlin.

Putrajaya’s wide avenues make the Champs Elysees look like a narrow alley. The city boasts exact replicas of the Pont Alexander III bridge in Paris, another of a span in Isfahan, Iran, as well as a gigantic botanical garden in a pavilion designed in a Moroccan style. The bridges here were apparently constructed even before the canals and artificial lakes that flow underneath them were dug. The whole city is temperature-regulated through a central air-conditioning system. The underground railway system has not been put into service since there is not yet a need for it. All of the utility cables are subterranean, so as not to detract from the scenery.

Every detail attests to meticulous care, without one traffic circle or road divider out of place, and with the entire landscape smacking of artificiality and megalomania.

At the top of a hill with a commanding view of the city is the Putrajaya International Conference Center, which was built at a cost of a half-billion ringgits ‏(about NIS 500 million‏). The central hall seats 5,000 people, while 3,000 can enjoy a sitdown meal in the banquet room. The electronic message board at the auditorium entrance flashes quotes, such as this one from Albert Einstein: “The difference between genius and stupidity is that genius has its limits.” Or Mahatma Gandhi: “The weak can never forgive. Forgiveness is the attribute of the strong.” Others quotes are from such diverse personages as Michael Jordan ‏(“Always turn a negative situation into a positive one”‏), Winston Churchill and Napoleon Bonaparte.

A total of 20 billion ringgits have already been sunk into Putrajaya, with an additional 30 billion budgeted for planned, but as-yet un-built, governmental, commercial and residential structures. Twenty-thousand housing units are already occupied, mainly by government workers who have relocated here. When Kazakhstan embarked on a similar venture in its capital city of Almaty, the Kazakhs visited Putrajaya to learn how to do it.

Economic miracle

Malaysia-- Endless PossibilitiesMalaysia is experiencing an economic miracle. The country, with its so-called tiger economy − which benefits mainly from a vibrant oil and gas industry, from exports such as palm oil and rubber − is prospering. Even after a recent slowdown, annual growth stands at 5.5 percent, with privatization proceeding at full steam. Some 25 percent of the government budget is devoted to education.

This is a land of contradictions. Malaysia is a Muslim country where sharia law is the rule, although it is not always enforced. However, that law applies only to the Muslim majority, comprising 60 percent of the population, whereas, for example, Malaysia’s large Chinese minority ‏(25 percent‏) is allowed to sell and consume pork and alcohol without hindrance. The country is seemingly democratic, although the same ruling party has been in power for a very long time. The governing coalition is determined before, rather than after, elections. There are 3 million foreign workers from poorer Asian countries, who carry the brunt of labor on their shoulders, constructing first-world-quality infrastructure. Poverty seems to be evident only in rural areas, and is not apparent in Kuala Lumpur.

This impressive economic feat can be ascribed to Tun ‏(an honorific title‏) Dr. Mahathir bin Mohamad, the local version of David Ben-Gurion, who served as prime minister for 22 consecutive years until 2003, when he was forced out of office. I met Mahathir at a conference this week called “Global Peace Efforts: What Went Wrong?”, sponsored by the Perdana Global Peace Foundation, which he helped found. At 88, this spry, impressive man and his wife are accorded royal treatment. He sat through a whole day of sessions, listening to lectures by scholars from abroad and taking notes.

The former Premier can hardly be called a fan of Israel, but his speech at the conference on various conflicts around the globe was reserved, with the opinions he expressed about Israel not much harsher than what one hears these days in Europe. Shortly before he stepped down as Prime Minister in 2003, Mahathir raised an international storm when he claimed that Jews dominate the world.

The conference organizer, Dr. Samsudin Hitam, counts in shekels. When he organized for a boat to carry sewage pipes to Gaza two years ago, he discovered that the ringgit and shekel are of approximately equal value. During my eight-day visit to Malaysia, a country closed to Israelis (I received a special pass), he made all references in shekels during our conversations.

Samsudin is former Secretary-General of both Malaysia’s Finance Ministry and its Ministry for Economic Development. Now retired, he is am activist on behalf of Perdana. He organizes peace conferences and humanitarian-aid ships bound for the Gaza Strip, which he visited last December.
A round, energetic and friendly man, Samsudin is definitely not a hater of Israel. The conference he organized was marked more by an anti-American stance, although Israel, too, did not escape criticism.

A few days before the gathering began there was supposed to be a public “tribunal” at the same venue, where Israel was to be tried for genocide. Well-known jurists from around the world were to be part of the event, but it was cancelled immediately after it opened, after the prosecution panel, consisting of two law professors, Gurdial Singh, from Malaysia, and Francis Boyle, from the United States, attempted to disqualify one of the judges, Prof. Eric David, from Belgium, claiming he was a Mossad agent. This farce went on for two days, until the public trial was cancelled. The team that was presenting Israel’s case consisted of an Australian professor donning a white wig, like a British jurist, as well as an Iranian legal expert, no less. No Israeli jurist agreed to come, according to the organizers.

Awakening Malaysia raises mixed emotions. There is something artificial in its accelerated pace of development, and it’s not easy to get the measure of the country’s character in a single visit. The relations between the Muslim majority and the large Chinese minority are muted. The last bloody inter-communal riots occurred in 1969. Meanwhile, the Chinese-Malaysian community dominates the economy, yet claims to be discriminated against on an ethnic basis. The Muslims claim that all the Chinese care about is money.

‘Truly Asia’

In a marketplace in Bukit Tinggi, a “new Chinese village” ‏(the term used for internment camps for Chinese Malays during the war waged in the 1960s against the communists, in the thick jungles of the mountains surrounding Kuala Lumpur‏), vegetable sellers market their cheap wares while calculating their profits on tablet computers. Not far from this mountainous village is a resort called Colmar Tropicale, another fanciful tourist project − an exact replica of the French vacation town of Colmar, complete with turrets and the voice of Edith Piaf singing “Non, je ne regrette rien” coming over the sound system.

Almost 20 million tourists visit Malaysia each year, comprising mainly Arabs and Asians, but also a fair number of Europeans. The goal is to welcome one tourist per citizen: 29 million a year. Tourists come for the beaches and malls, where prices are low. Salaries are also low.

In fact, former police chief Tan Sri Norian Mai told me, over a wonderful Malaysian meal, that a policeman’s starting salary is NIS 1,000 a month. Those towers, the tallest twin buildings in the world, serve as Kuala Lumpur’s commercial “logo.” In order to be the tallest, a turret of several meters was added to the top.

Minarets are rarely seen in the city; indeed, a Malaysian mosque often looks like a pagoda. But the muezzin’s call can be heard in several of the city’s neighborhoods.

Kuala Lumpur is now decked in flags in advance of the upcoming celebration of Independence Day, which falls tomorrow, August 31. Even the flag is a replica of something else. Like the American flag, it depicts 13 red and white stripes, symbolizing the 13 states that make up Malaysia, to which are added the Muslim crescent and a star. The country’s international advertising slogan, “Malaysia, Truly Asia,” is appropriate.

During one of my evenings here, at a beach that is one of the country’s most beautiful, as I watched the children of Saudi, Chinese, Japanese, Korean, Qatari and Indonesian tourists playing in the pool, I witnessed a new world, one so unfamiliar to Israelis.

Gangs going public to feel ‘macho’


August 14, 2013

Gangs going public to feel ‘macho’

by P Ramani@www.freemalaysiatoday.com

Secret societies are becoming more open and bold in brandishing their acts via social media.

PETALING JAYA: The sense of self-pride and being macho’ have surfaced among the younger generation who leads the secret society these days, says USM Associate  Professor P Sundramoorthy.

The traditional handshakes and code words used among the secret societies have now been replaced with more open and bold vows displayed on the social media by this generation gangsters.

The gangsters openly display their gang name and logos. Some even receive huge support from their peer groups or gang members. The abuse of spiritual logos by the secret societies is becoming rampant, for example, the swastika emblem is associated with Gang 21 and the “om” symbol with Gang 36.

Secret societies that are popular in Facebook and Youtube are 04, 21, 1804 Kaigelz, and Gang 36 which also known as ‘Bob Marley’. Some of these gangs openly display their gang’s logo during funeral processions of their members or leaders; and further upload their videos on Youtube.

According to criminologist Sundramoorthy, the change of behaviour in becoming bolder is due to decaying moral values among gang members. “This generation gang members are not bothered when they publish their acts, as long they get highlighted and obtain more support. This makes them feel stronger,” Sundramoorthy told FMT.

The criminologist from Universiti Sains Malaysia (USM) also stated that some of these gang members are passive but joined the gang just to feel they are in an upper elite gangster society.

hans gangstersOnly the active gang members involve themselves in criminal activities such as drug distribution, kidnapping, extortion and so on. To curb this trend, Sundramoorthy suggests that the Police take a proactive approach in curbing the increasing numbers of secret societies.

“Through intelligence gathering and criminal database updates, the Police should do more in preventing this increasing culture among the gangs,” added Sundramoorthy. He also added that tolerance should be minimal and police should not think twice to act on this menace.

Glamour and Security

Meanwhile, HELP University College’s Centre for Fraud Management & Institute of Crime and Criminology director Akbar Satar is of the opinion that these generation gangsters are emulating the acts displayed by overseas’ gangsters.

“It is a common trend followed whereby American gangsters display their gang names and activity on Youtube and Facebook,” said Akbar. He also added that emerging of new platform technologies is abused and it helps the gang to recruit members online as well as help them promote their existence.

Meanwhile, criminal psychologist S Niraj added that social media such as Facebook being used by gangs was no longer a secret.

“The main reason for exposing gangs in Facebook is because of ‘identity’. In psychology and sociology, identity is a person’s conception and expression of their individuality or group affiliation,” said Niraj. He also added that since these youngsters associated themselves with a gang, they feel glamorous and secure.

“Through Facebook, gangs are able to post their activities, show their strength and indirectly use as a tool for membership drive. By adding friends in Facebook, members feel there is a security,” added Niraj.

Trans Pacific Partnership Agreement (TPPA) – Why Protest (Bantah)


August 6, 2013

Trans Pacific Partnership Agreement (TPPA) – Why Protest (Bantah)

by Anas Alam Faizli

Back in 2008, the Malaysian government concluded the signing of a US-Malaysia FTA with 58 redlines or “red-stops”, which discontinued the two-year negotiation. Among leading protagonists was then Agriculture Minister Tan Sri Muhyiddin Yassin, who mentioned that he would not compromise the livelihood of local farmers. He was even quoted as saying ‘over my dead body’ by some quarters. YB Khairy Jamaluddin even led a protest, citing that the FTA would take away Malaysia’s sovereignty, while patent protection would deny access to generic medicine. Question is, what has changed in the past five years? One thing for sure, it is definitely not the content of the FTA.

Why Trans Pacific?

We can imply that TPPA is called Trans Pacific because of the geographic locations of the countries taking part in the negotiations, and between whom the agreement aims to conclude amongst. TPPA is unique in the sense that it is open-ended agreement. Any country interested to join can join in as long as they agree with concluded text and other countries agree to the entry.

Every country participating in the TPPA already has existing FTA with America except Japan, New Zealand, Malaysia and Brunei. Japan and New Zealand are developed economies with very large trade sizes with other countries in the world, and Brunei is a resource-rich nation with a less significant trade size. That leaves Malaysia, which has most at stake as a developing nation and a new entrant to an FTA with America.

What does this mean? It means that, for countries with existing FTAs with America, the TPPA will probably just result in minor additions to status quo. But for our small economy, the TPPA will entail a much bigger impact.

The first TPPA negotiation was held in March 2010 amongst 8 countries, while Malaysia joined in December 2010, followed by Mexico and Canada December 2012. Recently, Japan joined in at the Kota Kinabalu negotiation round.

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The contents of TPPA’s texts ares confidential and negotiations are held behind closed doors. What we have are five leaked chapters, namely Investment, Intellectual Property, Trade to Barrier and Regulatory Coherence. MITI reported that it has almost concluded 14 out of the 29 chapters.Previous US FTAs have shown that they do not vary much from each, with an average variance of about less than 5%. This clear indicates standardization on the part of the Americans and their reluctance in entertaining non-conforming measures (termed as “exclusions”) at the negotiation table. It can thus be implied that one FTA will not be that much different from another. Other US FTAs with Singapore, South Korea and Chile serve as good guidance for us to know what to expect in the TPPA.

Investment and Sovereignty

This is arguably the largest chapter, which also has linkages to most of the other chapters. This chapter will restrict the policy space of governments through its ‘Investor-To-State Dispute Settlement (ISDS)’ and the ‘State-to-state Dispute Settlement’ (SSDS) clauses. TPPA in this case supposedly “strengthens” trans-national ‘corporate’ justice (fairness and equity) – by providing ways for multinational corporations to trample over national legal systems through international arbitration tribunals comprising of three judges; two international and one local.What do fairness and equity here mean?

