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SOS: The 11th Malaysia Plan

Koon Yew Yin
23 May 2015

In a recent Barisan controlled newspaper, the following headline screamed out for attention: “There is continuity in all Malaysia Plans, says Najib”. The Prime Minister further argued that claims that policies in each Malaysia Plan is disconnected from the other are not true, said the Prime Minister.

Yes, we agree – there is continuity. There is continuity in the unwillingness to put a full stop to the NEP policy. There is continuity in the massive corruption that accompanies every Malaysian Plan. This has happened especially since the 1980’s when the practice of giving out large contracts and concessions without competitive open tenders became institutionalized under Dr. Mahathir’s version of “crony capitalism”. There is continuity in the refusal to practice the system of meritocracy – the only sure way to ensure that we can join the league of modern and developed nations of the world. Continue reading “SOS: The 11th Malaysia Plan”

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Has Najib forgotten that Malaysia was second in Asia after Japan in prosperity and income when we achieved independence in 1957 and that we have been overtaken by Hong Kong, Singapore, Taiwan and even South Korea which became high-income countries 20 – 28 years ago?

When the Prime Minister, Datuk Seri Najib Razak boasted in the Eleven Malaysia Plan that Malaysia had risen from the ranks of a low-income economy in the 1970s to a high middle-income economy with a national per capita income more than 25-fold from US$402 (1970) to US$10,796 (2014), and is well on the track to surpass the US$15,000 threshhold of a high-income economy by 2020, Malaysians are entitled to ask him whether he has forgotten that Malaysia was second in Asia after Japan in prosperity and income when we achieved Independence in 1957?

What were the reasons why other countries like South Korea, Taiwan, Hong Kong and Singapore which were poorer than us when we achieved Independence had not only caught up with us, but gone ahead, with Hong Kong, Singapore, Taiwan and even South Korea becoming high-income countries some 20 – 28 years ago, a target we are seeking to achieve by the end of the 11th Malaysia Plan and Vision 2020? Continue reading “Has Najib forgotten that Malaysia was second in Asia after Japan in prosperity and income when we achieved independence in 1957 and that we have been overtaken by Hong Kong, Singapore, Taiwan and even South Korea which became high-income countries 20 – 28 years ago?”

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The 11MP is resting on flawed foundations

— Lee Hwok Aun
The Malay Mail Online
May 23, 2015

MAY 22 — The just released Eleventh Malaysia Plan (11MP) strives to inspire, cajole and rally us toward 2020. I have no problem in general with slogans, catchphrases, cheerleading, even a dash of hyperbole. The document has to contain some of that.

But the mandate to tug at our hearts does not give license to toy with the facts.

This Plan handles some data in a bizarre, anomalous manner. The most prominent of the 11MP’s six multidimensional goals rests on flawed foundations.

And it is difficult to believe that errors and confusions – of a most rudimentary nature – are committed innocently.

I have confidence enough in the capability of our civil service to correctly and carefully present statistical analyses and projections. I suffer a confidence deficit with regard to the independence of this process from political influence. Continue reading “The 11MP is resting on flawed foundations”

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Is your pocket 41 percent deeper?

Aidila Razak
Malaysiakini
Mar 23, 2013

COMMENT

Whether 41 percent or 49 percent, the numbers in the Economic Transformation Programme 2012 annual report is essentially trying to tell us this – Malaysia will reach high income status by 2020.

That gives the impression that the average Malaysian will be bringing home about RM48,000 (or US$15,000) a year by that time.

But will they? Does the average Malaysian feel 41 percent – or even the more modest 24 percent in ringgit terms – richer today compared to 2009? Are their pockets deeper?

The simple answer is no.

So is the government lying to us? Not exactly. Continue reading “Is your pocket 41 percent deeper?”

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20-Day Countdown to 13GE – Lies, Damn Lies and PEMANDU Statistics

Oh! What a tangled web we weave,
When first we practise to deceive!
Sir Walter Scott, Marmion, Canto vi. Stanza 17.
Scottish author & novelist (1771 – 1832)

Datuk Seri Idris Jala, CEO of PEMANDU has issued a statement stating that growth of Gross National Income (GNI) per capita in US dollars from 2009 to 2012 has been revised down to 41 percent from 49 percent.

