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Mind the gap: Asian income gulf shows economic model’s flaws

By Alan Wheatley, Global Economics Correspondent
BEIJING | Mon May 9, 2011 12:55pm EDT
Reuters

(Reuters) – Asia should have a smile on its face. The region’s economy is displaying resilience in the teeth of a structural rise in oil and commodity prices. Overheating is a greater threat than a swoon in growth.

Yet the tone of some officials’ recent comments has been strikingly cautious, reflecting an awareness that Asia has failed to seize the chance during the past decade of strength to address long-standing vulnerabilities.

Asia is still hopelessly dependent on final demand from rich countries. Investment, the seed corn of future growth, remains far below levels scaled before the 1997/98 financial crisis — except for China and India.
Continue reading “Mind the gap: Asian income gulf shows economic model’s flaws”

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Malaysia’s brain drain getting worse, says World Bank

By Lee Wei Lian
The Malaysian Insider
Apr 28, 2011

KUALA LUMPUR, April 28 — World Bank senior economist Philip Schellekens painted a gloomy picture of the Malaysian brain drain situation today saying that it not only grew rapidly but is likely to intensify, further eroding the country’s already narrow skills base.

Schellekens said that the number of skilled Malaysians living abroad has tripled in the last two decades with two out of every 10 Malaysians with tertiary education opting to leave for either OECD (Organisation for Economic Cooperation and Development) countries or Singapore.

“Brain drain from Malaysia is likely to intensify in the absence of mitigating actions,” he said at the launch of the World Bank report titled “Malaysia Economic Monitor: Brain Drain”. Continue reading “Malaysia’s brain drain getting worse, says World Bank”

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NEP, brain drain holding back Malaysia, says World Bank

The Malaysian Insider
Apr 28, 2011

KUALA LUMPUR, April 28 — More than one million Malaysians live abroad, the World Bank said today, adding that policies favouring Malays are holding back the economy, causing a brain drain and limiting foreign investment.

In a Bloomberg news service report today, World Bank senior economist Philip Schellekens was also quoted as saying that foreign investment could be five times the current levels if the country had Singapore’s talent base.

“Migration is very much an ethnic phenomenon in Malaysia, mostly Chinese but also Indian,” Schellekens told Bloomberg in Kuala Lumpur on Tuesday ahead of the report’s release today.

Governance issues and lack of meritocracy are “fundamental constraints” to Malaysia’s expansion because “competition is what drives innovation,” he said. Continue reading “NEP, brain drain holding back Malaysia, says World Bank”

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Who’s off the rails, Bernama?

John Malott | Feb 20, 11
Malaysiakini

Bernama news agency recently commented that I have “gone off the rails” because of my article in the Asian Wall Street Journal.

Because Bernama is owned by the Malaysian government, it is no surprise that they would feel obliged to say something critical.

But who really is off the rails? It is too bad that Bernama went into attack mode before it did its homework. Indeed, the article reads like it was written by a PR firm, trying to spin the truth.

So let’s take a look at what Bernama said. Continue reading “Who’s off the rails, Bernama?”

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Can Malaysia graduate?

East Asia Forum
January 19th, 2011
Author: Hal Hill, ANU

Malaysia is one of the developing world’s great success stories. Few countries outside of East Asia can match its development record. Since its independence over 53 years ago per capita incomes have risen more than eight-fold, and absolute poverty has been all but eliminated.

But it currently faces three key, interrelated challenges, some generic to upper middle income developing countries, others specific to Malaysia itself.

The first, how to graduate to the rich-country club, has been clearly articulated by the country’s Prime Minister, Tun Najib: ‘We are now at a critical juncture, either to remain trapped in a middle-income group or advance to a high-income economy … We now have to shift to a new economic model based on innovation, creativity and high value added activities.’

The second, shared by some of its Southeast Asian neighbours, is the country’s slower development trajectory since the Asian financial crisis of the late 1990s. Even before the current global financial crisis, which it has navigated quite successfully, economic growth in the 2000’s was about two percentage points below that of the decade 1986-96.

