Wednesday, June 30, 2010

Majority want UPSR, PMR scrapped?

Like all other parents with school-going children I am a stakeholder in Malaysia's education system.

As such, I have a direct interest in urging the Malaysian government to stay the course on using English as a medium of instruction for Mathematics and Science (aka PPSMI).

I also have a direct interest in the issue of whether UPSR and PMR should be scrapped.

My children are studying in an SMK. They are not ensconced in a private school or an international school. They are mainstream.

Like any other children, I'm sure they find exams tedious. Even more so, public examinations.

I'm sure that they would prefer the abolition of any exam of any sort...FOREVER.

That, certainly, was my prayer throughout my entire school life. That, I'm inclined to believe, also forms part of their prayer at some level.

This is only natural.

Examinations are an audit of our knowledge, cognitive progress and analytical ability.

Nobody likes to be audited.

Even grownups who control or work in places like Enron, Worldcom, PKFZ, Transmile and Kenmark do not like to be audited.

Like any audit, exams have this unpleasant and discomfiting habit of pitting us against other people. It exposes our weaknesses...our Kryptonite...our Achilles Heel. Too much exposure.

Many of us like to be left alone.

Like many say about the game of golf, we should only be playing against and measuring against ourselves...although the same many fail to explain why, then, is there a necessity for golfing competitions.

As a matter of fact, I famously (famously because I have been re-telling this story) wrote down my name and exam number on the Additional Maths answer sheet at SPM-level but left the entire sheet (in Zen-like spirit) blank. This probably explains why my aspiration to be the greatest aeronautical engineer in history did not come to be. It also explains why my blueprint sketches of Raptor-like jetfighters and improvements to the Tomahawk cruise missile did not contain technical specifications. And, also why I like Winston Churchill's description of his schooling at Eton in his autobiography, My Early Life.

I digress.

So, should the UPSR and/or PMR be abolished?


But...and, there's always a "but"...but, is that sensible?

My annoying head...says NO.

Exams are audits. Exams are a way in which progress or the lack of it is measured.

In a fairly brief part of the lives of young Malaysians there is a public audit of their mental development at ages 12 (UPSR), 15 (PMR), 17 (SPM) and, some say, 19 (STP).

Much as I hated exams, especially public exams, the certificates issued are an objective measure of how good...more likely, how average I was.

But, at least, there is a record.

My school report cards have long disappeared.

The only thing left are the public exam certificates.

Those certificates are an objective record of my mental progress in school. Anyone picking up the certificates will be able to form a reasonable impression of how my present intellect...or the lack of it...came to be.

Old photos don't count. They don't tell the same story.

Maybe the focus of the proposed Roundtable should be on improving the quality of education instead of whether, or not, to scrap UPSR and PMR.

Tuesday, June 29, 2010

What I Learned From A Chinese Billionaire

It's not that I have gotten lazy, though I've been rather distracted from blogging by work and the World Cup (of course).

But, I do have to reproduce this piece from Forbes by Shaun Rein because he tells an interesting story about the important values that nurture entrepreneurial success. In this case, the story involves a Chinese billionaire. But, it could be anyone, anywhere. This is a good tale about the importance of having ethics and values in business. Here's the piece:

He taught me the basic principles he relied on to go from grinding poverty to enormous wealth.

In the last decade more new billionaires emerged in China than anywhere else in the world. There are now at least 79 there. China's rich are fueling the country's 15% annual growth in luxury sales, which have reached $9 billion a year, making the country the world's second largest market for top-end products. You can wait a year for a new Ferrari there. Porsche launched its Panamera sedan there before it did so in the U.S. Long lines often stretch outside Louis Vuitton and Herm├Ęs stores.

Who are the superrich Chinese? What are they like? How did they get so wealthy?

To find answers to those questions I've talked to a half dozen Chinese billionaires. Some of them made their money by taking Internet companies public in the U.S., others by investing in real estate or beverages. Unlike many of today's American billionaires, such as Rockefellers or the Waltons of Wal-Mart, China's are almost all self-made. Half of the world's 14 self-made billionaire women are Chinese. They all overcame hardship and failure, and they all are highly optimistic about China's future.

One Chinese billionaire, a real estate mogul, met with me more than a dozen times over five years to share his lessons for succeeding in business. Sometimes we met at his palatial home in Beijing, sometimes at my much smaller one in Shanghai. We ate clams the size of footballs on a beach in Australia, and one time we went to McDonald's for french fries. I liked spending time with him not only because I could briefly live the life of a billionaire but also because it became obvious why he was so successful. He actually embodied the lessons he taught me. He didn't just preach them.