He is reported to have said that the revision arose following the adoption of a new accounting method, rather than a deliberate attempt to fudge numbers.

He pointed out that the change in figures was due to the adoption of the latest version of the United Nations System of National Accounting (SNA 2008) in 2012 which had pushed the GNI per capita up for 2009 from US$6700 to US$7059.

He offered other weak and lame reasons defending the method and the numbers put out by PEMANDU.

Little of what he said cuts much ice. The change in numbers makes little difference. The attribution to an adoption of a new method or international standard has little to do with the nature of the numbers.

He has been caught in a gross deception by applying the concept of GNI to project growth in per capita incomes of individuals. GNI is defined by the UN Statistical Division as: Continue reading “20-Day Countdown to 13GE – Lies, Damn Lies and PEMANDU Statistics”

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21-Day Countdown to 13GE – The empty drumbeats from Pemandu (Part 1)

The EPT Annual Report for 2012 prepared by PEMANDU and launched by the Prime Minister with great fanfare is nothing more than a public relations effort.

The report has been written and delivered as part of the electioneering effort mounted by a Government that is desperately attempting to convey to a disbelieving electorate a picture of progress and achievements together with promises of attaining the promised land of a High Income country by 2020.

Taken as a whole, the Report is a document that attempts to project illusions, highly massaged selective facts to lull the electorate. The primary objective is to gain a return to power at all costs.

The Report contains glossy charts and graphs and statements that cannot be substantiated.

It fails dismally by not providing a true and candid assessment of the challenges the nation faces because of squandered opportunities for mounting genuine economic reforms particularly needed in view of the uncertainties linked with weaknesses in the global economy that emerged in 2007. Continue reading “21-Day Countdown to 13GE – The empty drumbeats from Pemandu (Part 1)”

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Dissecting the ETP Annual Report (Part 7): Perception Manipulation and Deception Unit

— Ong Kian Ming and Teh Chi-Chang | August 09, 2012
REFSA (Research for Social Advancement)

At PEMANDU, perception trumps reality. This very powerful government agency values perception and spin above genuine transformation. Starting with the headlines, its rosy communiqués trumpeted strong economic numbers in 2011 rather than admit that real gross national income (GNI) growth was below target, let alone explain the causes or articulate measures to close the gap.

PEMANDU lied in its annual report. It took “100 per cent” credit for the construction of a RM1.9 billion wafer fab plant that was never built. Malaysian official statistics have, until now, been accepted as reliable. This is crucial for investor and public confidence. We hope PEMANDU is not pressuring other government agencies and EPP owners to also dress up their numbers, which will ultimately lead to a catastrophic collapse in confidence in Malaysia.

Agreed-upon-Procedures (AUP) are not worth much. Contrary to general public perception, PricewaterhouseCoopers (PwC) did not conduct a full audit. It conducted AUP, the ambit of which was so loose that PwC failed to detect a huge RM1.9 billion wafer fab plant that was never built. How many other less audacious lies slipped through the net?

PEMANDU is driving a delusion. The very foundations of the ETP are doubtful now that PEMANDU has confessed to errors that slashed 45 per cent off the incremental GNI claimed. Also, some so-called transformative EPPs were chosen based on exaggerated numbers. However, PEMANDU’s biggest “success” is manipulating Malaysians into believing that the ETP is transformational, when in fact, workers will take a mere 21 per cent of the incremental income the ETP promises to create, down from their 28 per cent share currently. Continue reading “Dissecting the ETP Annual Report (Part 7): Perception Manipulation and Deception Unit”

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The Glorious One’s flawed economics

— Sakmongkol AK47
The Malaysian Insider
Aug 10, 2012

AUG 10 — Since we are deluged with One this and One that, we shall now call Najib the Glorious One. My friend Aspan Alias has conferred the title Sahibus Samahah on him for other reasons. Let’s talk about his economics.

What actually is the central idea behind the ETP? The idea is as old as the prevailing thinking during Aristotle’s time. Which is you can control your charges to the extent the voice of the herald can reach. What this means in modern economic terms is it’s almost impossible to co-ordinate economic activities from a central command. You have to leave it to the market.

