Malaysian Economic Democratisation

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

4. Budget Objectives

To meet the challenges of improving Malaysian global economic competitiveness while addressing the growing rich-poor disparity in Malaysia and being mindful of the fiscal constraints and harnessing our oil resources effectively, the DAP Budget 2010 is themed “Malaysian Economic Democratisation”.

The goals of economic democratisation is to ensure that public funds and expenditure by the government will be more effectively and efficiently spent in accordance to the needs of the people, ensure that public projects are structured in mechanisms which will benefit the rakyat as opposed to politically-connected operators as well as enabling Malaysians to achieve greater economic freedom.

The process of “economic democratisation” will hence focus on 3 key thrusts, that are:

Economic Democratision – Fiscal Decentralisation

Rakyat First – Restructuring & Reallocation

Empowerment & Enablement – Capacity Building

4.1 Thrust I: Economic Democratisation – Fiscal Decentralisation

The Malaysian economy has increasingly become a bureaucratic behemoth dictated and run from the central federal government, with diminishing roles of the various state governments. Malaysian income and corporate tax revenues are all collected by the federal government and subsequently these revenues are reallocated to the various state government via constitutionally provided per capita grant, as well as other discretionary grant allocations.

The existing policy has resulted in major imbalances between the expenditure budget of the federal government vis-a-vis the respective state governments. For example, in 1990, the combined state expenditure budgets added to 25% of the overall Federal government expenditure. This proportion has declined substantially over the past 20 years to less than 9% in 2007.

Such centralised and discretionary policy decision making may also result in imbalances between the various state governments. For example, the allocation to respective states is based solely on the whims and fancies of the central government which will result in certain states enjoying unequitably larger allocations, while other states enjoy subtantially less from their fair share.

As a result, economic and government policy implementation has become substantially less efficient and effective due to the bureaucratic nature of transfers from the federal government to actual local development. Centralised planning has also the clear weakness of poor decisions arising from weak understanding of the local development needs and circumstances. For example, a highly centralised Transport Ministry will not be able to make informed and effective public transportation policies for each township and city across the entire country.

Therefore, in order to improve the government delivery system, its efficiencies and effectiveness of expenditure, the implementation of a wide-array of economic and developmental policies is best left to individual states to decide according to their own priorities, preferences and unique situations. Enlightened, accountable local government on-the-ground is best placed to determine and execute socio-economic strategies. Sectors which will enjoy increased fiscal decentralisation proposed here will include the transportation and internal security.

The DAP proposal for “economic democratisation” via increased fiscal decentralisation marks a tectonic shift in the Malaysian economic framework which a will trigger an explosive boost to economic efficiency and productivity due to greater effectiveness in per ringgit expenditure as well as higher multiplier effects for government expenditure on the economy.

Fiscal decentralisation will also ensure more balanced regional development as opposed to highly centralised development in selected regions such as the Klang Valley, and thus creating more developed and economically productive secondary cities through out the entire country.

To complement the move for economic democratisation via fiscal decentralisation, DAP will move for complementary local government elections with amendments to the federal constitution, and for sharing more fiscal power with state governments. This will ensure that the greater fiscal allocations to and the utilisation by the local authorities and state governments will remain fully transparent and accounted for by democratically elected and competent representatives.

4.2 Thrust II: Rakyat First – Restructuring & Reallocation

Years of weak and misdirected policies, as well as abuse by the existing government have resulted in institutionalised misallocation of Malaysia’s scare resources which has concentrated the benefits to the few who are politically connected, while marginalising the vast population where the help and resources are much required. Malaysia’s decades long fling with the New Economic Policy (NEP) which emphasizes almost exclusively on “race” at the expense of “needs” and “merit”, have resulted in major structural deficiencies in our economic system which penalises both the welfare of the people and the efficiency of our economy. On the other hand, the institutionalised misallocation has enriched the select few who are able to exploit the misguided NEP. A major concerted effort to restructure and reallocate our economy is hence required to ensure more balanced development between the rich and poor, as well as fostering greater economic efficiency and competitiveness.

As part of the restructuring and reallocation thrust, there will be dedicated efforts towards proper implementation of an efficient welfare system is required to help ensure those born into poverty are not trapped in a vicious cycle. The emphasis will strictly based on needs, and not on “race” as dictated in the NEP. Those specifically belonging to any race which are economically weaker as a whole will by definition receive the appropriate aid from the Government. On the other hand, those who are well-endowed and economically productive will not deserve assistance under welfare programmes regardless of race. The DAP strategy will include reallocation – direct handouts to the hard-core poor and elderly – and capacity building – improvements in education, transport and healthcare that will facilitate individuals working their way up the income ladder.

The DAP Budget 2010 also instills accountability and equitability in the distribution of the nation’s oil wealth. Malaysia has been blessed with rich petroleum resources which has generated huge income streams for the Malaysian government via the collection of income taxes, royalty, dividends and other taxes and fees. However, despite the lucrative returns from the oil and gas industry over the past decade, every single sen of earnings from this windfall has not only been spent, but with added debt on top. For 12 consecutive years, despite sky-rocketing global oil prices, Malaysia has no reserves or surplus to show from our oil wealth. The DAP seeks to restructure and reallocate our oil wealth, to ensure that it will be invested with the aim of creating a perpetual income stream that will flow even after the oil stops flowing through saving for the future economic downtime, strategic investment in building new capabilities such as renewable energy and green technology, as well as development of human capacities.

At the same time, DAP also seeks to restructure the lopsided concessions created since the 1990s under Mahathir’s “Malaysia, Inc” major privatisation programmes. These massive concessions which enriched a few, and drains the nation of its wealth, continue to strain the nation financially and compromise the country’s ability to compete effectively in the global marketplace. These contracts, especially ones concerning Independent Power Producers (IPPs), tolled highways and water concessions should never have been handed out to begin with, as politically-connected concessionaires have reaped grotesque amounts of profit at the expense

of hardworking, ordinary Malaysians.

4.3 Thrust III: Empowerment & Enablement – Economic Capacity Building

Finally, DAP receognises the development and retention of talent as a critical necessity for Malaysia to expand into high value industries. In addition, to restore Malaysia’s attractiveness as an investment destination, a range of concerted measures will be taken in the areas of education, healthcare, transportation, finance, technology, security, energy and environment in enhancing our regional and global competitiveness.

The weakening global competitiveness of Malaysia is real. The Government’s continued basking on past glories will only result in irreparable damage to our economy and national competitiveness. However, if we instill in our economy the spirit of resilience as well as the ethics of competition, hard work and innovation, Malaysia will be better positioned to reap the full potential of global economic growth. DAP seeks to revive the fierce competitive spirit of the Malaysian economy, complemented by increased competency, greater accountability and improved transparency.

                This entry was posted on Wednesday, 7 October 2009, 10:22 pm and is filed under
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Prime Minister of UMNO?

by
Hussein Hamid

Will someone tell if this Najib is the Prime Minister of UMNO, of the Malays or of Malaysia. I did not mention the Chinese, the Indians and the Others because by default and by his actions he has certainly made these people reject him as their Prime Minister. So that leaves the Malays and Malaysia because he certainly is Prime Minister of UMNO. Now because Malaysia is made up of not only Malays but also the others then again by default he cannot be Prime Minister for Malaysia. So that leaves the Malays.

