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.
Showing posts with label Public Interest. Show all posts
Showing posts with label Public Interest. Show all posts
Tuesday, September 15, 2009
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?
Thursday, June 25, 2009
Top leaders engrossed in child’s play as economy wanes
Deputy prime minister Tan Sri Muhyiddin Yassin and Khazanah Nasional managing director Tan Sri Azman Mokhtar took time out from their busy schedules on Tuesday to launch Kidzania, a RM50 million “educational theme park from Mexico” that will create 400 jobs, reported the Business Times.
Strip away the usual marketing hyperbole and Kidzania appears to be just a glorified play centre and property development project.
“Theme park” for me conjures visions of acres and acres of space a’la Disneyland and Universal Studios. The Kidzania “theme park” will take up merely 60,000 square feet of space in a new mall. That’s equivalent to about 40 modest terrace (link) houses. Not 40 bungalows or mansions, just normal terrace houses.
Also, the project entails
the construction of a seven-storey new building. Khazanah is in an 80:20 joint-venture with Boustead Holdings to develop this project. Boustead, developer of the Mutiara Damansara area and owner of the Curve mall in Selangor, will build a seven-storey structure to house KidZania (Picture from Malaysia Insider). KidZania needs only two floors of space, Petaling Jaya really does not need another mall. So why build a completely new property?
Furthermore, I am sure the bulk of the 400 jobs will likely be low-skilled and low-paid. Those who have been to Disneyland, whether at your own or taxpayer expense, know most of the jobs are routine, menial and fulfilled by young people on a temporary basis. Hardly highly-skilled and certainly not creatively or intellectually challenging nor highly-paid.
Still, a job is a job, But, in this case, does it warrant the attentions of not one, but two luminaries? None less than our deputy prime minister himself and the MD of Khazanah, who presides over TENS of billions of investments saw it fit to launch this project. In the meantime, tens of thousands of Malaysians are being thrown out of work, the government deficit is expected to hit a high 10% and sorely-needed capital is fleeing Malaysia, just to name a few items of great import.
On the subject of Khazanah and its multi-billion portfolio, I have three key questions:
1) Khazanah, in its own words, is “committed to building a globally competitive Malaysia by developing the right human capital”. What human capital does Kidzania really develop?
2) Why is Khazanah taking such a large 80% stake in this project? I doubt whether children’s play-centres can be considered among the “sectors that are deemed strategic to the nation's economy” that are supposed to be Khazanah’s focus.
3) What is Khazanah’s expected investment return on this project?
Strip away the usual marketing hyperbole and Kidzania appears to be just a glorified play centre and property development project.
“Theme park” for me conjures visions of acres and acres of space a’la Disneyland and Universal Studios. The Kidzania “theme park” will take up merely 60,000 square feet of space in a new mall. That’s equivalent to about 40 modest terrace (link) houses. Not 40 bungalows or mansions, just normal terrace houses.
Also, the project entails
the construction of a seven-storey new building. Khazanah is in an 80:20 joint-venture with Boustead Holdings to develop this project. Boustead, developer of the Mutiara Damansara area and owner of the Curve mall in Selangor, will build a seven-storey structure to house KidZania (Picture from Malaysia Insider). KidZania needs only two floors of space, Petaling Jaya really does not need another mall. So why build a completely new property?Furthermore, I am sure the bulk of the 400 jobs will likely be low-skilled and low-paid. Those who have been to Disneyland, whether at your own or taxpayer expense, know most of the jobs are routine, menial and fulfilled by young people on a temporary basis. Hardly highly-skilled and certainly not creatively or intellectually challenging nor highly-paid.
Still, a job is a job, But, in this case, does it warrant the attentions of not one, but two luminaries? None less than our deputy prime minister himself and the MD of Khazanah, who presides over TENS of billions of investments saw it fit to launch this project. In the meantime, tens of thousands of Malaysians are being thrown out of work, the government deficit is expected to hit a high 10% and sorely-needed capital is fleeing Malaysia, just to name a few items of great import.
On the subject of Khazanah and its multi-billion portfolio, I have three key questions:
1) Khazanah, in its own words, is “committed to building a globally competitive Malaysia by developing the right human capital”. What human capital does Kidzania really develop?
2) Why is Khazanah taking such a large 80% stake in this project? I doubt whether children’s play-centres can be considered among the “sectors that are deemed strategic to the nation's economy” that are supposed to be Khazanah’s focus.
3) What is Khazanah’s expected investment return on this project?
Wednesday, June 24, 2009
The startling lack of integrity at the very top
Should a scholarship defaulter even be considered for the position of director of Petronas, our national oil company?
PM Datuk Seri Najib Razak seems to see no problem. He is reportedly seeking to appoint his special officer, Omar Mustapha, to the board of Petronas. But, the appointment hit a snag when the board of Petronas raised reservations as Omar had reneged on his scholarship obligations.
Omar apparently graduated from Oxford on a scholarship from Petronas in the mid-1990s and worked briefly with the national oil corporation and another government-linked corporation before moving on to join prestigious global consultants McKinsey & Co.
Malaysia Insider carries the article.
Not fulfilling scholarship obligations betrays a lack of integrity and ethics. The scholar owes his fancy degree to contributions from the rakyat. The least he can do is repay that obligation, making good on his debt to the people of Malaysia. Instead, he gallivants of to more lucrative pastures.
Omar can hardly plead financial constraints for reneging on his scholarship commitments. McKinsey consultants are famously well-paid. So, what can the reason be? A misplaced sense of entitlement? Such is the quality of people advising our very top leadership …
PM Datuk Seri Najib Razak seems to see no problem. He is reportedly seeking to appoint his special officer, Omar Mustapha, to the board of Petronas. But, the appointment hit a snag when the board of Petronas raised reservations as Omar had reneged on his scholarship obligations.
Omar apparently graduated from Oxford on a scholarship from Petronas in the mid-1990s and worked briefly with the national oil corporation and another government-linked corporation before moving on to join prestigious global consultants McKinsey & Co.
Malaysia Insider carries the article.
Not fulfilling scholarship obligations betrays a lack of integrity and ethics. The scholar owes his fancy degree to contributions from the rakyat. The least he can do is repay that obligation, making good on his debt to the people of Malaysia. Instead, he gallivants of to more lucrative pastures.
Omar can hardly plead financial constraints for reneging on his scholarship commitments. McKinsey consultants are famously well-paid. So, what can the reason be? A misplaced sense of entitlement? Such is the quality of people advising our very top leadership …
Wednesday, June 10, 2009
When civic-conscious citizens turn criminal
My community is turning “gated”. It started with simple security patrols many years ago, expanded to closures of certain roads with crude barricades earlier this year, and now, proper boom-gates and guard-posts are being constructed. All thanks to dedicated community leaders and supportive residents.
