1MDB Energy Assets to China–What’s the Quid Pro Co?


April 21, 2017

1MDB Energy Assets to China–What’s the Quid Pro Co?

by P.Gunasegaran@www.malaysiakini.com

Image result for najib razak the liar

Thank You, King, for the Donation. but not enough that is why I have to sell 1MDB Energy Assets to China. The financial hole is too big. Sorry bro, no more from me since my Kingdom needs money for our own needs.

The signing of the power purchase agreement (PPA) last week between national power utility Tenaga Nasional Bhd and Edra Energy Sdn Bhd, formerly owned by Malaysia’s infamous 1MDB and now owned by China company CGN Group, puts Edra under public scrutiny yet again.

This is a good time to note the enormous, potentially adverse implications that Edra has on our energy industry.

First, ever since independent power producers (IPPs) were introduced in the 90s, this is the first time that Tenaga is signing a deal with a 100 percent foreign-owned entity – all previous PPAs were signed with locally owned companies which have at least 30 percent bumiputera participation.

Second, the deal clearly shows that future development of IPPs were included in the sale price of RM9.83 billion paid by CGN to 1MDB, as pointed out by an article in The Sun newspaper.

This has major implications and may indicate that not sufficient account was taken of this in the sale price.

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According to the article, at the time of the announcement of the sale in 2015, 1MDB held two project awards that were yet to the developed, a 2,000MW combined cycle gas turbine venture and a 10x50MW utility scale solar power plant, which are also in the list of assets sold. At the time, no confirmation was made on whether the rights had been transferred to CGN.

1MDB agreed to sell Edra Global Energy to CGN Group for RM9.83 billion cash in November 2015 with the sale completed March 2016.

1MDB had paid a total of just over RM12 billion for the power assets earlier, all owned by Malaysian entities – RM8.5 billion from Ananda Krishnan’s Tanjong Energy Ventures renamed Powertek Energy Group, RM2.3 billion from the Genting group and RM1.23 billion for Jimah Energy Ventures.

Even so, analysts felt that CGN overpaid for the assets by about RM1 billion. However, with future power development ventures included, it looks like overpayment, if any, may have been a lot smaller.

But consider the implications of this – prime power assets, not just in Malaysia but in other countries as well, were sold off to a foreign company from China, basically switching ownership of these assets out of the country. 1MDB is fond of saying that it is a strategic development company owned by the government – how strategic is that?

Despite the overpayment, 1MDB’s only earning assets within its rather dubious acquisitions were the power assets under Edra.

It is telling that despite loans at one stage of RM42 billion in its books and few assets to show, it had to sell Edra to quash bank debts which were becoming fast due – clear evidence of major problems at 1MDB.

Some of the bond issues were taken to buy the energy assets but were diverted elsewhere.

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Najib Razak and his Kaki Bodeks

There is legitimate concern that this rescue of 1MDB by CGN is a quid pro quo for other China deals such as the RM55 billion East Coast Rail Line project and the RM40-80 billion KL-Singapore high-speed rail.

Under the latest PPA, Edra will construct, own, operate and maintain a gas-fired combined cycle electricity generating facility with a total nominal capacity of 2,242 megawatts to be located at Alor Gajah, Malacca.

It will consist of three generating blocks, and an expected commercial operation date of Jan 1, 2021 for the first generating block, March 1, 2021 for the second generating block and May 1, 2021 for the third generating block.

The PPA governs the obligations of the parties to sell and purchase the generating capacity and, to the extent dispatched, the electrical energy generated by the facility. The PPA will be for a period of 21 years from the commercial operation date of the first generating block.

However, the purchase price for electricity is not disclosed by Tenaga and it was not possible to obtain any figures from the Energy Commission website as well.

Scarcity of info on IPPs

From the time former Prime Minister Dr Mahathir Mohamad introduced IPPs in the 90s, there has been a scarcity of good information on IPPs and their deals – however one thing is clear, billions have been made by people who were essentially cronies of the PM and the ruling party then.

Over the years, the deals for IPPs have gotten progressively more in favour of Tenaga but Edra may jettison the progress made – there needs to be transparency to ensure that deals that are too favourable to IPPs are not signed as it was in the past.

For that, two quantities need to be disclosed – the purchase price for the electricity and the internal rate of return (IRR – the financially correct way of measuring returns) for the project.

