MCA's lone ranger: Pacts ain't my style

In the aftermath of a poor showing at the March 8 General Elections, BN component parties have been remarkably low-key in their review of the debacle. Even in the context of UMNO, the movements of the second-tier leaders and their aspirations are clouded by the larger stage dominated by the perceived challenges faced by the party president and deputy president.

If there have been any serious reviews made within the other major BN parties like the MCA, Gerakan and MIC, such reviews have been kept under a tight wrap. It would seem that, in the face of adversity, the BN components have chosen to hold the thinned "dark blue line" of BN under a veneer of civility and genteel conduct.

Will this change as the party elections for each BN component draws nearer?

MCA party elections

In an interview with Malaysiakini's Stanley Koh entitled, MCA's lone ranger: Pacts ain't my style, the perceived front-runner, Ong Tee Keat, has maintained his non-factionalised posture. The current perception is that Ong Tee Keat may be more acceptable to the erstwhile factions of Ong Ka Ting and Chan Kong Choy when compared with the unannounced candidacies of Dr Chua Soi Lek and Chua Jui Meng. We should not forget the likelihood of Ong Ka Chuan joining the fray with his considerable behind-the-scenes prowess.

MIC: No leadership change

In the case of the MIC, there is a paradoxical situation where the long-serving president, Samy Vellu, has now declared himself to be the agent of change. This raises the logical and relevant question of; what if Samy Vellu is the main cause of MIC's current problems?

Gerakan: Decent but subordinate

Gerakan's pedigree is impeccable. This is the party that used to house the Socialist leaders and their intellectual ideals. But having been an appendage of the BN for nearly 4 decades, Gerakan has calcified into a party that is subservient to UMNO. Against the charisma of Lim Guan Eng and the Pakatan state government in Penang, none of the Gerakan leaders are able to muster a coherent response so far.

The end of BN component parties

Obituaries are premature. The astute observers would point out the franchise strength of the divisional and branch networks of these BN components. Parties like the MCA have very respectable memberships exceeding 1 million. Their war-chests are considerable.

Perhaps, in all 3 parties canvassed above, the driving need is for the rise of a leader or a grouping of leaders that are able to acquire the spine to deal with UMNO at a level of mutual respect (as opposed to grovelling subervience); and, leaders who can sketch out and, later, flesh out a clear direction for the party to regain lost "market share" among voters.

But, the biggest challenge is for these BN components, who are part of a coalition with overt communal designs, to rise above communalistic politics to embrace multiracialism.

Is M'sia at the cusp of a true multiracial political framework?

The concern about whether M'sia is nearer to multiracial politics arises from the ongoing "talks" between a faction of PAS with UMNO on Malay unity. See http://www.malaysiakini.com/news/86542 and, particularly, Karim Raslan's take on it at the Star Online opinion piece, Nasharudin Mat Isa and Malay unity.

In this milieu, it will take the correct leaders to the MCA, MIC and Gerakan to engender multiracialism, unless their interests lie elsewhere... In the context of the MCA, is Ong Tee Keat the correct leader for the times?

UPDATE 7.30 p.m. The indications appear to be an Ong Tee Keat-Liow Tiong Lai ticket which would tend to confirm that outgoing President, Ong Ka Ting, favours Tee Keat for the MCA presidency. Read Malaysian Insider's report. It looks as though the Lone Ranger, having possibly found Tonto need not ride alone! To paraphrase Lord Palmerston; Politicians have no permanent friends and no permanent enemies. Only permanent interests.

Ong Tee Keat gunning for MCA No. 1

Ong Tee Keat's declaration of his candidacy for the MCA Presidency should be regarded as a heartening development even for neutral observers. Read the report in The Star Online entitled Ong to go for top post and http://www.malaysiakini.com/news/86407.

The square-jawed MCA leader has steered a relatively independent course in his political career in a party that is filled with cliques. For this, he has been branded a recalcitrant by many quarters in MCA. But, by so doing, he has provided a third option to many MCA members in the past.

Widely regarded as a gifted writer in Mandarin, Ong, was an award-winning columnist for Chinese daily Sin Chew Jit Poh. His articles ran from 1979 to 1986.

Other front-runners

Malaysiakini reports that the other front-runners are likely to include party secretary-general and Housing and Local Government Minister Ong Ka Chuan and Youth Chief and Health Minister Liow Tiong Lai.

It is also reported that despite resigning from his vice presidency due to a sex scandal, Dr. Chua Soi Lek has been paving his way back to the leadership platform and is said to be keen to contest for a top post.

There is also speculation that another former vice-president Chua Jui Meng is expected to join the fray after being nominated for the Sungai Abong Tengah branch chairperson's post by his supporters during a nomination process at the MCA Bakri division office in June.

Nomination day on July 22

MCA is the second largest component party in Barisan Nasional and it has a total of 191 divisions with keen campaigning expected in Johore, Penang, Selangor, Perak and Kuala Lumpur come nomination day on July 22.

Ong Tee Keat and the future of MCA

Ong Tee Keat should be regarded as the MCA leader who can heal the party's many rifts. He should also be regarded as the correct leader for the current national ethos, in the aftermath of GE2008 when MCA suffered crushing defeats in the many seats it contested both at State and Federal levels.

As an overtly communal party, the MCA is well and, truly, at the crossroads. If the party sticks doggedly to a communal platform, it will eventually find itself marginalised. The MCA needs to reinvent itself at a very fundamental level in order to be relevant in the nation-building discourse.

This blog has previously criticised the stand taken by certain MCA leaders such as Yap Pian Hon for saying that the MCA cannot be multiracial until and, unless, UMNO turns multiracial. Read MCA cannot turn multiracial until UMNO does???

But, unlike the other more guarded (and, therefore, pro-status quo) MCA leaders Ong Tee Keat has courageously stated on record that MCA Needs To Be Multiracial Or Face Risk Of Eventual Extinction. This is what stands Ong Tee Keat heads-and-shoulders above the other MCA leaders. This strategic view of the future of MCA is very crucial for the following reasons.

The need for a multiracial platform for MCA

As Malaysian voters become better educated and better informed the BN's traditional communal discourse on economic development and education is losing its appeal. This may be one key inference that MCA should draw from GE2008.

If the MCA adopts a wait-and-see approach to morphing into a more multiracial party, it confirms to all that the MCA is very much a subservient junior partner to UMNO within the BN coalition. All Malaysians cannot have failed to notice the peon-like expression on Ong Ka Ting's face on national television whenever Pak Lah or Najib is in the foreground. OKT perpetually looks lost and awaiting instructions from his UMNO bosses. This perception must change.

It can only change if the MCA steers a more independent, yet harmonious course within the BN superstructure with a multiracial platform. This does not mean that MCA will necessarily abandon the causes it has espoused. For example, in any dialogue on the welfare of vernacular schools, just add the Tamil schools into the mix; in any dialogue on poverty eradication, MCA should add the plight of Malay fishermen or Indian estate workers into the dialogue.

The multiracial discourse is something that Ong Tee Keat can lead the MCA into with vibrancy, imagination and courage. More importantly, it will engender positive change in the party and keep the party strong and virile within the BN.

Penang's public transportation: A radical solution

I like radical solutions. They push the envelope of conventional thinking. I want to propose a radical funding solution for the Penangites for Trams Campaign. I very much believe that this Campaign makes absolute sense in the context of Penang Island which is compact, densely populated and, a magnet for tourists. The general merits of the Campaign are very well set out in the URL link above. It is unnecessary for me to go into it.