I watch with mixed feelings. On one hand, I certainly feel much safer with the enhanced security scheme, which I have supported from Day 1 of its humble beginnings. On the other hand, I am conscious that we are erecting barriers on public roads, which is a crime.
True, the residents’ association is closing roads with only the bests interests of the community in mind. And the authorities have adopted a hands-off attitude.
But where do we draw the line? Today we barricade a public road with the best of intentions. What next tomorrow? Who decides which intentions are noble enough for the law to be broken? Remember the political party which took over a playground to build a “service centre”? It claimed “good intentions”.
There are two big-picture issues here. One is the failure of the Barisan Nasional government to protect our communities. Crime used to be something that happened to someone else. Now, I personally know people who have been robbed, burgled and mugged. I am sure I am not atypical of the average city-dweller. Our police force needs to be far more effective.
The second issue is rising lawlessness. Laws are necessary for society to function. Laws must be enforced and people must be convinced that justice is even-handed for society to work. At this point, normally law-abiding citizens are now teaching their children that some laws can be ignored if our “intentions are good”. This fear of crime has forced civic-conscious Malaysians to turn criminals themselves, blockading public roads to protect the safety of themselves and their families. What next?
I watch with mixed feelings. On one hand, I certainly feel much safer with the enhanced security scheme, which I have supported from Day 1 of its humble beginnings. On the other hand, I am conscious that we are erecting barriers on public roads, which is a crime.
True, the residents’ association is closing roads with only the bests interests of the community in mind. And the authorities have adopted a hands-off attitude.
But where do we draw the line? Today we barricade a public road with the best of intentions. What next tomorrow? Who decides which intentions are noble enough for the law to be broken? Remember the political party which took over a playground to build a “service centre”? It claimed “good intentions”.
There are two big-picture issues here. One is the failure of the Barisan Nasional government to protect our communities. Crime used to be something that happened to someone else. Now, I personally know people who have been robbed, burgled and mugged. I am sure I am not atypical of the average city-dweller. Our police force needs to be far more effective.
The second issue is rising lawlessness. Laws are necessary for society to function. Laws must be enforced and people must be convinced that justice is even-handed for society to work. At this point, normally law-abiding citizens are now teaching their children that some laws can be ignored if our “intentions are good”. This fear of crime has forced civic-conscious Malaysians to turn criminals themselves, blockading public roads to protect the safety of themselves and their families. What next?
Friday, June 5, 2009
PKFZ scandal – how the cost rose from RM1.9bn to RM7.5bn, and counting
My Maxis is still Max-sick. 8 days after the problems began, one whole week after my first report, Max-sick engineers are “still working on it”. What a clueless bunch. On the other hand, thanks DiGi! Your broadband service has been fast and reliable.
Back to the main subject of this posting, Port Klang Free Zone (PKFZ). Last week, I summarized the story and gave a big picture view of how the cost grew and grew. This week, we shall delve into how those costs actually got added in, and who the beneficiaries were.
Let’s start with just the cost for land purchase and development works. These were originally estimated at RM1.957bn in 2001. As at 31 Dec 2008, that had ballooned by RM1.565bn or 80% to RM3.522bn.
How did that additional RM1.565bn cost happen? First, purchasing the land cost RM646m more than it should have. Port Klang Authority (PKA) paid private company Kuala Dimensi Sdn Bhd (KDSB) RM1,088m for the land via a negotiated direct purchase. It could have compulsorily acquired it, as originally directed by the Ministry of Finance, for RM442m.
That leaves another RM919m to explain (RM1,565m–RM646m=RM919m). That’s mainly due to additional development works and accelerating construction so that the project was completed in just 2 years instead of phasing it in in such a way that it could be self-financing as approved by the Cabinet. PKA was in such a hurry that it signed development agreements based on estimated amounts and without detailed building plans. Effectively, PKA told KDSB, we have money to spend, just build whatever you want and we’ll take it!
So, land and construction costs alone became RM3.522bn. On top of that, because PKA committed to paying KDSB more than it could afford from current cash flows, it agreed to deferred payment terms and had to resort to soft loans from the government. The interest cost of all those deferred payments and soft loans now totals RM3.931bn. Add that to the construction cost and you get the RM7,453bn total as of now.
The deferred payment terms to KDSB are another issue. PKA has to pay 7.5% pa interest to KDSB. Being a statutory body, PKA could have itself raised government-guaranteed debt at 4% pa and paid KDSB cash, saving 3.5% pa of interest payments. On the RM3.522bn development cost, 3.5% is equivalent to RM123m per year of additional payments. The beneficiary? KDSB!
So, who’s behind KDSB? KDSB is wholly-owned by Wijaya Baru Holdings Sdn Bhd (WBHSB). The major shareholder of WBHSB with a 70% stake is Datuk Seri Tiong King Sing, Barisan Nasional MP for Bintulu. Tiong, by the way, is also the chairman of the Barisan Nasional Backbenchers’ Club – the club for BN MPs. I don’t know who owns the other 30% in WBHSB.
KDSB did not keep all the profits itself. Its main contractor was Wijaya Baru Sdn Bhd (WBSB). WBSB is 45%-owned by Wijaya Baru Global Berhad, which in turn is 32%-owned by Tiong. I don’t have the details of the other shareholders. Wijaya Baru Global’s chairman is Datuk Seri Abdul Azim Zabidi, former UMNO treasurer. Azim is also a board member of KDSB. Wijaya Baru Global’s deputy CEO is UMNO Kapar deputy division chief Datuk Faisal Abdullah.
So there you have it. The cost over-runs and some of the beneficiaries. The police and MACC have been awfully quiet about any investigations so far. Perhaps they are too busy watching Men in Black.
Back to the main subject of this posting, Port Klang Free Zone (PKFZ). Last week, I summarized the story and gave a big picture view of how the cost grew and grew. This week, we shall delve into how those costs actually got added in, and who the beneficiaries were.
Let’s start with just the cost for land purchase and development works. These were originally estimated at RM1.957bn in 2001. As at 31 Dec 2008, that had ballooned by RM1.565bn or 80% to RM3.522bn.
How did that additional RM1.565bn cost happen? First, purchasing the land cost RM646m more than it should have. Port Klang Authority (PKA) paid private company Kuala Dimensi Sdn Bhd (KDSB) RM1,088m for the land via a negotiated direct purchase. It could have compulsorily acquired it, as originally directed by the Ministry of Finance, for RM442m.