The second needs to be audited by qualified people and their significance properly explained.Otherwise we are going to see a second round of masking of benefits, this time to foreigners.

Remember that Edra is no longer Malaysian but foreign owned – all 100 percent of it. And therefore it should no longer be entitled to the benefits that Malaysian companies get.

‘Malaysia first’ should be our slogan too. A Bernama article in April last year quotes Edra President and Executive Director Mark Ling who said the recent RM9.83 billion acquisition of Edra by CGN puts Malaysia in a strong position to develop ASEAN’s power sector. He of course got it wrong – it does not put Malaysia in that strong position but China.

He further said that Edra, backed by CGN’s capitalisation of US$60 billion, was now able to link through the Trans-ASEAN grids from the Philippines to Sabah, down to Sarawak and Sumatra.

“We are now able to immediately further enhance opportunities and commitments, opportunities which have been knocking at our door previously but which we were unable to entertain,” he said.

“And to actually have a Sarawakian lead Edra, it’s a great honour for us Sarawakians. We have to understand that we have got no barriers in convincing the rest of the world that we can do it. And I will be looking seriously into avenues of new energy businesses in Sarawak.”

Rather propaganda-ish! Well, if that’s the case, this means that this China-owned company is all set to get even more projects and that is extremely worrisome when you consider that Malaysian companies have the ability and the know-how to do the same – we never needed any help from China before.

Think Tenaga for instance. Why are we passing the baton on to a China company after spending so much effort to nurture and develop an indigenous power generation industry with international capability?

Is this yet another mysterious strategic development initiative followed upon by an earlier one by 1MDB? How much will we end up eventually paying for 1MDB’s transgressions in addition to the tens of billions of ringgit already lost and stolen?

P GUNASEGARAM says desperation and corruption are a potent combination for bad business. E-mail: t.p.guna@gmail.com.

Numbers and Shifting Assets –Old Game by Sime Darby


April 13, 2017

A QUESTION OF BUSINESS | Numbers and Shifting Assets –Old Game by Sime Darby

by P. Gunasegeram@www.malaysiakini.com

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Sime Darby Restructuring benefits Investment Bankers, but not its shareholders. Let the evidence of its past merger and demerger exercises confirm this view.–Din Merican

It will be more accurate to say that plantation-based conglomerate Sime Darby Bhd’s proposed demerger of its businesses will not create value by itself but only if benefits of the intended demerger, coming nine years after its massive merger, is realised by proper execution.

The billion-ringgit question this time around is whether the proposed demerger will create value for the group when it seemed not to have the last time around when it was merged with other major companies.

Recall that this conglomerate, majority owned by Permodalan Nasional Bhd or PNB, the operators of the national unit trust scheme, merged mainly with Guthrie and Golden Hope – both under the PNB stable too – to become the largest plantation operator in the world in 2008.

Initially at that time, the expensive merger, costing some RM500 million in fees alone, was greeted by an enthusiastic market and galloping prices of palm oil which saw Sime Darby become the most valuable company on the local market for a while.

Eight listed entities were involved in the merger, proposed end-November 2006. They were Sime Darby Berhad, Sime Engineering Services Berhad, Sime UEP Properties Berhad, Golden Hope Plantations Berhad, Mentakab Rubber Company (Malaya) Berhad, Kumpulan Guthrie Berhad, Guthrie Ropel Berhad and Highlands & Lowlands Berhad.

The early reception by the market for the merger was enthusiastic. The share price almost doubled to RM13.30 by January 11, 2008 after the completion of the merger, from RM6.75 when the deal was announced end-November 2006.

But Sime Darby would never hit that level again. Barely two years later, its energy and utilities division chalked up heavy losses of over RM2 billion, entering into areas it had no knowledge off. Its then-CEO faced charges in court but was subsequently cleared.

Paradoxically, the energy and utilities division was a minnow but was able to get contracts because of Sime Darby’s size – it turns out that size in this case was not used to get viable contracts but enter into risky ones.

Despite a new CEO, Mohd Bakke Salleh, who sold the errant division in 2011, Sime Darby’s share price has been lacklustre and languished at around the RM7-8 level until excitement over the demerger emerged last November. The share trades around RM9.30 now.

