Jebat was a Malay hero. But despite his good intentions, his methods were cruel, misguided and unwieldy. His anger towards a Sultan, led him to murder thousands of innocent lives. In the end…
“I support all efforts to protect the security of the state of Israel”
That’s what Anwar Ibrahim said in an interview with Wall Street Journal when asked what would Malaysia, a Muslim-majority nation’s relationship with Israel would be if he were elected as Prime Minister
A friendly leader to Israel
The article asked a lot of thing ranging from his opinion about the appeal made by the prosecutors over his acquittal of the sodomy charges, his agenda as the would be Prime Minister, all the way to reforming the sodomy laws which he deemed as ‘archaic’.
But the fact that he supports all efforts to protect the security of Israel is paramount in understanding the psyche of Anwar Ibrahim. Will we have a Prime Minister that will do his utmost best in securing Israel’s future?
The unfortunate reality of his statement is this – since when the state of Israel is being threatened which precipitates him to decide that Malaysia must support the efforts to protect it?
That is very telling indeed. When Malaysia in the past 6 decades had lent support to secure Palestinian’s sovereignty and security, Anwar Ibrahim will take the other way around.
Israel is a current reality that Anwar could have missed, can protect itself without Malaysia lending a helping hand; whether morally or financially.
It is the plight of fellow Muslims in the Palestine that needs our support.
Anwar Ibrahim however stop short his support of Israel by not saying he will open a diplomatic ties with Israel. But judging from this initial stand, nothing should be a surprise for us Malaysians.
Malaysia has consistently refrained from establishing diplomatic relations with Israel, although limited commercial ties exist between private companies in the two countries. That might change if Anwar Ibrahim is at the helm.
He remarked on the affirmative policy as well.
If elected, he said he would speed up the removal of racial quotas for university places and focus on helping lower-income groups regardless of race instead of solely aiding ethnic Malays.
Since when the government is solely aiding the Malays only? That is highly inflammatory and of course, misleading. The fact that he plays with racial sentiment over something which is not true and telling it to the world which tarnishes the country’s image makes him seditious and malicious.
His stand on sodomy laws is also unfathomable. He reaffirmed his stand that ”it is not his business to attack people or arrest people based on their sexual orientation”.
Yes, Malaysia does not attack or arrest people over their sexual orientation.
But there are laws that can be used if the victim is sodomised and wants to report it to the authority. That will protect the victims.
Which part of the sodomy laws that Anwar wants to amend? That victims cannot report to the police?
Two homosexuals can have their sexual relationship under the Malaysian sun without ever getting arrested. Unless of course, they are doing it in public or one of them cited rape etc. Same-sex marriage is of course prohibited under the Malaysian laws. The last time I check, it is even prohibited in most parts of the world.
Even in the US, there are laws against sodomy. The fact is and this is very important; Anwar is not in the correct state of mind to lead this nation.
The baggage he is carrying, his extreme need to coddle the West, his dictatorial and megalomaniac tendencies over his own party will not help him to provide the best for us Malaysians.
We take a break from talking about Azman Mokhtar and Danny Yusof as well as the bungle they and MAS are involved in with Tony Fernandes, AirAsia and QPR. Right now, we can safely say that MAS’ advertising investment is swirling around in the sink and will go down the drain anytime soon.
The position of QPR in the Premier League is now untenable.
They are languishing at 18th place in the relegation zone. The football pundits’ prediction may just come true by the end of this season; that QPR will be relegated into the lower division.
And along with it, MAS’ RM18 million which Danny had given away just to prop up Tony Fernandes’ pitiful football team.
What kind of other excuses can Danny Yusof give to defend his dodgy decisions, misjudgments and his precarious position? It is already beyond redemption.
It is not helping that he remains arrogant into thinking that he is doing a great job and remains ignorant that he is secured as to where he is.
This applies to Azman Mokhtar too. Unlike what he said earlier, advertising in QPR is never a good deal to begin with. Even this share swap is never a good deal.
Eyes are watching, ears are listening. MAS staff have the impression that Tony Fernandes is calling the shots and making decisions for the national air carrier.
A presumption never before seen in the history of MAS; an outsider, worse, a competitor taking charge into dismantling the once proud giant bone by bone, and strip its pride and pound it to the ground.
Whatever MAS has done so far (cancelling routes, advertising with QPR – that’s all they did?), do not require their shares to be swapped with Air Asia in the first place. One wonders why on earth did they do that? As the result, Danny Yusof is now in MAS and Tony Fernandes and Kamarudin Meranun are the directors of MAS!
In an interview with The Edge last Saturday, Danny gave us the reason on why the share swap is necessary. Here are the excerpts of his replies:
The Edge, 14 January 2012
The report stated that Danny was the main man that brokered the share swap between MAS and Air Asia. When asked why is it necessary for the share swap to happen when MAS could have fixed the problem without Air Asia getting in, he summarised it as the impetus “to access the top minds of the industry. The partnership will come useful when we buy planes, for instance.”
That was his main reason. I find it hard to fathom the intelligence level of this deputy group CEO. In the first place, MAS is not in the business to buy or own planes. That is Syarikat Penerbangan Malaysia Berhad’s (“PMB”) job so why on earth would MAS acquire planes?
Historically it was Danny Yusof and Azman Mokhtar who took away MAS’ power to buy and own planes through their WAU plan back in 2002 and now Danny is speaking as if PMB does not have the expertise to buy planes.
Danny said, “we can learn from Tony and Kamaruddin. After all they placed an order for 200 Airbus in one go and that in itself tells you how powerful their negotiation skills are.”
Is that the reason why the share swap is necessary? For Tony to act as negotiator? Might as well take him as consultant. We have so many other talents around the world that MAS can employ to lead the negotiations without getting its shares and its board of directors being infiltrated by competitor.
There were talks that Air Asia over buying the 200 airplanes to bet on the rising demands of the market in the next few years with the intention to re-sell the planes to other airlines at better price than the prevailing market prices in the near future.
Will MAS buy planes from Air Asia just to ‘help out’ Air Asia then?
It will be helpful for Air Asia to have a friendly party in the form of Danny Yusof controlling the operations.
Or, it can be said that it is easier for Air Asia to sell any unwanted planes to MAS when its owners are also the executive directors of MAS!
If top management of MAS can give money to a company belonged to one of its director without any regards to corporate governance, we will be sure to see another these kinds of things to happen in the near future.
To re-cap, whatever Danny Yusof and Ahmad Jauhari said to justify this share-swap is untenable. The deal should not have happened in the first place.
Their business turnaround plan is in shambles and many people are not happy. MAS lacks the pragmatism and aggression to really overhaul its ailing business precisely because its own top management and its main shareholder have other interests running contradictory to the survival of MAS itself.
Nobody in its Board of Directors have the gumption to do what is right because no one has a clue on how to do it. They do not have a clue because they are merely consultants who are being conned by their competitor. Danny is smittened with Tony.
In my previous article I said that MAS cannot become successful if consultants like him is managing it.
True enough MAS businesss turnaround plan was scoffed by analysts as simplistic and severely lacking the necessary measures to rejuvenate the airline. Have they looked into renegotiating their highly expensive flight catering cost with LSG Skychef – Brahim Sdn Bhd?
They won’t. Why?
Lack of aggression and curtailed by ulterior motives and interests. In other words, rightly put by analysts – they don’t have any traces of significant entrepreneurial spirit.