That leaves another RM919m to explain (RM1,565m–RM646m=RM919m). That’s mainly due to additional development works and accelerating construction so that the project was completed in just 2 years instead of phasing it in in such a way that it could be self-financing as approved by the Cabinet. PKA was in such a hurry that it signed development agreements based on estimated amounts and without detailed building plans. Effectively, PKA told KDSB, we have money to spend, just build whatever you want and we’ll take it!
So, land and construction costs alone became RM3.522bn. On top of that, because PKA committed to paying KDSB more than it could afford from current cash flows, it agreed to deferred payment terms and had to resort to soft loans from the government. The interest cost of all those deferred payments and soft loans now totals RM3.931bn. Add that to the construction cost and you get the RM7,453bn total as of now.
The deferred payment terms to KDSB are another issue. PKA has to pay 7.5% pa interest to KDSB. Being a statutory body, PKA could have itself raised government-guaranteed debt at 4% pa and paid KDSB cash, saving 3.5% pa of interest payments. On the RM3.522bn development cost, 3.5% is equivalent to RM123m per year of additional payments. The beneficiary? KDSB!
So, who’s behind KDSB? KDSB is wholly-owned by Wijaya Baru Holdings Sdn Bhd (WBHSB). The major shareholder of WBHSB with a 70% stake is Datuk Seri Tiong King Sing, Barisan Nasional MP for Bintulu. Tiong, by the way, is also the chairman of the Barisan Nasional Backbenchers’ Club – the club for BN MPs. I don’t know who owns the other 30% in WBHSB.
KDSB did not keep all the profits itself. Its main contractor was Wijaya Baru Sdn Bhd (WBSB). WBSB is 45%-owned by Wijaya Baru Global Berhad, which in turn is 32%-owned by Tiong. I don’t have the details of the other shareholders. Wijaya Baru Global’s chairman is Datuk Seri Abdul Azim Zabidi, former UMNO treasurer. Azim is also a board member of KDSB. Wijaya Baru Global’s deputy CEO is UMNO Kapar deputy division chief Datuk Faisal Abdullah.
So there you have it. The cost over-runs and some of the beneficiaries. The police and MACC have been awfully quiet about any investigations so far. Perhaps they are too busy watching Men in Black.
Wednesday, June 3, 2009
Maxis is guilty of fraud
Yup, my Max-sick broadband is on the blink again. The problems started Friday, but I was still able to get a steady, albeit slow connection via EDGE technology. On Saturday, the line kept dropping. By Monday evening, Max-sick was dead. Cue countless calls to Max-sick's “customer service” and a home visit by an unskilled vendor who insisted it was a modem problem when I was 1000% sure it wasn't. True enough, he changed the modem and still there's no service.
Finally, yesterday (Tuesday) evening, someone called and said Max-sick had “escalated my problem up to the engineering team”. What? I had complained on Saturday!!! It takes them THREE days to “escalate” the problem? Whatever happened to service integrity? Internet connection is a necessity nowadays. I rely on it to work and earn income. No internet = pissed off customers and lost opportunities. Yet when I asked Max-sick if they are at least going to waive my monthly fee, they said “they have to close the file first”, whatever that means.
Maxis is guilty of fraud. It is charging for a service (broadband) which it is not delivering. It's like a travel agent selling you a 5-star holiday package including accommodation at the Shangri-la, but dumping you into Rumah Tumpangan Ah Fatt instead. Actually it's worse than that. Maxis is not delivering ANY service at all. So, Maxis charges us for 5-star hotels but leaves us sleeping in the streets. In the meantime, it has the gall to continue aggressively selling Broadband packages. I know because I was accosted yesterday evening by yet another Maxis vendor! Needless to say, I gave him a piece of my mind, telling him he was selling a non-existent service.
But we consumers are powerless. There is no choice. Streamyx is equally bad, and I doubt that Celcom Broadband can outperform its sister company. In a situation like this, it is the regulator that has to protect the consumer against rapacious large companies.
So, where is our regulator? Incompetent like much of the Barisan Nasional government. Sigh. Next elections are so far away. In the meantime, we are stuck with a government that the majority of peninsular Malaysians did not vote for. Please, fellow citizens in Sabah and Sarawak – next elections help us kick out this useless administration.
And in case you're wondering, I had to drive out, incurring petrol and parking expense and spending unnecessary time, to find a place with wi-fi so I could upload this.
Friday, May 29, 2009
How TIA can make a lasting impact
Here’s my prediction: By 2012, three years after the launch of the Terengganu Investment Authority (TIA), the average Terengganu citizen will be pretty much unaffected by the billions of ringgit spent. Ultimately, when the projects are completed, when the land-flippers and contractors have collected their millions and hundreds of thousands or ringgit, the rakyat will be left with only poorly-constructed, under-utilised buildings which start falling apart very quickly.
TIA is perpetuating the myth that all it takes to develop a nation is infrastructure. Just build fancy new buildings and we’ll achieve developed status! It’s not that simple. It has already been proven in Malaysia – building first-world infrastructure WILL NOT take us to first-world status. Developed status is also about the soft issues – education, culture, civil society ….
Putrajaya, KLIA and the KLCC Twin Towers are the best case studies. These were supposed to be icons of a developed Malaysia. Now, after barely ten years, Putrajaya is already crumbling and KLIA is beset with the same taxi touts and illegal parking problems that plagued Subang. The KLCC Twin Towers area, in an ironic way, has turned out to symbolize Malaysia. Within KLCC itself, swanky stores cater to rich tourists and the professional Malaysians engendered by the NEP, but just 50 metres outside, rogue taxi drivers over-charge with impunity and across the road along Jalan Ampang, poor itinerant traders set up shop in the evenings, cooking on make-shift stoves.
But perhaps I am wrong, and TIA will not just be a mega-project play. Let’s say TIA does attract serious oil and gas specialists to set up shop in Terengganu, spending billions on capital investment. How many Terengganu folk are actually qualified to work in those specialized, highly-technical fields? Households in Terengganu are the second-poorest in Malaysia. It will look a lot like the British days, when foreigners held the senior positions and locals had to be content with the low-level jobs.
TIA would make a much more meaningful and lasting impact on Terengganu if it starts from the ground up. Let’s start with education. Use the money to fund the best teachers and offer good facilities. Build the proficiency of Terengganu children in English, Math and Science. Educate the next generation of Terengganu. Only then, seek the high-value, highly-specialised industries, when Terengganu people themselves can take full advantage of the employment opportunities
More to come. I’m off now to Port Klang to view the report on the Port Klang Free Zone (PKFZ) debacle with your hard-working DAP MPs. This time, I hope I’m not again forced to go back to pen-and-paper.
