Monday, May 30, 2011

"The Tiger That Lost Its Roar" - A Foreword

"The Tiger That Lost Its Roar", a tale on Malaysia's political economy has just been published. I've been asked to give a synopsis on the book, which tends to be a little difficult when it's 350 pages and covers a wide range of topics. But I thought the Foreword in the book provides a good background to what I've written, so I'll "blog" it here for those keen to find out more.

It's still kinda long, so enjoy ;-). For those keen on having it shipped to you (a personal autographed copy), before the book hit the bookstores perhaps in a month's time, you can order direct, details here.


In writing and producing this book “The Tiger That Lost Its Roar”, a book on Malaysia's political economy, I wanted to present the state of Malaysia's economy, supported by all the necessary facts and figures, in a fashion which a typical man-on-the-street will be able to easily digest and understand without complicated jargons or abstract economic theories. The economy is a subject matter which affects all Malaysians, regardless of race or religion, age or gender, but it is often poorly understood or worse, neglected as a subject best left for the “authorities”.

At the same time, the developing Malaysian economy is deeply and inextricably intertwined with the country's politics. Any attempt to decipher the former, without understanding the impact of the latter will only give a distorted abstract on the relevant issues. What is perhaps the most important is to debunk the myth that “politics and economics do not mix”, and what happens with the countries' politics, whether it is race-based policies or political rent-seeking and patronage does not significantly affect the economy at large.

In the past, it is often heard that patronage and corruption can be tolerated, as long as projects get completed and the economy continues to grow at a rapid pace. It's a “win-win” situation, so what is there to complain. However, the above cannot be further from the truth as Malaysia had sacrificed the future growth and prosperity of the country and our future generations to create this short-term feel-good mirage of economic euphoria, particularly in the 1990s. The Barisan Nasional government then continued to maintain a facade of economic growth in the 2000s with the support of windfall oil and gas income, papering over cracks which have started to widen significantly.

It was with the drastic drop in global oil prices in 2008 which finally “exposed” the naked emperor, triggering a whole series of supposed “reform” measures in the guise of the “New Economic Model”, the “Government Transformation Plan” and the “Economic Transformation Plan” to slam the brakes on our economic decline and reverse the years of damage caused by not only our economic policies but also the country's politics. I wanted to relate in this book how the economic implications of its politically-driven policies had severely affected the performance of our economy, and how our economy cannot be reformed without transformative changes to the entrenched political culture in Malaysia.

Putting this book on Malaysia's political economy together has certainly been a lot more challenging than I had initially anticipated. There was a ready pool of source materials for the book, which was in the form of my articles and columns written for my blog and newspapers respectively, as well as hundreds of press statements which I have written over the past few years. However, I didn't want to turn the book into a compilation of articles and statements which are related, but aren't properly “connected” in the context of a book. In addition, such articles will often carry repeated background information on particular issues which will not contribute towards an easy-to-read, concise and coherent book.

Hence much time was spent not only on organising, integrating and editing the hundreds of existing articles into cohesive chapters for this book, I realised that I had to write many new sections, or even brand new chapters to ensure that readers will be in possession of a more complete and coherent picture of the “stories” which I'd like to tell. The chapter on the RM12.5 billion Port Klang Free Zone (PKFZ) scandal for example, got expanded to 2 separate chapters due to the amount of “juice” flowing from the story, which if left unwritten, will do injustice to the scandal. After all, it is the ultimate example of a “perfect brew” of BN politicians from various parties getting their fingers dirty with crony businessmen, stinking of corruption and abuse of power, abetted by blissfully ignorant and incompetent government officials and unchecked by the country's top enforcement agencies. The scandal probably deserves a book on its own, but for the moment, a condensed version packed into 2 chapters will suffice.

The initial chapters gives the macroeconomic overview of the country's economy and the country's defining economic policies, the overaching “New Economic Policy” and its proposed replacement the “New Economic Model”. This is followed by the chapters reviewing the Government's privatisation policies on highways, water and electricity and their lasting distortionary implications.

Readers will then be “treated” to a series of scandals which reflects the decay in governance and its impact on our tax-payers' funds. These scandals further exacerbate the misallocation in the Government's budgetary expenditures, particularly in the accelerating operating expenditure which puts to waste the immense windfall revenue contribution from the oil and gas sectors. The ineffective use of crude interventionist policies such as price controls, subsidies and fiscal instruments further destroys competitiveness and efficiency, without at the same time achieving the objectives of such policies in the first place.

Finally structural issues within the Government, particularly that of the civil service, as well as infrastructural bottlenecks such as the country's transportation system, or the lack of it, with their root causes in politics, continue to impose an artificial glass ceiling on the growth potentials of the country's economy.

On top of all of the above, in my personal view, the biggest failure of the BN Government is its inability to protect and develop our excellent pool of human capital due to political expediency. Our economy has been able to remain “above water” thus far has less to do with the socio-economic policies of the Government, but in spite of it. This is because the Malaysian human talents were able to make do with whatever limitations and hurdles placed in their path. The chapter “Education Simplified” tells the simple tale of how our education system has been desecrated and debased, which not only fails the future generations of Malaysians but also at the same time encouraged them to look for greener pastures overseas.

The book isn't meant to be a book of unbridled negative criticisms with no corresponding positive and constructive proposals. Throughout each of the respective chapters, alternative policies with varying degrees of detail are outlined to achieve the goals for economic competitiveness and efficiency while protecting social and distributive justice for the man-on-the-street. I've also called for a “New Deal” to overhaul the archaic and increasingly centralised planning, decision-making and implementation of the government machinery which not only makes a mockery of our federal system, but severely restrains the development of dynamic regional economies in the country.

Malaysia today is a “tiger” that is weak and impoverished from years of neglect, abuse and malnutrition. As a result, it has not only lost its bite, it has lost even its roar. However with the necessary tender loving care, the right dose of medication and therapy, the Malaysian Tiger has every opportunity to bounce back, stronger than ever before. This can only happen if the Government of the day has the political will and moral courage to face its demons, place the interest of the rakyat above that of the vested interest parties and slaughter the sacred cows.

With the country on the cusps of change, there is no better time to bring back the Malaysian roar.

Tony Pua

Declassify IPP Contracts Now

The Government must declassify the Independent Power Producer (IPP)agreements to justify their refusal and failure to restructure these wildly unfair contracts which allows them to make astronomical returns at the expense of the people.

Earlier in the week MCA President Datuk Seri Dr Chua Soi Lek defended the IPP purchasing power agreements (PPA) claiming that these agreements are sacrosanct and hence the Government cannot restructure these unfair agreements.

According to The Malaysian Insider, Dr Chua said “because the government is tied up in a lot of agreements, this cannot just be abolished like DAP says or Anwar (Ibrahim) says… Then Malaysia will be seen by the world as a government that does not honour its agreements. That’s wrong.”

There is little point in 'arguing' with Dr Chua on he PPA that nobody outside the Cabinet has access to. I'd instead challenge Dr Chua to prove his point that the Government completely helpless after signing he PPAs by demanding that these agreements be declassified for public scrutiny.

After the highway toll concession agreements were declassified in 2009, close scrutiny of these agreements have proven that there are well-defined terms in them which allows the Government to expropriate or buy back the concessions. The expropriation clause ensures a reasonable buy back price while ensuring that the concessionaires receives a reasonable rate if return for their investments during their years in operation. These terms were agreed and signed by both the government and he concessionaires, and hence there is no question of its sanctity being breach. Pakatan Rakyat has since been able to show that the Government is able to expropriate these highways without burdening public finances.