Particularly worrisome is the slump in investment, which has been stuck at little more than 20 per cent of GDP since the late 1990s. This is 10-15 percentage points of GDP lower than the country’s historic ratio. With savings remaining buoyant, the country’s external position has been transformed dramatically. In 2002, the country had net liabilities equivalent to 35 per cent of GDP. By 2008, this had been transformed to net assets of 20 per cent of GDP. Put simply, Malaysians have been finding overseas investment increasingly attractive, while foreigners have been less attracted to Malaysia.

The third challenge relates to the development of high-quality institutions to underpin a modern market economy in a country that has experienced continuous one-party rule for over half a century. Malaysia’s ruling United Malays National Organisation (UMNO) is in fact the world’s longest-serving governing party currently in power among all ‘quasi democracies’. Not surprisingly, elements of UMNO exhibit the problems of complacence and arrogance that one expects from entrenched one-party dominance. Continue reading “Can Malaysia graduate?”

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Investors shun Malaysia as emerging market outlook cools

By Yow Hong Chieh
The Malaysian Insider
January 20, 2011

KUALA LUMPUR, Jan 20 — Global investors are continuing to avoid Malaysia as fund managers trim investments in emerging markets over concerns that China’s economy will slow this year.

Bank of America Merrill Lynch said in a note this week that Malaysia remained a “big underweight” for investors in emerging markets, with its underweight rating increasing from 46 per cent in December to 55 per cent in the first month of 2011.

An underweight call is a recommendation for investors to reduce their investments in a particular security, asset class or, in this case, country.

Malaysia slipped from 14th place in December to dead last this month among the 15 countries studied by the investment bank, despite the roll out of big ticket Economic Transformation Programme (ETP) projects and speculation that snap polls will be held later this year.

Topping the list was strongly overweight Russia, followed by Thailand, Brazil, Turkey, South Korea, China, Indonesia and Mexico. Other emerging market underweights were Poland, Taiwan, Colombia, India, South Africa and Chile.

Malaysia’s underweight call also comes at a time when fewer investors are looking to increase investments in emerging markets due to worries that China’s “eroding” economy will have a knock-on effect on the market in Asia. Continue reading “Investors shun Malaysia as emerging market outlook cools”

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Let’s stop talking politics and get real!

By P Ramakrishnan
President of Aliran

Let’s set aside political rhetoric and rigmarole and become sensible and serious. We cannot – and should not – play politics at the expense of our national well-being to score meaningless political points. What should be uppermost are the nation and its people.

The Pakatan Opposition Leader, Datuk Seri Ibrahim Anwar, has come out with his 100-day plan to transform Malaysia’s economy for the greater benefit of Malaysians. His transformation plan for the country, according to him, will cost the national budget RM19 billion.

Our Prime Minister, Datuk Seri Najib Abdul Razak, has pooh-poohed this plan. His caustic dismissal of Anwar’s plan won him a round of applause from the party faithful. They laughed and felt good that Anwar was being bashed.
Continue reading “Let’s stop talking politics and get real!”

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Pre-polls reforms unlikely, says Roubini’s RGE

By Yow Hong Chieh
The Malaysian Insider
January 13, 2011

KUALA LUMPUR, Jan 13 — Much-needed reforms to Malaysia’s pro-Bumiputera policies will likely be put on the back burner until Prime Minister Datuk Seri Najib Razak secures a new electoral mandate, a report by star economist Nouriel Roubini’s RGE global economic analysis firm has predicted.

RGE said in its “Wednesday Note — Malaysia’s Middle-Income Malaise” released yesterday that Umno was “unlikely” to revamp such policies “blocking” Malaysia’s rise to high-income nation status before the next general election for fear of antagonising Malay voters.

Najib’s market-friendly reforms under the New Economic Model (NEM) have received lukewarm to hostile response from the Malays, many of whom regard such proposals as a challenge to the special position of Bumiputeras outlined in the Constitution.

