1MDB is confirmed to be in bad shape; will be dismantled by MOF

So it is confirmed that 1MDB is in trouble. Otherwise, why would the Ministry of Finance decided to wind-down 1MDB in the effort to lessen the massive debts it has stupidly acquired for the past 6 years?

Since this is the weekend, let’s not talk about the technical details of this bailout. Let’s talk about the morals behind it.

Isn’t it strange for the Finance Minister to come up with a rescue plan when none other than the Prime Minister himself had assured Malaysians in his FAQ (Falsely Answered Question)  not to worry about 1MDB as its assets are more than its liabilities?

Wasn’t he the one that has been telling the public not to be hasty in their judgment and everyone should wait for the AG report as well as the PAC investigations to complete?

At every opportunity, he would say, “wait for the AG report”.

But it seems the Prime Minister and the Finance Minister are the ones who couldn’t wait and must dismantle this financial monstrosity soonest possible. So which is which?

Is 1MDB in critical shape, or is it not?

With more and more people beginning to realise that the leaders involved had misled Malaysians into thinking this company is in good shape and that the critics had been right all along, one wonders if this ‘winding-down’ strategy by MOF will just going to be a pyrrhic victory for the Prime Minister.

Obviously they would want to absolve all 1MDB’s mismanagement for the past 6 years under the pretext that this exercise will help reduce the RM42 billion debts.

They will wipe their hands clean and pat themselves on the back for the job well done. And when AG and PAC report is presented, it will be superfluous as the revamp exercise is going to be underway and the board of directors and advisors can walk away with a huge severance package.

This plan would not work unless there are no intelligent ministers in the cabinet to expose this nonsense.

Hoping this will be over soon..

Hoping this nightmare will be over soon..

The desperation is reeking from all angles. And to make matters worse, this is not the first time 1MDB is bailed out. The first was in February when it was rescued by Ananda Krishnan before loan payment of RM2 billion was defaulted. The second was in March when MOF extended a RM950 million standby credit for 1MDB to use in settling its loan interests.

And for the third, foreigners from the Middle-East are sought to help this troubled pile of stinking mess – to help reduce loans amounting RM16 billion which shouldn’t have happened in the first place. Begging the arabs to save us from our own mistakes.

So what will these arabs investors get in return?

“The deal reached with Abu Dhabi-based IPIC and Aabar will help reduce the debt by RM16 billion and in exchange, 1MDB will provide IPIC and Aabar with a number of financial assets, including units that are held in the company’s BSI Singapore account.”

Be afraid, be very afraid.

Will anyone be accountable and take the fall for this fiasco? Highly unlikely.

Will our original questions be answered? Next to impossible.

The emperor is busy fiddling while his pants is on fire.

#1mdb, #malaysian-corporate-matters, #new-economic-model

As the stories go… Tabung Haji and 1MDB

It is simply outrageous for the Prime Minister to brush off all the despondent criticisms towards the Tabung Haji Properties – 1MDB transaction with “it was not a bailout”.

He said:

Perdana Menteri menjelaskan, ketika Tabung Haji (TH) membeli sekeping tanah milik 1MDB ia adalah pelaburan dan bukannya ‘bailout’ 1MDB kerana TH boleh memperoleh keuntungan sehingga lebih RM170 juta melalui pembelian itu namun disebabkan perkara itu dijadikan isu, beliau menasihatkan TH menjual tanah berkenaan.

Najib berkata, melalui penjualan semula aset berkenaan, TH boleh untung sehingga RM5 hingga RM6 juta namun pada masa sama merugikan pendeposit TH sendiri kerana jika aset itu tetap milik TH, pendeposit boleh untung sehingga RM170 juta.

Now, since the Prime Minister thinks that all the rakyat are idiots, then let us try explain to him and his advisers on how we perceive things..

Firstly, in the eyes of the public, IT IS A BAILOUT. Why? Because regardless how much Tabung Haji Properties got from the deal (some say up to a huge amount of RM5 million), 1MDB received a cool RM188.5 million out of it. And they got that much because the government sold that land to them dirt cheap while Tabung Haji Properties had to pay really high.

Now why did the government sold that land for around RM60 per square feet but allowed 1MDB to resell it at nearly RM2,900 per square feet? That was a bumi tract of land.

We are not talking about Tabung Haji here. Of course Tabung Haji wasn’t bailed out. The common people know this. Even a child can identify with this. But 1MDB got easy money and this made the rakyat uneasy.