RHB disappointed by preview of ‘simplistic’ MAS turnaround plan
By Lee Wei Lian
KUALA LUMPUR, Nov 22 – Malaysia Airlines (MAS) lacks a plan for deep structural reforms said RHB Research Institute following a briefing by airline management ahead of the official unveiling of the national carrier’s turnaround strategy.
The research house said in a report today that the plan lacked cost cutting measures, revamps to the procurement systems or recapitalisation of its balance sheet.
RHB also said that it didn’t detect any evidence that the new collaboration with AirAsia has rejuvenated the airline.
“We did not find any significant ‘traces of entrepreneurial spirit’, if this is supposed to come with the entrance of Tune Air (controlled by AirAsia’s Tan Sri Tony Fernandes) as a 20.5 per cent shareholder of MAS,” said the report.
The report revealed that in the MAS briefing the management had said that they would cut unprofitable routes, improve fuel burn, negotiate better terms with aircraft manufacturers and redeploy capacity based on yield.
“We have to admit that we came out of MAS’ analysts’ tele-conference this morning feeling a little disappointed,” said RHB.
“Dubbed a preview to MAS’ grand turnaround plan scheduled to be officially unveiled next month, we did not find indications of any bold and dramatic moves that will turn things around, but just some logical things an airline will do in its normal course of business.”
RHB said that MAS’ key structural issues include a mature and saturated full-service segment and its main hub Kuala Lumpur not being a natural market for higher-yielding full-service business travelers unlike Singapore and Hong Kong.
It added that it hoped MAS would rope in a leading international airline as equity partner to help strengthening processes, revitalise work culture, broaden market reach and presence, and effect more constructive branding or co-branding exercises.
MAS reported a third quarter loss of RM477.6 million today, bringing total losses so far this year to RM962 million.
The airlines’ lacklustre financial performance in recent quarters had resulted in the share swap between MAS and AirAsia on August 9.
It saw state investment arm Khazanah taking a 10 per cent stake in Asia’s top budget carrier in exchange for a 20.5 per cent stake in the flag carrier.
This paved the way for AirAsia boss Tan Sri Tony Fernandes to sit on the MAS board, ostensibly to help turn the ailing airline around.
The share swap and accompanying collaboration framework agreement raised public concerns that it would give rise to an industry cartel.
Firefly’s budget jet operations were shuttered last month.
The Finance Ministry revealed on November 3, however, that the share swap between MAS and AirAsia is being probed by Bursa Malaysia and the Securities Commission (SC) for insider trading. Source here.
People, passengers and voters are angry. My suggestion is for directors from AirAsia to resign from MAS’ board and replace MAS’ top leadership with people who are serious about MAS. People who has MAS’ interests solely in their hearts.
This news caught my eye. It seems that Lim Guan Eng is back to his lying ways. It seems Lim Guan Eng will never stop lying in order to make himself look good. This is pitiful and not to mention pathetic.
KUALA LUMPUR, Jan 11 — Massive borrowing and irresponsible spending by the Barisan Nasional (BN) government will result in Malaysia becoming a fully indebted nation before the end of the decade, Lim Guan Eng said today.
The Penang chief minister said that Putrajaya’s debt to Gross Domestic Product (GDP) ratio has increased yearly from 53.1 per cent in 2010 to 53.8 per cent last year and is expected to hit 54.8 per cent this year.
Lim’s remarks are in response to a statement by Malaysian Institute of Economic Research (MIER) distinguished fellow Mohd Ariff Abdul Kareem, who warned that federal government revenue was growing too slowly to keep up with its borrowings which hit 53.1 per cent of GDP in 2010.
Mohd Ariff told The Malaysian Insider recently that Malaysia’s national debt will hit 100 per cent of the GDP by 2019 should Putrajaya continue to borrow more than it earns. He said while the current size of government debt relative to GDP was not troubling, the pace of its growth in recent years was cause for concern.
Lim added that a stagnation in salaries, coupled with increased prices for basic commodities such as sugar, eggs, and bread, will further result in Malaysians becoming even more debt-laden.
The Bagan MP said that MIER’s projections that Malaysia could end up becoming bankrupt by 2019 showed the need for new federal government, one that should be led by Pakatan Rakyat (PR).
He said that PR has successfully “managed” finances in states such as Penang.
“Penang managed to reduce (its) state debt from RM630 million in March 8, 2008 to only RM30 million as at end of October 2011. This represents a debt reduction of 95 per cent, or RM600 million, which is the highest debt reduction of any state in Malaysia’s history.
“Clearly, Malaysians who wish to have a better life for themselves and their future generations must make a choice between a government that is spendthrift and that borrows irresponsibly without being able to make the pie grow bigger, or a government that is prudent and transparent that will put the concerns of the rakyat first,” Lim added.
Even that so called fellow from MIER do not know what he is talking about. This blog and fellow bloggers SatD and economist HishamH had time and time again exposed Lim Guan Eng and his tendency to lie outright to the public.
Ooops! Caught lying again..
In Lim ‘The Empty Can’ Guan Eng, we had already exposed the fact that the debt of Penang was lessened not due to his remarkable leadership but because Federal Givernment had taken over the RM600 million debt from Penang and graciously change its status into a 45 year grant. That is how it became RM30 million. Down 95%.
It is not rocket science. Instead of thanking the Federal Government, this so called accountant turned chief minister had the audacity to chastise them further.
As for all the mumbo jumbo dished out by that MIER fellow, his arguments has been pre-empted, dissected and crushed by HishamH in his FAQ on National Debt.
You can read them here, here and here. It is a three part series.
I WISH ALL OPPOSITION LEADERS AND THEIR SYCOPHANTS TO REALLY KNOW YOUR FINANCES AND ECONOMICS STUDIES BEFORE OPENING THEIR MOUTHS.
I stumbled upon this poignant and profound youtube video which I find quite relevant for us today. Have a go at it. On that note, I hope it is not too late to wish all my friends a very happy and magnificent new year!
To put things simple enough, RM18 million of MAS’ very important, very hard earned cash was given to another company belonged to one of its directors. Basically, a director of MAS, Tony Fernandes got RM18 million given to his other company – a football team, Queens Park Rangers (QPR).
There is a massive conflict of interest there. Worse, the transaction was transacted like a kneejerk reaction. Like someone had jerk the leash of owners of MAS and bamboozled them into agreeing to give their money to another director.
EPL table as at 28th December 2011
Was there a tender committee being called before the transaction was approved? Which other teams were selected in the final leg of the tender procedures? Were the teams in the Spanish Primera Liga or the Italian Serie A taken into consideration as well? We can bet there were none. Is this how a premier airline should have used its advertising money?
Right after Christmas, QPR is now just 3 points above the relegation zone. From 18 games played, they could just secure 17 points. That is less than a point for each game. If this continues, they will get less than 40 points by the end of the season. In a season where 38 games are played, the 40 point mark is the benchmark in order to survive the Premier League. If this hold true, the punters were correct in saying that QPR has 1 in 4 chance to be relegated by the end of the season.
Maybe this would be a bad omen. Just like how MAS is fighting for its survival, QPR will be fighting most in the relegation zone for the rest of the season. But unlike QPR, the management of MAS is consciously mismanaging the company towards destruction.
Conflicts of interests?
Bad advertising deals?
Big deal!
Azman Mokhtar, Danny Yusof and Tony Fernandes are above the petty rules and regulations! Are they? Maybe the government should give Danny a Tan Sri-ship too!
