Hey, who in the right sense wants to keep their savings In Malaysia


February 11, 2016

Hey, who in the right sense wants to keep their savings In Malaysia

by Julia Yeow and Muzliza Mustafa

Some Malaysians are making the drastic choice of renouncing their citizenship to withdraw their EPF savings before the age of 55. – The Malaysian Insider file pic, February 11, 2016.

Some Malaysians are making the drastic choice of renouncing their citizenship to withdraw their EPF savings before the age of 55. – The Malaysian Insider file pic, February 11, 2016.Some Malaysians are making the drastic choice of renouncing their citizenship to withdraw their EPF savings before the age of 55. – The Malaysian Insider file pic, February 11, 2016.

When Joanne Koo first emigrated to Australia with her young family six years ago, she never planned on renouncing her citizenship as she was eager to hold on to her Malaysian ties, savings and investments.

However, earlier this month, Koo and her husband made a trip to Kuala Lumpur to surrender their Malaysian passports for the sole purpose of making a full withdrawal of their Employees Provident Fund (EPF) savings. (Savers are allowed full withdrawal at age 55.)

“It was never on our mind to take what my elders see as a drastic step (of renouncing our citizenship). But we’ve been monitoring the situation in Malaysia for a few years now, and we’re not confident,” she told The Malaysian Insider.

Koo, 44, is one of thousands of overseas Malaysians who have been spooked by the financial scandals and political instability plaguing the country over the past two years, and who have decided to withdraw their retirement savings to “safer environments”.

“The current government is likely to look towards institutions like EPF and Tabung Haji to bail out failed projects or companies,” said Koo, whose savings were in the “hundreds of thousands”.

“EPF is hard-earned savings, and nobody would want to wake up one day and find their retirement savings in someone else’s pockets.”

In 2014, a total of 3,098 Malaysians renounced their citizenship and left the country, withdrawing RM303 million from the retirement scheme fund. This figure is a startling 63% increase from 2010, where only RM185 million was withdrawn by those leaving the country, according to statistics obtained from the EPF website.

For ML, a former lawyer who moved to Switzerland in 2010, renouncing her citizenship and withdrawing her retirement fund was mostly because of the negative news about Malaysia that she kept reading about from Zurich.

“The recent public fiascos have partly influenced my decision (to become a Swiss citizen and withdraw EPF savings),” said the homemaker who was recently back in Kuala Lumpur to surrender her Malaysian passport.

“I have been following Malaysian news diligently. Every time I read the news, I am utterly gobsmacked with the answers provided or statements made, and I feel so helpless and worried about the state of affairs in Malaysia,” she said.

Apart from the growing fears of economic and political uncertainty, the ringgit’s continued decline over the past year is also believed to be a reason for Malaysians abroad to renounce their citizenship to make a full withdrawal of their EPF savings, said opposition lawmaker Dr. Ong Kian Ming.

“In the past, many people will leave their money in EPF even if they are living or working abroad, because the EPF has been offering decent returns.

“But probably one of the factors which motivates some of them to do this early withdrawal is the fears regarding the currency depreciation. At the rate of the ringgit’s decline, no matter how well your performance is, it cannot make up the depreciation,” he said.

Ong, who is the Member of Parliament for Serdang, said while he was not surprised at the increasing number of withdrawals, he believed a lot of the fears were “unwarranted”.

“I don’t find it surprising that more people are giving up their citizenship and withdrawing their savings, because in the larger context, there is a lot of fear and uncertainty in the country.

“But I do think some of (the fear) is not warranted. Among the government institutions that manage public money, the EPF is the best run among them.”

However, Ong said Malaysians both in and outside the country would tend to “lump EPF altogether with what’s going on in the government”.

Koo agreed that the high dividends paid by EPF annually was the main reason she was initially reluctant to make a full withdrawal, but decided that economic decline from mismanagement and the threat of further scandals was too big a risk for her to take.

“It is a bit of a shame, honestly, as the EPF itself seems to be performing quite well,” said Koo.

“But we’ve decided that we will not risk it and it would be safer to keep our retirement savings in a more secure place.Unfortunately, this means outside of Malaysia.”

http://www.themalaysianinsider.com/malaysia/article/scandals-weak-ringgit-spurring-malaysians-abroad-to-cash-out-epf-funds#sthash.rl0zALLH.dpuf

 

29 thoughts on “Hey, who in the right sense wants to keep their savings In Malaysia

  1. The only reason the Ringgit was the worst performing currency in East Asia last year is because nobody considers Australia as part of Asia. The Aussie dollar has fallen just as far and just as fast as the Ringgit.

