The Star had compared Pak Lah with the destroyer of nation

The Star today printed a laughable commentary by one of its writer, Baradan Kuppusamy which had equated Pak Lah with Mikhail Gorbachev - the former president of the once mighty Soviet Union. Maybe I shouldn’t be harsh on The Star since the writer had simply made his assertions based on an article in The Economist recently.

For those who missed it, here is an excerpt;

THE latest issue of respectable The Economist compared Prime Minister Datuk Seri Abdullah Badawi as possibly the Mikhail Gorbachev of South-East Asia, referring to the Russian statesman who oversaw risky reforms that gently killed the old Soviet regime and saw the birth of a new Russia.

The weekly posed the question, without answering it, whether Abdullah had the gumption to take a similar risk like Gorbachev to reform an increasingly dysfunctional system dominated by a single party and a single theme since independence.

It amazes me how the mainstream media would spin and spin any news which had seemed to give a positive assesssment on our benevolent prime minister. It seems that the emperor’s new clothes will continue to be spun indefinitely.

What benefit to Malaysia if Pak Lah follows the footsteps of Mikhail Gorbachev? He was the root cause of the fall of Soviet Union. With his calls of reform (perestroika), Russia’s economy deteriorated further into oblivion and the once strong nation crumbled into several independent states. As the result, the cold war ended and United States of America emerged as the ONLY superpower in the world. With the balance of power tipped over to the US in the early 90’s, the world plunged into war conflicts more frequent than Pak Lah’s visits to Perth. The Gulf War, the Bosnian War, the invasion of Afghanistan, the Chechen Wars, Kosovo War, the invasion of Iraq and any other wars occured in the 90’s and the new millenium can be traced from the fall of the Soviet Union on 26th December 1991.

Hundreds of years’ effort by their past leaders in unifying Russia as a mighty empire had been dismantled by a president who had the wrong vision for the nation. Although his intention in making economic reforms was noble, his effort in introducing more freedom of speech and to allow dissent proves to be disastrous to the formidable Russia. Gorbachev and Pak Lah failed to realize that there is a direct correlation between non performing economy with the greater freedom of expression a country has.

The article further stated;

Abdullah promised major reforms soon after talking power in November 2003 and the people welcomed the promise, giving him the biggest political mandate in our history but the promises were not translated into concrete action.

As a result, voters punished Abdullah on March 8.            

This can’t get anymore wrong! The voters did not punish Pak Lah because he did not undertake the reforms he promised. The voters punished Pak Lah because he destroyed the well oiled system further with more rampant corruption, stifling of dissent, shutting avenues for criticisms and extreme meddling in government’s policy by his cronies and family members. Shame on The Star for trying to change facts. But then again, all mainstream media editors have no shame and backbone anyway.

It then continues;

Significantly, he also appointed critics and reform-minded individuals like lawyer Datuk Zaid Ibrahim and Datuk Shahrir Abdul Samad into the Cabinet as initiators of reforms.

He also announced a new broad-based anti-corruption commission to oversee the ACA and a Judicial Appointment Commissions to return credibility to the battered judiciary.

However, both these and other reforms measures are plodding along so slowly that people are worried.

It is common knowledge the reform measures face serious opposition from the remnants of the old regime that still populate Abdullah’s Cabinet, the large political establishment and the bureaucracy.

Is this for real? Lets see what benefits Malaysians received by the appointments of those two clowns. Hmmm… one, the ex gratia payments and wrongly apologising to judges who committed wrongdoings. Two, increased in petrol prices and higher cost of living. It seems that those two do not even know what they are doing.  

The other two commissions may not see the light of day but the truth is, the majority of the people do not even give a rat’s ass about it. People are not worried about all those rhetorical reforms. They are worried only about their difficult livelihood in the regressing economy these days.

Why do I think Pak Lah is a fool? Because he is trying to dismantle the very thing that puts him in power in the first place - and with disastrous after effects! It was the old regime which had enabled him to wield such power even if he is too dim-witted to use it effectively. In the end, he is left with an unstable nation and deteriorating economic conditions. All through his own brainless leadership!

And then The Star gave us the impression that Pak Lah is very popular and powerful;

If Abdullah is returned unopposed as Umno president in the party elections in December, as it seems likely because of the nomination system that favours incumbents, he would have bought himself enough political capital to convince the party warlords that reforms, even mild ones, are urgently necessary.

It was his Reform Agenda that gave Anwar’s election campaign a populist flavour and propelled him to within reach of the seat of power. Abdullah can take a chapter from Anwar’s book to speed up the glasnost the country needs.

Here, the article contradicts itself. How can you praise somebody who wants to reform the nation and advocates regime change but at the same time steadfastly hangs on to the ways of the old regime? And yet, The Star finds nothing wrong in this.

Glasnost was the main cause on why Soviet Union lost its power and became smaller by the exclusion of the independent states of Estonia, Latvia, Lithuania, Ukraine, Belarus, Moldova, Georgia, Armenia, Azerbaijan, Kazakhstan, Kyrgyzstan, Uzbekistan, Tajikstan, and Turkmenistan. Do we want to see Malaysia divided and economically destroyed by extreme freedom of speech and a weak leader at the helm? Russia never really recovered. Not even Boris Yeltsin could stop its impending doom. Prior to the dissolution of the Soviet Union, it was the second largest economy after the United States. Russia gained some respect only after Vladimir Putin took a tougher stand and integrated parts of the old regime into his administration. 

If Anwar also follows Gorbachev’s methodology, then we Malaysians are truly screwed. You know what happened to Gorbachev in the end? He was removed from power rather embarrasingly after a coup attempt and had to resign in shame on 25th December 1991. Is this the path Pak Lah wants to take? Maybe The Economist would want Malaysia to end this way. But how stupid can The Star be to fall into this trap by the westerners? The West, under the disguise of freedom of speech, democracy and free market only wanted one thing - to rule the world and screw the developing countries into submission. Have we forgotten the term ‘economic colonization’?

Lastly, the article ended with;

The challenge now is not just reforms but also to preserve national peace against new and conflicting demands on the national polity. And that’s a job where everybody, Anwar included, has to share responsibilities.

The good thing about reforms is that once set-off, they have a way of snowballing on their own and sweeping aside, even the initiator, as happened to Gorbachev.

National peace and economic prosperity can only be achieved through strong leadership. No flip flopping in its policy and making unintelligent decisions. Even Patrick Teoh was spot on in this.

And the last paragraph is really descriptive and self explanatory. Do we want an unstoppable snowballing effect? What Gorbachev had achieved is the destruction of the only superpower which can neutralise the advent of the greedy United States of America. No wonder The Economist had nothing but praise for Gorbachev. To the US, Gorbachev is the reformer whom they should support. To the Russians, Gorbachev was the bringer of despair and the destroyer of a nation. He had single handedly destroyed the pride and the dignity of his own people within his 6 year rule from 1985 to 1991. Hopefully, Malaysians will not make the same mistake. Pak Lah should resign immediately.