We can safely deduce that this RM18 million advertising deal is to help Danny’s partner in crime fleecing money from a GLC at the most minimum hassle and purview.
You might think RM18million is a small amount. Try counting 1 to 18,000,000 and get back to me when you’re done.
Now how about the breach in anti-trust laws? When the share-swap agreement was inked in early August, the millionaire brother of the Prime Minister, Nazir Razak had said:
“We will be looking at all the anti-trust provisions in all the markets the three global airlines operate in.”
MAS and AirAsia even said in their statements to Bursa Malaysia ‘that the collaboration agreement would only be committed upon once an anti-trust analysis had been completed and was in compliance with the applicable laws with regards to anti-trust.’
But what happened soon after was anything but being compliant to the anti-trust laws. The routes to KL – Bandung and KL – Sandakan were taken off without so much of a warning; leaving AirAsia as the sole service provider of the routes.
There aren’t any other foreign flights to ply this route for customers to choose from too.
When MAS was still plying this route, the average ticket price of AirAsia ticket to Bandung from Kuala Lumpur was around RM300 to RM400 and could be as high as RM800 if you had bought them a few days before the departure date.
But currently, even at two weeks before the date, AirAsia is selling them at more than RM1,000 each! It was RM800 if you buy slightly earlier than that.
Pricing as at 5th December for flights on 20th December
This is in serious breach of anti-competitive laws.
Customers are at the mercy Air Asia.
You give capitalism a bad name
Nazir Razak made to look like a buffoon by this AirAsia – MAS swap. By issuing statements when he is not even privy to the operational plans of both companies, he probably won’t deny that he has become a buffoon.
The question now is, what will Azman Mokhtar do?
Tony Fernandes made it clear that he does not give a damn about what the customers think or feel. In one episode, when had to deal with the newly revised airport tax, Tony Fernandes responded via twitter to many of the complaints by his customers with:
“It’s a free world. If you don’t want to fly and done (sic) like us you don’t. We have to use malaysian airports. That’s the difference”.
Well it seems now, passengers going to Bandung have no choice but to pay the exorbitant ticket prices.
Now everyone can fly? I don’t think so.
Rumours has it that MAS will also terminate their Haji Charter services to Jeddah in their new business plan which by the way are planned by their board of executive directors. Incidentally, two of these directors are the owners of Air Asia. So which airline will be given this concession in the future?
Anyway, Tony Fernandes had the cheek to run a guerilla type campaign against Malaysia Airport Holdings Berhad regarding the airport tax when he himself is squeezing the public. One just have to remember the inability of Azman Mokhtar in trying to get Tony to pay MAHB over the millions of ringgit in airport tax collected by AirAsia.
Only in 2010 was the sum finally paid up; not totally, and getting further discount too.
Tony is fighting for the rakyat? Tony is robbing the rakyat that’s more like it. How much does a maggi mee costs in an AirAsia flight? Very expensive.
Can we bring our own food to eat in the flight if we don’t want to pay those extremely pricey food?
Of course we cannot do that.
Do you know that flights to Jakarta via KLM is much more cheaper than AirAsia’s own flights? KLM provides food and in flight entertainment too. With all those incidental fees here and there, Tony Fernandes hoodwinked Malaysians into believing that he provides cheap flights.
Coupled with very lousy service right from the booking department all the way to the quality of its aircraft, AirAsia is a behemoth of which crooks are hiding behind it.
Tony went overboard with his campaign against the MAHB when he urged the public to stand up for the ‘unfair’ airport tax hike when in fact, airport tax had not been increased for more than a dozen of years.
He proceeded in buying full page newspaper advertisement in The Star vilifying MAHB to the extent of directing AirAsia staff to wear protest badges and putting up anti-MAHB posters all over MAHB’s airports!
Surely as the owners of the airports, MAHB has the rights to remove all those illegal and provocative posters. But when MAHB did exactly that, Tony went berserk and publicly slam them for harassing his staff!
Tony tweeted:
“Malaysian airport staff tearing down our posters and taking away airport passes of our staff. And using intimidation. Can someone tell them this is Malaysia and not a police state.”
This is a typical opposition mentality whereby the main villain is antagonising and provoking the establishment and then claiming to be the victim. When you are acting like gangsters, of course someone will have to act against you.
And to think that Tony received the Asian Corporate Director Recognition Award by Corporate Governance Asia last July for his ‘contributions in enhancing business ethics, transparency and corporate social responsibility on the foundation of his success in running the airline business. In addition to these selection criteria, the award also recognizes Tony’s efforts in helping to raise the standards of corporate governance practice in Malaysia’.
Luckily the MD of MAHB, Tan Sri Bashir Ahmad stood his ground and remained a gentleman when facing this petulant CEO of a company which he had gave so many special privileges all these years.
Thomas Jefferson had said – “Nothing gives one person so much advantage over another as to remain always cool and unruffled under all circumstances.”
While Bashir Ahmad showed character and resoluteness, finesse is non existent in Tony Fernandes. At the same time, something much worse is plaguing Khazanah’s top management; their lack of accountability.
If Azman Mokhtar couldn’t curtail Danny Yusof from agreeing to that RM18 million deal, what makes you think his other investment decisions will be sound?
The deal was mired with blatant conflict of interests which is nakedly open for the public to see and yet the main shareholder of MAS is not doing anything about it. In fact, they are actively supporting this mistake!
The mismanagement and systematic destruction of MAS, the arrogance of the conniving Tony Fernandes, supported by inaction of Khazanah and their investment blunders will certainly not look good on the Prime Minister’s reputation.
But nobody seems to be awake at the moment. Everyone is being bigheaded and high and mighty yet nobody wants to be accountable.
Just like the arrogant CEO of AirAsia X, whom after been queried in twitter over the RM250 million subsidy given to them, had lashed out at people who questioned him as not having the necessary intellectual capacity.
He invited people to deal with him directly through email but then quickly dismissed any queries behind the Auditor General’s report. Nearly 2 months has passed but until this day, I have not received any explanation of the RM250 million subsidy from him.
Hot air is everywhere even during this rainy season but the government is too lethargic to take action.
Pemandu had issued an article to debunk the arguments or myths made by Anwar Ibrahim pertaining the ETP. I took the liberty to find what exactly Anwar had said and juxtapose it with what Pemandu had responded accordingly.
Note that in his usual attacks towards the government, Anwar did not provide any solutions beyond the general statements – better education system, prudent financial spending etc. If he had done so, he could have been a good leader. But when the parties within Pakatan Rakyat are unable to work together to form any comprehensive policies, it must have been safer for him to make such broad and general statements.
Nevertheless, the hypocrisy in him wouldn’t escape us unnoticed when he would nonchalantly criticise policies which he was clearly a part of, benefitted from it and definitely was instrumental in formulating them in the first place when he was in the government years ago.
Both articles by Pemandu and Anwar Ibrahim can be found here and here respectively.
Anwar Ibrahim: Poorer Malaysians in 2020 due to ETP
His argument: The economic reality that awaits Malaysians in 2020 is harsh, if drastic reforms are not carried out immediately.
If we were to extrapolate ETP’s model using a range of inflation figures, the picture is not one of a prosperous Malaysia for all. It is a bleak Malaysia with more and more Malaysians falling below the poverty line. Malaysians in general will be poorer in 2020, going by ETP’s own projection.
At 4% inflation rate, even if real wages were to grow at the unrealistic 3.6% rate annually for the next 10 years, there will be an additional 1 million Malaysians earning below the equivalent of today’s RM1,500 per month in 2020.