There was one condition to our talks and my writing about him, though. He insisted on remaining anonymous. Therefore I will call him Mr. Chen. Like many wealthy Chinese, Mr. Chen prefers to fly under the radar, because he doesn't want to accidentally get on anyone's wrong side. Lest you think his fears are exaggerated, realize that 70 of the people who have appeared on the Forbes China Rich List in the last decade have publicly gotten into trouble. China's affluent now sometimes half-jokingly call the ranking the Death List.

Lesson No.1

Mr. Chen's first lesson is to believe that anything is possible and the only thing that can stop you is yourself. He never ceased to believe that he would make something of himself. As a poor peasant child with no high government connections, he had the odds stacked again him. He had to drop out of school in his teens because his family had no money.

Yet he believed in himself and refused to give up. With no powerful family behind him, he had to take out loans at five times the normal rates of his well-connected competitors. He had to do smaller projects that no one else wanted and endure derision and slights from others. Slowly, over time, he developed a reputation for doing what he said he would, and his projects got bigger and bigger.

Now he pays for the food, medical costs and living expenses of more than 80 members of his extended family. He donates millions a year to set up schools in rural areas, and he often walks the halls of hospitals with his offspring and pays for the medical costs of uninsured patients. But before he could do any of that he spent decades in sheer perseverance, ignoring all the better-educated, wealthier people who disdained him.

Lesson No.2

The second lesson Mr. Chen taught me is that to get what you want you have to respect everyone and sometimes eat humble pie. A decade ago, when nearly everyone in China was poor, it took less than $10 million to make the China rich list. Last year you needed $120 million. The creation of wealth has been staggeringly quick. As Mr. Chen says, you could be a waiter today and the head of a food and beverage conglomerate tomorrow--so you'd better respect everyone, or your attitude may come back to haunt you. Practically everyone in China knows someone who a decade ago raised pigs and today drives a Mercedes and buys Tiffany jewelry.

Lesson No.3 (Very Important)

Finally, Mr. Chen believes in sharing wealth. He lets business partners make more than he does, so that the next time they secure a good deal they'll think of working with him first. He sees no point in ever trying to shortchange business partners.

He is right. I have been in meetings with him with different partners with projects all over the country. I asked several of them why they worked with him rather than anyone else, and every one of them said it was because they knew he'd take a smaller piece of the total pie. But so many small pieces add up to a whole lot of pie.

Mr. Chen believes in sharing wealth also in the sense of ensuring good working conditions for rank-and-file employees and letting the most productive ones get rich. He does not believe in letting lieutenants scrape by while a CEO is paid absurd sums. And he believes that companies like Apple and Dell need to improve the conditions at the factories where they source their products.

Mr. Chen built a fortune out of dogged determination and a reputation for being assiduously honest, fair and respectful. He sees no reason why the same shouldn't work for anyone else. As he told me once, "If I can do it with as little as I had growing up, anyone can do it."

Thursday, June 24, 2010


Many Malaysians strongly believe that the usage of the English language as a medium of instruction for the subjects of Mathematics and Science in Malaysian schools is necessary.

They believe that using English as the medium of instruction for these technical subjects is necessary because a lot of the knowledge of these two technical subjects are written in English.

Young Malaysians equipped with the English language in Mathematics and Science will have full and unrestricted access to this wide base of knowledge in these technical subjects.

I count myself in this category of Malaysians.

As such, Malaysian students who are conversant with the English language will be able to acquire important technical knowledge.

This technical knowledge will help Malaysian students to acquire the necessary skills that will turn them into engineers, architects, doctors, technicians, industrial designers, software engineers and so on.

These are highly paid and rewarding jobs.

It is true that non-English speaking or literate people can also acquire skills in these jobs. It is equally true that English-speaking and literate people can be so lazy and incompetent that they cannot qualify for these jobs.

The fact is, Malaysia has a strong history of being a place where English is widely used. This has been a significant advantage in the global competition for economic progress.

If we never had English, we will not feel its loss.

The fact is, we do have English and, we will, therefore, be fully aware of its loss.

So, please indicate your support to allow parents and schools to CHOOSE to maintain English as a medium of instruction in the teaching of Mathematics and Science (aka the Bahasa Malaysia abbreviation, PPSMI) by signing the petition to the Prime Minister.

Let him know that those Malaysians should have a choice for our children to be under PPSMI.

Wednesday, June 23, 2010

Daim: Govt should meet needs of Chinese community

This is a recent perspective offered by Tun Daim. The man offers a context that is sensible and worthy of note. The report is borrowed from The Sun:

FORMER finance minister Tun Daim Zainuddin says the era of the government telling the non-Malay voters to be grateful to it is long gone.

Any ruling coalition which wants to stay in power should take the initiative to resolve the problems facing the people, instead of asking them the question, "What more do you want?"