  2. Can always park it in Cambodian banks?

    My CPF Sinkapoh annual returns are only about 2.8% on average over 30 years. Do you know that?

  3. I hope many will follow them. Let them leave. There are many millions more love this country.
    _______________
    Then we become a nation of people who depend on UMNO handouts. Tell me who contribute most of the taxes to our Treasury, apart from Petronas. If that is your despicable mind-set, Esa, you should not be surprised that we will become a nation led by Malay corrupt monkeys in Putrajaya with greater idiots in tow. More money will leave the country and more will not come in and you will end up begging on the streets. Good luck.– Din Merican

  4. Yeah, standard answer of Umno apologists and loyalists. Can blame them, Pak Din. They have been conditioned to think and behave in that manner. Years of living on crumbs and hand-outs have made them what they are. Let’s see what happens when the Umno gravy train comes to a halt.

  5. Just some thoughts
    Rafita asked the tabung haji chairman how he handles reserves
    May be the chairman is better handling second hand car sales
    Don’t know whether he understands balance sheet and profit and loss account
    Don’t get me wrong
    I wish tabung haji well
    Anyway This reminds me of A chat many years ago with a chairman of a listed co which had a broking firm as its core biz
    In the course of discussion he has the temerity to tell me that he only understood the term “marked to market” after the stock market has crashed
    Guess what?
    The co went belly up due to bad debts after the 1997 stock market crash
    Moral of story?
    U need financially savvy and knowledgable stewardship at all times

  6. with all the economic problems SHOULD the PM be flying to US and may be other countries SAID TO BE for a ‘WORKING’ [at taxpayers’ cost] TRIP but perceived to be more of a ‘HOLIDAY AND SHOPPING’ and may be for MONITORING OVERSEAS YOU KNOW WHAT?

  7. /// Mat Bonk February 11, 2016 at 1:50 pm
    My CPF Sinkapoh annual returns are only about 2.8% on average over 30 years. Do you know that? ///

    Try converting that into Ringgit and then work out your returns.
    1973: SGD1=MYR1
    2016: SGD1 = MYR3
    Now, do your maths.

  8. “The only reason the Ringgit was the worst performing currency in East Asia last year is because nobody considers Australia as part of Asia. The Aussie dollar has fallen just as far and just as fast as the Ringgit.”

    That’s not really the issue is it ?

    Folks just don’t want their money embezzled or used to bail out crony companies or the numerous other corrupt practises this Regime engages in.

    Most people understand albeit simplistically that economic conditions around the world have an impact on the money they earn or save. Some things are out of their control.

    Friends of mine who have migrated – and sadly I will be joining their ranks soon – love this country but for whatever reasons find it better in the long run to migrate. While there is scepticism about the Government where they move to there is some level of confidence in the System.

    People come up with all sorts of excuses as to why people are leaving this country. Anecdotally speaking it’s not about money. Non Malays have been through a lot in this country, through good times and bad. It’s part of our collective Malaysian (Asian ?) nature.

    But the reality is that – and strangely enough I don’t think that this is an agenda of UMNO, I mean why would you want productive citizens to leave, right ? – they (UMNO) can’t control the Beast.

    Biblical enough for some of you ?

  9. Decades of Malay/Muslim politics of racial resentment and hatred and politics of religious intolerance had destroyed the country, let alone rampant corruption and gross mismanagement.

    In the right environment, a Malay/Muslim can be radicalised within a week.

    A generation is brought up with self granted ‘ rights ‘ and ‘ entitlements ‘ with no reasonable responsibility, creating an ever expanding entitlement industry and recession proof.

  10. Abb, the Chairman of Tabung Haji has an MBA from Preston University USA as listed in his bio data. Google Preston University and your question will be answered.

    ____________________
    Orang Malaya,

    Here is something more about Preston University. It has no presence in the US. Maybe in Pakistan. Only Frauds like Azeez of Tabung Haji get their degrees from this University.

