Saturday, September 29, 2007

Oil & Gas Windfall: Malaysia's Boon or Bane? (I)

I actually wrote this article a few months back for the purposes of submission to the New Straits Times (NST). Unfortunately, and bruising my personal ego in the process, it was rejected. ;) The article sort of sat around idle for a while until I submitted it to Aliran Monthly. Well, it's just been published, and I thought I'd put out my article here in 2 parts.

(A little plug for Aliran - It's a Reform Movement dedicated to Justice, Freedom & Solidarity and listed on the roster of the Economic and Social Council of the United Nations. Founded in 1977, Aliran welcomes all Malaysian above 21 to be members. Visit their website for more information or subscribe for a copy of Aliran Monthly today ;).)

Malaysia is a country blessed with abundant natural resources. In particular, we are thankful that the country is rich in oil and gas, which created Malaysia's sole representative in the Fortune 500, Petroliam Nasional Berhad (Petronas). In the most recent financial year ending March 2007, Petronas achieved record profits before tax of RM76.3 billion thanks to record high crude oil prices which increased from under US$25 per barrel to above US$70 all within 4 years.

Of greatest importance, was the fact that Petronas contributed RM53.7 billion to our national coffers in taxes, royalties, dividends and export duties last year. Contribution from Petronas and other oil and gas companies operating in Malaysia was budgeted to make up some 46.8% of the government revenue for 2007. This represents a steep increase from approximately 30% in 2006 and 25% in 2004. These statistics marks Malaysia's heavy reliance on oil and gas industry today.

Malaysia's abundance of oil & gas resources is akin striking lottery. It is a once-off affair, and at some point of time, our reserves will run dry. According to Oil & Gas Journal, Malaysia held proven oil reserves of 3.0 billion barrels as of January 2007, down from a peak of 4.6 billion barrels in 1996. These reserves will last us for only another 20 years or so.

What's worse, Malaysia is expected to become a net oil importer by 2010 assuming a conservative growth of 4% in petroleum products consumption. Our trade current account surplus has also been boosted significantly by oil and gas related products which constitutes more than 11% of our exports. The frightful acceleration of dependence on our limited oil and gas resources places the country's economy at great risks.

Malaysia must not fall into the trap of what economists call the “resource curse”, that is countries devoid of natural resources fare better than countries better endowed. Countries such as Hong Kong, Singapore and Switzerland contrasted against the oil-rich but poorly developed Middle East countries immediately comes to mind.

This appears to be closely related to the phenomenon known as the Dutch disease. The Netherlands in the 1960s, after its discovery and depletion of oil and gas in the North Sea, was plagued with unemployment and a unproductive manufacturing sector due to the negative side effects of such a discovery.

What is perhaps most worrying for Malaysia, with the reliance on natural resource overshadowing the other productive sectors of the economy, is the resulting “rent-seeking economy” where influential parties within and without the government focus their efforts in securing a a larger share of the economic pie, instead of creating a bigger pie.

Oil and gas for example, is of wealth, which does not in itself create employment. The right to manage this wealth however, lies in the hands of the government of the day. This concentration of distributive control over wealth leads to vastly disproportionate amount of resources spent on lobbying and rent-seeking activities which will in turn reduce efforts in raising our other productive sectors as well as human capital. Associate Professors, Ricky Lam and Leonard Wantchekon of Northwestern and New York University respectively labelled this phenomenon the political Dutch disease.

In Malaysia, we are certainly seeing the impact of the political Dutch disease. With rampant rent-seeking activities as well as political patronage, large amounts of economic and financial leakages are beginning to surface. Earlier this year, the Second Finance Minister, Tan Sri Nor Mohamed Yakcop has disclosed in Parliament that the recent bailout of 7 privatised projects has cost the Government RM11.0 billion, including the Putra and STAR LRT transport systems and Malaysia Airlines System costing RM7.7 billion and RM2.8 billion respectively. This amount works out to approximately 69.5% of the original cost of these projects.