Instead, I want to address only a few key issues that, in my humble view, will advance the cause of the Campaign. I hope the Campaign members will take this up and, I will be happy to embellish and develop the propositions, if called upon.

1. Set up a Penang Tram Foundation

The Campaign needs to go beyond the ranting and platitudes and step up the process. This can be done by incorporating a company limited by guarantee. I'm suggesting the name Penang Tram Foundation.

The basic charter of the Foundation is simply to promote and establish a public tram system for Penang.

2. Sidestepping the thicket of legalities

The Foundation, being a private entity (as opposed to the Penang State Government) has a just cause in the public interest to propose the establishment of a comprehensive tram system for Penang. The Foundation can meet the constitutional issues on infrastructure development being under the federal government by sending a formal proposal in the public interest.

3. Funding methodology: Public lottery

This is where I get radical. The Foundation should establish a public lottery to partially fund and finance the initial studies and surveys on the tram routes, the construction issues and tram technology to be deployed. The Penang Tram Lottery (a working name) will also be used to fund and finance the construction of the tram route, pay for any land acquisition required to create the route, the acquisition of the trams and, the subsequent tram operations.

4. Rationale for public lottery as a public finance device

The Campaign is clearly promoting the tram idea because it ameliorates the public transportation woes of Penang. It is a public-interest proposition since public transportation is a Public Good. And, if the federal government is reticent about solving the obvious public transportation woes of Penang, then the Foundation is a good vehicle to formalise the Campaign.

A public lottery is a form of public finance. It's economic merits are manifold if the goal is to create a public good. For a more technical economic analysis of the merits of lotteries as a means of financing public goods, please read John Morgan (of Princeton University) in an article entitled Financing Public Goods by Means of Lotteries.

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As I said, I like radical solutions. I very much believe that the issue of public transportation in Penang is a very serious matter that is already affecting the economic competitiveness of the state. The poor public transportation infrastructure is also having a deleterious effect on Penang's tourism.

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See also a related blog entry made earlier that provides a wider context to the public finance via public lottery proposition contained above at The Malaysian problem with privatisation of public goods.

LATEST UPDATE: Anwar's Press Statement

Please see the English version that was inserted by Anon 6:45 p.m. in my previous entry. The URL link to the BM version is at Kenyataan Media Pasca Penahanan

Decoupling

Yes, I'm being naughty with the title-caption. I did realise that, taken in the context of current affairs hitherto, decoupling will be taken to be a pejorative word that describes certain political leaders extricating themselves from the non-gender-specific nether region of their erstwhile partners. But that is not the thrust of this blog entry (stop it! stop the puns!).

What I want to highlight this time around is the hallucenogenic effect that financial analysts and financial writers can have on investor sentiments. In this case, the example is the myth that Asian economies were in a position to elect whether, or not, to decouple from the ailing and moribund US economy even way back in December, 2007.

Will the following categories of persons please read the link that immediately follows the list; amnesiacs, selective amnesiacs, voluntary amnesiacs (i.e. those who choose to forget because the memory was too painful) and those who claim plain ignorance, read this first.

Being Rip van Winkle?

When some of us first read about the angle of Asian economies having reached an apotheosis of economic growth, maturity and mutual consumption, we must have immediately wondered if we had become the proverbial Rip van Winkle, having completely missed this phenomenon of decoupling, in the context of Asian economic development.

The hypothesis of decoupling is the proposition that European and Asian economies, especially emerging ones, have broadened and deepened to the point that they no longer depend on the US for growth, leaving them insulated from a severe slowdown there, even a fully fledged recession. Faith in the concept generated strong outperformance for stocks outside the US.

In January 2008 as fears of recession mounted in the US stocks declined heavily. But, Lo! And, behold! Contrary to what the decouplers would have expected, the losses were greater outside the US, with the worst experienced in emerging markets and developed economies like Germany and Japan. Exports make up especially large portions of economic activity in those places, but that was not supposed to matter anymore in a decoupled world because domestic activity was thought to be so robust. Read this in Wikipedia.

And so, the myth of decoupling was very quickly busted. Read Why the US Economy Still Matters for the run-down on the bursting of the myth.

The moral

We should be leery of the spin made by analysts that make a living from investment houses and brokerages or, at the very least, place a huge caveat and weigh what the reports say very carefully. Often, these reports are used to justify a "Hold" position while graduated selling of stock and investment positions are taking place. At other times, these reports generate a classic herd behaviour on the part of the investment community.

The myth of decoupling was perpetuated for many months. I believe many investors who would have taken shorter positions i.e. slowly sold down their investment holdings in regional bourses actually held on or, worse, increased their holdings. So, to the retail investors out there, the world of stock brokerages and investment funds may be awesome with their lingos and numbers-spewing prowess, but at day's end you have to use your innate cow sense because behind the full glass walls, leather upholstery and double-Bloomberg screens, there is a bunch of 20-year old finance graduates (called researchers) who are only crystalball-gazing and reading tea leaves. But, Boy! are they good at stirring and spinning their financial yarns!

Updates from news sites

Given the high traffic at certain sites that may frustrate those of us who want the latest developments, I am attaching some links on latest developments for the edification of visitors to this blog. The reports are all from Malaysian Insider.

Anwar freed on bail

Raja Petra arrested

Anwar back at home

Post Apocalypse

10.30 a.m. Thursday July 17 : Just heard that Anwar just posted his bail. That means he can leave the custody of the Police and rejoin his worried family.
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While we are all waiting breathlessly for any breaking news on Anwar's travails at the KL Police HQ, I am taking some downtime to share this insightful piece by Lev Grossman who makes some insightful observations about the way in which angry or hate comments are made by visitors to blogs or websites that permit comments.

This blog has generally escaped too many hate comments probably because the contents are generally dull and un-sensational, dealing with more complicated and arcane economic policy matters. Here's an extract of Grossman's piece:-

The horribleness of commenters isn't really a mystery: Internet anonymity is disinhibiting, and people are basically mean anyway. Nor is it a mystery why the people who run websites put up with commenters: the economic model for Internet content is based on advertising, which means it's based on traffic volume, and comments mean traffic. They're part of the things that make online publishing work. TIME.com enables comments on its blogs, including mine.) It's just hard to tell whether they're ruining the Web faster than they can save it.

Commenters tend to respond with surprise--they're shocked, shocked!--when people call them on being not nice. In their social universe, this kind of rhetorical slap-fighting is just how you do business, and anybody who feels otherwise is thin-skinned and humorless. As lame and self-serving as this excuse is, we can learn something from taking it at face value. Maybe commenters are just on one side of a cultural disconnect between two incompatible ideas of what the social conventions of the Internet should be. One is based on the standards of real-world, off-line politeness. The other is a kind of communal game in which whoever is cleverest and pushes the most buttons wins.

This disconnect is probably just temporary. In another decade or two, one side or the other will have won out, and then we'll all be on the same page, and we won't have this kind of misunderstanding anymore.

I invite you to read the entire article entitled, Post Apocalypse.

Petronas: The RM202 billion question

Diving straight into the matter, take a look at People need to know where Petronas’ contribution to Govt has gone in The Star Online today. Jagdev Singh Sidhu's op-ed piece highlights a few things that bears reproducing here.

Petronas’ contribution to the Government’s revenue from FY04 to FY07 was RM140bil. Including the latest financial year's payment of RM62.8bil, the total would be RM202 billion. That was slightly more than half of the total RM403bil it had paid the Government since its inception in 1974.