In an interview with Nanyang Siang Pau today, the Umno veteran said the Barisan Nasional (BN) government should understand and meet the needs of the Chinese community.

Only then can it win the support of the Chinese voters.

"What the rakyat wants now is a clean and corruption-free government, which takes care of the poor, ensures that there is no hanky-panky in public project tenders, enhances public security, and provides them with a roof and basic infrastructure. These are what they want," Daim said when asked what the government should do to regain the support of Chinese voters.

He said leaders of BN component parties, especially elected representatives, should enhance services in their constituencies and take steps to overcome bread-and-butter issues.

"BN component parties should set up service centres in parliamentary and state constituencies, complete with mini-libraries, reading and computer rooms to promote interaction with the electorate, and to overcome problems facing the constituencies," he said.

On the dissatisfaction among the Chinese that the government is biased towards bumiputras in its policies, Daim said Malays, too, are now educated, and should be standing on their own feet unless they are lazy.

"The New Economic Policy (NEP) cannot exist forever, otherwise the Malays will become too dependent as they might feel the government will look after them.

"The reality is that the world has changed, we (the Malays) should take on the global challenges and stand on our own feet."

Daim, who served as finance minister from 1984 to 1991, said the NEP is meant to last for only a limited period. Furthermore, he said, the two main objectives of the policy – to eradicate poverty and restructure the society – have more or less been achieved.

He explained that in the early days of Merdeka, Malay participation in the commercial sector accounted for only a few percent, thus the implementation of the NEP.

"During that time, the Chinese worried that the Malays would rob them of their share (of the economic cake), when in fact the Chinese share increased in the end, as only the foreigners’ share was taken away.

"This is what has not been emphasised. What the Chinese lost was educational opportunities," Daim explained.

Educational opportunities

Commenting on the dissatisfaction among many Malay NGOs over Prime Minister Datuk Seri Najib Abdul Razak’s announcement about abolishing the mandatory 30% bumiputra equity in local main board companies (under the New Economic Model), Daim said equity is not important,"but what is important is educational opportunities".

"Given the opportunities to receive good education, (one) can get a good job, and in turn good pay. The extra money from the income can then be used to purchase shares. Therefore the crux of the matter is to get good education, which is what the NEP has been emphasising."

Daim stressed that the BN government should provide equal educational opportunities (to all), including offering more scholarships.

He said scholarships should be awarded based on merit, that is, those with excellent performance should be given scholarships.

"If you want top-notch talents, you have to take care of them," he said.

He points out the Singaporean government is very smart in that it is able to woo Malaysian talent without making any investment in them.

"It only asks what these students want in the last three years (of their schooling), and meets their requests."

On the government’s frequent lamentation that it lacked funds, Daim said even if the government retains just 100 top brains a year, it will have 1,000 in 10 years, and they can contribute much to the country.

"Therefore, don’t let them (the talented people) down, give them what they wish for … and they will make contributions to the country in the future."

Tuesday, June 22, 2010

How To Unmask A Liar

In these heady days where exposes are de riguer, particularly in the rarefied world of GLCs, it is useful to be reminded of some behaviourial traits that tells us more than the stuff that comes out of the mouths of the person in the spotlight.

pix from here.

Here's what Helen Coster and Melanie Lindner has listed as a loose guide on the art of lying:

Tricky Tilt. Truthful people more likely to face questioners head on. Liars are "likely to lack frontal alignment and will often sit with both their arms and legs crossed as if frozen," says Joseph Buckley, president of John E. Reid and Associates, which provides interview and interrogation training to law enforcement agents.

Imprecise Pronouns. To psychologically distance themselves from the lie, deceptive people often pepper their tales with second- and third-person pronouns like "you," "we," and "they."

Heavy Hands. When people tell the truth, they often make hand gestures that coincide with the rhythm of their speech. Hands emphasize points or phrases--a natural and compelling technique when they actually believe the points they're making. People who are less certain will keep gesticulations in check.

Tongues Like Telephone Wires. The phone tends to bring out the liar in people. In one week-long study of 30 college students, Hancock observed that the phone was the most popular weapon of choice, enabling 37% of the lies told in this time, versus 27% during face-to-face exchanges, 21% using Web-based messaging, and just 14% via e-mail. Little surprise, perhaps: Most phone conversations don't leave a trail, unlike email and instant messages.

Need to Be Right. When honest people tell stories, they may realize they left out some details and backtrack to fill in holes. They also may realize a previous statement wasn't quite right, and go back and explain it further. Liars, says DePaulo, "are worried that someone might catch them in a lie and are reluctant to admit to such ordinary imperfections."

Behavioral Blip. "You're always looking for change from the person's usual baseline," says Paul Ekman, professor emeritus at University of California San Francisco School of Medicine, and manager of Paul Ekman Group, which does training in the area of deception and emotional skills. "Some people always hesitate when they speak. If they speak without hesitation, that's a hot spot."

