Malaysia’s Top Economist and Mr.Transformer speaks


June 24, 2014

Malaysia’s Top Economist and Mr. Transformer speaks

I missed this one dated June 20, 2014, posted in Malaysiakini because Dr. Kamsiah and I were away in Taipei. Reading it, I thought the authorities in Taiwan should have appointed Dato Seri Idris Jala as their chief propagandist.  So here it is:

idris guitarSenator Dato’ Seri Idris Jala is a Minister in the Prime Minister’s Department and CEO of Malaysia’s Performance Management and Delivery Unit (PEMANDU), an organization tasked with ensuring Malaysia meets the goals set forth under the National Transformation Programme (NTP).

He spoke with The Prospect Group about the Economic Transformation Programme’s (ETP) goals for 2014, which includes Gross National Income (GNI), investment, and job creation, and ensuring Malaysia’s economy is resilient in the face of global uncertainty.

Q: What are the ETP’s main focal points for 2014?

JALA:

Our focal point for 2014 is to make sure we implement. We have to implement what we promised under the ETP as well as the GTP. The public wants results and the way in which we have to fulfill those results is to execute the initiatives within the 12 National Key Economic Areas (NKEAs) that will achieve big results fast.

Q: What are your 2020 GNI, investment, and job creation goals?

JALA:
By the year 2020, we would like to have become a high-income economy that fulfills the GNI targets of $15,000 per capita. That is our long-term goal. To do that will require a lot of investment; something like $444bn is needed to propel the Malaysian economy to grow. We also need to create 3.3m jobs; you have to create a lot more high-paying jobs so that the citizens can benefit. So those are the three true-North targets: gross national income per capita, private investments that will drive it, and jobs that are created. The good news today is that, from when we first began, in four years, we have been able to grow our total GNI per capita by 50%. We are at the halfway mark today. So we are very pleased with the progress made on the GNI target. With regard to job creation, we are supposed to create 3.3m jobs, and we have created 1.3m jobs in the four-year period. So that is really very good.

We have met more than 60% of the investment targets, signifying we are well on the way to achieving this as well. My view today is that we would like this coming year to continue in the same way as we have experienced over the last three years. That means that everything is on the right trajectory. If things continue the way that they are, we will fulfill our targets before 2020.

 

Q: In terms of time frame and the trajectory you are on today, when do you anticipate these goals will be achieved?

JALA:
I think we should reach our targets by the year 2018. But, as you know, the world is not linear. If you look back over the last four years, it has been a good run for us, but we are subject to what happens in the global economy. We have to build in a lot more resilience within the Malaysian economy to face any global crisis or any global slowdown to ensure we can weather storms that happen between now and the year 2020. It has been a very good run for the last four years.
Q: In a world of constantly changing economic realities, how can Malaysia’s Economic Transformation Programme (ETP) and National Key Economic Areas (NKEAs) adapt?
JALA:

Adaptation is a very important requirement moving forward for Malaysia. So what we want to do in Malaysia moving forward is to ensure we build enough resilience in our economy.Let me begin by saying we must implement proper fiscal reforms. Public debt in our case should not exceed 55% of our GDP. Now there are many countries that have gone to 80%, 90%, 100%, and even 190% public debt to GDP. So if you make sure that you grow the economy and make sure the government debt is below the 55% threshold, we believe that is the way to go. You cannot and should not over leverage, so we are really focusing on that.The second thing about being resilient as an economy and being able to face any un-foretold difficulties with the global economy is to make sure we do not have a fiscal deficit that exceeds 6%. We have been steadily reducing our fiscal deficit. When we first started, our fiscal deficit was 6.6%. We have since cut that down to 5.8%, and then to 4.8%, and last year we reached 3.9%.

The other aspect of making sure we can adapt is obviously to make sure we have the right competent talent. A competent talent pool means that whatever structural changes take place in the economy, people are able to be mobile and will do what is needed to produce products and services that can compete in the world outside.