And, the report says further, that, Based on the latest payment of RM62.8bil , Petronas said its contribution to the Government’s revenue was 44%. If the taxes of all the other oil and gas companies were added, then the oil and gas sector would account for slightly more than half of total government revenue.

The RM202 billion question posed by the report is, They (the analysts) also wonder: How wisely has the windfall over the past few years been actually spent?

Sometimes, a question posed at the wrong time will fall on deaf ears. In the current national ethos, the question of the manner in which the Petronas largesse has been utilised between 2004 to 2008 is a very compelling one indeed.

But, unlike the usual pithy (dare I hope?), opinionated and ascerbic analysis, I wish to draw your kind attention to the tireless effort of this tenacious man by giving a Google URL on the many times during which he has raised the issue of the manner in which Petronas' largesse has been used/abused by the BN federal govt. I must declare that I'm not a fan of his, nor do I think his level of analysis has been up to mark at times (maybe due to political necessity) but, I admire this man's chops, his gumption, his industriousness but, not his shrill stridency or his speaking style. But to give credit where credit is due, ladies and gentlemen, I give you Lim Kit Siang.

Anwar the clear winner in debate with Ahmad Shabery

Anwar is the clear winner in the debate. Ahmad Shabery's posture was to be the "protector" of Petronas. But Anwar made it clear he wasn't attacking Petronas and, in fact, lauded its achievements. That left Ahmad Shabery with making personal and barbed remarks about Anwar's rebellious history.

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OK, I'm biased. I'm biased because Anwar raised many of the issues raised in this blog, particularly the IPPs.

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But on a more objective note, tonight's debate reminds me of the Kennedy-Nixon televised debates in the sense that Anwar is outside the mainstream presently. In the M'sian context, if you're out of the mainstream you're out (not counting the blogosphere, of course).

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The televised debate brought a poised, cool, intelligent, articulate and persuasive Anwar into the living rooms of all M'sians. Here was the "monster", the "Devil incarnate". But, guess what? He had no horns. He was not spewing smoke and flames.

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Instead he was cool as a cucumber. He had a boyish grin. He looked charismatic. Hell! He WAS charismatic.

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Given that he has the sodomy charges against him, given that he has an appointment with the police tomorrow, Anwar's poise made him the winner tonight. It's my opinion anyway.

Can Penang get any of the RM8.3 billion?

I really don't care that I sound completely pedestrian about what I'm going to say. When I read that Petronas posts record profit, declares RM6b dividend to govt and, Govt to get RM2.3b from profit levy on palm oil I can't help posing the question, "How is the RM8.3 billion going to be utilised?"

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This is the era of transparency and accountability. Can MOF2, Nor Yakcop please explain the straighthrough usage and application of this RM8.3 billion?

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ALL M'sians know that the RM8.3 billion isn't all going to fuel subsidies. ALL M'sians know that the RM8.3 billion isn't going to Penang for the projects mentioned in my blog entry, Guan Eng wants RM4.7 billion cash.

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Meanwhile, at the Parliament, Guan Eng is trying to file his motion ON BEHALF OF PENANGITES, to secure the precious RM4.7 billion back for Penang. See the report at The Edge Daily, Guan Eng to file motion on reinstatement of projects.

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Where is the fairness on the part of the BN federal government?

Inflation and stagflation rather than interest rate hike worries financial market

Many analysts do not expect Bank Negara to raise interest rates at its July 25 monetary policy meeting and see the lacklustre bond market as affected more by the issue of inflation and windfall tax. Analysts are not expecting a rise in overnight policy rate (OPR, now at 3.5%) on July 25, but consumer price index numbers (an indicator of inflation) from June to December are expected to average at 7% to 8%. This blog had predicted an 8% CPI on 24 June 2008, against Bank Negara's forecast of 5%, read here.
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There are indications that Bank Negara is taking the correct view that a rise in interest rates will have adverse implications of dampening consumption. More analysts are now joining the bandwagon to say that there is a real risk of stagflation in Malaysia. So a rise in interest rates will impact adversely on consumption and, therefore, economic growth.

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A hike in interest rates may be useful as a tool to control inflation in an overheating economy, but that certainly isn't the case in the present environment. Read Star Online's report, Inflation rather than rate hike worries bond market.

MANDELA: 8 Leadership Lessons

This week's Time magazine cover features Nelson Mandela at 90 years of age. It contains 8 leadership lessons that current M'sian political leaders of any shade and, business leaders, will do well to abide by.

1. Courage is not the absence of fear — it's inspiring others to move beyond it.

2. Lead from the front — but don't leave your base behind.

3. Lead from the back — and let others believe they are in front.

4. Know your enemy — and learn about his favorite sport.

5. Keep your friends close — and your rivals even closer.

6. Appearances matter — and remember to smile.

7. Nothing is black or white.

8. Quitting is leading too.

Read Mandela: His 8 Lessons of Leadership at Time.Com.

The Role of a Loyal Opposition

Yes, the "no-confidence" motion was rejected. Malaysiakini has reported it at http://www.malaysiakini.com/news/86051. For a more technical explanation see Wee Choo Keong's description of procedural issues.
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"No confidence" motions in Parliament

Such motions are not unusual in any Parliament. Although the likelihood of success is slim particularly with a fairly disciplined coalition like BN, which is replete with bovine MPs, such motions are tabled by any Opposition to highlight the shortcomings of the sitting Prime Minister.

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The role of a loyal Opposition

The point of this blog entry is to highlight the role of a loyal Opposition. Never before, in Malaysia's political history has there ever been an Opposition numbering 82. Never before, has the government party, be it the Alliance or the Barisan Nasional, been less than 2/3rds dominant.

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While many M'sians have been cheered by this watershed event, the inroad made by Pakatan Rakyat come with conditions attached by the rakyat.

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In the first decade of Merdeka, the likes of Lee Kuan Yew (Yes! LKY himself), Lim Chong Eu, Tan Chee Khoon, the Seenivasagam brothers and so on - an honourable roll call - were at pains to project themselves as a "loyal Opposition" in Parliamentary debates.

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What is a "loyal Opposition"?

This blogger takes the view that a "loyal Opposition" is one that upholds the Federal Constitution; one that bows with bended knee to the M'sian flag; one that unashamedly displays absolute patriotism to the multiracial, multicultural and multifaith nation that M'sia is.

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What it entails, at its most fundamental form, is the protection of the rights of ALL M'sians.

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In this case, I am highlighting the right of ALL M'sians to a robust economy and, a right to a decent livelihood and, way of life.

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The challenges to the M'sian economy

Although, the de facto leader of PKR and Pakatan, Anwar Ibrahim has spoken of a New Economic Agenda the Devil, as we know, is in the details. He has highlighted that M'sia's Gini coefficient has deteriorated and that M'sia's economy must be non-discriminatory on ethnicity but discriminatory on income.

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But since then, M'sians have been treated to dribs and drabs of ad hoc commentary on specific economic issues as they arise. Such an approach does not sit well with many M'sians. Such an approach may be symptomatic of the larger underlying concern that the patchwork quilt known as Pakatan Rakyat has to step up to its responsibilities as a loyal Opposition; loyal to ALL M'sians.

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The need for a Shadow Cabinet

This blog submits that Pakatan Rakyat's loyalty can only be manifested in the form of a Shadow Cabinet. The salutary effect of a Shadow Cabinet is that it sends a clear message to ALL M'sians that PR has gotten its act together.

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Another benefit, more impactful to M'sians, is that designated PR MPs, as Shadow Ministers with specific portfolios that match each Ministerial portfolio, will have the responsibility to monitor and audit each Ministry. This will engender a structured political discourse that will allow M'sians to measure the BN with PR.