And to make matters worse, what most people couldn’t stomach is the fact that the hard earned money of depositors, the money from rural folks were used to transact with a much maligned entity. An entity which is perceived to be the epitome of ‘pecah amanah’ on a grand scale. It doesn’t matter if Tabung Haji Properties and Tabung Haji are two different entities. The ordinary folks don’t even care. It’s from their halal money, subsidising a mismanaged company. It’s a matter of perception.

The trust is simply not there. Compounded by the fact that when the news broke out, its ignorant chairman quickly lied to the public saying that the story on the exposed documents, in his own words were “tak betul”Well it turned out Azeez Tak Betul is the one Yang Tak Betul when the land purchase turned out to be true after all. The trust deficit widens. The people can’t trust you anymore.

And what did Tabung Haji Properties was ordered to do after that? Sell the bumi land off to a third party. Now is there a replacement for the bumi tract of land that is lost to the private sector?

Otherwise, the bumis will be at the losing end. 1MDB gets the money to pay off its laughing creditors, Tabung Haji Properties received a little bit of money to appease the people but the rakyat at large got swindled and lost a prime tract of land.

Is this the definition of New Economic Model? What kind of model is this when the Prime Minister wears so many hats and decides on various financial decisions?

The Finance Minister orders the land to be sold very cheap to 1MDB. The real market value of the land inflated their balance sheet. But 1MDB incurred a lot of debt due to mismanagement and has to service their loan interests. Top boss of 1MDB gets a lifeline from Tabung Haji when it received money through land sale. Tabung Haji incurred a lot of wrath. The Prime Minister advised Tabung Haji to sell the land to third party after people raised the issue (if it wasn’t exposed, government will not deem it as sensitive).

Now, why should the top boss of 1MDB also be the Finance Minister and the Prime Minister as well? Where is the segregation of duties? Where is the accountability? Can the Finance Minister be sacked because he failed in corporate governance? Can the Prime Minister order, without fear and favour, a complete and thorough investigation on 1MDB when he himself is in 1MDB and MOF?

We have written about this situation in 2009:

We have always believed that the PM should never hold the post of Finance Minister. Having two Finance Ministers shows lack of trust and above all, exposing the Prime Minister unnecessarily to an artillery of criticisms. The post of Finance Minister is a delicate post. One smart move will ensure strong vote of confidence from the people. One ill advised move or a contentious project made under the watch of the Finance Minister will render him hapless in the face of public scrutiny. Datuk Najib do not need this kind of attention as the Prime Minister. Repeating the mistakes of Pak Lah will be the death of Umno under Najib.

We told you so. We are in dire straits. We have serious trust issues. The answers are not forthcoming.

Instead of getting answers for 1MDB, Jho Low etc, we got replies in the form of crooked bridge and Team A/Team B battle royale in 1987 Umno AGM. What kind of nonsense is this?

Politics 101. You must not open new battle grounds when you can’t even afford to defend the 1MDB battle. You will then face so many battles in many fronts.

It is hard for the common people to say things to correct the government. Voltaire once said:

“It is dangerous to be right in matters where men in the establishment are wrong.”

To be continued..

p.s.: JMD will blog once again after months dishing it out on twitter.

#malaysian-corporate-matters, #new-economic-model

“The Importance of Being Earnest” by Dr. Awang Puteh

Just like the great masterpiece of Oscar Wilde, this article which was published in The New Straits Times today and written by one who calls himself Dr. Awang Bin Puteh revealed how comical double standards, ‘lupa daratan’, vanity, arrogance and hypocrisy thrive in the corporate world and among billionaires. And we thought these people living in the upper echelons of society could at least be humble, reciprocal and more reflective about their social standing and how they came to be.

A recommended read indeed.

The Importance of Being Earnest

CRONY CAPITALISM? It’s time for YTL boss to walk the talk and show ethical leadership by example

APPARENTLY, the negative trait of Melayu mudah lupa is not only confined to the Malays, but also to other ethnic groups in Malaysia. This is evident from the statement by YTL Corporation Bhd managing director Tan Sri Francis Yeoh when he commented  on crony capitalism a few days ago.

Yeoh’s claims that he is successful because he is not a crony and doesn’t depend on government contracts.

He also went further, which seems tantamount to fanning the flame of racial provocation, by stating that non-Bumiputera small-and-medium enterprises (SMEs) “absolutely have no chance” to even fight “for the crumbs” as they are already at the low end of the food chain.