The jury is still out and deliberating this issue. Yes there are only Malays in UMNO. But are the interests of UMNO and the Malays the same? The Malays are Muslims. And so, it seems are the profess religion of those in UMNO. Tapi cakap bukan serupa bikin. Islam frowns on greed, corruption, and deceit. UMNO does not.

The Malays are polite, soft spoken and do not, I repeat do not, tolerate arrogance and lack of respect for elders and for those that live amongst them. The leaders of UMNO are arrogant to a fault. They strut around like peacocks and yet bury their head in the sand like ostriches unwilling and unable to understand that the Malays are the reason they are in power for the last fifty years.

Instead they let it be known to anybody who would listen that it is because of UMNO that the Malays are what they are today. And what are the Malays today? Are they more successful then the Chinese? No! Are their children better educated that the thousands of others that have chosen or are driven to go overseas to further their studies? No. Are the Malays positioned to take on the Chinese economically? No – not even with the Bumiputra privileges, not with the NEP not even with our so-called control of all the major economic instruments required for our success in commerce.

This is because of the abuse and manipulations by UMNO of all these advantages that was to be for the Malays but instead hijacked by UMNO for its own. So if UMNO insists that the Malays are what they are to day because of UMNO – yes I agree. UMNO has cause the Malays to be a poor second to the Chinese and the others.

So I say that Najib is not Prime Minister for the Malays.

He certainly is Prime Minister for UMNO. He justifies the need and use of the ISA to imprison any opposition politicians that he perceives is a threat to UMNO. Not to the country but to UMNO!

He justifies the taking of our resources by UMNO stalwarts in the name of the Malays and then overlooks the keeping of these resources by UMNO for their own personal account. An act only a Prime Minister for UMNO will condone.

This Najib also talks about taking the high moral ground for all Malaysian and yet as Prime Minister of UMNO picks a  corrupt Isa Samad to be their flag carrier in a by-election this week in Bagan Pinang.

So I say again. Najib is Prime Minister for UMNO. Not for the Malays, not for the Chinese nor the Indians. Not for anybody else in Malaysia. He is only Prime Minister for UMNO.

For us Malays that are not in UMNO I can say with confidence that we will survive. We have survived for most of the past two decades of Mahathir’s regime without much assist from the UMNO government while he helps those preferred UMNO Malays and his cronies to the richness of our country. We do not expect this to change under Najib. We will wait for a Prime Minster to come that will be for Malaysia. For all of us. That day will come soon.

                This entry was posted on Wednesday, 7 October 2009, 10:09 am and is filed under
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Sinking in solidarity with Samy

By
Martin Jalleh

7 Oct. 2009

Samy Vellu is here to stay – as long as he wants. He has been made indispensable, invincible…even immortal.  He will remain as the “Saviour” of the Indians in Malaysia – a god-like status his “devotees” have strenuously bestowed upon him.

This strong message that Samy still reigns supreme was delivered by the majority of the 1,464 delegates at the triennial election of the Malaysian Indian Congress (MIC) held recently. It appears that they would prefer to sink with Samy – rather than swim in the current of change.

Dr M says “MIC is scared stiff of Samy Vellu”. But it is their very own political survival they are shivering and sweating over! Ironically, they felt very secure even if it meant strengthening Samy’s political stranglehold and further suffocating the whole Indian community!

With their future at stake the delegates were not prepared to stick their necks out. In fact, as Dr M once described the members of the MIC, they are “not even ready to stick their little finger out”. Such is the sordid state of affairs in the second oldest political party in the country.

“Everybody is playing safe. If I go against the chief, he’s going to hammer me. Then I won’t get contracts, I won’t be ‘ketua bahagian’ (party division chief),” Dr M succinctly described the sad scenario – which was very similar to Umno when Dr M was its president for 22 years.

Sycophants

In the run-up to the polls, Samy failed to display the stature of an elder statesman. He hyped about change (a hollow promise he made over the past 30 years) but hindered change by handpicking a “Presidential Team” and haranguing deserving candidates who refused to suck up to him.

His self-serving sycophants stuck to the status quo and made an almost clean sweep – the post of deputy president, three vice-presidencies and 19 of the 23 central working committee posts. The delegates shortchanged their party which was in desperate need of change.

As they saluted him, Samy broke into song perhaps in gratitude to the armies of Hanuman (monkey god) whose intervention he had desperately sought to save his day and in great jubilation that he now has a team whom he had selected and who would serve him in servile gratitude!

For Samy the results were a solid endorsement of his feudalistic lordship. But the slim majorities of some of his men, especially his incumbent deputy president G. Palanivel (who saw his majority of 495 votes in 2006 over Subramaniam slashed to 82) signalled a severe slide in the support for Samy.

Showpiece

Shocked by the results, former deputy chairman Subramaniam (Subra) accused the delegates for selling their souls. For so long Samy has used him as a convenient showpiece of democracy in MIC. One such example was Samy’s retort to Dr M in one of their sardonic exchanges.

Dr M had slammed Samy for having stifled Indian voices in the MIC. Samy shot back labelling Dr M “the destroyer of deputies” – in sharp contrast to him having only one deputy (Subra) who lasted for 25 years. Of course he was mum over how he had subdued, silenced and sidelined Subra.

Subra insisted that he was no coward. He had not challenged Samy “because the party was weak. I feared it would further weaken the party. But now the party is being weakened by the leadership and I want to bring a change”.  Sadly, such belated boldness has barely got him and his party anywhere. Its like blowing in the wind!

Having been with Samy for 25 long years, Subra seemed sympathetic to Samy and the syndrome he was suffering from: “Some leaders cannot prepare their mind to accept retirement…It is a combination of ego, addiction to power and false image of oneself… they misguide themselves.”

Subra knew that the party election was a do-or-die battle. Samy portrayed Subra as “doing nothing” for the Indians. Subra highlighted the insecurities of Samy, adding that “the president was too afraid to hand over duties to him” and there was nothing he could do about it.

(Six months before the last general elections, Samy had asked Pak Lah for “some money so that we can boost the morale of the party”. Samy related the outcome: “First he said ‘I’ll look into it’, later he said ‘No’ he cannot give.” And Samy’s response was “…‘what can we do?”! ).

The MIC supremo accused Subra of being “…subservient to Mahathir, I don’t know to what extent he is subservient to Umno… he needs somebody to push him forward. He can’t stand on his own legs…” – like how Samy was subjugated to Umno for the past 30 years and to Dr M for 22 years?

It is very obvious that at 65, and with the MIC in a further state of stagnation with Samy at the helm till 2012 (i.e., if he ever retires), Subra is done for in MIC. The only thing that is left for him to do is to have nothing to do with the MIC and to join the opposition.

Scapegoats

No one has really been interested in lifting a finger to help the Indians at the grassroots. The MIC delegates have been too afraid to “stick their little finger out”, and Samy and Dr M have been only interested in finger pointing and creating a facade of fighting for their cause.

The blame game which began during Dr M‘s tenure, climaxed before and after the MIC party polls when the best players in humbug, hypocrisy, hysterics and histrionics pitted themselves against each other, exposing their naked intentions and contradicting themselves and one another!