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Only then can PR claim to truly be a GOVERNMENT-IN-WAITING.

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The situation is urgent

This blog makes the call for the formation of a Shadow Cabinet because the external global economic turmoil has found its way to our shores already. The time is nigh for a concerted bi-partisan approach to examine and propose economic strategies for the M'sian economy to deal with inflation (both asset inflation and consumer price inflation) exemplified by rising prices of commodities and food and, the fiscal policies to be put in place to augment or adjust the 9MP gameplan.

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While M'sians are fully aware that both BN and PR are playing gamesmanship and brinksmanship in the political arena, M'sians desire an exhibition of true maturity by politicians from both sides of the Parliamentary aisle in the matter of M'sia's economic challenges.

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The question that this blog puts to PR is, Are you ready to be a loyal Opposition?

Stagflation, Inflation and Interest Rates

Is stagflation inevitable for Malaysia? Some time ago, this blog had warned about stagflation, see An economic agenda to consider. The concern over stagflation is now gaining traction. See for instance the Star Online report on the challenges facing the construction and housing sector, Strategies to survive the property slowdown.

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Stagflation is a portmanteau word that describes an economic illness wherein inflation combined with stagnation lock a society into slow-to-negative economic growth and rising unemployment, invariably including recession.

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Need for coordinated fiscal and monetary policies

What worries me is whether the M'sian economic strategists are able to craft a harmonious set of monetary and fiscal policies to combat this likely phenomenon. For example, there is evidence that Bank Negara may introduce an interest rate hike or a series of graduated interest rate hikes to control inflationary pressures. See this Star Online report, Can interest rate hike help fight inflation?

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But, interest rate hikes affect lending and savings which are useful if there is an asset inflation such as property booms. Granted that in the preceding years, Malaysia has seen bullish property prices.

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However, we are now faced with consumer price inflation in the form of higher fuel prices and food prices. Such a phenomenon is immune to interest rate hikes.

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Furthermore, there is a good chance that interest rate hikes will further dampen economic growth at a time when the government itself is in the mood for fiscal pump-priming to keep economic growth from contracting to below 5.5% of GDP.

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The government economic planners - meaning Bank Negara and the Economic Planning Unit, in particular - need to seriously look at coordinating a proper menu of policies and actions.

Roadblocks set up amid protest fears

I have already offered my views on today's proposed "no-confidence" motion at this blog entry. So, the Malaysiakini report Roadblocks set up amid protest fears raises interesting questions about the psychological war that the BN government is initiating by the alarmist tactic of roadblocks and court orders.

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The BN/govt security team appears to have learnt from the tactical playbook so successfully used against Protes 2008 where the protesters were successfully herded and corralled into a stadium instead of an open area. Threats of police action were also made then. This time around, we can see the level of sophistication increase with the added legitimacy of a court order. This is what is meant by the phrase when giants learn to dance, I guess.

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The "no-confdence" vote

As for the "no-confidence" vote itself, in lieu of quoting myself ad nauseam I offer an extract from Malaysiakini reporting that, "Two rebel lawmakers from Abdullah's ruling BN coalition have vowed to back the opposition debate. Sabah Progressive Party (Sapp) parliamentarians Eric Enchin Majimbun and Chua Soon Bui have pledged their vote for an opposition motion of no-confidence against Abdullah."

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I also want to highlight the Malaysian Insider's analysis which starts with the tantalising question, "Will there be a motion of no confidence against the Prime Minister today? That depends on the Dewan Rakyat Speaker. Will the rebel Sabah Progressive Party (SAPP) have its two lawmakers there to support such a motion? That depends on the duo after their anti-climatic no-show the first time around on June 24. But if both do happen, notwithstanding it’s a motion that does not call for a vote, can SAPP's move force Datuk Seri Abdullah Ahmad Badawi's hand to whittle his Barisan Nasional coalition to his favourite number – 13? 

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It's a tough call because BN leaders know SAPP president Datuk Yong Teck Lee wants his tiny Chinese-based party to be kicked out of the coalition instead of quitting, in an effort to underscore his assertion that Sabahans are treated badly and their grouses summarily dismissed in far-off Putrajaya. That appears to be the former Sabah chief minister's end-game. He won't quit BN but wants Abdullah to do so and if the embattled prime minister won't go, then BN must kick out the rebel party and turn it into instant heroes.-

For the full report read Can SAPP make BN break and be a hero this time?. 

Windfall tax seen hitting fund raising

Nazir Razak of CIMB is quoted in The Star newspaper Windfall tax seen hitting fund raising as saying that the windfall tax tax would affect raising funds for infrastructure projects.

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IPPs accounted for 21% of all ringgit-denominated bonds issued. Said Nazir, “There're no winners in this tax because bond yields have gone up, volume has come down and investor sentiments have been affected”.

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Nazir said the implication far exceeded any money the Government could hope to raise from the tax. He said the Government needed to deal with the windfall tax issue quickly because of its possible impact on the bond markets since Malaysia historically had the most successful bond market in the developing world. “This tax is like shooting the goose that lays the golden eggs” he said.

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Govt urged to re-look windfall tax

At the same time, The Star's columnist Daljit Desi writes in a column entitled, Govt needs a re-look at windfall levy for IPPs, that it is difficult at this stage to ascertain which option would be better for independent power producers (IPPs) – paying the windfall tax or renegotiating power purchase agreements (PPAs).

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Desi writes that if the terms and conditions of the PPAs are not favourable and would affect their earnings, the only option IPPs have is to bite the bullet – the windfall levy.

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She also put the view that fund managers said the levy could negatively impact the local investment landscape and, that many feel the Government should defer the levy and conduct a detailed study first as such a tax would affect the confidence of local as well as foreign investors.

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Further spin control by proxies of the IPPs?

Nazir, being from CIMB, would naturally be concerned about the impact that the windfall tax may have on the financial markets. CIMB is, after all, the biggest beneficiary of corporate fundraising exercises in recent years.

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What I'm rather perturbed by is Desi's observation that the IPPs have 2 choices - either to accept the windfall tax or, renegotiate the PPAs. Are the IPPs being given this choice?

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I should hope not! I believe that the IPPs should be subjected to BOTH windfall tax and renegotiation of the PPAs.

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Nazir calling the IPPs the golden goose only points to the obvious fact that the IPPs are, indeed, golden geese laying golden eggs only for the financial intermediaries like CIMB and, of course, the owners of the IPPs. Nazir, of course, has the luxury of pontificating while enjoying the largesse of corporate and financial deals from IPPs.

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A harmonious solution to the "conundrum"

The solution that benefits everyone including the owners of the IPPs is available. See my humble suggestion in Tenaga to acquire all IPPs . This solution will allay Nazir's fears about CIMB as an intermediary and, it will excite the fund managers since the acquisition of all IPPs by Tenaga Nasional will nicely dovetail into the largest bond and fundraising exercise ever seen in M'sia and, Southeast Asia!

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I know it's a radical idea. But if you give it some thought, you may find that it has merits from the economic, social and, even, political angles. The only "losers" are the owners of IPPs. And, they don't lose anything except opportunity because they will be selling their shareholding of the IPPs. They can cry all the way to the bank (CIMB?) and wallow in their misery in their personal bank vaults like Scrooge McDuck!

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The end result is that Tenaga Nasional will be left to run the generation AND distribution of electricity. Most, if not all, economists define electricity as public goods. It should NOT be left to the hands of private profiteers. The polyarchy that controls the IPPs must be disbanded through this process to enable the benefits of the electricity generation industry to pass through to the general public.