At 6% inflation rate (lower than the average inflation of 6.6% in between 2005 and 2009), there will be an additional 1.7 million Malaysians earning below the threshold income of RM1,500 per month.
The implication of this on our society cannot be taken lightly and outlines the challenges we face and the urgency to address these challenges effectively.
Two-thirds of our population reside in urban areas in 2009. This will grow annually that by 2020, the national poverty line shall reflect closely the cost of living in urban areas. Certainly, the current RM700 national poverty line is obsolete. In many households in urban areas, families struggle to make ends meet with an income of RM1,500 per month.
Thus, the additional 1.7 million Malaysians earning the equivalent of RM1,500 per month in 2020 means that the plight and hardships of the urban poor will be a major economic challenge in 2020.
The additional 1.7 million urban poor will complete the bleak picture that ETP tries hard to gloss – that is by 2020, there will be between 7 million to 8.3 million urban poor with monthly earnings of RM1,500 and below; according to ETP’s own projections.
This means a significantly higher proportion of our workforce and population will fall deeper into poverty in 2020; based on ETP’s economic modelling.
The ramifications of this on the economy are numerous. It will certainly stretch the national resources to the maximum as the government’s obligation to provide direct assistance to the portion of our workforce and population in poverty will be ever increasing.
ETP’s claim that it will send Malaysians on a journey towards prosperity and high income will remain a claim in 2020. The journey will end in nightmare, if Malaysians do not change course immediately.
ETP on that False Statement 1: The ETP will send additional 1.7 million Malaysians into poverty in 2020. By 2020, there will be 7 million to 8 million urban poor with monthly earnings of RM1, 500. This means higher proportion of our workforce and population will fall deeper into poverty in 2020, based on ETP’s planning.
Response: It is not only misleading, but irresponsible to focus on the two lowest income brackets without considering the increases across the board, including the higher income bracket. There also seems to be inconsistencies between the number of urban poor stated vis-à-vis wage bracket projections.
The ETP is anchored on facilitating consistent movement from low to higher income brackets across the board. It anticipates for 600,000 people to be removed from the lowest income bracket of less than RM1,000 per month, one million to move into the RM1,000-RM2,000 bracket, 1.3 million into the RM2,000-RM4,000 bracket, 1.5 million into the RM4,000-RM7,000 bracket, 900,000 into the RM7,000-RM10,000 bracket and 400,000 into the more than RM10,000 bracket.
Under the Government Transformation Programme (GTP), the Government will continue to assist lower income families. Specifically, the Raising Living Standards of Low-Income Households (LIH) National Key Result Area (NKRA) is aimed to empower low income households to improve their social standing and create more income opportunities. Some of the significant efforts undertaken under this NKRA include the 1AZAM programme, aimed at lifting low-income households out of poverty through means of employment, entrepreneurship, economic activities and services.
The ETP, supported by the GTP, aims to share the wealth of the country with all segments of the population, be it urban or rural, regardless of gender, and in all regions.
Anwar Ibrahim: Incorrect assumptions – The devil is in the details
His argument: Another fundamental flaw in the assumption used for ETP is the 2.8% average inflation for the period up to 2020. The inflation assumption is crucial to arrive at the magical target of RM48,000 gross national income (GNI) per capita by 2020 that has become the pillar of ETP. If inflation grows higher than 2.8% in the next few years, real wages will be lower and the GNI per capita target of RM48,000 is nothing more than a number on a fancy ETP brochure.
Much as we like to be optimistic that the nation can rein in inflation in an environment of high commodity and energy prices, we too have to be realistic if we are honest about the future.
The average inflation between 2001 and 2005 is 4.8%, reflecting the first energy price shock of 2003 that saw average crude oil prices moving beyond the psychological US$30 per barrel mark. The average inflation between 2005 and 2009 is even higher at 6.6% as a result of the 2008 crude oil price rally that saw the energy prices sky-rocketing throughout the world.
The environment of high energy and high commodity prices is here to stay. Realistically speaking, the days when the price of a barrel of crude oil is only US$20 is long gone and experts concur that it will settle at an average of US$80 per barrel for the foreseeable future, barring any future geopolitical shocks that may send the price sky-rocketing again.
Thus, we have to question the wisdom of adopting an over optimistic inflation projection of 2.8% over the next 10 years, when no economic, social and political indicators around us point to that direction. I dare say that while it may make ETP looks enticing to the public, it also makes a mockery of our intelligence.
The consequence that these flawed economic assumptions has on ETP is great. The premise that ETP can guarantee higher wages and deliver Malaysia to the path of high income nation status collapses instantly if we were to use more realistic assumptions detached from political spins and propaganda.
ETP on that False Statement 2:The assumption of 2.8% inflation for the period up to 2020 doesn’t reflect the current economic environment.
Response: The 6% average annual growth projected by the ETP required for Malaysia to achieve high income nation is real growth, and excludes the inflation factor. This means that we are able to adapt to the inflation rate, whatever it may be at.
In 2009, the World Bank defined high income as USD$12,196. In 2010, it was USD$12,276. Based on the World Bank’s projected growth rates, by 2020 we will need to hit USD$15,000 per capita gross national income. This target was set independent of the ETP. Our efforts are aimed at achieving the standards set by the World Bank.
Between 2005 and 2010, Malaysia’s inflation rate averaged 2.77 per cent; this includes an all-time high of 8.5 per cent in August 2008 due to high oil prices. As at October 2011, inflation is up 3.4 per cent year-on-year while for the period of January to October 2011, it is up 3.2 per cent year-on-year.
Based on historical and current data, an assumption of 2.8 per cent inflation over 10 years from 2011 to 2020 is reasonable. ETP targets are definitely still relevant.
More response to false statements can be read here.
Before we move further, let us look at the issue from other perspective for a bit and go straight to the real issue here.
On top of the pile, is the Prime Minister, Dato’ Sri Najib Tun Razak who is also overseeing Khazanah Nasional by virtue of him being the Minister of Finance as well.
Since he could be either impotent in dealing or maybe oblivious towards Azman Mokhtar’s many, many failures and shady deals, it is high time the Prime Minister takes a serious look into the affairs of his subordinates. Or at the very least, have the temerity to veer Khazanah Nasional into proper direction and whip it into shape.
Before this issue causes Barisan Nasional to lose more votes (who would want a government which do not punish non performance among its top brass and governmental institutions?), the office of the Prime Minister and the Minister of Finance must be seen as stringent in following its own tagline. Unless of course, the word ‘performance’ in “People First, Performance Now” connotes a different meaning altogether.
Because based on blog reports on mismanagement by Khazanah, it is unprecedented that a Managing Director of a GLC couldn’t manage some of the wealth of this country properly and yet be rewarded for his services to this nation.
Take on recent incident recently – the MAS/AirAsia shareswap. Never mind that the deal is so unfair towards MAS, but what is more glaring are the subsequent actions taken by the besieged MAS which defy any logic.
The latest misjudgment is the termination of 8 routes by MAS; among others, to Rome, Dubai, Buenos Aires and Surabaya.
Reason cited is ‘to rationalise unprofitable routes’.
We don’t have to tell the ordinary people on the streets on how difficult it was to get those routes in the first place. With so much money being pumped to market and promote those routes, it is certainly not the best way in dealing with an already competitive industry.
The dip in MAS’ reputation for dropping these routes will eat up their market share, if not already.