The declassification of the highway toll concession agreements also proved the lies of the former Works Minister Datuk Seri Samy Vellu who had for years claimed that the government would have to pay hundreds of billions of Ringgit in compensation should these contracts be terminated. He hid his arguments behind the Official Secrets Act (OSA) which prevents the public from finding out the real truth.

It is only with the declassification of the PPAs from the OSA that Dr Chua can prove that he is not another Samy Vellu who tried to protect the interest of the crony concessionaires while hiding behind the OSA.

At the same time, we have no confidence with the political will of the Barisan Nasional government's 'negotiations' with these IPPs to restructure he terms of their contracts as announced by the Minister in Prime Minister's office, Datuk Seri Idris Jala. The BN government had talked about renegotiating hgese contracts for more than 6 years now with absolutely nothing to show.

The latest announcement on renegotiations is only a meek attempt to placate an angry rakyat, and to buy more time for the IPPs which has only a few years left in their contracts to continue to profit under the current terms of their agreement.

If Najib's administration has the political will and is really sincere about renegotiating these contracts, it would not have taken him more than two years. It is only after being placed under pressure by the rakyat over the Government's attempts to cut subsidies for the man-on-the-street and not those for the large corporate cronies like the IPPs recently, that the recycled 'renegotiation' announcement was made.

The BN government must prove its commitment to transparency and accountability as promised under the Government Transformation Programme (GTP) by declassifying the PPAs and act to ensure that the people's interest comes first, as demanded under Najib's increasingly hollow 1Malaysia statement.

Saturday, May 28, 2011

73% Above Market Rates to Bailout Water Companies

The Edge Financial Daily reported that Syarikat Pengurusan Aset Air Bhd (PAAB) will acquire the bonds issued by the Selangor state water concessionaires through its-wholly owned subsidiary Acqua SPV Bhd for the amount of RM6.5 billion. The paper further quoted a market source that “in terms of price, the buying back is at 94.49 against mark to market value of only 54.54 at the end of last month”.

It is bad enough that the Federal Government has decided to bail out the Selangor water concessionaires, but for it to pay a whopping 73.2% higher than the market vallue of these bonds borders on being outrageous and an abuse of taxpayers’ monies.

This rescue deal for the private concessionaires is reminiscent of the Malaysian Airlines System bailout when the Federal Government paid RM8.00 per share, or 121% higher than the market price of RM3.62 per share to Naluri Bhd, owned by Tan Sri Tajuddin Ramli in December 2000. In fact, the Government has yet to see any returns on its “investment” for the stock price has slumped to RM1.59 (as at yesterday) or a 80.1% decline for its investment after 10 years. The company continues to be troubled as it made RM242.3 million in losses for its first quarter this year in its financial results released this week.

It is inexplicable that the Government has decided to settle the outstanding bonds of these privatised water companies when it should be the shareholders of these companies themselves who should be responsible for their debt.

In fact, when these companies were profitable, they have declared handsome dividends for their shareholders. Among the concessionaires, Syarikat Pengeluaran Air Sungai Selangor Holdings (SPLASH), whose parent company is Gamuda Bhd, declared dividends of RM578.6 million in 2007 while Puncak Niaga Holdings Bhd had declared dividends amounting to RM214 million between 2006 and 2010.

The above certainly makes true the dictum of the BN Government privatising profits and socialising losses by taking over the debt burden of these companies.

The debt bailout is worsened by the fact that the Government has not been transparent with the whole exercise when the Minister of Energy, Water and Green Technology, Datuk Peter Chin announced that there has been no cabinet decision on the matter earlier this week.

To date, we still do not know how the Federal government plans to restructure the water industry in Selangor based on the Water Services Industry Act 2006 after taking over these debts and whether these private concessionaires would be required to repay the Government for the bailout.

The Minister must no longer pretend to be clueless about the entire exercise and disclose the full terms of the bailout exercise as this affects the basic right to water of all residents in Selangor, Kuala Lumpur and Putrajaya as well as billions of ringgit of tax-payer’s monies. Unless of course, he is completely powerless in his own Ministry, with key decisions made without his knowledge, in which case, he should then just resign honourably to protect his personal reputation and integrity.

Friday, May 27, 2011

"The Tiger That Lost Its Roar" Out Now!

My new book, the first one in English, "The Tiger That Lost Its Roar" is finally printed after countless "interruptions" (like by-elections)! It's a tale on Malaysia's Political Economy, written in such a way that I hope will be accessible to all Malaysians (and everyone else who's keen on Malaysia's political economy).

It's 350 pages thick, covers issues from foreign investment, privatisation, subsidies, NEP/NEM, financial scandals (especially PKFZ), education as well as other problems and solutions to be implemented to resolve our declining competitiveness.  Plus, I drew that sad, scrawny-looking tiger on the cover. ;-)

It'll take a few weeks before it hits the bookshops around the country, but for those who'd like to have it shipped to you next week, send me an email -

Give me the following details:
  1. Name
  2. Shipping address
  3. Quantity
  4. Hardcover (RM60) or softcover (RM30)
There'll be a shipping charge of RM6 for local postage. You can pay via Maybank2U or Visa/Mastercard credit cards.

The book is published by DAP and the profits will of course go towards a good cause by the Party.

Thank you for all your support!

Scholarship Merit?

Dato’ Seri Nazri Aziz should be rapped for failing Malaysian’s crème-de-la-crème while defending the Public Service Department’s little Napoleons

Datuk Seri Nazri Aziz attempted to protect the officers of the Public Service Department (PSD) despite their obvious failure to ensure that the country’s crème-de-la-crème are given JPA overseas scholarships as promised by the Prime Minister, Datuk Seri Najib Abdul Razak.

Instead Nazri himself should be the person to apologise to all Malaysians for the Government’s failure to deliver on its policies because he is directly the Minister in the Prime Minister’s Department in charge of the PSD.

The Minister now claims that the Government never promised the top SPM scorers overseas scholarships. Instead, he argued that the only thing which was promised to students who scored more than 8A+ in their SPM results was a full scholarship, with no guarantees that they will be sent overseas.

It is indeed true that Najib had made the announcement that all with SPM results better than 8A+ will be assured of a local or overseas scholarship. Nazri was however highly mischievous by leaving out the fact that both Najib and himself had also disclosed and clarified that the 20% of JPA overseas scholarships will be awarded based entirely on merit.

This means that out of 1,500 students who have been given overseas scholarships for this year, 300 should be awarded entirely based on merit. Under such circumstances, there should be no room at all for the fact that students with more than 10A+ failing to receive overseas scholarship awards for there are less than 300 students who have obtained such excellent results.

Based on information published so far, it is not the odd student or two who have been denied the scholarship, which can be attributable to genuine mistakes by the PSD. The number who has been denied under the merit scheme adds up to tens, if not hundreds of students. This can only happen if there was a systematic attempt by the PSD to deny these brilliant students their rightful entitlement as promised by the Government.

Therefore Nazri must be rapped not only for failing to perform his duties and responsibility as the Minister in-charge of the PSD and for the award of scholarships, he must be taken to task for trying to defend his officers by misleading the public with half-truths. His attempt to defend the indefensible makes a complete mockery of the Prime Minister’s slogan of “people first, performance now”.

The Government’s lack of urgent action to right all the wrongs in the award of scholarships after decades of controversy will only result in more Malaysians, particularly the best and brightest, losing confidence in Najib administration’s to retain talent, and reverse the brain drain that is bleeding the country’s economy.