Anti-Corruption Agency gets prosecution powers

The report in MALAYSIAKINI: Anti-Corruption Agency gets prosecution powers suggests that the Malaysian Bar's view in Review A-G's role 'to avoid conflict' has been taken into consideration by the federal government.

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The Malaysian Bar, through its President, has stated that "The position of public prosecutor should be separate from the A-G to avoid any potential of conflict."

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Ex-senior ACA officer Mohamad Ramli Abdul Manan had stated that since 1902, the power to institute and conduct criminal proceedings was given to the public prosecutor, deputy public prosecutors and other enforcement agencies while the A-G was conferred similar powers under Article 145 (3) of the Federal Constitution since 1957. He said a misinterpretation of Article 145(3) after a 1997 court ruling now prevented public statutory bodies like the Employees Provident Fund, Securities Commission, Road Transport Department and local authorities to bring criminal charges against violators without permission of the A-G. Ramli added that the A-G was only given discretionary powers under the constitution for him to interfere and see that justice was done.

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Article 135(3) provides that, "The Attorney General shall have power, exercisable at his discretion, to institute, conduct or discontinue any proceedings for an offence, other than proceedings before a Syariah court, a native court or a court-martial".

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Will this decision lend more credence to the report in MALAYSIAKINI: ACA quizzes IGP Musa, AG Gani? As always, we shall have to wait and see.

Pak Lah wants time to finish his projects

When he was Prime Minister of Britain, Harold Wilson was quoted as saying, "A week is a long time in politics". What would Wilson make of the 2 years that Pak Lah has set for the balance of his tenure as PM of M'sia? There are many signs that portend very dark clouds not just for Najib, the PM-in-waiting but, also for Pak Lah himself during this "lame duck" 24 months to come.
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Firstly,MALAYSIAKINI: Ku Li says the handover is unconstitutional in the context of UMNO's own constitution. Ku Li also deftly side-stepped any potential conflict with Najib by saying that the challenge is for the Presidency which will leave Najib intact.
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Secondly,MALAYSIAKINI: Pakatan files no-confidence motion in Parliament which will depend on how Speaker Pandikar Amin rules on whether the tabling of the motion if it is either not specific, not urgent or not a matter of public importance. He, however, did confirm that there can be no call to vote under Standing Order 18, which only allows for an hour's debate on an emergency motion. The likely scenario is a "no go" by the Speaker.

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Thirdly, 2nd liners in UMNO are showing rumblings of discontent. See Muhyiddin: "Some say transition period too long".

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My take on it? Given the current constitutional structure of UMNO that favours incumbents, Ku Li is likely to be left flapping in the wind.

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The "no-confidence" motion is likely to be a no-hoper under the Parliamentary Rules that favours the party in majority.

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Conclusion, I offer Shakespeare's play entitled, "Much Ado About Nothing". But, that is not to trivialise these important political developments. The importance of the correct political leadership is clearly evident when we measure the policy flip-flops under Pak Lah with the terrible certainty of direction under the draconian, benevolent despotism of Dr M. Like a commentator asked me in an earlier blog entry, whose question I now paraphrase, "Is there a third possibility?"

PM to declare no contest for UMNO top 2 and etc.

Words and phrases association game based on headlines today...

Pak Lah to quit in June 2010 ... why take so long, one?

PM to declare no contest for UMNO top 2 ... where got democracy like that?

Pakatan plans no confidence move ... why-ah? Yong got jammed oreddy issit?

Meet my father, urges Anwar's daughter ... better to say "Meet my mother", then Ozzie PM can. Mother is Opposition Leader, father can wait behind curtains-lor!

Cracking the whip at UMNO ... why Singapore newspaper like S&M language? Mebbe becos got SM Lee issit?

Kinabatangan MP: Yes, I did it but... this guy show bad sign in Parlimen, how can?

Yen Yen backs castration for repeat rapists... Mebbe good punishment for Kinabatangan?

Advance apologies for offending anyone's sensitivities. The above entries are from my alter ego Balakong Joe who does not know the meaning of decorum. Normal programming will resume in due course.

State, Communities and Forests in Contemporary Borneo

I want to share this academic work, State, Communities and Forests in Contemporary Borneo with anyone who is interested in the environmental challenges and the displacement of native communities in Borneo, which encompasses the Malaysian states of Sabah and Sarawak and Indonesian Kalimantan. The kingdom of Brunei does not form part of this study. Published by the Australian National University, the ANU has been generous in sharing this outstanding piece online. The contributors are outstanding academics and they address social, economic, environmental, legal and political issues affecting deforestation and displacement of native communities in Borneo.

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If you are only interested in Sarawak, go to Fadzilah Majid Cooke, Ramy Bulan and Mogens Pedersen et al.

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If you are only interested in Sabah, go to Justine Vaz.

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To be honest, I haven't finished reading this compendious work. It is just a breathtaking albeit academic study. But the issues are serious and, think about it, every single day native communities in Borneo are witnessing the destruction of their ancestral and customary lands. And, the shame of it all is that these communities do not receive adequate compensation for being displaced.

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This is the point that I have repeatedly raised in various blog entries, particularly the piece entitled Sarawak NCR Land: The heavy price of progress and, generally under the label NCR.

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I must confess that I'm not a native nor am I a Sarawakian or Sabahan. But I'm Malaysian and, I hate to see what's been happening. In West Malaysia the decimation of Orang Asli communities is still continuing although greater sensitisation is slowly creeping in...very slowly.

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My innate sense of fairplay demands that I write and speak out about the plight of the native communities of Malaysia. If I can help to articulate their plight and help to frame the discourse on the rights of native communities and the concomitant impact that their displacement causes on the environment, then I am grateful that my education and writing skills are not wasted.

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Do ignore any hint of sanctimoniousness, if any, on my part. Do take the trouble to read the resources to get a better understanding of the issues affecting the native communities of Borneo and the environmental issues arising from their displacement. Progress should not come at any price. Progress must be a considered activity especially if it affects human beings.

No bloggers, no cry?

It is too irresistable not to make the following suggestion arising from MALAYSIAKINI: No bloggers no cry?. This is actually a proposal for the consideration of the BN strategists who appear to be in despair and, in sixes-and-sevens over the phenomenon of bloggers who tend to be less than sympathetic to the BN view of the world.

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Option 1

Make the economy grow as fast as possible, say 16% GDP growth per annum for the next 10 years. This will enrich all M'sians, even bloggers, to the point that all bloggers want to do is to blog about their travels, fine dining and new experiences in life.

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Option 2 (to be considered only if Option 1 is not possible)

Set aside RM100 million from the slush fund (you know it's there, c'mon!). Identify M'sian political/current affairs bloggers who have reached 1,000,000 hits. With great discretion and circumspection (NOT circumcision!) get 3rd parties to approach these bloggers with offers of assignments. Let me give examples:-

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Rocky - get a foreign publisher of magazines or newspapers to hire him and assign him to report on African matters IN Africa. The contract should be for 2 years (minimum). RM1,000,000-00 gross should set the package right.

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Susan Loone - ditto, except in South America.

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Haris Ibrahim - get an international human rights body to appoint him as a general counsel for human rights in, say, Afghanistan, Pakistan, Turkmenistan and other "go-stan" areas. Same package, same time-frame.

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The list goes on. But you get the picture. (P.S. add Patrick Teoh too. NIAMAH is slightly below 1,000,000 but his rants are quite terrible and too sarcastic. Give him some acting and stage production gigs in Los Angeles or New York. It HAS to be those places because as an actor he can be a prima donna at times.)