Wouldn’t it better if they had focused on passenger mile optimisation whereby apart from operational cost reductions, they must emphasise on selling the premium seats and reduce non-revenue no-shows. In other words, more aggressive marketing and selling! When was the last time you saw MAS advertisement on TV?
First class and business class seats are important yield boosters. As it is, there are not many first class and business class seats in MAS routes. God forbid if they were to drop London or Paris routes in the near future. That would be a catastrophe. But another airlines’ erroneous decision would be another’s gain.
The long haul AirAsia X could take over from these routes all to itself.
Actually if AirAsia is really sincere, they can start selling its tickets to passengers going to routes that MAS flies which AirAsia does not. Like a code sharing system. Meaning, they share the revenue with MAS taking the bigger bulk of it.
MAS abandoning those routes altogether is simply outrageous! To think that MAS does have other code sharing partners to begin with and the fact that MAS and AirAsia own each other’s shares but not having any code sharing venture is ludicrous.
One of the biggest and mind boggling operational cost is the flight catering cost. All know that the sole supplier for passengers’ food on board of MAS flight is LSG Skychef – Brahim Sdn Bhd; a company owned by Tun Abdullah Ahmad Badawi’s brother.
This company was awarded a really long contract to supply on board catering for MAS all the way to 2028! With costs quoted at stratospheric levels, it is bleeding MAS in hundreds of millions on yearly basis. Who is responsible for not looking into this contract and renegotiate a better one?
If they do not have the willpower or enough testosterone to negotiate the prices down, at the very least, the owner of MAS should have terminated this contract for its unfair prices and open another tender to acquire another supplier with more reasonable arrangement.
But they are not doing that. What they did was:
1) advertise in a small English Premier League club
4) allowing Tony Fernandes making a fool of MAS and Khazanah
5) abandon highly sought after routes
Whose fault is it?
Bear in mind, Azman Mokhtar and his partner in crime, Danny Yusof were the ones responsible for the Wide Asset Unbundling (“WAU”) back in 2002 which at that point of time promised everyone to be THE strategy to save MAS.
Fast forward to the future, we know that WAU was a failure. All the double degrees attained from Oxbridge by Danny Yusof or years of experience being a consultant by Azman Mokhtar couldn’t save MAS the first time. What makes them think they can save MAS the second time?
So we are back to square one. In fact, MAS’ position right after the shareswap is even worse than years before the WAU. Now, MAS is in the hands of its competitor – Air Asia.
Even having a Chief Operating Officer in the form of Mohd Zainal Shaari, another consultant, which was brought into Khazanah from PricewaterhouseCoopers can’t seem to save us from further losing money.
The most favourite word of a consultant (and investment banker) is corporate restructuring.
Restructure this and that. Hoping for a synergy of sorts. But restructuring a business on paper via equity transfers are not the only solution to make a business more viable. Any businessmen would know that. But the bosses in Khazanah are not businessmen. Trying to meddle in operations when you have close to zero knowledge about the business is a disaster waiting to happen.
How could Danny Yusof be appointed as the Group Deputy CEO of MAS in charge of operations when he left a trail of failures behind him? He did not do well in Aseambanker (he is not an investment banker); he was in charge of the restructuring of RapidKL of which the Operational Agreement he concocted made RapidKL even worse (he is not a public transport expert); RapidKL had to be restructured again in 2009 before it could sink even deeper.
And now he is trusted to manage MAS’ operations? Is he an aviation expert?
Do you know that MAS has no Chief Financial Officer for the longest time? How could a national carrier operate without a CFO? Not only that, the position of Head of Communication is vacant. No wonder MAS is floundering financially and publicly, its image is not all good.
This is not the first time Khazanah making disastrous decisions. In the first part of this article, it was mentioned that Khazanah lost RM18 billion worth of investments in 2008. They suffered losses when their tuna fishing venture lost RM120 million. In the Parkway Holdings fiasco, they lost RM935 million faster than David Copperfield could say “Hey presto!”.
Rumours are also circling that they are suffering losses in Malaysia Agrifood Corporation Berhad (“MAFC”) – an agriculture venture they cooked up a few years ago.
Basically what happened was, under the deal negotiated by Azman, Malaysia will swap the KTM land in Tanjong Pagar for land parcels in affluent Marina South and Ophir-Rochor. The greedy Khazanah probably was swayed with the 60-40 ownership of said land parcels and overlooked a development fee charged by Singapore.
In other words, Malaysians have to pay up to RM1 billion in the form of development fee due to Azman’s sheer inability to negotiate a better position for us. To put it bluntly, Azman successfully negotiated a money losing deal for Malaysia.
Azman Mokhtar had indeed overstayed his position in Khazanah Nasional.
All these string of failures and what did the government do?
They gave Azman Mokhtar a Tan Sri-ship and extended his contract.
In the first part of this article, we just scratched the surface of the lopsided sponsorship deal that benefited Air Asia more than MAS although the latter paid more money into the coffers of QPR.
But that’s not all. There are more serious issues at stake.
If we imagine all of us are the Board of Directors in MAS, which team should we put our money into; QPR, Manchester United, Arsenal or Liverpool?
Good branding strategy by owners of Mister Potato to associate themselves with Man United
If Telekom and even Mister Potato can sponsor Manchester United, why on earth would Malaysia Airlines sponsor a newly promoted team like QPR?
The next question is, how long had the marketing team in MAS looked into advertising in an English Premier League teams? Was decision made before the share-swap or after?
Why were better and bigger clubs not selected?
I suspect, just like how any normal consultant turned management person like Danny Yusof would react, the deal was a kneejerk reaction after being cajoled by Tony Fernandes and it was shoved into MAS’ throat without any proper marketing analysis on return on investment.
There is no way a sane Marketing head of a GLC would give away RM18 million knowing full well that the return on investment of its advertising value will be much higher if he had sponsored other bigger clubs.
Who in MAS decides where the advertising and promotions money should go? What kind of marketing clause been inserted in the share-swap deal? Was there an ‘advertising collaboration’ clause or a ‘joint marketing’ clause in the agreement? That will spell disaster in terms of MAS’ branding.
We often hear ad nauseam after the share swap that MAS is a premium airline. So why is this premium brand putting its hard earned millions into a team which has no significant brand value at all? Shouldn’t a premium airline sponsor a premium EPL team?
What is wrong with the Deputy CEO of MAS, Danny Yusof? Did he knock his head on the way to MAS’ office some time ago?
The exposure of MAS logo in home games at Loftus Road stadium is lower when compared to the exposure Air Asia logo will get when they go away to play other teams. This is common sense.
The EPL limits the number of live matches on TV in order to protect the stadiums’ revenue from ticket sales. Out of 380 matches in a season, the maximum number of live matches on TV is set at 138 per season. How many live matches QPR could get as compared to Liverpool, Arsenal, Tottenham, Manchester City or even Everton?
Is Azman Mokhtar, representing the biggest shareholder of MAS, really that wise? Logic says otherwise.
Expressing all the right sentiments to soothe QPR fans’ sullen resentment over the price hikes that immediately followed May’s promotion to the Premier League, Fernandes, in an interview with the Guardian, was not all soft soap, however. He made no secret that he was motivated to buy QPR for £45m not only for the love of football, but as a sponsorship, marketing vehicle for AirAsia, where he remains a significant shareholder, and Malaysian Airlines, in which he and a partner more recently bought a 20% stake.