    Dr Abdul Basit and Americans Dr Jerry Haenisch and Thomas Ries are facing criminal charges for forging public documents.Preston does NOT have any registration as a university in the United States. It only has an office in Los Angeles from where Bachelor´s, Master´s and Doctoral degrees are mailed upon being sold. This Office is being fraudulently being called “our Campus” by Dr Abdul Basit and Dr Jerry Haenisch and Thomas Ries.

    The previous Preston Office used to be in the State of Alabama, which was discovered by the US Department of Education to be a degree mill, and was closed by the authorities. Preston was banned in America in 2007 by the Department of Education in Alabama for cheating and fraudulent activities.

    Despite the above, Preston in its website shows the Los Angeles Office as its campus in the Untied States.It is thus clear that Preston sells false university degrees in America and abroad. Preston was also outlawed by the courts in Wyoming in 2009.

    Preston cannot obtain any registration due to the mandatory requirement of being accredited as a University, and approved by the Federal and State Departments of Education.Preston is giving false information on its web page that accreditation is not mandatory.

    Preston on its web page is also saying it is “waiting for approval by the California Bureau for Postsecondary Private Education “. The California Bureau for Post secondary Private Education says:

    “We are not authorized by the US Department of Education to give registration/ permits/ licenses to universities”.Preston shows a logo of its affiliation to the Chamber of Commerce which has no authority to register a university.

    Preston shows itself as incorporated in California. To be “incorporated” simply means to have a commercial file in order to pay taxes (as a shop). All the above information has been intentionally used by Preston to cheat and to make people believe that Preston is actually a university in America.

    As the US Department of Education warns:

    “Degree Mills always use information about affiliations which have no legal value for a university to operate. This is simply done in order to cheat and to convince the public that the degree Mill has some sort of legality”.

    This is legally considered in the United States as an Intentional and Aggravated Fraud.

  11. Tok Cik,
    That is why I am baffled if the word “partition” or “separation” has become a taboo over here. Seriously people like Esa is playing the numbers game and hence it’s extremely meaningless in carrying on this way.
    It’s time to consider “Talak 3 kali”. Even Michael Portillo has been pushing extremely hard for BREXIT! UK exit from European Union! Is it fair that sensible people such as us should be dragged down by people like Esa Adam!

    Guys and Gals,
    Ask Lupus about Exodus la! Notice the difference…………Did Egyptians surrender all their wealth to the Isrealites while they walk with their feet from Egypt………hahahahaha

  12. Pak Din and Orang Malaya, much as I despise those who buy degrees and honorific titles to boost their ego and standing in society, I too deplore the institutions which dispense these degrees and titles.

    I sat on the committee of one of Ipoh’s premier social clubs for four terms but withdrew my candidacy last year when a number of those vying for positions on the committee were bogus datos, PhD and Masters degrees holders.

    The funny thing is they don’t have an iota of guilt seeing the titles and degrees written after their names on the club management board. The whole club knows about it and yet they go about as if nothing happens. We sure have thick-skin morons in our midst. How unfortunate.

    This Azeez fella was once a canteen operator and having been accepted into Umno’s inner circle, despite of his simple background, went out of his way to give his social standing a lift. So buying a degree from a dubious mill factory comes naturally to him. He needs not buy dato and dato seri titles, as they come with his appointment as chair of Tabong Haji.

    Incidentally, there is a Preston in Melbourne. This Melbourne suburb is noted for its morning market where Asians, especially Arabs and Afghans, congregate.

    Azeez is typical of the kind of people Al Jubor picks to lead the nation – obedient and loyal to the hilt. He can’t even spell his name correctly or count one to ten in a single breathe. And now we have one sleepy head helming the state government of Kedah.

    We don’t learn from history. Adi Amin (Big Dada) of Uganda tried removing productive Indians and Pakistanis from commerce and replacing them with locals. Look what happened to Uganda and to Adi Amin.

    This bountiful country is heading head-long into oblivion, and there is little you and I can do.

    ______________________
    Tok Cik,

    Not only are politicians sick, some Malaysians are also. That is my observation.–Din Merican

  13. @abb and @The

    The approximate appreciation of the SGD versus the Ringgit (at least since 2000), works out to about 3.3% per annum. CPF returns over the same period were about 2.5%. In Ringgit terms, there’s actually little difference between CPF and EPF.