This further strengthens our call for the function of scholarship award to be delegated to the Talent Corporation to give hope to Malaysians that all is not lost, and perhaps next year, we’ll indeed see the end of the annual scholarship circus we are now accustomed to.

Thursday, May 26, 2011

RM6.5 billion Selangor water bonds bailout

BN Government's RM6.5 billion bailout of Selangor privatised water companies has jeopardised the people's chance of securing a long-term deal to enjoy quality water supply at the lowest water prices.

It has been reported in the media that the BN Federal Government has decided to bail out the debts of the Selangor privatised water companies to the tune of RM6.5 billion. This move has in effect killed any remaining possibility of the Selangor state government striking a deal with these companies to restructure and take over the water industry in Selangor.

The debts of these water companies were at risk of default after they were unable to meet their installment earlier this year. Of the four companies, Puncak Niaga Sdn Bhd and its subsidiary, Syarikat Bekalan Air Negeri Selangor (SYABAS), had debts amounting to more than RM4.2 billion.

The failure of these companies to service their debts, had no bailout been offered by the BN Administration, would have necessitated these companies to come to the table and negotiate the terms of restructuring with the Selangor state government or other parties which has made offers to acquire the businesses and assets.

The Selangor state government has made a third offer amounting to RM6.3 billion into acquire these water companies, and taking over their debts obligations. In addition, the state government is able to ensure that there will be no water tariff hikes post restructuring. Gamuda, through its subsidiary Pengeluaran Air Selangor Holdings (SPLASH) has also made an offer to acquire the same companies for RM10.8 billion, a figure including the existing debts.

However as a result of the Federal Government bailing out the massive debts, they have relieved these companies of their cash flow problems. This will mean that there is now no urgency for these companies to agree to any form of restructuring as desired under the Water Services Industry Act (2006) as they now have the upper hand at the negotiating table at the expense of the rakyat.

In fact the likely outcome from the bailout is that the Federal Government will follow up with the taking over water-related assets will be these privatised water concessionaires will continue to able to operate and profit from the provision of water services in Selangor, without having to be burden by debts which have been accumulated over the years.

The result is clearly a loss for the people of Selangor for they have lost an opportunity for the privatised water industry to be truly restructured to ensure quality water prices are to be provided at the lowest possible prices.

The Minister of Energy, Water and Green Technologies, Datuk Peter Chin must immediately provide clarifications for the move to bail out the debts of the water concessionaires before a restructuring deal is finalised, at the expense of the people’s interest. He must also fully disclose at the same time the means and terms of repayment to the Government by these concessionaires with the Government taking over these debts.

Finally, the bailout debunks all earlier claims by the BN Government that it is acting in the interest of the rakyat, and serves to prove that it is only interested in protecting the interest of its political cronies above everything else.

Talent Corp Should Take Over JPA Scholarships

Talent Corporation should take over the function of awarding Government scholarships given the total failure of Public Service Department to award scholarships in a fair and equitable manner after all these years

The Public Service Department (PSD) has proven itself to be a complete disaster in managing the award of government scholarships to the young and brightest Malaysians, particularly to those seeking the opportunity to pursue their education overseas. Over the past decades, it has never failed to attract controversy by failing to award scholarships in a fair and just manner resulting in hundreds of top students failing to secure the scholarships they deserve.

After last year's fiasco, the Prime Minister, Datuk Seri Najib Razak announced that there will be 20% of overseas scholarships will be awarded entirely based on merit. However, Najib's promise was made a complete mockery when top students with 10 or more A+ for their SPM failed to secure the overseas PSD scholarship, but were instead only local matriculation programmes.

In fact, the PSD defied the decisions of the Cabinet by creating completely new scholarship categories, such as the 'Open' scholarship as well as scholarships for diploma programmes to circumvent the directive of the Cabinet. The outcome is a circus where Barisan Nasional component parties such as the MCA, Gerakan and MIC becoming a public complaints bureau and the de facto channel for appeals from disappointed scholarship applicants.

In addition, the never-ending scholarship controversies have led to as well as further exacerbate the serious brain drain crisis facing the country. Students and families who are unjustly treated will be persuaded to leave the country to greener pastures who will not hesitate to poach our top talents. The worsening brain drain crisis will also lead to the failure to meet our high income nation goals under the New Economic Model and Economic Transformation Programme.

In the face of massive public uproar, Deputy Minister of Education, Datuk Seri Wee Ka Siong who came under heavy fire, had openly blamed the little Napoleons in the PSD for openly defying Cabinet directives. His accusations were supported by various other Ministers, Deputy Ministers and BN component parties.

Despite the obvious need to take strong disciplinary actions against top PSD officials, based on past experiences, there will be little or no political will from the BN Ministers to take any action against them.

Therefore, to prevent future scholarship fiascos arising from the failure or sabotage by the PSD, we'd like to propose to the Cabinet to transfer the Government scholarship award role to the newly set up Talent Corporation.

The transfer of this critical role and responsibility will be particularly fitting given the crucial role of attracting and retaining talent in Malaysia. They will also be the most appropriate agency to manage the best and brightest talents of our future given their close links with the industry. With the single-minded objective of harnessing talent for the country, the Talent Corporation will stand a better chance in succeeding with honouring our best and brightest as opposed to the PSD whose role is complicated and confused, made worse by vested interest and little Napoleons.

We call upon all parties, not just those in Pakatan Rakyat, but also MCA, Gerakan and MIC who has verbally expressed their frustrations with the PSD. The proposal is made in the interest of all Malaysians and there should be bipartisanship in ensuring the annual scholarship circus will never see the light of day again.

Sunday, May 22, 2011

Competitiveness Rankings Drop: Just "Perception"?

The steep decline IMD Competitiveness rankings in the categories of “Government Efficiency” and “Business Efficiency” from 2010 to 2011 proves that investors has had enough of “transformation” rhetoric from the Najib administration

Our global competitiveness rankings for 2011 as produced by the Switzerland-based Institute of Management Development (IMD) ranked Malaysia 16th out of 59 countries, marking a significant drop of 6 places from 10th in 2010. This was after a much-hyped jump in rankings from 18th in 2009 to 10th last year.

While the overall rankings decline is disappointing, it is shocking to discover that our ranking for 'government efficiency' and 'business efficiency' tanked from 9th and 4th to 17th and 14th respectively.

What is worse is to for the Minister of International Trade and Industry to justify the drastic drop in rankings due to the fact that these two categories are measured on "perception" and hence insinuating that they are not accurate!

Dato’ Seri Mustapa Mohamed’s statement in response to the above rankings decline emphasized the fact that it was due more to “perception-based factors” which declined as opposed to “real/hard data” which showed our “Economic Performance” rankings improving marginally from 8th to 7th this year.

On the contrary, when there were reported improvements last year when the country was ranked 9th and 4th respectively for these 2 categories, the Minister did not hesitate to pour praises on the Government’s performance. His statement last year had exclaimed “the remarkable advancement in our Government Efficiency rating” and he was gloating that based on “Government and Business Efficiency ratings, Malaysia’s performance is now ahead of developed countries such as Luxembourg, Switzerland, Canada, Denmark and Sweden.”

Why didn’t the Minister qualify his “joy” by saying that the improvements were just “perception” and not based on “real/hard data” last year?

However, if it is really a problem of just “perception” as highlighted by the Minister, then perhaps the entire public relations team in Pemandu as well as the Prime Minister's Department, such as APCO should be sacked for doing such a terrible job in improving the “perception” of our Government despite the hundreds of millions which have been spent on public relations and related exercises.

The fact is, the Government has never done or spent so much public relation exercises, launched in conjunction with multiple programmes - NEM, GTP, ETP, 10MP etc. - written beautifully by expensive consultants such McKinsey and Boston Consulting Group.