He delighted in lecturing us, delivered with a straight face and an affectation of pious conviction, that Malaysians are not taking advantage of our ethnic diversity, and we must introduce more open competition and encourage greater transparency in business.

Not unexpectedly, his statement evoked negative reaction from the public, and many reacted in disbelief to Yeoh’s hypocrisy given his companies’ close links with the government in the past as well as in the present.

Tan Sri Ramon Navaratnam summed it up aptly when he said that “people who live in glass houses, should not throw stones”. He further correctly stressed that Yeoh’s talking about getting rid of cronyism doesn’t sound right while his companies bagged lucrative government contracts through direct negotiations rather than open tender exercises.

Why the repetitive mantra by Yeoh despite YTL receiving all the government’s love and special attention all these times? We know that great wealth buys great political influence, but to insult the people’s intelligence with his sermon borders on brazen arrogance.

Maybe these kinds of people live in a bubble, and not surpassingly, those inside the bubble sometimes think that they can pull the wool over our eyes.

Nonetheless, let us address Yeoh’s arguments specifically.

Yeoh is adamant that YTL is successful because he is not a crony and doesn’t depend on government contracts. That is a bold statement.

Without government contracts, YTL would still be a small-time contractor. In fact, it is continuously the beneficiary of government assistance. For instance, in 1990, YTL was awarded an almost RM1 billion contract to build public hospitals.

Unless Yeoh suffers from amnesia, he could not possibly forget his big break in 1992 when the government awarded him the first licence to build, operate and manage power plants.

Without this lucrative concession, his company would probably be stuck as Syarikat Pembinaan YTL Sdn Bhd, a relatively small construction and property development company. This foray into the power sector vaulted YTL into the big league, where its pre-tax profit last year alone amounted to RM2.5 billion, versus RM30 million in 1991 before contributions from power operations began flowing in.

Importantly, most of the projects given to YTL were and still are heavily subsidised by the rakyat. His power agreement with Tenaga Nasional Bhd was so lopsided and utterly unjust that Tan Sri Ani Arope, the then TNB chief executive officer, submitted his resignation after refusing to accept YTL’s terms.

His “take or pay” agreement with TNB obligated it to take up YTL’s power output — priced much higher than what TNB could easily produce — whether the utility needed it or not, for 21 years.

Maybe that’s what Yeoh meant when he stated that YTL became successful via “innovation”, which ripped off billions in taxpayers’ money.

Has he also conveniently forgotten how he was recently awarded a RM10 billion contract by the Education Ministry to provide, among others, laptops to schools, despite YTL not being a computer maker, nor expert in education services? The contract irked member of parliament Zaril Khir Johari, who raised questions on this issue in Parliament. His 1BestariNet programme, which is to install 4G high-speed broadband to all schools, indirectly means that the rakyat are actually funding the commercial expansion of YTL’s YES 4G network. So much for innovation.

Yeoh was also borderline malicious when he said the non-Bumiputera SMEs had been discriminated by the government.

Well, I wonder where he got his statistics from. Analyses done by the Economic Planning Unit show that non-Bumiputera businesses, especially Chinese companies, took 80 sen for every RM1 in government contracts.

Even funding for SMEs benefited non-Bumiputeras the most, as data shows that Bumiputera companies accounted for about 30 per cent of the entire funding for SMEs last year.

To put things in perspective, the value of the contract YTL secured from the Education Ministry alone, for providing only laptops to students, exceeds the entire funding for all Bumiputera SMEs for the entire period of last year!

It is heart-warming to learn that YTL supports national unity. Let us, for a second meditate upon and closely scrutinise these nationalistic statements from Yeoh: “We should leverage on our different ethnic races in the nation and should start working together. We have been working for a long time like we’re in a tunnel. We have not learnt to work together. We have been separated and not looked at each other’s strengths. We do not celebrate our diversity.”

Such enlightened view should indeed be emulated by other companies! However, in the name of transparency, would YTL be willing to make public the ethnic diversity figures in YTL workforce, its board of directors, exco, senior management, mid-management and low-level positions?

YTL should also make public how much was sub-contracted to Bumiputera and Indian companies, compared to Chinese-owned companies.

Similarly, in the name of transparency, would YTL also make public its power agreements, which had enabled YTL to make astronomical returns at the expense of the people? Please allow public scrutiny of the agreements, as suggested by MP Tony Pua from DAP not too long ago.

Yeoh also argued that he is a true patriot, for he has “defended the present government’s concerted efforts to introduce more open competition and encourage greater transparency in business”.