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So, just keep everyone as busy as possible with new livelihood and new directions. Money has a way of moderating people's viewpoints. And, if we do it in a dignified and meaningful way that is still consistent with their principal interests and calling, then the end result is the "strategy for the neutralisation of political bloggers".

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Don't worry that this Memo is out in the open for now. Wait another 3 to 6 months, people will forget. Malaysians mudah lupa. Then, you can implement it.

IPP association urges govt to reconsider windfall levy

Meanwhile, the TheEdgeDaily reported that the Association of IPPs in Malaysia has urged the BN federal government to review and defer the imposition of the windfall profit levy on them, pending a more exhaustive economic impact assessment on its far reaching implications for the country as well as the independent power producers (IPPs).
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The IPP Association said it had consulted key financial institutions and experts and the feedback on the move to impose the Windfall Profit Levy (Electricity) Order 2008 would not only be detrimental to the IPPs, but to the overall economy and investor confidence. A windfall tax of 30% is to be charged on any excess return of assets over the threshold of 9%.

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It said in 2006, the value of ringgit bonds and notes issued by the IPP sector was estimated to be in the region of RM20 billion, making the sector one of the largest issuers of Islamic bonds in the country.

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It added that the market's acceptance and confidence in the bonds were premised on a clear understanding of the IPPs' operating environment, business models and contractual obligations. The IPP Association cautioned that any changes to those fundamentals could precipitate a default in bond payments and this in turn would have an adverse impact and "multiplier effects" on the country's financial markets.

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The IPP Association said bonds issued by the IPPs would immediately face downgrading; IPP bond investors, including many domestic institutional investors, may in turn be forced to liquidate their bond holdings; and the resulting loss of investor confidence in the capital market would cause further downgrading of other securities precipitating a major sell-off.

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The market reaction on the proposed windfall tax has already impacted Tanjong plc whose share price has dropped from a high of RM19.90 about this time last year to the current RM12.20.

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The dire warning by the IPP Association belies the fact that IPPs represent an artifice created during the era of privatisation. The Power Purchase Agreements (PPA) that has benefitted the IPPs at the expense of Tenaga Nasional and end-consumers have been conveniently forgotten.

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A truer picture will emerge if the IPP Association is prepared to release copies of all the PPAs for public scrutiny. I suspect that the Association will say that the PPAs are subject to the odious Official Secrets Act while the BN federal govt will say that it needs to consult the IPPs before considering whether to release bits and pieces of information on the PPA.

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If the IPPs are prepared to be responsible corporate citizens and, if the BN federal govt truly understands the message of the electorate in GE2008, they will mutually agree to release to the public copies of the PPAs.

MALAYSIAKINI: MPs query 'extreme profits' for IPPs

UPDATE (July 20, 2008): There is an excellent study on the M'sian IPP experience done in 2005 by Jeff Rector at Stanford University.The study is very complete and it is nuanced by including the Great Blackout of 1992 that created the impetus for the privatisation of electricity supply and, some political subtext to the IPP saga. Read The IPP Investment Experience in Malaysia.

The unfair Power Purchase Agreement (PPA) between the Independent Power Producers (IPP) and Tenaga is finally getting Parliamentary scrutiny.

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In the report MALAYSIAKINI: MPs query 'extreme profits' for IPPs MPs have started to call for a review of the PPAs. I had blogged about this in An economic agenda to consider.

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The Mkini report by Fauwaz Abdul Aziz states, "I want to ask now whether we will review the extreme revenues going to IPPs or whether, if there are other reasons for this, the government would take over the IPPs that are operating presently," said Ahmad Hamzah (BN-Jasin).

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In his reply to Lim Guan Eng (DAP-Bagan), Deputy Minister in the Prime Minister’s Department SK Devamany revealed that for the financial year 2006/2007, IPPs Segari Energy Ventures Sdn Bhd and YTL Power Generation Sdn Bhd pulled in pre-tax profits of RM614.883 billion and RM252.033 billion respectively.

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TNB Janamanjung Sdn Bhd and Tanjung Bin Power Sdn Bhd, meanwhile, earned pre-tax profits of RM860.498 billion and RM332.892 billion, respectively. Among the other big earning IPPs, Powertek Bhd and Genting Sanyen Power Sdn Bhd earned RM372.6 billion and RM312.275, respectively.

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Devamany also disclosed that 10 IPPs, from May 1997 to March 2008, received RM35.695 billion in gas subsidies from national petroleum firm Petronas. "

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In my earlier blog entry I had taken a harder stand. I extract below my earlier blog entry:

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Tenaga to acquire all IPPs
IPPs are protected by the unfair Power Purchase Agreements ("PPA") which forces Tenaga Nasional to purchase all power generated by the IPPs. We are told that Petronas is also subsidising the fuel consumed by these IPPs. Consumers are being forced to absorb the increased costs via higher electricity tariffs. This is classic rent-seeking behaviour.
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The government must do a work-out for Tenaga to acquire the IPPs. Tenaga can do a massive bond-raising exercise to acquire the IPPs with the government to stand as a sovereign guarantor. The consolidated cashflow from the IPPs and Tenaga's own operations combined with the sovereign guarantee should make these bonds attractive and be given a triple-A rating.
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I know there are brickbats thrown at Tenaga. But it is still a better vehicle that can be audited as opposed to the opaque structure that currently exists. Furthermore, the PPAs are under the Official Secrets Act, apparently. That is a sham!

Guan Eng wants RM4.7 billion CASH!

Lim Guan Eng, the Penang Chief Minister now demands RM4.7 billion cash allocation from the Federal Government in lieu of the Federal Govt's cancellation of the RM2 billion monorail, RM1.5 billion Penang Outer Ring Road, RM1.1 billion Mengkuang Dam expansion and RM100 million in lesser projects including the Penang Hill furnicular train. See MALAYSIAKINI: CM: Give us the cash, we'll do our own projects.

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The RM4.7 billion originally formed part of an RM6.152 billion allocation for Penang's development under the 9MP, which is 3.1% of the 9MP's RM200 billion budget. The Penang state govt has plans to use the RM4.7 billion principally for food agricultural development and projects that addresses the alleviation of the financial burden of Penangites in this period of fuel price hike and rising food prices.

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Is this a fair request? I think it is and I'll tell you why.

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State govt cannot raise funds via borrowing

The Federal Constitution forbids state govts from directly raising funds via borrowing from third parties or the public (Sabah and Sarawak are not restricted in this way). State govts may only borrow from the Federal Govt. The question is, what if the Federal Govt refuses to lend the money? How will Penang fund its development?

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Where does the "savings" of RM4.7 billion go?

Only Pak Lah and Nor Yakcop knows. Will they bother to explain this? They have to explain where this "saving" goes to under the 9MP because the public has the right to know whether the alternative use of these funds have greater merit than Penang's claim to the allocation.

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Penang's contribution to the federal coffers

Penang has one of the largest Gross Domestic Product in Malaysia, probably second only to Selangor. Penang is a manufacturing, tourism and services hub. Businesses resident in Penang certainly contributes a sizeable revenue to the Federal Govt in the form of income tax, service tax, customs and excise duties. Isn't it illogical for the Federal Govt to slow down the economic development of Penang? This is especially so at a time when there are clear signs of an economic slowdown? Isn't this a case of cutting off the nose to spite the face?

