Malaysian Economy: 2016 uneventful but 2017 is not rosy either


January 20, 2017

Malaysian Economy: 2016 uneventful but 2017 is not rosy either

By Dr. Shankaran Nambiar

2016 has been rather eventful for the Malaysian economy. The growth rate — the one big indicator of macroeconomic health — has crumbled. From a past average of 5 per cent in real GDP growth, 2016 is likely to see something like 4.2 per cent.

Related imageLike Tun Dr. Mahathir Mohamad in 1997, Najib Razak can now blame the Jews for Malaysia’s Economic Woes, instead of his inept economic management

What is of more concern is that growth in the country is mostly fuelled by domestic demand, which grew by 6.3 per cent in the second quarter of the year — picking up from the 3.6 per cent growth of the first quarter. Domestic demand has its limits given the small size of the domestic economy and the short duration that domestic demand can push growth for.

By contrast, external demand has taken a thrashing in the past months. Growth in net exports shrank by 3.8 per cent in 2015, sank to negative 12.4 per cent in the first quarter of 2016, and remained dismal in the second quarter at negative 7 per cent.

External demand is unlikely to rise again soon. The Japanese economy is not showing signs of any major pick-up. The Chinese economy is heading for a (hopefully gentle) slowdown, and Europe is unlikely to provide export demand for Malaysia due to Brexit and the fear of its potential successors. Malaysia will have to look to the improving US economy for help in spurring its export numbers.

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Asking Money from taxpayers

But there is also a flip side to the strengthening US economy. The Trump administration may roll-up the TPP, hurting Malaysian trade and investment — both crucial variables for Malaysia’s economy at this juncture. What’s more, the Federal Reserve’s decision to hike up interest rates in December 2016 was not in Malaysia’s favour. The hint that there may be at least three more rate hikes to come in 2017 is not welcome news and raises the threat of the ringgit sliding further against the US dollar.

It is not surprising, therefore, that export growth was at 2.7 per cent in the first quarter of 2016 and dropped to 1.4 per cent in the second quarter. Average export growth for the first eight months of this year has been a mere 0.9 per cent (it was 6.3 per cent in 2014). If this trend persists, the trade balance will likely shrink.

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Against this rather stark background, the rationale for Malaysia’s 2017 budget becomes understandable. The budget is primarily targeted at increasing domestic demand. Its measures include RM2.6 billion (approximately US$579 million) more financial aid for the 1Malaysia People’s Aid program and various other programs to increase access to housing — particularly for those in the bottom 40 per cent (B40) of income-earners. There are also incentives for public servants as well as RM50 million (approximately US$11 million) to train 20,000 graduates to enhance their employability.

While these efforts will likely increase domestic demand, their appropriateness is questionable. For instance, the intention of extending financial assistance to the B40 runs against the grain of upholding a market-oriented, subsidy-free economy. Once financial aid is provided it will be difficult to withdraw it. As for graduate employability, the problem should be treated as a structural one, rather than ad hoc and directed at only 20,000 graduates. And the policies for improving access to affordable housing are insufficient given the enormity of the problem.

Nevertheless, it is noteworthy that the government is committed to fiscal discipline and also determined to close the fiscal gap. A widening deficit will be detrimental at this point, although if there had been a good record on this score in earlier years it might have been a convenient tool to reach for.

The rapidly slipping value of the ringgit against the US dollar is another flash point. Although most emerging markets have experienced drops in their respective currencies against the dollar, the ringgit has suffered the biggest relative fall in the region. One reason for this is the perceived decline in good governance. Although the Malaysian authorities have cleared 1MDB of any wrong-doing, continued reporting in international media and the US Department of Justice’s interest on the matter may have put off some foreign investors.

In the face of the falling ringgit, Bank Negara Malaysia (BNM) has reminded market players that the ringgit is still not a fully internationalised currency. BNM has requested that non-resident foreign banks don’t engage in non-deliverable forward-related (NDF) transactions. In restricting NDF trade the central bank is only ‘re-enforcing’ existing rules against offshore trading of the ringgit. But foreign traders have been sceptical of the move.

Another measure to curb the falling ringgit has been to impose the requirement that exporters can only retain up to 25 per cent of export proceeds in a foreign currency, while the remainder must be converted into ringgit. Bank Negara Malaysia has stated that exporters are free to convert currency to meet up to six months of loan obligations not denominated in ringgit, stoutly denying claims that these measures are tantamount to capital controls. Nevertheless, they are interventions in the market and disrupt the decision-making process of exporters.

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2017 may not be rosy for the Malaysian economy. Taking a pessimistic view, the growth forecast could slip to the range of 4–4.2 per cent for the next year. We can take solace in the fact that the fuzzy edges of oncoming negative news can be vaguely seen in the distance and it is easy to count on Malaysia’s seasoned and expert policymakers to manage these predictable shocks.

Dr.Shankaran Nambiar is the author of the recently published book Malaysia in Troubled Times. He is also a senior research fellow at the Malaysian Institute of Economic Research. The views expressed in this article are his own.

This article is part of an EAF special feature series on 2016 in review and the year ahead.

Shameful Injustice


January 20, 2017

Shameful Injustice

by KJ John@www,malaysiakini.com

What is the cost of one human life? What if the person is an Islamic State (IS) terrorist? Does his life cost any less? What if the person is a Palestinian? What about an Israeli? Are there different rules of human value for different peoples? What would be that basis? Would it be colour or ethnicity or looks or brains? What then do we humanly mean by rule of law, in any state; is it not more like, all men are brothers, but some are more equal than others?