    Also, CPF deposits are only invested in Singapore Government Securities. The proceeds are then utilised for funding HDB land purchases and housing development and the excess is I believe managed by GIC. Whatever returns from these investments are not however given back to depositors. They could be making even more but there’s very little transparency on this, as GIC (and Temasek) assets under management and returns are state secrets.

    Lastly, if there is a country in ASEAN that worries me on the economic front, it’s Singapore.

    @Conrad

    At the risk of being indiscreet, trust me, your money in EPF is in safe hands. Khazanah, KWAP, SOCSO and PNB are also well run and managed. LTAT and Tabung Haji I’m not so familiar with, but from my interaction with them, I’m wary over them too.

  14. We can do all the maths, give excuses, be apologetic, make comparison by looking at other countries, downplay Singapore’s success, but at the final analysis, it comes down to TRUST. Every government in the World must keep some secrets of course, just like you and me. We don’t tell even our wives everything and vice versa, but we trust them enough and vice versa not to, or having the need to, want to know everything.

    The real issue is they are a growing number of Malaysians, (and would be former Malaysians), who do not trust their government and government institutions as much as they used to. Just on the 1MDB issue alone we get multiple, conflicting statements, (even outright lies), from the PM, Cabinet ministers and even the all powerful Attorney-General the last very person in the whole government machinery where the truth should be sacrosanct.

    Singaporeans, or at least enough of them, trust their government and government institutions not to demand to know every cent the government makes whether on the side or not. Why? Because they can see that enough “government” money is spent for and on them. And that makes all the difference.

    The ministers there are paid astronomical salaries for a reason, (for which they pay taxes), but it is open for all to see and vote against in general elections if so inclined, and if there is even a hint of corruption, no one is spared.

    BTW, it has been said, or whispered, that about 40% of all civil servants in government departments and statutory boards are former Malaysians. Enough said.

  15. /// hishamh February 12, 2016 at 9:04 am
    Lastly, if there is a country in ASEAN that worries me on the economic front, it’s Singapore. ///

    Care to elaborate?

  16. It is extremely sad to see to the day when more people are leaving the country to avoid unnecessary stress over many political issues like education, racism, corruption and other administrative policies where the minorities fear losing out in the near future where religious issues that crop up in their daily life. EPF used to be very stringent in their risk investments for fear of not investing in high returns with bigger risks. The policies of EPF money belongs to the rakyat who contibuted for their retirement with high return of 7/8 % of interest for those contributors in our early 70s. We do not have that kind of stringent policies that control risky investments made by the members.
    It is quite an understanable that those migrated overseas wanted to still hold on their citizenships due to many other reasons particularly their children’s education where Malaysia do not allow freedom of choice as well as avoiding stress in their livelyhood in Malaysia. From my experience, Malaysia is still the best for those who are born and bred in the country no matter what one may disagree of my opinion. One finds the fear of one’s contribution remained with EPF due to unforeseen political reasons.

  17. Hishamh

    Tabung haji to me is no longer of old. Which agency is next? How many times have they put their hands into Kwap? Remember time of renong group? and now Src though the bonds are guaranteed by the government
    push comes to shove in the event of major crisis I am not too sure if Kwsp will be spared though I must agree with u Kwsp is relatively well managed at this juncture
    U can’t blame the distrust after the gigantic fiasco of IMDb
    Is the extra couple of % worth the risk in kwsp? Food for thought for those who have the option to withdraw their funds

  18. @Wayne

    I don’t deny that trust is declining in Malaysia – just don’t throw the baby out with the bath water. There are still good people in government and government institutions, including in Tabung Haji. Why else do you think so many confidential papers are getting leaked? The BNM letter, the board paper on that TRX purchase – those could only have come from someone on the inside.

    As for Singapore government “spending”, healthcare and housing are financed directly through CPF savings. Only education has government fiscal support. Outside some social protection for the poor, public social spending in Singapore (as a % of GDP) is the lowest in the OECD. Since the government generally runs a budget surplus, none of the returns generated by Temasek or GIC are returned to the people.

    No doubt that Singapore and Singaporeans have been successful – but that’s the wrong standard to apply. The right question to ask is whether social welfare for Singaporeans can be improved with a different public policy approach, and the answer to that is: yes it can. If you don’t believe me, check out what’s coming out of the PAP these days. They are coming round to my way of thinking.