Detached Smile. People who are telling the truth tend to use many facial muscles. Liars just smile with their mouths--their eyes don't reflect their emotions.

Sunday, June 20, 2010

The Parliament

Certain things need to be cherished and upheld as immutable and, yes, even sacred.

Even after 53 years of Merdeka, Malaysia is still a young country. We are still learning how to conduct ourselves as a parliamentary democracy. We are still growing and developing our multiracial and multireligious culture.

Iconoclastic subversion of constitutional institutions
Over the past two decades iconoclastic behaviour by previous leaders have led to a younger generation of political leaders who have no understanding, appreciation or respect of the importance of constitutional institutions.

In 1987, the Malaysian Judiciary was assaulted. The head of the Judiciary, then known as the Lord President, was unceremoniously sacked. This was followed by the sacking of three Judges of the apex Malaysian court, then known as the Supreme Court.

The Malaysian Judiciary has yet to recover from that shock. The quality of the Malaysian Judges has declined since 1987. Of course, we have some fine brains still in the Malaysian Bench. But the average judicial and legal intellect has dropped. That is a fact.

The Malaysian Civil Service has also been compromised during the same period. Intelligent civil servants of integrity have been supplanted by those who exhibit sycophantic behaviour; the colloquial term for them is kaki ampu.

Dilution of quality of political leaders
Within the rank and file of political parties strong characters have been actively marginalised and removed in place of more kaki ampu. Quantity, that is to say, the size of the membership prevailed over the quality of members.

This is a clear attempt at dilution. The Merdeka parties like UMNO, MCA and MIC are good examples. This is the trend and state of affairs that prominent bloggers like Sakmongkol has consistently railed against.

There is a clear inverse proportional effect between the size of a political party and the quality of its leadership and policy goals.

Patronage in the purest feudal sense has pervaded Barisan Nasional parties. This is a bad thing.

Over the past two decades, people who joined BN parties did so to gain economic advantage. They did not join for ideals. Now these people are in the majority. That is why it is impossible for BN component parties to institute reforms.

The importance of the Parliament Building
So, where does the Parliament fit into all of this, you may ask?

I hate to say this because it is not 100% accurate. But, in many ways the Parliament is well and truly the last bastion for Malaysia as nation.

Of course, a nation is a sum of its peoples. That is true.

But, peoples are an amorphous mass. It is shapeless and has no fixed direction.

The shape and direction is given by the Federal Constitution.

It is the Federal Constitution that legitimately creates the constitutional institutions such as the:
  • Yang Di Pertuan Agung;
  • Federation of eleven Peninsular States, Sabah and Sarawak;
  • Conference of Rulers;
  • Parliament (Dewan Rakyat and Dewan Negara);
  • Prime Minister;
  • Cabinet;
  • Civil Service;
  • Armed Forces;
  • Police;
  • Election Commission and so on.
Almost every one of the constitutional institutions enumerated above has been compromised over the past two decades, possibly with the sole exception of the Dewan Rakyat.

pix from here

The ONLY reason why the Dewan Rakyat has stood out immune against the subversion is because it is the ONLY institution that requires a renewal of mandate every 5 years or less.

And, the Parliament Building, is the home of the Dewan Rakyat.

To ordinary Malaysians the Parliament Building is the symbol of their right to send a message to the great power that is known as the Malaysian Government.

Take away the Parliament Building and, Malaysians will further lose our bearing.

I am not exaggerating.

Do not allow any attempt to move Parliament away from the Parliament Building. It is hallowed and sacred property.

In its hallways walk the ghosts and aura of the greatest Malaysians.

Please have some respect for them and for Malaysia's brief but meaningful history.

Saturday, June 19, 2010

New look

Oftentimes one has to renovate and re-position to avoid becoming stale.

For, inasmuch as Nature has decreed that everything is cyclical, so must blog layouts.

Wednesday, June 16, 2010

"Kesh-strapped" & "He's a shark"

Two news items made the amateur journo in me get very excited. I thought the excellent albeit glib headlines should have been:


Nazri Aziz: Dumbing down Malaysia


pix from here.

I know Nazri has been getting many brickbats. Frankly I haven't bothered to check if the brickbats were deserved.

I do know, however, that his head should be whacked very hard for coming out with the type of statement shown below.

I don't believe any further editorialising is necessary. The Latin phrase (which Nazri be familiar with, being an ex-lawyer and all, is res ipsa loquitor i.e. "the matter speaks for itself", because it is so obvious).

pix from here.

As reported, Datuk Seri Nazri Aziz has defended the government’s plans to redeploy bright students to study locally instead of overseas, arguing that this could prevent a further “brain-drain” of talent.