Mainly, MNCs can expect no local condition or regulation changes affecting them once there reside in a partner country. For example, if Malaysia suddenly happens to find out that a certain ingredient in tobacco is harmful, and decide to ban it thereby affecting the profitability of a Tobacco MNC, the MNC has the right to sue the government for potential profit loss for the remaining period of their permit in the country, with interest. Such was the case with Phillip Morris, when it sued the Australian government over a new law onto cigarette packaging.

The same could happen if Malaysia decides to be more stringent with LYNAS, for example, in the future.To consider the extreme, we can even go to the extent of saying that legislators and the Parliament will be essentially rendered redundant; their hands will be tied to enacting only new laws that will not affect MNCs’ profitability and business viability! We recall Mexico being sued for USD 16 billion for disallowing removal of toxic waste harmful to its environment by an American corporation.

It is also widely known that developed nations like America and Japan are attempting the ISDS via the TPPA. ISDS is under a provision under the Investment Chapter which essentially will allow any corporations to take the Malaysian government to court for claims for damages or loss. It was not ratified previously under existing World Trade Organization (WTO) agreements. We can only imply with no substantial certainty that these clauses were not ratified by WTO for its potential negative impacts on some signatory countries, but there is still reason to be cautious.

On Government Procurement

With this chapter, all government procurement including that of the GLCs and Petronas cannot have special conditions to help local contractors in any way deemed unfair to other corporations. There is a floor threshold for this ruling; deriving from previous US FTAs, we expect it to be around RM 23 million and above which probably leaves room for only the small peripheral contracts for local companies. Meanwhile, the government procurement bill is sized at RM130 billion, or 25% of the Malaysian GDP.

Empirical evidence has shown that 94% of the American government procurement goes to American companies (Khor, 2008) and only 6% goes to over 170 companies worldwide. Such limited potential gains from what is supposed to be opening our doors to America! It is in fact our floodgate that is being opened for America.

What will happen to our local contractors? And what of all those local oil and gas contractors – Can even our giants like Sapura Kencana and MMHE at their nascent stages survive the competitive onslaught from developed nations? Not to mention the smaller players? Even the Petronas Vendor Development Program and licenses will witness its death.

SMEs and Agriculture

Among other things, The TPPA aims at trade liberalization and tariff reduction, which may cause drastic loss of jobs in many sectors. A direct impact is downward pressure on workers’ wages, expanding even further the currently large income disparity gap. Mexico serves as a good reminder; following the signing of the North American Free Trade Agreement (NAFTA) with Canada and the US, three million out of ten million Mexicans lost their jobs.

Tariff reductions will adversely impact particularly agricultural products. Promoting efficiency and healthy competition, however noble, becomes unfair when more than 90% of Malaysian companies in the agriculture sector are SMEs. They will face unfair competition from giant agricultural exporters from TPPA countries such as the US, Canada, and Japan, whose governments in the TPPA will not reduce huge subsidies to their farmers. A study by UNCTAD showed that subsidies reduce the price of American rice crop by 45% below cost of production, soybean by 32% and cotton by 52%. A rough calculation indicates that their rice can flood the Malaysian market at as low as RM1.40/ kg– what will happen to BERNAS, and more importantly, local planters then?

On Intellectual Property

The Big Pharmas will get medicine patents and obtain longer patents easily. This would also render generic medicines more difficult to, or delayed access, such as medicines for cancer, HIV and other chronic illnesses. This will definitely affect our populace. For example, Herceptin which is used for cancer, currently costs RM8,000 per cycle and is used for 17 cycles. Treating a lung cancer patient costs an average of MYR 44,725 ($14,455) per year, per patient. The chance of access to these medicines for those unable to afford these exorbitant prices becomes slimmer if generic medicines are prohibited due to an extra 20 years to patents where patent law is loosened.

Just as the TPPA’s intellectual property (IP) protection measures would make medical treatment more expensive for ordinary Malaysians, TPPA countries’ educational and research activities could also be harmed – and made more expensive – due to the more stringent copyright laws proposed. These include the ‘digital commons’ such as the Internet-based resources. Current copyright law is proposed to be extended from 50 years to 120. That’s also 70 more years of limited accessibility to students and academia due to prohibitive prices of book and references.

Tobacco control and Public Health

Tobacco is not our average ordinary product – it kills at least 50% of its consumers prematurely. Malaysia, along with all other TPP countries except the USA, is party to the WHO Framework Convention on Tobacco Control (FCTC) which requires countries to regulate tobacco, reduce its use and withhold grant incentives to the tobacco industry. The FCTC is a binding international treaty and Malaysia has been a Party; this entails the aligning of national policies with the goal of reduction in tobacco use and regulating the tobacco industry. Many provisions in various TPPA Chapters contradict those in the FCTC. This alone is cause for concern considering the potential conflicts between the two in the future, and more importantly the general harm to public health of a more heavily tobacco-consuming society.

Capital Control Capability

Another major consequence of the TPPA is restriction on our capability to enforce capital control. According to Reinhart & Roghoff (2009), periods of high international capital mobility have repeatedly produced international banking crises, not only as witnessed here at home and in the region in 1997, but also historically. When financial systems are adequately regulated, the scope for damaging financial cycles can be contained, or at least leave the economy less prone to such large cyclical swings as seen in today’s more liberalized environments. The idea is not to destruct efforts for a liberalized and efficient financial sector, nor to hinder Malaysia’s competitiveness in attracting foreign investments, but rather to cushion impacts of economic shocks to the most vulnerable Malaysian businesses and entrepreneurs. It is not archaic to take some heed from temporary capital controls measures we undertook during the Asian Financial Crisis. Even the IMF admits to the role that capital control played in expediting our recovery compared to that of Indonesia & Thailand.

Trade and FDI Myth

Back to trade itself, it has always been expected that the main benefits of signing an FTA with the US will be reflected through higher gains in trade benefits. How is it then that even in the case of a relatively stronger economy such Singapore, trade deficit had only widened from USD1.4 billion in 2003 when they signed the agreement, to USD4.3 billion in 2004 and USD6.9 billion in 2006 to USD10.5 billion in 2012?! Furthermore, no evidence of increased long term quality investments and FDI were found in bilateral trade agreements, according to a report by the United Nations on FTA impacts. While trade diversion is a valid concern, the loss of incomes and benefits from trade diversion as a result of opting out of TPPA, must be determinedly greater than the various losses and costs that the TPPA entails to the larger economy.

Protests around the World

It is not uncommon for nations worldwide to protest against FTAs with America. In Guatemala, two died protesting, and the people of Guatemala brought the government to court claiming that the FTA would go against at least 130 Acts in the Guatemalan constitution. In Ecuador, Emergency had to be declared due to massive demonstrations. Chief negotiators in Thailand and Colombia also resigned from their positions in protest. In South Korea, a protestor burnt himself to death to show protest against an FTA that it had with the US, which only passed by Parliament after the ruling Government effectively locked up the opposition.

Countries like Argentina, Bolivia, Brazil, Paraguay, Uruguay, Venezuela, South Africa, Botswana, Lesotho, Namibia and Swaziland had also previously engaged in negotiations with America for an FTA, but they were never signed.

In Malaysia, the Third World Network (TWN) and the Consumers Association of Penang (CAP) have been at the forefront of engaging with US-Malaysia FTA issues since 2008, and has continued to do so with the TPPA. Notable efforts have surfaced again lately in light of the TPPA negotiations and the leaked chapters. On 6th of June 2013, YB Nurul Izzah issued a press statement questioning the secrecy of the TPPA negotiation and asked pertinent questions; whether Malaysia plans to trade its sovereignty for free trade. She continued to put pressure from Pakatan Rakyat which led to the setting up of a parliamentary caucus and more engagement from MITI.

Simultaneously, momentum continues to build up with NGOs such as BLINDSPOT, MTEM, MAC, MTUC, GBM, IKRAM continuously engaging in forums and public awareness efforts. These efforts have no other aim than to make the public aware for the need for them to demand their engagement with the government in the negotiations. Other high profile figures like Tun Mahathir and Liow Tiong Lai also openly expressed opposition to the TPPA further fuelling efforts for public to engage in the issue.

The Coalition Act against TPPA

Badan Bertindak Bantah TPPA is a coalition of 52 Non-Governmental Organisations and 7 Coalition Councils formed with the aim of raising the people’s awareness with regards to TPPA in a sincere effort to ensure Malaysia gets the best out of TPPA. Our view is that the TPPA is straddled between the hopes of a relatively small circle of multinational corporations, whose commercial interests stand to benefit the most from the proposals, and the fears of civil society organizations representing the people of all 12 TPPA countries. In fact, the TPPA is neither about fair trade nor even about free trade alone, since it seeks to lock in the monopolistic position of big corporations over their industries. It is about ensuring the protection and prioritization of corporate interests above those of public welfare, safety and the socio-economic interests of less affluent economies than the obvious economic master here, which is America.

We note that America is assisted by a force of 1,000 that form a special advisory committee, mostly represented by industry experts. We demand the same here for Malaysia. A coveted UNDP study is hardly sufficient to ensure the public that our livelihoods and that of our future generations are not under threat here. Given the track record, Malaysia is not exactly a master at negotiations, having lost Block L and M, a skewed water agreement with Singapore, Batu Puteh island and many other international disputes. Negotiators from MITI alone cannot decide the fate of future generations of Malaysia.

Stop TPPA

Ultimately, the Badan Bertindak Bantah TPPA demands for the Government of Malaysia to suspend or pull out its involvement in the TPPA negotiations unless and until, an impartial and comprehensive cost-and-benefit-analysis and a comparative advantage study are carried out, disclosed and publicly debated by all stakeholders in Malaysia, that the texts are examined, scrutinized and assessed by parliament to rectify the TPPA as negotiated is indeed in Malaysia’s favour and interests, that the concerns are seen to have been incorporated into Malaysia’s positions and proposals for the TPPA; and that a popular referendum is held to determine to what extent Malaysians are in support of their government signing and ratifying the TPPA.

We demand for the government to adopt a transparent stance in this and for the voices of the various stakeholders amongst the people of Malaysia are considered in this negotiation round. Or else, pull out from TPPA negotiations in an absolute manner. A textbook outline of the benefits of free trade will not suffice; the TPPA may be a free trade agreement in form, but it is an imperialistic regulatory agreement in substance.Attention and empathy is needed from civil society itself.

Academics, industry experts, practitioners and even lay people who are concerned about the future of Malaysia must search, aim to understand research, speak out and write to contribute to current efforts to demanding the best out of our negotiations. Else, we really should be bidding our farewell to America and run for the door.

Anas Alam F*Anas Alam Faizli is an oil and gas professional. He is pursuing a post-graduate doctorate, co-Founder of BLINDSPOT and BADAN BERTINDAK BANTAH TPPA and tweets at @aafaizli

TPPA: Malaysia is NOT for Sale


July 23, 2013

MY COMMENT: Why the rush to get this TPPA signed andSAM_0358 sealed in time for the forthcoming visit of President Barack Obama  to Malaysia en route to Brunei.There are a number of provisions in the TPPA that are detrimental to Malaysia’s interest.

MP Shahrir Samad, the evergreen politician from Johor Baru, had suggested that we should have a bi-partisan group reflecting diverse interests in Malaysia to look at the TPPA thoroughly. His advice should be followed. We must prepare for the future but we must never compromise on our future. The MITI Minister must convene such a group. Our negotiation team is strengthened if  it comes to the table with the people’s support. Strange as it may seem, nobody in officialdom has explained the secrecy surrounding TPPA. –Din Merican 

TPPA: Malaysia is NOT For SALE

by  Dato’ Dr. R.S.McCoy@http://www.malaysiakini.com

In reality, the Trans-Pacific Partnership is not an equal partnership that stands for mutual gain. Essentially, it is a one-sided, legally-binding agreement which protects and enhances the economic interests of investing foreign transnational corporations, particularly from powerful countries such as the United States, and enables them to undermine a weaker country’s sovereignty and democratic foundations in the pursuit of their profits.–Dato Dr. R.S McCoy

COMMENT: It is critically important for the people and government of?????????????? Malaysia to think very carefully about the opaque, American-led Trans-Pacific Partnership Agreement (TPPA) and to recognise it for what it is.

Ostensibly, it is a multilateral trade liberalisation agreement among 11 countries – Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States of America and Vietnam.