Recently, a court in Israel found a soldier “guilty of manslaughter, rather than murder”. I do not know the full facts of the case, nor am I really too interested in specifics, but suffice to know that I heard three versions of news reports on the matter; from Al Jazeera, BBC and CNN. To me, it was a simple case story of an act of cold-blooded murder.

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Elor Azria was the Israeli soldier charged with manslaughter after shooting a prone and wounded Palestinian assailant in the head.

All three channels spoke of “obvious and willing killing of the injured Palestinian with a shot through his forehead by that lone soldier”. It was a military court in Israel that found him guilty of manslaughter but my question is, why was it re-framed as “manslaughter” when it was obvious that the criminally convicted soldier knew that the Palestinian was already badly injured and “essentially captured”?

But this soldier still chose to put a bullet through the Palestinian’s forehead. Did we not already deal with such concerns at the Nuremberg Trials? Adolf Eichmann claimed he was following orders and was declared guilty by an Israeli court.

Culture of closing one-eye on facts

The scientific method of verification of truths in a modern court is based on two equally rational systems of fact-finding; one based on evidence-based facts, and then there is a due process of rule-making and decision-taking but all designed to questioning and challenging these methods for certainty assertion. The judges decide finally.

Therefore, when all such due processes are followed, in all matters, the question of how the judgment is received is moot and quite irrelevant! But, in the above specific case, my concern is that “the system had compromised justice even before the case started”. Why do I say this?

Image result for Chelsea Manning and President Barack Obama

Private Chelsea Manning who leaked classified information to Wikileaks was pardoned by President Barack Obama–A Controversy.

Why would the public prosecutor agree that the original charge made, after police investigations, to be reduced to manslaughter? Why would the Israeli military court allow such a negotiated compromise even before hearing the facts in this case? The soldier shot the injured Palestinian through the forehead 11 minutes after he was lying on the ground. It was murder by most definitions.

Is this ‘really showing grace’ or was this not really ‘an abuse of the due process of law?’ There are already international rules of conduct in public places under non-war conditions. Even if their Israeli mindset is in a constant state of war-mindedness, is such an act and visible breach of human law of mutual regard, by another human being, right, good, and true?

How then can an entire onlooker global and Israeli system choose to close one eye if the appeal of Israeli Prime Minister Benjamin Netanyahu to abrogate the verdict is subsequently taken seriously? Are we not creating and promoting a culture of obvious wrongdoing and closing one eye to all such wrongs?

High-level collusion for corrupt motives

Whether in Israel, or Myanmar, or ‘Melayusia’; are not a culture of collusion in favour of corrupt values, and the consequent abuse of democracy, a denial of our only real ideal?

In my current lived geography, quite unaware of what they are really doing, a group of vigilantes have been doing almost a similar thing, as follows:

1. Some volunteers formed a society and registered it with the Registrar of Societies (ROS). But their constituent members are only selective members (of only four roads) even though they claim to represent the entire community or settlement with their name ‘Katura’ or Kampung Tunku Residents Association which should theoretically represent all 30 roads of the Kampung Tunku settlement, and not just the selected four.

2. They claim to have got the Petaling Jaya City Council’s (MBPJ) agreement with their ‘illegal and unrepresentative proposal’ to create a pseudo-guarded community made up of only four out of 30 streets.

3. I have registered more than one complaint with the mayor, and another with the council and a third with the police and to date there is still no hope on the horizon for those of us who feel like Palestinians in an Israeli-claimed geography.

4. Recently also, all others who are badly affected by the programme’s road closures are also protesting. These three road closures are affecting drivers who access these roads to get to where they are going. My understanding is that such closures should only be at midnight, but obviously these vigilantes are self-made heroes, right? They follow their own rules.

5. My police report to police HQ by Internet filing no is: RMP.008579. They promised a response in three days and so I will choose to wait before I pursue the matter with them.

My core question to all in local governance is“when was security of our lives privatised to Nepali guards by the Royal Malaysian Police?” When was the Federal Constitution amended to make the this concession? Even the National Security Council (NSC) Act does not allow this, yet.

Privatising motives to ‘illegal others’

Ever since ‘the government’s privatisation policy’ was abused, over time, into a policy for cheating, stealing and lying (CSL), to achieve specific agenda of promoters, those perpetrators began a culture of cheating, stealing, and lying to cover their tracks. But such rape and theft continues unabated in spite of a change of government at the state level. Now, proofs are made available by the Malaysian Anti-Corruption Commission (MACC) arresting a secretary-general.

I have always labelled such an abusive policy, a ‘piratisation policy’, or a policy that seeks to use public assets and resources for private motives, including for a political party’s sectarian goals or agenda. Public Policy always exists to protect and preserve Public Interest.

Image result for Najib is Malaysian No 1 Official

The world-famous Malaysian Official 1 (MO1) is one classic case of such a ‘piratisation’ agenda as revealed by evidences from the US Justice Department (DOJ), the Swiss and the Singapore government agencies.

In fact in a different way, I heard even Dr Mahathir Mohamad say that “such stealing” was not so blatant under his governance of UMNO; he in fact even argued that he was always concerned that more than one trustee was appointed to manage all such UMNO funds. He also claimed that he never allowed such monies into private accounts of any one person.