Remember, the road to hell is often paved with good intentions. 

THINK!

This is my gift to Pak Lah

I totally forgot about Pak Lah during the Father’s Day celebrations in mid June. Since Pak Lah is THE BAPA MERTUA of Malaysia, I would like to give him a gift. My gift to Pak Lah is to give him this piece of news for his consumption.

From Berita Harian (30 April 2008):

KUALA LUMPUR: Semua tanggungjawab pengeluaran sijil Halal Malaysia yang sebelum ini dikendalikan Jakim kini diserahkan kepada Perbadanan Kemajuan Industri Halal (HDC).

Ketua Pengarah Jakim, Datuk Wan Mohamad Sheikh Abdul Aziz, berkata dalam satu kenyataan hari ini bahawa penyerahan secara rasmi tugas itu kepada HDC dibuat di ibu pejabat Jakim di Putrajaya pada 17 April lalu, disaksikan Menteri Di Jabatan Perdana Menteri, Datuk Seri Dr Ahmad Zahid Hamidi

Namun, katanya, soal keseragaman undang-undang halal dan semua persoalan mengenainya akan dilakukan dengan kerjasama Jakim.

Wan Mohamad berkata semua 163 pegawai Jakim yang bertanggungjawab mengendalikan ujian secara saintifik dan Islamik masih diberikan tugas untuk meneruskan kerja mereka walaupun selepas urusan itu diambil alih oleh HDC.

Katanya ini bagi memastikan garis panduan pensijilan halal akan tetap menggunakan kaedah yang selama ini diguna pakai oleh Jakim.

“Dengan pengambilalihan tugas ini juga bermakna HDC turut bertanggungjawab mengeluarkan sijil halal Malaysia termasuk bagi produk dari negara luar yang menggunakan logo Jakim,” katanya.

Wan Mohamad berkata semua persoalan pembayaran untuk mendapatkan pensijilan dari peringkat antarabangsa juga akan diserahkan kepada HDC.

Semua pengiktrafan oleh negara Pertubuhan Persidangan Islam (OIC) dan Bangsa-Bangsa Bersatu (PBB) terhadap sijil halal yang dikeluarkan Jakim yang dahulunya ditadbir urus oleh Jakim kini akan dilakukan oleh HDC yang berpangkalan di Cyberjaya.

So basically what this piece of news is saying, HDC will use the resources (expertise and manpower) from JAKIM but the revenue will solely belongs to HDC. In other words, HDC will get the money while JAKIM will incur the operating costs. This is very convenient to HDC since they have less than 20 staff to begin with. Therefore it is impossible for them to operate without the help of JAKIM.

However today we can see the extend of this arrangement.

In Berita Harian today:

HDC proses lebih 300 permohonan sijil halal Malaysia

PERBADANAN Pembangunan Industri Halal (HDC) sedang memproses lebih 300 lagi permohonan daripada syarikat tempatan yang mahu mendapatkan pensijilan halal Malaysia.

Ketua Eksekutifnya, Datuk Jamil Bidin, berkata sejak HDC mengambil alih tanggungjawab pengeluaran pensijilan halal daripada Jabatan Kemajuan Islam Malaysia (Jakim), awal April lalu, ia sudah meluluskan 80 permohonan.

“Setakat ini, HDC telah menerima 380 permohonan yang kebanyakannya daripada sektor makanan bagi mendapatkan sijil halal dan yakin jumlahnya akan terus meningkat.

“Berdasarkan perangkaan Jakim sebelum ini, agensi itu biasanya menerima antara 1,500 hingga 2,000 permohonan setahun daripada syarikat yang mahu mendapatkan status halal,” katanya pada sidang media di Kuala Lumpur, semalam.

Mengenai yuran pensijilan halal domestik, beliau menegaskan, bayarannya adalah sama seperti yang dikenakan Jakim sebelum ini manakala bagi pensijilan halal antarabangsa, bayarannya adalah lebih kompetitif berbanding Badan Persijilan Halal lain di dunia.  

Apparently, as I see it, this is just another scam by the cronies of Pak Lah in getting easy money from the public by fronting as a government agency. One of JAKIM’s source of income has been taken over by a private entity. With the service charge that can reach up to RM700 per certificate, the amount which can be potentially collected by HDC is huge. But the biggest loser would be JAKIM themselves. Notwithstanding the fact that it is their resources which are being exploited by HDC.

It’s good to have a Bapa Mertua who can easily change any policy of a government agency to suit the needs (and greed) of a family member, isn’t it?  By the way, who is HDC is closely linked to?

No prizes for guessing correctly. Most of Malaysians know him already.

Another gift I’m presenting to Pak Lah would be a cordial reminder on his promise back in late April. In Utusan Malaysia, it reads:

Kerajaan akan tubuh majlis ala Mapen - PM

KUALA LUMPUR 30 April — Datuk Seri Abdullah Ahmad Badawi berkata kerajaan akan menubuhkan sebuah majlis ala Majlis Perunding Ekonomi Negara (Mapen) yang disertai oleh semua pihak termasuk wakil parti pembangkang.

Perdana Menteri berkata perkara itu diputuskan pada mesyuarat Majlis Tertinggi Barisan Nasional (BN) yang diadakan semalam.

“Dan telah ditetapkan sebuah jawatankuasa untuk nak menentukan kriteria dan format-format yang hendak dipersetujukan bersama supaya bila kita dah dapat tetapkan dengan betul maka mudahlah cadangan itu dikemukakan,” katanya menjawab soalan tambahan Datuk Seri Abdul Hadi Awang (PAS-Marang), di Dewan Rakyat di sini hari ini.

Abdullah berkata mekanisme itu akan membolehkan pihak kerajaan berbincang dengan semua pihak khusus dalam menangani krisis kenaikan harga barang dan implikasinya terhadap ekonomi negara.

“Saya sangat menghargai cadangan bahawa perkara ini bukan hanya kerajaan sahaja perlu tangani kerana kenaikan harga barang, implikasinya terhadap ekonomi, kenaikan harga petrol, ini adalah perkara yang penting bagi semua rakyat di desa, di bandar, semua lapisan rakyat sebenarnya.

“Maka dengan itu adalah amat penting jika sekiranya pandangan daripada semua yang berkenaan didengar dan dapat dikumpulkan dalam satu bentuk tindakan yang akan dapat kita jayakan bagi kebaikan rakyat kita, bagi kebaikan negara dan kebaikan ekonomi kita,” katanya. Abdul Hadi dalam soalannya bertanya sama ada kerajaan bersedia menubuhkan majlis seperti Mapen yang telah terhenti separuh jalan, kerana krisis harga minyak sekarang memerlukan kerjasama dan pandangan daripada semua pihak.

Mapen adalah forum rasmi yang ditubuhkan kerajaan pada satu ketika dahulu dan dianggotai oleh wakil-wakil masyarakat khusus untuk membantu kerajaan membentuk masa depan ekonomi negara.

Mapen II adalah yang terakhir ditubuhkan kerajaan dan dilancar pada 1999.