TIA is perpetuating the myth that all it takes to develop a nation is infrastructure. Just build fancy new buildings and we’ll achieve developed status! It’s not that simple. It has already been proven in Malaysia – building first-world infrastructure WILL NOT take us to first-world status. Developed status is also about the soft issues – education, culture, civil society ….
Putrajaya, KLIA and the KLCC Twin Towers are the best case studies. These were supposed to be icons of a developed Malaysia. Now, after barely ten years, Putrajaya is already crumbling and KLIA is beset with the same taxi touts and illegal parking problems that plagued Subang. The KLCC Twin Towers area, in an ironic way, has turned out to symbolize Malaysia. Within KLCC itself, swanky stores cater to rich tourists and the professional Malaysians engendered by the NEP, but just 50 metres outside, rogue taxi drivers over-charge with impunity and across the road along Jalan Ampang, poor itinerant traders set up shop in the evenings, cooking on make-shift stoves.
But perhaps I am wrong, and TIA will not just be a mega-project play. Let’s say TIA does attract serious oil and gas specialists to set up shop in Terengganu, spending billions on capital investment. How many Terengganu folk are actually qualified to work in those specialized, highly-technical fields? Households in Terengganu are the second-poorest in Malaysia. It will look a lot like the British days, when foreigners held the senior positions and locals had to be content with the low-level jobs.
TIA would make a much more meaningful and lasting impact on Terengganu if it starts from the ground up. Let’s start with education. Use the money to fund the best teachers and offer good facilities. Build the proficiency of Terengganu children in English, Math and Science. Educate the next generation of Terengganu. Only then, seek the high-value, highly-specialised industries, when Terengganu people themselves can take full advantage of the employment opportunities
More to come. I’m off now to Port Klang to view the report on the Port Klang Free Zone (PKFZ) debacle with your hard-working DAP MPs. This time, I hope I’m not again forced to go back to pen-and-paper.
Wednesday, May 27, 2009
TIA shaping up to be another mega-project ploy
The Terengganu Investment Authority (TIA) was well-covered by the weekend press, including the Star and the Edge Weekly. “Well-covered” in the sense of plenty of news pages being devoted to this RM11bn fund, which, by the way, is equivalent to ladening RM11,000 of debt on every single one of the 1million Terengganu folk!
Not surprisingly, hard, penetrating questions were rare. Like, “How exactly will the average Terengganu citizen benefit from all this?”
Based on the reported comments by CEO Sharol Azral Ibrahim Halmi and executive director of business development Casey Tan, TIA will be yet another launch pad for huge construction mega-projects that will benefit a few cronies, a few hundred Class-F contractors (want to bet they’ll mainly be UMNO-related?) and a few thousand, mainly foreign, construction workers.
Consider just two examples:
1) CEO Sharol said TIA is “taking a masterplan approach to build a resort with private villas and other amenities as well as retirement homes”. TIA will invest US$1.8bn and expects a foreign investor to match this sum. That works out to nearly RM13bn, which coincidentally is about the same sum reportedly frittered away in the Port Klang Free Zone debacle;
2) An even worse idea comes from Tang: “It will be a tourism play. The land will be acquired from the state and sold at a higher price to the master developer.” Hello? Land-flipping was a major issue at PKFZ. Influential private parties acquired land cheaply from the state and subsequently resold it at far higher prices. What the private party gains, the state loses – why can’t the state sell it at the higher price in the first place, and use the proceeds to fund state development. Why is TIA, a sovereign fund which aspires to best-practices, even considering this approach?
Coming full circle to my original question, after the land is bought and sold, after the spanking new buildings are constructed … how will the average Terengganu resident be better off?
More to come …
Not surprisingly, hard, penetrating questions were rare. Like, “How exactly will the average Terengganu citizen benefit from all this?”
Based on the reported comments by CEO Sharol Azral Ibrahim Halmi and executive director of business development Casey Tan, TIA will be yet another launch pad for huge construction mega-projects that will benefit a few cronies, a few hundred Class-F contractors (want to bet they’ll mainly be UMNO-related?) and a few thousand, mainly foreign, construction workers.
Consider just two examples:
1) CEO Sharol said TIA is “taking a masterplan approach to build a resort with private villas and other amenities as well as retirement homes”. TIA will invest US$1.8bn and expects a foreign investor to match this sum. That works out to nearly RM13bn, which coincidentally is about the same sum reportedly frittered away in the Port Klang Free Zone debacle;
2) An even worse idea comes from Tang: “It will be a tourism play. The land will be acquired from the state and sold at a higher price to the master developer.” Hello? Land-flipping was a major issue at PKFZ. Influential private parties acquired land cheaply from the state and subsequently resold it at far higher prices. What the private party gains, the state loses – why can’t the state sell it at the higher price in the first place, and use the proceeds to fund state development. Why is TIA, a sovereign fund which aspires to best-practices, even considering this approach?
Coming full circle to my original question, after the land is bought and sold, after the spanking new buildings are constructed … how will the average Terengganu resident be better off?
More to come …
Tuesday, May 19, 2009
Terengganu’s ‘Sovereign Wealth Fund’ is anything but
“The country’s first state-established sovereign wealth fund, Terengganu Investment Authority (TIA), with an initial fund of RM11bil, has identified several high-impact investment projects in the tourism, energy and agriculture sectors in the state and around the country,” reports the Star today, Tuesday May 19.
Unfortunately, as with most financial-related topics associated with the Barisan Nasional (BN) government, there are far more questions than answers. Here are just three big ones, to start off with:
1) First, funding. TIA will reportedly raise RM5bn in bonds backed by a federal government guarantee. PM Najib reportedly said “There’s no money involved” (The Edge Daily, May 19). Hello? Has he been keeping up to-date on the multi-billion ringgit Klang Port scandal which involved dubiously granted government guarantees?
The bigger question though, is why TIA needs a government guarantee in the first place. TIA will also reportedly have RM6bn ‘raised through the assignment to TIA of some of the future oil royalties due to the state.” RM6bn is already a huge some of money to start off with. Why the rush to add RM5bn of federal government-guaranteed debt on top of that?
2) Second, objectives. TIA chief executive officer and former executive partner at Accenture, Shahrol Halmi said, “The key objectives of TIA’s investment strategy are … ensure the development of long-term sustainable economic and social programmes for the state.”