This is commendable, but flies in the face of facts. How does YTL explain its willing participation in direct negotiations with the government on some of the most lucrative contracts? It was only last week that a YTL Corp wholly-owned subsidiary was awarded a power plant project by the Energy Commission via direct tender!

Maybe YTL can make a declaration to the public that it will no longer participate in direct-negotiations and cease altogether from seeking contracts from the government.

There is still time for redemption for a devout man like Yeoh to walk the talk. I am sure he would like to show ethical leadership by example.

Moving forward, we have to help Yeoh from backsliding from his recent epiphany, and to become the born-again corporate leader that he aspires to be.

I would urge the government to be kind to him by avoiding any dealings with YTL group, either in providing contracts, or using its products and services. The government should also exclude YTL from participating in any way whatsoever in the KL-Singapore High Speed Rail project, if the project is yet to be awarded to him. He sorely needs help from the government to wean him away from his old habits.

As for me, I will also do my little part. I will stop patronising YTL hotels, shopping malls and Internet service provider, among others. I am boycotting YTL and I suggest the rest of Malaysia follow suit.

After all, Yeoh proudly claimed that his company gets 85 per cent of revenue from overseas operations.

Oh, by the way, the deafening silence from some of the most vocal critics of crony capitalism in Malaysia is really puzzling.

Imagine if the same statement was made by a Malay tycoon, I am sure the deafening silence will become a raging tropical thunderstorm.

Maybe when a Bumiputera businessman gets a contract, it’s cronyism and unfair privileges. But when people like Yeoh gets it, it is innovation, market forces and meritocracy.

 

#chinese-supremacy, #malaysian-corporate-matters, #new-economic-model

Impact of Pakatan Rakyat’s mindset onto the people’s intelligence

On Labour Day last Thursday, a demonstration organised by Pakatan Rakyat to protest the implementation of GST (Goods and Services Tax) were held in Dataran Merdeka.

And as we all know, most people who take part in demonstrations do not actually know what they are protesting. Some even got their information backwards while others don’t even know why they are there in the first place.

Kudos to Pakatan Rakyat leaders who had successfully stupefied some of the rakyat.

As per the video below, we can now see the extend of stupidity Pakatan Rakyat leaders like Rafizi Ramli, Ong Kian Ming, Nizar Jamaluddin etc had done onto the average people on the street.

Enjoy.

#malaysian-corporate-matters, #new-economic-model

The snapshot on global economy and the local economy

If anyone of the readers here haven’t read the Confessions of an Economic Hitman book, here is a Youtube video where the author summarily describes the content of the book in about 11 minutes.

Locally, our own economy is floundering.

None of the great economic consultants employed by the Prime Minister are able to find the right formula to revitalise the local economy yet. Today, the blogger Darah Tuah wrote a snapshot on the economic position of this country right now particularly the economic relationship between the bumiputera and the non-bumiputera. The blogger gave recommendations as well.

Maybe PEMANDU and other advisers can learn a little bit of something about it too.

Please have a read HERE.

Thank you.

#chinese-supremacy, #malaysian-corporate-matters, #new-economic-model, #public-sector, #reference

Stiglitz : The US is committed to a lack of transparency

Just read what the Nobel laureate, Professor Joseph Stiglitz has to say about the TPPA:

Though nothing has come of the World Trade Organization’s Doha Development Round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. But this time the negotiations will not be held on a global, multilateral basis; rather, two huge regional agreements – one transpacific, and the other transatlantic – are to be negotiated. Are the coming talks likely to be more successful?

The Doha Round was torpedoed by the United States’ refusal to eliminate agricultural subsidies – a sine qua non for any true development round, given that 70% of those in the developing world depend on agriculture directly or indirectly. The US position was truly breathtaking, given that the WTO had already judged that America’s cotton subsidies – paid to fewer than 25,000 rich farmers – were illegal. America’s response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving in the lurch millions of poor cotton farmers in Sub-Saharan Africa and India, who suffer from depressed prices because of America’s largesse to its wealthy farmers.

Given this recent history, it now seems clear that the negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the West.

There are a few basic principles that those entering the discussions will, one hopes, take to heart. First, any trade agreement has to be symmetrical. If, as part of the “Trans-Pacific Partnership” (TPP), the US demands that Japan eliminate its rice subsidies, the US should, in turn, offer to eliminate its production (and water) subsidies, not just on rice (which is relatively unimportant in the US) but on other agricultural commodities as well.