    @The

    Since the about turn on immigration policy a couple of years ago, Singapore has lost its main source of growth, which was foreign emigration. Singaporean SMEs are slowly relocating overseas (mainly to Malaysia, of all places), due to high costs and unavailability of labour. The local population is ageing at a very rapid pace and birth rates are below replacement levels, on top of a per capita immigration rate that is higher than Malaysia’s. The government is trying to shift the economy to be more services based, but that’s a change that may take a generation to achieve, if at all. They’ve failed to substantially increase productivity, despite decades of trying.

    Those are the long term structural issues.

    Short term, Singapore had a credit bubble that you would not believe, with loan growth of 20%-30% per annum between 2010-2013. Those are the kind of growth rates you would expect to see from a low or middle income country with high inflation, not a mature economy with low and stable inflation. Household debt to GDP is just a hair below Malaysia’s and they accumulated it faster. Huge red flag to me, and analysts covering Singapore are privately worried too. That kind of credit expansion almost always brings trouble, and NPLs are already rising.

    MAS is not telling where all this money went, but some surely went into local and international property (e.g. London where Singaporeans are apparently the number 2 biggest investors, right after the Arabs), and some to China. Borrowing costs have been going up over the last couple of years, and with the Fed tightening, we could see Singaporean households and companies coming under stress.

    It may not come to a financial crisis, but I worry nonetheless, not just for Singaporeans, but also the potential contagion into the rest of the region.

    Lastly, don’t bet on the SGD over the near term. MAS policy looks too tight to me and there has been ongoing market speculation that they will shift the trading band downwards, or reduce the slope of the SGD appreciation. Next policy meeting is in April, but they might surprise the markets by moving between meetings, like they did this time last year.

  19. “At the risk of being indiscreet, trust me, your money in EPF is in safe hands. Khazanah, KWAP, SOCSO and PNB are also well run and managed. LTAT and Tabung Haji I’m not so familiar with, but from my interaction with them, I’m wary over them too.”

    hishmah, there was a time, when I would have agreed with you. However this particular Regime has demonstrated that no cow is sacred.

    As for Singapore, – as a long time critic of Singapore -even though most things economic are considered state secrets , I have enough confidence that the Mandarins of the PAP would be able to navigate the choppy seas of the world economy and not contribute to the decline of their economy .

  20. I agree with the general point put forward by hishamh that Singapore’s public finances are not transparent. That being said, Singapore has never been a champion of democracy. And to put the record straight, Temasek publishes annual accounts (which are available from its website), and has been reporting its annual returns consistently for at least a decade now. It also publicly provides the details of its main investment holdings. So Temasek is much less secretive than you may think.

    GIC on the other hand is indeed very opaque, though it does report its annualised returns over the last (rolling) 5, 10 and 20 years, plus the broad geographic locations of its investment holdings.

    Finally, it is incorrect to say that the average Singaporean does not see any benefit from the Temasek and GIC investment returns. The Singapore government budget includes the item “Net Investment Return Contribution”, which tends to be more than 10% of the budget. So much of the returns from the two sovereign funds are injected into the government’s annual expenditures.

    I personally agree that more social welfare spending could be undertaken in Singapore, given the extremely large reserves (amounting to multiples of Singapore’s annual GDP) that have been built up by the government over the years. But this is a totally separate topic to the main article that is being discussed here.

    As for the point about Singapore’s financial vulnerability, yes I agree with that too. Singapore is a major global financial centre, and the financial and business hub of ASEAN. So any economic problems in Asia, and ASEAN in particular, will have negative repercussions on Singapore to be sure. If the China growth slowdown were to worsen and persist, then you can be sure that most of Asia will suffer. That includes both Malaysia and Singapore. One could argue that Singapore is maybe more vulnerable given its large financial sector. On the other hand, it does have access to huge reserves and probably the largest current account balance relative to GDP in the world. I fully expect the USD/SGD exchange rate to rise further over the next year or so, but I am not sure if I would short the SGD/MYR exchange rate. I think it is difficult to say whether Malaysia or Singapore would be worse off from a regional recession/crisis.

  21. HIshamh says “As for Singapore government “spending”, healthcare and housing are financed directly through CPF savings. Only education has government fiscal support”.