My obvious question would be - What the hell happened to this promise? This so called consultative body never materialised. What irks me the most was, Pak Lah knows the need for it but did not do anything. Only after he increased the fuel price did he introduce us to the non responsive National Inflation Council. But even that was not participated by all levels of society, including the opposition.

Yet another promise was broken.

Thank you Pak Lah.

Use this gift well. 

Pak Lah and his cronies screwed us again!

ECM Libra FInancial Group Berhad has a stake in Pos Malaysia Berhad (PMB) through it’s acquisition of Avenue Capital Resources in 2006. That deal left a bitter taste in the mouths of those knowledgeable in the financial world as it was a clear case of insider’s trading. Note that Khairy Jamaluddin was a Director of Investment in ECM Libra in 2004 before he tendered his resignation after this infamous debacle. However, Pak Lah’s closest crony, Dato’ Seri Kalimullah is currently the Chairman and Chief Executive Officer of ECM Libra. 

Recently, PMB was given the job of giving out the cash rebates to replace of fuel subsidy. It is quite odd on why JPJ was not given this role but instead it was given to a postal service company. Instead of the more efficient and more relevant job function of the JPJ, these cash handouts responsibility were thrusted into the already mountainous variety of services PMB had to handle. The only defence that Pak Lah might see the appropriateness of this move is the many branches of post offices nationwide which the public can easily have access. 

But now, let’s see how Pak Lah and his cronies get extra money out of this purportedly ‘for the rakyat’ act of selflessness.      

For every transaction, PMB will get 10 sen commission on every RM10 of that RM625 and RM150 (for cars and motorcycles respectively). That means, for every transaction, PMB will get RM6.25 for cars and RM1.50 for motorcycles in the form of transaction fees.

There is about 11 million cars and 8 million motorcycles in this country at the moment. Let’s do the math :

RM6.25 x 11 millions = RM68.8 million (for cars)

RM1.50 x 8 millions = RM12 million (for motorcycles)

A cool total of RM81 million for the whole exercise per year. Even if we use pareto principle and apply the 80/20 ratio, RM65 million (80% out of RM82 million) would still fall in their hands. And this does not include the commission from RM200 subsidy to be given to each fishermen in the country!    

With RM117 million already paid out during the first day, I wonder how much PMB will collect by March 2009. This role was given to PMB and not JPJ because PMB is a public listed company (read: profit oriented) while JPJ is government owned entity (read : no cost to public). It’s even funnier that those who own cars 2,000cc and above were told to claim their RM200 rebate from the JPJ, not PMB. Why is this? Well, there are not many people with cars above 2,000cc in Malaysia anyway. And JPJ do not impose any fees.

This cunning way of trying to ‘help’ the poor while at the same time enriching one self is very much prevalent in Pak Lah’s administration. What’s worse, they are emptying the nation’s coffers (from the Treasury) in the form of cash rebates and transfer a percentage of it into their own pockets (through fees paid into PMB and ultimately into ECM’s bank accounts).  

And that my friends is how the poor get screwed to help the rich get even richer! (Orang kaya menjadi bertambah kaya kerana orang miskin).

These poor people did not realize that they had helped finance Pak Lah’s cronies indirectly

 

Goliath vs Goliath

Snippets of interview session with the ‘duri dalam daging’;

And another one;

While on the same note, the so called Prime Minister in waiting had a press conference;

Seems that both political goliaths are talking about the same problem that is plaguing Umno and both are trying to oust the current PM as he had failed the nation politically, socially and economically. The only difference is, one is trying to be the next PM himself while the other is trying to make somebody else as the PM.    

The belated National Inflation Council

Only now he created the ‘National Inflation Council’. I don’t know about you, but this government has got it all ’backwards’!

3 weeks ago I posted an article about rice supply and the government’s inability to pinpoint the source of spiralling food prices. One of my observation was;

I can see that the government had approached the problem from the consequential evidence, which is - people can’t afford to pay the expensive food.  What they should have done is to approach the cause of the problem - output of food supply is dwindling under the impact of increased demand (increased population + food consumption). So what did they do? By focussing on the consequence, they worked on the above initiatives which predominantly only tackling the pricing issue.

Many people have opinions. I have one. How about if the next government should at least do some basic SWOT analysis the moment they come into power. The very least, they can identify the threats facing the nation. The moment they do that, they can easily form an action council to develop solutions for a particular problem. If Pak Lah and the gang had done their homework, this National Inflation Council should have been created way back in 2005, prior to the RM1.92 increase of petrol from its previous price of RM1.62!

What’s more troubling is the announcement by Pak Lah on 4 initiatives to lighten the burden faced by the rakyat. To me, these cost cutting measures are way beyond their intended usefulness. It came too late. What is the purpose of these steps anyway? One such objective is for the government to save some money for them to redistribute to the development projects. Will these measures directly lessen the rakyat’s burden? How could a measly 10% cut on the Prime Minister’s entertainment allowance (about RM1,800 per month) can directly help you and me lessen our daily expenses? How could the freezing of paid leave of the ministers help us ease our day to day cost of living?  You tell me. As a matter of fact, these steps should have been thought of and implemented prior to the decision made on the increase of the fuel price. At least by then, Malaysia have enough buffer to steady the fuel prices.

The government should have exhausted all avenues before they finally declare their inability to protect the rakyat against the increasing oil prices. Not the other way round. It is hard to fathom the modus operandi of the current government where it spent lavishly since 2004 on expenses (unprofitable mega projects, private airbus, monsoon cup, corridors, jacked up project costs etc), and in the case of balancing out the nation’s coffers, it failed to generate enough income to beef up our wealth. That is why, when high inflation hits us, the government had no more money to protect us.

The government should have started implementing any cost cutting measures as soon as the oil prices hit USD70 back in 2006. Nearly all analysts at that time predicted that oil prices will increase further. Why was this signal not heeded? Greed and lack of vision would be the correct answers.

Someone had discussions and established working groups (MTEN, Malaysian Business Council, NCIT etc) 1 year BEFORE the implementation of capital controls. Pak Lah created the National Inflation Council 2 years AFTER the price increase of RM1.92 per litre and nearly a week after the latest hike to RM2.70 per litre. Nothing can be done anymore. As the pain had been inflicted to the rakyat. The impact had been effected. The ship has sailed. The government had punished the rakyat because it was too lazy to think and was trapped in a honeymoon period for the past 4 years. Now, we the rakyat had to suffer.

The only thing National Inflation Council will be good at is to think of further cost cutting measures. But, trying to cut costs after the price increase will only cripple the economy. Cutting off projects will make contractors and its industry to lose business opportunities. Being thrifty will slow down the economy and decreasing money circulation. Reducing road tax or other taxes to ‘help’ save the people will further decrease the nation’s income. It’s going to be a deadly catch 22 position. The spin off effect of these measures would be an economic downturn never before faced by Malaysia. I said never before faced by Malaysia because our PM and his advisers had not the ability to take us out of this potential doldrums. 2009 will be the year where the economy falters completely and it will be completely his fault. Albert Einstein once said - “the significant problems we face cannot be solved at the same level of thinking we were at when we created them”.  