Second, no trade agreement should put commercial interests ahead of broader national interests, especially when non-trade-related issues like financial regulation and intellectual property are at stake. America’s trade agreement with Chile, for example, impedes Chile’s use of capital controls – even though the International Monetary Fund now recognizes that capital controls can be an important instrument of macro-prudential policy.

Other trade agreements have insisted on financial liberalization and deregulation as well, even though the 2008 crisis should have taught us that the absence of good regulation can jeopardize economic prosperity. America’s pharmaceutical industry, which wields considerable clout with the office of the US Trade Representative (USTR), has succeeded in foisting on other countries an unbalanced intellectual-property regime, which, designed to fight generic drugs, puts profit ahead of saving lives. Even the US Supreme Court has now said that the US Patent Office went too far in granting patents on genes.

Finally, there must be a commitment to transparency. But those engaging in these trade negotiations should be forewarned: the US is committed to a lack of transparency. The USTR’s office has been reluctant to reveal its negotiating position even to members of the US Congress; on the basis of what has been leaked, one can understand why. The USTR’s office is backtracking on principles – for example, access to generic medicines – that Congress had inserted into earlier trade agreements, like that with Peru.

In the case of the TPP, there is a further concern. Asia has developed an efficient supply chain, with goods flowing easily from one country to another in the process of producing finished goods. But the TPP could interfere with that if China remains outside of it.

With formal tariffs already so low, negotiators will focus largely on non-tariff barriers – such as regulatory barriers. But the USTR’s office, representing corporate interests, will almost surely push for the lowest common standard, leveling downward rather than upward. For example, many countries have tax and regulatory provisions that discourage large automobiles – not because they are trying to discriminate against US goods, but because they worry about pollution and energy efficiency.

The more general point, alluded to earlier, is that trade agreements typically put commercial interests ahead of other values – the right to a healthy life and protection of the environment, to name just two. France, for example, wants a “cultural exception” in trade agreements that would allow it to continue to support its films – from which the whole world benefits. This and other broader values should be non-negotiable.

Indeed, the irony is that the social benefits of such subsidies are enormous, while the costs are negligible. Does anyone really believe that a French art film represents a serious threat to a Hollywood summer blockbuster? Yet Hollywood’s greed knows no limit, and America’s trade negotiators take no prisoners. And that’s precisely why such items should be taken off the table before negotiations begin. Otherwise, arms will be twisted, and there is a real risk that an agreement will sacrifice basic values to commercial interests.

If negotiators created a genuine free-trade regime that put the public interest first, with the views of ordinary citizens given at least as much weight as those of corporate lobbyists, I might be optimistic that what would emerge would strengthen the economy and improve social well-being. The reality, however, is that we have a managed trade regime that puts corporate interests first, and a process of negotiations that is undemocratic and non-transparent.

The likelihood that what emerges from the coming talks will serve ordinary Americans’ interests is low; the outlook for ordinary citizens in other countries is even bleaker.

#new-economic-model

Assessment by Financial Times

From the Financial Times today:

Malaysian PM faces big test as tight poll looms

By Jeremy Grant in Putrajaya

Malaysian Prime Minister Najib Razak looks out through the window in his spacious office in the administrative capital of Putrajaya, and points to the foreign ministry on a nearby hill.

“They cheated the prime minister and occupied the highest spot,” he jokes, in a reference to the 1990s when Malaysia moved its government from Kuala Lumpur.

Now, as election fever rises, in the multi-ethnic southeast Asian country of 28m, Mr Najib and his long-dominant United Malays National Organisation (Umno) could be upstaged by a far bigger force: the opposition Pakatan Rakyat coalition, which hopes to seize power in the most contested poll in the nation’s history.

Since the era of Mahathir Mohamad, who led the country as prime minister from 1981 to 2003, Malaysia has been governed by Umno. The party and its coalition partners have enjoyed thumping parliamentary majorities that have ensured a firm grip on power since independence from Britain in 1957.

Mr Najib is expected to call an election within days after keeping the country guessing about timing. Meanwhile, the opposition, led by Mr Mahathir’s former deputy Anwar Ibrahim, believes it has its best ever chance of victory.

At the last election in 2008, Pakatan Rakyat robbed Umno and its partners in the governing Barisan Nasional coalition of a two-thirds majority in parliament.

The shock result prompted Umno to replace the incumbent prime minister with Mr Najib, a 59-year-old economist and son of a former Malaysian premier.