In reality, the Trans-Pacific Partnership is not an equal partnership that stands for mutual gain. Essentially, it is a one-sided, legally-binding agreement which protects and enhances the economic interests of investing foreign transnational corporations, particularly from powerful countries such as the United States, and enables them to undermine a weaker country’s sovereignty and democratic foundations in the pursuit of their profits.

The Trans-Pacific Partnership Agreement (TPPA) is made up of 29 chapters, but only five are about trade. The other 24 chapters deal with sensitive issues, such as patents, copyright, intellectual property, transparency, labour, development, government procurement and the environment, among others.

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Exclusive negotiations have been going on in secret since 2008. And yet, 600 US business corporations have direct access to the deliberations. The only way in which information seeps out is through leaks.

In the event of a dispute, the TPPA empowers the investor to sue a host government in an international court, under an Investor-State Dispute System (ISDS). For Malaysia, it will represent a return to the yoke of neo-colonialism, 56 years after Merdeka.

In the distant past, disputes over foreign investments were resolved either through the host country’s domestic judicial system or through government-to-government negotiating processes.

Today, in the TPPA, foreign investor protection, through enforcement of an ISDS, threatens to undermine independent national justice systems and fundamentally shift the balance of power in a manner that detracts from the fair resolution of legal disputes.

ISDS tribunals essentially fail to meet the fundamental principles of due process, consistency and transparency, common to the Malaysian legal system.

‘Greater rights for foreign investors’

In the TPPA, the substantive rights of the foreign investor have been expanded significantly through creative, elastic interpretations of the new language of current investment treaties, which are skewed heavily in favour of the economic interests of transnational corporations at the expense of the public interest, national autonomy and state sovereignty of the host country.

More than that, this system of the free market often grants foreign investors greater rights and privileges than those enjoyed by local investors under the laws and constitution of the host country.

There are numerous examples of how sovereign states have suffered from the legal entanglements of such trade agreements.

In the recent case of Chevron vs the government of Ecuador, an order by an arbitral tribunal forced the executive branch of the Ecuador government to violate its constitutional separation of powers and halt the enforcement of a ruling by an appellate court.

In June 2012, in the case of the Railroad Development Corporation (RDC) vs the Republic of Guatemala, under the Central Free Trade Agreement (Cafta), the tribunal ruled that the US$11.3 million award in favour of the RDC was further enhanced by a court order to pay compound interest, dating back to the time when RDC first challenged government action.

Investor-state tribunals have constructed wide interpretations of the minimum standard of treatment language and the related fair and equitable treatment standard, proposed for the TPPA, which will hold governments liable for an array of actions that meet the customary international law standard of denial of justice.

Tribunals have generated theories of investor expectations that have led to awards being granted simply because governments have altered policies of general application in response to changing circumstances, such as financial crises, or in response to public demands when environmental and other laws are violated.

Some of these interpretations have placed the economic interests of transnational corporations over and above the sovereign right of states to regulate and govern their own affairs.

Malaysian political parties, professional organisations and civil society groups have been quick to point out the pitfalls and traps set by the TPPA.

Hold government to promise

The legal profession in many countries has raised serious concerns about the Investor-State dispute arbitration provisions, proposed in the TPPA, pointing out that such a regime could undermine justice systems and the fair resolution of legal disputes.

It is a legitimate concern of foreign investors that they have access to an open and independent judicial system for dispute resolution in the host country.

It is therefore up to the Malaysian government to convince foreign investors that Malaysia’s judiciary is independent and impartial and that there is no justification for such a stringent dispute settlement system.

For example, the TPPA will strengthen the power of profit-laden pharmaceutical companies to challenge a country’s health policies on patents and generic drugs.

Many studies have shown that trade agreements with the United States or Europe have led to escalating drug prices, following strict patent rules on the sale of cheaper generic drugs and the consequent use of more expensive branded drugs.

During 2002–2006, enforced secrecy of data interrupted the introduction of cheaper generic versions of 79 percent of medicines released by 21 multinational drug companies. Such policies will drive up the cost of health care in an unacceptable way.

The TPPA will also enable the tobacco industry to challenge government policies and  laws on smoking and tobacco control, enacted to implement obligations under the World Health Organisation Framework Convention on Tobacco Control.

Incredibly, the governments of Uruguay and Australia are being sued by Philip Morris for their “plain packaging” regulations. But in its TPP negotiations, the government of Australia has asserted its support for the rule of law and has refused to accept or submit to the powers bestowed upon such a system of dispute settlement.

The Malaysian government must follow Australia’s example and reject the TPPA as it stands.

Datuk-Seri-Mustapa-MohamedInternational Trade and Industry Minister Mustapa Mohamed has given a reassurance that the views and opinions of opposition parties and non-governmental organisations have been taken into account to protect the country’s interests.

Mustapa has promised that “if the agreement is detrimental to our sovereignty, we will not sign the TPPA” and that “the people’s views and that of national interest will surely be considered.”

The people of Malaysia must hold him to that promise, but not before there is a wider, open public debate. What better way to do that than having the TPPA debated meaningfully and openly in civil society forums and in Parliament?

There must be no secret negotiations or secret agreements. Transparency and accountability are imperative. Malaysia is not for sale or for exploitation.


DR RONALD McCOY is a former President of the Malaysian Medical Association and International Physicians for the Prevention of Nuclear War.

Book on Malaysia


July 17, 2013

BOOK REVIEW: Malaysia’s Development Challenges

ANU's Hal HillAny book on Southeast Asia that has Hal Hill’s name on it is likely to be interesting and thought-provoking. This book is no exception. Hal, together with Tham Siew Yean and Ragayah Haji Mat Zain returns to a familiar stomping ground – Malaysia, its economic growth and development challenges – at an opportune time, as Malaysia seeks ‘ideas and solutions’ to not only move to a high income economy but also to realign the interests of its political elites with the Rakyat.

In the past two decades, Malaysia has received several book length treatment as individuals and institutions investigate and attempt to identify the variables that have contributed to Malaysia’s spectacular economic growth story, as well as to identify ones that could/are contribute/ing to its growth slowdown. Volumes such as “Restructuring the Malaysian economy: development and human resources” (Lucas and Verry 1999),  “Industrialising Malaysia – policy, performance andJomo prospects” (Jomo 2002), “Modern Malaysia in the Global Economy” (Barlow 2001), “Malaysian Economics and Politics in the New Century” (Barlow and Loh 2003),  “Sustainable Growth and Economic Development – a case study of Malaysia”(Mahadevan 2007) , and “Tiger economies under threat: a comparative analysis of Malaysia’s industrial prospects and policy options” (Yusuf and Nabeshima 2009) are among notable attempts to understand, explain and possibly forewarn Malaysians of the challenges that they face through either the discipline of economics and/or of political science.

This volume follows on in this tradition. It is comprehensive in its scope with a strong policy dimension. The volume contains 13 chapters, written by 17 authors addressing a multiple set of issues. Analysing a country involves many moving parts and possibly moving in various directions simultaneously. Hence making a coherent argument of the causality and organising it in a logical sequence can be challenging. To address that, this book takes the following logic. Chapter 1 by Hal, identifies 6 stylised facts about Malaysia [rapid economic growth; rapid structural change; consistent openness; competent macroeconomic management; social progress; and institutional quality, political economy and ownership structures], and 3 broad and inter-related factors [microeconomic, macroeconomic and distributional] that are central to the Malaysian graduation challenge. The following twelve chapters then speak to these six stylised facts and provides the basis for analysis, assessment and then solution within the 3 broad factors on what needs to be done in Malaysia to overcome the middle income trap.

The volume begins with an excellent preface by one of Malaysia’sm-ariff intellectual giants, Emeritus Professor Datuk Dr. Mohamed Ariff. He provides a broad sweep of Malaysia’s economic history since independence, identifying succinctly the theoretical basis to Malaysia’s economic and political development strategies, the inherent problems – internal and external – faced over time, and the policy success and failures that successive administrations had made which contributed to Malaysia’s economic growth as well as creating the challenges that it must now face. If one needed a fifteen minute in-depth introduction to the Malaysian economy and its challenges, this preface would be sufficient.

Chapter 1 is the most important chapter in the book, with all other chapters providing the supporting evidence. Chapter 1 not only provides the logic of the book, but also narrates Malaysia’s economic development path, summarises the key factors that has contributed to its success, evaluates which are the factors that will continue to put Malaysia in good stead as well as identify factors that will contribute to Malaysia being stuck in the middle income trap. Chapter 1 makes the analysis by bringing to bear the various growth theories (e.g. evolutionary economics, convergence theory, institutional theories, etc.) but also compares with the actual experience of other countries (e.g. Argentina, New Zealand, South Korea, Singapore, etc.) while identifying the unique issues that Malaysia faces.

The 12 chapters that follow then discusses the following aspects to articulate Malaysia’s development challenges in more detail. Each chapter provides a brief historical overview and then identify where policies have succeeded or failed: Chapter 2 – political reforms; Chapter 3 – corporate ownership and control; (iii) Chapter 4 – economic crisis management; (iv) Chapter 5 – monetary policy and financial sector development; (v) Chapter 6 – public finance management; (vi) Chapter 7 – microeconomic reforms; (vii) Chapter 8 – services sector liberalisation; (viii) Chapter 9 – technological upgrading in the electronics sector; (ix) Chapter 10 – education sector reforms; (x) Chapter 11 – poverty and income inequality; (xi) Chapter 12 – demographic change and labour force issues; and (xii) Chapter 13 – sustainable development.

Dani RodrikThe problems identified in each of the chapter[i] appears to be many, multi-faceted, well-known and well-researched. Using’s Rodrik’s conceptualisation of growth factors into deep determinants (institutions, trade, and geography) and proximate determinants (factor endowments and productivity) as a way of classifying these problems (Rodrik et al. 2004), the usual suspects identified in this volume when traced to its root cause appears to be institutional in nature. Problems such as the debilitating effects of political patronage on a whole range of issues; poor quality human capital development; mismatches in the labour markets; protectionism in key services sector; technological level and innovation that is not keeping pace with the income level of the country; poor quality tertiary education system; underdeveloped private sector especially small and medium scale enterprises (SMEs); fiscal profligacy; mismatch between stated public policy objectives and implementation; and environmental degradation can all be classified as institutional failures.

The more interesting question which this volume appears to haveTerence Gomez neglected is why a government as successful as the Barisan Nasional – the world’s longest continuously elected government – has failed after more than a decade to address the growth slowdown Malaysia is experiencing. This question is all the more interesting as it has been researched extensively for more than a decade. The works of Professors’ Gomez (Gomez 1994; Gomez and Sundaram 1999), R RasiahNarayanan (Narayanan 1996) and Rasiah (Rasiah 1996, 1995) are illustrative as more than a decade ago they had already breached these issues – Gomez on money politics and institutional degradation, Narayanan on fiscal profligacy and Rasiah on labour and technological upgrading. Furthermore, many studies – from individuals and institutions – have identified what Malaysia needs to do, as this volume does. But nothing much has changed in Malaysia, and some would argue that the situation has regressed further.

Here is where this volume could have done better especially with the array of Malaysia experts at hand. The million dollar question for Malaysia is not what needs to be done but how should it be done. Identifying the problems are often the easy bit. Prioritising, sequencing, implementing, monitoring and recalibrating them when needed as it unfolds is the tough part. Intelligently, academics have left these to the politicians. However, a chapter which addresses the ‘how to’ would have been most beneficial and would have made this book a stand out.

As Malaysia’s challenges are institutional in nature implies that what is14766-mushtaq-khan-medium needed is reforms at the very top of the institutional hierarchy. One approach that comes to mind in addressing the ‘how to’ question would be Mushtaq Khan’s revisit of political settlements or as he states it, finding ‘growth enhancing governance’ (Khan 2010). This growth enhancing governance is not the ideal but the practical; a settlement among the competing elites and important stakeholders that allows for institutional stability, while allowing for payments to powerful vested interests, does not negate the overall opportunities for growth and its distribution to the majority of its populace. The ruling coalition in Malaysia may have figured this out in the past but it is clear that this political settlement is not working anymore. It therefore necessitates a new political settlement to graduate into a high income country.

Malaysia can be a model for many countries for many reasons as this volume affirms. More importantly its attempts to reform peacefully is a distinctive feature among developing countries. This volume is much welcomed as it is one source which compiles in a comprehensive manner the issues, analyses them, and suggests reform measures. It should be read by all those who want to understand the challenges Malaysia face as a middle income country and does it in a forthright manner. Most importantly it also makes good reading.

References

Barlow, Colin. 2001. Modern Malaysia in the global economy: political and social change into the 21st century: Edward Elgar Publishing.

Barlow, Colin, and Francis Kok-Wah Loh. 2003. Malaysian economics and politics in the new century: Edward Elgar Pub.