Start thinking of your action plans now. Do not be lulled over by Pak Lah’s misplaced optimism regarding our economy.

Note : In another observation, I find that the blog www.chedet.com  is a good place for the rakyat to interact with the former prime minister. Lately, most of the comments sent by its readers are complaints about the current hardship they are facing. The blog owner can directly gauge the sentiment of the rakyat this way. As I see it, www.chedet.com has become the website  to go if you want to ‘mengadu dumba’ about your weak government and your difficulty in facing the tough months ahead. Hence, the function of Barisan Nasional (being the champion of the people) and Pak Lah (who said he is neither deaf nor blind) as the listeners of the people’s problems is greatly diminished. This is not helped by their inaccesibility and inability of the rakyat to meet them directly.    

Oh My God is this PM stupid

Before reading the piece below (courtesy of MekYam), I often wondered whether our current PM lacks intelligence and determination. I often thought that his stupified look actually hides some cunning intelligence in that head of his. But OH MY GOD IS THIS PM REALLY STUPID! Makes me reminiscing the good old days…

THE FINANCIAL CRISIS OF 1997 - 1998
By Nor Mohamed Yakcop

A moment comes, which rarely comes in a lifetime, when a particular event redefines a person’s life and changes the course permanently. For me, the meeting with Dr. Mahathir Mohamad in Buenos Aires (Argentina) on the evening of October 3, 1997 was such an event. It enabled me to devote the next 6 years of my life working for Dr. Mahathir Mohamad, meeting him almost daily. In the process, it enabled me to see, at very close range, the abilities of this great man.

The combination of many noble qualities in one person is rare, and it is this unique combination that has enabled Dr. Mahathir Mohamad to transform Malaysia from an otherwise typical third world country into a thriving and vibrant nation, well on the way to become a developed nation. It is also this combination of qualities that enabled Dr. Mahathir Mohamad to save Malaysia from becoming another IMF nation during the financial crisis of 1997 - 1998.

I am often asked about my involvement in the recovery plan implemented on September 1, 1998. It began on September 29, 1997, when I received a telephone call from the office of Dr Mahathir Mohamad informing me that the Prime Minister wanted to see me. The PM was in Cuba at that time, and I asked (in jest) if I was to meet the Prime Minister in Cuba !
I was told (not in jest) that he will be arriving in Buenos Aires on October 3, 1997 and I was to make sure I was in Buenos Aires at least a day before he arrived. I packed my bags and left for Buenos Aires, and arrived in Buenos Aires on October 2.

The PM arrived the following day at 5 pm and we met immediately at his suite. He informed me that he had asked many people to explain to him what was causing the financial crisis but no one was able to give him a satisfactory reply. He asked me whether I could explain to him what exactly was happening.

I asked him how much time he had, and he said two hours. I explained to him how the forex market works, about short positions and long positions, about hedging and how currencies are borrowed and sold, the difference between “bid” and “offer” and how funds can be transferred from one country to another at the click of a button. I also explained how the equity market works and the relationship between the forex market and the equity market. Dr. Mahathir hardly said anything, asked one or two questions, and listened intently.

After two hours, he had to end the meeting to get ready to go for an official dinner. He asked me about my plans for the night and I said I had been invited for the same dinner. Dr. Mahathir said to me: You go back to your room and write down all that you have been telling me for the last two hours, and see me at 7 am tomorrow. I went back to my room, skipped dinner, and wrote it all down, finishing at about 6 am.

I saw him the next morning at 7 am and gave him the report. He asked me to take a rest and come back again at 2 pm. When I returned, he told me that he had read the report and that he now understands what was happening in the financial markets. We started discussing various methods of overcoming the crisis, and our discussions continued when we returned to Malaysia. I met him almost daily for discussion, sometimes at his house and sometimes at his office. We tried a few mechanisms to overcome the crisis, some of which worked initially, but the hedge funds were so strong that it was difficult to proceed successfully with these mechanisms.

In early 1998, Dr. Mahathir Mohamad asked me to explore the idea of imposing an exchange control regime to overcome the crisis. I remember preparing voluminous notes on this subject. Dr. Mahathir went through the notes carefully, and kept asking for more and more details. We went through many rounds of discussion, until he was finally convinced both with the concept as well as the proposed mechanism. The rest, I guess, is history.

Dr. Mahathir also asked me to prepare a paper on how to put an end to Malaysian shares traded in CLOB (Central Limit Order Book) in Singapore. Dr. Mahathir was of the view that an important reason for the falling stock market was the short-selling of Malaysian stocks in CLOB. I prepared the report and Dr. Mahathir understood, for the first time, how exactly CLOB operates. The report, which was also implemented on September 1, 1998, put to an end the trading of Malaysian shares in CLOB.

I should add that the exchange control measures were crafted in such a way as to minimize the control aspects and maximize the outcome. The Prime Minister went through the proposed mechanism many times to make sure that the control elements were as few as possible, but adequate enough to ensure a positive outcome. There were no bureaucratic elements in these measures, such as requiring importers to obtain Bank Negara’s permission to import. The Ringgit was also pegged at a level where it was not overvalued. In almost every other country, which imposes exchange control measures and pegs its currency, there would, almost by definition, be numerous bureaucratic controls, and the currency would also be pegged at an overvalued rate.

It is often assumed that the system of exchange control (including fixed exchange rate) that we implemented on September 1, 1998 saved the country. The measures of September 1, 1998 were undoubtedly a necessary condition, but it was not a sufficient condition to overcome the crisis. Malaysia was saved, not by exchange control measures per se, but by Dr. Mahathir Mohamad.

Let me explain. Any other developing country, facing a similar crisis, if it had introduced the measures that we introduced in September 1998, the measures would probably have failed. The fact that in Malaysia these measures succeeded is due to the ability and character of Dr. Mahathir Mohamad. The economy and the financial system, under Dr. Mahathir’s leadership, was in a very healthy state–healthy enough for the exchange control measures to be implemented without negative consequences. Moreover, the Prime Minister’s hands-on management style enabled quick and timely decisions to be made, which was vital under the new exchange control regime.

Dr. Mahathir, as Prime Minister, had ensured that the Malaysian economy was fundamentally strong. Ringgit was strong and stable. On the back of the currency stability (at RM2.50 against the US dollar) Malaysia was doing very well. At the end of 1996, real Gross Domestic Product (GDP) grew at almost 8.5 per cent and the growth was expected to continue for many more years. The government was enjoying a fiscal surplus. The external debt was low, at 40 per cent of the Gross National Product (GNP). The current account of the balance of payments had narrowed from a deficit of 10 per cent to 5 per cent of GNP, and was expected to improve further. Inflation was at its lowest at 2.1 percent. We had steady growth of over 8 per cent for a major part of that period. And this fundamental strength of Malaysia was a critical factor that enabled the exchange control measures to succeed.

