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Investigate Malaysia’s debts now

By Pak Sako | Thursday, 21 February 2013 11:34
CPIASIA

Former prime minister Mahathir Mohamad claimed last week that Malaysia’s current debt level is “healthy” compared with Greece’s.

But the debt-to-GDP percentage Mahathir relied on tells next to nothing about the full extent of Malaysia’s debts; the nature of these debts; or what can happen next.

The real devil lies in the details, namely:

(i) the trend in the debt level.

How has it changed in the recent past? Is there momentum in a certain direction? The federal government’s debt had doubled in just four years from 2007 and 2012. Will it stop growing, or will the trend and absolute totals continue their upward rise?

In the last decade, our finance ministers have repeatedly pledged to reduce the budget deficits. This has not happened. Instead, deficits have ballooned and the federal government’s debt has mounted.

(ii) the causes of debt.

For what are the borrowings and for whom? Are these borrowings for worthwhile investments that benefit the public? Are these liabilities being used to cover government operating costs or to prop up failing crony companies or the stock market? Is the use of costly loans for projects with low or no rates of return justified?

Almost a trillion ringgit was recently whisked out of the country in the form of illegal outflows. This is capital flight. It is conclusive evidence that our economy is ‘leaking out’ wealth.
Continue reading “Investigate Malaysia’s debts now”

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Pengiraan Detik 52 Hari ke PRU13: PRU13 bukan saja pungutan suara terhadap empat tahun “tanpa transformasi” Najib tetapi juga 22 tahun dasar korup Mahathir

Adakah parlimen akan dibubarkan bulan untuk untuk membolehkan Pilihan Raya Umum ke-13 diadakan bulan depan?

Dijamin jawapannya tentu positif, bersiap untuk pembubaran parlimen paling lama ditangguhkan di dalam sejarah negara daripada seorang Perdana Menteri tidak diundi paling lama dan berkemungkinan menjadi pilihan raya umum paling kotor dan mahal Malaysia!

Perdana Menteri, Datuk Seri Najib Razak, sedang pusing satu negara berkempen untuk jangka hayat politiknya, tetapi terdapat seorang insan di dalam UMNO/Barisan Nasional yang sedang mengatasi kempen Najib – dan beliau adalah mantan serta Perdana Menteri paling lama berkhidmat, Tun Dr. Mahathir Mohamad.

Pilihan Raya Umum ke-13 amat penting dan kritikal buat Najib – tetapi lebih penting dan kritikal lagi buat Mahathir, memandangkan ia bukan saja pungutan suara terhadap empat tahun “tanpa transformasi” Najib tetapi juga 22 tahun dasar authoritarian dan korup Mahathir.

Sebenarnya, untuk Mahathir, masa depannya turut dipertaruhkan dalam PRU13 – memandangkan PRU13 akan menentukan sama ada beliau dapat terus menjadi dalang politik untuk politik UMNO/BN, yang kini secara sendirian membuat keputusan dalam UMNO/BN selepas beliau Berjaya memaksa perletakan jawatan Tun Abdullah sebagai Perdana Menteri sesudah “tsunami politik” pilihan raya umum 2008.

Kuasa dan pengaruh Mahathir kini lebih besar daripada Najib yang merupakan Perdana Menteri.

Malaysia mempunyai enam Perdana Menteri sepanjang tempoh 56 tahun tetapi tidak ada sesiapa di dalam UMNO/BN berani untuk beritahu mana-mana Perdana Menteri supaya meletakkan jawatan sekiranya gagal memperoleh mandat yang lebih besar berbanding pilihan raya sebelumnya – seperti yang dilakukan secara terbuka oleh Mahathir di Malaysia Strategic Outlook Conference ke-15 pada 31 Januari yang mana beliau mengatakan Najib sepatutnya memberi laluan kepada Timbalan Presiden UMNO Tan Sri Muhyiddin Yassin sekiranya BN hanya memperoleh kemenangan tipis di dalam pilihan raya. Continue reading “Pengiraan Detik 52 Hari ke PRU13: PRU13 bukan saja pungutan suara terhadap empat tahun “tanpa transformasi” Najib tetapi juga 22 tahun dasar korup Mahathir”

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52-Day Countdown to 13GE: The 13 GE is not only referendum on Najib’s four-year “non-transformation” but also on Mahathir’s 22-year authoritarian and corrupt policies

Will Parliament be dissolved this month for the 13th General Elections next month?