Cooray, Arusha. 2012. “Malaysia’s Development Challenges: Graduating from the Middle, by Hal Hill, Tham Siew Yean and Ragayah Haji Mat Zin (Routledge, London, UK, 2012), pp. 376.” Economic Record 88 (283):597-8.

Gomez, Edmund Terence. 1994. Political business: Corporate involvement of Malaysian political parties: Centre for South-East Asian Studies, James Cook University of North Queensland Townsville, Queensland, Australia.

Gomez, Edmund Terence, and Jomo Kwame Sundaram. 1999. Malaysia’s political economy: Politics, patronage and profits: Cambridge University Press.

Hirschman, Charles. 2013. “Malaysia’s Development Challenges: Graduating from the Middle edited by Hal Hill , Tham Siew Yean , and Ragayah Haji Mat Zin (eds) PB – Routledge , London and New York, 2012 Pp. xxvi + 348. ISBN 978 0415 63193 8.” Asian-Pacific Economic Literature 27 (1):163-5.

Jomo, Kwame Sundaran. 2002. Industrializing Malaysia: policy, performance, prospects: Routledge.

Khan, Mushtaq. 2010. “Political settlements and the governance of growth-enhancing institutions.”

Lucas, Robert E. B., and Donald Verry. 1999. Restructuring the Malaysian Economy: Development and Human Resources: St. Martin’s Press.

Mahadevan, Renuka. 2007. Sustainable growth and economic development: A case study of Malaysia: Edward Elgar Publishing.

Narayanan, Suresh. 1996. “Fiscal reform in Malaysia: Behind a successful experience.” Asian Survey 36 (9):869-81.

Rasiah, Rajah. 1995. “Labour and industrialization in Malaysia.” Journal of Contemporary Asia 25 (1):73-92.

———. 1996. “Innovation and institutions: Moving towards the technological frontier in the electronics industry in Malaysia.” Journal of Industry Studies 3 (2):79-102.

Rodrik, Dani, Arvind Subramanian, and Francesco Trebbi. 2004. “Institutions Rule: The Primacy of Institutions Over Geography and Integration in Economic Development.” Journal of Economic Growth 9 (2):131-65.

Yusuf, Shahid, and Kaoru Nabeshima. 2009. Tiger economies under threat: a comparative analysis of Malaysia’s industrial prospects and policy options. Vol. 566: World Bank Publications.


[i] Those interested in a chapter by chapter analysis should read Arusha Cooray’s review of the same book (2012) while Charles Hirschman (2013) provides a more historical review.

http://asiapacific.anu.edu.au/newmandala/2013/07/05/malaysias-development-challenges/

Emerging World needs a New Economic Model


July 16 2013

MY COMMENT: In a couple of days, Malaysia will be hosting din mericanthe 18th meeting of the TPP club in Kota Kinabalu to craft– finalise may be a better word– the Trans-Pacific Partnership Agreement. I assume that our leaders and policy makers know what they are doing and will negotiate hard so that we have an agreement which we all, as individuals, corporations and a country, can live with. Once we become party to the TPPA, we have little choice but to realign our economic and social policies. We will be operating on a different playing field, where productivity and competitiveness will be decisive.

Perhaps, it is now time for a relook at Najib’s New Economic Model,which is supposed to be an improvement on the New Economic Policy, and gear ourselves to the new realities where productivity and human capital will be critical to enable us to compete globally while remaining strong in our domestic market.  If I may be suggest, we should revive our committee of experts, led by ISIS Malaysia, for this purpose. Some of the ideas in Rossi’s article may be of some use. 

The era of cheap currency and export-led growth is over. Our challenge will be how to enhance national resilience based on fiscal prudence, sound money, and domestic competition in the face of a gathering economic storm, looking ahead to the next few years. –Din Merican

Markets Insight

July 15, 2013 9:43 am

Emerging World needs a New Economic Model

By Dominic Rossi@www.ft.com

Cheap currencies and export-led growth have run their course. The recent weakness in emerging market equities is structural. The developing world has reached a crossroads in the search for a new economic model to replace an existing approach which, despite its success to date, has run its course.

The current economic model in emerging markets rose from the ashes of the 1997-98 crisis. That episode ripped bare the Washington Consensus that had dominated emerging market economic thinking since the fall of the Berlin Wall.

The Washington Consensus espoused the then current liberal economic thinking – fixed or quasi-fixed exchange rates, fiscal discipline, free trade, and round after round of privatisations. The model brought early successes in taming inflation, but failed in most other areas. The rapacious behaviour of multinational organisations during privatisations, in particular, convinced national governments that the Washington Consensus was a dressed-up model of neo-colonialism.

It is hardly surprising that the economic model that succeeded the Washington Consensus would carry deeply nationalistic characteristics. After 1997-98, one emerging country after another developed a model framed around economic and financial self sufficiency. It consisted of four key elements: cheap currencies, export-led growth, the accumulation of US dollar reserves and the development of non-US dollar sources of funding, especially via local currency debt markets.

By these means, EM countries believed they would never again find themselves on the hook to the US Treasury (or the International Monetary Fund), nor for that matter would they need to inconvenience local vested interests with “structural reform”.

This model worked pretty well for a decade. Exports boomed, the accumulation of US dollar reserves gave birth to a generation of sovereign wealth funds, local currency debt markets swelled, and local vested interests did rather well. A great deal of new wealth was created, and 2bn people were lifted out of poverty as a new middle class emerged, giving the model its political legitimacy.

But this approach has run its course. Cheap currencies are no longer so cheap, and in real terms have largely recaptured their lost purchasing power of 1997-98. Moreover, the export-led growth model is now crippled by a developed world that is rapidly moving towards balanced current accounts. It was good while it lasted, but the time has come for emerging markets to think anew.

The next emerging market model needs to learn from the last two, keep what works, and move on. Emerging markets need to commit to free-floating exchange rates, keep hold of their US dollar reserves and continue to develop non-US dollar sources of funding. But they should abandon the world of cheap currencies and export-led growth.

The current round of competitive devaluations is a particularly disturbing policy development. Stagnation lies just around this particular corner. After the 2008 collapse, inflationary problems returned surprisingly quickly to the developing world in 2009-10 and emerging markets can ill afford to embed these pressures with successive devaluations.

nem1Malaysia’s New Economic Model: Objectives

Instead, emerging countries need to dust down the “structural reform” agenda they quietly abandoned a decade ago and move to revitalise domestic competition. Regulators need to be empowered to crack local oligopolies that stifle competition and growth. Swathes of industries from telecommunications to integrated utilities and beverage companies across the emerging world are in the hands of one or maybe two operators. This can strangle the small and medium-sized enterprises that typically generate employment.

Fiscal policy needs to find its way back on to the emerging market agenda. Structural reform has given way to fiscal fine tuning over much of the past decade. Tax reform is a priority, especially the mix between income and consumption taxes. In some developing countries, momentum behind pension and social security reform has flagged, despite the fact that demographics is turning into a headwind rather than the tailwind it has been for some time.

Finally, governance within the corporate sector has failed across the emerging world, even when companies are listed on developed country exchanges. Unless governance practices improve, the inevitable consequence will be a rise in the cost of capital for all.

The emerging world has made progress over the past decade. Further steps in the right direction will require a change to the economic model and some painful decisions. Those that can take these steps will continue to prosper; those that do not may look back at the past decade as a golden era.

Dominic Rossi is chief investment officer, equities, at Fidelity Worldwide Investment

Martin Khor on TPPA


July 15, 2013

Global Trends by MARTIN KHOR

What to expect in TPPA talks

Martin-Khor-Global-Trends-1The nature and effects of free trade agreements has become a topic of public discussion, especially with the round of talks of the Trans Pacific Partnership Agreement (TPPA) about to take place in Malaysia (in Kota Kinabalu, Sabah).

Not much is known about the TPPA drafts. But with some of its chapters leaked on the Internet and since much of the TPPA is likely to be similar to bilateral FTAs that the United States has already signed, we can have a good idea of its main points.

As can be expected, there are many contentious issues to consider, especially for developing countries like Malaysia.

On Trade

On trade itself, the TPPA countries will have to remove tariffs on almost allMITI's Mustapha Mohamedproducts coming from one another. Perhaps only one or two products can still be protected. The main implication is that local producers and farmers would have to compete with tariff-free imports from other TPP countries.

Ironically, agricultural subsidies which is the main trade-distorting practice of developed countries like the United States, have been kept out of the TPPA, thus depriving developing countries of what would have been their major gain.

On Services and Investments

On services and investments, we can expect the TPPA countries to be pressured into opening all their industrial and services sectors.Exclusion of any sector will have to be listed and this is subject to negotiations.

In the investment chapter (0f TPPA),the country will have to commit not only to liberalise the entry of foreign companies but also to protect the foreign investors’ rights in an extreme way that goes far beyond what is recognised in national laws and courts. For example, the foreign investor includes any person or company who has an asset (factory, land, shares, contract, franchise, intellectual property, etc). “Fair and equitable treatment” to be given to them has been interpreted in past cases to include a standstill on (no changes in) regulations.

Thus any new law or change to existing laws and regulations that a foreign investor claims will affect its future revenues can be challenged in an international tribunal for monetary compensation. The regulations could be economic, social, health and environment related.

TPP countries have agreed to allow foreign companies to sue governments in any international court( usually ICSID, based in Washington DC) for compensation. Expropriation is defined as not only confiscation of property (for eample, nationalisation) but also reduction of revenues due to regulatory changes.

These investor-state disputes can cause countries a lot. A court award an American oil company USD2.3 billion (RM7.1 billion) against Ecuador’s government in 2012. Indonesia is being sued for USD2 billion (RM6.2 billion) for withdrawing a contract that a state government made with a British oil company.

Government procurement

The TPPA will also open up government procurement, with foreigners being allowed to bid on similar terms as locals for goods, services and projects above a threshold value. Existing preferences for local companies will be affected,as will be the ability to use government spending to boost the domestic economy and as a major social and economic policy instrument.

Since government procurement contracts are considered investments, the foreign supplier can sue the government at an international tribunal by claiming unfair treatment including a renegotiation of contract.There is also  a sub-chapter on state owned enterprises (SOEs). The United States and Australia are proposing disciplines on the operation of SOEs in which the government has a share.

syedalialattas0903This would restrict the state to state’s ability to government to govern or manage government-linked companies, or provide incentives and preference. For Malaysia, this would affect the New Economic Policy programmes and activities, which are deemed  to be discriminatory . This would also have  serious implications  for developing countries whose success is based on the role of the state in the economy and on public-private partnership.

On Intellectual Property

The chapter on Intellectual Property has generated public debate because it obligates the TPP countries to have IP laws far beyond WTO rules. Longer patent terms and restriction of the state’s policy freedom to promote generic medicines are expected to raise the prices of medicines and other pharmaceutical products.

Tight copyright rules would affect dissemination of knowledge including books. periodicals and journals and digital information.Local producers in industry may find it more difficult to upgrade their technologies and local farmers could have less access to agricultural inputs including seeds.

There are many benefits to foreign investors and companies. Local companies would lose a lot of their present preferences and incentives. They cannot stake a claim to “fair and equitable treatment”  or sue the government in a foreign court, like a foreign company can.

Naturally, there are pros and cons to any agreement. Any potential gain for a country in exports or investments  should be weighed against potential loss to domestic producers, and especially the loss to the government in policy space and potential payout to foreign investors claiming compensation.

MACC: What more evidence you need ?


Video expose implicates Sarawak CM, kin in alleged land graft

A new video implicates Taib and his family in shady land deals.KUALA LUMPUR, March 19 — An international activist organisation provided today video proof of shady land deals in Sarawak that implicates the state’s Chief Minister Tan Sri Abdul Taib Mahmud and his family, with parts of the clip aired on the Al-Jazeera news channel at 10am.

In a covert investigation, Global Witness (GW) captured on video dealings with Taib’s cousins and several other intermediaries to acquire thousands of hectares of forest land that the London-based activist said revealed the systematic corruption and illegality that lay at the heart of Malaysia’s biggest state.

“This film proves for the first time what has long been suspected — that the small elite around Chief Minister Taib are systematically abusing the region’s people and natural resources to line their own pockets,” said Tom Picken, forest team leader at Global Witness, in a statement released today.

“It shows exactly how they do it and it shows the utter contempt they hold for Malaysia’s laws, people and environment.”

In a 16-minute video clip, GW investigators, who posed as foreign investors, recorded snippets of their conversation with Taib’s cousins and lawyers, to purchase the land for hefty profit and which the environmental campaigner said would displace thousands of the indigenous people living there.

