(Speech at the DAP Gelang Patah forum “1MDB in RM42 billion debt – Is Malaysia on the Verge of Financial Turmoil” in Johor Baru on Tuesday, 16th December 2014 at 8 pm)
My first book “Time Bombs in Malaysia” in 1978 quoted my speech in Parliament on the Third Malaysia Plan in July 1976 where I warned that several time bombs were ticking away in Malaysia and unless these time bombs were defused, Malaysia could be blown to smithereens.
I would never imagine that today, more than 36 years later after the first edition of “Time Bombs in Malaysia”, we are faced with even greater dire straits as never before in our nation’s history have we a situation where so many time-bombs are ticking away in Malaysia which could spell disaster for the nation if they are not defused or detonated.
The RM42 billion 1MDB scandal, which is the subject of tonight’s forum, is one such Time Bomb in today’s Malaysia.
This mega financial scandal, exposed by Pakatan Rakyat MPs Tony Pua and Rafizi Ramli, is now also being questioned by UMNO forces led by former Prime Minister of Malaysia, Tun Mahathir, his cohorts like Tun Daim, to the extent that a police report against 1MDB has been lodged by an UMNO division leader, creating huge waves in UMNO.
Until the seventies, when there was greater regard for good governance, public integrity and financial probity, the biggest financial scandal was the RM65 million Bank Rakyat scandal.
The then Prime Minister, Tun Hussein Onn, who could not stomach any corruption or misuse of power, was shocked by the RM65 million Bank Rakyat scandal and insisted on parliamentary accountability and a White Paper was issued following a Price Waterhouse inquiry into the Bank Rakyat scandal – and the RM65 million Bank Rakyat was the subject of parliamentary debates and scrutiny in 1979.
Since the eighties, corruption and financial scandals increased by leaps and bounds from the RM2.5 billion Bumiputra Malaysia Finance (BMF) scandal, the RM600 million Maminco tin-buying scandal and the RM1.5 billion Co-operatives Finance scandal in the 80s, to the RM30 billion Bank Negara foreign exchange scandal and RM11 billion Perwaja scandal in the 90s, and the multi-billion ringgit Scorpene and defence procurement scandals and the RM12.5 billion Port Klang Free Zone scandal in the last decade.
Now, Malaysia has shot into the stratosphere of mega-financial scandals running into tens of billions of ringgit which is becoming the rule rather than the exception, with the RM42 billion 1MDB Scandal reigning currently as the King of Mega Scandals – and I leave to Tony Pua who, together with Rafizi, have become the unchallenged authorities on this “mother of all scandals” to elaborate later at this forum.
But the RM42 billion 1MDB scandal is not the only Time Bomb now ticking away in Malaysia. We are faced with a host of economic, financial, political, education, race and religion, nation-building Time Bombs which if not defused or detonated will spell disaster for Malaysia.
Some of these ticking Time Bombs include:
1. The RM1.3 trillion illegal capital flight Time Bomb. The latest annual report of the Washington-based Global Financial Integrity (GFI) revealed that Malaysia lost RM171.11 billion in 2012 in illegal capital flight or an accumulated amount of RM1.38 trillion (US$394.8 billion) in the ten years from 2003 to 2012.
Malaysia remains among the top five countries for illegal capital flight, behind China, Russia, India and Mexico. If calculated on a per capita basis, Malaysia’s illicit capital outflow is the world’s No. 1 in 2012, at US$1,646.36 (RM5,762.26) per capita, ahead of Russia’s US$856.16 per capita, Mexico’s US$774.81 per capita, China’s US$183.91 per capita and India’s US$47.65 per capita.
2. The Oil Price Collapse Time Bomb. Crude oil prices are poised to fall below half where they were six months ago, with Brent, the global benchmark, expected to slide to as low as US$50 a barrel – which will have catastrophic effects on the country’s economic model as 30% of the country’s spending is reliant on oil.
3. The Economic Crisis Time Bomb – with Malaysia regarded as South East Asia’s weakest spot with the multiple plunge of forex and equity markets in tandem with current slide in global commodity prices leading to research houses revising their 2015 growth outlook for Malaysia.
4. The Corruption Time Bomb – Although Malaysia is ranked No. 50 in the Transparency International (TI) Corruption Perception Index (CPI) 2014 and is the best ranking under the Najib premiership, there is nothing to crow about as Najib’s best is still lower than the worst rankings of the two previous Prime Ministers, as Tun Mahathir’s worst TI CPI ranking was No. 37 while Tun Abdullah’s worst ranking was No. 47.
The most damning indictment of Najib’s administration and its fight against corruption is the condemnation on Sunday by the country’s former top civil servant in the Election Commission, Tan Sri Abdul Rashid Abdul Rahman, who had served as secretary and later chairman of commission for 25 years, who told the Prime Minister to “Please stop lying to the rakyat” as “the main weakness of the Federal government was its failure to address corruption” and alleging that “Now even the Malays corrupt our leaders.”