Now, is my geography also adopting such a CSL policy with impunity? I have acted against these illegal actions every step of the way, in the last 30 years, but I have not been successful to stop this rot and growing culture of corruption. The sad reality is that such abuse has continued, even if at a slower rate, with a different political alliance leading the state. Nonetheless, it still appears like more of the same even if at a slower rate. Power does in fact corrupt all.

If Anwar Ibrahim was charged with abusing political influence wrongly, and for improper motives, my question to the MACC chief commissioner is, while you appear to be a new broom sweeping our dirt clean; why only pick on public servants and not yet the most important politician? And, especially those who by default have been proven to have abused public funds by putting them into personal accounts; even if unknowingly?

By the way, was tax paid for personal funds in the account held by MO1?

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We are Malaysians–Dumb Ones

As a Malaysian, I am also frankly tired of seeing everything wrong with every Israeli action but with an inability to seeing wrong with similar issues in our own country. Actually, we govern ourselves almost exactly like the Israeli’s govern their system with two different sets of laws; one for the governed and another for the governors.

Rakyat Malaysia, how can we change this form of mis-governance for the good of every citizen; and especially those who have greater needs?

Malaysians are concerned with the Economy


January 19, 2017

Donald Trump aside, Malaysians are concerned with the Economy

by Martin Khor@www.thestar.com.my

As the new year gets underway, ordinary citizens are concerned about the rising cost of living, the ringgit’s low level and the outflow of capital.

Image result for Felda Global Ventures a messMaking Malaysia messy is his forte

WHILE Donald Trump’s inauguration as the new United States President will hog the headlines this week, it is the bread-and-butter issues that preoccupy the man and woman in the street as the new year gets into stride.

In Malaysia, a major talking point is the state of the economy. Three issues are worrying the ordinary Malaysian – rising prices, the fall of the ringgit and the outflow of capital. Each is an issue in its own right, but they are also all interlinked.

Inflation has become a hot issue because it is accelerating and will continue to do so. There are one-off factors influencing retail prices, such as the removal of the cooking oil subsidy, the weather affecting vegetable output or the slight recovery of the world oil price.

 But prices across the board are affected by the weakening of the ringgit since this increases the prices of imports.

Malaysia is very dependent on imports for a wide range of products, from food and household utensils to machinery and components for making cars, computers and all kinds of other goods.

As the most recent ringgit plunge started in mid November, prices of products that have high import content may not have fully risen yet because the shops are still clearing stocks bought earlier. But you can expect the new prices to kick in more and more.

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Irwan Siregar —  Fox in the  Malaysian Financial Hen House

The second issue is the ringgit decline itself, which has bad and good effects, with some sectors and people losing and others benefiting. The negative effects include:

  • Consumers having to pay higher prices for imported goods and services.
  • Traders and retail shops getting less business as the demand for the dearer imports goes down.
  •  Manufacturers and construction firms paying higher costs for parts and production inputs, which will translate into higher consumer prices and eventually higher house prices.
  • Parents with children studying abroad must fork out more ringgit even if the fees and hostel rent remain the same.
  • The Government and its enterprises and private companies that took loans in foreign currencies lose significantly as they have to spend more ringgit to service their loans.

Among the good effects:

  • Smallholders and companies exporting palm oil, rubber, petroleum and other commodities will receive more revenue in ringgit terms.
  • Local manufacturers exporting goods such as rubber gloves and furniture become more competitive as they can reduce their prices in foreign currency, or else they receive more in ringgit if they retain their international prices.
  • The tourism and hotel business should thrive since it’s cheaper for foreigners to visit Malaysia. Locals who now can’t afford to travel abroad may also spend their holidays in the country.

On balance, will the gains outweigh the losses? From a public perspective, this is unlikely as the higher cost of living will affect all Malaysians, especially the poor and middle classes, and the higher external debt repayment will affect the public and the economy overall.

The prospect of further depreciation of the ringgit also has a bearing on capital flows, the third issue. Malaysia is one of the countries most vulnerable to the shocks of foreign funds moving out, because so much capital was allowed to move in.

In recent years, a new type of vulnerability emerged when foreign funds were welcomed to invest in government bonds denominated in ringgit.

It was originally thought that foreign loans in ringgit would be safe as the borrower would avoid the foreign exchange risk, as contrasted with loans denominated in US dollars.

This is true but the sheer volume of bonds now owned by foreigners makes the economy vulnerable to large outflows in a short period.

Comparison is usually made between potential capital outflows and the level of foreign reserves. The reserves as at December 30, 2016 were US$94.6bil (RM424bil).

The total foreign debt outstanding was RM865bil at the end of September 2016.

Of this, offshore borrowing (in foreign currency) was RM472bil, and ringgit-denominated government bonds held by non-residents were worth RM211bil, according to Bank Negara data.

Some of the investors have a long-term commitment and not everyone will move in the same direction at the same time, but in recent weeks external conditions such as a rise in US interest rates (and anticipation of more rises in 2017) have prompted capital outflows from emerging economies, including Malaysia.

Image result for Malaysia's National Debt

The country also has high foreign participation in the stock market (22.6% in November 2016), and in recent months there has also been a net withdrawal of equities by foreigners.

November 2016 was a bad month, as foreigners withdrew from the country RM19.9bil of government securities, and RM4.2bil of equities, according to a report in The Star (January 7, 2017). The potential and probability of more capital outflows in 2017 is a factor weighing on the perception of the ringgit’s prospects.

A high trade surplus has previously acted as a strong buffer against potential large capital outflows. The trade and current account balances are still positive, but the surpluses have been declining.