A recorded conversion with sisters Fatimah Abdul Rahman and Norlia Abdul Rahman — who are the daughters of the state’s former Chief Minister Tun Abdul Rahman Ya’akub and first cousins with the incumbent CM — provided a very telling glimpse into the means of how business is conducted in Sarawak to enrich the ruling elite.

Fatimah: Ample Agro belongs to my family, but my sisters, the four elder ones are in the company. The Land and Survey Department, they are the ones who issue this licence… Of course it’s from the CM’s directive but I can speak to the CM very easily.

GW: Can you?

Fatimah: Yes.

GW: And you think he’ll agree?

Fatimah: Yeah, he was the one who gave us the land. He’s my cousin [laughs]. His mother and my father are sisters and brothers, siblings. He’s my cousin so it’s quite easy.

The sisters said they were owners of 5,000 hectares of land given to them for a nominal sum by Taib, and which they were looking to sell under their company, Ample Agro, which they admitted to be a shell company.

GW: You’re proposing basically, Ample Agro, which is your company OK, sell your company, rather than the land. And your company owns the land?

Norlia: Yes… I bought that company as a shell company for this land.

Their lawyer, Alvin Chong, was also recorded in the video telling the GW “investors” how to evade real property gains taxes.

Another lawyer, Huang Lung Ong of Huang & Company Advocates, was also recorded trying to sell land for his uncle, a prominent businessman in Sibu, Datuk Hii Yii Peng, said to have close ties with Taib, saying that at least 10 per cent of the sale price would have to go to the chief minister as commission.

In its statement, GW alleged that senior government officials and a timber company executive said it was standard practice in Sarawak for companies to pay a personal fee to Abdul Taib in return for approval of timber and plantation licences.

London lawyers representing the chief minister have denied the allegations, the NGO reported.

“The Government of Sarawak issues licences for land in very controlled circumstances,” the law firm, Mishcon de Reya, was quoted as saying. “This is an administrative exercise, not political patronage.

“Our client never demands or accepts bribes for the grant of licences and leases.

“He has not issued any ‘directive’… illegally to benefit his cousins.”

Taib, 76, has been Sarawak chief minister for 32 years, having taken office in March 1981.

His personal wealth has stirred much controversy, with detractors alleging he gained much of it through dubious means.

 

What a Good Trans-Pacific Partnership Looks Like


March 12, 2013

What a Good Trans-Pacific Partnership (TPP) Looks Like

By
March 8, 2013

Abstract

The proposed Trans-Pacific Partnership (TPP) is a major step toward building a free trade area in the Asia–Pacific. For the U.S. to benefit economically, the TPP must be a high-quality agreement that moves market-oriented liberalization forward on multiple fronts. These should include state-owned enterprises, intellectual property, and services liberalization. A sound TPP will also reinforce American political leadership in the Asia–Pacific and around the world, demonstrating that the U.S. will continue to make the decisions necessary to remain fully engaged in the global economy for the cause of open markets. The Heritage Foundation’s Derek Scissors explains what a sound TPP should look like.

Every day, U.S. policymakers are faced with choices that will determine the future of American leadership in Asia. One such set of choices involves the Trans-Pacific Partnership (TPP) currently being negotiated.

The TPP is a set of trade and investment negotiations among the U.S., Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam. It is an attempt by these countries to expand the scope of the 2006 Trans-Pacific Strategic Economic Partnership (P-4) beyond the four members of Brunei, Chile, New Zealand, and Singapore. Once finalized, the TPP is intended to remain open to additional parties—eventually becoming the core of a free trade area for the Asia–Pacific.

One of the challenges the TPP faces is preventing the dilution of its original economic goals for the sake of expansion (or any other reason). In order for the U.S. to benefit economically, the TPP must be a high-quality agreement that moves market-oriented liberalization forward on multiple fronts. A sound TPP will also reinforce American political leadership in the Asia–Pacific and around the world, demonstrating that the U.S. will continue to make the decisions necessary to remain fully engaged in the global economy for the cause of open markets.

What constitutes a sound TPP? The diplomatic environment is such that a TPP will shape the global trade agenda for the next decade. Beyond the new standard reached in the U.S.–South Korea free trade agreement (KORUS), the TPP must aim high for new rules on state-owned enterprises, intellectual property, and various services sectors. It should include reduction of American trade barriers and should avoid backsliding—for example, with regard to rules of origin. Because of the precedent that the TPP will set, two steps forward in one part and one step back in another, could eventually haunt the American and world economies.

The TPP is a game-changer, economically and diplomatically. If it fails, the recent “pivot” to Asia will be seen as military in nature and America’s value as a friend or ally would be high only in case of potential conflict. The U.S. should conclude and implement a high-quality agreement as soon as possible.

Elements of a Good TPP

The number of TPP members makes for complexity that will inhibit assessments of quality. The rationalization of national regulations and existing multilateral arrangements by itself is a daunting challenge, all the more so because the countries involved are at multiple stages of development. Ideal outcomes are not feasible, particularly for a group that hopes to expand. The TPP should be judged on the number of clear steps forward, or backward.

The perfect is also the enemy of the good in another sense—a TPP is overdue. Global trade diplomacy, topped by the World Trade Organization’s (WTO) Doha round, has flagged. A good TPP was needed yesterday. The partnership should include Japan among the initial signatories, and the U.S. should facilitate its entry into negotiations. But Japanese accession does not justify further delay.

There are many important elements of a good TPP. Liberalization should be as broad and as quick as possible, including lower non-tariff barriers and fewer restrictions on investment and government procurement. But a good TPP must offer progress in three comparatively new areas:

  1. State-owned enterprises must be restricted to a limited number of sectors;
  2. Intellectual property, including trade secrets, must be better protected; and
  3. There must be major service-sector liberalization, perhaps focusing on financial services.

To achieve real and considerable progress in these areas, the U.S must be prepared to reduce barriers in agriculture, textiles, and maritime services. Further, the U.S. should avoid actions that clash with the goal of liberalization—for instance, managed trade in autos.

State-Owned Enterprises

The TPP should be an effort to restart global liberalization. The alternative is a global economic order in which the state plays a far more prominent role.[1] Very large state-owned enterprises (SOEs), topped by Chinese firms but including firms from most of the major economies, have become leading global actors. That makes explicit and enforceable limits on SOEs indispensable to the TPP’s ultimate success. The two main barriers to effectively controlling SOEs are related—(1) defining them and (2) the enormous variety of subsidies available to them.

A narrow definition of SOEs may permit firms to escape classification due to superficial changes. These can include selling a small amount of stock on a public bourse, or including discrete, “private” ownership by members of its own board or even government officials.[2] Such a definition would negate any SOE restrictions, regardless of their content.

A broad definition is needed in order for an SOE chapter to have any meaning. Such a definition will be based on competition first and ownership second: For instance, SOEs exist wherever governments have a capital stake in a firm and sharply or repeatedly suppress competition on the behalf of that firm, by any means. This will include multiple entities in the U.S. The growing role of, and threat from, SOEs makes the gain for the U.S. from a broad definition far larger than the costs.[3] American policymakers must realize this trade-off, and overrule internal political objections to a broad definition.

Major State-Owned Enterprises

Given a broad definition, it will be far more effective to restrict the presence of SOEs than to restrict the assistance they receive. That is, SOEs should be barred from most industries. Requiring that they simply operate on a more commercial basis will not work. Some governments will claim that they already operate on a commercial basis for extended periods, but this is entirely insufficient. A firm that would have failed a year ago—but was rescued by the government—cannot truly be operating on a commercial basis now since, on a commercial basis, it would no longer be operating at all.

Governments have developed too many means of support for SOEs, featuring a range of financial subsidies not currently bound by the WTO and regulatory exemptions from competition, sometimes justified by vague reference to national security in connection with a “strategic” industry.[4] Identifying these channels for a particular set of countries at a particular time begs for governments to work to circumvent prohibitions, for example, by selectively offering benefits to domestic private players. A prolonged game of cat and mouse, not a substantial rollback of SOEs, will ensue.

Second and more important, the very existence of SOEs should be understood as an effort by governments to limit market competition and increase state control in a particular sector. That is: an effort precisely to retain sector participants which do not operate on a commercial basis. The goal should not be to pretend to commercialize SOEs in opposition to the reason for their existence, but to permit their operation in a minimal number of areas. SOEs should be banned from most sectors of the economy.

Where TPP member states insist on retaining SOEs, their market share should be capped at as low a level as possible, to forestall absurd claims that state firms completely dominate markets due to competitive superiority. This can be done on an annual basis. SOEs should set revenue targets based on total sector revenue from the previous year. Exceeding these revenue targets by a given amount, say 5 percent, would permit legal retaliation from countries whose firms operate in the sector.

Because SOEs represent circumscribed competition at home, their investments overseas can properly be considered by host countries as different from investment by companies that earn commercial profits at home. In turn, though, host countries should not be able to simply bar SOEs or extort concessions in return for market access, but should commit to a clear set of treatment guidelines.[5]

Intellectual Property

Voluntary trade is mutually beneficial—otherwise one side would decline to participate—and following comparative advantage maximizes this mutual benefit. At the national level, the main American comparative advantage is in innovation, both in terms of how the economic system works and in terms of the resources devoted. Violations of intellectual property (IP) cut at the heart of this comparative advantage, reducing trade benefits for the U.S. and eroding public support. It is therefore quite right for American negotiators to place IP at the center of international economic discussions. Protecting IP will also benefit other TPP members, both now and in the future.

research and development spending

IP is a far-ranging issue even with a group at a similar level of development; with the TPP, the countries involved offer very different challenges in protecting IP. There is no chance the IP issues with all these countries can actually be resolved; a reasonable goal is current improvement and conditions for future improvement. A “TRIPS+” approach—expanding the WTO’s “Trade-Related Aspects of Intellectual Property Rights” framework—is appropriate in principle. Such an approach was employed in the KORUS agreement,[6] but the variation among TPP countries means that priorities within TRIPS+ will have to be set, since not all members are capable of all expansions of TRIPS.

When determining priorities, the U.S. should avoid three past mistakes: (1) insisting on criminal punishments for violators that are never enforced; (2) focusing on specific sectors; and (3) believing partners will come to accept the need for IP protection within a fairly short time.[7]

It could be decades before some TPP members, and prospective members, see self-interest in protecting IP that belongs to foreigners. As long as specializing in innovation is not viable, as is true in most of the world, stealing will remain an attractive alternative. The response, though, is not to prioritize criminal punishments everywhere. The rule of law is stronger in some places, such as Singapore, than in others, such as Vietnam. In addition, an emphasis on pharmaceuticals or another sector is likely to prove shortsighted as IP issues shift across sectors and the TPP draws new members.[8]

A good point of emphasis within IP is trade secrets. Many governments, including some TPP members, may be genuinely unable in the near term to enforce IP protection across the whole of society. With trade secrets, though, governments themselves are involved.

Traditionally, theft of trade secrets has meant that IP shared with governments by foreign firms for legal and regulatory reasons is not being protected. This is often connected to SOEs. Some governments reveal trade secrets to enable their own enterprises to compete with multinational corporations; others practice coercive technology transfer.[9] Strong rules limiting government prerogatives with regard to sharing trade secrets and providing compensation when these are lost are more feasibly crafted and enforced than broad IP statutes meant to apply to all.

Further, such obligations could serve as the foundation for an accord concerning the new way governments suborn theft of trade secrets: cyber-espionage. A February 2013 initiative in trade secrets protection from the U.S., inspired by aggressive Chinese behavior, provides initial steps only,[10] inadequate for discouraging predatory behavior. To shape an effective global response, the TPP must do more. One possibility is to treat theft of trade secrets as equivalent to government-imposed illegal trade barriers and permit responses along the lines of WTO cross-retaliation.[11] This would discourage cyber-theft while legalizing and controlling the inevitable retaliation.

Services

Services share several features with intellectual property. Both are areas of American comparative advantage that need to be pressed in the TPP, and then elsewhere, on partners that sometimes want to accord them secondary consideration. Both are also broad in scope. With services, since American comparative advantage will shift over time and this is a newer area of liberalization than goods, there is more than one path to follow that will bring intense benefits. Precedent here is more important than the specific steps.

One route that recent negotiations have taken is expanding the use of negative lists. A negative list specifies the sectors protected from changes, creating a presumption of liberalization. (Its opposite, a positive list, specifies only the areas to which liberalization applies.) In many agreements, a negative list has been applied to services investment—services provided entirely within a country by a subsidiary established there through investment by a foreign entity. Services trade, by contrast, is buying and selling across national borders by independent entities based in different countries. The TPP should apply a short negative list to services trade as well.