“Sending overseas students causes brain-drain where some of them won’t want to come back".

"If you keep sending students overseas, when are we going to improve our standards (locally)?”

Tuesday, June 15, 2010

Lesen & Kedai Runcit

To the best of my amnesiac recollection, Malaysia hasn't had a decent Minister for Domestic Trade & Consumer Affairs since the late Tan Sri Megat Junid in 1997.

In recent years we have been inflicted with Ministers who said they were binggung about controlling prices of consumer goods and dealing with "unexpected" negative reactions from wholesalers, retailers and consumers.

The current Minister has done worse than his predecessors. He wanted Malaysians to flash their identity cards to Bangladeshi workers at petrol stations to get subsidised petrol at one point. Thank goodness the Malaysian public reacted with loud disgust.

Now he wants to issue more licensing papers to kedai runcit operators. These poor fellows are already fighting a losing battle against Cash & Carry operators and super-duper hypermarts.

Some of the actions of the Ministry of Domestic Trade and Consumer Affairs are examples of a government without common sense or intelligence or both.

Just to be clear, the issue is NOT about regulating the kedai runcit operators.

The issue is subsidies and, how to remove them without hurting the lower-income groups.

And, just to be clear, many kedai runcit operators can be classified as lower-income Malaysians.

Think more clearly. Use more common sense.

Regulations must improve the situation, NOT worsen it.

Thursday, June 10, 2010

Betting on gambling in Malaysia

The rancour over the Ascot sports betting saga needs a better context.

First, the Malaysian government has consistently demonstrated a level of pragmatism that should rightly be held up as a model of sensible governance in a multi-racial and multi-faith community. This cannot be disputed. This should be applauded.

Second, the propensity to gamble will always be there, particularly within the Chinese Malaysian community. We can argue till the cows come home. The fact will remain that gambling activity will remain significant in the Chinese Malaysian community. A good government will not ignore this social reality.

Third, if the Malaysian government chooses to be cowed by moralistic shouting by certain quarters it will have failed to act responsibly to deal with an obvious activity that fertilises the criminal elements in Malaysia. There is a trade-off between being moralistic in a crime-infested community and to practice hardnosed governance by regulating a hitherto "black economic activity".

(Yes, naysayers can cleverly point to prostitution and drugs as other examples of the "black economy" but such arguments can be said to being too clever by half. This is not a luxury that a responsible government can afford to indulge in).

Why not an open tender?
That said, the point raised by detractors who asked why an open tender was not made does require a straight answer from the Malaysian government.

If there was, indeed, a "first right of refusal" given to Ascot, then, can the rakyat have a look at the document?

If not, why not?

This has to be answered. If no answers are forthcoming, this Malaysian government can expect strong cries of cronyism.

If there are sound legal reasons which will give Ascot a sure-win in the Courts over the Malaysian government, then, the rakyat would want to know whether the Attorney-General has rendered a legal opinion on the matter.

Poor spin control
As I have said in a previous short post on sports betting, the ineptitude in handling the matter is astounding.

The sensible playbook should have been as follows:

First, get the law enforcement people to seriously clamp down on illegal gambling activities. Arrests must be made. Charges must be written up. Books must be thrown at gambling syndicates.

Second, get the media to trumpet these arrests and charges.

Third, get the law enforcement people to provide fresh estimates on the incidence of illegal gambling. (Yes, it's been done umpteen times. But, hell, the public has a short memory and attention span. Do it again and again.)

Fourth, get the politicians and NGOs to decry the incidence of illegal gambling activities. Link it to criminal activities (which is obvious).

Fifth, repeat steps one to four several times over the span of at least one month.

Sixth, then, announce the grant of the sports betting franchise.

But, wait, the idiot who stands to receive the franchise needs to be grabbed by the collar and told in no uncertain terms that he must not, at all cost, strut his stuff in the public arena. He must call in the professional spinners (aka media and public relations people) to disseminate public statements in an orderly and controlled manner.

No off-the-cuff verbatim remarks are permitted.

Seven, make sure that the recipient establishes a major effort, no expenses spared, for round-the-clock gambling addiction counselling services.

Eight, highlight the gambling addiction counselling services. Get expert psychologists to write about or, be interviewed, on how the modality of gambling addiction counselling will be provided.

And, of course, even with all that there will be no stopping brickbats from being thrown.

But, at least, you will have been better prepared than to lamely answer questions in Parliament by replying that the sports betting licence has not been given ... yet.

Why no open tender?
All eight steps will not answer why no open tender was conducted.

That question needs to be answered by the Malaysian government.

Wednesday, June 9, 2010

Our "Teflon Prime Minister"?