Government measures could help, such as the requirement that exporters convert 75% of their ex­­port proceeds from foreign currencies to ringgit.

Other measures can be considered if the situation does not improve. For example, companies and funds, starting with government-linked ones, can be discouraged from investing abroad – for the time being at least.

Malaysia has ruled out more drastic measures such as capital controls and pegging of the ringgit.

Developments in these three economic issues will be closely watched, not least by the public whose pockets are affected, as the year progresses.

External events could improve the situation, such as if prices of Malaysia’s export commodities increase, or could worsen it, especially if the US raises its interest rates further and if Trump really pursues protectionist policies.

However, domestic policies to respond to the problems are crucial and there should be a comprehensive plan to tackle these issues, since they may persist as 2017 progresses.

Martin Khor (director@southcentre.org) is executive director of the South Centre. The views expressed here are entirely his own.

UMNO after GE-14


January 17, 2017

Thanks to the fractious Opposition, UMNO after GE-14

by S. Thayaparan@www.malaysiakini.com

“Justice can sleep for years and awaken when it is least expected. A miracle is nothing more than dormant justice from another time arriving to compensate those it has cruelly abandoned. Whoever knows this is willing to suffer, for he knows that nothing is in vain.”

– Mark Helprin (Winter’s Tale)

Image result for Mahathir Vs NajibThe Master Vs Pupil–Advantage Pupil

While I have always been sceptical of anything that comes out of the Penang Institute, I thought Ooi Kok Hin’s article in the Diplomat hit the target but missed the bullseye. I have argued in various pieces that ultimately what would bring down the UMNO house of cards is an economic calamity brought upon by “ketuanan economics” and not any stratagems that the fractious opposition comes up with.

I began the year by saying – “No matter how the government spins it, the economy is in bad shape. And when it gets bad enough, when the money runs out and when political bromides from either side isn’t enough to fill empty bellies, people on their own accord will take to the streets.”

Ooi ends his piece with – “If political change is not sufficient, will it take an economic downturn to bring change in Malaysia, like Indonesia?”

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However, implying the rapid democratisation of Indonesia after despotic rule brought upon by economic instability exacerbated by policy malfeasances as something of a miracle and the only option opposition-voting Malaysians could hope for is intellectually dodgy especially after presenting a fairly cogent argument as to why Chairman Najib will most probably win the next general election.

Ooi made his first three factors as to why Najib Abdul Razak will win the centre-piece of his argument:

(1) Electoral malpractices: Keeping the incumbent in their seats.

(2) Political fragmentation: Weaker and disunited opposition.

(3) Institutional failures: Culture of unaccountability, graft, and state repression,

It is ironic that it is these three points that the opposition keeps harping about that has not gained them any traction with the demographic they claim is keeping the UMNO hegemon in power. Indeed, there is very little the opposition can do against the rigged system (that are those institutional failures) and a frontal assault is akin to attacking a tank with a spear.

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Sarawak-Sabah–The Deciders

Counting on Sabah and Sarawak to deliver us from UMNO is exactly the same kind of bankrupt ideology that UMNO peddles and this meme that West Malaysians are ignorant and less sophisticated displays the hubris of Peninsular oppositional types and the reason why they want us to stay the hell out of their states.

And strategically speaking as long as UMNO has to rely on Sabah and Sarawak to maintain hegemony, the easier it should be to destabilise UMNO in the Peninsula. The fact that this has not happened says more about the opposition then so-called ignorant voters.

What is needed is to derail the tank’s track and this is where Ooi’s fourth factor – Societal fault Lines: One cleavage too many – is worth exploring because it provides the key to bringing down the UMNO hegemon but it is also a record of the opposition’s failure to present a cohesive alternative to not only UMNO but also policies that have no place in an egalitarian Malaysia.

While Ooi rightly argues that everything in Malaysia, is seen through the lens of race and religion, and correctly points out UMNO’s part in this mess, he fails to acknowledge that the opposition has also contributed to the narrative.

While the ‘PAS for All’ fiasco was predicated on the pragmatism of the late Tok Guru Nik Aziz Nik Mat, the systemic oppositional policy of chasing the ‘Malay’ vote by the same means as UMNO has resulted in religion playing an even greater role in mainstream oppositional politics.

By neglecting the secular approach and instead embroiling itself with Islamic, Christian and of late Hindu political and social agitations, the opposition has turned out to be just another Barisan National clone peddling the same kind of manure. People outside the echo chambers are wondering why vote for the clone when the original can get things done not by rule of law but by fiat.

Here is a hint. If you want to stop religious and racial extremism, stop funding – on a state level – institutions that enable such impulses in the guise of reaching out to the Malay-Muslim community. As long as you are held ransom to the idea that in order to defeat UMNO you must use the same tactics to secure the Malay vote, there is always going to be that Malay tilt to UMNO.

Parties dance to UMNO’s tune

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The demonisation of the Chinese community is part of the larger narrative of the reactionary nature of Chinese communal politics. The MCA and DAP have positioned themselves as loudspeakers for the Chinese community hence there is no room for by bipartisanship on any issue, leaving important social, political and economic issues unresolved because these two parties dance to the UMNO tune.

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Hudud? These guys don’t care as long as they can get BR1M and other opiates via “ketuanan economics”

These contradictions of course are not lost on the voting public. While I argued that the MCA for instance “has by far had a more accessible position on this subject (hudud) instead of the conflicting messages coming out of the Muslim wing of the opposition front and their non-Muslim supporters; they stand idly by while the UMNO hegemon sponsors state-sanctioned racial provocations against the Chinese community using the DAP as a proxy.”

