I’ve spent a year now on community service. When I quit my full-time job, it was with the intention of spending more time with family and focusing on doing things I enjoyed. However, MP Tony Pua persuaded me to lend a hand for a better Malaysia.
So, I helped to craft the privatize PLUS proposal, which the MCA subsequently decided to support and now the Barisan government under PM Datuk Seri Najib has commissioned a study on Malaysia’s toll highways.
The DAP’s Alternative Budget is on its way, and if all goes well, my book The Budget: How the Government is Spending OUR Money will be published by mid-October. I think it’s a good informative read. Buy a copy and tell me if you agree ; -) It’s not all boring financials – Antares (formerly known as Kit Leee) is working on the illustrations. Mail orders also possible - please send an email with your name, address and phone number to econs@chichang.net. Publishers REFSA will contact you just before the book hits the shelves.
Along the way, I also started this blog, helped in explaining the extent of the Port Klang Free Zone (PKFZ) debacle and worked on other odds and ends …
With that, it’s time to go back to paid work. Circumstances change, and a steady cash flow stream would be nice again. Senior managers at statutory bodies may not know what cash flow is, but the rest of us hard working Malaysians fully understand its importance. No cash flow = no money!
All my work was done pro-bono. The only expense claim I’ve made is for one return (Firefly) flight to Penang. All other expenses such as fuel, toll and parking charges and telephone and other bills I paid myself. No donations came my way, and certainly no trips to Disneyland or private jet flights! I would likely have justified a nice, tidy sum in consulting fees if I’d been hired by the government, but that’s the way it is … In the meantime, hats off to all the dedicated staff and volunteers I’ve met.
As for the people who continually gripe about the state of our country, our education system, the crime rate, our politicians .… We get the government we deserve. If you want things to be different, contribute, whether it be in time, effort or money.
Today is our nation’s birthday. Don’t just sit around spouting hot air. Resolve to do something productive instead.
Thanks for reading. This is the 99th and last post for a while.
Well it's all right, remember to live and let live
Well it's all right, the best you can do is forgive
- The Traveling Wilburys
PS: Just a reminder- PLUS can be privatized at zero cost to the taxpayer. It could be toll-free before 2020!
Wednesday, September 16, 2009
Tuesday, September 15, 2009
The Budget: How the government is spending OUR money
Finance Minister and Prime Minister Datuk Seri Najib will present Budget 2010 in Parliament on 23 October.
Every year, come this time, there is plenty of speculation about what “goodies” the government will “give” the rakyat. And every year, after the Budget is announced, there are the usual proclamations of “it’s a people’s budget”, “it’s people-friendly”, “it’s a growth budget”.
You may walk away happy with a small income tax cut, or on the fact that cigarette and beer taxes have not gone up. But there is much more to the Budget than just those few ringgit you saved.
The real “goodies” are hidden away from public view. RM47.8bn is being spent on education and training this year. That’s equivalent to RM8,000 for each student in public education. And yet, so many parents feel compelled to send their children to private schools or for private tuition. So, what happened to all that money?
Also, did you know we spend the same amount on defence - RM13.7bn – as we do on healthcare ? Do you think that is the right choice?
My upcoming book, The Budget: How the government is spening OUR money is a guide to how our government raises its funds and how it spends all that money. The federal government alone spends about RM200bn per year. On top of that, there is also spending by state and local governments. Do you think you got your money’s worth?
The first of its kind in Malaysia, this book explains in plain English where the federal government gets its income and what it spends it on. Interested citizens and taxpayers will find this an accessible read, while professionals will, for the first time, find the numbers compiled in a concise format.
Or, just buy it for the illustrations by Antares!
It’ll be in bookstores by mid-October. If you’d like to a copy delivered to you by mail, please send your name, address and phone number to budgetbook@chichang.net.
Publishers REFSA will contact you just before the book hits the shelves. Indicative price is RM25 + RM5 postage within Malaysia.