“Many people do not realise the power of sport to market a brand,” said Fernandes, whose Lotus Formula One team is sponsored by AirAsia, which also sponsored last year’s British Grand Prix and, for a time, Manchester United. “You can spend £40m on advertising and have nothing like the same effect. Around the world, everybody watches Premier League football.”
What happens if that ‘marketing vehicle’ has no value in terms if advertising potential? Easy for Tony to say that there is always risks when doing business. It is always easy to say that when RM18 million is not his money to begin with.
And of course, not everyone watches QPR and certainly QPR is not the team to be given priority to be shown on TV. And for what is worth, we all know QPR isn’t the first team that Tony wants. He had to settle for QPR after his foray into buying Wet Ham United did not materialise.
Malaysia's potato heads; beloved by Najib Tun Razak
If you were MAS shareholder, wouldn’t you be mad? If a minority Air Asia shareholder can get angry when Air Asia discontinued sponsoring Manchester United and parked their RM12 million into one of the smallest team in EPL, shouldn’t we, MAS’ ultimate stakeholders demand an explanation from Danny Yusof and his boss, Azman Mokhtar?
There is a serious corporate governance issue here from both MAS and Air Asia’s shareholders’ point of view; why should Air Asia and MAS direct its advertising money to AirAsia’s Group CEO and MAS’ executive director, Tony Fernandes?
In the recent spat between Tony Fernandes and Malaysia Airport Holdings Berhad (“MAHB”), Azman Mokhtar seemed incapable and lacking the testicular fortitude to defend MAHB.
I have been monitoring the recent pandemonium surrounding our aviation industry concerning very top level personnel which is rather embarrassing and unprecedented in terms of its sheer implications.
My last article regarding an apparent share swap between Air Asia and Malaysia Airlines (“MAS”) turned out to be an outright management takeover of MAS by Air Asia as time moves on.
Right from the outset, there is something really wrong with the deal but the market was somewhat pacified when Tan Sri Azman Mokhtar assured Malaysians that MAS will not be taken over by Air Asia. The justification of the deal was that it will help the floundering MAS.
But the manner the deal was executed raised many eyebrows.
Khazanah had to fork out tax payers’ money to buy Air Asia’s over-priced shares which, few months before the share swap deal was announced on August 9th, was escalating sky high in the regions of more than RM4.
Juxtaposing this with the share price of MAS which went in a downward spiral a few months before the deal to be around RM1.60, allegations of insider’s trading and share price manipulation emerged.
MAS and Air Asia’s share counters were suspended on the 8th August but the suspension came too late and was seen as just a formality as the little Napoleons in Khazanah had made the final preparations of the share swap and it was beyond the point of no return at that time. True enough, the share swap was announced on 9th August amidst all the speculation and mystery.
In the end, Tune Air Sdn Bhd which controls Air Asia, bought 20% of cheap MAS shares while tax payers had to buy the much higher Air Asia shares. To make matters worse, the share price of Air Asia dropped the very next day thus the tax payers lost more money barely 24 hours after the deal was announced.
As Khazanah lost money over the deal, the new shareholders of MAS; Tony Fernandes and Kamaruddin Meranun gained more money as MAS shares jumped to RM1.79; 19 sen more than the price they had to pay to get the 20% stake.
The share swap enables Tony Fernandes and his partner to be executive directors of MAS while non of MAS’ Board of Directors were elected as Air Asia’s director. As the result, Air Asia now has the ability to learn about MAS’ business plans on yearly, monthly, weekly or daily basis while MAS has no clue on what Air Asia might do. One wonders how this can help MAS in the long run.
Tony himself was quoted in newspapers saying that the share swap is not a merger but an alignment of both companies’ shareholders. In his own words – “this is not a merger; it is a shareholder alignment”.
Therefore, why is MAS being unfairly disadvantaged from the start?
Furthermore, soon after the deal was announced and inked, the first conflict of interest occurred when MAS had to fork out RM18 million ringgit and give it to QPR; a lowly football club owned by Tony Fernandes.
Basically, MAS was made to give millions of ringgit to one of its directors in exchange of 11 jerseys with MAS logo printed on it.
MAS is not Berjaya, Genting UK or YTL. It is owned by the government and ultimately owned by the people. MAS suffered more than RM700 million losses in the first half of 2011 and still can afford to pay and enrich one of its director by another RM18 million.
What irked me the most is that Air Asia will only fork out RM12 million for the RM30 million advertising deal. A deal which was brokered and price set by Tony himself.
For Air Asia, it is the case of getting money from Tony’s right pocket and putting it into his left. But for MAS, they were screwed from the beginning.
All this happened under the watchful eye of Azman Mokhtar. His partner in the form of Danny Yusof made to look like Tony’s chief khadam and had to fly all the way to England to witness the official signing of giving away MAS’ precious fund to Tony.
In any other instances which all experts of corporate governance will agree, the whole board of directors of MAS will be hauled up and made to answer in Parliament on the blatant misappropriation of funds of a GLC. Heads should roll.
Imagine, if money from a GLC was given to another company belonged to its new director in exchange of something which is terribly overpriced.
It is wrong on two counts; the over inflated price, and the conflict of interests that involved. By right, Tony Fernandes and Kamarudin Meranun should have either resigned from MAS’ Board or from QPR’s for the deal to happen.
But what did the boss of Khazanah do?
Azman Mokhtar claimed that the QPR sponsorship is a good deal. From which part of the abyss he would have made that call, I can never fathom.
What is so good about it when RM18 million is used to sponsor home jerseys which could only be seen by 18,500 spectators in QPR’s small stadium while Air Asia which only had to fork out RM12 million has its logo in the away jerseys which can be seen by up to 60,000 spectators if they play much bigger teams?
Will this benefit MAS, or does it benefit Air Asia more?
Azman Mokhtar is the tumour that is infecting Khazanah Nasional ever since he was appointed to lead the corporation while his misjudgments and bad decisions are diseases that have been plaguing the government’s investment arm all this while.
Words of passion and motivation - picture from @khairulryezal
Our Under 23 football quad secured the sweetest victory in Stadium Bung Karno after drew 1 – 1 in the normal 90 minutes. Goals from each side of the half time by Indonesia and Malaysia respectively forced the game to be played in the extra time. Stalemate and goalless in extra time is proceeded by penalty shootout which Malaysia eventually won with 4 – 3 aggregate.
Malaysia successfully won gold medal and retain its title as defending champion of SEA Games football sport. Congratulations Harimau Malaya!
—————— Original article:
It is reported all over the news. The SEA Games football final between Indonesia and the defending gold medallist, Malaysia will be the sporting highlight of the year.
It is labeled as a grudge match and rightly so judging from the circumstances surrounding the SEA Games.
The Indonesians had taken bad sportsmanship to another level where shoddy treatment of our athletes and officials were blatantly undisguised; the contempt shown by their supporters in their stadiums everytime our national anthem were playing was uncouth and crude; the booing of our athletes whenever they are performing are highly uncalled for.
The level of hostility shown by the host country towards their guests probably reached new found heights when our football national squad requested to be safeguarded in an armoured vehicle in their journey from their hotel to the stadium.
This would have never happened in any other country and compounding to our dismay, other countries are spared from this enmity. The hatred is specific. The fact that it is targeted by a country which is most similar to us in culture and demographics must be painful to accept.