Not to mention that now former Prime Minister Tun Dr. Mahathir Mohamad is the de facto opposition leader, he continues reviving the narrative that the “Malays” will lose their land to “Chinese” interlopers, while Chinese opposition types warn against China’s investments because it is bailing out the UMNO hegemon.

So on the one hand we have the narrative of Malays losing their land to Chinese pendatangs and on the other we have Chinese oppositional types confirming that the narrative that the country is being sold to the PRC. So this lens of race and religion is opaque and it is a grave mistake – although it plays well in echo chambers – to simply describe it as something wrong with Umno policy as opposed to describing it as the reality of Establishment – BN and Pakatan Harapan – politics.

Which brings me to Ooi’s most important point and one which is most often overlooked in favor of his other three factors. And this point to me is the one where the opposition could do serious damage to the regime but unfortunately will continue being overlooked.

“There is a visible gap between the politicians, the city folks, the demonstrators who so urgently and desperately want reforms, and the voters outside the cities, who voted for candidates affiliated to Najib’s party” writes Ooi, which is axiomatic but for various reasons goes unnoticed by the power brokers of the opposition.

When Ooi writes, “people don’t mind the status quo as long as they are not affected at the most immediate and personal level,” he is not only speaking plainly but also truthfully and this of course is the reason why this country has endured the long UMNO watch.

 The opposition has a long history of being unable to organise an orgy in a brothel. Speaking plainly, ever since the opposition broke the magical two-thirds barrier, they have been coasting on their success, thinking that UMNO has been playing defence while the reality is that UMNO has only ever played offence.

All politics is local and the opposition has yet to figure out what affects voters ‘outside the cities’ beyond pushing the narrative that they are ignorant and living off UMNO handouts. There really is no excuse for this type of political laziness.

Opposition politicians operating in the rural heartlands tell me that this obsession with urban issues has absolutely no traction in their communities and makes UMNO’s job easier because it makes it seem that the urban elite – meaning us – have no idea what is going on where they live except to think of them as lazy and ignorant.

There are people in the opposition who know exactly what affects these people on an immediate and personal level but these issues do not get the attention that the latest stupid thing a BN potentate says or the latest corruption scandal that is part of the news cycle that plays well in the echo chambers.

Issues facing the folks outside the cities are exactly the kind of issues that UMNO wishes to avoid and the latest outrage that captures the attention of city folks is manna from heaven for an ailing financially-strapped hegemon.

Waiting for miracles to happen absolves the opposition from actually doing the hard work of capturing the hearts and minds of people and allows job security for career opposition politicians.


S THAYAPARAN is Commander (Rtd) of the Royal Malaysian Navy.

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

Caring about Malaysia


January 15, 2017

Caring about Malaysia

by Dean Johns@www.malaysiakini.com

Who cares about Malaysia? This is the question that fellow Australians most frequently ask me, and indeed that I frustratedly keep asking myself, about why I keep writing about Malaysian politics.

And it gets more difficult every week to come up with a convincing reply.

Back when I started in 2006, however, my motives seemed as simply and plausibly explicable to others as they were clear in my own mind.

My main motivation, as I recall explaining in the introduction I wrote for the my first book of collected columns, ‘Mad about Malaysia’, was to make some meaningful contribution to the country that my wife, daughter, extended family and a great many good friends and valued colleagues called home, and in which, though a foreigner, I was temporarily welcome to work.

Image result for Steven Gan and Premesh Chandran and Malaysiakini Staff

The courageous men and women of Malaysiakini led by  the now globally famous duo, Premesh Chandran and Steven Gan. I am proud to be associated with them as SEACEM Fellow a few years back. These committed Malaysians work hard and put in long hours to keep us all informed. Great 2017 and Keep Going.–Din Merican, Phnom Penh, Cambodia

Less altruistically, but just as sincerely, I also felt driven to be involved with, and if possible help support, Steven Gan, Prem Chandran and their staff in their courageous struggle to ensure the survival of their inspired creation, the country’s first source of true news and independent views in living memory, Malaysiakini.

These days, however, now that Malaysiakini is no longer merely surviving but mightily thriving, and my wife and daughter have long-since embraced life in and become citizens of Australia, it’s not so easy to explain to myself or anyone else why I persist in writing columns calumnising the criminal regime that’s still apparently endlessly running and in the process ruining Malaysia.

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Din Merican’s Favorite Mat Salleh Dean Johns–He and I  and other Fellow Journeymen care about Malaysia since being dumb and  remaining silent is for us not an option.

Mainly what keeps me persisting in this frustrating and thus-far utterly futile endeavour, of course, is my feeling of sympathy, solidarity and comradeship with all those intrepid and truly patriotic Malaysians who have chosen to struggle to save their beloved country, not by leaving it and criticising its criminal misleaders from a distance, but staying at home to fight.

But despite their fighting with all their might, and my own and others’ efforts to support them from beyond the battle-lines if not out of sight, the vast majority of Malaysians are still apparently failing or refusing to see the UMNO-BN blight in its true lying and larcenous light, and so Malaysia remains in a terrible plight.

As the head of the allegedly blatantly UMNO-BN biased Election Commission (EC) Mohd Hashim Abdullah lamented recently in a laughable attempt to portray himself and his officers as politically-impartial, 4.2 million Malaysians citizens who are qualified to vote have not taken the trouble to register, and millions of those who have registered can’t be bothered turning up on election days to cast their votes.