Every year, come this time, there is plenty of speculation about what “goodies” the government will “give” the rakyat. And every year, after the Budget is announced, there are the usual proclamations of “it’s a people’s budget”, “it’s people-friendly”, “it’s a growth budget”.
You may walk away happy with a small income tax cut, or on the fact that cigarette and beer taxes have not gone up. But there is much more to the Budget than just those few ringgit you saved.
The real “goodies” are hidden away from public view. RM47.8bn is being spent on education and training this year. That’s equivalent to RM8,000 for each student in public education. And yet, so many parents feel compelled to send their children to private schools or for private tuition. So, what happened to all that money?
Also, did you know we spend the same amount on defence - RM13.7bn – as we do on healthcare ? Do you think that is the right choice?
My upcoming book, The Budget: How the government is spening OUR money is a guide to how our government raises its funds and how it spends all that money. The federal government alone spends about RM200bn per year. On top of that, there is also spending by state and local governments. Do you think you got your money’s worth?
The first of its kind in Malaysia, this book explains in plain English where the federal government gets its income and what it spends it on. Interested citizens and taxpayers will find this an accessible read, while professionals will, for the first time, find the numbers compiled in a concise format.
Or, just buy it for the illustrations by Antares!
It’ll be in bookstores by mid-October. If you’d like to a copy delivered to you by mail, please send your name, address and phone number to budgetbook@chichang.net.
Publishers REFSA will contact you just before the book hits the shelves. Indicative price is RM25 + RM5 postage within Malaysia.
Wednesday, September 9, 2009
Headlines
The media shapes our beliefs and prejudices. It can be for the better, or for the worse, insidiously.
I was clearing a pile of old newspapers when I came across a few covering the time in February 2009 when wheel-chair bound Member of Parliament Karpal Singh was confronted by a group of UMNO Youth members.
Under a caption “Face of Fury”, the Star front-paged a picture of MP Gobind Singh shielding the disabled Karpal Singh from the strapping young men seeking to confront him. The New Straits Times said “Parliament Violated”.
Both headlines and the picture (from the Star) skirted the core issue: A mob of young men confronting a disabled MP twice their age could have been construed as an attempt at intimidation. Yes, they had their grievances. But couldn’t they have appointed one representative to present a memo to Karpal? Surely they didn’t need to feel safety in numbers?
Our government says the media has an undue influence on the young. So we have bans and restrictions on depicting Mat Rempit, effeminate men, long-haired males ….. In the same vein, the government and civic elders should display intolerance of boorish behaviour. Downplaying such antics foments a society where civil, reasoned debate is foregone in favour of might is right.
Media influence also extends to politics, of course. Here are headlines which could have been:
“Terengganu UMNO out of control” – remember the Mercs, the disagreement over who should be Menteri Besar and the on-going issues?
“Deputy Prime Minister Defends Disbarred Lawyer” – the UMNO candidate for Permatang Pasir
This is something easily addressed. If you agree the mainstream media has become unduly one-sided, stop consuming it. Don't buy the daily newspaper and watch less tv. Read independent news and good books instead.
I was clearing a pile of old newspapers when I came across a few covering the time in February 2009 when wheel-chair bound Member of Parliament Karpal Singh was confronted by a group of UMNO Youth members.
Under a caption “Face of Fury”, the Star front-paged a picture of MP Gobind Singh shielding the disabled Karpal Singh from the strapping young men seeking to confront him. The New Straits Times said “Parliament Violated”.
Both headlines and the picture (from the Star) skirted the core issue: A mob of young men confronting a disabled MP twice their age could have been construed as an attempt at intimidation. Yes, they had their grievances. But couldn’t they have appointed one representative to present a memo to Karpal? Surely they didn’t need to feel safety in numbers?
Our government says the media has an undue influence on the young. So we have bans and restrictions on depicting Mat Rempit, effeminate men, long-haired males ….. In the same vein, the government and civic elders should display intolerance of boorish behaviour. Downplaying such antics foments a society where civil, reasoned debate is foregone in favour of might is right.
