Barisan Nasional is the marriage-of-convenience

Some Malaysians are falling for the mainstream media’s portrayal of the Pakatan Rakyat coalition as a marriage-of-convenience, as it relentlessly highlights the disagreements between the coalition partners. Recent differences that come to mind are the Kedah PAS-DAP quarrel and the disunity over PAS’ proposed unity talks with UMNO.

No marriage is perfect. Partners will have disagreements. They may settle it discreetly, argue quietly or fight publicly, but it is a fact, normal adults in normal relationships will have different opinions. And that is what Pakatan Rakyat is going through as the partners work through their relationships to make it even stronger in coming years.

In a marriage-of-convenience on the other hand, one partner has the upper-hand. There is no striving for a greater good. One partner may want a green card or financial security so he or she just grins and bears it, no matter what nonsense the other partner gets up to.

Which quite aptly describes the situation at the Barisan Nasional (BN). There is the façade of unity because the component parties don’t quarrel too much. The reality is that happens because UMNO calls the shots and the others just fall into line.

Take the Port Klang Free Zone scandal. Two weeks ago, Transport Minister Datuk Seri Ong Tee Keat made a principled move by directing Port Klang Authority to withhold payment until studies were completed. A few days later, the Ministry of Finance “instructed” PKA to pay up. This was a clear case of over-stepping boundaries. PKA is part of the Ministry of Transport. The Ministry of Finance did not even have the courtesy of working through the Transport Minister - it sent the “instructions” directly to the PKA board!

And what did the Transport Minister do? Not a peep. His authority has been completely undercut and yet he continues working with UMNO and the BN. Quite unlike the coalition of real partners in Pakatan, where the parties will stand up for their principles and express their real opinions.

So, which is the marriage-of-convenience?

PS. I’m taking a break. Off on a holiday to rest and recharge. Next posting will be on Wed, 5 Aug.

Najib’s “11 people-friendly measures” mere crumbs

The New Sunday Times yesterday was expectedly all agog with its boss’s prime minister Datuk Seri Najib’s 100-day milestone. In addition to 6 National Key Result Areas, he announced 11 people-friendly measures. Really, more smoke than substance. Here’re the 11 measures, and my critique:

1) Increasing taxi permits by 3,000 to be approved over the next three months

Hmm .. who decides who gets the permits? And doesn’t this increase competition for all the other taxi drivers who are still forced to rent permits from influential rent-seeking individuals? They are going to find it even harder to make ends meet. Has anyone even done a proper study on what’s a sustainable number of taxis in KL ie balancing commuter convenience with taxi drivers’ rights to earn a decent, honest living?

Actually, on the subject of permits, it is Najib’s Prime Minister’s office that gets to issue the permits! In a recent reshuffling, the Commercial Vehicles and Licensing Board was transferred to the Prime Minister's office whereas the Transport Ministry should have appeared a more suitable home.

So, right now, as Tony Pua points out, Public Transport, which is one of the 6 National Key Result Areas is a complete recipe for disaster. We have the Prime Minister himself taking care of taxis and public buses, the Finance Ministry championing RapidKL, the Transport Ministry in charge of KTM and LRT, and the Works Ministry overseeing the road transport network.

2) 20% discount for SmartTag and Touch & Go cardholders who pay toll 80 times or more in a month
Great headline and great discount. But meaningless to most people. Do the math.
A worker who works five days a week and pays toll to-and-fro = 5 day week * 2 toll payments per day * 4 weeks a month = 40 toll payments/month.
On weekends, he takes his family out and pays toll a total 8 times per weekend = 32 times per month.
Total = 72 times per month only!

3) Introduction of new Amanah Saham 1Malaysia with an initial size of 10 billion units
You are investing your own money! And bear in mind, this is not capital-guaranteed. It is fund like any other fund, with the usual caveat, “The value of your investment can go up, as well as down”.

4) Drastic measures to reduce crime and fight corruption
Haven’t we heard this before? I’ll believe it when I see it, and I’ll be relieved when this happens and ordinary civic-conscious citizens no longer need to turn criminal to protect their own families. In the meantime, the crime rate is soaring, as Tony Pua highlights.

5) Construction of additional roads in Sabah and Sarawak
6) Upgrading of water and electricity supply in rural areas of Sabah and Sarawak
7) Improving efforts in registering births in Sabah and Sarawak.
52 years after Merdeka, and 46 years after Sabah and Sarawak joined the Federation, a birth-registration system is still not in place and roads, water and electricity are still privileges ???!!!

8) Increasing by RM150m the allocation for Tekun Nasional, with RM15m for young Indian entrepreneurs.
9) Fee for learning to ride motorcycles of Calls B2 and below reduced to RM211
10) 50% discount on licence renewal fee for hawkers in Kuala Lumpur
11) Sale of 44,000 public housing units to people renting them in Kuala Lumpur

Mere crumbs to distract the public while big money continues to be wasted elsewhere.
Just last week, the one-year old Aquatic Centre in Batu Buruk was shut down after it was found to have too many flaws. This centre alone cost RM18m.
Of course, there’s a whole range of other huge money scandals, with the current pinnacle being RM13.5bn and counting at PKFZ. Transport Minister Ong Tee Keat tried to do the right thing by stopping payment, but he was overruled by his UMNO colleagues at the Treasury.

Since when is “Politician sits with people” news?

Politicians in most mature democracies practice the common touch naturally. They take public transport, kiss babies, mingle with the people they represent…. All that is standard practice which hardly deserve news coverage.