For a period of more than a year after the measures of September 1, 1998 were implemented, the Prime Minister met with a small group of us everyday - 6 days a week - for at least 2 hours to go through various economic data, including data on loan growth, exports, imports, property overhang etc. This enabled the Prime Minister to take quick actions, whenever required. I remember one morning when we were going through the property figures, he looked at me and directed that I should organize a property fair to clear the overhang of properties. I did, and property worth more than RM 3 billion was sold. Even after the crisis was over, Dr. Mahathir continued to meet with the group regularly, though no longer on a daily basis. And Dr. Mahathir continued to go through all the economic data with a sharp pencil.

No other Prime Minister in the world, either in developed or developing countries, employs such a hands-on approach in managing the economy. We can see, therefore, that it was not the exchange control measures per se that saved the country but the man — Dr. Mahathir Mohamad — himself.

The period 1997 - 1998 was, to paraphrase Charles Dickens, the worst of times, but it was also the best of times. The worst conditions brought out the best in Dr. Mahathir Mohamad. There is a saying that a good leader is like good tea - you only know the true quality when he is in hot water !

Throughout the crisis, the Prime Minister was focussed on resolving the crisis. Day and night, he thought of nothing else but the crisis. He read all he could on finance; he kept asking me to prepare notes on various technical issues. Sometimes he was sick with bad flu and cough, but he did not take time off to rest. He was convinced that he had to understand the issues before he could work out the solutions. His native intelligence and ability to focus on core issues were there throughout the crisis. He did not show any sign of fear even at the worst of time, only concern at the fast deteriorating state of the economy. He was, at all times, confident that he would prevail in the end.

I would like to add two additional points related to the financial crisis. The first is that, in implementing the measures of September 1, 1998, Dr. Mahathir not only saved Malaysia but the neighbouring countries as well. Let me explain. When Malaysia imposed its exchange control measures on September 1, 1998, the currency speculators realised that the other affected countries (Thailand, Indonesia and South Korea) could also impose similar controls, and they, therefore, stopped their activities in its track. The speculators backed off. They bought back the currencies that they had sold. This is resulted in the regional currencies appreciating. Moreover, the International Monetary Fund (IMF) was not happy with what Malaysia had done, particularly since, after implementing the measures, we did exactly the opposite of what the IMF wanted us to do, i.e. we lowered our interest rates and injected liquidity into the system. The IMF, therefore, started relaxing conditions in other countries and allowed them to lower their interest rates and allowed them to inject liquidity to stimulate their economies so that Malaysia would not outperform the IMF countries. Therefore, it is no exaggeration to say that Dr. Mahathir Mohamad not only saved Malaysia, but the other affected countries in the region as well - Thailand, Indonesia and South Korea.

My second point is regarding what would have happened if the exchange control measures were not implemented. If the measures were not implemented, many of corporations in Malaysia would have gone under, due to the high interest rates. When the corporations fall like dominos, banks would have faced severe liquidity and solvency problems due to the ballooning NPLs. The problems of the banks would have resulted in a credit squeeze, which would have led to another round of corporate failures. The Government’s revenue would have fallen drastically as fewer firms would be paying corporate taxes, thereby reducing the Government’s ability to stimulate the economy through fiscal policy measures. As a result of the problems faced by corporations and banks, unemployment would have increased substantially, leading to a second round of problems. This is the classic vicious cycle, which could have, in the end, destroyed the social and political stability of the country. This was a scenario that was waiting to happen. It did not happen because of the decisiveness and guts of Dr. Mahathir Mohamad, who decided to take the path less travelled.

We owe Dr. Mahathir much gratitude for what he has done for Malaysia over the last 22 years. Solving the financial crisis of 1997 - 1998 was just one, albeit perhaps the most important, of Dr. Mahathir Mohamad’s many contributions to the nation.

On a personal note, over the last 6 years, I have come to admire this great man for his abilities, his high moral values and, most of all, for his sincerity. Certainly, a man like Dr. Mahathir Mohamad is not born everyday.

(23rd. October, 2003)

Don’t worry, Government understands the hardship we face!

The Star today reads;

IPOH: The Government understands the hardship the people will face following the fuel price increase, Housing and Local Government Minister Datuk Seri Ong Ka Chuan said.

Ong said the Government had no choice but to increase the price due to the rise in global crude oil prices.

“Even with the increase, the Government is still subsiding petrol prices by 30 sen for every litre as the current market price is RM3 per litre,” he told reporters here yesterday after attending a fund-raising dinner for Sichuan earthquake victims.

Ong, who is also MCA secretary-general, added that to ease the people’s burden, the Government was giving out rebates such as the RM625 for cars below 2,000cc.

Therefore, in order to lead by example, The Prime Minister had slashed his own salary by 50%. The rest of the cabinet will get a 10% pay cut. The 4th floor goons however will get a 75% pay cut for giving unreliable advice and bringing shame to their Oxbridge degrees.   

Furthermore, all petrol allowances enjoyed by the ministers and deputy ministers will be revoked. They now have to pay their daily petrol consumption using their own salary. The damaging scenario whereby the poor subsidising the rich ministers should immediately be stopped.

In a brilliant afterthought, the Prime Minister will go overseas to attract foreign investors to Malaysia in order to increase the revenue of the nation. A move which many thought should have been done nearly 4 years ago. Instead of sleeping all the time, he would meet business owners, industry players and world leaders in the effort to ’sell’ Malaysia as a strategically attractive business haven.

Economy analysts nationwide concurred with this belated effort saying that ‘it is better late than never’. They further argued that when the ‘fixed costs’ of the nation increased, it is only logical to increase its ‘revenue’. Why bother inflicting more pains to the rakyat when this problem could have been routed out by having more income? After all, he and the Governor of Bank Negara often boasted that Malaysia had trade surpluses of gazillion billions of ringgit!   

According to the Prime Minister, he had only realised about this good economic theory after waking up from a long slumber during the cabinet meeting. He immediately cancelled all his monthly holiday trips to Perth and Turkey and ordered the serving staff in the cabinet meeting room to open up the curtains so that sunlight can come through. This would certainly help save up the electricity bills as well.

He will reschedule all the previously cancelled meetings with world leaders starting next week. He will resurrect the Langkawi International Dialogue, attend the World Economic Convention, personally attend the G15 meeting, and make a personal demand in the United Nations to curb the unlawful and damaging act of crude oil speculation.  

On top of that, the Prime Minister will ask his sister in law whether she could donate a few million barrels of oil from Iraq which she had managed to secure when he was the Deputy Prime Minister.

To alleviate the plight of the people further, he will pump in yet another RM4 billion to upgrade the public transport system. For the past 4 years at the helm, this is the third time he pumped in RM4 billion under the pretext of improving the public transport system. The first was in 2004 and the second was in 2006. As the result, public transport system in Malaysia is better than any developed countries worldwide. This latest move will make Malaysia as the leading role model of a perfect public transport system in the whole world.