But Najib doesn’t understand this; he thinks that co-ordination of man’s activities isn’t possible without an ordering mind. In the minds of Najib’s advisers, the co-ordination of economic activities is not possible without a central directing body. Because that kind of arrangement allows them to play commissars to Najib’s Czar. They get to play the little Napoleons. Continue reading “The Glorious One’s flawed economics”

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Dissecting the ETP Annual Report (Part 6): Recommendations for Pemandu

— Ong Kian Ming and Teh Chi-Chang | August 02, 2012
The Malaysian Insider

AUG 2 — Is asking for a few more facts and some additional background too much? Pemandu has accused us of “nit-picking” and not providing alternatives. That conveniently shifts the focus to other issues while Pemandu ignores our very pertinent questions and suggestions. We summarise here three recommendations, and remind Pemandu of the positive outcomes of our nit-picking.

Recommendation #1: Be clear about targets, data and methodology.

Pemandu now has three different targets for national income by 2020. Please be clear, so we can all work towards the same ultimate target. Also, Pemandu should declare now its GNI, investment and job creation targets for 2012 and 2013. This is to prevent a repeat of the discrepancies surrounding 2011, when its `targets’ were declared only after the actual numbers were out.

Recommendation #2: Remove doubtful EPPs.
Continue reading “Dissecting the ETP Annual Report (Part 6): Recommendations for Pemandu”

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Malaysia safest country in Southeast Asia. Really?

By Ong Kian Ming
Malaysiakini

The issue of crime, especially in the urban areas, has once again surfaced as a hot political issue. The Home Minister, Hishamuddin Hussein, was quoted as saying that the fear of crime is a result of ‘public perception’ while the CEO of PEMANDU, Idris Jala, was reported as having asked the media to focus more on the crimes that have been solved rather than those which have been committed. Meanwhile, DAP MP for PJ Utara, Tony Pua, seems to have been given conflicting sets of crime data on Selangor and has called for PEMANDU and the Home Ministry to released detailed crime statistics by the type of crime and the places where they were committed.

It is very difficult to question the validity of the crime statistics since this data is collected, compiled and later disseminated to the various ministries and later the public at large by the police. An in-depth audit is required in order to get a better handle on the veracity of these statistics.
Continue reading “Malaysia safest country in Southeast Asia. Really?”

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Thugs at my doorstep

— Ong Kian Ming
The Malaysian Insider
Jul 11, 2012

JULY 11 — At approx 4.45pm [yesterday] (July 10), three thugs, in their early to late twenties, tried to break into my house in Petaling Jaya.

Thankfully, they were unsuccessful. Thankfully, I am not hurt. I am immensely grateful at the outpouring of support shown by my friends and family. I am thankful to the police for their quick response in sending three squad cars to my house five minutes after I reported the incident and their follow up on this case.

Many are probably wondering why I think it was politically motivated rather than just a simple attempted break in. I cannot be 100 per cent sure that it was politically motivated but I’m quite sure of it. And here’s why:

The thugs came in a car and they parked directly in front of my house, which is about 200m from the community guard house. It is a simple and spartan double story terrace house. It is not a flashy house. I drive a Toyota Vios.

There are other houses along the same row with Mercedes-Benz and other nicer cars. Some of my neighbours were not at home. It would have been much easier to break into their homes instead of mine (not that I am recommending that they do this). Or a house that is more secluded. Or a house which seems to have more stuff to steal.

My car was in the driveway. The thugs must have considered the possibility that someone was at home. They broke the automatic gates, which create a huge noise, rather than scaling over the gate, which would have been easy to do and much more discreet. Continue reading “Thugs at my doorstep”

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Implications of rebasing and revising our national accounts

— Ong Kian Ming
The Malaysian Insider
Jun 27, 2012

JUNE 27 — Something interested happened to our national economy in May 2012. Our per capita Gross National Income (GNI) increased from RM29,094 to RM29,661. Our GDP increased from RM853 billion to RM881 billion and our GNI increased from RM831 billion to RM859 billion.

And all of these are nominal figures for the year ending 2011. Did we suddenly grow richer without actually realising it? Did we discover some hidden loose change in the deep recesses of the nation’s glove compartment or underneath the car seat?

Sadly, we’re not going to find an extra RM567 in our bank accounts, BR1M notwithstanding. These revisions occurred as part of a larger “rebasing” of our national accounts, a regular exercise undertaken by the Department of Statistics, due to improvements in data collection methods and conceptual innovations in the way we measure economic activity.