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The BN federal govt should really review their political strategy. Their playbook appears to be to financially starve recalcitrant Pakatan-controlled states. They have done it on Kelantan and, previously, Sabah. This type of strategy reflects the arrogant use of power. Furthermore, when this strategy is used against a key economic state like Penang, it is not difficult to miss the message that BN is announcing is that it is prepared to injure Penang's economy to punish Penangites. In the process such an action will also impair the overall M'sian GDP. It's a crazy thing to do.

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I think Guan Eng should rightly be "obssessed" with the mis-allocation of the RM4.7 billion. And, I think the BN federal govt should practice a policy of engagement with the Penang state govt to consult with and, discuss, development options.

Dayak leadership stands up for NCR

Finally! Is James Masing of Parti Rakyat Sarawak finally acquiring a spine on the urgent matter of NCR land? The latest report by Tony Thien in MALAYSIAKINI shows a still tentative and hesitant James Masing saying, "We like the government to consider (a review of the policy on NCR land) because our party is rural-based so land will be an issue."

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Malaysiakini further reports what Tony learnt that Dayak members have spoken of their growing concern about threats to the future status of NCR lands, especially with the opening up of more lands for commercial oil palm plantations and, tree planting and harvesting schemes throughout Sarawak. There has been increasing conflicts between oil palm and timber companies and NCR land-owners comprising mostly Dayaks such as Iban, Orang Ulu and Bidayuh communities. There are now nearly 200 litigation cases by NCR land-owners pertaining to lands claims and damages to crops.

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I have written about NCR land issues on several occasions. The issues facing the Dayaks are serious and the race is now on between BN and Pakatan to woo the Dayak voters in the Sarawak State elections that is looming within the next 24 months.

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The question in the minds of most analysts is whether CM Taib will keep James Masing and PRS on a tight leash on the issue of NCR land. If Masing and PRS cannot articulate a clear policy on NCR land to the satisfaction of the Dayak electorate, then BN Sarawak may stand to lose many seats. Pakatan will, no doubt, be assembling a coherent NCR land policy package.

MALAYSIAKINI: It's the economy, stupid!

Like many M'sians I have been agog and repulsed (at the same time) at the gutter politics that has engulfed our beloved country. Many M'sians have begun to pine for the relatively serendipitous era of benevolent dictatorship under Dr M. Despite the absence of democratic space there was, at least - so these M'sians reason - certainty.

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Witness the Malaysiakini reports Rakyat 'sodomised' by government or Headlines online and so on and it will be apparent why many fair-minded M'sians feel the fatigue and fear of uncertainty. Add to it the economic realities of inflationary pressure from the fuel price hikes and rising food prices - add to it the dismal indication from Bursa Malaysia - add to it the indignation from feedback such as 'Politicians greedy for power' in Malaysiakini - you will, no doubt, get the bleak picture of a hotchpot of meandering emotions, mostly negative.

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But I honestly don't think we should be nostalgic for the previous era under Dr M. To consider a reversion would be like an ostrich sticking its head in the sand to avoid processing this new amount of data. We would be like a caged bird that fears the uncertainty that comes with flying out of an open cage. We would be like toddlers who feel the pain of a bad fall and want to crawl back into the dark and warm and cosy womb of the mother.

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On March 8, whether by design or by accident, the M'sian electorate voted for the possibility of change. My humble take on the sentiment exhibited on March 8 is, that the electorate wanted a change from a system that favoured the few over the many; a system that pampered the few while marginalising the many; a system that rewarded psychophantic behaviour over truth-telling behaviour; a system that favoured rent-seeking behaviour and ignored the inconvenience of greater economic competitiveness and, the list goes on.

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Sure, we were enthralled by the oratory of Anwar, Hadi, Kit Siang, Guan Eng and Husam. Sure we found the likes of Hannah and Nie Ching fresh and cute. But to say that such phenomena was the tipping point belies the real truth.

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The truth may be (please take note BN think-tanks and strategists) the genuine feeling that the system is rotting. The system is rotting if the Prime Minister announces a policy, say, on Police reform but fails to see it through; the system is rotting if a 5-year plan, say, the 9MP creates corridors/ verandahs/ canopies/ pegolas that favours an elite group of construction companies but leaves the ordinary M'sians wondering "where's the beef?"; the system is rotting if the Election Commission commits a flip-flop on indelible ink and, yet, no one is fired; and, the list goes on.

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It is not the personalities that matter. M'sians crave for a system that does NOT depend on personalities like Dr M, or Najib, or Anwar. We crave for a system that is meritocratic; that draws the best and brightest minds; a system that is able to create economic plans far ahead of the curve; a system that creates a fund that will preserve the country's wealth for future generations; a system where disputes are adjudicated in our courts with fairness and intelligence; a system where the best young M'sian minds (regardless of ethnicity) is harnessed and nurtured in local universities that rank in the Global Top 10; and the list goes on.

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Although I understand that we, as a nation, are undergoing a transition from the era of benevolent despotism to an era where the democratic space is more open, I refuse to be drawn into political shenanigans and gutter politics. Frankly, all fair-minded M'sians are fully aware that for every sodomy-like allegation cast against Anwar by BN there is a countervailing sodomy/murder allegation cast against Najib. And, let us not even start with the nepotism and somnambulist allegations against Pak Lah.

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If we take a holistic view of M'sia as a developing economy and a developing multiracial and multifaith sovereign nation - if we take into account that it has been half a century since we achieved Merdeka - the likes of Pak Lah, Najib and Anwar must be measured by whether they made M'sia a better place for all M'sians or, whether they made us worse off.

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So, whoever wins or loses, I am reminded of Carville's scribble on the whiteboard in the basement of the Arkansas Governor's Mansion in 1991, when Bill Clinton first ran for the US Presidency, "IT'S THE ECONOMY, STUPID!"

Is there any strategic thinking in Malaysia?

TheEdgeFinancialDaily (Wednesday, 2 July 2008) reported on Singapore's Neptune Orient Lines looking to acquire German-owned Hapag-Lloyd. It will give NOL access to Germany's export markets and the huge payload of attendant cargo.

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NOL has a market capitalisation of Sing $4.8 billion (RM11.52 billion). NOL is two-thirds owned by Temasek Holdings. NOL's container line, American President Lines, has one of the most efficient cost structures in the industry. This led Elvind Kolding, CEO of Danish-owned Maersk Lines, the world's largest container shipping line, to observe that if Maersk had the same cost structure as APL, filled its container ships as fully as APL and carried similar types of cargo, Maersk would be two-and-a-half times as profitable!

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What happened to MISC?

What happened to the Malaysian International Shipping Company, in contrast? Set up by the likes of Robert Kuok at the urging of Tun Razak and Tun Dr Ismail, MISC was always intended to be Malaysia's flagship national maritime carrier. In the past 2 decades MISC has been content to carry only Petronas liquid oil bulk and LNG. No interest in becoming world-beaters, content to be jaguh kampung.

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If you recall, in the 1990s MISC was taken-over by Mirzan Mahathir's Konsortium Perkapalan group. When the Asian economic crisis hit, Petronas was summoned to bail-out Konsortium Perkapalan. Now MISC is still principally a shipper of Petronas liquid bulk. This is just a vertical logistics integration exercise.

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Can we attach any blame to Petronas for lack of strategic thinking for MISC to be a world-class shipping company? Presently, MISC is only a logistics appendage to its core business of oil exploration and extraction.

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No strategic agenda

But, as the people in Shell would say, let's take a helicopter up to view Malaysia's maritime agenda from a national vantage point. The view presented is that Malaysia has no strategic vision on matters such as shipping.