Not included in the above lists are projects such as the MATRADE building and the Middle-Ring Road II which had repair bills of RM120 million and RM70 million over their original cost of RM167 million and RM120 million respectively.

More recently, we have seen how just completed government projects such as the Immigration office in Putrajaya, the mega-court complex in Jalan Duta as well as the renovated Parliament house require desperate resuscitation efforts.

Whilst the bail out packages and the repair bills have worked out to huge sums of money, its impact on the economy appears to be minimal at first glance. The country's gross domestic product (GDP) continues to grow at a healthy rate of around 5% per annum for the past few years. However, the GDP growth rate masks the fact that we have been increasingly reliant on our God-given natural resources for revenue, which has in turn cushioned the impact of dissipation of wealth caused by the impact of non-value-adding rent-seeking activities.

More coming up in Part II. ;)

Friday, September 28, 2007

Budget 2008: The Neglected SMEs

Last week in my regular column in Oriental Daily, I wrote on the fact that in the latest Budget 2008 announced by the Datuk Seri Abdullah was extremely disappointing for it neglected the largest productive sectors of the economy, both the manufacturing sector as well as the small medium enterprises (SMEs).

In the entire 44-page budget, there was only 1 incentive for the SMEs, that is taxes for new start ups can be paid in a more flexible fashion within the first 2 years. The manufacturing sector, despite contributing to 30% of our economy, was not mentioned at all except when it was mentioned that it is only expected to grow 3.8% in 2008 from the estimated weak 3.1% in 2007.

Both the SMEs and the manufacturing sectors are facing huge challenges in terms of globalisation and competition. The fact that the Government made no additional incentives or policies to enhance the competitiveness of our local companies relative to our neighbours and competitors is just "shocking". Clearly, there are some misplaced priorities in the Government's economy policies despite the record-breaking RM176.9 billion budget expenditure.




政府刚刚宣布的2008年预算案,其预算的1千769亿令吉开销再创历史新高。若跟10年前相比,这笔开销无疑增加了两倍。因此,国内企业界总是期待政府通过 庞大的开销,为它们带来一些有利及具有创意的新政策。







Thursday, September 27, 2007


Left to right: Ng Wei Aik (Political Secretary to DAP Secretary-General), Jenice Lee Ying Ha (DAP Teratai Chairperson), Victor Gu (MCA New Kid On The Block) and yours truly.

Heh, heh, Chinese current affairs magazine, 'Special Weekly', did a cheeky take pn some of the "young guns" expecting to contest in the coming general elections. You'd notice that the DAP kids are all in Optimus Prime gear, while Victor Gu's in the Bumble Bee outfit. I wonder who's going to don the Megatron suit... ;)

Wednesday, September 26, 2007

Malaysia Civil Service Revisited

Not too long ago, I got myself into a little "tiff" with UMNO Deputy Youth Chief, Khairy Jamaluddin when I released a press statement which cited the need for the Government to "streamline" a bloated civil service. I also stated that the accelerated increase in the number of civil servants was partially caused by the Government's policy of absorbing a "politically sensitive" pool of unemployed graduates into its fold.

As a result, the UMNO Deputy Youth Chief claimed that I was insulting Malays. Well, it appears that I'm definitely not alone with my opinions.

The Singapore Straits Times correspondent in Malaysia, Carolyn Hong, wrote an article "Stampede for govt jobs in Malaysia" on 24th September.
Last month, when [the Government] advertised for three electronics technical assistants and one electronics engineer, it was swamped with 9,216 resumes for the first job and 3,705 for the second.

The public sector, it seems, is the most popular employer these days.
And the reason?
It is the result of the government's drive to produce more graduates. One in every five Malaysian workers now has a degree or diploma, compared with one in seven five years ago.

Many new Malay graduates flock to the government sector because, as [economist] Datuk Dr Zainal [Aznam Yusof] said, they find it harder than others to find jobs in the private sector.
The article also quote a few other Malay economists on the jobs and employment situation in Malaysia. I'd certainly like to hear whether the UMNO Deputy Youth Chief will similarly think that what they are saying represents an "insult" to Malays.