A distraction from ‘manipulation of constitituencies’

What Mohd Hashim failed to mention, however, was that a great many voters have become hopelessly cynical about and thus alienated from participating in the electoral process by the EC’s shameless alleged manipulation of constituencies, which are constitutionally required to be of similar voter-population size with a maximum permitted variation of 20 percent, but currently range from around 5,000, as in the blue-ribbon UMNO seat of Putrajaya, to 150,000 or more.

He was also using his regret at low levels of voter registration and turnout as a distraction from this and also the lamentable reality that in many electorates a great many of those who do both register and show up to vote only do so in the expectation of allegedly receiving gifts or outright cash payments for supporting UMNO-BN candidates.

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The fawning UMNO henchman–Using Power of his Office to defend Malaysia’s No. 1 Criminal, Prime Minister Najib Razak.

Another UMNO-BN bigwig working hard this week to convey an illusion of care for the country more than for himself and his own privileged position as a prominent member of the UMNO-BN regime was Attorney-General (AG) Mohamed Apandi Ali.

Despite the universally-known fact that he was promoted over the politically dead body of the former AG to pander to Prime Minister Najib Abdul Razak’s allegedly dire need to be declared innocent of any larcenous intent or even meaningful involvement in the massive 1Malaysia Development Berhad (1MDB) financial misappropriation and money-laundering scam, Apandi had the gall and audacity to hector his audience at a Conference of the Attorney-General’s Chambers’ Legal Officers in Malacca on the topic of corruption.

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Dean Johns and Din Merican are fighting to get rid of this toxic and bygon resistant termite –Najib Razak (and his consort Rosmah Mansor too).

“Corruption is like a termite infestation that will slowly weaken the country without the people realising it,” he thundered, as if his own legal officers, like the rest of us in Malaysia and around the world weren’t aware that the UMNO-BN regime he represents, or rather misrepresents, wasn’t a nest of the nation’s allegedly most notoriously voracious – and at the same time least veracious – political termites.

Just as former Chief Minister of Sarawak, Abdul Taib ‘The Termite’ Mahmud, built a multi-billion mound of money by allegedly chomping his way through his state’s rainforest-timber resources, Najib has devoted his time as Prime Minister to systematically white-anting the entire nation of Malaysia.

With the aid, support and protection of his hordes of alleged sycophants in Government, the Judiciary, the Police Force, the ‘mainstream’ news media, the aforementioned electoral commission and all the other public services, he has allegedly consumed countless billions of Malaysian people’s rightful share of public money and natural resources, and allegedly undermined as many as possible of the Malaysian citizens’ civil rights and legal protections.

Yet there he was this week trying to kid attendees at the Prime Minister’s Department monthly assembly that the recent and current string of graft charges against civil servants “is a reminder that those in government must not take away what rightfully belongs to the people.” The sheer hypocrisy of it all!

The rest of us know very well that this just another Najib-style lie to conceal the fact that those being targeted for corruption are either small termites, or slightly larger termites who have made the mistake of failing to pass the expected cut from their country-consuming scams up the line to the termites at the top.

So, who cares about Malaysia? Certainly not Najib, Apandi, Mohd Hashim Abdullah or any other members, cronies or supporters of the UMNO regime. Which leads me to the conclusion that it’s up to all the millions of Malaysians who claim that they care about Malaysia but do nothing to show it, to finally summon-up the interest, energy, integrity, courage or whatever else it takes to demonstrate that they truly do give a damn about making a difference.


DEAN JOHNS, after many years in Asia, currently lives with his Malaysian-born wife and daughter in Sydney, where he coaches and mentors writers and authors and practises as a writing therapist. Published books of his columns for Malaysiakini include ‘Mad about Malaysia’, ‘Even Madder about Malaysia’, ‘Missing Malaysia’, ‘1Malaysia.con’ and ‘Malaysia Mania’.

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

China’s Investments–Geo-Political Implications for Malaysia


January 14, 2017

China’s Investments–Geo-Political Implications for Malaysia

by Dennis Ignatius

Image result for China's Investments in MalaysiaHe is praying for the best but not doing his best

China’s ravenous appetite for Malaysian infrastructure assets has resulted in yet another multibillion ringgit deal. In early January, a RM6.3 billion deal to redevelop and expand Penang Port was signed between two Chinese port operators (Shenzhen Yantian Port Group and Rizhao Port Group) and local partner, KAJ Development, a relatively unknown reportedly state-owned company incorporated in 2001.According to press reports, the project would increase the port’s ship handling capacity to 100,000 ships per year.

Dominating the transport sector

The Penang deal comes on the heels of KAJ Development’s RM30 billion Malacca Gateway Project with another Chinese conglomerate, Powerchina International Group. The Gateway project includes extensive land reclamation and the development of what is expected to be the biggest port in the region.

Image result for RM12.5 billion Kuala Linggi International Port

Barely 55 km away from the Malacca Gateway project, work has begun on the RM12.5 billion Kuala Linggi International Port project, funded by China Railway, Port & Engineering Group. When completed, Linggi port will become, according to a company statement, “the world’s preferred shipping hub in the Straits of Malacca” offering port facilities, storage and transshipment of crude oil and petroleum products and repair and bunkering facilities.