Dr M has long argued that the main grouse of the Indians is not with him but Samy Vellu. Remove Samy and all will be resolved. Why did Dr M refrain from removing Samy during his tenure? Was it because he was a very handy “asset” then to hoodwink the Indians?

Samy has said that Dr M “had promised this and that but in the end told the community nehi (’no’ in Hindi)” and that he “did very little for the Indian community… Despite the MIC appealing again and again for help, he refused to budge”.

Samy however has had no guts to stick to his guns especially when the “great statesman” throws down the gauntlet at him. He backpedals soon after he boldly sets himself on a collision course with Dr M. Samy says Subra  is unable to “stand on his own legs”, yet Samy can’t even put his foot down!

Dr M (who does not believe that the Indians are marginalised) once insisted that “the government gave a lot to the Indians”. Alas, there is a lot more to be known! What has happened to the “crumbs” that the government had contributed through the hands of Samy and his cronies?

In the run-up to the MIC polls, Dr M claimed that the Indians are “fed up of Samy Vellu”. They voted in the last general elections for the opposition out of anger with Samy. He should step aside, step down, follow his (Dr M’s) footsteps in retiring. (But has Dr M really stepped down?)

Samy’s retort was that the Indians voted against the BN because they were fed up with the ruling coalition, and not him. He also told his mentor of manipulation that he was messing around with his party polls. Surely Umno would make mince meat of him if he were to interfere in its polls!

The MIC president succeeded in making use of the MIC delegates to severely criticise Dr M and Umno “for favouring only the Malays and ignoring the woes of the Indians for many years” (Malaysian Insider). The polls results they delivered were a snub and a stinging slap in the face for Dr M and Umno.

One delegate suggested a garland of slippers be hung around a portrait of Dr M for interfering. Umno went into a fit and frenzy. The delegate was suspended temporarily. Samy said he would say sorry personally. Dr M hit out at Umno’s hypocrisy and considered the jibe rather petty!

It did not take very long for Dr M to launch another attack on Samy, labelling his former loyal ally “a liability to the BN in the next general election”, and sending him a loud and clear message: “You (Samy Vellu) have failed to lead the MIC until you yourself lost”.

Dr M revealed that he was “worried that the people’s support for the BN (also read as Umno) would erode and the coalition would be the victim because Samy Vellu was still leading the MIC”. Very evidently the former PM is not really concerned about the MIC nor the Indian but the future of his disintegrating Umno.

Shameless

It is very obvious that this game of blame, will continue on between the big political players who without any conscience, will gamble away the future of the real losers in this game – the Indian Malaysian who is increasingly displaced, deprived, disempowered, disillusioned and dysfunctional.

In a Malaysiakini interview, the MIC president dismissed the notion that the longer he remains at the top, the more problems it will create for the party at the bottom. In his usual zest he commented: “Anybody who says that, I will say he is a political zero”..

Very ironically there is no better example of a “political zero” than Samy Vellu himself. He has little or no results to show as he desperately hangs on after 30 years. The MIC resolutions of each branch and assembly, and of each passing year, show no progress but more and more evidence of mismanagement, scandal and frustration.

Samy has no explanation as to why Indian Malaysians have failed to free themselves from what he calls “the shackles of poverty” and why according to him “the rubber industry workers have been neglected over the past 150 years”. Neither has he an answer for “the imbalance of equity participation” they have encountered for so long.

Samy has no parliamentary seat, no Cabinet or government post. He had no contender in the elections of the MIC president early this year – the only real contender was disqualified. He has no political leverage. He has no support from his BN counterparts, especially Umno.

His leadership is one propped up by his lapdogs who have more bark than brains and boldness and who often act like street bullies. After 30 years of being “god” in MIC he has groomed no one to be his successor.

From a multi-racial perspective, his race-based MIC has no longer any place in Malaysian politics. Samy has no tolerance for the truth. There is no doubt that he has no sense of shame – and there is really no future in the MIC! (And of course Dr M has no credibility left to tell him all these!)

(The above is an improved version of an article that first appeared in the latest issue of the Aliran Monthly.)

                This entry was posted on Wednesday, 7 October 2009, 3:35 pm and is filed under
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Tomorrow D-Day for Malaysian universities – THES-QS Top 200 Universities Ranking 2009

The Prime Minister, Datuk Seri Najib Razak went before the United Nations Educational, Scientific and Cultural Organisation (UNESCO) in Paris yesterday to extend his 1Malaysia motto to 1World.

Four years ago, at the University of Malaya’s centennial celebrations in June 2005, as Deputy Prime Minister, Najib threw the challenge to University of Malaya to raise its 89th position among the world’s top 100 universities in Times Higher Education Supplement (THES) ranking in 2004  to 50 by the year 2020.

Instead of accepting Najib’s challenge with incremental improvement of its THES ranking, the premier university went into a free fall for two years followed by completely disappearing from the Top 200 Universities ranking in the past two years.

After being  ranked in 2004 at 89th position in the THES-QS World Top Universities, University of Malaya fell to 169th in 2005 and 192nd placing in 2006, and in the past two years of 2007 and 2008 rankings, not only University of Malaya but Malaysia fell out of the 200 Top Universities altogether!

We can only hope that Najib’s 1Malaysia and 1World calls will not be as dismal as his call in 2005 to University of Malaya to be among the world’s top 50 universities.

Tomorrow, Malaysians will know whether Malaysian universities could redeem themselves and get back into the World Top 200 Universities ranking when the 2009 THES-QS World Top Universities ranking is  released, or whether Malaysia has fallen into the “black hole” of international university competitiveness stakes, unable to prove their academic quality, excellence and worth in the international arena.

Last year was the second consecutive year where there was not only not a single Malaysian university in the 2008 THES-QS Top 200 Universities list, but also  not a single university in the separate ranking of Top 100 Universities for five subject areas – Natural Sciences, Social Sciences, Arts and Humanities; Life Sciences and Biomedicine; and Technology.

Universiti Kebangsaan Malaysia and Universiti Malaya were in the 2006 Ranking, placed No. 185 and 192 respectively. UKM plunged to 309 in 2007  and improved to 250  in 2008 while UM fell to 246 in 2007 improving slightly to 230 in  2008  – but both remain outside the Top 200 Universities ranking.

The government named Universiti Sains Malaysia (USM) as the Apex University but it has a dismal international rankings after being included once in the Top 200 Universities list – No. 111 in 2004, No. 326 in 2005, 277 in 2006, No. 307 in 2007 and No. 313 in 2008.

It is both sad and pathetic that our Apex University, the USM, at No. 313 ranking, is not only left far behind in South East Asia by Singapore (National University of Singapore No. 30 and Nanyang Technological University No. 77) but also by Thailand (Chulalongkorn University No. 166), Indonesia (University of Indonesia No. 287) and the Philippines (Ateneo de Manila University No. 254 and University of the Philippines No. 276).

Until 2007, Malaysian universities were all ranked well ahead of the Indonesian universities, but in the 2008 THES-QS World Top Universities ranking, Indonesian universities were catching up with Malaysian universities in leaps and bounds.