Second in priority to use of a negative list is identifying particular areas for enhanced liberalization. An obvious first choice for the U.S. is financial services. These are not treated separately in the original P-4 agreement,[12] but are a mainstay of the American economy. To varying degrees, greater openness in financial sectors will benefit all TPP members. While the extent of liberalization in particular areas of finance will be controversial, the specific results will be less important to long-term U.S. interests than the precedent of including substantial financial services liberalization as part of TPP, as this will be the basis for any expansion of TPP and future agreements with other parties.

American Offers

One argument the U.S. has often made, correctly, to its trade partners is that liberalization is not a concession. Liberalization benefits the implementing country. Independent research has demonstrated again and again that the bulk of the gains from international economic agreements do not stem from greater access to overseas markets, as is commonly argued when approval of the deals is sought. Rather, most gains stem from increased openness and competition at home.[13]

This does not only apply to America’s partners, of course. Because the American market is largely open already, the areas where it remains closed stand out. In particular, the U.S. has comparative advantages in agriculture and services, yet retains protectionist policies in both areas. Combining efficiency and scale, U.S. agriculture is by far the world’s leader. Farmers and the country as a whole would benefit greatly from open global markets.

Yet the U.S. gives its trade partners reason to remain closed by selectively protecting its own market.[14] Just as valuable precedents will be set through the inclusion of financial services in TPP liberalization, the U.S. should reduce tariffs and other barriers—to foreign sugar and dairy, especially. Liberalization in these areas does not have to be completed within the TPP, but it is long past time for it to begin.

US cross border services trade

Agriculture is the main area for self-defeating American protectionism, but maritime services may see the single most self-defeating U.S. policy. The Merchant Marine Act of 1920 (the Jones Act) requires all goods transported by water between American ports be carried in U.S.-flagged and U.S.-built ships, 75 percent owned and manned by U.S. citizens. It is a restriction of competition that benefits the American shipping industry and costs American consumers, especially as domestic natural gas production soars. It also justifies services markets restrictions by other countries, harming a huge range of U.S. services companies.[15]

Another area of longtime American recalcitrance is textiles. Here, the U.S. is not fighting the last war, it is fighting a war from the 19th century. Textile and apparel imports benefit consumers, especially poorer consumers who are more vulnerable to price increases for these goods.[16]

Moreover, the jobs supported by imports far outweigh remaining production jobs. Textile and apparel production employed about 384,000 people in the U.S. at the end of 2012. American imports of Chinese apparel alone help support close to that number of jobs in offloading, transport, and retail.[17] Apparel imports from China are less than half the total. Liberalization in textiles would help the U.S. while offering considerable benefits to current and prospective future TPP members.

Pitfalls the U.S. Should Avoid

There are also things the U.S. should not do. Rules of origin are a double-edged sword in a multilateral arrangement like the TPP. Unless rules of origin are rationalized among participating countries, companies often ignore the opportunities offered by new trade agreements because complying with the new rules of origin is too complicated.[18] Rationalizing rules of origin is a core element of any successful trade agreement.

What must not occur is the tightening of the rules of origin as the free trade net is cast wider. This would not be trade creation and liberalization, it would be trade diversion and exclusion.[19] It would change the TPP from a group that can be easily expanded and is intended in part to restart global trade progress to a group that hastens the formation of dangerous blocs.

The same caution applies to labor and environment provisions. There is nothing wrong with mutually agreed-upon labor and environment provisions unless they introduce restrictions on trade and investment. These kinds of restriction are inevitably used as precedents to attack open markets.[20] A broad scope for the TPP will be beneficial as long as the chapters on the newly introduced topics do not clash with the goal of liberalization.

Finally, the U.S. should minimize exclusions, such as those granted in KORUS for rice on the Korean side and, essentially, managed trade for autos on the American side.[21] The TPP should be an opportunity to move forward, not backward. In general, as few items as possible should be exempted through these mechanisms or inclusion on negative lists.

US agricultural trade

Timing

A sound TPP would greatly benefit the U.S. and its partners. The faster it is in place, the sooner the gains would be realized—gains that are especially needed now with chronically weak American and global economies. And there are still more reasons to speed up the TPP process.

The WTO Doha round is all but dead. The U.S. chiefly blames India and China,[22] although the recent American contribution is also suspect. If Indian and Chinese recalcitrance is indeed the major barrier to global liberalization, the TPP is the best available tool to induce cooperation from them. The same is true for Japan, an ally of the U.S. but one that has struggled with trade liberalization. Japanese participation in the TPP should be welcome, when Tokyo can move quickly. If it cannot do so at the moment, then a finished, functioning TPP may speed Japanese action.

For its part, American trade policy has bordered on stagnant for six years. If KORUS had been ratified in late 2007, upon completion, it might have been possible to make considerable progress on the then-embryonic TPP in 2008. Had the Obama Administration not been critical of imports early on,[23] it might have been possible to make more progress on the TPP in 2010. Instead, the U.S. economy has suffered from restrictions on competition here and overseas. Global trade has become effectively less liberal, as other players created regional accords of often dubious quality.[24] A TPP failure risks not only more lost benefits, but the continuing erosion of the U.S.-built post-war economic system.

High Stakes

There are two different ways the TPP process can fail: (1) no agreement or (2) a bad agreement. The first has unpleasant political implications; the second has unpleasant economic implications.

On the economic side, the inclusion of Canada and Mexico makes the TPP a heavyweight. The two countries accounted for 29 percent of American trade in 2012. Singapore and Australia add a few more percentage points. If TPP candidates Japan and Korea are added, the share passes 40 percent of U.S. trade.[25] Even these numbers do not tell the full story, however.

With the new U.S.–EU free trade initiative, the TPP is no longer the only game in town. But it is difficult to imagine a failed or empty TPP being followed by a powerhouse U.S.–EU accord. The political environment for both will be challenging. If the American side is not willing to move forward on genuine liberalization with TPP partners, there is little reason to believe it will do so with the EU. The TPP’s share of American trade may be 30 percent to 40 percent, but it likely represents the whole of American trade policy in terms of whether valuable progress will be made in the next few years. The stagnation at the WTO and in genuine trade liberalization more broadly puts a heavy burden on the TPP to be a strong agreement, not any agreement.

The TPP also affects American leadership. Respective shares of world trade show China making strides in bolstering its claim to economic parity with the U.S. Asserting American leadership in this context requires a powerful response, starting with a sound TPP.

Absent a high-quality TPP, trade development in Asia will be governed by the Regional Comprehensive Economic Partnership (RCEP). RCEP is to be composed of the Association of Southeast Asian Nations (ASEAN) and its current free trade agreement partners—Australia, China, India, Japan, New Zealand, and South Korea.

In terms of economic benefits, the RCEP should be no match for a successful TPP. Like all of ASEAN’s FTAs, the agreement is likely to be far less liberalizing—focused primarily on goods and offering multiple exclusions and differential treatment. Some RCEP countries, such as Thailand, are natural candidates for the TPP in the future. However, a failed or vacuous TPP leaves even the limited RCEP as the only active vehicle for trade and investment liberalization in Asia—and the U.S. on the outside looking in.[26] (The U.S. is not a candidate for the RCEP as it has no FTA with ASEAN and is not likely to have one in the foreseeable future.)

Finally, if the TPP fails outright, the recent American “pivot” to Asia will be seen as purely military in nature. America’s value as a friend and ally would be high only in case of potential conflict, a somewhat self-defeating position. Along these lines, a TPP collapse would allow China to portray itself as leading when it comes to progress in the Asia–Pacific and indicate that the U.S. only leads when the situation deteriorates.

US china total trade

A Good Trans-Pacific Partnership

In order to achieve a sound TPP, the U.S. should:

  1. Restrict the operating space of SOEs to specified sectors and cap their market shares there. Trying to govern SOE behavior will not work.
  2. Seek to bind governments, rather than entire societies, when it comes to IP. Coercive government acquisition of trade secrets should be subject to legal, structured retaliation.
  3. Insist on a negative list approach in services trade. At least one major financial sub-sector should be included in the areas of fresh liberalization.
  4. Take clear steps to address the most egregious American trade protections. Dairy and sugar are obvious choices, but textiles and maritime services should also be opened.
  5. Conclude and implement a high-quality agreement as quickly as possible. At this point, speed is more important, and the extent of true liberalization far more important, than the number of initial signatories.
  6. Keep rules of origin at least as loose as in the KORUS agreement.
  7. Minimize the number of exceptional areas, such as autos.
  • The TPP must be a high-quality agreement and it is already overdue. A TPP with little economic value-added will harm American interests indefinitely. A sound TPP will strengthen the U.S. economy and ensure American economic and political leadership in Asia into the future. —Derek Scissors, PhD, is Senior Research Fellow in Asia Economic Policy in the Asian Studies Center at The Heritage Foundation.

[1] Wojciech Ostrowski, “State Capitalism: An Emerging Regime,” Polinares Working Paper No. 51, December 2012, http://www.polinares.eu/docs/d4-1/polinares_wp4_chapter1.pdf (accessed March 4, 2013).

[2] Organization for Economic Co-operation and Development (OECD), “Ownership Structures in MENA Countries: Listed Companies, State-Owned, Family Enterprises and Some Policy Implications,” September 13, 2005, pp. 3 and 16, http://www.oecd.org/mena/investment/35402110.pdf (accessed March 4, 2013); Aldo Musacchio and Sergio G. Lazzarini, “Leviathan in Business: Varieties of State Capitalism and their Implications for Economic Performance,” Harvard Business School Working Paper No. 12-108, June 4, 2012, http://www.hbs.edu/faculty/Publication%20Files/12-108.pdf (accessed March 4, 2013); and OECD, “Corporate Governance of State-Owned Enterprises: Change and Reform in OECD Countries since 2005,” September 14, 2011, https://www1.oecd.org/corporate/corporateaffairs/corporategovernanceofstate-ownedenterprises/48512721.pdf (accessed February 10, 2013).

[3] Xi Li, Xuewen Liu, and Yong Wang, “A Model of China’s State Capitalism,” Federal Reserve Bank of Dallas, May 16, 2012, http://www.dallasfed.org/assets/documents/institute/events/2012/linkages_yang1.pdf (accessed March 4, 2013).

[4] Derek Scissors, “The Most Important Chinese Trade Barriers,” Heritage Foundation Testimony, July 20, 2012, http://www.heritage.org/research/testimony/2012/07/the-most-important-chinese-trade-barriers.

[5] Investment Canada Act, “Guidelines–Investment by State-Owned Enterprises–Net Benefit Assessment,” Industry Canada, http://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/lk00064.html#p2 (accessed March 4, 2013), and Matthew Rennie and Fiona Lindsay, “Competitive Neutrality and State-Owned Enterprises in Australia: Review of Practices and Their Relevance for Other Countries,” OECD, August 2011, http://www.oecd.org/daf/corporateaffairs/corporategovernanceofstate-ownedenterprises/48510172.pdf (accessed February 8, 2013).

[6] Office of the United States Trade Representative, “Intellectual Property Rights in the U.S.–South Korea Trade Agreement,” http://www.ustr.gov/uskoreaFTA/IPR (accessed March 4, 2013).

[7] Peter K. Yu, “The U.S.–China Dispute Over TRIPS Enforcement,” Drake University Law School, October 2010, p. 3, http://www.law.drake.edu/academics/ip/docs/ipResearch-op5.pdf (accessed March 4, 2013); Vinod Aggarwal, “Reluctance to Lead: U.S. Trade Policy in Flux,” Business and Politics, Vol. 11, No. 3 (2009), p. 3, http://basc.berkeley.edu/pdf/articles/Relutance%20to%20Lead%20US%20Trade%20Policy%20in%20Flux.pdf (accessed March 4, 2013); and Minxin Pei, “Intellectual Property Rights: A Survey of the Major Issues,” Asia Business Council, September 2005, p. 6, http://www.asiabusinesscouncil.org/docs/IntellectualPropertyRights.pdf (accessed March 4, 2013).

[8] Ian F. Fergusson and Bruce Vaughn, “The Trans-Pacific Partnership Agreement,” Congressional Research Service, January 10, 2011, http://assets.opencrs.com/rpts/R40502_20110110.pdf (accessed March 4, 2013).

[9] 2011 U.S. Intellectual Property Enforcement Coordinator, “Annual Report on Intellectual Property Enforcement,” The White House, March 2012, http://www.whitehouse.gov/sites/default/files/omb/IPEC/ipec_annual_report_mar2012.pdf (accessed March 4, 2013).

[10] “Administration Strategy on Mitigating the Theft of U.S. Trade Secrets,” The White House, February 2013, http://www.whitehouse.gov//sites/default/files/omb/IPEC/admin_strategy_on_mitigating_the_theft_of_u.s._trade_secrets.pdf (accessed March 4, 2013).