When Ronald Reagan was President of the United States of America, he earned the moniker, "Teflon President" because of his enduring popularity in spite of many gaffes and mis-steps.

Has Najib become our "Teflon Prime Minister"?

FYI, Wiki says, Teflon is a nickname given to persons, particularly in politics, to whom criticism does not seem to stick. The term comes from Teflon, the brand name of a "non-stick" chemical used on cookware.

Merdeka Center survey: PM’s approval rating remains strong

72% of Malaysians said that they were satisfied with Prime Minister Najib Tun Razak's performance in this survey which is higher compared to 69% recorded in April 2010. Broken down into ethnic groups, the survey found 77% of the Malays, 58% of the Chinese and 80% of the Indians expressed satisfaction. Overall, the survey found that the number of people dissatisfied with his performance remaining about the same at 21% as compared to 22% in June 2009.

From the survey, we note that the high approval ratings may in part be reflected by reasons why a part of the electorate felt that the country was headed in the right direction, i.e. views that the Malaysian economy was still doing reasonably well, the nation‟s leaders were more dynamic and that general conditions in the country remained peaceful and conducive for development.

But confidence levels in the government‟s initiatives are limited, for example, only 50% were confident that initiatives such as the Government Transformation Program, 1Malaysia and New Economic Model will be able to achieve their goals. Exemplifying the sentiments of an increasingly cynical public, a majority, 58% agreed with the view that “the federal government was good in planning but weak in implementation”.

The Peninsular Malaysia wide telephone survey of 1028 randomly selected Malaysian registered voters aged 21 and above was carried out between 6th and 16th March 2010. Respondents were selected using the random, stratified sampling method and structured along the national electorate profile and specifically proportional to gender, ethnicity, age groups and state of residence.

Tuesday, June 8, 2010

Sports betting

I am astounded by how inept this whole matter of granting a sports betting licence has been handled by both the issuing authority and the recipient.

From the speed at which the approval (or approval-in-principle or grant or bequest or conditional approval or whatever it will be called) was given to the bravado and in-your-face machismo displayed by the recipient, it has all the characteristics of a fiasco from the get-go.

What a joke.

So, what we have is this. Imagine it being sung by the relevant persons:

This one will never sell,
they'll never understand,
I don't even sing it well,
I try, but I just can't.
-Barry Manilow: This One's For You-

Thursday, June 3, 2010

Slashing Subsidies 2: walla perspectives

I will post here 3 interesting sequential comments by the inverterate commentator walla first. As always, walla gives some context and texture to the firmament that has enveloped us. walla's curling observations is a welcome relief that allows me to make a steaming cup of Java and just read before I get back to stroking the keyboard:

Part 1
Unfortunately for Idris Jala, sugar might be one of the subsidies to be removed so he can't be the Mary Poppins with her spoonful of sugar to help the medicine go down.


Idris is just the messenger and deliverer of bad tidings not of his doing.

In the first place, he must have had nerves of steel and a sense of corporate nationalism to have accepted the MAS job when he could have been cushier living on his reputation at Shell, knowing full well that the only way to improve the airline's bottomline was to liquidate some assets in order to sweeten the outlook to shore investor confidence and so save the rating for future financing without having to depend on government support which would not have been forthcoming under present circumstances.

And other airlines have floundered in the maelstrom of the roller-coaster rides of fuel prices. Thus, hard lesson learned notwithstanding, no one should be expected to score perfect hits on fuel hedging in the first round.

After all, if someone can, he would only need to do it once and be set for life, considering aviation fuel contributes thirty percent to the cost of running an airline.

Since it is a notable fact that decision-makers and eminences read this blog, one should therefore add more confusion in order to supersaturate the matter and thus crystallize the situation.

So it remains to say what one should be concerned going forward are these points:

one, the assumptions qualifying the assertion of bankruptcy are doable. Cough:

the economy can achieve three percent year-on-year;

the deficit will continue to balloon, and,

government debt will continue to rise at twelve percent a year.

Why do we say these assumptions are achievable?

The whole purpose of the exercise is to remove subsidies. Once subsidies are removed, cost of living will rise about forty percent by the incantation of sticky price multipliers.

This negative effect will only be nullified if the people can live on less or make more to cover the loss. If they have to live on less, the government will have to be very brave to continue maintaining the same tax rate. If the government reduces tax, it will reduce its own revenue, not that this government having lots of money has been entirely without grievances to the people.

And if the people make more, why haven't they by now?

So they can't make more or live on less. Both motivation and ability will be missing, and more importantly - simultaneously. That's the real crux of the matter. If one were to precede the other, there's elbow room to nudge the problems one way or the other. But since both stand side by side, they magnify each other instead.

In the words of Voltaire's Candide's Dr Pangloss, we are exactly where we are in this best of all possible worlds.