The steep decline in rankings for these 2 categories is due to the fact that the business community and the public at large have seen through the glossy "transformation" programmes, the snazzy event launches and the choreographed speeches delivered by our Ministers and Government.

After more than 2 years of "transformation" rhetoric, they have realised the real change has not been forthcoming, critical reforms have been quietly shelved while government business favouring politically-connected parties are continuing business as usual.

Very simply, no amount of fancy PR consultants will be able to change that "perception" if the Government fails to deliver on its promises of change and transformation.

Both the Prime Minister and Minister of International Trade and Industry must recognise that it is the Government's failure to implement the necessary reforms as well as its repeated U-turns in policy-making which has caused the stark drop in global competitiveness rankings. The failure of Dato’ Seri Najib Abdul Razak to recognise this will only result in further loss of competitiveness and ultimately the failure to breakout of our middle income trap to achieve the much coveted 'high-income status'.

Saturday, May 21, 2011

Application to Strike Out Syabas Defamation Suit Withdrawn

Together with my lawyer, we've decided to withdraw the bid to strike out Syabas defamation suit against me, to give the earliest possible opportunity for the full trial to be carried out and witnesses summoned for testimony. We are looking forward to putting Syabas CEO, Tan Sri Rozali Ismail on the witness stand to answer various allegations of misappropriation and mismanagement in the Selangor water concessionaire.

I see no element of defamation in the alleged "defamatory words" published in Nanyang Siangpau, and I look forward to defending them during the trial. We are also expecting to bring in experts from the industry as witnesses to provide evidence in support of our case.

The judge has set June 20 for case management, and expects the trial to be carried out in July/August.

Full hearing for Syabas suit

KUALA LUMPUR: Petaling Jaya Utara member of parliament Tony Pua has withdrawn his application to strike out the defamation suit against him by Syarikat Bekalan Air Selangor Sdn Bhd (Syabas).
This is because both parties have agreed for all issues to be heard at trial, Pua's lawyer Ang Hean Leng said yesterday.

Ang said the court had set June 20 for the next case management.

The water company claimed that Pua had caused to be published an article entitled "Tony Pua: Selangor Government must have water rights to prevent rate hike" in a Chinese daily last November. It stated that the words were understood to mean that Syabas was incompetent in managing water supply rights and that the defamatory words had affected its business.

In his statement of defence, Pua claimed he was appointed as the spokesperson for "Return Water Rights to the People" campaign, launched by the Selangor state government and had offered his views when asked during a forum.

He also disputed the translation of the title of the article as stated in the statement of claim. He added that it should have been translated to read as, "Tony Pua: To ensure no hike in water tariff, Selangor state government wants management rights of water supply".

If Subsidies is "Opium", Who's the Drug Lord?

If subsidies is akin to "opium" as described by the Prime Minister, Datuk Seri Najib Abdul Razak, then sure the Barisan Nasional Government is guilty of being the "drug pusher" for offering "opium" to the Malaysian public over the past decades.

The reason why the BN government has fed "opium" to Malaysians in increasing doses over the years is to mask the fact that the Malaysian economy has been unable to grow at the necessary pace and competitiveness. As a result the people are unable to increase their income at a pace faster than the rapidly rising cost of living.

Hence the BN Government used "opium" to keep the general populace in an artificial state of bliss and ignorance that Malaysians are stuck in a middle income trap and rising income inequality.

While the population was induced with a "feel good" factor over the past two decades, BN continued to weaken the competitiveness of our economy through policies which were inefficient and ineffective, waste our scare wealth on poorly thought-out hare-brained projects and through rampant and blatant corruption involving the BN Government such as the RM12.5 billion PKFZ scandal. This has not yet included the fact the capital flight amounting to a shocking RM888 billion from 2000 to 2008 as announced by the US-based financial watchdog Global Financial integrity (GFI).

BN could feed the people with "opium" all these years thanks to the growing production of oil and gas as well as rising international oil prices which led to record oil revenues received by the Government, hitting a high of RM67 billion in 2009.

However as a result of extravagant and unproductive government expenditure over the past 2 decades, the BN government now finds itself having difficulty in reducing the budget deficit, feeding their cronies while at the same time continuing to supply sufficient “opium” to the people.

The problem hence is that the “opium” is not the real problems faced by Malaysia’s economy, but just one of the symptoms. The underlying problem for the country’s economy in this case is the plundering and pilfering of the country’s wealth by the BN government with its crony business interests. Therefore even if the “opium” addiction is removed, the plight of the economy will still continue because all that’s saved from the “opium” will still be pilfered away.

The only way to return the country’s economy to its potential trajectory is for the Government to start placing the interest of the rakyat above that of the BN cronies and start looking to improve the efficiency and effectiveness of its expenditures, as well as taking pro-active measures to improve transparency and accountability to reduce corruption and leakages. Without these key measures, removing the “opium” addiction will only be a short-term measure which will not lead us to become a high-income nation.

Friday, May 20, 2011

Visiting Taiwan

I'll be visiting Taiwan from the 24-27 May and will be meeting up with the Malaysian students, business and expatriates community there. Together with me, Teo Nie Ching (MP for Serdang), Ng Wei Aik (ADUN Komtar) and Violet Yong (ADUN Pending) will be organising an public forum in Taipei.

All Malaysians and Malaysians-at-heart are cordially invited to attend and participate in the public forum and dialogue on "Malaysia: The Politics & Economics of Change".

The details of the event are as follows:
Malaysia: The Politics and Economics of Change
25th May 2011 (Wednesday) 7.30pm
Frog Cafe (No.5, Lane. 69, Songjiang Road., Taipei City)
Finger food and light refreshments will be served

Please RSVP at our Facebook event page.

There will be a cover charge of NT500 to help defray the cost of the event. As seats will be limited, we look forward to your confirmation by May 22, 2011. We eagerly await your participation.




Subsidy Cuts: Where are the Mitigation Measures?

When Pemandu announced its subsidies rationalisation plans in June 2010, it has proposed to cut subsidies for fuel, electricity and essential food items on a quarterly or half-yearly basis.

The BN government has since announced several rounds of reduction in subsidies for fuel, sugar and other items. The price of sugar for example, has increased from RM1.45 to RM2.30 per kilogramme, or an increase of 58.6% in less than 18 months.

Diesel subsidies for critical transportation companies will also be reduced and the cost is expected to increase 24.1% from RM1.45 to RM1.80 per litre. In addition, statements made by Ministers over the past few days indicates that RON95 petrol used by the majority of Malaysians will be increased further in June, after 2 rounds of hikes in the 2nd half of last year.

Despite repeated denials and assurances from the Prime Minister, the inevitable outcome of the reductions is to exacerbate inflation in the country, already suffering from rising global food pricesm.

The Government had last year assured Malaysians of lower income groups that the impact of subsidy reductions on their living standards will be cushioned with a series of mitigation over the next 2 years.

For petrol subsidy reduction, Pemandu has proposed a cash rebate mitigation plan for motorbikes less than 250cc and cars less than 1000cc amounting to RM54 and RM126 per annum. As for the reduction in food subsidies, Pemandu had proposed a cash rebate of RM20 to MyKad/MyKid holders through post-offices for the first year, and subsequently through “MyKasih card” for those with income below a certain unspecified threshold.

However to date, despite the several rounds of immediate subsidy cuts, the Government has completely failed to disclose any proposed mitigation measure, much less implement any of them. It appears as if the Government is trying to pretend as if no mitigation measure has ever been proposed in the hope that Malaysians will soon forget about it.