The Government must face up to the problems faced by the bloated civil service as well as the increasing rate of unemployment among local graduates. To a large extent the very cause of the current problems faced, particularly by the bumiputera community, is ironically the New Economic Policy (NEP) itself, which was designed to assist them. Until the NEP is discarded and a more progressive policy implemented, the problems facing the community are only expected worsen in the coming years, and not as intended, improve.

Tuesday, September 25, 2007

What Constitution?

I won't write much. The quote from the Minister in Prime Minister's Department is shocking enough on its own. With reference to the boiling crisis of credibility facing our Malaysian judiciary with the exposure of the "Lingam tapes", Datuk Seri Nazri Aziz has this to say, as reported in Malaysiakini.

De facto law minister Mohd Nazri Abdul Aziz said he issued a denial on behalf of the chief justice in relation to the explosive ‘Lingam tape’ revelations because “I am his minister”.
“I am his minister. I am the minister in charge of legal affairs. He is clever enough to know that the reporters will ask me for a response.”
Clearly, the Federal Constitution is only a document for show in the current administration led by Datuk Seri Abdullah Ahmad Badawi. Having desecrated the constitution by declaring Malaysia as an Islamic state, the Government now does it again by not only removing the independence of the judiciary, but also subjecting it to a junior minister in the Malaysian cabinet.

I will certainly like to see the Deputy Minister for Youth and Sports, Datuk Leow Tiong Lai to wave the Federal Constitution, as he promised to do at the MCA Youth General Assembly at both the Cabinet as well as the Parliament. Having failed to defend the Malaysian constitution when the Deputy Prime Minister, Datuk Seri Najib Abdul Razak declared Malaysia as having never been a secular state, will he redeem himself this time round? Or more likely, is it a case of chicken again?

For that matter, why are all the BN component party parliamentarians so quiet on this issue? Some like Datuk Fu Ah Kiow even became apologists for their UMNO masters.

Monday, September 24, 2007

Malaysia's Misreporting Media

Guys, if you want to know how the local mainstream media reports activities by the DAP, then there is no better example than what happened last week with regards to the case of Nurin Jazlin Jazimin who was brutally assaulted and murdered.

See the image of the basket of flowers published on 19 September (Wed) on page 4 of The New Straits Times (NST) below?

Well, the caption says "One family's message, one nation's grief for the brutal death of an unknown child."

That for your information is an outright lie by the NST editors. The basket wasn't placed there by "one family" but by a delegation led by the DAP Secretary-General, Lim Guan Eng.

Not only did they lie about the origins of the flower basket and its message, they also doctored the photo. On the top right hand corner of the message card is the telephone number of the florist (where the flower basket was bought) printed in large fonts (see picture of by The Sun below). It "disappeared". What I'm less certain about is the fact that at the bottom right corner of the message card, "Democratic Action Party" both in English and in Chinese was written. This may have been blocked by the bear, although whether it could have been blocked in its entirety is the question.

The following is another picture on the same page, with 2 ladies who work for the DAP Rocket publication.

You can see Sdr Ronnie Liu, myself and YB Teresa Kok in the background. NST has very responsibly captioned the picture as "A bouquet and a soft toy are left where the girl's body was found." Clearly, it was too much to ask for NST to publish pictures of the key DAP leaders placing condolence basket but is it ethical for NST to avoid crediting DAP members, even when they are not key leaders?

If something as non-political as placing a condolence bouquet and expressing the anger of Malaysians at such brutality can demand such clearcut distortion of the truth in our venerable newspapers, then what can you expect when we raise other more "sensitive" issues such as ministerial and governmental corruption, abuse of powers and incompetence. For your information, the Chief Editor of NST was notified of the misdeed, but no response, apology nor correction was issued.

The Sun too, placed the picture of the flower basket on its front page on Wednesday last week, headlined by the contents of the message card itself - "Malaysians will not let you die in vain."