The other is that we made changes in the way the civil service operates. We have become a lot more efficient and the good news today is that we have been able to improve the ease of doing business. It is very easy to do business in Malaysia. The World Bank assessed Malaysia in 2009 at number 23. We then moved to number 18, and then to 12, and last year, for the first time, we moved to number 6 overall in the world in terms of the ease of doing business. So if it is easy for investors to put money and investment in Malaysia, and at the same time the government is fiscally prudent and we bring in all the fiscal reforms, and we have a talent pool in the country, then we can adapt very quickly to changes that are happening.

Q: How does this philosophy play into the ideology that Malaysia should move away from being a primary resource based economy and into a higher value added service based economy?

JALA:
If you look at the history of Malaysia, we were an agrarian economy during independence in 1957 and then we moved into a more commodities play. So what we are now doing is making sure that our manufacturing arm grows a lot bigger and we have started doing that. In fact, when it gets down to palm oil, we are now telling the industry it is fine and good for us to do a lot more primary products and selling that as crude, but it is much more important for us to start producing downstream products such as oleo chemicals and we gave a lot of incentives to allow this to happen as evidenced by the establishment of more refineries. That is happening as we speak today, the downstream component has to come in. At the same time, between now and 2020, we wanted to see that we increase the services sector of the GDP to become more than 60% and we have been growing that rapidly. You can see today that tourism is big for us, financial services are big, the health sector as a part of the economy is also growing, and the education sector. So all of these all together, they will become, by the year 2020, at least 60% of our GDP. So I think for the first time doing this, we will have to diversify the economy so that we do not rely entirely on the commodities play, but we get into the downstream part of the same sectors and at the same time we grow the services sector. I think if you add the two together, the Malaysian economy becomes more resilient.

Time running out to save the ailing Malaysian Airline System (MAS)


June 23, 2014

Time running out to save the ailing Malaysian Airline System (MAS)

Story by

Stephanie Jacob stephanie@www.kinibiz.com

Maybank KE has advised Malaysia Airlines Bhd (MAS) investors to sell, saying that time is running out to save the ailing airline and that Khazanah Nasional Bhd’s plans to take six to twelve months to come up with a restructuring plan is too long. The research house’s aviation analyst Mohshin Aziz noted that while MAS’ counter had reacted positively to Khazanah statements on restructuring, Maybank KE had been disappointed as it had hoped a plan would be introduced sooner.

In its report, Maybank KE said according to calculations, “MAS is experiencing a cash burn rate of RM5 million a day and could exhaust its entire free cash resources…by 2015.” Furthermore at this rate, its gearing could hit 5x by the end of 2015, it added.

Noting that MAS’ had a cash burn of RM494 million in the first quarter of financial year 2014 (1Q14), Maybank KE said that it expects the trend to continue on to 2Q14. The ongoing quarter is expected to be the worst so far for MAS, as together with being seasonally its weakest quarter, it is also expected to suffer from industry wide weak yields and flight cancellations.

MAS-cash-balance-movement-230614

Mohshin said that MAS’ cash balance is expected to fall to RM2.1 billion by the end of financial year 2014 (FY14) and to RM1.1 billion by the end of FY15. He added that this trend was not sustainable. READ on :

http://www.kinibiz.com/story/corporate/91927/time-seen-running-out-for-mas-restructuring.html

Attracting Malaysian Talent Home is tough for Johan Merican


April 9, 2014

Malaysia struggles to woo Malaysian experts home due to ‘better life’ abroad–A Tough Job for Johan Merican

 by MD Izwan (04-08-14) @www.themalaysianinsider.com

TalentCorp CEO Johan Mahmood Merican says the agency has several incentives to make it easier for overseas Malaysians to come home, including tax exemptions on their cars. – The Malaysian Insider pic by Najjua Zulkefli, April 8, 2014.

TalentCorp CEO Johan Mahmood Merican says the agency has several incentives to make it easier for overseas Malaysians to come home, including tax exemptions on their cars.–  pic by Najjua Zulkefli, April 8, 2014.