The people who will suffer most from the repeat rounds of subsidy cuts are those who are in the low and lower-middle income groups. The lack of concern from the Government for the bottom 40% of income earners in Malaysia will only accentuate the already high-levels of income inequality in the country.

As it stands, the World Bank Report on "Inclusive Growth" in November 2010 has highlighted the fact that income inequality in Malaysia is among the highest in Asia and is close to the levels suffered in South America. In addition, the high levels of inequality has remained stubbornly high over the past [decade].

Hence the Government's continued absence of measures and concerns to help the bottom 40% of income earners in the country to cope with rapidly rising cost of living, worsened by the repeated rounds of subsidy reduction will only increase the degree of inequality suffered in Malaysia.

Stop "Fat Cats" Subsidies First

Muhyiddin must not pull the wool over the people’s eyes by cutting simple subsidies for the man-on-the-street but refuses to take action against large subsidies feed fat crony companies.

There is little to dispute on the fact that subsidies cannot last forever and our Malaysian subsidy system needs to be restructured. According to our Deputy Prime Minister, Tan Sri Muhyiddin Yassin, the subsidy burden is expected to increase from RM10.32 billion to RM20.58 billion this year, of which approximately RM18 billion goes to fuel-related subsidy.

As a result, Muhyiddin has hinted strongly that retail fuel prices, particularly that for RON95 used by majority of Malaysians, will be raised sooner rather than later. This comes hot on the heels of the most recent 20 sen increase in sugar prices, the 4th such increase in 18 months, or a total of 58.6% increase over the period.

However, what the Deputy Prime Minister has failed to explain to the Malaysia public is the overwhelming bulk of the projected RM18 billion of fuel-related subsidies is given to companies with lucrative concessions earning billions of ringgit in profits annually.Read more!

Wednesday, May 18, 2011

Whose "opium" to cut?

Pakatan faults BN for subsidy ‘opium’ addiction
By Clara Chooi May 18, 2011

KUALA LUMPUR, May 18 — Pakatan Rakyat (PR) lawmakers have blamed Barisan Nasional (BN) for failing to address the country’s addiction to subsidies with alternatives, rebuking Datuk Seri Najib Razak for transferring the “opium’ to cronies.

They said escalating cost of living and stagnant wages have made Malaysians dependent on subsidies, warning that any sudden removal would bankrupt people instead of encouraging competition and wiping out market distortions.

The PR lawmakers suggested the Najib administration take a more holistic approach to cut its burgeoning subsidy bill through a total restructuring of the system by reducing subsidies to corporate giants instead of to the poor, implementing a minimum wage council to boost salaries, and providing better public transportation system to reduce dependency on vehicle ownership and fuel consumption.

“What they are essentially doing shows that they are not serious in their intent to restructure subsidies in the country,” said DAP publicity chief Tony Pua who agreed with Najib subsidies were like “opium” to the Malaysian economy but he blamed the government for failing to provide a proper alternative to consumers before reducing their access to the subsidy “opium”.

He also complained that the administration was going about its subsidy removal plan in the wrong way by cutting from the “poor man on the street” and yet at the same time, still providing massive subsidies to big corporate giants.

“What Najib is doing instead is making this opium exclusive to Barisan Nasional (BN) cronies,” the Petaling Jaya Utara MP told The Malaysian Insider.

He said in order to ease the people’s addiction to the subsidy “opium”, better alternatives should be made available like a good public transportation system.

“At this point in time, Malaysians consume a large amount of fuel, not just because we pay lower-than-market rates but because we have no other alternative but to own cars due to the lack of transportation infrastructure,” Pua added.

He also suggested the government consider cutting back on its subsidies to corporate giants like the independent power producers (IPPs) and toll concessionaires instead of depriving the poor of financial aid.

For the full article, click here.

Monday, May 09, 2011

1Malaysia Email: Truth & Lies (II)

I had taken the opportunity to read every word in the advertorial placed by PEMANDU to explain and justify the “1Malaysia Email Project” controversy across all major newspapers and even news portals yesterday.

I also read with interest the repeated assertions with regards to “misrepresentations spewed by the vocal minority”. Datuk Idris Jala had clarified that “the reason why PEMANDU is clarifying this situation is to make sure that the general public is not misinformed by people who distort the truth” and that “PEMANDU believes in integrity and transparency.”

I am not sure if I’m included in this exclusive circle of “vocal minority” who is “bent on distorting the truth”, and I shall not be so bold as to think that the criticisms are directed at me. However, after reading the “comprehensive” reply, I’m felt compelled to compile my own list of “frequently asked questions” (FAQs) on “truths and lies about MyEmail”

Q1: Is the “1Malaysia Email Project” a Government initiative or a private initiative?

Fact #1: Tricubes issued a statement on Bursa Malaysia on 4 April 2011 “The Board of Directors of TRICUBES wishes to announce that the Company has on 4 April 2011 accepted the appointment by the Government of Malaysia represented by Malaysian Administrative Modernisation and Management Planning Unit (“MAMPU”) vide MAMPU's letter of award dated 29 March 2011 to implement the 1Malaysia Email Project. TRICUBES will enter into a definitive agreement with Government of Malaysia to finalise the detailed terms and conditions of the appointment in due course.”

Fact #2: The original text description of the project on PEMANDU website says “The 1Malaysia Email project is a government initiative in providing a unique and official email account and ID for the citizens of Malaysia”. After the initial public outcry, the description was however changed to “The 1Malaysia Email project which features the domain name of ‘’ is a private sector initiative led by Tricubes Berhad to provide a unique and official email account and user ID for interested citizens of Malaysia.”

Fact #3: Datuk Idris Jala now reclarifies that “it was always seen as a Government initiative, funded by the private sector”. The Advertorial also added that “a competitive selection process was undertaken [by MAMPU and GITN] to ensure high technical standards and the right business model are adopted at the lowest cost and highest quality. The evaluation team [from MAMPU and GITN] selected Tricubes Berhad based on these criteria.”

Truth or Lie?

The “facts” above issued by PEMANDU and Tricubes is riddled with contradictions which are self-explanatory. What is the truth and which is the lie?

Q2: Is there a “concession” or not in the 1Malaysia Email award?

Fact #4: PEMANDU says “MyEmail is neither a concession nor a long-term commitment which binds the Government to use it for all its correspondences to the public… If there is any company that can come up with a better, cheaper and even more secure email service, the Government and public agencies are completely at liberty to use their services instead of Tricubes.

Fact #5: PEMANDU claimed “the selection process is merely an assessment to find out which company would likely succeed in rolling out the email service based on its capabilities. It does not mean that other companies cannot offer their own version of the service.

Fact #6: PEMANDU also stated that “however, overlapping projects could lead to waste of resources and that is why the evaluation team only selected one company.”

Truth or Lie?

The Government claims absolutely anyone can offer the “email” services. At the same time, it went through a “competitive selection process” and argued that “overlapping projects could lead to waste of resources” (Fact #3). Tricubes has announced that it’ll be signing a “definitive agreement” with the Government of Malaysia (Fact #1).

So what type of agreement will that be? A “definitive non-binding agreement”? Or certain preferences or advantages will be granted to Tricubes which will not be available to any other companies? What is the truth and which is the lie?

Q3: Will the Government pay nothing for the services?

Fact #7: PEMANDU says “there are a small group of detractors who keep asserting without basis that this project is a waste of public funds. How can this be a waste of public money when not a single sen of public money is or will be spent, while a lot of public money can be potentially saved?”