The bet is that the answer will be in the positive, setting the stage for the longest-delayed dissolution of Parliament in the nation’s history by the longest unelected Prime Minister in what is likely to be the dirtiest and most expensive Malaysian general elections!

The Prime Minister, Datuk Seri Najib Razak, is out on the hustings throughout the country campaigning for his political life, but there is one person in UMNO/Barisan Nasional who is out-campaigning Najib – and he is former and longest-serving Prime Minister, Tun Dr. Mahathir Mohamad.

The 13 General Elections is important and critical for Najib – but it is even more important and critical for Mahathir, as it is not only a referendum on Najib’s four-year “non-transformation” but also on Mahathir’s 22-year authoritarian and corrupt policies.

Actually, for Mahathir, his future is also at stake in the 13GE – as it would determine whether he could continue to be the kingmaker of Umno/BN politics, as now single-handedly calling the shots in UMNO/BN after he successfully forced the retirement of Tun Abdullah as Prime Minister after the “political tsunami” of the 2008 general elections.

Mahathir’s power and influence now writ larger than that of Najib the Prime Minister.

Malaysia has had six Prime Ministers in the past 56 years but no one in UMNO/BN had dared to tell any incumbent Prime Minister that he would have to step down from office if he could not win with a stronger mandate than in the previous polls – as Mahathir has openly done at the 15th Malaysia Strategic Outlook Conference on 31st January where he said that Najib should give way to Deputy Umno president Tan Sri Muhyiddin Yassin if BN only scores a slim majority in the elections.
Continue reading “52-Day Countdown to 13GE: The 13 GE is not only referendum on Najib’s four-year “non-transformation” but also on Mahathir’s 22-year authoritarian and corrupt policies”

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Will the Share Market Rise or Fall if there is a Pakatan Victory?

By Koon Yew Yin

Quote from an angry Internet reader

If [the] market plunge(s), it will rise up again but if a country goes bankrupt, it is gone forever. I don’t know why you can’t get it in your brain unless your brain is always thinking of sex with your mistress.

During the last few weeks there have been increasing predictions from Barisan leaders emphasising that there will be a sharp fall in the share market should there be a Pakatan Rakyat victory.

The latest prediction by MCA leader Chua Soi Lek in a party event at Kepong argues that Malaysia will witness a “‘huge financial disaster if Pakatan Rakyat comes to power in the 13th general election”.

This type of electioneering tactic aimed at frightening the electorate is dangerous and irresponsible. How can the MCA president be so confident as to openly declare that our stock market will drop to 500 points within a week if the opposition wins power?

Challenge to Dr. Chua Soi Lek

Let us subject his prediction to closer analysis. Firstly, it is not clear whether he stated that the KLCI will drop by 500 points or drop to 500 points. Whichever is the correct version, his claim implies that anything from one to two thirds of the total share value of the KLCI will be wiped out due to the election result.
Continue reading “Will the Share Market Rise or Fall if there is a Pakatan Victory?”

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What change? A reply to Dr M

― Pak Sako
CPI
Jan 04, 2013

JAN 4 ― Former prime minister Dr Mahathir Mohamad published a piece called “Change” yesterday in his blog.

In it he asked why change governments.

He then criticised the socialist ideology. He strangely claimed that “Malaysia has no ideology”.

That is completely untrue.

When Dr Mahathir came into power in 1981, Malaysia was introduced to the neoliberal ideology.

This is an ideology that is biased in favour of corporations and capitalists.

It is the opposite of socialism, which aspires to put people first.

The neoliberal ideology was aggressively promoted around the world in the early 1980s by influential global networks of business interests and their supporters.

Their mantra? Continue reading “What change? A reply to Dr M”

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Hanya kroni yang tergugat dengan dasar ekonomi DAP yang telus dan bertanggungjawab.

Zairil Khir Johari | 18 Disember 2012
Penolong Setiusaha Publisiti Kebangsaan DAP

Dalam laporan akhbar Sinar Harian yang bertajuk “Izat: Ekonomi Melayu gugat jika DAP diberi kepercayaan” pada 17 Disember 2012, Presiden Persatuan Pedagang dan Pengusaha Melayu Malaysia (Perdasama), Datuk Moehamad Izat Emir telah dipetik sebagai berkata bahawa “sokongan orang Melayu terhadap DAP akan hanya menyebabkan ekonomi dan masa depan orang Melayu terumbang-ambing.”