Elsewhere in the world, the whole point of sovereign wealth funds (SWFs) is to invest windfall gains from high resource prices wisely, OUTSIDE the home country. SWFs came about because resource-rich countries found that their own economies were too small to effectively deploy all the income coming in from their trade surpluses. Rather than have too much money chasing to few goods, leading to unproductive investments and domestic property price inflation, countries such as Norway chose to set up SWFs in order to effectively invest the money overseas for a rainy day.
Over here, TIA is proposing to invest within Terengganu. Yes, a major political issue is the people of oil-rich Terengganu do not appear to have reaped any benefits from record-high oil prices. But, that’s an issue with the BN federal and state government delivery mechanism. How does TIA fit in with the local government? In fact, the presence of TIA could actually deter investment by private investors, as it could be perceived that TIA will be given undue advantages. SWFs should have no business in their home countries!
3) Third, accountability. Media reports say TIA will have a “triple-tier check and balance system comprising the board of directors, a board of advisers and a senior management team.” I say a system is only as good as its people. Note that the board of advisers will include the Prime Minister or the Finance Minister, in his stead. Far better if politicians stay out completely and leave it to professionals.
Also, the best accountability is via public disclosure. Dare we hope that TIA will adopt best practices as per the Government Pension Fund of Norway? (Contrary to its name, this fund is entirely funded by surplus wealth from Norwegian petroleum income – no government guarantees! – and is professionally managed). I invite you to check their website. Information including ALL the shares held by the fund are available for quick and easy download!
I have other issues, including the so-called “experienced personnel” involved in running the fund. Right now, the list is very narrow and, by accident or design, seems to consist primarily of one ethnic group only. I know for a fact, having worked for MNCs, that financial services talent encompasses the entire globe from Caucasians to sub-continent Indians to mainland Chinese. If TIA truly intends to be world-class, its hiring policies need to be world-class too.
Unfortunately, as with most financial-related topics associated with the Barisan Nasional (BN) government, there are far more questions than answers. Here are just three big ones, to start off with:
1) First, funding. TIA will reportedly raise RM5bn in bonds backed by a federal government guarantee. PM Najib reportedly said “There’s no money involved” (The Edge Daily, May 19). Hello? Has he been keeping up to-date on the multi-billion ringgit Klang Port scandal which involved dubiously granted government guarantees?
The bigger question though, is why TIA needs a government guarantee in the first place. TIA will also reportedly have RM6bn ‘raised through the assignment to TIA of some of the future oil royalties due to the state.” RM6bn is already a huge some of money to start off with. Why the rush to add RM5bn of federal government-guaranteed debt on top of that?
2) Second, objectives. TIA chief executive officer and former executive partner at Accenture, Shahrol Halmi said, “The key objectives of TIA’s investment strategy are … ensure the development of long-term sustainable economic and social programmes for the state.”
Elsewhere in the world, the whole point of sovereign wealth funds (SWFs) is to invest windfall gains from high resource prices wisely, OUTSIDE the home country. SWFs came about because resource-rich countries found that their own economies were too small to effectively deploy all the income coming in from their trade surpluses. Rather than have too much money chasing to few goods, leading to unproductive investments and domestic property price inflation, countries such as Norway chose to set up SWFs in order to effectively invest the money overseas for a rainy day.
Over here, TIA is proposing to invest within Terengganu. Yes, a major political issue is the people of oil-rich Terengganu do not appear to have reaped any benefits from record-high oil prices. But, that’s an issue with the BN federal and state government delivery mechanism. How does TIA fit in with the local government? In fact, the presence of TIA could actually deter investment by private investors, as it could be perceived that TIA will be given undue advantages. SWFs should have no business in their home countries!
3) Third, accountability. Media reports say TIA will have a “triple-tier check and balance system comprising the board of directors, a board of advisers and a senior management team.” I say a system is only as good as its people. Note that the board of advisers will include the Prime Minister or the Finance Minister, in his stead. Far better if politicians stay out completely and leave it to professionals.
Also, the best accountability is via public disclosure. Dare we hope that TIA will adopt best practices as per the Government Pension Fund of Norway? (Contrary to its name, this fund is entirely funded by surplus wealth from Norwegian petroleum income – no government guarantees! – and is professionally managed). I invite you to check their website. Information including ALL the shares held by the fund are available for quick and easy download!
I have other issues, including the so-called “experienced personnel” involved in running the fund. Right now, the list is very narrow and, by accident or design, seems to consist primarily of one ethnic group only. I know for a fact, having worked for MNCs, that financial services talent encompasses the entire globe from Caucasians to sub-continent Indians to mainland Chinese. If TIA truly intends to be world-class, its hiring policies need to be world-class too.
Tuesday, May 12, 2009
What about respect for the rakyat?
Perak Regent Raja Dr Nazrin Shah had to wait five hours to deliver his opening address to the Perak State Assembly due to the shenanigans last Thursday. As he was taking his seat, menteri besar, as reaffirmed by the High Court yesterday, Datuk Seri Mohd Nizar Jamaluddin requested to raise an objection on the forceful and illegal means employed by the Barisan Nasional to remove speaker V. Sivakumar.
The New Straits Times reported the Raja Muda then asked Nizar and the DAP’s Datuk Ngeh Koo Ham to approach him. The Raja Muda told the duo: “I don’t want to get involved in this. I just want to give my speech, so respect my speech, when I am giving it. You understand that? If you want to work with me in future, you have to respect my speech. Understand?
“So go and tell that." (to the Pakatan Rakyat state assemblymen)
The Raja Muda can demand respect due to his position as a constitutional monarch. Who will accord respect for the rakyat’s wishes? Only a minority of Perak folk voted for the Barisan Nasional. The majority of the people of Perak do not want a Barisan Nasional state government.
How have we come to the situation where the minority is allowed to rule over the majority? What does this say for the future of Malaysia? We took a huge step away from democracy last week. I fear we are on the path to kleptocracy. Dare I see a glimmer of hope following yesterday's court decision?
The New Straits Times reported the Raja Muda then asked Nizar and the DAP’s Datuk Ngeh Koo Ham to approach him. The Raja Muda told the duo: “I don’t want to get involved in this. I just want to give my speech, so respect my speech, when I am giving it. You understand that? If you want to work with me in future, you have to respect my speech. Understand?
“So go and tell that." (to the Pakatan Rakyat state assemblymen)
The Raja Muda can demand respect due to his position as a constitutional monarch. Who will accord respect for the rakyat’s wishes? Only a minority of Perak folk voted for the Barisan Nasional. The majority of the people of Perak do not want a Barisan Nasional state government.