[11] International Chamber of Commerce, “Cross-Retaliation Under the WTO Dispute Settlement Mechanism Involving TRIPS Provisions,” June 29, 2012, http://www.wto.org/english/forums_e/ngo_e/cross_retaliation_2012_e.pdf (accessed March 4, 2013).

[12] Trans-Pacific Strategic Economic Partnership Agreement, Main Agreement, pp. 11–19, http://www.mfat.govt.nz/downloads/trade-agreement/transpacific/main-agreement.pdf (accessed March 4, 2013).

[13] Antoine Bouet, “The Expected Benefits of Trade Liberalization for World Income and Development: Opening the ‘Black Box’ of Global Trade Modeling,” International Food Policy Research Institute Food Policy Review No. 8, 2008, http://www.ifpri.org/sites/default/files/publications/pv08.pdf (accessed March 4, 2013), and Gregory Corcos, Massimo Del Gatto, Giordano Mion, and Gianmarco I. P. Ottaviano, “Productivity and Firm Selection: Quantifying the ‘New’ Gains from Trade,” Intangible Assets and Regional Economic Growth Working Paper No. 05/14, March 2009, http://www.iareg.org/fileadmin/iareg/media/papers/wp5-14_Corcos_Del_Gatto_Mion_Ottaviano.pdf (accessed March 4, 2013).

[14] Chris Edwards, “Agricultural Regulations and Trade Barriers,” CATO Institute, June 2009, http://www.downsizinggovernment.org/agriculture/regulations-and-trade-barriers (accessed March 4, 2013).

[15] Merchant Marine Act of 1920, 46 U.S. Code § 27, 2002, p. 6, http://www.upa.pdx.edu/IMS/currentprojects/TAHv3/Content/PDFs/Jones_Act_1920.pdf (accessed March 4, 2013), and Terry Miller and James Jay Carafano, “Lets Pull the Plug on the Jones Act,” Heritage Foundation Commentary, July 3, 2010, http://www.heritage.org/research/commentary/2010/07/lets-pull-the-plug-on-the-jones-act.

[16] Christian Broda and John Romalis, “Inequality and Prices: Does China Benefit the Poor in America?” Banco de Portugal, March 10, 2008, p. 2, http://www.bportugal.pt/en-US/EstudosEconomicos/Conferencias/Documents/2008MonetaryPolicy/John_Romalis.pdf (accessed March 4, 2013).

[17] Bureau of Labor Statistics, “Current Employment Statistics–CES (National), 2012, http://www.bls.gov/web/empsit/ceseeb1a.htm (accessed March 4, 2013), and Derek Scissors, Charlotte Espinoza, and Terry Miller, “Trade Freedom: How Imports Support U.S. Jobs,” Heritage Foundation Backgrounder No. 2725, September 12, 2012, http://www.heritage.org/research/reports/2012/09/trade-freedom-how-imports-support-us-jobs (accessed March 4, 2013).

[18] Paul Brenton, “Notes on Rules of Origin with Implications for Regional Integration on Southeast Asia,” PECC Trade Forum, April 22–23, 2003, http://www.pecc.org/publications/papers/trade-papers/4_ROO/2-brenton.pdf (accessed March 4, 2013); Masahiro Kawai and Ganeshan Wignaraja, “The Asian ‘Noodle Bowl’: Is It Serious for Business?” Asian Development Bank Institute Working Paper No. 136, April 2009, http://www.adbi.org/files/2009.04.14.wp136.asian.noodle.bowl.serious.business.pdf (accessed March 4, 2013); and Carolyn L. Evans, “Bilateralism, Multilateralism, and Trade Rules,” Federal Reserve Bank of San Francisco Economic Letter, January 9, 2012, http://www.frbsf.org/publications/economics/letter/2012/el2012-01.html (accessed March 4, 2013).

[19] “Rules of Origin, Communication from Hong Kong,” GATT Negotiating Group on Non-Tariff Measures, September 15, 1989, http://www.wto.org/gatt_docs/English/SULPDF/92080053.pdf (accessed March 4, 2013).

[20] Byron Dorgan and Sherrod Brown, “How Free Trade Hurts,” The Washington Post, December 23, 2006, http://www.washingtonpost.com/wp-dyn/content/article/2006/12/22/AR2006122201020.html (accessed March 4, 2013).

[21] William H. Cooper et al., “The Proposed U.S.–South Korea Free Trade Agreement (KORUS FTA): Provisions and Implications,” Congressional Research Service, August 9, 2011, http://fpc.state.gov/documents/organization/171373.pdf (accessed March 4, 2013).

[22] Faizel Ismali, “Is the Doha Round Dead? What Is the Way Forward?” University of Manchester Brooks World Poverty Institute Working Paper No. 167, May 2012, http://www.bwpi.manchester.ac.uk/resources/Working-Papers/bwpi-wp-16712.pdf (accessed March 4, 2013), and Alan Beattie, “Negotiators Sift Debris,” Financial Times, July 29, 2008, http://www.ft.com/intl/cms/s/0/dde1e23a-5da0-11dd-8129-000077b07658.html (accessed March 4, 2013).

[23] News release, “Obama Administration Strengthens Enforcement of U.S. Trade Laws in Support of President’s National Export Initiative,” United States Department of Commerce, August 26, 2010, http://www.commerce.gov/news/press-releases/2010/08/26/obama-administration-strengthens-enforcement-us-trade-laws-support-pr (accessed March 4, 2013).

[24] Julia Gray, “Politics and Patronage: The Function of Dysfunctional Regional Trade Agreements,” Princeton University, April 23, 2010, http://www.princeton.edu/~pcglobal/conferences/ptas/Gray_pta_paper.pdf (accessed March 4, 2013); Pascal Mossay and Takatoshi Tabuchi, “Preferential Trade Agreements Harm Third Countries,” University of Reading and University of Tokyo, September 14, 2012, http://ideas.repec.org/p/cor/louvco/2012035.html (accessed March 4, 2013); and Australian Government, “Bilateral and Regional Trade Agreements,” Productivity Commission Research Report, November 2010, http://www.pc.gov.au/__data/assets/pdf_file/0010/104203/trade-agreements-report.pdf (accessed March 4, 2013).

[25] United States Census Bureau, “Top Trading Partners–Total Trade, Exports, Imports, Year-to-Date December 2012,” http://www.census.gov/foreign-trade/statistics/highlights/top/top1212yr.html (accessed March 4, 2013).

[26] Sanchita Basu Das, “RCEP and TPP: Comparisons and Concerns,” Institute of Southeast Asian Studies, January 7, 2013, http://www.iseas.edu.sg/documents/publication/ISEAS%20Perspective%202013_2.pdf (accessed March 4, 2013).

http://www.heritage.org/research/reports/2013/03/what-a-good-trans-pacific-partnership-looks-like

Shame on All of Us, Fellow Malaysians


January 30, 2013

Shame on All of Us, Fellow Malaysians

Note: We are all so engrossed with our nation’s politics that we lose our compassion and sense of caring. One of the objectives of  9 strategic objectives of Vision 2020 is to nurture and build a caring nation. But we have shown our ugly side. The passing of young William Yau has not moved us one wee bit. What is wrong with us, I wonder. Other kids before William  too have died in vain because we do not care enough.

Now  I read the story which appears in the New Straits Times today about the poisoning  of elephants in Sabah. I hope the authorities find the culprits of this barbarous act and make them pay for their cruelty to animals with punitive sentences.

An+dead+elephant+at+the+Gunung+Rara+Forest+Reserve+in+Sabah

I am moved to see the above picture of the baby elephant trying to revive its mother. It shows me what love is about. I don’t think animals have problems (I disagree with BTN propagandist Sharifah Zohra Jabeen) but we do as we do not know how to co-exist with them.–Din Merican  

Jumbos believed poisoned

10 DEAD: All were found to have badly damaged internal organs

KOTA KINABALU: A TRAIL of 10 dead elephants in one of the last bastions for the species in Sabah has raised concerns on how far people will go to protect their interest.

Carcasses of the Bornean pygmy elephants from a single herd were found near a logging camp and an oil palm plantation not far from the Gunung Rara Forest Reserve, about 130km from Tawau, between December 29 and January 25.

The elephants were believed to have been poisoned with a rat poison-like chemical, large amounts of which may have been used in areas where they feed on.

Only a 3-month-old male baby elephant was found alive next to its mother and promptly sent to the Lok Kawi Wildlife Park near here. The odds of the elephant surviving, however, remained slim as it was still nursing from its mother.

Sabah Wildlife Department director Datuk Laurentius Ambu yesterday said the discovery was disturbing because of the large number that were found dead.

“We are on the lookout if there could be more in the area, which is part of the Forest Management Unit concession held by Yayasan Sabah.”

The 100,000ha concession area, between the Danum Valley and Maliau Basin Conservation Areas, accounts for nearly 1,000 or half the elephant population in the state.

Laurentius said the family of elephants live within a 400km square area.”The dead elephants, three males and seven females, were found within an area of about 10 sq km radius but it may have consumed the poison elsewhere before dying near the logging camp.”

A post-mortem have been conducted on most of the carcasses and senior veterinarian Dr Sen Nathan said all were found with badly damaged internal organs.

“There were no signs of external injuries such as gunshots or cuts.We have sent samples to the Chemistry Department as well as to the Veterinary Services Department to check on the possibility of bacterial infection.The livers were enlarge or inflamed, the lungs congested and there was internal bleeding in the intestines.”

A task force made up of the Wildlife Department, Forestry Department, Police, Yayasan Sabah and World Wildlife Fund has been formed to probe the findings.

Tourism, Culture and Environment Minister Datuk Masidi Manjun expressed shock on the death of the elephants.”This is a very sad day for conservation and Sabah.”

ASEAN’s missed opportunities


October 3, 2012

ASEAN’s missed opportunities 

by Murray Hunter

Although the pundits state that the ASEAN Free Trade Area (AFTA) and ASEAN Economic community (AEC) will be in place by 2015, there are signs on the ground in many of the member nations that this is far from the case.

With the rapid growth and development of China and to a lesser extent India, the ASEAN region has been largely out of global focus in recent times. Although in terms of GDP, the ASEAN region cannot come even close to matching the other blocks like the China, the US, EU, India, and Japan; trade and consumption figures are very interesting.

Exports from the ASEAN region to the rest of the world were USD1.25 trillion (RM3.75 trillion) in 2011, not too far behind China at USD1.89 trillion, the EU USD1.79 trillion, and the US at USD1.5 trillion. ASEAN exports were higher than Japan at USD800.8 billion, and India USD298.2 billion.

What is even more interesting is that the ASEAN region is also a very high consumption block indicated by its imports from the rest of the world at USD1.06 trillion, which was much higher than India at USD451 billion, and Japan at USD794.7 billion. ASEAN still trails China at USD1.74 trillion, with the EU at USD2 trillion and US at USD2.314 trillion.

If one looks at mobile telephone usage as rough indicator of consumption, ASEAN usage (569 million) is much higher than the EU (466 million) and ASEAN has a higher per-capita usage than China and Japan. Finally the population growth rate within the ASEAN block is much higher than any of the other blocks.

This makes the ASEAN region one of the most interesting growth markets in the world. ASEAN as a single trade entity also has the potential to strongly influence world affairs through its trade strength.

The agreement to form the ASEAN Free Trade Area (AFTA) in Singapore back in 1992, and later the ASEAN Economic Community (AEC), with the objective of streamlining banking, finance, transport infrastructure, customers regulations, human capital mobility, and economic policy embodying AFTA by 2015 may potentially enable the region to exercise this influence.

However this promise of great opportunity that could propel much of the ASEAN region into great prosperity and influence, may falter due to the current unpreparedness of ASEAN members in most areas of integration. The writer believes that this is not just a lagging schedule, as has been suggested by many, but most of the region’s members are currently inwardly focused upon their own domestic interests which may lead to the failure of achieving the implementation of the AEC by 2015.

Moreover, a parochial rather than any regionally orientated mindset currently persists in Bangkok, Jakarta, Putra Jaya, Manila, Hanoi, and Naypyidaw, suggesting that this position may not change in the immediate future.

Inward Focus

Without going into detail, many ASEAN governments are facing watershed issues that may well set out how their respective societies will look for many future generations. Consequently their focus is currently inward upon domestic issues.

The Yinluck Shinawatra (left) led government in Thailand has many deep issues to solve which not only concern the government’s immediate survival, but the way Thailand may be governed in the future. Shinawatra must find a way to work with the palace and the military without being seen to betray her peasant constituency in the North-east of the country who very deeply feel many injustices over the last six years since the coup d’état ousting her brother, Taksin Shinawatra.