Media influence also extends to politics, of course. Here are headlines which could have been:
“Terengganu UMNO out of control” – remember the Mercs, the disagreement over who should be Menteri Besar and the on-going issues?
“Deputy Prime Minister Defends Disbarred Lawyer” – the UMNO candidate for Permatang Pasir
This is something easily addressed. If you agree the mainstream media has become unduly one-sided, stop consuming it. Don't buy the daily newspaper and watch less tv. Read independent news and good books instead.
Wednesday, September 2, 2009
Should the CEO also be the CFO?
The two most powerful positions in corporate management are of chief executive officer (CEO) and chief financial officer (CFO). The CEO is the boss and sets overall direction. The CFO controls the purse-strings.
Quite often good CEOs and CFOs will disagree. CEOs by nature and expectation have to seek new growth opportunities to expand corporate profits. They would tend to emphasise the rewards over the risks. CFOs are entrusted with financial stewardship. And when it comes to stewardship, being conservative and risk-averse are the preferred traits.
So, that’s how it works in the corporate world. No reasonable board of directors would countenance the CEO also holding the CFO position. There is just too much at stake to have one person holding the two most senior positions.
That’s also how it’s supposed to work in government. The prime minister leads and the finance minister tells him what the government can afford. Perhaps the most celebrated such pair in recent history was telegenic British prime minister Tony Blair and dour Chancellor Gordon Brown.
Over here in Malaysia though, no eyebrows are raised that the prime minister is also the finance minister. This practice began during prime minister Mahathir’s tenure, was continued by Abdullah Badawi and now Najib has continued the practice.
This might explain the deteriorating state of government finances. By 2009, we would have run 12 consecutive years of budget deficits. Our federal government debt alone is expected to reach RM414bn in 2009. This is more than double the RM206bn level nine years ago in 2000.
Put in other ways:
1. Federal government debt today is more than half the size of our entire RM741bn economy.
2. This is a burden that our youth will have to repay. The debt is equivalent to RM20,700 per person, based on about 20m youths (defined as Malaysians aged 39 and below.
Note that the actual debt burden is higher. The RM414bn number excludes debt incurred by other government-linked corporations (GLCs) such as PLUS Expressways and Tenaga Nasional. Other countries which have not embarked on extensive privatisation programmes incur road construction and electrification costs as part of their national budgets. PLUS and Tenaga alone among the GLCs have RM33.3bn of borrowings – equivalent to 8% to the federal government debt. On top of that, there is borrowing by other government-linked entities such as Syarikat Perumahan Nasional Berhad (SPNB), Putrajaya Holdings Sdn Bhd …..
Even more concerning is that we incurred the increasing debt even while we reaped the windfall gains from high oil prices. More in my up-coming book ….
Quite often good CEOs and CFOs will disagree. CEOs by nature and expectation have to seek new growth opportunities to expand corporate profits. They would tend to emphasise the rewards over the risks. CFOs are entrusted with financial stewardship. And when it comes to stewardship, being conservative and risk-averse are the preferred traits.
So, that’s how it works in the corporate world. No reasonable board of directors would countenance the CEO also holding the CFO position. There is just too much at stake to have one person holding the two most senior positions.
That’s also how it’s supposed to work in government. The prime minister leads and the finance minister tells him what the government can afford. Perhaps the most celebrated such pair in recent history was telegenic British prime minister Tony Blair and dour Chancellor Gordon Brown.
Over here in Malaysia though, no eyebrows are raised that the prime minister is also the finance minister. This practice began during prime minister Mahathir’s tenure, was continued by Abdullah Badawi and now Najib has continued the practice.
This might explain the deteriorating state of government finances. By 2009, we would have run 12 consecutive years of budget deficits. Our federal government debt alone is expected to reach RM414bn in 2009. This is more than double the RM206bn level nine years ago in 2000.
Put in other ways:
1. Federal government debt today is more than half the size of our entire RM741bn economy.
2. This is a burden that our youth will have to repay. The debt is equivalent to RM20,700 per person, based on about 20m youths (defined as Malaysians aged 39 and below.