For this particular exercise, the base year to measure real economic activity was changed from 2000 to 2005 (hence the term “rebasing”). Previous base years were 1970, 1978 and 1987. This means that data for real economic activity such as GDP and GNI have been revised upwards as has nominal economic data, as indicated in the opening paragraph.

There are a few reasons why these statistical revisions are important, especially for the readers of this paper. Continue reading “Implications of rebasing and revising our national accounts”

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Dissecting the ETP Annual Report (Part 2): The mystery of the disappearing entry point projects

— Ong Kian Ming and Teh Chi-Chang
The Malaysian Insider
Jun 07, 2012

JUNE 7 — The investments enigma. PEMANDU in its Annual Report claims that investments by the private sector were well above target last year. The headline claim may not withstand scrutiny though. Very large entry point projects (EPPs) appear to have faltered. We highlight just three examples here. If they had indeed faltered, which projects stepped up and more than filled their large shoes?

The shifting sands of LFoundry. PEMANDU gave itself full marks for the completion of construction of this 200mm wafer fab. However, very strangely, elsewhere in the Annual Report, a much less significant RM100 million equipment refurbishment project was showcased instead of this RM1.9 billion fab. The uncharacteristic modesty by PEMANDU led us to do some digging, which suggests that this lab might never have been constructed at all, contrary to PEMANDU’s claim.

What happened to Damansara City 2 and Marina Island Pangkor? These two EPPs announced last year were perhaps the most important in the Greater Kuala Lumpur/Klang Valley and Tourism NKEAs. But the ETP Annual Report omits any mention of them, focusing instead on modest “heritage trails” in Kuala Lumpur, and Penang, Klang and Kota Kinabalu as the three ports with the most tourism potential.

PEMANDU’s chimera of perfection. Glossing over issues merely results in a growing gap between reality and delusions of grandeur, and the facade will ultimately come crashing down. Rather than prolonging the charade of infallibility, PEMANDU should be frank and confess to problems, and state the remedial steps it took. This may well help others avoid making similar mistakes and adds much more value to Malaysians. Continue reading “Dissecting the ETP Annual Report (Part 2): The mystery of the disappearing entry point projects”

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PEMANDU lacks transparency over ‘disappearing’ projects, says think-tank

By Lee Wei Lian
The Malaysian Insider
Jun 07, 2012

KUALA LUMPUR, June 7 — PEMANDU’s insistence on presenting an image of “perfection” and not disclosing issues and problems related to its Economic Transformation Programme (ETP) projects could backfire later, said the Research for Social Advancement (REFSA) think-tank today.

In its latest critique of Putrajaya’s efficiency agency, the opposition-linked think-tank questioned PEMANDU’s alleged failure to be upfront with problems and progress related to three projects — the LFoundry wafer fabrication (wafer fab) plant in Kedah, Damansara City 2 in KL and the Marina Island Pangkor’s Extension.

REFSA pointed out in a report today that LFoundry had declared itself insolvent in Germany and that it was not listed as a tenant in Kulim Hi-Tech Park where the wafer fab was supposed to be built and yet PEMANDU had in its annual report for last year declared the project 100 per cent completed.

The report, which was titled “Dissecting the ETP Annual Report: Part 2 — The mystery of the disappearing entry point projects (EPPs)”, also noted that there was no mention of any progress on Damansara City 2 despite the project being one of the largest related to KL and also no information on progress on the Marina Island Pangkor Extension. Continue reading “PEMANDU lacks transparency over ‘disappearing’ projects, says think-tank”

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The ‘G’ in the C+I+G=Y formula

— Sakmongkol AK47
The Malaysian Insider
Jun 01, 2012

JUNE 1 — When Kenyesians dan Hayekians debate each other, they don’t debate on the science of economics as a science. As a science which studies the allocation of scarce resources among competing wants and needs, that part is settled. They debate on the bigger issue of how to manage the economy. Keynesians want to steer the economy while Hayekians want to set the economy free. One side thinks they can plan for others. The other side wants the planning to be done by many as individuals adapting themselves to the free market.

They debate on the efficacy of polices, whether managing aggregate spending or freeing the market is better in order to increase income. Controlling aggregate spending suggest some control over the aggregates, whether consumption, investment or government spending. Who controls them? The answer: the government. Control suggests the omnipotence of government and of course governments all over the world like to control things.