How have we come to the situation where the minority is allowed to rule over the majority? What does this say for the future of Malaysia? We took a huge step away from democracy last week. I fear we are on the path to kleptocracy. Dare I see a glimmer of hope following yesterday's court decision?
Wednesday, May 6, 2009
On ex-PMs becoming “advisors” …
Tun Abdullah Badawi is now advisor to Malaysia Airlines. The Malaysian Insider says “The Najib administration has manoeuvered around a potentially delicate situation … keeping Tun Dr Mahathir Mohamad as Petronas advisor.”
Apparently there is a “tradition” for a recently retired prime minister to be given the prestigious advisor position in the national oil company. This can’t be a long “tradition”. Petronas was formed only in the 1970s after our first prime minister Tunku Abdul Rahman had retired. Our second prime minister Tun Abdul Razak passed away in office. Tun Hussein Onn was the first such ex-PM “advisor”. And Tun M is the second.
I wonder why this “tradition” developed. The scope and terms of reference of these “advisors” has never been officially disclosed. It is less of an issue in the case of unlisted Petronas. But Malaysia Airlines is a public-listed company, with directors elected by shareholders. Where does Tun Abdullah sit in the overall scheme of corporate governance?
It would be wonderful if Tun Abdullah declines this ‘honour’ and nips this dubious “tradition” in the bud. Cushy GLC (government-linked corporate) positions should not become part of the expected retirement package for ex-PMs.
It would be far more meaningful if ex-PMs apply their influence to champion projects that benefit the ordinary rakyat. For instance, I am thinking of the Tun Hussein Onn Eye Hospital, a wonderful hospital that provides affordable specialist eye-care. Jeff Ooi was a very satisfied patient; and so was I.
Apparently there is a “tradition” for a recently retired prime minister to be given the prestigious advisor position in the national oil company. This can’t be a long “tradition”. Petronas was formed only in the 1970s after our first prime minister Tunku Abdul Rahman had retired. Our second prime minister Tun Abdul Razak passed away in office. Tun Hussein Onn was the first such ex-PM “advisor”. And Tun M is the second.
I wonder why this “tradition” developed. The scope and terms of reference of these “advisors” has never been officially disclosed. It is less of an issue in the case of unlisted Petronas. But Malaysia Airlines is a public-listed company, with directors elected by shareholders. Where does Tun Abdullah sit in the overall scheme of corporate governance?
It would be wonderful if Tun Abdullah declines this ‘honour’ and nips this dubious “tradition” in the bud. Cushy GLC (government-linked corporate) positions should not become part of the expected retirement package for ex-PMs.
It would be far more meaningful if ex-PMs apply their influence to champion projects that benefit the ordinary rakyat. For instance, I am thinking of the Tun Hussein Onn Eye Hospital, a wonderful hospital that provides affordable specialist eye-care. Jeff Ooi was a very satisfied patient; and so was I.
Wednesday, April 29, 2009
Malaysians are poor – based on our tax records
Only 1 million or so Malaysians pay tax. That’s 10% of the working population. Take a look around you. 9 out of 10 adults you see don’t pay tax. That’s a phenomenally narrow tax base. 1 million Malaysians are paying for the government services for all 24 million of us; 26 million if you include the (legal) foreigners.
Or perhaps it’s more accurate to say 1 million Malaysians are paying for the “work” done by our government, which includes trips to Disneyland, Mount Everest and other exotic locations.
Hafiz Noor’s musings on income tax got me thinking.
Firstly, are the vast majority of Malaysians that poor, that 9 million working Malaysians don’t pay tax?
Secondly, if the core issues are not addressed, more and more Malaysians will do their utmost to avoid tax. Because, we don’t seem to be getting our money’s worth.
One function of taxation is to raise revenue to fund social services such as roads, schools, hospitals and security. Yet, in Malaysia, we 1) pay tolls, 2) are forced to send our children for private education, 3) go to private hospitals when we are very ill and 4) engage private security to patrol our home neighbourhoods because of the rising crime rates. Another function is redistribution, that is to take from the rich to help the poor. No right thinking human should be against that. But how much of that do we see going on in Malaysia? We see billions of ringgit being squandered on follies and some scandal or other; and on the other hand there are so many obvious examples of poverty.
So, where did all our tax money go? This lack of accountability fuels the sense of injustice by the taxpayer and increasing efforts to avoid or downright evade tax. Why pay tax when “the government is going to waste it anyway”?
Which brings me to the broader, third issue. There are about 12 million eligible voters. The fact tbat only a fraction of these voters pay taxes is fertile ground for populist politicians offering voters short-term goodies at the expense of longer term economic disaster.
Voters will be tempted to vote for whoever offers cheap petrol/electricity/[insert whatever you want here] because they don’t have to cover the cost. The only way the costs can be covered would be to raise taxes. Our taxes, once you factor in the indirect taxes, are already among the highest in the world. Raise them further and the brain drain will get worse. We will face economic ruin when our best and brightest are all gone.
How can we get around this? One – break the addiction to cheap foreign labour so that Malaysians can move up the value chain and earn enough income to pay taxes. Two - accountability by the government – so we know where our tax money is going and feel we have a stake in its spending. Dare we hope for the report on the Port Klang Free Zone problems to be made public; and just as importantly, the people responsible held accountable and penalized?
Or perhaps it’s more accurate to say 1 million Malaysians are paying for the “work” done by our government, which includes trips to Disneyland, Mount Everest and other exotic locations.
Hafiz Noor’s musings on income tax got me thinking.
Firstly, are the vast majority of Malaysians that poor, that 9 million working Malaysians don’t pay tax?
Secondly, if the core issues are not addressed, more and more Malaysians will do their utmost to avoid tax. Because, we don’t seem to be getting our money’s worth.
One function of taxation is to raise revenue to fund social services such as roads, schools, hospitals and security. Yet, in Malaysia, we 1) pay tolls, 2) are forced to send our children for private education, 3) go to private hospitals when we are very ill and 4) engage private security to patrol our home neighbourhoods because of the rising crime rates. Another function is redistribution, that is to take from the rich to help the poor. No right thinking human should be against that. But how much of that do we see going on in Malaysia? We see billions of ringgit being squandered on follies and some scandal or other; and on the other hand there are so many obvious examples of poverty.
So, where did all our tax money go? This lack of accountability fuels the sense of injustice by the taxpayer and increasing efforts to avoid or downright evade tax. Why pay tax when “the government is going to waste it anyway”?
Which brings me to the broader, third issue. There are about 12 million eligible voters. The fact tbat only a fraction of these voters pay taxes is fertile ground for populist politicians offering voters short-term goodies at the expense of longer term economic disaster.