Kenyataan Datuk Izat ini jelas dangkal, bermotif politik perkauman dan langsung tidak berasas. DAP adalah sebuah parti politik yang konsisten dalam pelaksanaan dasar tadbir urus yang cekap, bertanggungjawab dan telus, sepertimana yang dibuktikan oleh pentadbiran kerajaan negeri Pulau Pinang selama hampir lima tahun ini. Keberkesanan tatakelola pentadbiran yang dilaksanakan oleh kerajaan Pulau Pinang telah pun mendapat pengiktirafan dan pengesahan daripada Laporan-laporan Ketua Audit Negara setiap tahun.

Bagaimanakah ciri-ciri ketelusan dan kebertanggungjawaban boleh menjadi ancaman kepada orang Melayu? Hipotesis yang kurang waras ini hanya digunakan oleh sesetengah pihak yang tidak mampu berdaya saing akibat kebergantungan mereka kepada sistem kroni dan amalan rasuah.
Continue reading “Hanya kroni yang tergugat dengan dasar ekonomi DAP yang telus dan bertanggungjawab.”

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Rethinking wage policy to reposition our economy

― Liew Chin Tong
The Malaysian Insider
Nov 28, 2012

NOV 28 ― Although the minimum wage law is scheduled to take effect in January 2013, the Barisan Nasional government does not seem to be particularly committed to re-imagine the Malaysian economy through wage policy reform. Efforts to smoothen the transition for small and middle industries are seriously lacking too.

Minimum wage is meant to tackle several long-standing structural issues of the economy at once. As the United States and Europe struggle to stay afloat economically, Asia can no longer remain as an exporter, we need to grow our domestic/Asian markets; a higher income among locals will help generate a more vibrant domestic market which in turn will generate more jobs.

Also, with minimum wage, companies and industries will likely to rely less on cheap labour but invest in longer term potentials, capabilities and hence productivity of the workforce.

This is a virtuous cycle that will check dependence on unskilled foreign workers and brain drain at once. Skilled citizens who work in foreign countries are likely to consider resettling back to their homeland if the wage difference between their home and host countries is narrowed. Continue reading “Rethinking wage policy to reposition our economy”

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Malaysia becomes rich ‘Tiger Cub’, but still intolerant

The Malaysian Insider
Nov 01, 2012

KUALA LUMPUR, Nov 1 ― Malaysia has been singled out together with Vietnam, Thailand and Indonesia as “Tiger Cub” countries fast catching up with regional leaders on a list of the most prosperous economies in the world, but was also named as among the worst countries for promoting personal freedom of its citizens.

Malaysia was ranked as the 45th most prosperous nation, trailing behind Singapore at 19th and with Indonesia fast catching up at 63rd position, on the Legatum Prosperity Index.

The London-based think-tank Legatum’s Prosperity Index assesses 142 countries based on performance in eight areas such as economy, personal freedom, health and social capital.

This year, Norway again topped the list of 142 countries, followed by Denmark, Sweden, Australia and New Zealand. The United States, the United Kingdom and Germany came in at 12th, 13th and 14th spots, respectively.

The Central African Republic propped up the list.

The Legatum Institute, which publishes the index, noted that “a new generation of Asian ‘Tiger Cub’ countries has emerged, according to the latest findings from the Legatum Institute’s Prosperity Index, with Malaysia, Vietnam, Thailand and Indonesia all appearing in top half of the worldwide rankings this year.” Continue reading “Malaysia becomes rich ‘Tiger Cub’, but still intolerant”

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Before meddling with subsidies, ask why we need subsidies

by Pak Sako
26th Oct 2012

Two groups, CPI and REFSA-IDEAS, are debating government subsidies.

This debate is critical because politicians are taking their cues from it.

It is important that good judgement prevails. Much is at stake.

But first, what is a subsidy? Why do we need it?

Some believe subsidies are government money spent on primary healthcare, infrastructure, culture or the environment.

But these are not subsidies. These are fundamental public provisions that a decent society would collectively provide for all its members in most ordinary circumstances.

A subsidy is different. It is a special kind of public expenditure.

A subsidy is designed to support a disadvantaged group that cannot secure the needs and necessities for survival because an underlying condition is persistently preventing their fulfillment. Continue reading “Before meddling with subsidies, ask why we need subsidies”

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Refsa on subsidies: Still off the mark

Dr Lim Teck Ghee
CPI

The response by Research for Social Advancement (Refsa) institute to my note is disappointing. It provides little value added to the current knowledge on subsidies in Malaysia; repeats various motherhood statements about the need to rein in subsidies and selectively focuses on so-called various ivory tower statements that they have detected in my note to triumphantly declare victory.