In 2007  for instance, the three top Indonesian universities were all ranked behind the Malaysian universities – University of Indonesia (UI) No. 395, Bandung Institute of Technology (ITB) No. 369 and Gajah Mada University (UGM) No. 360, as compared to the three top Malaysian universities University of Malaya (UM) No. 246, Universiti Sains Malaysia (USM) No. 307 and Universiti Kebangsaan Malaysia (UKM) No. 309.

In the 2008 ranking, University of Indonesia had improved by 108 placings to be ranked as No. 287, Bandung Institute of Technology No. 315 and Gajah Mada University No. 316.

This means that in the 2008 THES-QS Ranking, University of Indonesia (No. 287) had narrowed the gap with University of Malaya (No. 230) and Universiti Kebangsaan Malaysia (No. 250), while ahead of Malaysia’s apex university, Universiti Sains Malaysia (No. 313), University Putra Malaysia (No. 320) and Universiti Teknologi Malaysia (No. 356).

The performance of Malaysian universities in the 2008 THES-QS Top 100 lists for the five subject areas are even more dismal, with not a single university making into the five lists for two years consecutively although Malaysia secured four of these 500 prestigious slots in 2006 – University of Malaya was ranked 49 in Social Sciences and 95 in Natural Sciences, UKM was placed No. 62 in Natural Sciences, and University Sains Malaysia placed No. 96 for Life Sciences and Biomedicine.

For the 2008 THES-QS ranking, National University of Singapore (NUS) (No. 30) is ranked among the Top 100 Universities for all the five categories while Nanyang Technological University (NTU) (No. 77) is ranked among the Top 100 universities for three categories, viz: Technology (No. 26); Life Sciences & Biomedicine (No. 78) and Social Sciences (No.89).

NUS is ranked No. 11 for Technology; No. 17 for Life Sciences and Biomedicine, No. 31 for Natural Sciences; No. 18 for Social Sciences and No. 30 for Arts & Humanities.

NTU is ranked No. 25 for Engineering & IT; No. 99 for Natural Sciences and No. 88 for Social Sciences.

Even Thailand’s Chulalongkorn University is rated among the Top 100 Universities for two categories – Technology (No. 86) and Social Sciences (No. 72); Indonesia’s Bandung Institute of Technology rated as among the Top 100 universities for Technology (No. 90) and two universities in Philippines ranked among the Top 100 Universities for Arts and Humanities – Ateneo de Manila University (No. 79) and University of the Philippines (No. 82).

After being placed in four of the 500 slots in the five Top 100 Universities for the five subjects in 2006, Malaysian universities have been conspicuously missing from all the five listings of Top 100 Universities for the five categories for the past two years.

Tomorrow will reveal whether Malaysia ends the two-year exclusion from the THES-QS World 200 Top Universities Ranking or whether  the country’s universities  haave plunged into the “black hole” of international university competitiveness stakes.

                This entry was posted on Wednesday, 7 October 2009, 2:31 pm and is filed under
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Before 1MALAYSIA can be extended to 1World …

By
Dr Chen Man Hin, DAP Life Adviser

The announcement by Prime Minister Datuk Seri Najib Razak recommending his concept of 1Malaysia to other countries to adopt a similar concept and his call for the creation of 1WORLD dream are both astounding and confusing.

Najib must be commended for his inspiration but unfortunately he is quite premature to do so, as back home in Malaysia, the concept of 1Malaysia is not a done thing yet.

In the first instance, his definition of 1Malaysia is unclear. The people want to know whether 1Malaysia means all citizens are equal, that all citizens have the same status of first-class Malaysians.

If it is so, then why is Umno propagating a policy of MALAY SUPREMACY. Umno claims that Malays are
ketuanan Melayu
 (malay supremacy) while the others the Chinese, Indians and indigenous communities are second class.

Najib is the president of Umno. It is incomprehensible for him to sponsor two conflicting concepts — 1Malaysia and
Ketuanan Melayu
.

The DAP is quite sure that the countries of the world do not subscribe to the philosophies of racial supremacy whether it is white supremacy, Malay supremacy or Aryan supremacy. Apartheid of whatever form stands condemned by the whole world.

The world has embraced the philosophy of a multiracial world, with different culturs, different religions, different mores and habits.

United States which comprises of 87% whites have chosen a black American to be their president. This is a signal for the world that race is no more a racial problem.

Surely, the president of Umno and his cohorts must accept this fact of life. If Umno persists to pursue its objective of
ketuanan Melayu
, it would be extremely difficult for Malaysia to be accepted as a member of a new global world. 1Malaysia cannot be a reality but will remain as a perpetual dream.

For 1Malaysia to be wholeheartedly accepted by all Malaysians, Najib must demonstrate by policies and practices that Malaysia is indeed a country where all races are equal, who enjoy.

                This entry was posted on Thursday, 8 October 2009, 1:03 pm and is filed under
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Malaysia’s loss of face past two years in being totally excluded from Top World 200 Universities retrieved somewhat with University of Malaya ranked No. 180 but still a long way to go

Congrats to University of Malaya (UM) for making a come-back in the THES-QS World Universities Rankings 2009 to be among the world’s top 200 universities – climbing 50 places from last year (No. 230) to rank No. 180 this year.

Malaysia’s loss of face in the past two years in being totally excluded from the Top World 200 Universities ranking has been retrieved somewhat with UM’s return to the Top World 200 Universities bracket but there is still a long way to go for Malaysian universities to establish their excellence and  international competitiveness for at least six reasons:

This is still a far cry from UM’s previous rankings in the THES-QS Top World 200 Universities – 89th in 2004 and 169 in 2005, before falling to 192 in 2006 and out of the Top 200 bracket in the following two years (ranked 246 in 2007 and 230 in 2008).

In June 2005, at UM’s centennial celebrations, then Deputy Prime Minister Datuk Seri Najib Razak challenged UM to raise its then 89th position among the world’s top 100 universities in the THES-QS ranking to 50 by the year 2020. After four years, UM had fallen 91 rankings although this is not as bad as falling 157 rankings in 2007. Is Najib’s challenge for UM to be among the world’s Top 50 universities “an impossible dream”?

UM is being left far behind by Thailand’s Chulalongkorn University, which made giant strides from No. 223 ranking in 2007 to 166 in 2008 and 138 in 2009.

Singapore has two universities in the Top 200 ranking for the past five years. In 2009, National University of Singapore remains at 30th ranking while Nanyang Technological University improved four  rankings from No. 77 to No. 73.

Not a single Malaysian university in the separate THES-QS 2009 rankings of Top 50 universities for five disciplines – Engineering and Information Technology; Life Sciences and Medicine; Natural Sciences; Social Sciences; and Arts and Humanities.

In the 250 slots for the 50 Top Universities in the five disciplines, 49 are taken up by Asian universities with six Asian  universities ranked in all the five disciplines for  Top 50 Universities – University of Tokyo (ranked No. 22 in Top 200 World Universities), University of Hong Kong (No.24), Kyoto University (No. 25), National University of  Singapore (No. 30) and Peking University (No. 52). Thailand’s Chulalongkorn University is ranked No. 49th in the Top 50 Universities list for Arts and Humanities.