Note that the actual debt burden is higher. The RM414bn number excludes debt incurred by other government-linked corporations (GLCs) such as PLUS Expressways and Tenaga Nasional. Other countries which have not embarked on extensive privatisation programmes incur road construction and electrification costs as part of their national budgets. PLUS and Tenaga alone among the GLCs have RM33.3bn of borrowings – equivalent to 8% to the federal government debt. On top of that, there is borrowing by other government-linked entities such as Syarikat Perumahan Nasional Berhad (SPNB), Putrajaya Holdings Sdn Bhd …..
Even more concerning is that we incurred the increasing debt even while we reaped the windfall gains from high oil prices. More in my up-coming book ….
Wednesday, August 26, 2009
Independence
Merdeka Day is just around the corner. Here is food for thought from Xanana Gusmao, fighter for independence and the first president of East Timor:
“Independence for East Timor has never been an end in itself but rather is a means. True independence is the recognition of the freedom of others, is the respect for the supreme interests of populations, is the respect for the most basic human rights, is the fundamental right of peoples to determine their own destiny.
When independence is only a trampoline for rulers to enrich the families of a parasitical elite, with the confiscation of peasant lands, and with total disregard and indifference for the miserable living conditions of workers, when independence blinds rulers, greedy for their own well-being and the profits of their grandchildren’s grandchildren and who set the country’s doors wide open for the invasion of international monopolies that ruthlessly destroy the environment, when independence denies the citizens the freedoms to express, to assemble, to organize and to question; when all this happens in a country with its own flag and president, the independence is but a luxurious reality for only a few, and a nightmare for millions of others ….”
Letter from the Commandant, an excerpt of a speech written by Xanana Gusmao while imprisoned in Cipinang, July 1995.
The above is taken from “The Truth and What to Do With It”, Off the Edge, Apr 09.
“Independence for East Timor has never been an end in itself but rather is a means. True independence is the recognition of the freedom of others, is the respect for the supreme interests of populations, is the respect for the most basic human rights, is the fundamental right of peoples to determine their own destiny.
When independence is only a trampoline for rulers to enrich the families of a parasitical elite, with the confiscation of peasant lands, and with total disregard and indifference for the miserable living conditions of workers, when independence blinds rulers, greedy for their own well-being and the profits of their grandchildren’s grandchildren and who set the country’s doors wide open for the invasion of international monopolies that ruthlessly destroy the environment, when independence denies the citizens the freedoms to express, to assemble, to organize and to question; when all this happens in a country with its own flag and president, the independence is but a luxurious reality for only a few, and a nightmare for millions of others ….”
Letter from the Commandant, an excerpt of a speech written by Xanana Gusmao while imprisoned in Cipinang, July 1995.
The above is taken from “The Truth and What to Do With It”, Off the Edge, Apr 09.
Sunday, August 23, 2009
Danajamin – multi-billion losses in the making?
The Star on 19 August reported Danajamin Nasional Bhd, the national financial guarantee insurer, has received 2 applications for credit enhancements to raise RM8.4bn of bonds.
Danajamin was set up in May 2009, as part of the “RM60bn” stimulus package announced by the government in March, to ensure that businesses continued to have access to bond market financing.
Here’s what an interested reader says:
“This Danajamin is a disaster waiting to happen.
Bank Negara governor Tan Sri Dr Zeti says "it provides credit enhancements for viable corporations to raise financing from the bond market". But in that, there is a contradiction. If it is viable, then why need enhancements?
This sort of credit enhancement features are typically for bad companies, which cannot access the loan or the bond markets by themselves. The REASON they cannot access these 2 markets is because they are NOT credit worthy.
Banks are experts in credit analysis. In fact, that is the bread-and-butter of lending-based banking. If the banks themselves, who are experts, deem the companies not suitable for loans, then what extra expertise or knowledge does Danajamin have to decide to bear that risk?