But be as it may, our boys must persevere. They should have the testicular fortitude to fend off the mind numbing, nerve wrecking atmosphere in the stadium. They must summon the courage of all Malaysians and fight to the end just like how they won the Suzuki Cup last year. The mood in Indonesia and Malaysia tonight will be electrifying. The atmosphere in both countries will be epic.
Exactly a week ago, Dato Seri Idris Jala was ‘quoted’ by The Malaysian Insider as saying“Malaysia could still become bankrupt within a decade if it spends borrowed money on operational expenditure such as subsidies instead of investing the cash.”
The opposition portal also alluded that this statement triggers alarm bells with forecast of bankruptcy.
As the result, blogger SatD made a scathing attack on Idris Jala in his blog and this writer further enquired through twitter on his statement particularly the part where the government could have breached some fiscal rules and guidelines (please refer here).
Below is the twitter conversation this writer had with him concerning the issue:
As the result of intentional spin by The Malaysian Insider, The Mole contacted Idris Jala directly over this miscommunication and published an article to straighten the whole issue:
Idris Jala: ‘IF” is the word
By Azreen HaniThursday, November 3, 2011
KUALA LUMPUR: Minister in the Prime Minister’s Department Datuk Seri Idris Jala has called on his critics and those bent on running down the government’s Economic Transformation Plan to listen carefully to his statements.
Stressing that the government did not break any fiscal rules, as implied by a newsportal, Idris who is also the Performance Management & Delivery Unit (Pemandu) chief said his statement about the country going bankrupt had once again been reported in bad light.
Idris was responding to a question posed on to him by blogger Jebat Must Die via micro blogging site Twitter.
Screen capture of the tweets
Jebat Must Die had questioned Idris if it was true that the government breached fiscal rules by using borrowings to finance government subsidies.
In his reply Idris he tweeted: “The govt is NOT breaking any fiscal rules! I hope you listen to my video (presn and QA). Nothing wrong with what I said.” (The government is not breaking any fiscal rules! I hope you listen to my video (presentation and QA). Nothing wrong with what I said.)
The question was raised by the blogger based on a report by The Malaysian Insider which stated that Malaysia could become bankrupt if it spends borrowed money on operational expenditures such as subsidies instead of investing the cash.
Jebat Must Die in his latest blog posting asked whether Idris was implying that there is dereliction of duty by the Minister of Finance pertaining the government’s its fiscal responsibilities.
“Is he (Idris) saying that Malaysia will go bust if Government continues to finance subsidies through borrowings? Since we know that it is against the law to do that, we are now stuck in a quandary.” Jebat Must Die queried.
The fiscal rules and guidelines stated that operating expenditure is financed through revenues while borrowings are only used for development expenditure.
Idris pointed that his statement was reported differently.
Another blogger, SatD, the first to raised the issue following the newsportal report also pointed that Idris must be able to differentiate between development expenditure and operating expenditure of the government.
“What you are saying is misleading and reckless for someone of your position…..you give the impression that our Government does not have any financial discipline and does not adhere to the Law as provided for by the Constitution and its guidelines,” he wrote, criticising Idris for his statement (as reported by the news portal).
An officer from ETP’s corporate communications unit told The Mole the news portal did not report Idris’s comments in its actual context.
Idris, during the Q and A session inconjunction with ETP’s first year anniversary on Tuesday, gave a briefing on programme’s progress and answered a host of queries from the public.
Responding to a question on the rationalisation of subsidies and his past statement that the country could face a possibility of going bankrupt, Idris re-iterated that his statement on the country being bankrupt was based on a presumption that ‘IF nothing was done” to improve the economy.
“If our economy grows for the next ten year with less than 4 per cent, if we grow with only 3 per cent and we do not curb our operational expenditures which includes subsidies, and we need to borrow at 12.5 per cent, if our annual debt rises at 12.5 per cent per annum as we did in the last 10 years, and if our revenue does not grow, then we’ve had it. The presumption of we’ve had it means we would have reached our debt position of 100 per cent of GDP by 2019.”
Idris pointed that the introduction of ETP showed the government’s seriousness developing the economy in a very focused manner while ensuring Malaysia and her people achieved greater prosperity.
On suggestions that the government should not borrow money as it would increase national debt, Idris said it was not wrong to borrow.
“We should borrow the money provided that it is spent as an investment, (like) development expenditure (rather) than operating expenditure.”
“That is why when you run an economy of the country; we need to make sure our borrowing is proportionately focused on the investment,” he explained.
Pemandu has also released the full context of Idris’ comments on the need for Malaysia to keep GDP (gross domestic product) growing, as well as clarifications on the “bankruptcy” issue.
Time and time again, The Malaysian Insider was caught spinning what would be considered as a deliberate attempt to mislead their readers. This practice must stop. The country’s economic prospect looks fine. I believe the opposition has no more issue to criticise the Government in order to rile the public to vote against It.
The Economic Transformation Program (ETP) celebrated its one year anniversary yesterday with a dire scenario stated by Tan Sri Idris Jala, the man behind PEMANDU.
But before we go on, we must understand the fiscal rules and guidelines set by the Constitution of Malaysia and few other administrative laws that would show how the Government should exercise its fiscal responsibility. Particularly this part below:
Taken from http://www.treasury.gov.my/bajet2011/data/er/chap4.pdf
Basically the document sets out the guidelines on how the Government should manage its debt and borrowings. We must thank SatD for graciously providing us the link.
It is clear above that the government must use the money to finance it’s operating expenditure (subsidies included) through government revenue while development expenditure must only use borrowings.
This is a good rule.
Money from borrowings is channelled for development expenditure as investment in development will create more money to finance the debt while expenditure such as subsidies and emoluments is financed by revenues since these kind of expenditure normally do not create more income.
This is a simple principle similar to what is contained in Robert Kiyosaki’s Rich Dad, Poor Dad book.
Fungibility aside, essentially, you must never ever use money from borrowings to finance operating expenditure. It would be irresponsible for the Government to do so.
But Tan Sri Idris Jala in his presentation yesterday said that there is a risk this country going to bankruptcy “if it spends borrowed money on operational expenditure such as subsidies instead of investing the cash.”
He said:
KUALA LUMPUR, Nov 1 — Datuk Seri Idris Jala said today that Malaysia could still become bankrupt within a decade if it spends borrowed money on operational expenditure such as subsidies instead of investing the cash.
“If our economy grows less than four per cent… and we don’t cut our operating expenditure, if we borrow at 12.5 per cent, if our annual debt rises to 12.5 per cent and our revenue does not grow, then it will happen,” Idris said today after announcing the latest investment updates for the government’s economic transformation programme (ETP).
The performance management minister triggered alarm bells with his controversial bankruptcy forecast last year.
Malaysia’s national debt rose by 12.3 per cent to over RM407 billion last year, according to the Auditor-General’s latest report released last week.
Although the economy grew by 7.2 per cent in 2010, last year’s fiscal deficit maintained public debt at over 50 per cent of GDP for the second year running.
The Auditor-General said in the report that the government owed 53.1 per cent of GDP, slightly down from 53.7 per cent last year.
Economists have also said the country’s economic growth could slow to just 3.6 per cent next year from a projected 4.3 per cent this year due to the increasing risk of a double dip global recession.
Idris said today that Malaysia will not go through a recession but will suffer an economic slowdown as a result of the ongoing financial crisis in Europe spreading.
“It’s not as rosy as we would like,” the Sarawakian minister admitted during a public question-and-answer session.
He noted that the GDP this year was only at 4.4 per cent.
But he assured Malaysians “our government will not allow that to happen”.