    This is incorrect. There is Medifund to help poor people pay for their healthcare expenses. Then there are periodic financial “top ups” to Medisave accounts given by the regime (especially when the General Election is coming). It is only that the Singapore government is rich but stingy when it comes to social welfare spending.

  22. Why has this become about Singapore ? In a discussion like this Singapore is the unholy union between a Red Herring and a Straw Man. Help me out here folks. Is this part of the Malaysian Sino-Malay discourse ?
    _________________
    Conrad, our commenters can get side-tracked because they don’t read carefully before they comment.All they do is lepas saja. Fancy, I have to put up with when I moderate.–Din Merican.

  23. @Abb

    Yes, I agree, this is not our fathers Tabung Haji. In some ways, they have improved tremendously, but in others…

    On KWAP, I think from his public comments, CEO Wan K regrets that occurrence and I don’t think they’ll let it happen again. Fool me once shame on you, fool me twice shame on me. To be fair to him, nobody at the time even suspected there was a problem at 1MDB.

    @Waiyuen Long

    Back in the day, interest rates were fairly high, and you could get good nominal returns just investing in government bonds. Fund managers didn’t have to work very hard or take on much risk. Those days are long gone. Interest rates globally have been in secular decline since the 1980s, and we’re seeing some countries now experimenting with negative interest rates. Global bond markets these days are becoming more akin to equity markets – you don’t buy them for the yield, but for the potential for capital gains. The yield on 10 year Japanese government bonds just went negative last week for example – you effectively have to pay interest to invest in them.

    On the liabilities side, Malaysia’s ageing population, low wage structure and higher cost of living means achieving retirement income adequacy is becoming more critical. It’s an enormous, desperately challenging dilemma that has to be solved, and its facing nearly every pension body in the world, not just ours.

    If we kept to the old approach to investing, EPF returns might not even be able to keep up with inflation, much less grow members savings.

    @Conrad

    I think the governance structure at EPF is more than adequate. The BOD includes representatives from both unions and employers – neither would take kindly to government interference. The Investment Panel is composed mainly of independents, and includes Nazir Razak. I think you know how he feels about 1MDB and the need to preserve the credibility of public institutions.

    With respect to SG, I had the privilege last year to address a delegation from their MOF. They’re very good, but nobody’s perfect, and nobody can ignore structural economic realities.

    @veritas

    Thanks for the tip on Temasek. That data is relatively new (last time I checked was a couple of years back), as they never previously published their AUM.

    Going by the constitution, only half of net investment returns can be utilised for expenditure in any current year. Since 2008, what gets included is only realised returns, rather than increases in the AUM (which is sensible but generally reduces the available “return”), less interest on bonds issued to CPF. Revenue from land sales are not included in budget estimates at all. From my examination of the budget reports, most of the NIR is actually used for transfer into trust and endowment funds rather than for current expenditure, so what citizens actually get is whatever is utilised from those funds, which is typically much smaller than current year transfers. A return on a return, if you get my meaning.

    On the potential for a crisis, I see the potential of contagion into Singapore as considerably lower than contagion from Singapore to the rest of the region. The debt overhang problem is domestic, not international. The international situation exacerbates the risk, but is not the underlying problem. In that sense, having large reserves aren’t really a comfort, because of the domestic context. International reserves are pretty useless on that score (i.e. all the funds at GIC and about 40% of Temasek’s), while domestic reserves would be subject to prices in domestic asset markets i.e. their value will decline with the economy. Liquidating them would also increase downward pressure on asset prices.

    Singapore’s large current account balance is precisely the reason why I think the government is under serving the people – as the country as a whole is living well within its means, there is no necessity for the government to do so. In fact the opposite, as almost all of the surplus will be corporate, which means by rights the government should run a permanent deficit. Anything else, and we’re not maximising social (i.e. household) welfare.

    @Phua Kai Lit

    I think I did mention social protection for the poor in one of my earlier comments. But stingy is a very good way to describe it. Having said that, they’re more effective at it than we are (in terms of reducing inequality), though far below the standard achieved in other East Asian economies.