Still Sime Darby is big, representing PNB’s largest investment in the stock market after Malayan Banking and is regularly among the top five most valuable companies listed on the Kuala Lumpur stock market, with a value of over RM60 billion. And it’s the only conglomerate in the top 10.

However, although known as a conglomerate, it continues to be heavily plantation based with over half of profit coming from that sector. Its fortunes are therefore intimately tied with the price of palm oil, its main plantation produce.

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Bakke said at a press conference end-November last year that the plantations unit may be demerged and listed separately next year, followed by its property division. That had sparked some interest in Sime Darby shares again.

In January, Bakke confirmed in a statement that Sime Darby will create “pure play” listed entities for its plantation and property divisions. Others, including its BMW distributorship, port operations and trading, will remain under the existing listed entity.

Meantime, PNB group chairperson, former Minister in the Prime Minister’s Department Abdul Wahid Omar, said last month that excitement over the restructuring of Sime Darby amongst others have led to a RM20 billion increase in the value of PNB’s six main listed entities.

True value creation

However, such an increase in market value arising from perception can be very short-lived as illustrated in the previous share price movements of Sime Darby. Short-term market sentiment should never be mistaken for true value creation which is creating value in the production process by improving productivity.

At the end of the day, that is the only way to create value – by improving productivity. Is a merger or demerger going to create value by itself? No, never.

It can if a merger results in economies of scale or where there are overlapping functions in which case staff can be laid off. That effectively means less people doing more work – an increase in productivity. But even so, the truly enlightened company will think of redeploying staff into other areas instead of laying off, although that’s the quickest way.

But most mergers destroy value – studies at the time of Sime Darby’s merger in 2008 showed that 85 percent destroyed value. It’s not hard to see why – sometimes mergers take years before their values can be realised and valuable time is wasted. Meantime, productivity suffers.

In a demerger, it is possible that the increased focus and concentration on the core business can result in higher productivity but there has to be a focus on that by competent management.

On balance, demergers may have better chances of creating value than mergers but the most important factor is who is managing the change. If the same people are doing the same things in the same old, expect neither mergers nor demergers to create value.


P GUNASEGARAM says value cannot be created by simply rearranging the same assets differently – someone has to work the assets more efficiently. E-mail: t.p.guna@gmail.com.

Kampong Chhnang Province
Related image
Kampong Chhnang is one of the central provinces of Cambodia. Neighboring provinces are Kampong Thom, Kampong Cham, Kandal, Kampong Speu and Pursat. The capital city of Kampong Chhnang Province is Kampong Chhnang. Wikipedia
Area: 5,521 km²
Population: 472,616 (2011)
Area rank: Ranked 14th

NOTE: I am on an assignment to Kompong Chhnang from April 13-15 and will not be blogging during this period. I will also not be on Facebook either. Take care.–Din Merican

PROTON: The National Albatross


March 30, 2017

PROTON: How long more can Malaysian Taxpayers bear the Burden of this National Albatross

by P. Gunasegaram@www.malaysiakini.com

Proton is a clear case of how a wrong policy – producing our own national car – can cost the consumer hundreds of billions of ringgit over the decades of its implementation. Enough has been wasted with the government already giving out some RM15 billion in grants and the latest loan. If Proton can’t find a foreign partner, it is best to let it simply go under.–P. Gunasegaram

Image result for Mahathir and Proton

Mahathir masih belum terima realiti bahawa Projek PROTON idaman beliau itu gagal

PROTON, both car and company, have been a problem from day one. It should have been resolved three decades ago but has been allowed to snowball to epic proportions. Even the current search for a foreign strategic partner (FSP) appears bogged down.

That’s because till today, in the midst of negotiations to find a FSP, there is an ingrained reluctance to surrender control to bring in the technological expertise, business acumen and international standing to turn Proton around. If this transigence does not evaporate, then Proton will not have a deal.

That prolongs the suffering of Malaysians who since 1985, when the first Proton Saga rolled off the plant in Shah Alam, are paying much higher prices for cars, sometimes two or three times the price in other countries, because of protective barriers. According to my calculations, this could have amounted to as high as RM360 billion that car buyers have sacrificed in duties to the government and subsidies to manufacturers.

I have used estimated sales of some 12 million vehicles between 1985 and 2016 of which some four million vehicles sold were Protons. I have estimated, conservatively, that the average price per vehicle was RM30,000 higher because of protective barriers. Multiply this by 12 million vehicles for RM360 billion. You may disagree with the exact figure but there can be little doubt that the order of magnitude is in the hundreds of billions of ringgit.