Lastly, he hoped that the people would forgive him for being lazy and uninspiring for the past 4 years at the helm. He had no choice anyway. Not many people were born smart and hardworking. 

Dictator Dollah’s too stupid to learn any lesson

Can you imagine the horrified looks of the ordinary Malaysians when they heard about the hike in fuel prices?

Dictator Dollah has done it again. I am disgusted at the level of stupidity this man and his advisers have. This great gift by the BN government should be cherished forever. Truly, Datuk Seri Abdullah Bin Haji Ahmad Badawi is the worst Prime Minister of Malaysia even for the next 100 years!

Anyway, I can already see the headlines tomorrow:

• Our petrol is still the cheapest in the region
• Ubah gaya hidup
• Government working hard to improve the livelihood of Malaysians

And to receive only RM625 per year as rebate? That amount is too small as compared to the spin off effect from this price increase. How much a rebate of that amount can achieve to alleviate the livelihood of Malaysians if everywhere else, other things will become more pricey?

Shahrir Samad had failed in his job. Dictator Dollah failed again. The BN government had failed. Just look at their 2008 manifesto and you’d immediately know that this HUGE increase in petrol price is not in the manifesto and Dictator Dollah had broken his promise.

Promise on economy

1. Raise the nation’s productivity, income and competitiveness levels
2. Cushion the effects of rising prices and ensure quality living standards for the people
3. Strengthen private sector’s role as the main driver of economic growth
4. Nurture and assist 1 million SMEs and entrepreneurs over 5 years
5. Generate at least 2 million quality job opportunities over 5 years 
6. Reduce the Budget deficit further – more funds for development, without increasing taxes
7. Follow through on 5 Development Corridors to bring equitable growth, investment and job opportunities to all parts of Malaysia

Dictator Dollah sure had not studied the consequences of his actions. Shame on him. He is indeed the greatest SABOTEUR of the nation. And to rile me up further, the rebate was just about the only mechanism he had for us to lessen the impact. Any 5th grader could have come up with that stupid solution! When you do not have enough money to pay subsidies for the benefit of the people, you should never burden them further to the detriment of your ever waning popularity. What you should have done my dear Dictator was, increase the income of the nation when you first took over in 2003. A bright person should have at least grasp the simple concept of inflation and had the good sense of preparing the nation towards the increase in cost of living.

But you did exactly the opposite, shouting rhetorics, practising wastage, cronyism and nepotism. No wonder the nation’s treasury suffered. Hence, our buffer needed to pay the subsidies diminished even further. Your stupidity in dealing with important issues and inability to solve the nation’s woes is the main difference between you and your predecessor.

We chose you to be better than this! Down with the Dictator! Down with his idiotic shenanigans! Prancing around the country as if he’s a God’s gift to Malaysians. And this is all he can come up with? Bah!

BN politicians might as well pack their bags now. No need to wait for PRU13 coz you all will surely lose! I would love to hear all those proponents and supporters of zero subsidies defend their stand right now. But those are all rich people who did not understand how difficult life could be without any subsidies given from a government of a net oil exporter anyway! 

Tun Dr Mahathir and his book

YABhg Tun Dr Mahathir bin Mohamad will hold an autograph signing session for the book “Dr Mahathir’s Selected Letters to World Leaders”

Date    -  Thursday, May 29, 2008

Venue  -  Bookfest Malaysia 2008, KL Convention Centre, Hall 1, Ground Floor.

Time    -  11.30am - 12.30pm

“Image of book cover are the copyright property of Marshall Cavendish (M) Sdn Bhd and is being used with permission under license. This image may not be copied or downloaded without permission from Marshall Cavendish (M) Sdn Bhd. Online bookstore : www.marshallcavendish.com”

Trust me, this book is an excellent reading material. I fully recommend it to all.   

The week in review

I’m sorry for not being able to update my blog for almost a week now. Have been terribly busy with work and some voluntary jobs over the weekends. But aren’t we glad to be living in these exciting times? There has never been this much interesting news to chew upon since the day after the general election. I am overwhelmed with the amount of things that had happened for the past 1 week that had made it impossible to complete dissecting any news before another story crops up and stole the previous news’ limelight.

Therefore, in the effort to gain a little bit of sleeping time, here is the round up of the past week (please click on the link to read the full story);

FRIDAY 16th May 2008

• Royal Commission of Inquiry submits its report to the Cabinet and later on, the AG ordered the people connected to the VK Lingam inquiry to be investigated. One point that needed to be raised here is how can Tun Dr Mahathir be made guilty when what he did was following the provisions provided in the Constitution?

  Under Article 122B of the Malaysian Constitution, the appointment of the Chief Justice, like those of the President of Court of Appeal, the two Chief Judges, judges of the Federal Court, the Court of Appeal and the High Court, are made by His Majesty The Yang di-Pertuan Agong on the advice of the Prime Minister after consulting the Conference of Rulers.

  However, before tendering his advice as to the appointment of a judge other than the Chief Justice of the Federal Court, the Prime Minister shall consult the Chief Justice. A tough act by any prosecution I guess. To a large extent, any critics need detail out what are the parameters on the relevant words such a ‘advice’ and ‘consult’. And what kind of evidence needed to even suggest that Dr Mahathir had done wrong there? 

• The Prime Minister’s Department lodges a police report against several mainstream newspapers including The Star, Utusan and NST. A bit peculiar here since the 4th floor boys are acting against a newspaper headed by one of them (Kalimullah Hassan). It is obvious that the ‘leaks’ came from one of them initially.

• An odd job worker got the green light by all three of his current wives to marry another younger woman (reading this piece of news gave me hope as I know there are some single women out there who do not care about looks, status, wealth or the wrath of the first wives club).

• A man was jailed for sending lewd photo to a female friend through his mobile phone. Why would he want to send his wife the photo of his private parts anyway? Thinking his wife may have forgotten how it looks like maybe? That was just an excuse. To me, he is unmistakenly a pervert.

SATURDAY 17th May 2008

• It seems that Tony Fernandes had been barking up the wrong tree with the revelation by the Transport Minister, Ong Tee Kiat. Poor Tony. Greedy boys won’t win anything Tony. Even the deputy CEO seems to be equally dense by saying - “We have many restraints. Why is MAS focusing on AirAsia routes? Why are they targeting our model?” . Err.. aren’t those AirAisa routes originally being serviced by MAS before AirAsia took over? And now,  those routes were given back to MAS after AirAsia had finished sucking out money from it.
• In the mean time, Datin Seri Wan Azizah’s effort to highlight corruption in the Ministry of Defense (definitely taking orders from her husband) had greatly backfired and left her face red in embarassment. In the end, it was made known that it was her husband who had approved the project.
• Malaysia lost in the semi finals of the Thomas Cup in Jakarta. The lost of 2 - 3 to China was not unexpected. But Malaysia fought hard and should not feel ashamed by the defeat. The surprise finalist, South Korea beat the Indonesians to reach the finals against China.
• Nik Aziz proclaimed that Pak Lah should not take all the blame for the political situation in Umno and Malaysia generally. Nik Aziz forgot that he is also a politician in a political party. Maybe he should take the blame for politicising religion for the sake of having power. Trumpeting that Islamic country is the aim of PAS ad nauseam can be quite nauseating since that aim is strongly opposed by PAS’ partners in the Pakatan Rakyat.       