    @Dato Din

    Sorry Dato, I’ll shut up about Singapore from this point on.
    ________________
    Hishamh,

    Why stop commenting on Singapore, if you can be critical. It is not a perfect place. But at least we know it is being run by competent leaders backed by an excellent civil service, unlike Malaysia where our pak hangug civil servants are in league with corrupt politicians.–Din Merican

  24. “I think the governance structure at EPF is more than adequate. The BOD includes representatives from both unions and employers – neither would take kindly to government interference. The Investment Panel is composed mainly of independents, and includes Nazir Razak. I think you know how he feels about 1MDB and the need to preserve the credibility of public institutions.

    With respect to SG, I had the privilege last year to address a delegation from their MOF. They’re very good, but nobody’s perfect, and nobody can ignore structural economic realities.”

    I have no idea how anyone in Malaysia could have confidence in an institution merely because it includes representation by unions and employers or so called “independents” like Nazir Razak (and no, I have no idea how Nazir Razak thinks).

    Considering the history of political abuse and systemic corruption that has plagued our once fairly well managed institutions and the recent scandals that demonstrate that public institutions are not to be trusted to carry out their functions independently or legally, platitudes such as the one put forward here, carry no weight at all.

    To be honest I have been witness to the most outrages forms of corruption and political interference, so this could be clouding my judgement but nah, not buying your particular line of reasoning at the moment. Experience has shown that everything eventually gets touched.

    As for Singapore nobody demands perfection which is not a criteria but a straw man, in discussions like these. And my point was that the mandarins of the PAP, are not the kind of tyrants who would ignore economic realities in furtherance of hegemonic agendas.

  25. @Conrad

    If you will not be persuaded, you will not be persuaded, and we’ll leave it at that. I have been too indiscreet already. As for how Nazir Razak thinks, try this. I can’t imagine that makes for comfortable family get togethers.

    As for the PAP, point taken, but I would also add they have a much easier time putting in place the right policies than we do. Any decent economic policy we come up with here seems to attract virulent opposition.

  26. One last point:

    Key thing to watch out for in the next few months, institutional wise, will be who gets to replace Zeti as Governor. If its one of the internal candidates, we should still be okay. I’d be wary if an external candidate is picked, even a respected ex-banker like Wahid Omar.
    _______________
    Hishamh,

    It will likely be an ultra-Melayu (mamak) Irwan Sirega from the Treasury. Najib needs someone who can keep the follow-up on the Bank Negara investigation from proceeding further. Bank Negara has been severely compromised after Tan Sri Aziz Taha resigned when he had serious disagreements with Mahathir. –Din Merican

  27. I want to make a couple of points because I dislike the tone I took in this discussion.

    (1) I think hishamh’s blog is perhaps the best Malaysian blog on economics. Yes you may find issues you disagree with but it is a good place (for me at least) where the intelligent reader will discover the difference between economic points and political ones. Is this a good thing ? Again , it’s up to the reader to decide.

    (2) In discussions like these Singapore is a complete non issue. Why, because proponents and detractors of Singapore waste valuable time regurgitating well used canards or talking points and not discussing the issue from a purely Malaysian perspective.

    (3) With regards to Nazir Razak, yes I am well aware of his oblique public statements, have tangential experience with his well documented (or at least it should be) professional weltanschauung and do not wish to impugn his capacity for fulfilling whatever fiduciary obligations entrusted to him.

    (4) “… but I would also add they have a much easier time putting in place the right policies than we do. Any decent economic policy we come up with here seems to attract virulent opposition.”

    I don’t think this is entirely accurate. There may be public and political opposition but ultimately any policy in this country is unilaterally decided by UMNO without regard for anything else. The GST and TPPA are but two examples.

    The problem with Malaysia has always been with implementation and enforcement. Both done in ways that most often amounts to mala fide, in my opinion.
    _______________
    Yes, Conrad. Hishmah is a good economist, educated at LSE, and has an excellent blog. I was worried he was not going to comment on this blog.

    I have no bones to pick with your comments. We are focusing on the ringgit’s weakness. That is just a symptom. To me, we are facing a crisis of confidence in the Najib administration. His government cannot be trusted to do the right thing. The Ringgit will bounce back when he is out of power. –Din Merican

  28. Edit to add.

    from hishamh’s blog :

    “Now if you are talking purely about investment returns or political scandals you might have an argument, but using the “weak” Ringgit is a poor excuse.”

    Herein lies the problem. Not many people are squirreling away funds because the Ringgit is weak and I don’t think this particular article implied this. It is difficult to rebut the argument that people have lost faith in the System.

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