Poor ranking of the  other Malaysian universities, with adverse placings as compared to last year for Universiti Kebangsaan Malaysia (UKM), Universiti Sains Malaysia (USM)  and Universiti  Putra Malaysia (UPM) except for  Universiti Teknologi Malaysia (UTM) viz:

Universities

2009

2008

UM

180

230

UKM

291

250

USM

314

313

UTM

320

356

UPM

345

320

If Malaysia is serious in wanting to create a world-class university system to transform the country into a knowledge-based innovative economy, it must end the New Economic Policy (NEP) in the universities and fully restore the policy of meritocracy and academic excellence coupled with social need to provide university education opportunities to economically-backward Malaysians regardless of race.

The government must recognize that so long as the NEP is kept in place in the universities, there would be no way for any Malaysian public university to compete with other universities from other countries.

If Malaysia is to get back to the trail of world-class academic excellence, all universities should be allowed to enroll the most qualified students, employ the most competent professors and researchers with competitive remunerations and restore a culture of academic excellence and freedom.

Furthermore, the  Higher Education Minister must ask the Cabinet to end the present fraudulent meritocracy using both STPM and matriculation by having a common university entrance examination.

This is the recommendation of the World Bank study on “Malaysia and the Knowledge Economy: Building a World-Class Higher Education System” submitted to the government in 2007.

Otherwise, the Higher Education Ministry is only continuing to pay lip service to university excellence and quality without the political will to bring about the institutional changes without which there is no way for UM to meet the challenge to be among the World Top 50 universities and for other Malaysian universities to be in the World Top 100 or 200 universities.

                This entry was posted on Thursday, 8 October 2009, 1:05 pm and is filed under
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Malaysian Economic Democratisation – Extract 2

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

5. Key Policy Highlights

Based on the 3 key thrusts outlined above to achieve greater economic democratisation via fiscal decentralisation, to place rakyat first with restructuring and reallocation, and to empower Malaysians through economic capacity building, the key policy measures proposed include:

Tax revenue sharing agreements
 where 20% of individual and corporate income taxes collected in a state will become the state’s entitlement. For Selangor and Penang, this revenue sharing agreement would entitle them to approximately RM 3.2 billion and RM 500 million respectively. An
equalisation and development grants
 formula based on a function of population, poverty, area development, cost, human development and gross revenue per capita indices will also be given to ensure that poorer states do not lose out.

States will be given the
rights to borrow
 up to a maximum of 50% of their annual ownsource revenue, which is revenue raised directly by the state governments.

We will set up a fund of
RM 400 million
 to provide grants to state governments to reinstate
local council elections
, conduct delineation studies, hold trainings and promote awareness via publicity and education campaigns after amending the Housing & Local Government Act.

Authority over the design and administration of public transport networks will be devolved to states. Every city will have a Transport Authority under the oversight of the local city council; for smaller towns and suburbs, they would be grouped together under the control of the State-wide Transport Authority. In the Klang Valley, which is too interconnected for public transport management to be left to a single state or local council, the DAP proposes to create the
Klang Valley Transport Authority (KVTA)
.

Under this system of
devolved transport expenditure
, RM 13 billion is budgeted for public transport in 2010, and will be distributed to the individual states based on population and vehicle density.
Limited competition and Gross-cost route contracts
 will also be implmented to allow the transport authority to prioritise stability and connectivity while seeking cost efficiency. Under this system, the network and design is determined by the transport authority, while the operator selected via a open and competitive tender.

RM750 million in 2010 to
eradicate hardcore poverty
 in Malaysia within 5 years, RM500 million for
Social Safety Net
 for those living below the higher and revised Poverty Line Income (PLI), RM 500 million for
development of human capital
 of poor families and RM 3 billion for the
development of basic amenities
 in rural areas and East Malaysia.

RM1.07 billion will be allocated for the
Senior Malaysian Bonus
. Up to RM3,000 will be channeled into EPF account of a working adult at the end of the year and will be available for immediate withdrawal if the personal income is less than RM3,000 per month under the
FairWage Programme
. RM 1500 will be given to a homemaker (non-working spouse of a working adult) whose spouse income is not more than RM3,000.

To assist the Malaysians cope with the rise in living expenses, particularly in urban areas, we propose that the first RM15,000 chargeable income will be tax exempt, with the subsequent RM15,000 taxed at 7%. Currently, only the first RM2,500 is tax exempt while the next RM2,500 is taxed at 1%. In addition, we propose that the top tier of the income tax bracket be raised from RM 150,000 chargeable income currently to RM300,000.

Legislate the use of surplus oil and gas revenue
 where at least 20% of the surplus payment will be channelled to Khazanah Nasional for new capacities and capabilities building in key areas such as Renewable Energy and Energy Efficiency (RE&EE), and Green Technology, at least 20% of the surplus payment will be deposited at a new
National Stimulus Fund
 that boosts fiscal spending and provides financial assistance to all Rakyat during economic downtimes under the new
Malaysia Reversed Bonus
 scheme and Special Risk-sharing Initiative (SRI) and at least 20% of the surplus payment will be invested in building human capacity, particularly in Education and Training, above and beyond their normal budget allocation.

An off-budget RM25 billion is allocated to
buy back the PLUS Expressways
 as well as other highway toll concessionaires with abnormal levels of profitability which does not commensurate with the risk and capital invested. The buy-back will be in accordance to the terms and conditions specified in the concession agreements. A new
“Unfair Contracts Act”
 will also be established to ensure transparency and legitimacy of the process, as well as to review other lobsided government concessions such as the Independent Power Producers, the privatised water concessionaires, hospital management services, privatisation of the Government Medical Store and foreign worker medical tests.

To build a real
world class learning environment
 for our young Malaysians and students, a sum of RM43.3 billion is allocated for education and training, accounting for 23.8% of the overall 2010 Budget. At the same time, development expenditure will increase most significantly with RM13.69 billion over RM10.07 billion boosted by the legislated 20% of surplus payments amounting to RM4 billion from PETRONAS earnings.

The existing
JPA undergraduate overseas scholarship scheme
 into two tiers RM60 million is allocated for scholarships to all top SPM students for pre-university studies without conditions for more than 4,000 students, up from the existing 1,500 students, while RM500 million is allocated for at least 1,000 pre-university students who have secured places at top universities overseas. Additionally, RM200 million will be allocated to top pre-university students from poorer background.

To better position our SMEs in the face of changing economic environment, the DAP proposes to mandate the state governments with autonomy and resources in developing thematic SME clusters. RM100 million is also allocated to facilitate and strengthening the collaborations of our universities, SMEs, public and private research centers and a RM250 million fund be set aside to act as seed funding for these new enterprises.

DAP will be proposing allocate RM50 million as a matching grant of up to RM 250 per household for the installation cost of security guards and CCTV for identified high risk neighbourhoods. RM25 million will also apply as a matching grant for the installation of CCTV for micro, small and medium private enterprises in high risk areas. The RELA regiment will also be disbanded and replaced by a Community Police team set up by the respective local council with a total budget of RM67 million.

