Teo: Does 1MDB’s Arul think Malaysians are idiots?

November 30, 2015

Arul, Lodin and Najib

COMMENT: Politicians in power and those they employ in the civil service, statutory bodies, government-linked corporations are arrogant. They always assume that we are stupid. May be they can fool some Malaysians all the time, but not all of us all the time. Arul Kanda Kandasamy does not seem to get the message and that is why he continues to spin and even lie.

The first thing  I learned Economics 101 (Theory of the Firm) is that if total revenue minus total cost equals zero, the firm is said to have broken even. Graphically, it is the point of intersection between the total revenue curve and the total cost curve.  I stand to be corrected,  and if I am wrong, then I must have learned nothing from my microeconomics course at the University of Malaya under the late Professor Dr. Yip Yat Hoong in my First Year in 1960. I also knew concepts like opportunity cost, transaction cost,  and “holding cost”, inter alia.


In the case of the sale of assets, one disposes them at book value, or on revaluation,  or at discount to book value depending on circumstances. I do not know what Arul and his finance team did during negotiations. We are expected to accept his word that 1MDB broke even when Edra Global  Energy  Berhad was sold to China’s  CGN Group.

The Chinese certainly did not pay a premium for those power assets. Probably, being hard-nosed businessmen, they bought them at discount by way of direct negotiations with some sweeteners including extension of the concessionary period, power offtake price to Tenaga Nasional,  and tariffs with respect to some of the IPPs. Again, we are kept in the dark about the Sales & Purchase Agreement between 1MDB and the new Edra owners from China. That is Malaysia. We love to operate in the dark.

All I can say at this stage 1MDB did not make a profit from the sale of its power assets.  However, it has been able to use the proceeds to reduce its debt. That was why  bond markets reacted favourably to the news of the sale. Can someone else in the know educate me?   I cannot trust Arul to tell the truth.–Din Merican

Teo: Does 1MDB’s Arul think Malaysians are idiots?

by FMT Reporters



Kulai MP Teo Nie Ching has charged in a statement that 1MDB Chief Arul Kanda Kandasamy “doesn’t know how to count” if he claims that the trouble-stricken government-owned company has “broken even”. “How is the sale of Edra Global Energy Bhd and its subsidiaries a ‘break even’ in 1MDB’s books? Can Arul Kanda please enlighten us?”

“Do they think Malaysians are idiots who failed their elementary mathematics in school?” The break-even in economics, business, and specifically cost accounting, is the point at which total cost and total revenue are equal, meaning there is no net loss or gain, she pointed out.

Teo was commenting on 1MDB claiming, in responding to former Prime Minister Mahathir Mohamad, that it has broken even on its investment with the help of the sale of its power assets.The MP noted that 1MDB bought the power companies for RM12.1 billion. “The energy assets have now been sold for RM9.83 billion. How is that breaking even?”

“If Arul Kanda regards that as breaking even, no wonder he can claim 1MDB to be profitable. The RM2.27 billion is nearly a 20 per cent loss for 1MDB.” In terms of debt, she added, it was even worse. “Yes, the sale of Edra to CGN Group represents a reduction in 1MDB debt by RM17 billion.”

However, she continued, the total debts incurred and assumed by 1MDB when acquiring these power companies was approximately RM30 billion. “The RM30 billion comprises USD3.5 billion (RM15 billion) bonds, RM7.4 billion short-term loans and RM8 billion inherited debts. Hence, even after reducing the debt pile by RM17 billion, there is still another RM13 billion outstanding without any asset-backing in 1MDB.”

Even if the state investor has received RM2 billion cash dividends over time throughout its ownership of the power assets, said Teo, there was still a debt of RM11 billon.


Japan and China step up rivalry over ASEAN infrastructure contracts

November 24, 2015

Japan and China step rivalry over ASEAN infrastructure contracts

by Ben Bland in Kuala Lumpur

http://www.ft.com/intl/cms/s/0/f20f9fec-90f4-11e5-bd82-c1fb87bef7af.html 11/23/2015

ASEAN's Time

China and Japan are stepping up their battle for strategic infrastructure projects in Southeast Asia amid rising economic competition and tensions over maritime disputes.

At an annual summit of Asia-Pacific leaders in Kuala Lumpur this weekend, China pledged to add another $10bn to its growing pool of infrastructure lending in Southeast Asia, while Japan vowed to halve the time it takes to approve infrastructure loans and take on more financial risk.

China recently beat Japan to win a $5bn high-speed rail project in Indonesia on the back of no-strings financing that did not require the Indonesian government to act as guarantor.