But, in Najib’s 1-Malaysia, the headline on prime page 3 space in the New Sunday Times today is “Najib mingles with the rakyat”. The crux of the article was prime minister Datuk Seri Najib Razak decided to deliver his 100th-day speech at the Kuala Lumpur Convention Centre rather than from his office in Putrajaya. PM Najib, in turn, was appreciative that the coterie of Tan Sri, Datuk Seri and Datuk ministers present deigned to sit together with the people.

That’s a useful reminder of the heights of Barisan Nasional arrogance. It is a noble step for all those titled politicians to “give up protocol” and mix with us, the rakyat they are supposed to serve. It is a sacrifice that we, the rakyat, must appreciate!

Still, I will grant that’s a step in the right direction. Unfortunately, like many Barisan initiatives, it looks skin-deep rather than a DNA-change. Elsewhere, when boss Najib is not present, the lordly instincts revert. Page 13 of today’s New Sunday Times is telling. Kelantan UMNO chief Datuk Mustapa Mohamed said he has “to advise his VIP friends to be extra cautious” and not come and go in flashy cars with police outriders that would annoy the villagers in Manik Urai.

Contrast that with the Pakatan-led state governments. Chief Minister, plain old Encik Lim Guan Eng flies economy class. On a regular basis as he fulfils his duties as Chief Minister and Member of Parliament. Unlike the former BN Menteri Besar of Selangor, who spent RM1.7m visiting Disneyland and lives in an exclusive community, in a house valued at between RM3.5m and RM24m, depending on whom you believe.

Similarly, the 11 people-friendly measures are skin-deep rather than deep-rooted change. More to come …

PS: The print edition of New Sunday Times today captions this as "PM ... mobbed by the crowd ... yesterday". The people in the background seem more interested in something else - notice they are all looking away from the PM!

Is the taxpayer paying for AirAsia’s marketing costs?

I received an email from AirAsia recently, proclaiming “No Airport Tax”.

Quite ironic, considering that Prime Minister and Finance Minister Datuk Seri Najib Razak on June 23 in a written reply to Wee Choo Keong (Wangsa Maju – PKR) said Malaysia Airports is negotiating with AirAsia on RM65m of airport taxes that Air Asia owes. “Drastic action cannot be applied … on AirAsia as it would affect the operations at the low-cost carrier terminal (LCCT) and cause a negative result on MAHB as operator and manager of the airport.”

Subsequently, the Edge Daily on June 25th reported the government had appointed a consultant to find a middle path in the dispute between AirAsia and Malaysia Airports. Another consultant? Why? PM Najib has confirmed AirAsia is in arrears to the tune of RM65m.

What is there to discuss? Airlines collect airport tax from passengers just like your restaurant charges you the 5% government service tax. It is a tax collected by the private sector on behalf of the government. The Customs and Excise department quite rightly goes after restaurants and other businesses who charge that 5% but don’t remit the sum to the government. No negotiations. You remit what you collected. Why the special treatment for AirAsia? Its passengers had all paid the airport tax when booking their flights. It is money that they believed was going to the airport, not to AirAsia.

Now Air Asia is offering a “No Airport Tax” promotion. Is AirAsia really absorbing the airport tax? Or is it going to tell Malaysia Airports later on that it cannot afford to pay? In which case, this promotion is being sponsored by the taxpayer!

Air Asia already benefits from extremely one-sided contract terms which are unfair to consumers. Let’s not add taxpayer support .

Economic reforms – One step forward, one step back .. and watch the implementation

The mainstream media has been trumpeting liberalization measures announced by Prime Minister Datuk Seri Najib Razak at the InvestMalaysia Conference on Tuesday.

Amid the plethora of measures, the one that stands out is removal of the 30% bumiputera quota for companies seeking listing in Malaysia. It is a bold political move indeed, to eliminate this “something for nothing” crutch.

Having said that, the actual impact to bumiputeras is minimal. The pipeline of new listings has hardly been inspiring in recent years. I challenge you to name even one recently-listed prominent company. Also, the policy had been a huge failure in terms of its intention to build bumiputera wealth. PM Najib said RM54bn had been allocated to bumiputeras (I think it is a lot more), but only RM2bn remains. So, bumiputeras kept less than 5% of the amounts allocated to them!

But it is good news, in that it removes a huge impediment to listing. Many owners of successful businesses shied away when told they had to offer 30% of their company to a new “partner” at a large discount. Let’s hope this results in more and better quality listings on Bursa, which would make the stock exchange more attractive and help fuel trading volume.

I am dismayed though, that replacing this 30% quota is another new fund. The RM10bn Ekuinas fund is supposed to invest in “bumiputera companies and entrepreneurs, based on merit”. Such government-run funds have awful records. And what is Ekuinas going to do that existing institutions do not?

A better approach would be to work with the private sector. For example, the government could offer to share the risks of such loans and investments with banks and venture capitalists. It could agree to bear, say, half the losses if the entrepreneurs fail. That way, the process of credit allocation is still primarily private sector driven, which should be more efficient and it saves the government having to build a duplicate infrastructure of officers to administer and monitor the investments.

As for “watch the implementation”, I am referring to the “stern” directives to:
1. Government-investment corporations (GICs) to reduce their stakes in the government-linked corporations (GLCs), in the name of raising free-floats and market liquidity; and
2. The GLCs to divest non-core businesses.

All sensible reasons, and if properly done, will be good for the economy. “Properly” is of course the crucial word. In particular, I want to see:

1. Transparency in the appointments of the brokers and the fees and commissions paid when the GICs reduce their stakes; and
2. Similarly, transparency when the GLCS sell their non-core businesses. Valuations must be fair – the businesses must not be sold at unduly cheap prices to influential parties – and all the costs, including commissions and advisory fees disclosed.

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?

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 …