Such is the uncertainty over the outcome of this election, that even the prospect of a slim win by the ruling Barisan Nasional is unnerving investors. Malaysia’s stock market has been one of the worst performers in Asia this year. [not true, there is a steady increase in the KLSE for the past 3 months (8.88%) as compared to other volatile markets]

At stake is the future of a moderate Muslim country and US ally, which has been a linchpin of political unity in the Association of Southeast Asian Nations as China’s regional clout has grown.

Most political analysts agree that Barisan Nasional stands little chance of regaining its two-thirds majority in parliament, but Mr Najib dismisses that in an interview, delayed by a few minutes as he completes afternoon prayers.

“I’m cautiously optimistic that we’ll have a good victory. Two thirds is achievable, but I also realise that in an election anything can happen so that’s why I say I am cautiously optimistic,” he says. “Investors are looking for a strong mandate for the current government. If we should, or rather when we get a good result, you will see an unprecedented boom in the stock market. I’m quite confident of that.”

Judging by the economic numbers, Mr Najib – a former finance minister [not true, he is still the finance minister] and avuncular technocrat – has the advantage of incumbency. He has presided over an economic performance last year that the International Monetary Fund said “surpassed expectations”. The economy grew by 5.6 per cent, driven by domestic demand and buoyant exports of commodities such as gas and palm oil.

The country has also been aided by an economic programme that the government launched in 2010 to double per capita income to $15,000 by 2020. That has seen billions of dollars pumped into projects in oil and gas and infrastructure, including in Iskandar, a vast industrial zone the size of Luxembourg across the strait from Singapore.

External confidence in Mr Najib’s reforms has seen foreign holdings of Malaysian government bonds jump by 550 per cent to M$215bn (US$69bn) since 2009, according to HSBC.

Mr Najib is also likely to get a small bounce from nationalist-minded voters after a military campaign to root out Filipino insurgents who recently invaded Sabah, on the Malaysian portion of the island of Borneo.

Yet there are concerns over the pace of reform, should Barisan Nasional lose, or scrape a win as most analysts see as more likely. Malaysia has a debt to GDP ratio of 51 per cent – one of the highest in Asia – and government revenues are weak. [not true, Singapore and Japan are considerably higher, twice and four times higher respectively, and many other countries have higher ratio]

Economists have urged the introduction of a general sales tax. Asked if he would do so, Mr Najib says: “I will look at the tax structure, definitely, because we need to enhance the revenue base . . . The government revenue base has to be predicated on a much stronger footing.”

The prime minister takes issue with the Pakatan Rakyat coalition’s economic proposals, which include raising the minimum wage, abolishing monopolies in telecommunications and rice, and removing excise duty on vehicles.

“I think it is too risky to put faith in a coalition that does not have a clear sense of direction that they want to take the country in. They have also presented a manifesto that is not credible,” he says.

Mr Najib argues that the opposition’s manifesto would send Malaysia’s current account into deficit within a year.

Yet Umno is vulnerable on corruption – a key weapon in the opposition’s campaign. Allegations of bribes to secure government contracts are rife, while Transparency International’s country rankings for last year revealed no significant fall in corruption levels for Malaysia. The non-governmental organisation ranked Malaysia 54th out of 176 countries in its 2012 corruption perceptions index.

The issue was thrown into sharp relief this month after allegations by Global Witness, a campaign group, of kickbacks in land deals in the state of Sarawak, involving the chief minister, who has dismissed the allegations.

Mr Najib declines to address the case, pointing out that the corruption commission is investigating. He insists the government is “equally concerned about corruption” as its critics.

“Prostitution and corruption are two things that mankind has had to live with for so long. But we are determined to tackle it. It is a scourge. But it is something that will not go away overnight,” he says.

Should the coalition eke out only a narrow win, Mr Najib – who routinely polls more favourably than Barisan – could be vulnerable to a leadership challenge. That could see him replaced by his deputy, Muhyiddin Yassin, a conservative Malay whose reformist credentials are untested. Mr Najib took a calculated risk last year by extending his reformist zeal to his own party, changing Umno’s constitution to make it easier to challenge the leadership.

“I’ve made Umno more democratic, more inclusive. Of course by doing that I’m putting myself at risk. But I believe that what were doing is good for the country and good for the party.”

Summarily, the article is quite fair. Although it is unfortunate that all the negative slant is based on something which is not true (as in the parentheses above). There is a strong message in the last paragraph above. Which clearly shows that apart from the economical reforms, there are reforms made from within the party; as opposed to the very autocratic and non transparent parties of DAP and PKR in recent years.