                This entry was posted on Thursday, 8 October 2009, 9:23 am and is filed under
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Malaysian Economic Democratisation – Extract 3

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

8. Thrust I: Economic Democratisation – Fiscal Decentralisation

8.1 Greater economic efficiency and political accountability

Many countries have pursued fiscal federalism and have devolved or are devolving more power to state and local governments. China and Indonesia’s recent economic success has also been linked with the decentralisation of economic decision-making. In the UK, the Calman Commission has recommended that Scotland be given greater tax-varying powers in order to further improve their devolution process. This is largely because of the economic efficiency and accountability arguments.

Certain areas of expenditure responsibilities should be decentralised because states and local governments are better placed to tailor their programmes to local needs. For example, state governments are more likely than the central government to know their region’s comparative advantage and hence promote investment initiatives accordingly. In order to decentralise expenditure, revenue must also be shared with states. Instead of being dependent on the federal government spending directly in the states, states would be able to implement their own programmes encouraging tourism, SMEs and industry. In this case, when the 13 states are unshackled in their courting of investment projects with their tailored policies, it is very likely that more and better investments will be attracted and made.

The stronger link between a state’s work efforts and its revenue would also increase economic growth incentives for both public and private sectors. The public sector has greater motivation to increase their tax base and hence to promote and develop industry within their borders. There will also be healthy competition between states that will encourage greater efficiency in public service delivery and innovation in promoting development. More importantly, the greater control states have over their revenue and expenditure and the states’ development would allow voters to hold the state governments more accountable, instead of letting state governments blame their shortcomings on the federal government.

Existing imbalances between federal and state powers

Malaysia was created as a federation that guaranteed the rights of the member states. But in the past 50 years, political and financial power has been increasingly centralised at the federal level. Federal government revenue grew from 4.4 times the consolidated State government revenues in 1990 to 7.2 times in 1999 to 10.4 times in 2007. Federal government expenditure increased from 4 times the consolidated State government expenditure in 1990 to 7.8 times in 1999 to 12 times in 2007.

Considering how consolidated State government revenue and expenditure is made up of 13 states, it is clear that public spending is highly dependent on the federal government. The federal government had a budget of more than RM 200 billion in 2009 whereas state budgets ranged from less than RM200 million (Perlis) to just under RM3 billion (Sabah).

In addition, federal allocations to State governments have slowly shifted from grants to loans. Federal Government grants to the States decreased from 9.0% of its operating budget in 1975 to 3.2% in 1999 to 2.9% in 2008.15 Between 1975 and 1999, outstanding loans from the Federal government to the State governments also increased from RM1,107 million to over RM9,000 million.

This imbalance in revenue flow and the federal government’s shift from giving grants to loans has tightened federal control over states. Due to a lack of fiscal resources, State governments have gradually surrendered various functions to the federal government, thus allowing further centralisation.

Direct federal grants to the states make up a small proportion of federal allocations to states. For example, Penang was allocated RM 1.2 billion in federal development expenditure in 2007 and only received RM 127 million in grants. This in turn means that the federal government has great influence over what goes on in each state and there is a lack of accountability by state governments to their voters for public spending in states.

Political abuse of discretionary federal power

Currently, the Constitution only guarantees capitation grants and grants to maintain state roads. However, despite amendments over the last half century to the sums guaranteed, the figures have not kept up with inflation. E.g. in 2007, Johor got RM41,049,159 or RM11.80 per capita under capitation grants, Selangor got RM67,661,987 or RM12.80 per capita, and Perlis got RM8,389,573 or RM34.10 per capita. The rest of the federal allocations to states, whether in the form of grants, project-specific or direct spending, are discretionary and entirely up to intra-BN negotiations or the whims of the federal government. Unfortunately, this distorts the state governments’ incentives. Instead of working for the benefit of the people who elected them into power, state governments are beholden to whoever is in power at the federal government.

The politicizing of federal-state fiscal relations is clear when analysing allocations to Kelantan and Terengganu. These two states have been among the poorest and least developed in Malaysia. But during periods in which their state governments were controlled by opposition political parties, the
rakyat
 were punished by smaller and delayed grants to the State governments. Furthermore, when PAS formed the Terengganu State government in 1999, the federal government withheld the petroleum royalties due to the state and instead issued

payments directly to villagers through ad hoc programmes. Thus, federalism in Malaysia can be characterized as “retractable”: The rights of the states have been at the mercy of the federal government.

The centralisation of financial power and decision-making at the federal level may also have contributed to the biased focus on developing the Klang Valley. As a result, the development of secondary cities within Malaysia is depriortized and this has resulted in excessive migration to the Klang Valley which further decelerate economic activities and progress of these cities. On the one hand, it has created immense stress on the infrastructure and it development in the Klang Valley, while on the other hand, for state capitals such as Ipoh and Kuala Terengganu which are designated as official “cities”, economic activities there remains focused on less sophisticated industries and a clear absence of high-end professional and financial services.

                This entry was posted on Thursday, 8 October 2009, 11:10 am and is filed under
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Malaysian Economic Democratisation – Extract 4

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

8. Thrust I: Economic Democratisation – Fiscal Decentralisation

8.2 Fiscal decentralisation policies

Other countries, such as Canada, Spain, and the UK have been moving in the opposite direction recently compared to Malaysia, by increasing decentralisation. Nearer to home, China and Indonesia have also successfully decentralised much of their financial and economic decision-making process. Even smaller countries such as Switzerland and Belgium have developed forms of fiscal federalism. To ensure that Malaysia is able to tap into the sizeable latent potential benefits arising from the political accountability, economic efficiency and economic growth, DAP proposes that states are granted greater control over their finances.

8.2.1 Tax revenue sharing agreements

It is proposed that the federal government enter into tax revenue sharing agreements with states so that there is a stronger link between a state’s performance and its revenue share. 20% of individual and corporate income taxes collected in a state, as determined by the residence of the taxpayer and location of the establishment, will become the state’s entitlement. Income taxes will continue to be collected by the federal government using the existing infrastructure, but the states’ portion will be distributed back to the states for each financial year. This is the system which has been adopted by Germany.

For Selangor state, which contributes approximately RM 16 billion a year in income taxes, this revenue sharing agreement would return RM 3.2 billion to state coffers, which is twice the size of their current budget. For Penang on the other hand, 20% of what an approximate RM 2.5 billion in income taxes would give them RM 500 million, which is larger than their current budget.

8.2.2 Equalisation and development grants

For the poorer states with smaller tax bases, equalisation grants will be given to meet their fiscal needs and make sure people benefit from similar levels of public services at a similar tax burden throughout the country. The formula for equalisation grants will be linked to the relative tax base in state compared to average tax base in country.

Development grants will also be given to less developed states to promote economic development and help them catch up. These grants will be formula-based to ensure that states and the rakyat get what they are entitled to, and that grants are not used for rewarding political support or obedience. The formula will likely be based on some measure of poverty rates and average income. These formulae will also be reviewed every 5 years to ensure their relevance. We will also review the amounts guaranteed in the apitation grant.

In Indonesia for example, the “Expenditure Needs” of each of its 434 districts and 32 provinces is a function of population, poverty, area development, cost, human development and gross revenue per capita indices. A formula-based equalisation and development grant will ensure greater predictability of grants and state finances, ensuring better long term planning by the respective state agencies.