Higher salaries, better professional opportunities and a comfortable life – these are the main reasons Malaysian professionals living abroad are reluctant to return to Malaysia, TalentCorp said.

According to its statistics, TalentCorp managed to bring back 2,500 Malaysians working abroad, but the figure is small when compared with a 2011 World Bank estimate that almost a million Malaysians are working outside the country.

TalentCorp has received almost 4,000 applications in the three years since it was established in 2011 to address the brain drain in the country.

“It is a combination of several factors. First, the quality of life is related to salaries, second, professional opportunities and third, a comfortable life, ” TalentCorp Chief Executive Officer Johan Mahmood Merican told The Malaysian Insider recently. However, the gap in quality of life is not too big when Malaysia is compared with other countries, he said.

“For example, the salaries in London are definitely high but we must increase their awareness about the quality of life after living costs are taken into account. Sometimes, the gap is not that big,” he added.

In terms of professional opportunities, Johan said Malaysia was still capable of offering the best opportunities as the country’s economic position was still good.

“In many other developing countries in the world, their economies are relatively slow but Malaysia’s is steadily progressing,” he said.

“The third factor, there are a lot of reasons for that. It’s true that there are some Malaysians who are worried about education, crime and the political scenario in the country,” he added.

The country which has the highest number of Malaysians wanting to come home is Singapore, followed by the United Kingdom, China, Australia and the Middle East.

According to a World Bank report, Malaysia’s Gross Domestic Product (GDP) was US$303.53 billion (RM995.43 billion) in 2012. Malaysia’s GDP represents 0.49% of the world’s economy.

“When they have been out of the country for too long, it will be hard for them to come home. At least, we appreciate their efforts by giving them incentives.”

The administration of Prime Minister Datuk Seri Najib Razak has targetted Malaysia to become a high-income nation by 2020 through Vision 2020, which was introduced by former Prime Minister Tun Dr Mahathir Mohamad.

As part of efforts to achieve the goal, Najib also introduced fiscal steps to reduce the country’s deficit, but that have affected the inflation rate.

Up till 2013, TalentCorp was allocated RM65 million, but it has received criticism over the huge allocation as it did not reflect in the number of talents brought home.

“TalentCorp is not only about bringing workers from overseas, we also have other programmes such as graduate employability and helping foreign talents,” Johan said.

The area in which most talents have decided to come back to is the business service sector, followed by oil and gas, finance, electronics, information technology and health.

“We support the Economic Transformational Programme (ETP) and not just overseas programmes. We help drive the ETP,” he said, adding that TalentCorp was in line with the government’s goal of achieving a high-income nation by 2020.

Johan also said that TalentCorp does not take on the role of a “recruitment agency” for the talents brought home.

“We do not operate like a recruitment agency because we are a government agency. We do not look for jobs for them; it is up to them to find jobs.However, we realise that Malaysians who have worked overseas for too long will not necessarily be used to the local professional culture so we are prepared to help them to get in touch with recruitment agencies or executives,” he said.

Realising that the move to bring back talent is not easy, Johan said TalentCorp has prepared several incentives to make it easier for them to return to Malaysia.

“When they have been out of the country for too long, it will be hard for them to come home. At least, we appreciate their efforts by giving them incentives.”

Among the incentives are tax exemptions on cars the applicants would like to bring back to Malaysia under the Return Expertise Programme (REP).Johan said it was not fair for others to judge TalentCorp’s work just based on allocations to the agency, as there were other activities that they take on.

“You cannot take a whole amount of allocation and divide it by one activity… we have other different activities.Maybe our activities hardly get any coverage, but we are managing talents in a different aspect,” he said.

In 2011, a World Bank Report revealed that Malaysia was experiencing a huge brain drain to other countries, with almost a million of the country’s professional workforce reported to be working overseas.

According to the report, the migration is caused by the imbalances of the New Economic Policy (NEP), with Indians and Chinese making the highest numbers.

The World Bank warned that if the situation was not addressed as soon as possible, it would slow down the economy and halt the country’s development.