China and Japan are going head to head to secure other high-speed rail projects, including one linking Kuala Lumpur and Singapore, as well as bidding against each other for ports, power stations and other infrastructure deals across this fast-growing region.

Shinzo Abe, Japan’s Prime Minister, said in a speech that Japan’s official development assistance must keep pace with the speed of change in Asia.

Xi and Abe with Jokowi

“We will drastically reduce the time needed for going through the procedures for ODA loans by as much as one and a half years compared with the current system,” he said, promising a significant reduction from the current average processing time of three years. We will also revise the current practice of requiring without exception recipient governments’ payment guarantees.”

A senior Japanese diplomat said that Tokyo had to become more “expeditious” in executing infrastructure projects in Asia, rather than simply highlighting that it has a better record than China in terms of quality, safety and social and environmental protection.

Beijing also pledged to accelerate and deepen its economic co-operation in Southeast Asia with Premier Li Keqiang promising $10bn of new loans for infrastructure as well as an increase in grants to the region’s less developed nations.

Sale of 1MDB Power Assets to China

China rescues Najib Razak from 1MDB scandal

While China clashes at sea with Japan and some Southeast Asian nations including Malaysia, the Philippines and Vietnam, Beijing and its rivals are competing to build alternative spheres of economic influence.

Malaysia, Vietnam, Japan and the US were among 12 nations that recently signed the Trans-Pacific Partnership, a pact that excludes China and is designed to promote a rules-based trading and investment system in the region.

Beijing has backed a rival trade deal with Southeast Asia, called the Regional Comprehensive Economic Partnership,  that has fewer requirements for economic liberalisation.  But hopes to conclude RCEP by the end of the year received a blow on Sunday when Malaysia, which is chairing the Association of Southeast Asian Nations, said that negotiations would not be concluded until next year because of the “challenges faced”.

Xi Jinping, China’s President, made an implicit criticism of the TPP on Wednesday when he warned at another regional forum in Manila that “with various new regional free trade frameworks cropping up, fragmentation is becoming a concern”. Despite Beijing’s concerns, since the TPP was agreed last month other Southeast Asian nations including Indonesia, the Philippines and Thailand have said they are interested in joining.

“With the TPP now finally coming to fruition, it increasingly seems like it is the best game in town in terms of driving economic development,” said a minister from one of the Southeast Asian nations keen to sign up. “But given the state of our economy and the fact that the existing TPP participants must ratify the deal first, it will take several years before we can join.”

Barack Obama, US President, welcomed the new interest in the TPP from Southeast Asian nations, claiming that the pact would “write the rules for trade in the Asia Pacific for decades to come”, promoting the resolution of economic disputes through dialogue rather than “bullying or coercion”.

US President Barack Obama calls for debate on TPPA

November 21, 2015

COMMENT: I welcome US President Barack Obama’s statement that the TPPA should be debated by the general public. The President is fully aware that this trade pact affects our lives.

The TPPA must not just serve the interest of US corporations at the expense of other stakeholders. This debate will happen in the United States which practises  open, transparent and accountable governance. But I am not sure about Malaysia.

Our government is well-known for using the Official Secrets Act toMustapa-Mohamed-TPPA-300x202 keep the Malaysian public in the dark on matters of national importance. It also is arrogant and presumptuous to think that “government knows best”. Its handling of the TPPA negotiation is no exception.

We have, however, been assured by our MITI Minister, Dato’ Mustafa Mohamed, that his ministry will be organising some sort of dialogue cum briefing for all stakeholders including Malaysian business and other civil society organisations, which have raised serious and valid concerns about the TPPA. So far, I am not sure if the Minister has kept his word. Perhaps, the Minister is still waiting for the “right time”. The right time is now, so please get on with it.

There should also be a White Paper to our Parliament, giving a full account of the recently completed round of negotiations in Atlanta and the benefits and costs of this pact to Malaysia. Our parliamentarians should be allowed to debate it and reach a consensus.–Din Merican

US President Barack Obama calls for debate on TPPA

by Reuters

Obama at Taylors University

US President Barack Obama gestures while speaks at a meeting with students from the Young Southeast Asian Leaders Initiative at Taylor’s University in Kuala Lumpur, November 20, 2015. — Reuters pic

US President Barack Obama launched a defence today of a signature Pacific trade pact kept largely under wraps and said the public would get its say before legislators in each country debate the full details.

The Trans-Pacific Partnership (TPP), a “mega-regional accord” covering four-tenths of global GDP, was so complex it would not have materialised if all interest groups were involved in the protracted talks, he said.