Again, there was no credit to the photo and no context provided. At least the paper didn't print a blatant lie or attempted to doctor the picture. However, credit must be given to the Sun for printing the context to the picture the next day, Thursday, after belatedly realising the mistake made, although no pictures were reprinted.

And what about the largest circulating English daily, the Star? Well, a reporter was certainly assigned to the story, but unfortunately for her, since the story will place DAP in a positive light, her work went straight into the thrash can. I am actually highly sympathetic to the English press reporters who do turn up at our press conferences (not all, but some) but who would find that their efforts to file a story completely wasted. The only consolation? At least the Star didn't attempt to capitalise on the picture or tell a lie. They just pretended that it wasn't important enough to publish.

Hence it is not surprising that many members of the public, particularly those who read either just the English or worse, the Malay dailies, think that the opposition parties like the DAP doesn't do much til election day. I can tell you with confidence that the party does a great deal throughout the year, all around the country. For the unbelievably limited resources that we have, we are clearly punching way above our weight. Unfortunately, our reach has been limited, with the exception of reaching out via the Chinese press which provides a little more room for us to publicise our views and activities.

So, if you want positive change, let the newspapers and the Government know by writing to them, or voting "correctly" in the next general elections. Or even better, do your part by helping out with DAP's party activities or if you are in the Klang Valley, help me out. You know how to reach me ;)

Tuesday, September 18, 2007

Dr K J John Makes His Stand

I'm a regular reader of Dr K J John's columns in Malaysiakini. I knew Dr John almost 10 years ago, when he was a senior vice-president at MIMOS, while I was a young fledging entrepreneur. Having dealt with him, he was certainly a man I strongly respected.

He has also frequently made known his position on politics, whether in his columns or in his public talks, that he is not partial to any political parties, and will make decisions and choices during elections in accordance to his conscience. For the coming general elections, Dr John has made up his mind, as expressed in his latest article "Why I would not vote for BN".

He gave 3 reasons:
  1. The issue of leadership integrity. I voted for the Pak Lah government at the last general election and even convinced all my friends to do so, simply because I believed in Pak Lah and all the promises he made. He has not delivered on many of his promises. Granted, five years is not enough, but surely the political will and intent will be visible by now, if there is any. I do not see it yet, having served as a government servant of 32 years. Neither Umno at the highest level nor MCA at the grassroots level (in my constituency) gives me confidence that Pak Lah, given another five years will and can make a difference. [...]

  2. My representatives at the grass-roots level have also let me down. During the 1999 elections, I brought both the Adun and my then future MCA MP to review the situation of the “rape of the green lung in my neighborhood.” Alas, the government cronies did what they wanted to do; they raped our 30-year-old green lung without even a proper hearing. [...] Sorry MCA representatives, even if Mr Ong Ka Ting personally appeals to me, I cannot vote one of yours as you are part of the problem.

  3. Local governance is at its worst ever. How can the government of the day be arbitrary in the “governance of the public spaces of life?” While Citizen Nades has been fighting through writing (exercising the power of the pen), it appears to no avail. [...]
Read his article for his views in full.

We are all part of the civil society that is pushing for change, and everyone has their roles. People like Jeff Ooi and myself have decided to take a stand via direct involvement in politics, while others like Dr John has made his views known to influence the vote of the public. It is clearly not enough for us to keep our views to ourselves, and vote for the party of our choice come the next general elections.

To effect change, there must be a mass movement, and it involves everyone, yourself included. We need to ensure that the message gets spread, not just to our family members, but also to friends, neighbours and the community. You can do so by printing leaflets and dropping them into mailboxes (I can help), sending out mass emails to everyone in your address book, and raising these issues at breakfast, lunch, tea and dinner functions. This is our Malaysia, and its up to us to redeem the country.

So, what is your stand? And more importantly, what are you going to do about it?

Monday, September 17, 2007


I wrote this article on the Budget 2008 for Oriental Daily last week, asking "Where the Candies?" I'll be writing more on the Budget this week, as my schedules frees up a little ;) So watch this space ;).