Following the report, Putrajaya set up TalentCorp and introduced programmes to lure Malaysian talents from overseas. – April 8, 2014.

Is Hishammuddin Hussein headed for the top?


March 31, 2014

Is Hishammuddin Hussein, voice of Malaysia on flight MH370, headed for the top?

After a brush with death and addressing world’s media on flight MH370, Hishammuddin Hussein’s personal journey may yet take a dramatic turn

by Satish Cheney in Kuala Lumpur

 PUBLISHED : Sunday, 30 March, 2014, 6:08am
UPDATED : Sunday, 30 March, 2014, 7:21am

 

Urgent questions for Malaysian Prime Minister


March 25,2014

Urgent questions for Malaysian Prime Minister

by RK Anand@ http://www.malaysiakini.com

NajiboSince the onset of this crisis, I have disagreed with the speculation that Malaysian authorities have been deliberately withholding or concealing information regarding the status of MH370.

The conflicting and often contradictory details stemmed from incompetence, as opposed to a diabolical plot. Our authorities just lack the experience and expertise in dealing with a misadventure of this magnitude. And to believe that Malaysia has the ability to hoodwink the world is giving our leaders too much credit.

But I strongly feel that satellite “pings” and some form of “analysis never before used” are required to locate the brains of our officials. And the absence of a functioning cerebrum was evident in the events that unravelled last night.

In a hastily organised news conference, a grim-faced Prime Minister Najib Abdul Razak announced that the Boeing 777 had gone down in the Indian Ocean, and that all 239 on board were lost.

The revelation even caught China by surprise. Were the other nations involved in the search and rescue mission notified or were they kept in the dark as well?

The next question is: why the rush?

Najib made a brief statement on the fate of the plane and those on it without divulging specific information or fielding questions from journalists. Instead the media was told that a briefing would be held this morning. Perhaps the Prime Minister was worried that if he did not break the news, the foreign media might beat him to it and steal the limelight.

The relatives of the passengers and crew were shell-shocked and understandably so. In Beijing, tears flowed, tempers flared, chairs flew and walls were punched. Imagine. After 17 days of trepidation as investigators landed at one dead end after another in search of a plane that simply vanished, the Malaysian Prime Minister tells the relatives that all hope is lost.

And this devastating blow comes after days of keeping their hopes alive with the oft repeated “looking into all possibilities” remark. Indeed, since the Beijing-bound flight went missing on March 8, a slew of speculations – some bordering on the bizarre and supernatural – had emerged.

But what actually transpired would only be known once the black box is discovered, which could take days, weeks, months or even years. However, one thing is for certain. The credibility of the Malaysian government has suffered a major dent as a result of this disaster.

Amid Search for Plane, Malaysian Leaders Face Rare Scrutiny


Asia Pacific

http://www.nytimes.com/2014/03/13/world/asia/missing-jet-exposes-a-dysfunctional-malaysian-elite.html?_r=0

Amid Search for Plane, Malaysian Leaders Face Rare Scrutiny

afif_the_malaysian_insider_dca_hishammuddin_hussein_radars_540_360_100

SEPANG, Malaysia — Malaysia’s governing elite has clung to power without interruption since independence from Britain almost six decades ago through a combination of tight control of information, intimidation of the opposition and, until recently, robust economic growth.

But worldwide bafflement at the disappearance of Malaysia Airlines Flight 370 has challenged the country’s paternalistic political culture and exposed its coddled leaders to the withering judgments of critics from around the world.

Civilian and military leaders on Wednesday revealed that they had known for the past four days, but did not publicly disclose, that military radar had picked up signals of what may have been the missing aircraft. It appeared to be flying on a westerly course sharply off its intended flight path to Beijing.

If the radar readings were from the missing plane, it could mean a radical reinterpretation of where it ended up. And it was only under a barrage of intense questioning on Wednesday from a room packed with reporters who had arrived from many countries that officials acknowledged that the last recorded radar plot point showed the jet flying in the direction of the Indian Ocean — and at a cruising altitude, suggesting it could have flown much farther.