According to press reports, construction has gone ahead despite objections that the project could well be an environmental hazard. Not to be outdone, the Port Klang Authority is now planning to build another giant port on Carey Island which is expected to cost RM200 billion. According to reports, the transport ministry is in talks with China Merchants Group to finance the project.

On the east cost of Peninsular Malaysia, another Chinese company, Guangxi Beibu International Port Group already owns a 40% stake of Kuantan Port Consortium and is investing billions to double the port’s capacity. China is also a key investor in Sarawak’s Samalaju Industrial Port project.

At this rate, and given China’s already sizeable investments in our railway infrastructure, China will soon be the dominant player in Malaysia’s transportation sector.

Unanswered questions

Quite apart from the obvious security implications, China’s massive investments in ports and railways have also raised a number of concerns which have yet to be adequately addressed.

How much port capacity, for example, do we really need bearing in mind that we spent billions developing the Port of Tanjung Pelapas (making it one of the largest container ports in the region) and that not all of our ports are operating at fully capacity?

And how will other major port developments now being planned along the Malacca Straits, such as the mammoth Tuah project in Singapore and the China-funded Tanjung Sauh port in Indonesia’s Batam island impact overall capacity? It certainly looks like this whole port building frenzy has gone off the deep end, especially as no convincing argument has been made that such a significant increase in port capacity is even warranted.

Without credible feasibility studies and greater transparency, these projects could well end up like the Petroleum Hub project which was taken out of service in 2012 after the government had spent more than RM100 billion on land reclamation, costs which Malaysia’s long suffering taxpayers are now having to shoulder. 

It is also unclear what the actual financial arrangements are for many of these Chinese projects and what kind of concessions and guarantees Malaysia has had to offer. That some of these projects involve secret negotiations and secret agreements with companies that don’t appear to have much experience or which have been blacklisted by the World Bank, only adds to concerns about control, ownership, costs, viability and the potential for corruption.

And unlike earlier infrastructure projects where local companies retained significant oversight and decision-making authority, projects with China invariably end up with Chinese companies in charge of management, design, procurement and construction. Even the workers come from China!

Whatever happened to all our national policies about equity, local participation and transfer of technology? At the end of the day, it is hardly the kind of “equal, mutually beneficial, win-win” situation that the Chinese embassy here likes to brag about.

OBOR?

Image result for China’s One Belt One Road (OBOR) Initiative

The other thing about many of these Chinese projects is the constant reference by Malaysian politicians and businessmen to China’s One Belt One Road (OBOR) initiative. Suddenly, it is no longer about Malaysia’s national development goals or priorities but about whether or not it is relevant to OBOR.

It is perhaps a testimony to China’s increasing power and influence that many of our political and business leaders are now gamely parroting the Chinese line about how great and magical OBOR is and how fortunate we lesser mortals are to receive Chinese loans, Chinese technology and Chinese expertise to help build OBOR-related infrastructure.

What they don’t see or don’t want to acknowledge is that through clever financing arrangements, China is in fact getting us to pay for the infrastructure that it needs to establish economic primacy in the region. OBOR is primarily about China’s strategic national objectives; whatever benefits to Malaysia are purely incidental.

In the absence of a critical and in-depth assessment of whether these OBOR-related projects genuinely serve Malaysia’s interests and are worth the costs to Malaysian taxpayers, it would be ‘bodoh’ to acquiesce to it.

The geopolitical element

And let’s not be unmindful of the geopolitical considerations as well. Will we see Malaysian ports, for example, being integrated into the Chinese Navy’s regional infrastructure to support its growing naval presence in the region?

While the government is coy about the kind of naval access that has been given to the Chinese Navy for obvious political reasons, port calls by Chinese naval vessels are increasing. Two Chinese submarines, for example, quietly docked at Kota Kinabalu port recently while Chinese warships now regularly use other Malaysian port facilities.

Image result for Chinese Navy in the Straits of Malacca

China of the 21st Century is a nation of geo-strategic thinkers and state entrepreneurs–Keeping Asia secure and safe means China is safe too.

China is making strategic investments to fortify its position as the dominant player in the South China Sea with modern port facilities in ASEAN and expand trade in Chinese manufactured goods and services. It is using Malaysia to have important stakes in the Straits of Malacca (in Malacca, Penang and Johore ports). Why not, particularly when assets in Malaysia can be acquired on the cheap or profitable investments made  at inflated cost (for the benefit of corrupt UMNO and Barisan Nosional politicians). I am not against Chinese investments per se, but I am very concerned with deals done on a hush-hush basis by Najib and his cohorts. China’s moves in Asia does not end with the  South China Sea. It is back to the age-old objective of keeping the barbarians at the gate.–Din Merican

Of course, naval vessels from other countries regularly berth at our ports, and in itself is no cause for alarm. However, only China is aggressively pursuing territorial claims against Malaysia. For that reason alone, caution is called for. Does it make sense for us to facilitate the very naval force that is intruding into our waters, harassing our fishermen, laying claim to our reefs and islands and gathering data to support those claims?

Colony building

Image result for RM100 billion Forest City project

There are also growing concerns about the massive residential and commercial development projects that are being built with Chinese capital.

The RM100 billion Forest City project, for example, one of two being built by Chinese conglomerate Country Garden, will reportedly house more than 700,000 people in a development that will include office towers, parks, hotels, shopping malls and an international school.

Meanwhile, China state-owned Greenland Group is building office towers, apartments and shops on 128 acres in Tebrau, Johor, while Guangzhou R & F Properties Co. has begun construction on the first phase of Princess Cove, another mixed development along the Johor coast, with hotels, offices, parks, shopping malls and clubhouses.