#new-economic-model

Improving Malaysian taxi service

Yesterday’s news in Cars, Bikes, Trucks gave some hope in one of the most problematic public transportation here in Malaysia, specifically in our capital city, Kuala Lumpur. I even wrote about it a couple of years ago where a few bad apples in the taxi service industry have tarnished the image of this country.

Thus it is encouraging to read the news:

SPAD Plans to Merge Taxi Companies

The merger of taxi companies in Malaysia is on the cards.

According to the chairman of Land Public Transport Commission (SPAD) Tan Sri Syed Hamid Albar, the proposed move to merge the cab companies would only increase the competitiveness of the public transport industry.

“If you remember the financial crisis in the late 90’s when the country was hit by economic downturn, several banks were merged to strengthen the financial institutions. This is the same formula for the taxi industry,” he said at a press conference after hosting meet-the-taxi-driver luncheon session for 500 cabbies at SPAD headquarters in KL Sentral today.

He also added that SPAD would standardize allocation and distribution of individual taxi permits as well as leasing as part of an effort to restructure the industry in the upcoming National Land Public Transport Masterplan.

“There are 45 per cent individual taxi permits out of the 37,000 taxi permits at present in Klang Valley. SPAD is scrutinising the whole range of individual taxi permits to ensure that the standard of service of the taxi drivers will continue to improve,” said Syed Hamid.

Cars, Bikes & Trucks learned that more details of the merger and restructuring of the taxi services would emerge when the government will host another round of meet-the-cabbies session soon.

Syed Hamid also added that since 2011, no new taxi permit was issued by the commission in view of the high number of taxi drivers in the country.

The taxi-to-passenger ratio for Klang Valley cabs is considered as among the highest in the world with 4.8 taxis against 1,000 populations.

This is in contrast New York City’s 13,237 yellow cabs in 2011, a ratio of 1.6 against 1,000 people followed by Hanoi at 2.2 per 1,000 persons, Jakarta at 2.65 per 1,000 populations and London at 2.8 per 1,000 people.

“The commission discovers that sizeable numbers of taxi permits are inactive or dormant. Most of these cases involve individuals, associations and organizations that received the Special Approval Letter (STK) in the past but failed to operate over a period of time,” he said.

In addition, he said, SPAD is currently negotiating with cab operators to standardize the existing hire purchase practice because “there’s a wide range of rental rate, between RM45 to RM15 per day.

Syed Hamid also said the commission won’t seize the taxi permit without a valid reason and “will only retrieve the dormant permit.”

“If the permit holders do not have the financial capability to purchase a new taxi including insurance, maintenance and so forth, SPAD will try to assist them to obtain loans from financial institutions,” said the commission supremo.

I won’t delve further on to something which is not yet certain but merging taxi companies will surely be a good thing. Actually the best case scenario is to follow the history of RapidKL buses.

Back in the day before RapidKL buses existed, even before the now defunct bus operators of Intrakota and Cityliner plough the routes, there were many bus operators in the Klang Valley. We had Len Seng buses, Len buses, the Selangor Omnibus, Sri Jaya buses etc. We also had the highly dangerous speed demons called Bas Mini Wilayah.

This scenario is very much akin to the current taxi industry where there are too many players and laden with poor service.

What happened to the bus service industry was, Prasarana bought over Intrakota and Cityliner in 2003 (while retaining those two as operators) and they began operating as RapidKL  in 2006.

As the result, there are synergy in the efficiency of resources where profitability of the routes increased, better service all around, timeliness has improved and a more manageable supply and demand.

Compare our current bus service to the one we had in the 90s and we can see huge improvement.

Therefore the merger of taxi operators should be something to look forward to. Just from the news report above we can see red flags all over the place. Too many dormant permits, too many taxis (disrupting the supply and demand), problematic hire purchase practice, and 45% of 37,000 permits are individual permit holders. That means, there are possibly 16,650 taxi drivers trying to survive on daily basis with meagre income.

Apart from bad service by some taxi drivers, the industry itself is rife with other problems such as political interference and alleged corruption in giving out taxi permits.

All these have to stop now.

Since the advent of ETP where the government is cultivating greater cooperation and initiative from the private sector, it would be good if there are highly experienced and financially capable companies to back this plan. If there is one flagship (let’s skip the Intrakota and Cityliner busines model) much like RapidKL to operate the whole taxi industry in the city centre, then there will be synergy which will benefit the end users.