There are 9 local banks in Malaysia, 3 Arab banks, 2 Spore banks and 4-5 foreign banks (HSBC, ABN, StanChart etc etc). Collectively, 20 banks can’t be wrong, and Danajamin correct. Secondly, since these companies are not credit worthy, they are prone to default if there is any downturn in the economy.
As such, Danajamin will be laden with non-performing loans (NPLs). Banks have the means to monitor and modify NPLs. How will Danajamin do so?
As I said above, unless Danajamin can claim that they have a better form of credit enhancement than all the 20 banks in the system and that their risk management of potential and actual NPLs is also superior, this is a disaster waiting to happen. Assuming a 20% NPL rate of MYR 18.4 billion is a massive number. Let us cross our fingers that there is no double dip recession in the US.”
To which I would add, Dr Zeti herself was quoted as saying, ““The recent narrowing of spreads between benchmark issuances and triple A rated papers indicates that risk aversion has now eased,” and demand for higher-yielding securities was also beginning to rise, ahead of the recovery in the global economy.
Danajamin might have been justified when markets were frozen. But if markets are recovering and functioning again, it has no raison d’etre.
Note that the RM8.4bn was just for two deals – so we’re talking a massive RM4.2bn size per issue. From my experience, any issue of this size would would be inundated with bankers vying for a slice of the action – for the sizeable fees and the bragging rights.
Danajamin was set up in May 2009, as part of the “RM60bn” stimulus package announced by the government in March, to ensure that businesses continued to have access to bond market financing.
Here’s what an interested reader says:
“This Danajamin is a disaster waiting to happen.
Bank Negara governor Tan Sri Dr Zeti says "it provides credit enhancements for viable corporations to raise financing from the bond market". But in that, there is a contradiction. If it is viable, then why need enhancements?
This sort of credit enhancement features are typically for bad companies, which cannot access the loan or the bond markets by themselves. The REASON they cannot access these 2 markets is because they are NOT credit worthy.
Banks are experts in credit analysis. In fact, that is the bread-and-butter of lending-based banking. If the banks themselves, who are experts, deem the companies not suitable for loans, then what extra expertise or knowledge does Danajamin have to decide to bear that risk?
There are 9 local banks in Malaysia, 3 Arab banks, 2 Spore banks and 4-5 foreign banks (HSBC, ABN, StanChart etc etc). Collectively, 20 banks can’t be wrong, and Danajamin correct. Secondly, since these companies are not credit worthy, they are prone to default if there is any downturn in the economy.
As such, Danajamin will be laden with non-performing loans (NPLs). Banks have the means to monitor and modify NPLs. How will Danajamin do so?
As I said above, unless Danajamin can claim that they have a better form of credit enhancement than all the 20 banks in the system and that their risk management of potential and actual NPLs is also superior, this is a disaster waiting to happen. Assuming a 20% NPL rate of MYR 18.4 billion is a massive number. Let us cross our fingers that there is no double dip recession in the US.”
To which I would add, Dr Zeti herself was quoted as saying, ““The recent narrowing of spreads between benchmark issuances and triple A rated papers indicates that risk aversion has now eased,” and demand for higher-yielding securities was also beginning to rise, ahead of the recovery in the global economy.
Danajamin might have been justified when markets were frozen. But if markets are recovering and functioning again, it has no raison d’etre.
Note that the RM8.4bn was just for two deals – so we’re talking a massive RM4.2bn size per issue. From my experience, any issue of this size would would be inundated with bankers vying for a slice of the action – for the sizeable fees and the bragging rights.
Wednesday, August 19, 2009
It’s expensive keeping up with the Joneses in the Barisan Nasional
The passionate enter politics to make their ideals of a better nation reality. They enter to serve. Some suffer imprisonment, personal injury or even death in pursuit of their beliefs. They pay the highest price of all.