If it was purely a question of business, Proton would have been sorted out a long time ago. But like many things in this country, it became an issue of national and even Malay pride, local capability and capacity, and one man’s plain old-fashioned stubbornness in the face of overwhelming evidence that it could not work.

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Najib is afraid to shut down PROTON

Proton, then controlled by sovereign fund Khazanah Nasional Bhd, was about to sign a deal with Germany’s Volkswagen in 2007 when the deal was jettisoned days before the signing by intense lobbying to then Prime Minister Abdullah Ahmad Badawi. Among the lobbyists were said to be then International Trade and Industry Minister Rafidah Aziz and those associated with former Prime Minister Dr Mahathir Mohamad, whose “brainchild” Proton is.

Then as now, Proton’s problems are well-known — lack of technical knowhow to produce reliable vehicles cheaply and insufficient production to benefit from economies of scale and develop new, viable models – two factors which feed off each other to make things progressively worse.

The only thing which helped to produce profit in the past were high tariff barriers and rebadged vehicles from manufacturers such as Mitsubishi in the early years and Honda in the later years with little more than assembly involved.

What has Proton to offer? Mainly two things. One, excess production capacity which means there is little lead time to production. Two, access to the 10-member 623-million-people Asean market whose member nations have largely dismantled discriminatory tax barriers for cars among themselves – except for Malaysia which imposes a thinly disguised discriminatory excise duty based on “local” content.

The solution is simple and straightforward. Give a competent foreign partner majority stake and control of the manufacturing operations at a reasonable price. Try and maintain control of domestic sales and marketing. That is as much as one can hope for – the operation is losing money by the bucketloads and the outlook is ominous to say the least.

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 The Clear Winner is Produa, thanks to Daihatsu Technology combined with savvy sales and marketing owned by local interests

Failed Proton’s arch rival Perodua, also a national car project, is succeeding. Why? Perodua has access to technology from Daihatsu which in turn is owned by Toyota – its cars are therefore much more reliable than Proton’s. Not many people know this but Perodua’s manufacturing is majority foreign-owned while sales and marketing is majority owned by local interests.

But even now, when it has its back against the wall and some RM1.5 billion in support loans from the federal government to keep it going meantime, Proton is balking.

Geely pulls out

According to an article in the South China Morning Post, China’s successful home-grown auto manufacturer Geely Automobile Holdings has withdrawn from a bid to acquire a controlling stake. It quoted Geely’s President An Conghui.

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Geely Chairman  Billionaire Li Shufu

An did not elaborate on the reasons for the decision, but Li Shufu, its chairperson, had previously indicated the Malaysian firm had been “uncertain” about what it wanted from an overseas partner, in an interview with Bloomberg earlier this month, the report said.

Why the uncertainty?

However, listed DRB-Hicom, Proton’s shareholder and eventually majority owned by prominent businessman Syed Mokhtar AlBukhary, denied Friday that Geely has pulled out. Proton has reportedly lost RM2.5 billion since DRB-Hicom took it over in 2012.

That takeover represents a series of musical chairs when different companies were left holding the parcel as this article I wrote for The Star in 2012 explains. It passed from the government’s Heavy Industries Corp of Malaysia or Hicom to Diversified Resources Bhd or DRB, later renamed DRB-Hicom, to national oil corporation Petronas when DRB-Hicom was rescued and then to Khazanah Nasional which sold it back to DRB-Hicom, now controlled by Syed Mokhtar. DRB founder, Yahya Ahmad who was well-regarded by Mahathir – was killed in a helicopter crash in 1997 before Proton was sold to Petronas.

Geely, the owner of the Swedish Volvo brand, was considered the favourite to acquire a controlling stake in Proton although Europe’s second-largest carmaker Groupe PSA, which owns the Citroen, Peugeot, and DS brands was still in the running.

If indeed Geely has pulled out, and it seems rather likely it has, that will leave Groupe PSA as the sole contender for Proton, giving Proton very little room to bargain.

There is no choice but for Proton to get an FSP. That should have been done 10 years ago. As time passes on, there is less and less reason for companies to set up manufacturing here. They can simply go to Thailand which is already a manufacturing hub. Or Indonesia.