“[Given] the governing party’s reliance on Bumiputera support, major changes are unlikely until new elections are held and the government has the political confidence to confront popular resistance to reform,” RGE said. Continue reading “Pre-polls reforms unlikely, says Roubini’s RGE”

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Talent Corpse

By Dean Johns | Malaysiakini

The late Teoh Beng Hock is a living symbol of the dilemma facing the millions of bright young expatriate Malaysians that Najib Razak is attempting to attract back home with his latest cynical political ploy, Talent Corp.

On the one hand many of them would dearly love to contribute their energy and skills to the growth and development of their homeland, and to enjoy its rich culture and fabulous food in the company of their families and old friends.

And on the other hand, most seem totally alienated by witnessing the plight of their contemporaries who, through courageous choice or force of circumstances, elect to stay in Malaysia under the deadly BN regime.

Admittedly the case of Teoh is an extreme example of the fate that awaits the best and the brightest in BN’s Malaysia. But his highly suspicious death while in the custody of the Malaysian Anti-Corruption Commission (MACC), and the coroner’s bizarre finding that his demise was neither suicide nor homicide, are entirely symptomatic of the BN system.
Continue reading “Talent Corpse”

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Brain drain continues: Newest Singapore senior counsel – equivalent to island republic’s Queen’s Counsel – a Malaysian from Seremban

[Update and correction: The statement that Chan Leng Sun had “never worked in Malaysia” is wrong. In fact, Chan worked in Malaysia first. He was a pupil assisting a few dedicated counsel who were representing the former Lord President Tun Salleh Abas when he was being tried by a tribunal for alleged misconduct in 1988. It was only later that he went to Cambridge on a Kuok Foundation scholarship. Sincere apologies for the error – Kit 12 January, 2011 6.50 pm]

Yesterday, it was reported that a Malaysian is again the top Singapore student for the third consecutive year – 16-year-old Chia Pei Yun of CHIJ St Nicolas Girls’ School who hails from Damansara Utama, Selangor and who scored 10 A1s in Singapore’s GCE O-level exams.

Today, my attention has been drawn to another Singapore news report last Friday underlining the grave problem of brain drain from Malaysia.

The following is the Channel News Asia report:

Two lawyers appointed Senior Counsel
By Dylan Loh | Posted: 07 January 2011

SINGAPORE: Two lawyers with over 50 years of combined experience have been appointed Senior Counsel. They are Mr Roderick Martin, 63, and Mr Chan Leng Sun, 46.

The announcement was made by Chief Justice Chan Sek Keong at the Opening of the Legal Year on Friday.
Continue reading “Brain drain continues: Newest Singapore senior counsel – equivalent to island republic’s Queen’s Counsel – a Malaysian from Seremban”

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Malaysian as top Singaporean student for third consecutive year should be important agenda of Cabinet meeting tomorrow

A Malaysian as top Singapore student for the third consecutive year should be important agenda of the Cabinet meeting tomorrow if the Prime Minister Datuk Seri Najib Razak is serious about the New Economic Model and the Economic Transformation Programme to give top priority to retain and attract talents to catalyse Malaysia’s economic transformation.

In Singapore’s GCE ‘O’ Level examinations results yesterday, a Malaysian, 16-year-old Chia Pei Yun, was the topscorer with 10A1s from the school-leaving examination.

Chia, from Kuala Lumpur, completed a hattrick for Malaysians and also her school, Convent CHIJ St. Nicholas Girls’ School after following the footsteps of Selangor girls Lai Kai Rou and Haw Sue Sern.

Chia is a former student of Kuen Cheng Girls’ School in Kuala Lumpur.

The Cabinet tomorrow should be reminded of the dire warnings of the New Economic Model last March, which said:
Continue reading “Malaysian as top Singaporean student for third consecutive year should be important agenda of Cabinet meeting tomorrow”

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NEM 2 a big disappointment to the people

By Dr Chen Man Hin, DAP life adviser
NEM 2 unlikely to attract investors to help create a high income economy for Malaysia

When NEM 1 was presented to the people, it showed promise, and there was hope that this time, there is a chance to have an high economy that is dynamic and booming. The report talked about liberalisation of the economy and that it would be inclusive, meaning that NEM would cater to the interest of all the the people whether Malays, Chinese, Indians and the natives of Sarawak and Sabah. So people waited expectantly for announcement of NEM 2.