The major contention in my note is necessary to repeat:

It is necessary to remind the REFSA-IDEAS team that subsidies have an important role to play in providing a safety net for vulnerable groups. They help bring down the cost of living as well as enable access to health, education, transport and other necessities.

They are a necessary burden in a highly skewed capitalist economy such as Malaysia’s where the lower classes of labour do not get the fair remuneration that they are entitled to or deserve. Continue reading “Refsa on subsidies: Still off the mark”

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Budget 2013: Federal government subsidies go up in flames while poor Malaysians watch

By Teh Chi-Chang, CFA
Executive Director
REFSA (Research for Social Advancement)
Friday, 12 October 2012

We write to rebut Dr Lim Teck Ghee’s assertion that “There is little empirical research to back up what has become an increasingly popular line of argument” that blanket subsidies such as for cheap petrol and sugar “benefit upper-class Malaysians who consume much more than their poorer cousins[1]”.

These are the basic facts:

  1. The federal government subsidy bill is expected to exceed RM42 billion this year.

  2. If we can agree that subsidies should go only to the poor, and we define the poor as the bottom 1/3rd of households, there will be 2.3 million households or nearly 10 million Malaysians[2] who will get subsidies.

  3. RM42 billion is enough to give these bottom 1/3rd of households RM1,650 per month – which will more than double their current incomes of RM1,500 per month!

Continue reading “Budget 2013: Federal government subsidies go up in flames while poor Malaysians watch”

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BFM interview Koon Yew Yin

Follow Koon Yew Ying’s BFM interview. Koon said: “There are hundreds of big buildings and structures, can you tell me which buildings or structures are won by Bumiputera contractors through open tender? There are hundreds of K. meter of highway, can you point out the stretch of highway awarded through competitive tender?

“Record shows that it is easy to produce doctors, surgeons, lawyers, engineers and other professionals but it is very difficult to produce competent contractors or entrepreneurs.

“Bumiputeras must be willing to start from the bottom and learn the business. Tan Seri Yeoh Tiong Lay started as a small time contractor. Tan Seri Lim Goh Tong started as a scrap iron dealer in Sungei Besi.

“I, Koon Yew Yin and 3 other small time contractors started with Rm 200,000 capital in 1966. As a result, I was one of the founders of IJM Corporation Bhd.

“I am completely retired from business and I hope you are not offended by what I have expressed here. I trust we will elect politicians who will not simply give out large contracts or concessions without open tenders.”

Video: Continue reading “BFM interview Koon Yew Yin”

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Playing a risky waiting game

Free Malaysia Today
September 17, 2012

The prime minister is holding back on the election date to shore up flagging support and give his reforms more time to work.

KUALA LUMPUR: Prime Minister Najib Tun Razak could call national elections anytime between now and April 2013, but he may wait to announce a generous budget on Sept 28 as he plays a risky waiting game.

The ruling Barisan Nasional coalition is widely expected to win the election but further gains by the opposition after its strong performance in 2008 could undermine Najib’s standing.

Holding back until after September would give Najib more time to shore up flagging support among ethnic Chinese voters, and to convince Malaysians that his reform efforts are working as he tries to reverse the ruling coalition’s worst election showing in 2008.

It would also make him vulnerable to any worsening of the global economy or the emergence of fresh corruption scandals that could push swing voters over to the three-party opposition. Continue reading “Playing a risky waiting game”

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Growth without private investment

— Jayant Menon
The Malaysian Insider
Sep 12, 2012

SEPT 12 — It was not long ago that the Malaysian development story was hailed as a model of FDI-driven, export-led industrialisation worthy of emulation by aspirants in the developing world.

Malaysia remains an outstanding model of how openness to trade and FDI can transform a poor, agrarian economy into a thriving, manufacturing-based, middle-income one in a generation. During this time, Malaysia also successfully preserved social harmony in its multiracial society, relying on economic openness to sustain growth under an expensive affirmative action programme that skewed incentives, the New Economic Policy (NEP). In this sense, the NEP performed an important signalling role and played its part in delivering the peace and stability that enabled Malaysia to sustain high growth. This growth, combined with revenues from large oil reserves, facilitated a massive tax-transfer scheme that favoured the majority, without significantly eroding macroeconomic stability.