Once Proton is taken over, then all that’s left to do is to set a timetable to dismantle the high tariffs for cars and put everyone on a level-playing field. And finally enable Malaysians to benefit from reasonable car prices. Presumably, with the FSP, Proton will have no more need for protection because it will have scale and technological expertise, becoming a regional manufacturer for the FSP.

Proton is a clear case of how a wrong policy – producing our own national car – can cost the consumer hundreds of billions of ringgit over the decades of its implementation. Enough has been wasted with the government already giving out some RM15 billion in grants and the latest loan. If Proton can’t find a foreign partner, it is best to let it simply go under.

Over the decades, Malaysians have paid hundreds of billions more ringgit for cars. Our calculations indicate RM360 billion. How much more do we have to pay before this long, sorry, sad saga is finally brought to an end?


P GUNASEGARAM says: “The government never pays the price of protecting local industry, the consumer always does.” E-mail: t.p.guna@gmail.com.

Policy uncertainty threatens trade growth, says World Bank


February 22, 2017

Policy uncertainty threatens trade growth, says World Bank

Warning on protectionism and threats to trade agreements in Trump era

https://www.ft.com/content/9d49b092-f859-11e6-9516-2d969e0d3b65

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Political uncertainty is slowing trade growth, a World Bank report has concluded, indicating that the rise of Donald Trump may already be casting a shadow over the global economy.

Major international institutions such as the IMF, the OECD and World Bank have recently upgraded their forecasts of global economic growth largely due to expectations that tax cuts, rising infrastructure spending and a wave of deregulation will boost the US economy under the new president. But the report by World Bank economists, released on Tuesday, highlights the fragile state of one historically important engine of global growth — trade.

To the extent that the policy uncertainty will remain high we should continue to expect [global] trade growth to be subdued. Michele Ruta, World Bank report co-author

The study avoids naming Mr Trump, but highlights rising protectionism and threats to unwind trade agreements — such as those made by the president. It also raises the prospect that attempts by the Trump administration to force companies to repatriate global supply chains to the US could undermine efforts to boost lagging productivity growth. To the extent that the policy uncertainty will remain high we should continue to expect [global] trade growth to be subdued Michele Ruta, World Bank report co-author International trade has been growing below historic trends for the past five years. The 1.9 per cent growth recorded in 2016, according to the team at the bank, was the slowest since the 2009 collapse in commerce that followed the global financial crisis.

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Prime Minister Justin Trudeau meets with U.S. President Donald Trump in the Oval Office at the White House–The Future of NAFTA

The team found that some of the reasons for the anaemic trade growth, which affected both developed and developing economies, were broader trends such as slow economic growth around the world and a collapse in commodity prices. But in 2016 the principal change was a surge in uncertainty about economic policy. According to the World Bank’s calculations, such uncertainty was responsible for 0.6 percentage points of the 0.8 percentage-point fall in trade growth between 2015 and 2016. The team at the bank based their figure on a study of the relationship between trade and economic policy uncertainty in 18 countries over three decades. They added they expected the impact to continue in 2017. “To the extent that the policy uncertainty will remain high we should continue to expect [global] trade growth to be subdued,” said Michele Ruta, one of the authors. The World Bank team also sought to quantify the impact of trade agreements on global trade growth. World trade grew at an annual rate of 6.53 per cent between 1995 and 2014, they calculated. Had no new members — including China — joined the World Trade Organisation or no new trade agreements been signed, international trade would have grown at just 4.76 per cent annually, they found.

One of the big consequences of the explosion in trade deals in recent decades has been the emergence of global supply chains. Such chains are widely seen by economists to have made businesses more efficient and boosted productivity. But Mr Trump and his administration have said they want to unwind those international supply chains and bring them home. “It does the American economy no long-term good to only keep the big box factories where we are now assembling ‘American’ products that are composed primarily of foreign components,” Peter Navarro, one of the president’s top trade advisers, told the Financial Times last month.

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According to the World Bank team such a move, coupled with unwinding existing trade agreements that have encouraged the establishment of international supply chains, would hurt productivity growth. “Preserving and expanding the reach of trade agreements, rather than backtracking on existing commitments, would help to sustain the growth of productivity,” the bank’s economists wrote.