8.2.3 Rights to borrow

Furthermore, it is proposed that states be given power to borrow from sources other than the federal government. States lost their right to borrow when they joined the Federation of Malaysia because the Constitution only allows borrowing from the federal government. But this need not be the case. Many other federations in the world, e.g. the US, Canada, Germany and Switzerland, allow states or provinces to have autonomous borrowing rights. This enables states to invest in infrastructure and development projects without needing to wait for federal approval and funds. Additionally, state governments would also be accountable to their creditors and thus have further pressure to invest wisely.

To ensure that the states utilise this new found right in a responsible and effective manner, restrictions will be put in place initially to ensure a managed transition. States can only borrow up to a maximum of 50% of their annual own-source revenue, which is revenue raised directly by the state governments and does not include federal grants or shared federal income tax revenue. The funds raised must be used for development expenditure and not operating expenditure. In the initial 3 years of introducing this measure, the federal government will guarantee only 30% of state debt to help states enter the borrowing market. The burden of scrutiny must however, be on the private sector lenders.

8.2.4 Increased state expenditure responsibilities

At the same time, we propose increase more spending power to states. States will be granted the responsbility to take charge of expenditure on areas such as public transport, amenities, utilities and social welfare, where the state government and local councils are better positioned to tailor responses to local needs. There will also be new responsibilities created such as the setting up of community police which will be given to the state for implementation.

States will have access to federal expertise at the Economic Planning Unit which will act as a co-ordinating agency, and various federal ministries to make sure they are able to use their new allocations most efficiently, and to prevent unnecessary and ineffective duplication of functions or investments.

                This entry was posted on Thursday, 8 October 2009, 11:20 am and is filed under
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Malaysian Economic Democratisation – Extract 5

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

9. Thrust II: Rakyat First – Restructuring and Reallocation

9.2 Managing Oil Wealth

Over-reliance on Oil and Gas

Malaysia is blessed with abundant natural resources. In particular, we are thankful that the country is rich in oil and gas, which created Malaysia’s sole representative in the Fortune 500, Petroliam Nasional Berhad (PETRONAS). Since the incorporation of PETRONAS Group 35 years ago, the Group has paid RM471 billion to the Government, in addition to bearing a cumulative gas subsidy of RM97 billion.

In the most recent financial year ending March 2009, PETRONAS achieved profit before tax of RM89.1 billion amidst the challenging economic backdrop. Of greatest importance was the fact that PETRONAS contributed RM61.6 billion to our national coffers in taxes, royalties, dividends and export duties last year. Contribution from PETRONAS Group alone was budgeted to make up some 46% of the Federal Government revenue for 2008. This represents a steep increase from approximately 20% in 2004. The heavier reliance on oil and gas industry for Malaysia over the years signals an alarming trend.

Despite the fact that the total Malaysia hydrocarbon reserves has increased marginally from 20.13 billion barrels of oil equivalent (boe) at January 2008 to 20.18 billion boe at January 2009, and the reserves replacement ratio (RRR) has improved from 0.9 times to 1.1 times during the same period, our reserves will inevitably run dry at some point. During an interview with Bernama in June 2008, the president and chief executive officer of PETRONAS Group, Tan Sri Hassan Marican said that “we will continue to produce for another 20 years or so.” In more immediate terms, “Malaysia will become a net importer when its domestic consumption, growing at six percent per annum, is expected to overtake national production in 2011.”

Furthermore, increasing globalisation has intensified the competition among PETRONAS, oil majors and other national oil companies. This impact is particularly significant because international operations were both the Group’s biggest revenue generator as well as its fastest growing segment for the last two consecutive years. 42.1% of the Group’s revenue for FY2009 was derived from international operations, compared to 35.4% in FY2005. In order to maintain its competitive edge as a leading global oil player, it is crucial for the Group to channel its profit and investment to maintain the amount of extractable oil and gas reserves, to enhance its recovery ratio and to improve the reliability and productivity of its infrastructure.

However the Group’s investment capability and long term sustainability might be undercut by the declining share of profit for reinvestment and rapid-growing total payments to the Governments. In particular, profit available for reinvestment by PETRONAS has dropped from 42.5% in FY2005 to only 21.1% in FY2009. In terms of absolute value, it has dropped from RM28 billion in FY2005 to RM21.9 billion in FY2009. In the meantime, share of PETRONAS Group profit allocated to the Federal Government has increased from 44.1% to 65.4% over the same period.

As a result, the total payments by PETRONAS to both the state and federal governments have ballooned from RM32.1 billion in FY2005 to RM74.0 billion in FY2009. The frightful acceleration of dependence on our limited oil and gas resources places the country’s economy at great risks.

9.2.1 Capping PETRONAS profit contributions

To tackle the over-reliance on oil and gas revenue, the DAP proposes that the PETRONAS Group sets the target to pay not more than 50% of the Group profit before tax, duties and royalties to the Federal Government from 2012 onwards. Through imposing this cap on the proportion of Group profit paid to the Federal Government, our nation would maintain the share of oil wealth to the Federal Government revenue at around 35%, which is coherent with the strategic goal of our nation to diversify its economy and revenue sources.

The cap imposed on the proportion of Group profit paid to the Federal Government would not compromise the fiscal strength in stimulating our national economy. The fact that Norway only derives approximately 30% of its national revenue from the petroleum industry despite its position as the third largest gas exporter globally provides an exemplary model for our nation to follow.

The cap would not only reverse the trend of over-reliance on exhaustible oil and gas resources, and hence catalyse the growth of other productive sectors of the economy, but also enable PETRONAS Group to boost its reinvestment ratio. The reserved profit endows PETRONAS with the flexibility and capacity to increase the share of profit reinvested to approximately 40% level. This will narrow the gap of reinvestment ratios among PETRONAS, oil majors, which reinvest 57.1% of their profits in average for FY2009, and other national oil companies, which channel an average of 72.9% of their profits for reinvestment in the same fiscal year.

Given the current challenging economic climate in Malaysia, the DAP understands the needs to stimulate and hasten our economy recovery through greater injection of our oil wealth. Therefore, the DAP proposes in this Budget that the PETRONAS Group channels 60% instead of 50% of the Group profit before tax, duties and royalties to the Federal Government for Budget 2010.

9.2.2 Optimizing Utilization of Oil Wealth

Malaysia’s abundance of oil and gas resources is akin to striking lottery. Our nation must not fall into the trap of what economists call the “resource curse” in which countries devoid of natural resources fare better than countries better endowed. It is imperative for our nation to optimise its oil wealth, and utilise the resources in the best interests of the nation and the Rakyat. In light of this, the DAP proposes in this Budget that only a fixed value of RM30 billion, out of the total payment by PETRONAS to the Federal Government, will be channelled directly to the normal national budget. This figure shall be adjusted upwards in accordance to the country’s inflation rate for subsequent years. Any surplus of the total contribution to the Government by PETRONAS shall be legislated as below:

At least 20% of the surplus payment will be channelled to Khazanah Nasional for new capacities and capabilities building in key areas such as Renewable Energy and Energy Efficiency (RE&EE), and Green Technology

At least 20% of the surplus payment will be deposited at a new National Stimulus Fund that boosts fiscal spending and provides financial assistance to all Rakyat during economic downtimes under the new Malaysia Reversed Bonus scheme and Special Risk-sharing Initiative (SRI)

At least 20% of the surplus payment will be invested in building human capacity, particularly in Education and Training, above and beyond their normal budget allocation

As an example, PETRONAS Group profit before tax, duties and royalties is forecasted to be RM84 billion for 2010 Budget. Based on the DAP’s proposal, RM50 billion (60% of RM84 billion) will be paid to the Federal Government. A fixed amount of RM30 billion out of the RM50 billion will be channeled directly to the normal national budget. The remaining amount of RM20 billion will be spent according to the proposed legislation, in which at least RM4 billion will be streamed each to Khazanah Nasional, National Stimulus Fund, and Human Capacity development (i.e. Education & Training) respectively.