But all that changed after the Asian financial crisis. FDI flows fell sharply and continued to remain low even after recovery. While foreigners continue to shun Malaysia, even domestic investors seem to have fled, with Malaysia becoming a net exporter of capital since 2005. Malaysia continues to grow, but without private investment it is unlikely to break out of the middle-income trap. Indeed, these days Malaysia is often discussed as a classic case of the middle-income trap. Growth without private investment is also unsustainable and Malaysia risks sliding back. Continue reading “Growth without private investment”

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1MDB’s RM2.3b acquisition of Genting Sanyen – Questions

By Sentinel

Several months ago, 1MDB had won the bid to acquire Tanjong Energy from Ananda Krishnan for a consideration in excess of RM 8 billion. One weekend in August, rumours swirled regarding a new major acquisition by 1MDB in the power sector.

The “rumours” became reality when an announcement by Bursa said that 1MDB had agreed to acquire a unit of Genting Energy for RM 2.3 billion. That unit of Genting Energy was Genting Sanyen, one of the first generation IPPs with a capacity of 720MW and which came into operation in 1995. The power purchase agreement (PPA) with TNB will expire in 2016. Separately, Genting made a parallel announcement regarding the divestment, adding that it will book a extraordinary gain of RM 1.9 billion from the sale.

Any person with some commercial sense will realise that the book value of the Genting asset in question is only RM 400 million. The PPA has 4 more years to run, after which the asset will be worth nothing more than scrap metal. Even if TNB decides to extend the term of the PPA, it will be on TNB’s terms, and not on Genting’s terms because the alternative to Genting is scrap value of the plant. So why would 1MDB pay RM 2.3 billion for the asset ? Can it recover the RM 2.3 billion in the 4 years remaining of the PPA? Continue reading “1MDB’s RM2.3b acquisition of Genting Sanyen – Questions”

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Is Malaysia’s IPO Boom Overhyped?

– By Dhara Ranasinghe
CNBC
27 Aug 2012

Malaysia is marking itself out as the IPO destination to beat this year with a string of billion-dollar-plus deals. Impressive, for sure, but don’t take the booming IPO market as a sign that Malaysia is poised to become a regional financial hub, experts say.

The reasons for this, they add, are simple: once the slew of big Malaysian companies seeking new listings runs out there is likely to be a dearth of initial public offerings (IPOs) in Malaysia. Because Malaysia is still developing open and liquid capital markets, foreign firms looking to list in the region are likely to pick Singapore and Hong Kong over Kuala Lumpur.

All the big companies listed in Malaysia this year are local firms. To really develop itself as a centre for IPOs, Malaysia needs to attract new listings from big foreign firms in the way Singapore and Hong Kong have done in the past, analysts add.

“Part of the boom in the Malaysian IPO market can be explained by the well-developed pension system in Malaysia, which has allowed for growth in domestic demand for equities,” said Herald Van Der Linde, Head of Equity Strategy, Asia-Pacific at HSBC in Hong Kong.

“However, when it comes to comparing Malaysia with Singapore and Hong Kong, these markets are much larger, more diversified and much better developed. As such, they can compete for global IPOs. This is unlikely to happen in Malaysia yet,” Van Der Linde said. Continue reading “Is Malaysia’s IPO Boom Overhyped?”

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Be aware of Fitch’s fiscal warning

— Ramon Navaratnam
The Malaysian Insider
Aug 23, 2012

AUG 23 — International ratings agency Fitch Ratings has once again warned Malaysia that its public finances are under sustained strain!

This firm but polite expression of censure, if not admonition, should not be played down by unduly highlighting Malaysia’s short-term good economic growth gains in the last two quarters of this year .

Neither should we be complacent about the serious declines in economic growth and stability occurring currently in the relatively rich developed industrial world. We can do this only at our own peril.

The fact of the matter is that Malaysia will be adversely affected by the global slowdown in the near future. The extent of our economic slide is difficult to project at this time. But we know for sure that we cannot take a “business as usual” attitude against the headwinds and strong disruptive socio-economic currents whirling around us, at home and from abroad. Continue reading “Be aware of Fitch’s fiscal warning”

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Ideology and debt: A reply to Dr Mahathir

— Pak Sako
The Malaysian Insider
Aug 23, 2012

AUG 23 — In his blog post “Change” (August 22, 2012), former Prime Minister Tun Dr Mahathir Mohamad criticised the socialist ideology.

He then claimed that “Malaysia has no ideology”.

This is not accurate.

It can be strongly argued that the Malaysian government after 1980 followed the “neoliberalism” ideology, a pro-business ideology.

This economic ideology was aggressively promoted around the world at the start of the 1980s by two pro-business world leaders: British Prime Minister Margaret Thatcher (elected 1979) and American President Ronald Reagan (elected 1981). Continue reading “Ideology and debt: A reply to Dr Mahathir”