Voters will be tempted to vote for whoever offers cheap petrol/electricity/[insert whatever you want here] because they don’t have to cover the cost. The only way the costs can be covered would be to raise taxes. Our taxes, once you factor in the indirect taxes, are already among the highest in the world. Raise them further and the brain drain will get worse. We will face economic ruin when our best and brightest are all gone.
How can we get around this? One – break the addiction to cheap foreign labour so that Malaysians can move up the value chain and earn enough income to pay taxes. Two - accountability by the government – so we know where our tax money is going and feel we have a stake in its spending. Dare we hope for the report on the Port Klang Free Zone problems to be made public; and just as importantly, the people responsible held accountable and penalized?
Monday, April 20, 2009
What’s happening in Perak?
For those confused by the plethora of articles, or, like me, are just too tired of this whole imbroglio to wade through all the reports, here’s a summary of the situation.
The mainstream media reports Barisan Nasional (BN) now has an undisputed majority in Perak following the Federal Court’s recent declaration that Speaker V. Sivakumar’s suspension of UMNO’s Datuk Seri Zambry Abd Kadir and his six executive councillors are null and void. Combined with the earlier ruling that it is the Election Commission (EC) and not the Speaker that decides an electoral vacancy, it is said BN now holds a 31-28 majority in the state assembly, including the three party-hoppers.
The alternative media on the other hand points out that only two declarations sought by the BN applicants were granted, which were to declare null and void the suspensions for Zambry and also his exco. The Federal Court omitted the application to declare that Zambry and his exco have the right to attend and take part in all assembly meetings. Constitutionally, the Speaker has full power in the assembly. If that is the case, then Pakatan holds a 28-24 majority as Zambry and his six exco members would be barred by the Speaker.
N.H. Chan, a former Court of Appeal judge writing in Malaysiakini says the relevant law, in the present context, is Article 72 of the Federal Constitution which states:
(1) The validity of any proceedings in the Legislative Assembly of any State shall not be questioned in any court.
(2) No person shall be liable to any proceedings in any court in respect of anything said or any vote given by him when taking part in proceedings of the Legislative Assembly of any State or of any committee thereof.
(3) No person shall be liable to any proceedings in any court in respect of anything published by or under the authority of the Legislative Assembly of any State.
Following the Federal Court decision, the Perak state assembly secretary Abdullah Antong Sabri, without the consent of Speaker V Sivakumar, issued a notice convening the Perak state assembly on May 7. Speaker Sivakumar subsequently suspended him indefinitely for this act of ‘insubordination’ and appointed Misbahul Munir Mardukhas, the political secretary of recently-elected Bukit Gantang MP Mohd Nizar Jamaluddin, as his replacement. “Meanwhile, the purported sitting on May 7 cannot proceed, pending clarification,” he said, adding that he would write a letter to the palace to seek clarification if the palace had given permission for an assembly to be convened.
So, that’s where we stand. A real constitutional mess with the BN quite ironically hamstrung by the various constitutional changes it had put through in the past which reduced the scope for judical review of the legislative branch. My hope? Prime Minister Najib will stop this BN attempt to impose a BN government in Perak that the majority of Perak rakyat did NOT vote for. Focus on fixing the economy and the states you rule, deliver “People First, Performance Now” and in the next elections you can convince the rakyat you deserve to be the government.
Saturday, April 4, 2009
Khir Toyo and family spent RM1.7m meeting Prince Charming and Cinderella
The Selangor Select Committee on Competency, Accountability and Transparency (Selcat) concluded its public inquiry into the expenses of the now-defunct Balkis on Wednesday, March 31.
Balkis was the welfare and charity organization set up by the wives of Selangor’s elected representatives during Barisan Nasional (BN) rule. It was hurriedly dissolved after March 8, and RM10m was transferred to Bakti, the charity organization for wives of federal government ministers. The legality of that dissolution and cash transfer is also being questioned, but that’s another issue.
Right now, I am disheartened by the absence of public outrage and mainstream media coverage on the abuse of power and privilege unearthed by the Committee. Consider just a few of the revelations:
1) State investment agency Permodalan Negeri Selangor Bhd (PNSB) spent almost RM1m on a Dec 2004 Eurodisney trip for then Selangor menteri besar Datuk Seri Dr Mohd Khir Toyo, his wife, their three children AND maid;
2) Khir must have hankered for the real thing after seeing the European copy, so off he went to Disneyland in Orlando, Florida, in Jan 2008, just 2 months before historic March 8. Again, his wife, their three children and maid went along. Cost – about RM650,000 for their entire US jaunt.
PNSB CEO Datin Khairiyah Abu Hassan told the Committee that the trips were in preparation for setting up an 8 hectare theme park in Bagan Lalang. A very flimsy reason indeed which collapsed under further questioning when it transpired that Khir and entourage visited Disney as ordinary public guests, there were no meetings with Disney senior executives or technical personnel and no reports were submitted after the trips!
But where is the public outrage, and where is the disciplinary action by UMNO? The very senior UMNO politician has not denied spending RM1.7m of public money on a private family jaunt. RM1.7m is 68 low-cost houses; it can keep nearly 300 families out of hard-core poverty for a year. And that RM1.7m is just one of numerous other infractions. If UMNO is serious about reform, it needs to send a clear message. Abuse of power will not be tolerated. Transgressors will be expelled.
It doesn’t seem to be happening.
Also, what about the other Barisan Nasional coalition members? Silence implies consent, or at the very least, acquiescence.
Ask what politics can do for you and your family, not what you can do for the people sounds like an appropriate BN slogan.
Balkis was the welfare and charity organization set up by the wives of Selangor’s elected representatives during Barisan Nasional (BN) rule. It was hurriedly dissolved after March 8, and RM10m was transferred to Bakti, the charity organization for wives of federal government ministers. The legality of that dissolution and cash transfer is also being questioned, but that’s another issue.
Right now, I am disheartened by the absence of public outrage and mainstream media coverage on the abuse of power and privilege unearthed by the Committee. Consider just a few of the revelations:
1) State investment agency Permodalan Negeri Selangor Bhd (PNSB) spent almost RM1m on a Dec 2004 Eurodisney trip for then Selangor menteri besar Datuk Seri Dr Mohd Khir Toyo, his wife, their three children AND maid;
2) Khir must have hankered for the real thing after seeing the European copy, so off he went to Disneyland in Orlando, Florida, in Jan 2008, just 2 months before historic March 8. Again, his wife, their three children and maid went along. Cost – about RM650,000 for their entire US jaunt.