FACT #8: PEMANDU added that “… Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services… While the Government will spend money for the services rendered by Tricubes similar to other services it uses, the amount spent will be significantly less than what it is current(ly) spending.”

Truth or Lie?

So will the Government pay or will the Government not pay? What is the truth and which is the lie?

PEMANDU is perhaps misdirected in its response, intentionally or otherwise. The people are asking why pay 50 sen for every email sent? That is “a waste of public funds”. PEMANDU is arguing that the Government doesn’t have to pay for the project, just as the BN Government has argued that the Government need not fork out a single sen to build the various “private” highways. You only pay for it later via toll, as you use the highway, or government compensation.

Q4: Will the Government save RM200 million?

FACT #9: PEMANDU says “the Government benefits because… it can save about 50% of the current cost of sending correspondences. In 10 years, the project can save the four agencies used in the simulations at least RM200 million.”

FACT #10: According to PEMANDU, “Government agencies pay up to RM1 per mail and even RM2 for each returned hardcopy correspondence… when you use the MyEmail platform… cost up to 50 sen per email.”

FACT #11: By outsourcing it, the Government will avoid having to invest RM50 million and avoid spending money operating the email system… It is more cost efficient and effective to use best-in-practice platforms offered by specialised private entities.”

Truth or Lie?

Based on the simulation figures cited by PEMANDU, these 4 agencies alone will issue 400 million emails over 10 years, in order to save at least RM200 million based on RM1 per physical correspondence and 50 sen payable to Tricubes for each email.

Tricubes will hence be investing the assumed RM50 million, gets back RM200 million over 10 years, a 300% return. And if more than 4 Government agencies use the system, then the return will be even higher. Is this ‘outsourcing’ mechanism more cost efficient and effective? Should the Government to trying to save RM200 million or RM350 million, if the so-called MyEmail project is indeed so effective?

Q5: Is 50 sen per email reasonable?

FACT #12: PEMANDU says “the cost saving is derived from the free email delivery. The remaining cost of 50 sen goes towards extracting the information required from the database and presenting them in the respective formats. Most agencies do not possess this system, also known as the digital bill presentment solution.”

FACT #13: PEMANDU says “by investing up to RM50 million in a secure and efficient email system and value-added services over five years, Tricubes can generate revenue through service charges to the Government, its agencies and private sector clients as well as users of their value-added services. The plain email service is free.”

Truth or Lie?

PEMANDU or Tricubes should perhaps come out in the open to say for certain, if the 50 sen per email charge is based on emails delivered to accounts in Tricubes’ database, or is the 50 sen inclusive of setting up the entire hardware and software infrastructure to deliver government bills and notices to an electronic format, or the so-called “digital bill presentment solution”.

They are 2 completely different types of project. The email portion just takes the “output” from the “digital bill presentment solution” and delivers them electronically via email to the account holders. The second involves restructuring and reengineering the billing systems of the Government agencies.

Citibank and Maybank also have “digital bill presentment solutions”, but they can still deliver their statements and bills to account holders via free email accounts like Gmail or Yahoo! Mail. Is Tricubes also responsible for the implementation of “digital bill presentment solutions” in these Government agencies? This is of a vastly different scope from what has been presented about the “1Malaysia Email project” so far.

I can go on raising questions on the points raised in the PEMANDU advertorial. But the above 5 questions alone will give you points to ponder. Am I among the “small minority that has already made up their minds” that “even after [PEMANDU] publish these facts, this small group will continue to reject the facts and find ways and means to distort the truth”, that Datuk Idris Jala is referring to?

I’ve presented the statements made by the Government, PEMANDU and Tricubes itself. Malaysians can decide for themselves, what are the truths and which are the lies. It is unfortunate that I will not be able to spend tax-payers’ monies to publish the above in all major newspapers and portals.

Saturday, May 07, 2011

MRT: The Recipe to Over-Pay

The MRT, which is estimated to cost in excess of RM53 billion by CIMB Research is by far the country’s largest ever infrastructure project.

The Government Transformation Programme (GTP) launched by the Prime Minister, Datuk Seri Najib Abdul Razak himself, and promoted by Pemandu, quoted PEMUDAH which estimated that corruption could cost Malaysia as much as RM10 billion a year, “when business decisions are made for the wrong reasons.”

As one of the key measures to tackle corruption, the GTP specifically sought to “reduce leakages of funds allocated for national development and operational expenditure and ensure transparency in the award of contracts.”

The GTP even quoted a 2007 Survey by Merdeka Centre which revealed that 71% and 54% of corporates and public respectively perceives “no transparency and openness” in “the current procurement process or system used for awarding major government projects”.

Hence the GTP called to “disclose details of government procurement contracts” and recognises the role of public scrutiny to increase accountability and reduce corruption and wastage.
It is well established that transparency is crucial for a fair and efficient government procurement process. This is because transparency increases public scrutiny on the procurement process and helps ensure that accountability and well-defined policies, regulations and procedures have been put in place and followed closely…

People in both public and private sectors are particularly sceptical of unnecessary projects, award decisions that are not made public or sufficiently justified, project delays, contract variations and concealment of substandard work. (GTP pp133-135)
However, the opaque and obtuse management of the RM53 billion MRT project has proven beyond doubt that Najib’s administration is “all talk, and no action”.

In the written parliamentary reply to me for my oral question on the Gamuda-MMC “project delivery partner (PDP) contract” on 6 April 2011, the Prime Minister confirmed that the contract has been awarded with no price fixed despite claims that the PDP will bear all cost-overruns on the MRT project. It is an oxymoron for Najib to argue that the PDP will bear all cost-overruns when its own project contract value has yet to be finalised, and may be increasing as we speak, as the cost of the MRT project has already ballooned from a budgeted RM36 billion to now, an estimated RM53 billion.

And as first exposed by The Malaysian Insider, initially denied but now admitted by Syarikat Prasarana Negara Bhd (SPNB), the Government’s wholly-owned vehicle to own the MRT project, an “Independent Check Engineer” (ICE) role has been awarded to a consortium led by HSS Integrated Sdn Bhd (HSSI) in a cloak and dagger fashion.

When The Malaysian Insider first exposed the award on 15th April, SPNB Group Managing Director, Shahril Mokhtar immediately refuted the report, claiming that “the appointment of the KVMRT ICE is not finalised. Speculation of the ICE fee quantum at this point will only jeopardise our ability to negotiate competitive fees from the ICE candidates.

However, Syarikat Prasarana Negara Berhad (SPNB) group director for project development Zulkifli Yusoff admitted that an engineering consortium led by HSSI has been on board as an independent check engineer (ICE) since February, clearly contradicting SPNB’s initial response.

What is perhaps of greatest concern to Malaysian tax-payers is the fact that while an ICE should not have an existing relationship with the parties managing the project to ensure independence, HSSI has been the contracting engineers for Gamuda’s double-tracking projects. Furthermore, the speculated 2% consultancy fee on the cost of the entire project, which has yet to be finalised, is substantially above market rates, understood to be in the region of 0.8%.

Based on the above, assuming a RM50 billion project cost, the HSSI consortium will pocket RM1 billion in fees, RM600 million more than the estimated market rate of RM400 million. It also appears that while the Gamuda-MMC joint-venture is meant only to be a “PDP” and all projects are to be awarded by SPNB, the PDP gets to dictate who gets the contracts for the project, signalling the commencement of crony contract awards for the MRT project.

The above clearly makes a complete mockery of Najib’s so-called reforms via the GTP, and raises the question of how much the Malaysian tax-payers will be over-paying for the MRT project. Given the nature and size of the project, PEMUDAH will need to come up with new and higher estimates on how much corruption and government wastage is costing our economy.