Unfortunately, there were rumblings of dissatisfaction from a group of extremists – Perkasa. They vehemently opposed the proposal to dump the NEP (New Economic Policy) with its bumi equity quota. PM Najib attended a meeting with Perkasa, and because of their objections, Najib agreed to rescind the proposal to drop NEP.

Against this background, analysts and economists waited for the announcement of NEM 2, hoping for the best but fearing for the worst.
Continue reading “NEM 2 a big disappointment to the people”

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World Bank report – indictment of BN government

Tweets @limkitsiang :

Media conference w NieChing who dealt w nefarious subject of IMM13 – which is now known as Instant Made Msians for 13GE. Present Hiew Jimmy
11/19/2010 12:56 PM

I spoke on WorldBank’s 2010 MsiaEconomicMonitor (MEM) released last wk-terrible indictment of failure BN 2ensure inclusive devlpmnt in Sabah
11/19/2010 01:03 PM

WB MEM conclusion – in 5decades Sabah plunged from 1 of richest 2bcome poorest state n likely 2remain in deep poverty w no inclusive growth
11/19/2010 01:10 PM

MEM prepared w full cooperation of Sabah govt w NasrunMansur Asst Minister in CM Dept praising World Bank @rpt handing-over ceremony in KK
11/19/2010 01:15 PM
Continue reading “World Bank report – indictment of BN government”

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Rental hikes and lack of parking bays a bane in Little India

By G Vinod | Free Malaysia Today

KUALA LUMPUR: After the pomp and pagentry at the launch of ‘Little India’ in Brickfields on Oct 27, the lights have dimmed and a pall of gloom has decended in the area.

Traders and businessmen at the 3km stretch of Brickfields are at crossroads with the prospect of ‘impending’ rental hikes and dwindling sales due to the absence of car parks.

Several businessmen voiced their frustration over these two issues which could hamper trade in the bustling area, where one could purchase almost all items found in India.

While an increase in rental could slice profits significantly, the lack of parking space could inflict severe damage to their business, which they claim had already been battered.
Continue reading “Rental hikes and lack of parking bays a bane in Little India”

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Malaysia Seeks World Bank Help to Cut Spending, Trim Deficit

By Soraya Permatasari and Barry Porter | Bloomberg

Nov. 12 (Bloomberg) — Malaysia will ask the World Bank to help in the country’s efforts to cut government spending as Prime Minister Najib Razak seeks to reduce the budget deficit from a 22-year high.

The nation is asking the Washington-based lender to review all areas of government expenditure, including how state contracts are awarded, to prevent waste from inefficiency, Second Finance Minister Ahmad Husni Hanadzlah said in an interview in Kuala Lumpur yesterday. Malaysia hopes the study will bolster the government’s credibility, he said.

“We just want a third party as a check and balance,” said Ahmad Husni, 58. An annual audit of spending at state agencies has shown “some negative findings and we hope that with the involvement of the World Bank, in the future we can see a clean sheet,” he said.
Continue reading “Malaysia Seeks World Bank Help to Cut Spending, Trim Deficit”

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ETP without the NEM cannot achieve a high income economy

by Dr Chen Man Hin, DAP life adviser

The ETP (Economic Transformation Programme) without the New Economic Model (NEM) cannot achieve a high income economy for the people of Malaysia

Immediately after the UMNO assembly where the delegates unanimously rejected the NEM proposal to liberalise the economy beginning with the removal of the 30% bumiputra equity. There was alarm that this would mean the end of the NEM which was promoted Najib since he became Prime Minister.

To assuage the fears of investors and the economic and business world, PM Najib quickly assembled a coterie of 10 foreign investors before a gathering of a few thousand people, PM Najib presented them as multi-billion investors who are investing in the country. They were the pioneers of the ETP which is expected to harvest some US$444 billion of projects to propel the economy from a middle income to a high economy status by the year 2020.