He also said his forecast did not mean Putrajaya should stop borrowing.
“We should borrow money provided the money is spent as investment rather than as operating expenditure,” he said.
“We must make sure our borrowing is in proportion to investment,” he added.
Subsidies are among the government’s biggest operating expenses.
The CEO of the government’s Peformance Management and Delivery Unit (Pemandu) said bankruptcy could be avoided even if the GDP falls below the targeted six per cent a year as long as it can increase its revenue collection.
Idris said that the country’s population has grown to 28 million but highlighted that only one per cent was currently paying income tax.
He said one of the ways to raise revenue was to implement the goods and services tax (GST).
He added that the GST would also help make the country globally competitive, noting that 140 other nations have already done so.
“If we do that, it propels competition. Sooner or later, we’ve got to implement GST,” he said.
He said the government has proposed the consumption tax but was unable to carry it out due to objections from the opposition Pakatan Rakyat pact.
What does that mean?
Is he implying that there is a dereliction of duties by the Minister of Finance over its fiscal responsibilities?
Is he saying that Malaysia will go bust if Government continues to finance subsidies through borrowings?
Since we know that it is against the law to do that, we are now stuck in a quandary.
Idris Jala is harping on this ‘Malaysia will go bankrupt if it borrows money to pay for subsidies’, therefore alarm bells should be triggered because rules and guidelines have been breached.
We have two Finance Ministers and yet this simple rule cannot be adhered too?
Prime Minister Najib Tun Razak and Husni Hanadzlah have a serious issue at hand here. They have a senator in charge of the economic transformation of this country accusing the finance ministry of being irresponsible.
I am sure Idris Jala is not that reckless and misleading as what SatD implied at the end of his article posted last night.
But if there is a small chance that what Idris Jala was wrong, and that he was just listening to the many con-job con-sultans encircling PEMANDU, then he must do what is honourable; which is to retract his statement.
Because like what SatD had said:
…you (Idris) give the impression that our Government does not have any Financial Discipline and does not adhere to the Law as provided for by the Constitution and its guidelines.
True enough, looking at the many comments in the Malaysian Insider article, he had created a widespread negative perception towards Barisan Nasional. Worse, it could possibly based on a superfluous assumptions.
We all know his pride in telling the world that he is a non politician minister. The amount of backpedalling he had to do last year over his ‘Malaysia will go bankrupt’ remark caused PEMANDU some serious public relations nightmare.
By the way, this is the summary outlook on Malaysia’s debts all through these years:
Evidence suggests our current debt ratio to GDP is manageable
It seems these days everyone can become an economist; more so when the person entrusted to manage the New Economic Model seems to be shooting in the dark when it comes to giving economic diagnosis.
The latest of his ploy to show that he is the next best thing after Anwar Ibrahim (God’s gift to Malaysia) is his pathetic ruse to hoodwink Malaysians on how good he was to decrease Penang’s debts.
Of course, besides himself, the ones that are singing his praises are non other than The Malaysian Insider crowd.
Again, blogger SatD has once again burst Guan Eng’s bubble in his latest article here.
Basically to cut the story short, this is what had happened;
The Penang state has a burgeoning state debt of near RM700 million as at June 2011. The debt has increased every year since Guan Eng took over the state with deficit running in the millions.
Notice the 39% jump of state debts from 2007 to 2010?
GEORGE TOWN: The Penang government has agreed to the water restructuring agreement with the federal government in exchange for a complete restructuring of outstanding federal loans of RM655.24 million owed by Penang, said Chief Minister Lim Guan Eng.
The exercise involves the migration of the core assets of the state-owned Perbadanan Bekalan Air Pulau Pinang (PBAPP) to Pengurusan Aset Air Bhd (PAAB), a company under the Ministry of Finance Inc.
The agreement shows that the Pakatan Rakyat state government is committed to a mature working relationship with the federal government in the national interests and for the people’s benefit, said Lim.
Under the agreement, PAAB will assume responsibility for water supply projects through the National Water Services Industry Restructuring Initiative.
In other words, the ‘evil’ Federal government helped the ‘brilliant’ Guan Eng to re-classify his embarrassingly huge state debts into an interest free lease arrangement. Guan Eng again has been caught lying especially in this particular case where he is caught mouthing figures that are untrue and more heinously, had badmouthed the Federal government in singing his own praises.
GEORGE TOWN, Oct 26 – Penang has sliced RM600 million or 95 per cent of the state’s debt since the Pakatan Rakyat took over the state in March 2008, Chief Minister Lim Guan Eng said today.
The first-term chief minister pointed out the state debt stood at RM29.66 million as of September 30 compared to the massive RM630.13 million in March 2008.
Guan Eng also said Penang’s Budget 2012 will be a surplus even as it is expected to undergo a deficit of RM107.78 million because the state has regained RM1.13 billion in reserves as at end of last year.
With such glowing figures in the black, the Johor-born DAP leader could not help but point to his political foes helming Putrajaya which saw the national debt grow as much as RM190 billion or 71 per cent within the same period. Source here.
Sliced 95% of state debts and then proceeded to criticise the Federal Government? What kind of a human being are you Lim Guan Eng?
You sliced nothing Guan Eng!
What you did was just window dressing your state’s financial woes.
Please note that Penang’s average GDP after Guan Eng took over is very poor:
How would the ‘evil’ Federal Government help Guan Eng? The gist of it is as below:
1. The state’s outstanding loan of RM655.24 million from the federal government will be interest-free and rationalised by alienating state land-related water assets to PAAB for a period 45 years. PAAB will lease back the water assets to PBAPP for 45 years and PBAPP shall pay PAAB a yearly lease of RM 14.56 million. Upon settlement of the lease at the end of 45 years, the state land will automatically revert to the state;
2) The funding for the Mengkuang Dam expansion project of RM1.2 billion will be given as a grant by the federal government instead of a 3% interest loan
Obviously with SatD’s latest expose, Lim Guan Eng’s self praises had fallen flat. As rightly pointed out by SatD, this failed accountant should be thanking the Federal Government instead of biting the hand that had fed him.
Moreover, Lim Guan Eng is not nearly good enough as his sycophants in Malaysian Insider would like to believe.
In fact, if one to consider all the tricks and lies made by Guan Eng, then psychologically, Guan Eng himself knows that he is not doing well in Penang. That is why he has to resort to all this peurile lies and fabrication with the help of other insidious machinations in the form of Malaysian Insider and Malaysia Kini.
These two portals have made it a priority to promote his leadership which is currently facing the risk of cracking under the weight of beleaguring attacks due to his own incompetence.
I wonder whether The Malaysian Insider will expose the fiction made by Lim Guan Eng since that portal claims itself to be independent and neutral.
Well, we all doubt it right?
Sometimes I sympathise with all the reporters in The Malaysian Insider and Malaysia Kini. Their lousy journalistic skills will not endear them to any future employers.
You can read more on Lim Guan Eng’s lies here and here.
To all readers who had visited this blog, I’d like to wish a very Happy Deepavali to you and your family. I may not know you personally but I certainly hope this joyous occasion is celebrated with much love and respect with one another.
The more prominent commentators that I am certain will be celebrating Deepavali are Balan Kumar and his brother Rakesh Kumar. Hope everything is great down there in Johor for both of you.
RT @ramgk: Why ask for something you are obviously going to dismiss anyways? “@limkitsiang tells people to push for royal panel probe on NFC 22 hours ago
RT