1Malaysia Email: Truth & Lies

Pakatan asks why public funds used to defend Tricubes
By Boo Su-Lyn May 06, 2011

KUALA LUMPUR, May 6 — Pakatan Rakyat (PR) today demanded the government explain why public funds were spent to buy newspaper advertorials defending the 1 Malaysia email project when it was a private initiative.

A two-page advertorial headlined “Truths and Lies about MyEmail” by the Performance Management & Delivery Unit (Pemandu) on the controversial project was published in major newspapers today.


DAP publicity chief Tony Pua similarly denounced Pemandu’s advertorial. “I think it has come to a really silly stage where the government is spending tens of thousands in advertorials to defend a so-called private initiative because ‘Pemandu believes in integrity and transparency’,” said Pua.

“If that’s really the case, then just disclose the request for proposal (RFP) documents from the government as well as the full contract terms and letter of award given to Tricubes. Publish them online and save the tens of thousands of tax-payers’ money,” the Petaling Jaya Utara MP added.

Pemandu refused to divulge the cost of the advertorial when questioned by The Malaysian Insider today. “We have answered your question... I have nothing to add,” Pemandu corporate communication chief Ku Kok Peng told The Malaysian Insider on the phone.

Pemandu also emailed a statement to The Malaysian Insider and said it commissioned the advertorials to “make sure that the general public is not misinformed by people who distort the truth.”

In the advertorial, Pemandu CEO Senator Datuk Seri Idris Jala said Tricubes Bhd would invest 100 per cent of the RM50 million MyEmail project that was conceptualised as an Entry Point Project (EPP) under the Economic Transformation Programme (ETP). Jala also stressed that the government “will not spend a single sen” in the project’s investment and operating costs.

“On the other hand, it is estimated that the government stands to save at least RM200 million over 10 years,” he said.

He explained that government agencies would make savings of almost 50 per cent by paying 50 sen per email to accounts, as government agencies currently paid up to RM1 per mail and RM2 for each returned hardcopy correspondence.

Pua pointed out government agencies should instead encourage the public to register their own email accounts. “Now you’re paying 50 sen to someone else to send it [electronically]. Why not send it to (email) addresses provided by people and save the entire RM1?” asked Pua.


Pua also questioned why the government conducted a selection process if the project was merely a private initiative. “If it’s completely private, [they] don’t need to go through Pemandu or Mampu (Malaysian Administrative Modernisation and Management Planning Unit). Just go to the government department and sell their services,” said Pua.

Jala said today that the selection process was an assessment to find out which company would likely succeed in rolling out the email service. “Other parties who are not selected or did not submit a proposal earlier can still pursue the opportunity if they see a viable business case for it,” said Jala.


For the full article, read it here.

Friday, May 06, 2011

Equal Opportunity Commission to Reverse Brain Drain?

The Prime Minister Datuk Seri Najib Abdul Razak has set the lofty goal of becoming a high-income nation earning US$15,000 per capita which all Malaysians must support.

However, the recent World Bank Malaysia Economic Monitor Report on “Brain Drain” serves up a stark reminder to Najib that such goals will be nothing but pipe dreams if critical reforms are not instituted. The Report said that “Malaysia seems stuck in a middle-income trap, the predicament that prevents middle-income countries from fulfilling the next step in their development path towards high income.”

It added that our “growing inability to remain competitive as a high-volume, low-cost producer coupled with the difficulty to break into fast-growing markets for knowledge- and innovation-based products and services.”

As a result, we are failing to achieve our income potential and it cited the damning but instructive example of South Korea where “four decades ago South Korea was markedly poorer than Malaysia, South Korea’s per capita income is now three times higher than Malaysia’s.”

To break out of the middle-income trap and to fulfil our growth and income potentials, the World Bank report had confirmed what many had already knew, that Malaysia must stem and reverse the acute brain drain faced by this country, where 2 out of every 10 tertiary educated leaves.

In fact, the World Bank survey has found that an overwhelming 87% of respondents suggested that a "paradigm shift away from race-based towards needs-based affirmative action" may entice a migrant to return to Malaysia. What’s more, the survey had indicated that 60% of respondents cited "social injustice" as a key reason for their leaving the country.

Hence as an immediate measure to demonstrate Najib’s commitment towards achieving a high-income nation status, he must reinstate the “Equal Opportunity Commission” (EOC) which was proposed in the New Economic Model (NEM) Part 1, but was subsequently inconspicuously dropped due to strong protests from within UMNO and from right-wing Malay rights groups such as Perkasa.

The EOC was proposed in the original NEM to “cover discriminatory and unfair practices” in both the public and private sectors, not only to promote “economic efficiency through competition”, but more critically, to ensure “inclusive growth”.

The late Datuk Zainal Aznam, who was the Deputy Director at Institute of Strategic and International Studies (ISIS) and Malaysian Institute for Economic Research (MIER), who had spent 20 years with the Economic Planning Unit (EPU), was a key member of the National Economic Action Council (NEAC) who delivered the NEM.

Datuk Zainal Aznam was highly critical of the Government’s decision to drop the proposed EOC where he said “after more than 50 years of independent growth, we are no closer to being racially blind… Current and future conflicts in Malaysia will be fuelled more by an outraged sense of inequality and unfairness in economic opportunities…”

At a forum organised by think-tank Institute for Democracy and Economic Affairs (IDEAS) in February this year, Datuk Zainal Aznam had revealed that reforms such as the EOC were “lambasted and strangled by right wing groups led by Perkasa. They wanted to burn part one (of the NEM)”

He lamented that “there is political will, but it is insufficient, like (what happened with) the Equal Opportunities Commission,” and added that he had “serious doubts (about) how far the BN government is willing to go.”

As a tribute most befitting to Datuk Zainal Aznam who had passed away on last week, Najib should immediately announce the reinstatement of the proposed EOC, and introduce the necessary legislations in the coming parliamentary sitting commencing on 13th June. The measure will contribute positively towards helping Najib’s Talent Corporation succeed in convincing migrants to return, and curb the excessive drain on the country’s talent, so critical in achieving Malaysian’s high income nation target.

Tuesday, May 03, 2011

2011 DAP Internship: Last Call

"...I did a 1½-month internship with Tony Pua and Dr Ong Kian Ming (UCSI lecturer, political analyst, consultant). And everything that I did within that time span felt right. It didn’t matter whether I took three flights in two days between Peninsular Malaysia and Sarawak. It didn’t matter that I had to be at Taman Jaya station at 8 in the morning everyday to head to the many districts in Selangor, only to do the simple task of note-taking during the town hall meetings which will contribute to the Selangor Blueprint. On these days, I’ll reach home at about midnight, only to have that few hours of sleep, and repeat the whole routine again.

I worked with people on the ground, learned their way of life, their morals, their culture. I heard their heartbreaking stories about how all they want is a Sibu that doesn’t flood, a Kuching that has its land distributed fairly among its people, an education system that doesn’t brainwash their children... I saw these people, and had this surging desire to educate the uneducated, to give jobs to the poor, to speak for the voiceless.

I felt that I would be doing injustice if I were to use my abilities and resources for myself. It just wasn’t right. I want the aunts and uncles who sell fruits by the street to not have to worry whether they’ll be able to make a good sale tomorrow. I want the children of these uncles and aunts to know that they have an equal opportunity to achieve their heart’s desires in the future. I want UM to find its place on the world stage again. I want teachers to have pride in their work. I want Malaysia to be the place where people are proud to be a part of; a place where people will want to come home to.