SUNDAY 18th May 2008

• If you are looking at a sample on how stupid the Malaysian government is, look no further than the indelible ink fiasco. The indelible ink fiasco continued to haunt the SPR and the government with a statement by the SPR Chairman days earlier regarding the directive from the Cabinet to cancel the use of the ink. In return, the government denied it was a directive and instead, deemed it as only a ’suggestion’. I assume, unlike all the road signs in Malaysia (which nobody cares), the Cabinet suggestion could easily be regarded as a directive. Read it here and here.
• Tan Sri Muhyiddin Yassin announced that he is not an ambitious politician. Logically, a non-ambitious person would have never rise as high as him in the first place. He was the Menteri Besar of Johor from 1982 to 1995 and now a Vice President of Umno. I’m betting that he will challenge the top two post and will announce his intention by June 2008. Humility is good. But ambition will make you go further. 
• MIC is asking a yearly fund of RM300 millions from the government to help the Indian community. I do not understand the request of this fund as the people already have the proper channels to ask for government’s assistance. For instance, the MIC President said that the fund will be spent on agro-based business development and school affairs. I think that is the reason why we have Agricuture Ministry and the Education Ministry not to mention the Rural Development Industry in the first place. In my opinion, this is just a ploy to increase his war chest in the face of party elections coming up soon. Being unemployed sucks with no source of income to appease his supporters’ appetites.
• The civil servants need not to be selfish in serving their role, so says the Raja of Perlis. It is sad for the civil servants to be reminded about this issue time and time again unless they actually are known to be selfish and corrupt. Are they?      

MONDAY 19th May 2008 

• Tun Dr Mahathir and Tan Sri Sanusi Junid quit from Umno. Too many analysis and opinions came forth from this issue. From my observations, people tend to see all the good and bad things brought forward by Dr Mahathir during his 22 year tenureship as the Prime Minister. However, people often forget that he is the last surviving Prime Minister who had directly involve in the fight for the Independence. He was one of the first, original Umno members and he was among the people who had decided to defend the sovereignity of the Malay rulers against the creation of Malayan Union. Thus we must not see him as only a former Prime Minister but also as one of the founding fathers of Independence. In 1957, Tun Abdul Razak (then Datuk) became the Deputy Prime Minister at the age of 34. Tun Dr Mahathir, was 32 at the time and was actively involved in the nation building process eventhough he wasn’t politically active at that time. To confine his good deeds just within his 22 year rule is seemed unfair. At least he should be applauded for his efforts and sacrifices made during the fight for Independence. Without Tunku Abdul Rahman and his Umno members (including Dr Mahathir) in that era, we can never be as prosperous as we are today.   
• Happy Wesak Day!
• Tun Musa Hitam equates Tun Dr Mahathir as a ‘thorn in the flesh’ when giving his comments about the former Prime Minister quitting Umno.
• Melaka opened a new landmark called ‘Menara Taming Sari’. A gyro-viewing tower which can accomodate up 3,500 people during the weekends. Also billed as the highest viewing tower in the world.

TUESDAY 20th May 2008

• AirAsia Bhd owes MAHB RM110 millions since 2002. And the amount owed did not show in AirAsia’s financial statements! Tony Fernandes sounded more and more like a petulant child complaining and throwing tantrums needlessly.
• Efficient robbers came in wearing only their underwear and facemasks and robbed a house in Miri. I think their leader went to time management course some time ago and practiced this time saving method in order to save time (robbing and raping).
• Illegal parking operators are a menace to the public and thank god DBKL is catching these unscrupulous people under their ‘Operasi Jaga’.
• Predictably, all the Umno MPs pledged their support to Pak Lah. Datuk Mukhriz however, was missing during the meeting.

WEDNESDAY 21st May 2008

• Malaysian bloggers ought to be happy they are living in a country where the media freedom is very much lax as compared to their neighbour down south. And to think most of the Malaysian bloggers like to migrate there! If we use the yardstick used by the Singaporean government, most of the bloggers and their commenters in Malaysia would be hauled up in jail (judging from the awful comments in most of Malaysia Today’s articles).
• Datuk Nallakarupan, now the President of a new found party - Malaysian Indian United Party, met Pak Lah for about 5 minutes and declared his undying loyalty and love towards the Prime Minister. Nallakarupan was infamous for his friendship with Datuk Anwar Ibrahim but suffered a fall out after the latter did not select the former to stand in the Ijok by election a couple of years ago. Anyway, all this brown nosing made me sick.
• Who the hell is Beego and why would we care about his divorce?
• Where are you? 1,649 children have been missing since 2002 and not much has been done to deter the rising crime index. Somebody must be sleeping somewhere.   

THURSDAY 22nd May 2008

• Tun Dr Mahathir gave a stinging reply towards Tun Musa Hitam’s assertions that the former is a ‘thorn in the flesh’. It is true with what some people are thinking. Dr Mahathir outside Umno is more dangerous to Pak Lah’s government than when he was inside it. I bet some people would be more cautious before they launch any attack towards him. Tasting one’s own medicine can be very bitter indeed.
• Matthias Chang, a lawyer and former political secretary to Tun Dr Mahathir, continued his lucid attacks towards Tun Salleh Abas. He may have a case there. The judiciary crisis of 1988 story may be far from over. 
• Datuk Seri Mohd Nazri Aziz arrogantly declared that Umno will do better without Dr Mahathir in it. Two questions came to my mind the moment I saw his interview here. One, is Umno can be better with him (Nazri) in it and two, will Umno going to be stronger in the coming months when it is being led by someone like Pak Lah? 
• And the picture of the week;    

Pak Lah fell asleep during a press conference while his deputy spoke on during an Umno Supreme Council Meeting last Wednesday night. Sheesh..!

 

No action against food shortage actually

Several years ago, I was working for about 2 years in the food industry. I had come to realize back then that the increase in price of rice is quite inevitable. Luckily, the government made 5 initiatives in order to curb the rising prices of rice. These initiatives are;

• Maintaining the controlled price of between RM1.65 and RM1.80 per kilo for the Super Tempatan 15% rice.
• Ceiling price for Super Special Tempatan 5% at RM2.80 per kilo and Super Special Tempat 10% at RM2.70 per kilo effective 1 June 2008. Note that the 5%, 10% and 15% percentile means how much percentage the quantity of broken rice in a kilo. That is why 5% rice is slightly more expensive than the rest as it has less broken rice in the mix.
• Price of imported rice are floated.
• Movement of rice across state borders is to be freed in stages.
• Raising the Guaranteed Minimum Price (GMP) for farmers from RM650 to RM750 per tonne.     
   