Continuing the confusion, the government may decide not to remove subsidies because it calculates that the savings from removing the subsidies cannot be parlayed fast enough by new taxable income from a workforce that will be down and out completely. And that's not because we are not in the Caribbeans.

Therefore and unless new revenue comes its way quickly, its deficit will balloon and its debt will continue at the current rate.
Part 2

So we have cunningly reduced everything away from the rakyat and private sector, and towards the government sector.

Which is immediately presented with two options: reduce fat and/or increase income-generating activities.

If we look at the performance of one of its major holdings, that going by the name of Sime, we will have to be reticent with our confidence the others in the same stable will be doing spectacularly better. If it can bleed in oil even while having plantations, what will the other holdings in infrastructure, gaming and so forth be capable of?

And since the government is the biggest employer in the country without whom the economy may nosedive further if its employees as customers of the private sector be out of jobs, the same problem will have to be retained.

The only way around this continuing confusion is to reengineer and transform both.

Given that Cuepacs have just said forty one percent are suspect of being on the take, that will take some doing. Given that the government have had to borrow an executive from a petroleum company to shape-charge its transformation program, the other aspect about re-enginnering government-held semi-private management will also present insuperable challenges.

After fifty three years of nation-building, we find ourselves without adequate quality management for critical positions across the land while the country remains mired in a financial situation whose alarm bell has been sounded so loudly it would probably explain the twenty percent drop in crime rate.

Except that a certain group of MPs have thicker tympanic membranes. They are adamant the government will not be bankrupt.

If that be the case, why the need for the four strategic pillars then, one asks timidly?

Why the need for labs, even?

That crux mentioned above points to the matter of competitiveness. We are said to have risen by eight notches to be last year's tenth most competitive nation. But how can that be when we are one of the most subsidized economies on earth? One therefore suspects if we remove the subsidy element from the Swiss equation, the ranking will fall. Would the same group of MPs be then saying the same thing?


It takes years to become an innovative economy. First, first-class brains are needed extensively. Second, the environment in which they thrive must already be present and thriving. Third, the soft factor of policies and how farsighted, pro-industry and globally-encompassing their implementation has taken root must be routinely actuated without the slightest shred of counter-productive moves that will cause a fall in confidence. Fourth, the governmental, business and physical ecosystem must be clean, green and efficient. And fifthly, there must already exist a globally-tested genius factor in the market. In other words, killer applications and blue-ocean products already well-accepted and earning good dough from the rest of the world.
Part 3

These are the challenges for the government sector to address in its moves to trigger higher value output from the private sector.

And it has less than ten years to do so.

Meanwhile there is an NGO movement going around. It is moving ahead of the NEM-10MP formulation to position itself strategically so as to have better bargaining power with the government vis-a-vis retention of status quo.

There are some nettlesome points.

One, the dilemma might have been a fact but its solution has been a fiction the size of the financial abyss that is the stark reality before us.

Two, forty percent of the government's revenue comes from oil. No new oilfields within sovereign waters have been announced. Ergo, the government will have to depend on Petronas striking deals with other oil-rich countries. Unless some oil-strikes are already in place, the prospects are only so-so. If not, why the whole rigmarolly exercise?

Three, the government has not delivered a single record of financial prudence. A short stretch of highway has a three hundred percent price overrun. Tolls whose rates should have been diminished permanently by twenty percent by now are still collected at blasting rates with the specter of another increase. The Auditor-General's report has been a nightmare of leakages and siphoning galore, and those are just the ones caught in its radar by its small-staffed teams. The public sector remuneration bill is ballooning even as its levels will soon not be even adequate for the livelihood of the public servants. Meanwhile money is thrown into all manners of projects whose returns are suspect. Take F1. Take the annual billion for KLIA. In fact take any damn project that one can recall. Any. All. Which can be said to be a model of financial prudence and eclectic success?

So, if there is going to be a trillion ringgit debt in nine years time, what is there to bargain about now? If the assumptions turn true, the government will be in a corner where it cannot even afford to pay salaries let alone run services. Under such a circumstance, it would be foolhardy to load the private sector because if it falls, the country falls.

A high sovereign debt debilitates everything. We may have some savings. Subject to the absence of a distortive W-shape from the Eurozone, our recent ten percent quarterly growth may be signaling a recovery - but - do.we.have.fundamentals.on.hand in the first place to be confident enough to negate the arrival of such a high sovereign debt that will cause financing costs to spin all into a vicious cycle, so that all future effort will be just to pay the interest charges and not the principal sums of a loan? If our ratings fall, things will cost more because sellers will insert a risk cost into the prices and buyers will see opportunity to press for discounts. Our foundation for competitiveness will then erode before it can even be laid.