Thursday, September 13, 2007

More Mandarin Forums

This is probably the record week in terms of the number of speaking engagements for me. Six nights out of eight, it can't get much more than this. Phew! Well, I have 2 more Mandarin forums to go, one in Alor Star (!). Details are as follows:

1. Oriental Daily Forum: The Budget & The Stock Market

Date: 13 Sept 2007 (Thu)
Time: 7.30pm
Venue: KL Selangor Chinese Assembly Hall
(The last two times when I spoke on the Asian Financial Crisis as well as the recent Stock Market turmoil, it was a packed hall, so do come early to book your seat ;))

2. Kedah Chinese Assembly Hall (Youth Wing):
After 50 Years - Where Do We Go From Here?
(吉打州华人大会堂青年团: 建国50年,马来西亚路在何方?)
Date: 14 Sept 2007 (Fri)
Time: 7.30 pm
Venue: Kedah Chinese Assembly Hall
See you guys there! ;)

Tuesday, September 11, 2007


I wrote in Oriental Daily column two weeks back on quite a different topic from my usual spill, heh, on the Malaysian stock market. Given the volatility of the markets, caused to a large extent by the subprime mortgage crisis, what is the outlook for the Malaysian bourse?

The title for my column can be roughly translated as "avoid gambling and you profit". Without going into details, the alternating daily disclosures of good and bad news is enough to give those who are weak in the heart a nervous breakdown. Given the absolute uncertainty of the medium term plus the gains made by the stock market to date, avoid the stock market unless you are prepared for a wild ride, and that means significant downside risks.

What's the extent of downside risk? Well, some of you may remember a time where the only direction could have been up, the KLSE index tanked from 1,300 points to 270 points within less than 6 months in 1997/8. It may not have be as bad this time round, but it certainly takes only a 200 point drop to make you feel the pinch.

Hence, given the unpredictability, any short-term purchase of shares is pretty much akin to the roll of the dice. And if you decide not to roll the dice, you have made a profit already ;)


有人说, 只要华尔街一打喷嚏,全世界就要跟着感冒。日前,随着美国次级抵押贷款危机引发的风暴越来越大,导致华尔街流鼻涕的情况越来越严重,并爆发信贷危机。然而,最大的问题还是这类危机,会否导致全球股市送院留医好一阵子?











Budget 2008: Hear Zewt

Hmm... there hasn't been much time for me to sit down and write down my thoughts on the disappointing budget in full (that means many many pages...). Sigh. I'll try to do this soon, before the entire interest in the Budget sort of fades away.

But in the mean time, have a look at 2 posts by Zewt:

(1) Clarifying the "tax free" dividend policy
...if you happen to be a shareholder of that company, and so happened your tax bracket is lower than 27%... too bad, you’re screwed. If you’re a pensioner and hold a lot of shares, you’re wonderfully screwed.
(2) and some of his general thoughts on the Budget 2008
The proposal which was supposed to make us all feel very good is that EPF contributors will be allowed to withdraw balances from Account 2 to pay monthly housing instalments. Sounds like a good idea. But if you were to think properly… the government is basically allowing us… to use our own money… to pay for our own house. And we are supposed to feel thankful about it? You tell me…
Enjoy. ;)

Monday, September 10, 2007

Batman, Where Are You?

I wrote this column for Oriental Daily 2 weeks ago, but forgot to post it last week. It's an adaptation of a blog post I wrote here a while back on "Crime City".






在我之前公司任职的一位员工,在过去3年就经历两次暴力攫夺案。第一次,她就被送入医院求医。当然, 她并非办公室内唯一的罪案受害者。







尽管我非常关注治安的问题,然而若每个人对国内治安不理不睬,这是相当令人担忧的。(难道这跟年龄有关?)难道我们逐渐沦落为《蝙蝠侠》电影里头的愚人城市(Gotham City)?