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There was some chest-thumping a few years ago when Port Tanjung Pelepas stole a march on Singapore by securing Maersk as a port management partner. This led the world's largest carrier fleet to channel a signifcant amount of cargo throughput to PTP at Singapore's expense.

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Apart from that flicker of light, we have been inundated with the bleak controversy surrounding the Port Klang Free Zone matter which is, to-date, a non-starter. Wasn't the strategy to create a hub for distribution, drop shipments, break-bulk handling etc in order to compete with the Port of Singapore? But PKFZ may drown in a sea of debt and lack of customers.

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The lesson of PKFZ may be that strategic thinking must be predicated on a viable financial model. Otherwise, all projects created by strategic goal-setting may end up as white elephants. In Malaysia, the list of white elephants is long.

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Ku Li's strategic contribution

Some of us may recall Tengku Razaleigh's simple observation in an interview by The Edge last year. Ku Li spoke of the simple strategic move to set up an oil refinery hub at the southern tip of Johor that would compete with Singapore's oil refining hub. Soon after, the government announced that it was setting up such a hub at the southern tip of Johor! No credit given to Ku Li. This is further evidence of an ad hoc approach i.e. a why-didn't-we-think-of-that approach.

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Singapore's strategic planning approach

For decades, Singapore has recognised the need for strategic thinking. A vision formulated by studying regional and global economic patterns to stay several steps ahead of the game. It is not a mere vision and mission statement like Vision 2020. Singapore sets the mission goals without fanfare and tests and, re-tests the goals using sophisticated econometric models. How many Cray supercomputers does Singapore have to support econometric modelling? How many does Malaysia have? Even for the water supply issue with Johor, Singapore has used numerous alternative planning scenarios that led to Newater as an added safeguard against being held hostage by Malaysia on the matter of water supplies.

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In the mid-1970s, Singapore strategic thinkers concluded that they needed to push the nation-state to the next level up the value-chain as countries like M'sia were offering cheaper venues for manufacturers. So, they built Changi Airport and revamped their fiscal policies and investment incentives to attract higher-end electronic manufacturers with great success.

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In this millenium, Singapore has upped the ante again. This time their strategic thinkers decided that a more liberal social environment and the establishment of 2 casino entertainment centres will usher in billions of dollars of tourism-related income, one of its highest GDP contributor.

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Singapore has also actively courted Nobel science prize winners to conduct and further their research projects by creating joint-resource-sharing facilities like Biopolis. These bright minds are intended to enlighten Singapore-based scientists and researchers who will assist these Nobel-standard scientists in their research. This type of knowledge-transfer is invaluable. It may be the base upon which Singapore's next quantum leap will take place from.

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This is in addition to their decades long sovereign wealth funds in the forms of Temasek and their Government Investment Corporation.

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Dr M and M'sian think-tanks

In the final chapters of The Malay Dilemma written in 1972 by Dr M, he wrote about the need for Malaysia to have think-tanks like the Rand Corporation in the US. In his time as PM he was a big fan of people like Alvin Toffler the futurist and, Kenichi Ohmae of McKinsey who is a strategic thinker. He also set up ISIS which is more into external, geopolitical and defence matters but less so on economic matters. While many of us are not big fans of Dr M's Machiavellian approach to politics and uses/abuse of power, we have to admit that Dr M definitely had a point there.

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Who is doing the strategic thinking in M'sia now?

Another case in point is the strategic thinking on wealth management. Permodalan Nasional Berhad has been the wealth manager for the Bumiputras since the 1970s. It is the creation of Tun Razak and Ku Li. PNB's creation was based on the strategic plan to house, in trust for Bumiputras, part of the wealth of the nation.

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In recent years we have Khazanah Nasional which seems to be more a knee-jerk creation to house previously ailing corporates handed-over by the now-defunct Danaharta. The strategic thinking to create PNB as a wealth fund is clear enough. But, what is the idea behind Khazanah? It doesn't seem to have the gravitas of a sovereign wealth fund. Often, it appears to be just a basic fund management company.

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But, really, where are we headed in terms of the strategic positioning of Malaysia in terms of economic competitiveness? EPU? ISIS? ASLI? More on this later.

MALAYSIAKINI: Malaysia Today website hacked

Really, do the BN leaders that sanctioned the cybertroopers that hacked into Pete's site, Malaysia-Today.net actually think that they will create any mood change in favour of BN? Read the report in MALAYSIAKINI.

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It is childish, infantile and completely shambolic. If anything, such a prank only serves to aggravate whatever iota of goodwill that the blogosphere has with the BN empire.

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Trumped-up charges against dissentient leaders and cyberhacking and refusal to allocate funds for economic development of non-BN states. That seems to be the menu for when the BN "Empire Strikes Back". Sorry, not impressed.

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As for first-class ranting and raving on recent events, I invite you to visit good 'ol Patrick Teoh at NIAMAH! Trust me, this time around he's even more angry than ever before. It was good therapy for my frustration about Pete's site, anyway.

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P.S. Anil Netto has a journalistic take on this at Malaysia Today, Aliran websites attacked.

MCA: No future without a multiracial platform?

Tempted as I am to weigh in with some curling remarks about Anwar Ibrahim's current travails, I shall refrain from doing so. There are many views expressed on the matter with great insight, clarity and dignified contempt of the possible motivations of the accuser and prosecution and, genuine concern over the lack of tactical nous on the part of Anwar's oppressors. See for example, Malik Imtiaz and Farish Noor, whose views I completely subscribe to on the matter.

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Instead, I wish to highlight and counterpose Najib's reassurance as reported in Malaysiakini under the caption Najib: Chinese community will not lose out and Dr Chua Soi Lek's latest blog entry captioned, Expected announcement at an unexpected time which basically led me to make the following comment at the good Doctor's blog:-

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Will any MCA leader be any different from OKT in respect of having REAL ACCESS & REAL STANDING as an equal BN partner?

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Will UMNO forever be the domineering partner? Will MCA's true relevance for the discourse on Malaysia's future take place OUTSIDE of the BN framework?Will MCA be more relevant on a multi-racial platform?

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You may recall that in MCA's history, there was a pivotal moment when Tan Cheng Lock was on the verge of joining Onn Jaafar's Independence of Malaya Party grouping. Tan's effort was thwarted by TH Tan (the, the, MCA Sec-Gen)who was so enamoured and charmed by Tunku.

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This is really a time for a serious stand to be taken on where MCA's future lies.Being a thinking leader, I am very certain that you must be fully aware that the present relationship between MCA & UMNO leaders is so formalised & in such low ebb that BN is truly a sham & a series of photo-ops.

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I am not a cynic as many of your blog's commentators tend to be. I am not an MCA member. I am a M'sian that happens to be of Chinese descent. My father was an MCA Branch Chairman in the 1970s.

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MCA has had a key role in M'sia's history & development. But History is irrelevant if the present & future leaders of MCA do not seriously consider a multiracial platform AND seriously review MCA's subservient relationship vis-a-vis UMNO.

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In case you missed the point, it was Najib of UMNO that had to reassure the Chinese. MCA was conspicuously silent (and, irrelevant?).

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But as I keep saying, this is the failed BN communal and racial discourse. Where various races must be separately pandered to. Malaysia has to move away from this framework of race, communalism and ethnicity. That is why parties like the MCA have to do serious soul-searching if they want to survive. Otherwise, MCA members should just join a multiracial party to argue for various income groups instead of championing one race over another. It is out of date. It is unhealthy. It is divisive. Just stop it now!