Hayekians support the free market, relying instead on the actions of individual economic actors with motivations and self-interests (what interests the individual) to make the economy work. Free market does not mean free from government involvement absolutely. Rather, government’s scope is limited over a few matters such as keeping peace from within and without. Government’s role is that of an umpire and the umpire must be neutral.

Our government of course supports the Keynesian approach without a doubt. They are adherents to the dictum, we are Keynesians now. But here is where the similarities end. While in western economies, the focus is on actually seeing the economy succeed, the emphasis in our country is different. The focus here is to concentrate steering power into our hands as much as possible, so that in the name of guiding the economy, the state plays the role of allocating resources to who they think can advance the economy. The state assumes omnipotence stature. And because of this status, they get to choose who succeeds and who fails.

We are digressing too far I am afraid. We can already anticipate the headlines. “We must avoid what happens to Greece. In order to do that, we must spend more. To hell to those who complain of increasing public debt to GDP share. If we cut spending, the economy will contract. The opposition is stupid. They are just following the IMF’s prescriptions.” Continue reading “The ‘G’ in the C+I+G=Y formula”

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Dissecting the ETP Annual Report (Part 1) — Grade A+ for obfuscation!

— Ong Kian Ming and Teh Chi-Chang
The Malaysian Insider
May 31, 2012

MAY 31 — Top marks for befuddling even highly-qualified Malaysians. PEMANDU released its annual report last month to an expected chorus of praise. An economist at a leading financial institution gushed that the ETP deserves an “A” for transformation. Our analysis however, finds that pretentious words and slick presentations, protestations of diligence and toil and selective representation of data obscure the true picture.

Real GNI grew only 4.7 per cent last year. This is well below the 6 per cent per year growth rate called upon for the duration of the ETP. Nominal GNI growth, which includes inflation, was 12.3 per cent. But inflation does nothing for our real quality of life, and it is only because inflation was higher than expected that the nominal GNI growth rate hit double-digits.

PEMANDU’s GNI “target” is questionable. PEMANDU claims it has outperformed as GNI last year exceeded its RM797 billion target. Strangely enough, this “target” was declared only after the actual data was already out. Furthermore, the target was exceptionally low. As far back as October 2010, the Ministry of Finance was already projecting RM811 billion GNI. It is easy to exceed targets when they are low, and only declared after the fact. No real value is added, though.

Scoring is easy when you can shift the goalposts. The subterfuge by PEMANDU includes attempting to steal credit for 2010 economic growth, conflating GDP with GNI and using exchange rate movements to amplify performance. And these are just on the subject of headline economic performance. We shall uncover more ruses as we delve into the execution details. Stay tuned! Continue reading “Dissecting the ETP Annual Report (Part 1) — Grade A+ for obfuscation!”

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PEMANDU hiding ETP failure, say critics

By Shannon Teoh
The Malaysian Insider
May 31, 2012

KUALA LUMPUR, May 31 — Putrajaya’s efficiency unit is “shifting the goalposts” to hide its failure to transform the economy since launching its ambitious Economic Transformation Programme (ETP) in October 2010, says the Research for Social Advancement (REFSA) think-tank.

The opposition-linked think-tank, which has published a series of critiques on the ETP that aims to double per capita income by 2020, said in a focus paper released today that the Performance Management and Delivery Unit’s (PEMANDU) gross national income (GNI) targets were lower than those set by the government.

REFSA noted that after the Finance Ministry (MoF) released the national income figure of RM830 billion for 2011, PEMANDU claimed the RM797 billion target had been exceeded. The unit under the Prime Minister’s Office is tasked with executing various transformation plans,

“Where did this RM797 billion target come from? It was not stated in the ETP Roadmap launched in Oct 2010. The MoF had already projected RM811 billion GNI for 2011, before the ETP Roadmap was launched.

“PEMANDU’s so-called ‘target’ is underwhelming. Taken at face value, PEMANDU is dragging down the Malaysian economy instead of transforming it. How else would you explain PEMANDU’s target for GNI being smaller than the forecast made by the MoF?,” REFSA said. Continue reading “PEMANDU hiding ETP failure, say critics”