Image result for bandar malaysia – china’s new regional capital

In Kuala Lumpur, China Railway Group (CRG) will be developing the mega Bandar Malaysia project which is expected to cost between RM160 – 200 billion. Bandar Malaysia will host the world’s largest underground city together with shopping malls, indoor theme parks, a financial centre, residential and commercial units as well as the RM8.3 billion regional headquarters of China Railway.

CRG is also involved in another RM2.1 billion project in Ampang to build 7,000 residential units as well as commercial and retail outlets. In keeping with the management practices of most China-based corporations, CRG has been appointed the main contractor with sole responsibility for monitoring, managing and supervising the day-to-day construction and operations of the project.

Reports suggest that these massive residential and commercial developments in Malaysia are being marketed mainly to PRC nationals who wish to work, reside or holiday in Malaysia. Country Garden, for example, has been aggressively promoting its Forest City project in China; it is already the 11thmost popular investment destination for Chinese home buyers on Juwai.com.

In addition, relatively cheaper living costs, affordable private medical facilities, a (mostly) smog- free environment and proximity to both China and Singapore, make Malaysia a preferred retirement destination for middle-class Chinese. China’s ageing population (240 million over the age of 60 by 2020) makes for a huge potential market that Chinese developers are hoping to exploit.

If the expectations of these China-based developers are realized, we could be seeing more than a million PRC nationals living in Malaysia within a decade.

Malaysians must ask themselves whether it would be desirable to see a huge influx of citizens from just one country establishing foreign enclaves here. It is not beyond the realm of possibility that these colonies could soon evolve into exclusive, semi-autonomous zones serviced and managed by PRC nationals for the benefit of PRC nationals.

What impact will this have on the social, cultural and political fabric of our nation? How will it affect property prices? How will any downturn in the Chinese economy influence the local property market? How much of the related infrastructure costs of these projects are being borne by Malaysian taxpayers? And what kind of concessions are being given to these property developers?

Viewed from almost any perspective, therefore, Malaysia’s burgeoning economic, political and military relationship with China ought to set off alarm bells across the nation.

Image result for bandar malaysia – china’s new regional capital

The combination of a rising power with global ambitions backed by an unlimited stash of cash buying up strategic infrastructure assets, on the one hand, and a local political elite bent on staying in power at all costs tethered to cronies more interested in profits than patriotism, on the other, could prove a fatal one.

Even in the best of circumstances, it would be simply too risky to allow any one country to dominate our economy and control critical infrastructure networks the way China is now set to do. It gives China too much power and influence in the affairs of our nation and it leaves us too indebted, too exposed to a country whose intentions must be considered with some circumspection.

How far will China go to protect its position?

One thing we can be sure of, though, if history is anything to go by: the more China invests in Malaysia, the more China will be tempted to intervene and meddle in our affairs to protect its investments and ensure its strategic position is not jeopardized. Indeed, China has already begun to do so.

In a statement just this week, the Chinese embassy lashed out at opposition leaders and others for questioning the government’s policies towards China, accusing them of having ulterior motives and instigating hatred against China and warned that “China will not allow anyone to jeopardize the mutually beneficial bilateral cooperation between China and Malaysia.”

Amazingly, the Embassy also dared to presume to speak for Malaysian Chinese when it suggested that such actions by the opposition would not earn them the trust of the Malaysian Chinese community.

Clearly, the Chinese embassy now feels it has the right to threaten our politicians, inveigh against those who raise questions about China’s investments and inject itself into what is essentially a domestic discussion.

Such brazen interference in our domestic affairs will only get worse. How far will China now go to stifle domestic opposition and criticism to its increasing role in our nation? Will it work behind the scenes to prop up local pro-China leaders in much the same way as the CIA did in other countries? 

The most pressing foreign policy challenge

Tellingly, while the Chinese embassy grows bolder, many of our own leaders remain silent despite blatant acts of interfere in our domestic affairs.

In the early years of our relationship with China, our security agencies were extremely concerned that Malaysia’s ethnic Chinese community might sell out to China; who would have thought we would end up in situation where many of our politicians and officials would be so blinded to the challenges that China now presents or worse still, resign themselves to the inevitability of some sort of Chinese domination?

One minister, for instance, recently remarked in his blog that “it is futile trying to resist China’s great march forward just like it was futile to resist Western colonialism 500 years ago.” He also said that China is buying up assets all over the world and that is something that “Malaysia needs to accept or else get left behind and perish.”

Let’s be clear: this is not about trying to stop China from rising or about shunning Chinese investments but about ensuring that we don’t get colonized again, about making sure that China does not get to the point where it controls our economy and is able to dictate policy as it already does in some neighbouring countries.

Whatever it is, Malaysians must not be lulled into a false sense of complacency by all the sweet talk of mega contracts, grandiose promises of prosperity and jobs or the effusive pledges of eternal friendship for that matter.

China is no different from any other big power and we would do well to be wary when dealing with it.

Image result for tun muhammad ghazali bin shafie

As the late Tun Ghazali Shafie, arguably the best Foreign Minister we’ve ever had, was fond of reminding us at Wisma Putra: small countries on the peripheries of a big power don’t have the luxury of taking anything for granted.

At the very least, we owe it to ourselves, and to future generations, to have a national debate on this, the most pressing foreign policy challenge we now face as a nation. And the Chinese embassy would do well to butt out of it.