Racist Politics in Malaysia–Blame the Whole Shebang


February 19, 2017

Racist Politics in Malaysia–Blame the Whole Shebang

by S. Thayaparan@www.malaysiakini.com

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It was obvious that bigotry was never a one-way operation, that hatred bred hatred!”

– Isaac Asimov, ‘Pebble in the Sky’

COMMENT: Readers interested in what I write should consider this a companion piece to my article describing how non-Malay Malaysians (specifically) are a tolerant lot.

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Mahathir’s First Carma (Cari Makan) Journalist–A Kadir Jasin

De facto opposition leader and former Prime Minister Tun Dr. Mahathir Mohamad casually mentioned last week that he was partly to blame for the demonisation of DAP. I suppose this went together with veteran journalist A Kadir Jasin’s admission that he was part of the brainwashing that went, and goes on, in UMNO. They say admitting you have a problem is the first step, but I doubt that the indoctrination of Malay youths will cease any time soon when the opposition is made up of Islamic groups determined to use Islam as a political tool.

I wrote the last part of the above paragraph after the opposition had suffered a setback in the by-election where the current UMNO grand poobah was supposed to receive a black eye but apparently, the opposition punched itself in the face. A reader had emailed and asked if the schadenfreude tasted good, especially since I had predicted the results.

I take no pleasure in any opposition defeat and neither do I take pleasure in a UMNO win. This is the bitter taste of having to choose between the lesser of two evils. Furthermore, when I say “evil”, do not get your panties in a twist because it is an expression and not a description of either political fronts. These days I cannot tell the difference between winning and losing when it comes to “saving Malaysia”.

As I have argued before, a country can recover from corruption scandals, but it rarely recovers from that type of Islam that neutralises the democratic imperative. In Malaysia, where race and religion are not mutually exclusive, the threat from Islamists is coupled with ethno-nationalism.

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The  First Malay Nationalist (or is it Racist?)

The de facto Opposition Leader is right when he says that he demonised DAP as DAP and other opposition parties had demonised him. However, the reality is that these political parties were not only demonising their political rivals, they were demonising entire communities.

So, when you want to win, and you demonise your political opponents, and by extension whole communities, the political terrain becomes a battleground for competing racial interests instead of ideological or policy ideas.

This is why I have always been sceptical of the opposition propaganda about voting across racial lines. In one of my numerous articles about race relations in this country, I wrote: “In addition, this idea that voting across racial lines as some sort of evidence of burgeoning multiracial solidarity is complete bunkum. The real test is when people vote across ethnic and religious lines in support of ideologies that run counter to the interests of their communities and by this, I mean egalitarian ideas that run afoul of constitutional sacred cows and social and religious dogma.”

While the former Prime Minister (and now de facto Opposition Leader) and the system contributed to Malay fear of DAP, the whole political system and voting patterns of Malaysians is also culpable for this sad state of affairs. UMNO succeeded because the majority of Malaysians voted for race-based parties. Racial preoccupations were the currency that sustained BN politics and still does.

The problem is that because we do not have an alternative, BN politics is the only game in town. Non-Malay oppositional voices and voters do not demand an alternative but rather that the system continues but in a more “fairer” manner.

DAP and MCA furiously battle for the Chinese vote. Meanwhile Malay-dominated so-called multicultural parties battle with UMNO and now PAS for the Malay vote. Until the former Prime Minister showed up, there was no central theme that united the Opposition.

While the charismatic Anwar Ibrahim and the late Tok Guru Nik Aziz Nik Mat discovered that populism does not necessarily mean racial or religious preoccupations when it comes to cobbling together a formidable coalition, the emergence of the former Prime Minister as the de facto opposition leader has given the current UMNO regime an opportunity to:

1) Revisit history.

2) Dredge up the financial scandals of the former Prime Minister.

3) Point out that their strategies for securing the Malay vote is based on his strategies that kept him in power for decades.

If anyone is wondering why questions of race always revolves around the Malay and Chinese dialectic, it is because… well, if you are going to ask this question, you have obviously not being paying attention.

All are participants in race game

When I argued that Malaysians were a tolerant lot, the thrust of the piece revolved around how systemic inequalities were a detriment to the non-Muslim population but I failed to emphasise how the non-Malay communities were active participants in the race game in this country.