“If you are negotiating with 12 countries and there’s no space for everyone to agree on the deal … then it would never get done,” Obama said during a town hall at a Kuala Lumpur University.

“The nature of the trade agreement is so many interests are involved, so what we’ve done instead is close the initial deal, it’s subject to review ….each country then has to ratify and it’s subject to the legislatures.”

Obama was responding to a question from a Malaysian youth who said the TPP was elitist and excluded most voices. Barring occasional leaks, details of the TPP have been kept secret during the more than five years of negotiations, angering those affected by its broad implications.

“I still have to get it past Congress,” Obama added. “I believe it’s a good deal and we’ll get it done, but there’s no guarantee.”

The pact could come up against some opposition in Washington. Obama has long championed the deal but needs to muster support among moderates to ensure ratification.

He recently said it would allow the United States to “write the rules of the road” for 21st century trade, but warned: “If America doesn’t write those rules, then countries like China will.”

The pact covers countries from Japan, Canada and Australia to Mexico, Vietnam and Malaysia and would slash tariffs between them and set common standards on issues ranging from workers’ rights to intellectual property protection.

Obama used the US pharmaceutical industry as an example of resistance and how concessions needed to be made.“We were very specific in the chapter to say that we have to protect generics for low-income persons,” he said.

“Here’s proof that this wasn’t just some giveaway to the drugs companies. Right now a lot of drugs companies in the United States are mad at me because they said ‘how come we didn’t get more protection?’

“Well, part of our job is to promote the US drug industry but part of our job is also to be good partners with countries that have people who are sick.”  — Reuters–www.themalaymailonline.com

Singapore: Getting Around with Technology

November 9, 2015

Singapore: Getting Around with Technology

by Surekha A. Yadav


Not everyone has noticed but Singaporeans are living through a revolution right now. An old and arbitrary tyranny is falling around us for a new, better order driven by technology.

Taxi apps are revolutinising our transport space and that’s a pretty big deal.Taxis and the weakness of the Singapore cab system have long been a personal bugbear.And I am not alone.

Often you had to wait more than an hour to get a cab at many points in the city and getting a taxi in the suburbs was well near impossible every weekday morning — crippling facts of daily life for many Singaporeans.

Yet now just months after I last penned my lament on the state of taxi affairs, the situation has turned on its head. Waiting for a cab to get to work in the morning, I’m honestly spoiled for choice. I could use Grab taxi, Hailo or of course, Uber.

At one glance (and a few swipes) I can see what my options are, know which cabs are in the vicinity, get an idea of how much my journey will cost and manage the whole process while scrolling my Facebook feed. I don’t need to make so much as a phone call, let alone walk out onto the street and stand at the corner soliciting stony-faced taxi uncles.

This brave new world is an amazing demonstration of how technology really can change lives and alter the fabric of daily life. Thousands of vehicle owners and drivers are clearly using the technology to such an extent that the triumvirate of traditional taxi companies Trans-Cab, Comfort and SMRT appear to be struggling to find drivers and maintain fleet levels.

Taxi Service in Singapore

These days, you don’t have to fret about not being able to get a taxi in Singapore… taxi apps to the rescue! So far (traditional cab companies aside) it seems to be a clear win-win with drivers getting better terms such as higher revenues or lower overheads and app users getting a faster and more reliable service.

What’s even more striking is that regulators have stepped in broadly to support the city’s taxi transformation. Government legislation is often the bane of innovation. And as taxi apps moved from being a novelty to becoming a regular means of transportation, legislation became inevitable.

There were cries by taxi companies and drivers affiliated with them to outlaw or severely restrict the scope of app-driven hire services. Their argument being that the low overheads and limited legal restrictions in the online space give these apps an unfair competitive advantage.

Basically, the old operators wanted to freeze the taxi eco system and preserve their market share. However, the Bill passed this week does not lock us into the ancient regime. Rather it broadly empowers what it terms Third-Party Taxi Booking Service Providers while ensuring they stick to basic legal parameters.

Uber cars cannot pick customers off the street like regular cabs, and the apps can’t compel you to provide your final destination in advance — lest drivers begin adopting the behaviour of regular taxi drivers and reject customers for going somewhere out of the way.

With a few safeguards in place, it’s really a positive piece of legislation and it’s clear in this case that the government is moving with technology and not impeding it. What this means is the taxi revolution has succeeded and become the new status quo with legislation, users and providers all lined up behind a new world.

Viva la revolution!