In addition there will be a transition to a new monarch in the near future which according to commentators may bring some uncertainty. This is not to mention the insurgency in the South of Thailand which has seen an escalation over the last few months, potential floods again over the next few months, which last year devastated industry around Bangkok and surrounding areas, where long term solutions are scant.

In Malaysia the Najib Razak Barisan Nasional led government has been in power for 55 years and is tired. The Opposition Pakatan Rakyat under the leadership of Anwar Ibrahim looks to be in a very strong position for the coming 13th general election that must be held before May 2013. The Barisan Nasional has the fight of its life ahead just to survive and cannot rely on its traditional strongholds like Johor, Sarawak, and Sabah to carry it through this time. The country has been in a quasi-election mode for some time, and with the focus on survival, there has been little interest in regional issues.

In Myanmar, President Thein Sein (right) recently reshuffled the cabinet to reportedly strengthen his own personal position and maintain forward reform momentum. Myanmar is heading down a road of reform where it hasn’t gone before and the potential outcomes are still uncertain.

Although Aung San Suu Kyi has been released from house arrest, many foreign governments have dropped sanctions, and the government has made peace settlements with a number of ethnic insurgency groups (yet many more like the Rohingyas need to be solved), there is little focus or interest in the regional issues at this point.

Indonesia went through its political turmoil more than a decade ago with the riots in 1998 that eventually brought the resignation of Suharto. With three presidents between 1998-2004, Indonesia is emerging as a vibrant multi-party democracy with Susilo Bambang Yudhoyono as President since 2004. The country is still plagued with corruption, natural disasters, pressure for autonomy, and poverty.

Political diversity may be hindering the creation of a national vision of development that all in a bipartisan fashion can engage. Coupled with the logistics of managing an archipelago more than 4,000km long, the Indonesian focus is still primarily concerned with economic management, although there is a general belief that an ASEAN market would in the long term benefit the country.

Corazon Aquino was swept to the presidency during the peoples’ power revolution of 1986, ousting Ferdinand Marcos. Since her term as president, there have been a further four elected presidents of the Republic of the Philippines, with her son Benigno Aquino III as the current president. Political power in the Philippines is still very much based upon favour and alliance of ‘political warlords’ in each regional subdivision and this partly explains why the former first lady Imelda Marcos and children, although forced to flee the country in 1986, were welcomed back and today hold positions of power as a provincial governor and members of the legislatures.

The Philippine government’s focus currently remains upon the issues of poverty, which at 32.9 per cent of the population is the highest in the region. Democracy in the Philippines has not seemed to solve the country’s fundamental issue of poverty. Like Indonesia, the Philippines is also an archipelago which presents many problems for development. The government still has to deal with the Abu Sayyaf in the south of the country, regular natural disasters, and rampant corruption.

Finally, although Vietnam has tried to reform the economy with the ‘doi moi’ programs of the mid 1980s, the country is still basically a centrally planned economy. More than 20 per cent of GDP is agriculture based and state owned enterprises account for more than 40 per cent of GDP. Vietnam has a large trade deficit even though exports are rising rapidly. Controls have been put in place to stem further blow outs in the trade deficit, bringing more state control over the economy rather than liberalisation.

State debt is also high with some state firms in deep financial trouble which is eroding the country’s financial ratings and even causing some political instability at leadership level. The Vietnamese economy, along with that of Cambodia and Laos are far from ready for integration within the framework of the AEC.

Currently there is an absence of any leader with regional vision within ASEAN. The leaders of the region don’t appear to have the relationships like their predecessors once had, as emerging democracies and development have their own demands. The club of dictators has gone.

Even the pro AEC ASEAN Secretary General Dr. Surin Pitsuwan (right) who kept the integration momentum going is preparing to hand over the position to a less experienced diplomat from one of the less developed members, potentially leading to a further vacuum in leadership on the issue.

The beneficiaries?

The constituency that one would expect to support an integrated ASEAN economy, regional conglomerates appears to still be lukewarm to the concept. Although companies like Air Asia, CIMB Bank, Bangkok Bank, SingTel, and Siam Cement are taking advantage of the region as a market, they are the exception. The majority of ASEAN conglomerates are ethnic Chinese who settled across the region building up their empires along common models of trading, real estate, finance and insurance, retail, and banking activities.

These firms are well connected in their own countries and haven’t historically done well business wise in countries within the region where their connections are weak. Consequently these firms prefer to diversify business interests within their home country rather than expand across the region.

One can easily get the impression when visiting Bangkok, Jakarta, Kuala Lumpur, and Manila that business there is a widely diversified ownership of business, where in fact region businesses in ASEAN countries today are still in the hands of a small number of families. Many of these companies are yet to develop the regional mindset necessary to take up the opportunities that the AEC offers. They may actually enjoy the current protection that is afforded them from outside competition.

At the same time the ASEAN region is dominated by SMEs which account for approximately 98 per cent of all enterprises and some75-85 per cent of total employment. Many of these are subsistence based enterprises employing no innovation in their business models. AFTA and the AEC will provide very few opportunities to these enterprises, except in the area of tourism.

ASEAN member states still see each other as competitors, competing with each other to attract direct foreign investment. Competing education and medical hubs have been set up which aim to attract international customers at the lowest cost. How the paradigm of collaboration rather than competition can be developed still remains to be seen.

Lagging preparation and the barriers to overcome

Infrastructure and logistic networks the AEC required for increased trade within the region are still very much work in progress. With the exception of Singapore, major highways, railways, deep-water ports are still under construction. Many border crossings are extremely congested, and the high speed railway between Thailand, Laos and Southern China is still only just an idea.

The banking system is not yet integrated, little has been done in the way of streamlining customs procedures which is hindering the implementation of high quality logistic systems across the region. Little exists in the way of a regionally based media to culturally integrate the region.

Existing ASEAN initiated projects like the Indonesia-Malaysia-Thailand Growth Triangle (IMT-GT), and the East ASEAN Growth Area (BIMP-EAGA) have existed more as ideals rather than anything that has substance on the ground. Above all there has been no attempt to integrate monetary or fiscal policy within the ASEAN region which would be necessary within any common market.

ASEAN states are still very much in different stages of growth, spread across a wide development continuum. The contrast between developed Singapore and Laos, Myanmar, Vietnam, and Cambodia is extremely wide, much more than any other region around the world. This diversity presents even greater challenges where assistance given by the more developed members of ASEAN could be construed as interference by the lesser developed nations. This is still a very sensitive issue within ASEAN today.

In addition, each country within ASEAN is in a different stage of legal system development, which is very important as the legal system creates the framework upon which business is conducted. Even if the common market is pronounced to be in existence by 2015, this factor alone will be a major impediment for companies within the region. There is too much folklore within the business communities about specific ASEAN country legal systems that make them shy away from direct investment.

At government level there are still many bilateral issues that can potentially hinder and set back collaboration. Only just recently the Thai and Cambodian army had a number of skirmishes over the Preah Vihear Temple ruins along their common border.

Cambodia is concerned about Lao dam construction, Malaysia and Indonesia are yet to settle some maritime and land borders in Borneo, the Philippines still has a claim on Sabah, Singapore and Malaysia had a number of spats concerning water, land reclamation, and rock formations in the South-China Sea that went as far as the International Court of Justice (ICJ). Vietnam and Cambodia are still in dispute over outlying islands along their common border.

The region is way behind schedule in the implementation of the AEC. Many unresolved issues concerning agriculture and non-tariff barriers are yet to be resolved. The less developed countries of Cambodia, Laos, Myanmar, and Vietnam are also holding back progress.

If the ASEAN region fails to create an effective and integrated common market in 2015 which is truly competitive, with free flow of skills, and capital, ASEAN will be severely disadvantaged vis-a-vis China, the US, Japan, and the EU, at a delicate time when the current détente is in flux and transformation.

It may be ASEAN’s own inward focus and inbred parochialism that prevents it sitting at trade, political, and economic forums as equal partners with influence and stature. This may also prevent ASEAN entering into an era of diverse economic prosperity in the near future from the synergies and market size an AEC would bring.

It is highly unlikely the AEC will be in place with any effective form by 2015 unless it becomes a high policy priority within each member government. The outcome most likely is the formation of an AEC in a compromised form, consistent with the track record of past ASEAN compromises since its formation back in 1967. — New Mandala-The Malaysian Insider

Brand Malaysia: “Orang Utans and Pandas don’t cut it anymore.”.


September 4, 2012

http://www.thestar.com.my

Brand Malaysia: “Orang Utans and Pandas don’t cut it anymore”.

by Dato Dennis Ignatius (08-30-12)
duta.thestar@gmail.com

According to Datuk Seri Idris Jala, Cabinet Minister and CEO of the Performance Management and Delivery Unit  (PEMANDU), the Government is in the midst of a major exercise to rebrand the country and promote a more vibrant image abroad.

A national branding unit with a RM30mil budget and a dedicated team of officers has been established in the Prime Minister’s Department to spearhead the project.

International management consultants have also been hired to give strategic advice and assist in the rebranding exercise.

Malaysia has undoubtedly had its successes. Dynamic development strategies, successful investment promotion, innovative tourism marketing, a reputation for racial and religious tolerance, an innovative foreign policy and world-renowned corporations like Petronas helped make Malaysia a respected name globally.

However, during the past decade in particular, a series of unfortunate developments has left brand Malaysia in tatters, as I noted in this column more than two years ago (“Brand Malaysia reeling from a thousand cuts”, February 4, 2010).

Racial and religious extremism, corruption scandals, significant outflows of local capital and talent, a lack of transparency and accountability, intense and highly divisive politicking and a perceived democracy deficit have taken a ruinous toll.

And all this at a time when it has become far more challenging to sustain national brands. In a world of real-time communications and social media, global opinions are shaped before local policy makers can even react.

Singapore Prime Minister Lee Hsien Loong, for example, recently expressed concern that xenophobic comments and postings on the Internet by Singaporeans were damaging Singapore’s international reputation.

Furthermore, where previously national branding was centred mostly around tourism, today a cutting-edge global reputation hinges upon quality of life, business environment, justice and good governance as much as anything else. Orang utans and pandas don’t cut it anymore.

Malaysia has not fared too well in this new branding environment. We were ranked 43rd out of 113 countries that were measured for brand strength by FutureBrand, one of the branding industry’s pioneers and a collaborator in the Malaysian rebranding exercise.

With the exception of culture and tourism, Malaysia did not score highly in any of the other categories (value system, quality of life, good for business, etc.) that FutureBrand considers in assessing a country’s overall brand.

The Government’s move to take stock of how we are presently perceived by the world at large is, therefore, timely. We might also need to consider repositioning our nation beyond the “Malaysia, Truly Asia” tourism specific brand that served us well these past years.

To be effective and productive, however, the rebranding exercise must be grounded in a realistic appreciation of what branding is all about.

Branding can help focus and project the essence of a nation, its values, its culture and the unique qualities it brings to the world. It cannot serve as a substitute for sound policy or camouflage obvious weaknesses. Merely developing a nice jingle or a catchy phrase by itself will not substantially improve a nation’s image.

It should come as no surprise that the countries with the best and most recognisable brand names are countries with free and open societies which have found a way to empower their people, ignite their creativity and marshal their talents.

As FutureBrand explains on its website, “from progressive politics to a sense of openness and freedom of speech, a country that is geared around its people … will always score highly”.

Countries like Australia, Switzerland, New Zealand, Japan, Canada, the United States and Sweden, therefore, did well while Pakistan, Zimbabwe and Cambodia did poorly.

We don’t, of course, need expensive foreign consultants to tell us all this; it’s common sense and already obvious to most Malaysians. What we do need, more than anything else, is the political will to address the underlying causes of our declining national brand.

There can be no doubt that if we seriously tackle the very issues that regularly make headlines in our own media, our international image will improve dramatically. The unique and amazing strengths of Malaysia, after all, remain undiminished; they just need to be given proper expression.

We also need to keep in mind that building and sustaining a successful national brand requires long-term consistency, commitment and attention to detail, something that we don’t seem to be particularly good at.

Take, for example, the KL International Airport (KLIA). We spend time and money to promote it as a world-class airport only to see these efforts undermined by repeated heists at the airport. According to local media reports, there were three major heists at KLIA in the last few months alone.

It doesn’t take an expert to tell us that if KLIA is perceived as lacking in security, it will never realise its full potential as a competitive regional hub.

The bottom line, therefore, is that if we want a better international image we must start by cleaning up our own act. Foreign consultants can help with spin, packaging and presentation, but it is up to us to make the policy changes that alone can build and sustain a successful national brand.