Voting for race-based parties meant that we did not have to concern ourselves with egalitarian concepts that would have been the basis for a more democratic system. It was not that we were “immature” or “uneducated”, it was just easier to vote for a political hegemon that provided security and stability for decades but not the rights and responsibilities that are part and parcel of a functional democracy.

Image result for UMNO's Grand Poobah Najib Razak

UMNO’s Money Stealing Grand Poobah

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Tolerance may have been a one-way street, it was also the street where we stopped by the sidewalk and spat at the “Malays”. There is the other narrative of non-Malays engaging in subtle and overt racism, all the while supporting racial political parties that claimed inclusiveness.

The majority of us did this to ensure that our racial preoccupations were satisfied by a plutocrat class instead of demanding for an accountable and transparent government, but more importantly demanding for a principled opposition who fearlessly made their positions clear instead of championing communal causes under the guise of “multiracial/culturalism”.

The private sector was (is) dominated by Chinese polity who were perpetuating their own form of systemic inequalities and contextualising this reality as a response to the systemic inequality perpetrated by the UMNO Malay state.

While I think, there is generally “a live and let live” vibe between Malaysians, it would be a mistake to assume that this is some sort of national identity or some form of stable unity. I realise that this is political incorrect to say, but the hard truth is that while race relations have been manipulated by establishment (both UMNO and the Opposition), the reality is that there was always tensions between the various races of this country.

This is why talking about “race” in this country is such a demoralising endeavour. Appeals to emotion replace rational discourse. The fact that our constitution is compromised, the system itself is predicated on maintaining racial and religious superiority, makes any discussion about how the non-Malays react to such a system, their complicity in sustaining the system difficult to articulate.

The fault of UMNO and the Opposition is that nobody offered an alternative and Malaysians never expected anything better.

You know what the big difference is between the corruption scandals of UMNO back in the day and the one now is? The difference is that a vast majority of Malaysians kept voting UMNO-BN back then than they do now. This is a testament to not only the political strategies of Mahathir but also the apathy of the Malaysians. This of course is a boon for the Opposition because Mahathir seems to be the only person who can galvanise the opposition. The more things change, the more they remain the same.

 

Harping on Chinese FDIs in Malaysia


January 16, 2017

Harping on Chinese FDIs in Malaysia

by Josh Hong @www.malaysiakini.com

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A leopard never changes its spots, does it? Having failed to offer a set of alternative policies and convince the general public of their ‘reformist’ credentials, Dr. Mahathir Mohamad, Zainuddin Maidin and Muhyiddin Yassin are now all back to bashing Najib Abdul Razak along the not-so-subtle racial lines.

Yes, China has been investing aggressively in Malaysia, but the Chinese are not the first ones who came, saw and conquered our market in recent years.

Before that, the Americans, Japanese and Arabs, too, had pursued very proactive business strategies in South-East Asia. With its relatively well-developed infrastructure and affordable land, Malaysia stood to benefit tremendously from their investments for more than three decades.

Since the 2000s, the Arabs, too, have been investing heavily in strategic industries in Malaysia, especially the petrochemical sector and real estate development, with the United Arab Emirates emerging as one of Malaysia’s largest trading partners and among the most vigorous investors in Malaysia’s oil and gas industries.

Mubadala Petroleum is currently setting its sights on Sarawak, while the International Petroleum Investment Company remains a key investor in Malaysia despite the 1MDB debacle. Both Putrajaya and Abu Dhabi maintain bilateral and trade relations are rock solid.

Meanwhile, the Qatar Investment Authority is a big player in Malaysia’s strategic real estate, commodities and energy sector. In 2013, it had plans to develop the Pengerang Integrated Petroleum Complex in southern Johor that was worth US$5 billion, aimed at making the country a petrochemical regional hub, not too dissimilar from China seeking to help turn Malaysia into a ‘transportation hub’ via Bandar Malaysia and the proposed high-speed rail terminal.

Even less well-known was that an agreement was signed in 2012 to make Qatar Holding a cornerstone investor in Felda Global Ventures Holdings Berhad, no doubt a highly important and vitally strategic global agricultural and agri-commodities company, while the Kuwait Investment Authority invested US$150 million in Malaysia’s IHH Healthcare.

At one time, the Qataris and the Najib government even agreed to build a ‘seven-star’ Harrods Hotel in the Bukit Bintang area in Kuala Lumpur, right next to the upmarket Pavilion shopping mall. The business venture somehow went awry and subsequently called off.