PNSB CEO Datin Khairiyah Abu Hassan told the Committee that the trips were in preparation for setting up an 8 hectare theme park in Bagan Lalang. A very flimsy reason indeed which collapsed under further questioning when it transpired that Khir and entourage visited Disney as ordinary public guests, there were no meetings with Disney senior executives or technical personnel and no reports were submitted after the trips!
But where is the public outrage, and where is the disciplinary action by UMNO? The very senior UMNO politician has not denied spending RM1.7m of public money on a private family jaunt. RM1.7m is 68 low-cost houses; it can keep nearly 300 families out of hard-core poverty for a year. And that RM1.7m is just one of numerous other infractions. If UMNO is serious about reform, it needs to send a clear message. Abuse of power will not be tolerated. Transgressors will be expelled.
It doesn’t seem to be happening.
Also, what about the other Barisan Nasional coalition members? Silence implies consent, or at the very least, acquiescence.
Ask what politics can do for you and your family, not what you can do for the people sounds like an appropriate BN slogan.
Thursday, February 5, 2009
Perak imbroglio another indictment of Barisan's poor ethics
I was about to post a blog on stimulus packages, the inept delivery of even the modest RM7bn initial stimulus announced last year and how we can emulate some of what Singapore proposed in its Budget for 2009. But the turn of events in Perak makes this moot.
The Barisan Nasional (BN) is quite clearly still focused on politicking and seeking to wrest, by hook or by crook, what the people don't want it to have – the right to govern in 5 states in Malaysia. Rather than using its vast majority in Parliament – just 8 seats short of 2/3rds! - and all the resources it controls as Federal government to help Malaysia navigate this global economic storm, it is still politicking, nearly one year after the general elections.
Some would blame Anwar and PKR for starting this cross-over nonsense. I agree, and it is also the DAP stand, that individual cross-overs are unethical and a betrayal of the will of the people. In our political system, we vote for the party as well as the individual.
The mainstream media is trotting out comments by various “experts” justifying party-hopping. Their logic is it can be OK for MPs and assemblymen to hop because it is difficult to tell what exactly the people voted for – whether the individual or the party.
Against this argument, I have one simple question: Would these cross-over reps have been elected had they stood as independent candidates? Highly unlikely. Therefore, if they had truly lost faith in their respective parties, the honourable thing to do is to resign, join the new party and seek re-election again.
Right now one could be forgiven for casting aspersions on their motivations for hopping. We might be able to accept the hopping if they gave good, clear reasons why they chose to hop. What has changed in PKR and DAP between then and now to cause them to revisit their allegiances? Are they privy to bad practices that we, the rakyat, do not know about? In that case, it is incumbent upon them to bring these to light. But there have been no such statements.
Also, consider the willingness of BN to accept two assemblymen with pending corruption charges. What signal does this send?
The Barisan Nasional (BN) is quite clearly still focused on politicking and seeking to wrest, by hook or by crook, what the people don't want it to have – the right to govern in 5 states in Malaysia. Rather than using its vast majority in Parliament – just 8 seats short of 2/3rds! - and all the resources it controls as Federal government to help Malaysia navigate this global economic storm, it is still politicking, nearly one year after the general elections.
Some would blame Anwar and PKR for starting this cross-over nonsense. I agree, and it is also the DAP stand, that individual cross-overs are unethical and a betrayal of the will of the people. In our political system, we vote for the party as well as the individual.
The mainstream media is trotting out comments by various “experts” justifying party-hopping. Their logic is it can be OK for MPs and assemblymen to hop because it is difficult to tell what exactly the people voted for – whether the individual or the party.
Against this argument, I have one simple question: Would these cross-over reps have been elected had they stood as independent candidates? Highly unlikely. Therefore, if they had truly lost faith in their respective parties, the honourable thing to do is to resign, join the new party and seek re-election again.
Right now one could be forgiven for casting aspersions on their motivations for hopping. We might be able to accept the hopping if they gave good, clear reasons why they chose to hop. What has changed in PKR and DAP between then and now to cause them to revisit their allegiances? Are they privy to bad practices that we, the rakyat, do not know about? In that case, it is incumbent upon them to bring these to light. But there have been no such statements.
Also, consider the willingness of BN to accept two assemblymen with pending corruption charges. What signal does this send?
Wednesday, December 10, 2008
It all starts with accountability
Accountability: /əkaʊntəbɪlɪti/ the state of being accountable, liable, or answerable; a state unknown to Malaysians.
I was among the speakers at “The New Economic Vision for Penang and Malaysia” International Conference in Penang over the weekend. It was heartening to see so many people who care about Penang and Malaysia and its future. About 350 participants registered and they were not just there to see the heavy-hitters – Datuk Seri Anwar Ibrahim, Penang Chief Minister Lim Guan Eng and the Menteri Besars of Perak and Selangor. The conference hall was fairly full throughout the entire 1.5 days.
Kudos to Penang Invest for running such a well-honed conference. Timekeeping was excellent, as were overall logistics. An achievement all the more impressive given the very short notice. I have attended many conferences in my previous banking career. The global banks have huge conference budgets and specialist teams to manage these affairs. Penang Invest punched well above its weight to deliver this event so smoothly.
There was lots of high level talk and aims and visions and strategies from the politicans and the heavyweight academics. I am jaded. No disrespect is intended to the learned academics. We were privileged to hear their learned thoughts. But lofty aims and visions and studies are all too prevalent in Malaysia. Execution is lacking.
We need accountability. Heads must roll when negligence is proved. University Malaya's Professor Rajah Rasiah who shared a panel with me said he had personally enticed leading specialists over to Malaysia under the “Brain Gain” programme (remember that?). Within 2 years, most had gone back overseas.
What went wrong? The government must follow-up on its policies instead of announcing a new one every few years. In this instance, investigations should have been done. Why did those specialists go back? Was the environment unsatisfactory? Did bureaucrats get in the way? Only if we know the answers can we fix the programme. And if someone was found to have been negligent, he or she should be punished. Not just transferred, but very publicly demoted and/or fired.
In my 38-year lifetime I have seen lots of plans proposed by the BN government ranging from the Malaysia Plans and Multimedia Super Corridor to Iskandar Development Region and the various Corridor Initiatives. I will agree some of the plans were decent, others less so. But the commonality is all failed – because of poor execution. Until we focus on execution, in another 38 years, we will still be saying the same things at conferences and talks, whether the government is Pakatan or BN.
Accountability works both ways. Reward those who deliver, like Penang Invest. Penalise those who don't.
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