Things are better in the BN. High prices also have to be paid, but these are merely in ringgit terms. Chow Kum Hor, aide to Transport Minister Datuk Seri Ong Tee Keat, wrote in the New Sunday Times on 16 August that he “… spent a fortune changing my wardrobe and even stopped going to the neighbourhood barber” as he does not want to “… make the boss look bad.”
I guess we shouldn’t be surprised at Chow’s sartorial upgrading. When your boss flies private jets (business class is not good enough?), and your coalition counterparts swan around in handsomely-tailored Italian suits and luxurious Swiss watches one could be forgiven for feeling a little bit insecure.
That’s the BN for you. A preoccupation with style over substance. It doesn’t matter that 400,000 households – about 2 million Malaysians - still live in poverty. Our government must look good!
It also betrays a lack of true self-confidence. What’s important is your ideas and character. Gandhi lead India to independence in a dhoti. Fine, Gandhi is perhaps too ideal an example for our politicians to aspire to. President Barack Obama, leader of the most powerful nation in the world, wears US$1,500 suits which can be bought in department stores. And here at home, DAP leaders look just fine in their regular outfits.
I agree, clothes make the man and first impressions are important. I wouldn’t want our leaders presenting themselves in rags and tatters. But there is no need to spend a small fortune to look good. Consider the picture below, from Malaysiakini.
The DAP elected representatives look smart enough to me. By the way, Tony Pua (far right) didn’t change his wardrobe when he was elected as MP for PJ Utara. In fact, he downgraded. Following a price hike at the Lake Club barber, he now patronises the neighbourhood barber just downstairs of his service centre. And as far as I can remember, Kit Siang and the rest have dressed the same.
Great leaders are often described as having great vision, passion and character. A snappy wardrobe is rarely mentioned.
I’m not saying the DAP leaders carry all the positive qualities. But at least they live and dress like most Malaysians.
The BN in contrast, considers the neighbourhood barber low-class. It’s good enough for millions of Malaysians but not enough for them. If they’re so divorced from the average Malaysian, can they really lead us to a better future?
Things are better in the BN. High prices also have to be paid, but these are merely in ringgit terms. Chow Kum Hor, aide to Transport Minister Datuk Seri Ong Tee Keat, wrote in the New Sunday Times on 16 August that he “… spent a fortune changing my wardrobe and even stopped going to the neighbourhood barber” as he does not want to “… make the boss look bad.”
I guess we shouldn’t be surprised at Chow’s sartorial upgrading. When your boss flies private jets (business class is not good enough?), and your coalition counterparts swan around in handsomely-tailored Italian suits and luxurious Swiss watches one could be forgiven for feeling a little bit insecure.
That’s the BN for you. A preoccupation with style over substance. It doesn’t matter that 400,000 households – about 2 million Malaysians - still live in poverty. Our government must look good!
It also betrays a lack of true self-confidence. What’s important is your ideas and character. Gandhi lead India to independence in a dhoti. Fine, Gandhi is perhaps too ideal an example for our politicians to aspire to. President Barack Obama, leader of the most powerful nation in the world, wears US$1,500 suits which can be bought in department stores. And here at home, DAP leaders look just fine in their regular outfits.
I agree, clothes make the man and first impressions are important. I wouldn’t want our leaders presenting themselves in rags and tatters. But there is no need to spend a small fortune to look good. Consider the picture below, from Malaysiakini.
The DAP elected representatives look smart enough to me. By the way, Tony Pua (far right) didn’t change his wardrobe when he was elected as MP for PJ Utara. In fact, he downgraded. Following a price hike at the Lake Club barber, he now patronises the neighbourhood barber just downstairs of his service centre. And as far as I can remember, Kit Siang and the rest have dressed the same.
Great leaders are often described as having great vision, passion and character. A snappy wardrobe is rarely mentioned.
I’m not saying the DAP leaders carry all the positive qualities. But at least they live and dress like most Malaysians.
The BN in contrast, considers the neighbourhood barber low-class. It’s good enough for millions of Malaysians but not enough for them. If they’re so divorced from the average Malaysian, can they really lead us to a better future?
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