Apart from that, the national stock buffer will be increased from 92,000 tonne to 292,000 tonne. Will this solve the looming crisis of price increase? Probably yes. Will this solve the actual root cause of the problem? Sadly no. The root cause of the price increase is the shortage of food worldwide. But the government seemed to tackle different issue altogether.

I can see that the government had approached the problem from the consequential evidence, which is - people can’t afford to pay the expensive food.  What they should have done is to approach the cause of the problem - output of food supply is dwindling under the impact of increased demand (increased population + food consumption). So what did they do? By focussing on the consequence, they worked on the above initiatives which predominantly only tackling the pricing issue.

To me, one of the things that they should have done as in the case of this rice issue is to urge the local farmers to increase output of rice. From two seasons a year to 5 seasons in two years at least. Officially the farmers are currently producing paddy crops twice a year but I do know that most of them are only producing it once a year. The remaining idle months they spent doing something else. Let me tell you a secret; the farmers are a lazy lot. They scream and rant that BERNAS are squeezing them by only buying their paddy crops at RM650 per tonne. But at the same time, they actually are selling bad quality crops to BERNAS while their good quality crops are sold to the highest bidder in other private paddy mills not belonging to BERNAS. There were cases where BERNAS officials found debris, rocks and tree branches in a pile of paddy crops after it had been unloaded from the lorry right after disembarking from the weighing bridge. To accuse them of cheating will make the farmers run straight to the nearest ‘wakil rakyat’ and soon, BERNAS will be called all sorts of names in the Parliament for not thinking about the ‘welfare’ of the farmers.

BERNAS can’t afford to pay more than RM650 because to increase it, will make the price of rice too expensive for the end customers. Remember, a tonne of paddy crops will not necessarily be transformed into 100% of rice at the end of production. In a good batch of crop, only about 60% (this is called the ‘rice recovery rate’) of the whole tonne can be turned into pure rice. The balance 40% are actually the paddy’s inedible parts, its husk and other impurities. In a bad quality crop, BERNAS would be lucky even to reach 40% rice recovery rate.

Furthermore, the process of separating the paddy from its husk, cleaning, polishing the rice, sorting and packaging them costs another RM700 to RM800. Eventually, the total cost of producing local rice is between RM1,400 to RM1,450 per tonne. And what’s the price ceiling for the controlled local rice? Around RM1,300 per tonne. For every tonne of rice that BERNAS produces, they lose about RM100 to RM150. All in the name of social obligation. And how much does BERNAS produce rice locally? Around 1.3 million tonnes per year. That is why BERNAS who has an average sales of RM1 billion per year can only manage to gain profit before tax of about RM100 million per year or less.

Their production costs are eating 90% of their sales figure! And what saved BERNAS from being in the red? The imported rice. Inported rice from Thailand and other parts of the world is bought cheaply by BERNAS and sold at a higher price to the end users. But the import of rice is regulated by the government in order to protect the local farmers. Everytime BERNAS has to place and import purchase, they have to seek approval from the Ministry of Agriculture. That is why, import rice are limited to about 700,000 tonnes per year. If only BERNAS could at least break even on their local rice production, they can gain at least 30% more of their profit before tax.

The average annual demand for rice in Malaysia is about 2 million tonnes of rice. How do they arrive at this figure? Okay the average eating consumption of a Malaysian is about 80kg of rice per year. This is an average figure. It could be more or it could be less. Depends on whether a person likes pizza more or their ‘nasi campur’ more. But the difference won’t be that much. 80kg times the population of Malaysia at 27 million people gives you 2.16 billion kg or 2.16 million tonnes per year.

Approximately 2 million tonnes of rice per year will satisfy the demand of the Malaysian public. But why is there shortage? Easy. The foreign workers.

The accounted and the unaccounted (illegal) foreign workers. To date, the official count of foreign workers is slightly less than 3 million people including the illegal ones estimated around half a million.

Let me digress a bit by telling you a story of a friend of mine who went to China recently to visit some coal mines there. He visited a small village deep in the heartland of China. It was a small village by the Chinese’ standards because it only has a population of 12 million people in it! That wasn’t a typo. I kid you not. Now China has a ‘one child policy’ in placed since 1979. If a couple gave birth to a second child, they will be imposed huge fines upon the moment they wanted to register the newborn child. The fines were normally so heavy they had no choice but to leave the child unregistered all their lives. In rural areas, most families have children as many as they liked since they couldn’t afford to pay the fines for the second child anyway. The unregistered children may face problems in the future but they can still have adequate resources to live as they are geographically isolated and can afford to self sustain with the use of their own farmlands and making their own supplies etc.

Recently, they have millions and millions cases of young adults wanting to register themselves and had collected enough money to finally pay the fine and get themselves registered. For all we know, China, with the official population rate of 1.1 billion people could actually have 2 billion people instead!

Coming back to the topic at hand, foreign workers especially the Indonesians and Myanmars eat a lot of rice. The average eating consumption of Indonesians and Myanmars is 125kg of rice per year. With the huge surge of foreign workers in the country and the inability of the authorities to curb the rising number of illegal immigrants into this country, no wonder our food source is drying up as soon as it went into the shelves of hypermarts and sundry shops. This is a grave situation that the government had failed to see its many impact. Not just on the crime rate, but on our food supply as well.

Another matter which is the factor is the dwindling of cultivated lands. In Malaysia, each paddy fields are lined with dividers known as ‘batas’. This is purely territorial in nature. Historically, one paddy field owned by a farmer long ago could have reached the size of 10 acres each. But due to passing down inheritance to their descendants, the once huge paddy field is divided to give away to his many sons and subsequently divided further to his grandsons by the use of these ‘batas’. These dividers are eating up precious land area if you total them up together. An acre of paddy field can produce up to 5 tonnes of paddy crops in a season. But if an acre is strewned with so many dividers then the amount produced would be much smaller than 5 tonnes per season.

In Thailand (one of the biggest rice exporter in the world), there is no such thing as these ‘batas’. Each paddy field is so huge you can’t even see the edge of it if you’re standing at one side of the field. No dividers lining their fields in sight. Thus, the Thais can maximise their output. This was what BERNAS was trying to achieve some time ago but as usual, our territorial local farmers were so paranoid that they might confuse their own paddy fields to another if the dividers were to be disintegrated. Thus, they would rather keep their underutilised paddy fields rather than helping BERNAS to achieve greater output. They were too deaf to hear that an increase of output will eventually increase their income.      

I believe, taking everything into account from the above, those are the root causes of food shortage. Lack of reliable data to correctly calculate the demands of food supplies in the country vis a vis the rate of food production/output. The government should solve these illegal workforce problems, increase the output of farmers, motivate them to produce more before finally moving on to tackle the pricing issue. The food shortage will always be there regardless of the inititatives done to tweak the prices. In this, the government should be more focussed and should obtain more intelligent advice from the experts. Relying on just the Ministry of Agriculture to tackle this problem is not universally adequate. All areas should be covered and all ministries should chipped in ideas to solve the root of this problem.

Just my 2 cents…