Continue reading the main story

Detecting a Plane

Two kinds of radar are used to keep track of air traffic from the ground.

Primary radar

Sends out radio signals and listens for echoes that bounce back from objects in the sky.

Transponder

Secondary radar

Sends signals that request information from the plane’s transponder. The plane sends back information including its identification and altitude. The radar repeatedly sweeps the sky and interrogates the transponder. Other planes in flight can also receive the transponder signals.

That raised the question of why the information had not been released earlier.

“The world is finally feeling the frustration that we’ve been experiencing for years,” said Lee Ee May, a management consultant and a former aide to a Malaysian opposition politician.

Ms. Lee said she was embarrassed when the country’s Defense Minister, Hishammuddin Hussein, the scion of a powerful political family, rejected a reporter’s assertion on Wednesday that the search for the airplane had been disordered.

“It’s only confusion if you want it to be seen to be confusion,” Mr. Hishammuddin said at a news conference that unfolded before an international audience.

Relatively free from natural disasters and other calamities, Malaysia has had little experience with handling a crisis on this scale. It is also an ethnically polarized society where talent often does not rise to the top of government because of patronage politics within the ruling party and a system of ethnic preferences that discourages or blocks the country’s minorities, mainly ethnic Chinese and Indians, from government service.

Ethnic Malays, who make up about half of the population, hold nearly all top government positions and receive a host of government preferences because of their status as “sons of the soil.”

Authoritarian laws have helped keep the governing party, the United Malays National Organization, in power — and an ascendant opposition in check.

The day before Flight 370 disappeared, the leader of the opposition, Anwar Ibrahim, was sentenced to five years under a sodomy law that is almost never enforced. Critics called the case an effort to block the opposition’s rise at a time when the governing party’s popularity is waning.

Then on Tuesday, a court convicted Karpal Singh, another opposition politician, of sedition, a law enacted in colonial times.

“We call it persecution, not prosecution,” said Ambiga Sreenevasan, a lawyer and the former head of the Malaysian Bar Council.

The government is accustomed to getting its way, and the crisis surrounding the missing plane is holding officials accountable in ways unfamiliar to them, Ms. Ambiga said.

“Malaysians have come to accept that their leaders don’t answer questions,” she said. “When you are not seriously challenged in any meaningful way, of course you get complacent and comfortable.”

For a relatively prosperous country of 30 million people that is less well known internationally than neighboring countries like Thailand and Singapore, the government’s confused efforts at finding the missing jetliner are an awkward and undesired appearance on the world stage.

The crisis has led to introspection about why the government has appeared uncoordinated and unable to pin down seemingly basic facts about the missing flight.

Officials insisted for three days that baggage was removed from the flight before takeoff when five passengers did not board. But the country’s chief of police on Tuesday said that was false: Everyone who checked in boarded the plane, he said. No explanation was given for the conflicting accounts.

Ibrahim Suffian, the Director of the Merdeka Center, an independent polling company, said the response to the crisis had underlined a lack of precision both in government and in the society over all.

“There’s a tolerance for a lack of attentiveness to detail,” he said. “You have a tendency of not asking so much and not expecting so much.”

The crisis also highlighted a lack of competence in government that Mr. Ibrahim said was related to a deference to authority and reluctance to take initiative. “There’s always been a kind of wait-for-instructions-from-the-top attitude,” he said.

Yet amid the criticism of the rescue efforts there was also an acknowledgment that the plane’s disappearance was so unusual that perhaps no government would be fully prepared for it.

“This is almost a unique situation,” said Ramon Navaratnam, a Harvard-trained economist and a former Malaysian senior civil servant. “Anyone would be caught off guard.”

For now, the Malaysian authorities are stuck in the unenviable position of hearing many questions but having few answers.

“They have never faced pressure to perform like this,” said Ms. Lee, the management consultant. “But now international eyes are on them, and they have nowhere to hide.”

A version of this article appears in print on March 13, 2014, on page A11 of the New York edition with the headline: Leaders in Malaysia Face Unusual Scrutiny.