5. The Brain Drain Time Bomb – Some two-and-a-half million of our best brains and the most creative talents have left our shores to help other countries to become great when they should be in Malaysia to ensure we achieve our destiny as a great nation in the world. It is not only non-Malays but also Malays who are being forced to migrate because of an unimaginative, uninspiring, undemocratic and repressive government and leadership.
6. The Education Time Bomb – I was surprised by the statement by the Deputy Prime Minister and Education Minister, Tan Sri Muhyiddin Yassin when he visited Shanghai early this month that Malaysia wants to emulate the Shanghai education system which has succeeded in producing high-performing students in the Programme for International Students Assessment (PISA).
Muhyiddin said Malaysia was keen to adopt some of the success formulae from Shanghai which gained the top spot in Pisa for its students’ high performances in Mathematics, Science and Reading and his ministry would send its expert team to Shanghai to study the matter.
I find this completely mind-boggling as it has taken Muhyiddin a full year to wake up to the implications of the 2012 PISA results which were released in December last year, and as far I can remember, Muhyiddin had not said a single word about the deterioration of educational standards of Malaysia’s 15-year-olds in the international assessment in the three subjects of mathematics, science and reading, to the stage where the 15-year-old in Shanghai, Singapore and South Korea were performing as though they had four or even five more years of schooling than 15-year-olds in Malaysia!
From the PISA 2012 released in December last year, Malaysia was stuck in the bottom third of the countries surveyed in international assessments, and not making any upward move towards the upper tier of the top third of the countries.
Although at the bottom third of the pile, Malaysia was also being overtaken by other countries in the group, like Kazakhstan in mathematics and science.
With an Education Minister who takes one full year to wake up and respond to the 2012 PISA results instead of instant reaction, response and action, no wonder Malaysia’s education system at all levels – primary, secondary and tertiary – has reached a new low, to the extent that UMNO/BN Ministers and leaders themselves have no confidence in the national education system and are sending their children or grandchildren to international schools, with Tun Mahathir by his own confession the best example.
This is a Time Bomb which will have far-reaching consequences on our future national competitiveness, economic growth and prosperity as it is the human capital which has become the most important determinant of a nation’s future.
7. The Terrorism Time Bomb. The tragedy in Sydney which signals the advent of lone-wolf terrorism, that leaves two innocents dead after a 16-hour hold up; and the Taliban massacre of at least 132 children in a school in Peshawar in Pakistan are stark reminders of the dangerous times that we are living in.
This was why I was aghast at the police complacency when it said it was no cause for concern when Malaysia leapt into the world’s Top 50 countries in the recent Global Terrorism Index of the Institute of Economic and Peace, where Malaysia climbed 42 places from 91st in the 2012 edition to 48th out of 162 countries.
8. SSKM Time Bomb – Although those who advocate “Sabah Sarawak Keluar Malaysia” (SSKM) is minuscule, the unhappiness and grouses of Sabahans and Sarawakians that they have not been given fair and equitable treatment in the 51-year-old Malaysian Federation is widespread and must be given prompt attention.
The outrageous Report of the Royal Commission of Inquiry into Illegal Immigrants in Sabah (RCIIIS) which had caused disbelief, dismay and disquiet among Sabahans is a good example that the legitimate complaints and grievances of the people of Sabah and Sarawak can only be ignored at the expense of a more cohesive and sustainable sense of unity, harmony and solidarity in Malaysia!
9. The Racial and Religious Time Bombs – Racial and religious polarisation in Malaysia have never been more serious than in recent years, as a result of the unrestrained rhetoric and politics of hate, immoderation and intolerance to incite inter-racial and inter-religious hatred, conflict and tension.
Just like 1Malaysia, “moderation” is the slogan of the Prime Minister in international forums but not his policy in the country.
10. The Time Bomb of Repression. National and international confidence in national institutions, like the police, the rule of law and the independence of the judiciary have been going south as a result of the “white terror” regime in the past few months, with the crackdown on Pakatan Rakyat leaders, intellectuals, social activists and student leaders, with 23 persons prosecuted under the Sedition Act since 2009, and countless investigated and awaiting sedition charges, including Anwar Ibrahim and myself.
In contrast, UMNO/BN leaders and affiliates including those who openly incite racial and religious hatred and conflict like threatening to burn the Bible or concocting lies that the Chinese community in Kedah burnt the Quran “page by page at a prayer ritual” enjoy immunity and impunity from the sanctions of the law.
There are many other Time Bombs ticking away – like the Iskander Time Bomb in Johor, the MAS Time Bomb and the MH 370 and MH17 air disasters and tragedies; and even the Time Bombs in the Political Parties, whether in Barisan Nasional or Pakatan Rakyat, like the controversy over hudud implementation which is a Time Bomb for all BN and PR parties.
The maturity, wisdom and judgment of Malaysians are going to be sorely tested with the host of these Time Bombs ticking away, as to whether they could be defused or detonated to saved Malaysia from disaster.