This aside, Saudi Arabia several years ago ranked fifth among Malaysia’s leading sources of investment, just behind Japan, South Korea, the US and Singapore. China was nowhere to be seen then.

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Mind you, PetroSaudi International was deeply involved in the scandal-ridden 1MDB and the Saudi Foreign Minister Adel al-Jubei even confirmed in April last year that money was wired into Najib’s personal account and it was a “genuine donation with nothing expected in return”.

Now, one may derive from the s statement that the Kingdom of Saudi Arabia was complicit in corruption on a global scale but did any Malay or Muslim leader in UMNO or outside of it accuse the Saudi government of seeking to undermine Malaysia’s sovereignty or taking over the country? Is Saudi Arabia beyond reproach simply because it is where Mecca, Islam’s holy city is located?

The Arabs have been coming but no-one, certainly not UMNO, Mahathir or his minions in Bersatu, has said a word against investors from the Gulf region.

Nobody is talking about Najib turning the country into an Arab colony except for Marina Mahathir who lashed out at ‘Arab colonialism’ because traditional baju Melayu for women are now more difficult to find than in the old days as compared to the increasingly popular Arab attire. But her father has yet to cast aspersions on Najib selling Malaysia out to the Arabs through all the strategic investments.

Instead, Mahathir has been harping on Chinese nationals buying up lands and properties and blaming it on Najib, hoping that this would heighten the siege mentality of the Malays which would in turn alienate them further from UMNO.

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But Mahathir’s subterfuge can escape anyone but me. After all, it was his alleged racist rhetoric that kept him in power for over two decades, and Malaysia’s complex racial dynamics have created a fertile ground for a cunning strategist like him.

Crafted with the Malay constituency in mind

The messages by Mahathir, Zainuddin and Muhyiddin are not a coincidence, for they are all carefully crafted with the Malay constituency in mind.

They cannot openly demonise the Chinese Malaysian community because they need to ensure the opposition parties including DAP win enough Chinese votes, but at the same time, they are in dire need of denying Najib critical Malay support. So the best way to achieve this is to play up China as a bogeyman.

Mahathir and Bersatu may appear to be concerned over the influx of mainland Chinese capital and money, but their articulation is nothing but a veiled warning to the Malays that continued support for Najib would mean a greater Chinese presence in Malaysia, to the detriment of the ‘indigenous population’, of course.

Why pick on the Chinese when your Muslim brethren from the Middle East are no less commercially greedy and strategically ambitious?

It is not very different from the days when Mahathir ‘cari pasal’ (find fault) with Singapore in order to consolidate the Malay base. Stigmatising Chinese Malaysians comes at too huge a political cost, hence the sudden ‘realisation’ of mainland Chinese investments being a threat.

It is nothing more than a repackaged argument that, in favouring the (mainland) Chinese, Najib would only end up marginalising the Malays, just like the British.

If Mahathir and his cohorts have an issue with excessive foreign investments, they must not just single out China but the Gulf countries also. Mahathir may even question his own national car policy which only resulted in Malaysia becoming almost totally dependent on Japan for spare parts and technology, while failing to make Proton a car giant as he would have dreamed!

I have a problem with Islamic conservatism, but I have no problems with the Muslims; I am sceptical about American expansionism but I am fine with the American people; I am opposed to Israeli policies on Palestine but I don’t hate the Jews; I disagree with Shinzo Abe’s historical revisionism but I appreciate Japan as a wonderful country, and I look askance at communist ideology yet I enjoy the friendship of my mainland Chinese friends.

And I remain very much a leftist and a liberal who considers neo-liberalism a major source of the global chaos today. But unlike Mahathir, I vow not to use race or religion as my weapon even if I am wary of the destructive power of capitalism, because I have always been acutely aware of the hard fact that capital and money have no motherland.

Go on supporting Mahathir and Bersatu if you want, and I won’t shed a tear for you even if one day you find yourself trapped in the quicksand of racial politics and unable to be free.


JOSH HONG studied politics at London Metropolitan University and the School of Oriental and African Studies, University of London. A keen watcher of domestic and international politics, he longs for a day when Malaysians will learn and master the art of self-mockery, and enjoy life to the full in spite of politicians.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.