Hi, my name is Michelle. Forsake my generation, I shan’t."

See full article in The Malaysian Insider here.

Well, here's a last call for internship applications from Malaysia's best and brightest to come in by 7th May 2011 for this summer's intership programme. For those keen for a year end internship, feel free to put in your application as well ;-)

  • Closing date of application: 30th April 2011 (extend to 7th May)
  • Start date of programme: Anytime after 1st June 2011
  • Successful candidates will be informed via email

Application procedures:

Email resume / curriculum vitae (CV) and cover letter expressing interest to Include in your application the following:
  • Preferred location (ie. which state/city in Malaysia)
  • Preferred duration of your attachment (minimum 1 month)
  • MP/ADUN of preference (if any)
See here for more details.

Monday, May 02, 2011

Muhyiddin & Mahathir: Biggest Obstacles to High Income Nation

Datuk Seri Najib Razak's ambitious goal of becoming a high income nation of US$15,000 per capita by 2020 faces the biggest stumbling blocks in the form of his predecessor Tun Dr Mahathir Mohammed and his likely successor, Tan Sri Muhyiddin Yassin for their strident opposition to a fairer and more inclusive Malaysian society.

The just released World Bank report on brain drain in Malaysia proved beyond doubt that "social injustice" as a result of the New Economic Policy (NEP) was the key reason why hundreds of thousands of the country's best talents had left our shores for greener pastures. The report survey had indicated that 60% of respondents have cited "social injustice" as a key reason for their leaving the country.

In addition, an overwhelming 87% of respondents had suggested that a "paradigm shift away from race-based towards needs-based affirmative action" may entice a migrant to return to Malaysia. At the same time, 82% of respondents also called for "fundamental and positive change in the Government and public sector".

The World Bank model also found that Malaysia would have attracted more than 5 times our Foreign Direct Investment (FDI) at US$15 billion instead of only US$3.8 billion in the 3 years 2007-2009 had we retained our skills base and adopted a more open investment policy regime.

The Report has called for a comprehensive policy on "inclusiveness" to bring back talent into the country and stem the accute outflow of skilled workers as a critical measure to fulfil our goals of becoming a high income nation by 2020.

Prime Minister Najib had taken some initial steps towards greater inclusiveness by defining "1Malaysia" in the Government Transformation Plan (GTP) as the goal where every Malaysian sees themselves as Malaysians first, their race, religion, class and geography second.

The "original" New Economic Model as announced by Najib had called for reforms on the race-based affirmative action system to a need-based one.

However both these initiatives which are crucial towards a more "inclusive" Malaysia were killed with the strident racial supremacy agenda expounded by Najib's Deputy, Muhyiddin and his predecessor, Mahathir.

Muhyiddin made a joke of the "1Malaysia" definition by stating that he's "Malay First" with his now infamous quote "How can I say I'm Malaysian first and Malay second, all the Malays will shun me". He has further aggravated the racial schism with his open endorsement of Utusan Malaysia's "1Melayu, 1Bumi" movement just a week ago.

Mahathir who has on the other hand dismissed the World Bank report "useless" and accused them of being "politically motivated" without even bothering to rebutt any of the results of the study. In fact, Mahathir must take the biggest responsibility for causing the huge drain in talent during his long reign from 1982 to 2003 which has consistently increased to some 1 million people today.

Instead of taking a statesman role to encourage greater racial unity and integration post retirement, Mahathir has chosen to sponsor and be the patron of the increasingly militant Perkasa movement, hell-bent on institutionalise a Malay-dominant society. It was Perkasa rapid rise which had caused Najib to roll back the most critical reforms in NEM needed to achieve a high income nation status.

Najib must pay heed to the advise and warnings presented in the World Bank Report. By remaining in denial, or succumbing to the pressures from Muhyiddin and Mahathir will not only lead to the failure of Talent Corporation, but also Malaysia missing out on our high income nation target.

Sunday, May 01, 2011

Najib "In Denial" over Brain Drain

The Talent Corporation is doomed to fail given that Najib is in denial over the World Bank Report on ‘Brain Drain’ in Malaysia

The Prime Minister, Najib was extremely quick and swift to “refute” the conclusions of the World Bank Report on “brain drain” in Malaysia without providing any substantive evidence in doing so. He first denied that the New Economic Policy (NEP) which dictated priority for bumiputeras has led to brain drain. At the same time, he also denied that the NEP and brain drain has resulted in a drop in investment flow into the country.

Najib is obviously in denial because it was his very own “Government Transformation Programme” (GTP) which stated in no uncertain terms that
“An unintended outcome of the National Economic Policy (NEP) was a sense of deprivation, discrimination and even resentment felt by the non-Bumiputeras, which was attributed to the over-zealous attitude and approach in implementation by some officers in certain agencies. There has also been a widening of the income gap within the Bumiputera community, leading to rising discontent amongst certain segments of that community. These factors have pushed many Malaysians, especially professionals, to work and reside overseas, in economically more advanced countries with attractive pull factors such as higher income, wider exposure and opportunities, better quality of life and education for their children. May have chosen to settle permanently, and there are signs that this brain drain has become increasingly serious. It is imperative that these issues […] are addressed, as not only is our economy’s competitiveness, stability and sustainability at stake, but continued widening and rising disparities will jeopardize national unity.”
Is Najib now saying that the GTP got it completely wrong?

Is he also saying that World Bank study which conducted a survey on the three top reasons for brain drain in Malaysia where 60% cited “social injustice” as the key reason for brain drain?

Najib has also dismissed the role of NEP and brain drain on our foreign direct investment (FDI) by citing the statistics that FDI had increased to US$9 billion in 2010 from US$1.4 billion in 2009.

Firstly, the fact that a student improved his Mathematics score from 10/100 to 50/100 isn’t something to be celebrated joyously. 2009 marked the 2nd lowest FDI Malaysia has received over the past 20 years, and making an improvement over the sum doesn’t sudden make Malaysia a super attractive FDI destination.

But more importantly, the World Bank Report conduct studies based on trends in Malaysia’s FDI over the past 20 years, and not just the year where we “improved” the most. For example, by comparing FDI over a 3-year period between 2007-2009 and 1990-1992, the World Bank showed that we were the only country in the region where FDI has declined and significantly so (Figure 1.57)! Malaysia’s FDI dropped by 35.5% over the period while all the other countries increased – Indonesia (+23.3%), Philippines (+51.6%), Singapore (+53.8%) and Thailand (+119.0%).

The World Bank Report also conducted was a hypothetical model where it measured Malaysia’s potential relative to performances of other countries in the region (Table 1.1 of the World Bank Report, pp46). It was determined that had Malaysia retained its talent as well as implemented an open investment policy regime, our FDI should be closer to US$15 billion instead of only US$3.8 billion for the 2007-2009 period, or more than 5 times our actual achievement. This proves the severe under-achievement of our potential under the BN administration.

Despite denying the role of NEP on brain drain, Najib did acknowledge that brain drain is indeed a serious issue which needs to be addressed and hence the setting up of Talent Corporation. However, if Najib and the BN administration is steadfast in its refusal to recognise the impact of “social injustice” on talent leaving the country, then all the efforts by Talent Corporation will all go to nought.

Talent Corporation will suffer the same ignominy as the “Brain Gain Programme” under Najib’s predecessor, Datuk Seri Abdullah Ahmad Badawi which failed miserably in attracting returning and stemming the massive outflow of talent. Najib’s instant denial of such a comprehensive and rigourous study by World Bank, and even forgetting about his own GTP is a harbinger of Talent Corporation’s fate.