Imagine if for example, RapidKL takes over all taxi operating companies and all willing taxi drivers are employed as full time staff. The management can then plan the routes and areas with greater efficiency. There won’t be any overlapping of supply, connectivity of residents in Klang Valley will be maximise. From residential areas where there are no RapidKL buses, there will be taxis to pick up passengers to LRT Stations. Or taxis will only travel the routes where there they will not overlap the LRT or monorail routes. Taxi drivers are paid salary instead of relying on meter fares. Thus decreasing the risk of taxi drivers cheating customers. Disciplinary action can be taken to errand taxi drivers and dealt with more effectively since they are full time staff. Above all, there is no more need to issue taxi permits.

Well this is just a suggestion; from an outsiders’ point of view.

Better connectivity is what is missing in our public transportation industry.

But if RapidKL has too much on its plate then there are other private conglomerates in the automotive industry that can surely operate this kind of business. What is important is the need to standardise and improve the service immediately. Otherwise the whole industry will jeopardise our reputation as one of tourists’ favourite destination.

#new-economic-model, #public-transportation

Conclusion text of the 2013 budget

CONCLUSION OF “PROSPERING THE NATION, ENHANCING WELL-BEING OF THE RAKYAT: A PROMISE FULFILLED”

161. The new budget that I have tabled for 2013 is the last budget before the 13th General Election. This is among the series of budgets that will propel this beloved nation towards achieving the national vision.

162. With the permission of the Almighty, and the support of the rakyat, god willing we will witness six more budgets to be tabled by the Barisan Nasional Government before transforming Malaysia from middle to a high income and developed country.

163. As a party with the mandate, we urge the rakyat to evaluate critically and rationally each and every successful record of the Barisan Nasional. Over the last 55 years, the Barisan Nasional Government and the earlier Perikatan Government have created a better quality of life for the rakyat.

164. We are aware that there are parties requesting to be given a chance to form the next Government. In a democratic country, we understand that they too have their rights. It is the rakyat who ultimately decides who will be given the mandate through the ballot box.

165. The time has arrived when every rakyat will soon make a choice in determining their future as well as that of their children. An important question to ask in making that decision is whether life today is better than yesterday, and whether tomorrow gives hope that is full of possibilities and potential. If the answer is yes, please give the mandate to the present Government to further improve what we have today, without any hesitation.

166. We recognise that the Barisan Nasional Government is not without fault, but what differentiates us from others is that they do not have the courage to accept mistakes. On the other hand, they make excuses and to find fault in others.

167. Ultimately, parties that offer an alternative must also be evaluated on their merit. The rakyat knows them well. Among them, there are those who were trusted as leaders to manage the nation’s wealth. Furthermore in many states they are heading the Government.

168. If today they make promises, the rakyat must ask why is this leadership, while in power, did not take any action. When they had the opportunity; and did not implement what they promised, what guarantee is there that they will fulfil promises when they are in power?

169. Wasn’t it during the Asian financial crisis that the country was almost destroyed? And today, in the states that are administered by them, their manifestos contain only promises. Can they be trusted when in power?

170. This is contrary to the conduct of Barisan Nasional Government, when we make promises, we fulfil them. As a matter of fact, even before making promises, we are responsible in ensuring that we are capable of fulfilling them. In trying to win, they are willing to do anything but when they win all their promises will be forgotten.

171. According to Plato, ‘The measure of a man is what he does with power’. There are parties who are willing to sacrifice everything simply for the sake of power. The Barisan Nasional Government is guided by “fastabiqul khairat” as written in Al-Quran that I had recited earlier, which is to do good. The parties on the other side are guided by the “fastabiqul fasad” that is they will not hesitate to do bad.

172. The Barisan Nasional Government fosters racial unity which is the basis for national stability. But other parties, however others who want to be in power are sowing seeds of conflict and hate. This Government has been accused of several wrongdoings according to their own whims and fancy.

173. Thus, I urge Malaysians to judge the Barisan Nasional Government on its merits. Please join my colleagues and I to fulfil our potential towards developing a country that we can be truly proud of. A country where the weak are protected, those in need get help, the strong protect, the young loved, the elderly are valued, those in need assisted, and those with potentials given opportunities.

174. Truly, we want Malaysia to be well known internationally, prosperous and peaceful. With His Blessings, and the support of the rakyat we will make it a reality. To You, Allah we submit.

#malaysian-budget-2013, #new-economic-model