This post, for that little baby in the crib just now, such a cherubic innocent smile. Whither its future?



Subsidies removed, government restructured, industry and business supported to the zenith, globalization assimilated completely, brain-cultivation the primary target, procurements rationalized completely, market completely opened up, and bloggers given fiscal incentives to carry on.



We are in this dilemma because things that should have been done long ago weren't and things that must not be done were and people whose mindsets should have been recultivated weren't and those who should have been supported more didn't get the support and denials which should have been nipped weren't and.....

The end.

Slashing Subsidies: Lessons from Mary Poppins

It is not easy to govern a country.

It is even less easy to deliver bad news to a restless population that has reduced the mandate to govern.

And so, when Najib delegated the extremely difficult task of driving the urgent matter of reviewing and forward-planning Malaysia's socio-economic future to Idris Jala, any Malaysian who bothered to turn his or her mind to the matter would have assumed that Najib had given the matter a lot of thought and, chose the best person available.

Idris, as Minister in the PM's Department in charge of the driving Pemandu, has done a sterling job so far.

He and his team has dissected, sliced, diced and reconstituted many knotty bottlenecks that has yielded fairly immediate results.

One of the more visible ones is the Crime Lab. We can see Najib's visible support for this in today's MSM report on his walkabout in SS2, Petaling Jaya. Of course, Hishamuddin and Koh Tsu Koon are in tow in the walkabout.

But, to be sure, it was Idris Jala's Crime Lab that zoomed in on the 50 crime hotspots in Peninsular Malaysia and, sorted the Police out on their unthinking policy on allocating manpower based on Police Districts rather than channelling more manpower to the 50 hotspots. This is why the crime rate has declined by 20% in 2010.

pix from here.

Hishamuddin and Tsu Koon can do the photo-ops. But, some of us know better. Lembu punya susu sapi punya nama!

That said, it appears that Idris Jala has recently been accused of being infected with the foot-in-the-mouth-disease (to continue the bovine analogy) when he was recently quoted as saying that Malaysia may become bankrupt by 2019.

His clarification is carried in full here. But, to be fair to the man, here is the salient part from the horse's mouth (to move from the bovine to the equine):

Why did you say that Malaysia will go bankrupt in 2019? Have you misled us?

During the Open Day, I presented some salient facts about the economy. For the last 10 years, we have been running a fiscal deficit which has been growing progressively from RM5 billion in 1998, to a record high of RM47 billion in 2009. This was due to the fact that government expenditure, including subsidies, has been escalating, whereas government revenue has not kept pace as our economy – the gross domestic product (GDP) grew at only 3% a year. Consequently, the government has to borrow a lot of money to cover for the shortfall. Our government debt in 1997 was RM90 billion and has grown at a rate of 12% a year to reach a record of RM362 billion in 2009.

In addition, as a proportion to GDP, Malaysia is one of the world’s highest subsidised countries with 4.7% of GDP compared to Indonesia 2.7% , Philippines 0.2% and Organisation for Economic Co-operation and Development (OECD) countries at 1.5% on average. (See first graphic below.)
To be clear, I said we could go bankrupt IF, and I repeat the word IF we continue with the same trends as in the past 10 over years; based on an annual increase of 12%, our debt will reach 100% of GDP in 2019 (a staggering RM1.158 trillion) and we could potentially go bankrupt then.

Together with escalating fiscal deficit exceeding 10%, we could end up in a similar economic situation like Greece and other similar countries. (See second and third graphics.)

All economists make assumptions and I did not say Malaysia will go bankrupt without qualifying it with certain assumptions. Theseare:

The economy/GDP continues at a rate of 3% a year;

Our deficit continues to balloon; and

Government debt continues to increase at rate of 12% a year;

Unfortunately, some of the reports about the bankruptcy projections did not state these assumptions and, therefore, can be taken out of context. These assumptions are used by us to make forecast about the future. In reality, as a country, we will have to do everything we can to prevent this from happening. The prime minister has laid out four strategic pillars which make up the country’s roadmap to achieving Vision 2020:

1 Malaysia, People First, Performance Now;

Government Transformation Programme;

New Economic Model; and

10th Malaysia Plan.

The future is clearly in our hands. And if all of us Malaysians work together, we can achieve Vision 2020. This involves concerted effort to grow our economy and be prudent in our spending.

In an effort to douse the spiralling flames of indignance arising from his "Greek tragedy", Idris met with some bloggers last night.

My takeaway from the generous 4-hour session between Idris and the bloggers is that the Malaysian Government sincerely wants to put some important economic course corrections. These course corrections will put Malaysia on a sound economic footing.

None of the bloggers were against the consumption subsidy principle.

The Mary Poppins lesson will come shortly.