This translates to bringing in investments averaging 1,300 billion ringgits a year. The government expects 99% of the money to come from the private sector.
Continue reading “ETP without the NEM cannot achieve a high income economy”

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Budget 2011: Would Razaleigh’s warning be heeded

2011 Budget not a child of New Economic Model but bears all the marks of old discredited Mahathirish policies (Part 2 of 5)

A veteran leader had warned that “It is time to wake up”.

He said: “Without a doubt, Malaysia is slipping. Billions have been looted from this country, and billions more are being siphoned out of the country as our entire political structure crumbles.”

Warning that corruption is the single biggest threat to the nation, he warned that corruption has become institutionalized in our political system and ruining Malaysia.

Who is this veteran leader? He is the head of the Barisan Nasional by-election in Galas, the MP for Gua Musang Tengku Razaleigh.

Will his views about the crisis of nation-building now be heeded? Of course not – just as it is clear that the Prime Minister does not have the political will to implement the New Economic Model (NEM) which he launched on March 30 to transform Malaysia into a developed, competitive and high-income economy with inclusivity and sustainability.
Continue reading “Budget 2011: Would Razaleigh’s warning be heeded”

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Budget 2011 : Malaysia towards a failed state and bankrupt nation 2019

2011 Budget not a child of New Economic Model but bears all the marks of old discredited Mahathirish policies (Part 1 of 5)

On Monday, the Prime Minister Datuk Seri Najib Razak launched the Economic Transformation Programme (ETP).

It was also the start of a week which saw the Government Transformation Programme (GTP) suffering a triple blow.

The first blow was Monday’s tabling in Parliament of the 2009 Auditor-General’s Reports which continues to be annual tale of horrors of waste, mismanagement, misuse of public funds and corruption – as highlighted by headlines like:

  • Federal government debt hits five-year high;

  • KTMB mired in RM1.45 billion debt;

  • Only 18.2% of pupils bring free eBooks to school;

  • Stimulus funds used for chandeliers, home theatre, government audit shows;

  • PTPTN to face whopping RM46 bil deficit;

  • PTPTN okayed RM23 mil to students who didn’t apply;

  • Million-ringgit scanner stuck in KLIA, under-utilisation woes;

  • ‘Sandwich kosong’ for school kids, sardines missing.

Continue reading “Budget 2011 : Malaysia towards a failed state and bankrupt nation 2019”

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Building projects unsustainable in long run, say analysts

By Boo Su-Lyn
The Malaysian Insider
October 25, 2010

KUALA LUMPUR, Oct 25 — Putrajaya’s focus on mega construction projects instead of key reforms in its economic plans — symbolised by the 100-storey Warisan Merdeka tower — will hamper the country’s goal of becoming a high-income nation, analysts have said.

They have stressed that economic and institutional reforms to increase market efficiency and human capital development were the crucial elements to lift Malaysia out of its middle-income trap.

“It is not sustainable as we will have first-class infrastructure and facility and third-world work ethics and mentality,” RAM Holdings group chief economist Dr Yeah Kim Leng told The Malaysian Insider.

“The soft part of the development, which is the human capital, will have to take centre stage for the high-income transformation drive to be successful,” he added.

Yeah noted that Prime Minister Datuk Seri Najib Razak’s reform commitments in his New Economic Model (NEM) have been eclipsed by the mega construction projects announced in Budget 2011 and the Economic Transformation Programme (ETP). Continue reading “Building projects unsustainable in long run, say analysts”

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Malays competitive and competent – need for New Pro-Poor Economic Policy/Reform

Malaysia’s Development Strategy Revisited (5)
by Dr. Mohamed Ariff*

A New Pro-Poor Economic Policy and Reform

There is certainly a need for a clear focus on the needs of the poor and marginalized regardless of race, colour or religion. In other words, Malaysia needs a ‘new’ New Economic Policy that is explicitly pro-poor. The main beneficiary of such a policy would still be Malay households, as they account for roughly three-quarters of the bottom 40 per cent of households in terms of income distribution. Continue reading “Malays competitive and competent – need for New Pro-Poor Economic Policy/Reform”