Budget 2008: Who Benefits? (II)

Who are the beneficiaries of the Prime Minister cum Finance Minister, Datuk Seri Abdullah Ahmad Badawi's 2008 Budget? What is the prospects like for the economy of the country? What did you receive from Pak Lah's budget?

DAP has also launched our own version of the Malaysian budget - "Malaysian First: Unity Driven Equity, Growth & Innovation" focusing on the challenges of globalisation and the country's reliance on oil and gas revenues. (You can download the English and Chinese versions)

To understand further on who benefits in the latest Malaysian budget, and to analyse Malaysia's economic prospects, DAP is organising an English forum on the 12th September 2007 at DAP Damansara Branch. The details of the forum are as follows:
Malaysian First: Budget 2008 - Who Benefits?

Date: 12 September 2007 (Wednesday)
Time: 7.30pm
Venue: DAP Damansara Seminar Room
(55-1 Jalan SS21/1A, Damansara Utama, 47400 Petaling Jaya - map below)
The panel of speakers include:
  • Lim Guan Eng, DAP Secretary-General
  • Charles Santiago, Coordinator, Coalition Against Water Privatisation
  • Khoo Kay Peng, Socio-political Analyst
  • Jeff Ooi, DAP National E-Campaign Director
  • Tony Pua, Economic Advisor to DAP Sec-Gen
For more information, please contact DAP Damansara Hotline at 016-2208867. The seminar room fits approximately 100 people, so please come early to book your seats. ;)

Click image for larger view of map

Friday, September 07, 2007

Budget 2008: Who Benefits?

Looks like my post-budget work hasn't completed. So just some quick announcements here. There are going to be plenty of discussions and forums on the Government's Budget 2008, yes, the much touted pre-election budget today at 4pm (and I'll be stationed at the Parliament).

For those who are interested to read the DAP version of the Budget, you can now download both the English version as well as the Chinese version. The Malay version is "work in progress".

But for a start, here's what you can do to find out more this weekend:

1. SinChew Budget Discussion Forum (Mandarin)

I'll be speaking tonight (yes, that's this evening!) on the Budget presented by the Prime Minister at the Sin Chew Jit Poh Auditorium in Petaling Jaya. The forum will be in Mandarin together with 3 other eminent speakers. Details are as follows:
Date: 7 Sep 2007
Time: 8.00 pm
Venue: Sin Chew Jit Poh Auditorium, Petaling Jaya
2. Malaysian First: Budget 2008 - Who Benefits? (Mandarin)

The first in a series of forums to be held by the DAP after the Prime Minister announces the budget will be on this Sunday (9th Sep) evening (7.30pm) at the KL & Selangor Chinese Assembly Hall. This one is a Mandarin forum:
Venue/地点:吉隆坡雪兰莪中华大会堂楼上会议室 (KLSCAH)

  • 民主行动党秘书长林冠英 (Lim Guan Eng)
  • 著名经济评论人何启斌博士 (Dr Ho Kee Peng)
  • 秘书长经济顾问潘俭伟 (Tony Pua)
  • 时事评论人刘镇东 (Liew Chin-Tong)
We will be organising an English Budget forum early next week in Petaling Jaya. We will provide the update on details once the speakers, date and venue is finalised.

See you! ;)

Wednesday, September 05, 2007

DAP Malaysian First Budget 2008

Hey guys, finally I've gotten my big project out of the way :) The 52-page DAP Malaysian First Budget 2008 is finally released to the public today, 2 days before Pak Lah's government announces theirs.

I'm too overdosed with caffeine, accumulated over the past 2-3 weeks at this point in time to write too much about it now. But you can read the latest reports by Malaysiakini in English and in Chinese.

Plus, you can download the full Budget document, entitled "Malaysian First: Unity Driven Equity, Growth & Innovation" to get a firsthand account ;). Know that we have worked on the budget with overwhelmingly limited resources both with regards to people and information and we are more than happy to welcome additional suggestions.

OK, got to go get my sleep now. Will certainly post more on the Budget in the coming days. ;)