ASEAN Economic Integration Possible and Essential

October 29, 2015

ASEAN Economic Integration Possible and Essential

by Dr. Ooi Kee Beng

Ishak Yusof Institute (ISEAS)


Ooi Kee Beng

Just 20 months short of turning half a century old, the Association of South-east Asian Nations (ASEAN) will officially become an integrated community. On December 31 this year, rotating ASEAN chair Malaysia will declare this to be the case.

The integration has essentially been and will continue to be in the field of economics. ASEAN has been ambitious and proactive in creating a common market and production base. Other areas of integration, however, by comparison and by design, take a backseat, and events there have been more ad hoc and opportunistic.

Given the way things work in this part of the world, understanding this reality requires a historical take that highlights the region’s uniqueness. Southeast Asia as a region had until recent times been largely peripheral to the greater sweep of history. This historical circumstance has many implications, and two of the most important are discussed here. First, let’s look at the region from within.

Political integration inconceivable

Although the region exhibits many cultural layers — and the overlaps vary greatly from country to country — there is no civilizational imperative for the region to integrate politically or otherwise.

A quick comparison with Europe will make this condition quite obvious. In Europe, attempts to unite the continent by force had been occurring since the end of Roman times. In contrast, South-east Asia’s diversity is rendered all the deeper by political and religious differences. This leads to conceptual miscellany in the understanding of basic concepts such as power, leadership, people or the role of patronage in politics.

Political integration in South-east Asia is therefore inconceivable in many ways. Collaboration in this area is more about border security matters, and non-traditional security threats such as epidemics, natural disasters and ecological catastrophes.

Asean Economic Community 2016Economic Integration Benefits are Real and Substantial

The region is also made up of relatively new polities and governments that are still very much focused on nation-building rather than integrating with their neighbours. In truth, it is only recently with budget airlines that South-east Asians have travelled more within the region. Most do not know their neighbours as well as they might imagine.

Second, let us look at the region within the larger geopolitical context. The region functioned both as a destination and thoroughfare throughout history for travellers, armies and missionaries from outside. Movement of people, goods and culture in and out of the region had been very free.

This porous characteristic made the region very vulnerable to colonisation, invasion and other turf wars. In the 19th and 20th century, the region was colonised by the Europeans, invaded by the Japanese, fought over by nationalist movements against the returning Europeans, and was a battle zone in the Cold War.

In the process, labour migration during this period changed the region’s demographics forever, and continues to do so today in new ways.

Gaining independence for many of these countries was not a return to an old polity; it was instead the start of new ways of political organisation that their newly installed governments did not always understand or master.

There is consequently a lot of defensiveness at the national, ethnic or cultural levels. Arguments over which country was the origin for which popular cultural item have been common, including whether the Malaysian national anthem has Indonesian roots or not, for example. And amazingly, after decades of seasonal haze clouding the region due to forest fires in Indonesia, it was only earlier this month that Jakarta accepted help from its gasping neighbours to help fight the fires.

Largely because of these historical geo-strategic and geopolitical conditions, South-east Asia is today almost by default a power vacuum. The nations each by itself cannot keep major powers out. The collective strength that Asean provides for each of its members is therefore highly valued.

Bound by nationalist economics

Suspicions remain so strong that outside powers, whenever they can, will reduce countries in the region to pawns in a bigger game. What is obvious to all is that economics decides the pace and nature of ASEAN integration. However, the economics that binds the region is essentially nationalist economics.

ASEAN’s modus operandi of consensus and unanimous decision-making is thus not a choice but a necessity. None of its members can accept being dictated to by its neighbours through a majority decision.

There are of course those who think that it is time for this tradition to be broken, but no major player really believes that this will happen any time soon. Nevertheless, ASEAN economic integration has progressed steadily, and this provides potential for the region’s new nations to influence international trends towards their own benefits. This is why ASEAN centrality is so important to these countries.

Much has been done to bring to fruition the ASEAN Economic Community (AEC). Many of the measures taken are gradual, slowed by long and laborious discussions and countless compromises. But then, what it is aiming to achieve is impressive as it is.

The AEC blueprint combines 625 million people into one integrated market and production base where the flow of goods, services, investments and skilled labour is free. Between 2008 and 2013, intra-regional trade jumped by 33 per cent from US$458.1 billion (RM1.9 trillion) to US$608.6 billion.

What ASEAN will be saying in December is that most of the necessary measures for South-east Asia to evolve into an economically-integrated region have been taken. Since early this year, it has been claimed that as much as 97.3 per cent of traded products within the region are duty-free.

Measures still awaiting completion most importantly involve removing non-tariff barriers. The significant ones are simplifying custom procedures, harmonising standards, minimising multiple testing of products and labelling requirements. As Malaysian International Trade and Industry Minister Mustapa Mohamed recently revealed, ASEAN has identified 69 such non-tariff barriers and resolved 45 of them.

Things are moving, and at a speed that its members are able to manage. But going forward, the question is whether ASEAN can keep pace with global developments. ASEAN has a tendency to be too dismissive of the relevance of the high speed at which the rest of the world is moving.

Furthermore, one worry often repeated today is that Indonesia, ASEAN’s biggest member, seems distracted by domestic issues, and its President, Mr Joko Widodo, is more interested in national solutions rather than regional ones. Time may not be on ASEAN’s side, and moving up a gear may be the region’s biggest challenge.

* Dr Ooi Kee Beng is the Deputy Director of ISEAS – Yusof Ishak Institute, Singapore.

On Leadership–Rafidah Aziz

October 28, 2015

Former Trade Minister Rafidah Aziz is right to advocate a mindsetDin Merican@Rosler change to enable Malaysians to think critically, have a passion for learning, undertake research, open their minds to new ideas by love of reading. Malaysian have to become global citizens.

The question is where to begin? My simple answer is that we should not be spending millions of ringgits on producing glossy master plans and blueprints prepared by foreign consultants (like Mckinsey and others) , which are  not read and understood and implemented by our Ministers and civil servants.

Permandu CEO, Idris Jala should no longer talk about transformation of the Malaysian economy, while that is important; in stead he should make the re-education of our inept and self-serving ministers and top civil servants and timid GLC chief executives as matter of priority. We need ethical leadership so that we have the capacity to implement much-needed administrative and structural reforms.

ITT Harold GeneenOur Ministers, senior civil servants and others in business have to be taught to lead by example. We need competent individuals, men and women in leadership roles, be it politics, business, public administration, and academia, who are knowledgeable and respected for their character, intelligence and conceptual skills, not a bunch of apple polishers, sycophants and jaguh2 kampong (village champions), who cannot think beyond their narrow self interests.

If we wish to operate in the blue ocean, instead of navigating the Pahang River, then we should educate our politicians and civil servants on good governance and ethical leadership. Everything starts at the top. There must be cultural change if we are to be a respected member of a global community. Being a developed nation requires us to think beyond GNI/GDP terms.

Our politicians, civil servants and business leaders, as champions of the status quo, are major obstacles to change. We need enlightened leaders who understand what leadership means. To me, to be a leader one must have impeccable character imbued with a high sense to duty to our King and country. –Din Merican

Time to change Malaysian Mindsets, says Rafidah Aziz

by Jennifer Gomez


RafidahMalaysia must identify what has made it fall behind and determine whether such factors were reality or people’s perceptions, outspoken former minister Tan Sri Rafidah Aziz said today.

She said the country must take stock of what areas needed to be transformed, adding that transformation could not take place in conferences, seminars or laboratories.

“You must have a developed country that is matched by a society that can think forward, that is not lagging behind in terms of expectations of a developed country,” she told reporters after speaking at a conference by the Malaysian Institute of Accountants in Kuala Lumpur.

The former minister of international trade and industry added that mindsets needed to be transformed first, and that Malaysia had to move away from politicising important issues.

“Mindset moves everything.We are politicising education to the disadvantage of our future generation, we are politicising issues based on the racial divide. We are politicising issues based on the gallery we speak to which is very divisive, we are politicising issues, which are far removed from the good of the people and the country.”

Najib-Razak-and-Rosmah-Mansor-Thumb-DownAntithesis of Moral and Ethical Leadership

Rafidah has of late been vocal on social media about current issues affecting Malaysia, including the country’s political turmoil and lack of confidence towards the government.

She has urged national leaders to provide clear answers to alleged wrongdoing involving the government, and only yesterday said Malaysia, which once enjoyed rapid economic growth, needed to rebrand itself.

Rafidah today said the school system must also be revamped so that students were taught correct values such as integrity and honesty.

Asked about Budget 2016 meeting the targets of becoming a high-income nation, Rafidah said there should not be too much excitement about it, given that it was just financial planning for one year.

She said instead, there should be more concern about longer term strategies to move towards 2020.

“The budget is just an annual allocation of funds, collection of revenue and programmes and projects, residual from previous years.I am not concerned so much on the quantitative aspect, money spent and projects done. I’m more interested in the mindsets of the people.

“Are the mindsets oriented towards first world mindsets?Are we readying the young to be the workforce of the first world? Are we readying the young to be able to interact globally?” she asked, adding that there was only five years left to achieve this.