9.2.3 Khazanah Nasional: Building New Capacities & Capabilities

Adopting Best Practices of the Petroleum Fund of Norway

“Norway’s sensible approach to oil wealth management deserves the attention it has received in other resource-rich countries around the world.” The Petroleum Fund of Norway, which is derived from the surplus wealth produced by Norwegian petroleum income, provides a role model for our oil wealth management. This Norwegian fund has exceeded US$388 billion by the end of 2007, which is equivalent to around US$75,000 per Norwegian, up from US$1,500 per Norwegian in 1996. Most importantly, the fund is driven by great transparency and trust, in which it distinguished itself from other sovereign wealth funds in the amount of information it makes public. Its performance and risk exposure are reported quarterly and its holdings in about 3,500 companies are detailed annually.

Transforming Khazanah Nasional

Judging from the remarkable performance and high reputation of the Norwegian fund, there is a strong case for Malaysia to adopt the best practices of this open fund in the process of propelling our national economy forward. It is important for our nation to capitalise on the windfall revenues by building new capacities and capabilities. The DAP proposes to channel at least 20% of the surplus payment directly to Khazanah Nasional, the investment holding arm of our Government. For the 2010 budget this amounts to at least RM4 billion. The DAP perceives this mandate as an opportunity and strategic timing for Khazanah to transform itself into a world-class government investment arm that boasts a high level of transparency and professionalism.

Since its establishment, Khazanah has been empowered as the Government’s strategic investor in new industries and markets. Moreover, Khazanah is also tasked with nurturing the development of selected strategic industries in Malaysia with the aim of pursuing our nation’s long-term economic interests. Given Khazanah’s experience and expertise in promoting economic growth and making strategic investments on behalf of our Government, the DAP proposes to give Khazanah the mandate to utilise the allocated resources to equip our country with new capacities and capabilities, by investing in projects and companies in key areas such as Renewable Energy & Energy Efficiency (RE&EE), and Green Technology.

The focus areas will be reviewed every five years to enhance our global competitiveness. Through channelling our oil wealth into building new capacities and capabilities, the depletable revenue stream from our natural resources will be converted into a perpetual income flow. Consequently, Malaysia will be better prepared in optimising unexpected opportunities and facing uncertainties of future leadership.

Expediting the Growth of Renewable Energy & Energy Efficiency

RE&EE is identified as one of the key development areas for our new capacity and capability building. Against a backdrop of robust industrialization and development globally, the world energy demand has set on a rapid-growing trajectory. According to the Energy Information Administration (EIA), world energy consumption is projected to increase by 44% from 2006 to 2030. In the meantime, renewable energy is the fastestgrowing source of world energy, with consumption increasing by 3% per year.

While an increasing number of advanced economies are gearing towards the use of renewable energy, Malaysia is seemed to be lagging behind the train of growth in this aspect. Based on the Ninth Malaysia Plan, the projected energy demand in 2010 for Malaysia will consist of 61.9% petroleum products, 15.8% natural gas, 18.9% electricity, and 3.4% coal & coke; the demand for renewable energy is negligible. Meanwhile, less than 3% of the energy supply will be derived from renewable energy. In view of this, it is essential for our country to boost investment in renewable energy and energy efficiency. Expediting the growth of renewable energy and energy efficiency will certainly help Malaysia to enhance its long term energy security and sustainable development.

Tapping into the Green Technology

Another focus area is Green Technology. The new millennium has witnessed a surge of government investments in Green Initiatives around the world. The commitment and endeavor of South Korea in pushing the frontier of Green development is particularly noteworthy. The success of the USD900 million urban renewal project in restoring the Cheonggyecheon River has ignited a string of green innovations in the country. In 2009, South Korea has pledged to invest USD32.7 billion (approximately RM111 billion) in the “Green New Deal” over a four year period. In particular, South Korea will create lowcarbon emitting railways, construct nationwide bicycle path, build dams, reservoirs and various water management facilities.

As part of the Green Technology programme, Khazanah will co-invest with the Selangor state government
RM2.5 billion
 over 5 years to the urban renewal of the Klang River, to emulate the success of Cheonggyecheon River project in South Korea. The Klang River clean-up and rehabilitation project which will ultimately cost RM20 billion over 10 years, will enhance real-estate development along the river and land reserves, provide business to companies and jobs for the people as the river together with its many tributaries was over 250km long. Along the global tide of Green development, Malaysia has the potential to build significant capacity and capability in Green Technology. Khazanah will channel the funding into appropriate Green Technology investment that can be leveraged on our national core competency. As an example, Malaysia can take advantage of its vigorous palm oil industry, which generates vast amount of palm biomass to develop a palm-oiloriented recycling industry. This direction is coherent with the push for recycling and renewable industry in both South Korea and Hong Kong. For instance, South Korea is spurring its recycling and renewable industry, in particular through investment in facilities converting trash into fuels and bio-gas. Currently, 75% of renewable energy in South Korea is derived from waste. Similarly, Hong Kong is developing a regional hightech recycling industry in the Pearl River Delta.

9.2.4 National Stimulus Fund

The National Trust Fund, or Kumpulan Wang Amanah Negara (KWAN), which was set up in 1988 under the Act 339 will be remodelled and substituted by the National Stimulus Fund.65 This new fund will be established to drive fiscal spending and to provide financial assistance to all Rakyat during economic downtimes when the GDP grows at levels below 2%. This fund will have a crucial role in stabilising revenues and helping all Rakyat to through economic hard times.

The DAP proposes to mandate the EPF as the manager and custodian of this newly established National Stimulus Fund. Guided by the clear mission of securing the continual prosperity and sustainability for our national economy, the EPF will channel this fund into stable long-term investments such as well managed funds.

In the years of booming economy and windfall revenues, the surplus payment from PETRONAS will be deposited in the National Stimulus Fund, which focuses on low risk investments with steady rate of return. This practice will not only better prepare our country for unforeseen circumstances and future uncertainties, but also prevent the scenario of overheating and overinflating our economy during good times. Based on the estimated revenue projections from PETRONAS, at least
RM4 billion
 will be deposited into the National Stimulus Fund in 2010 based on the DAP Alternative Budget.

DAP believes that oil revenue windfall should be shared and enjoyed by all Rakyat in order to cultivate greater stewardship and to cherish the labour of all Rakyat. This sharing of wealth can best achieve its objectives by rendering financial assistance to all Rakyat directly during economy slowdown when our Rakyat need the support the most.

Malaysia Reversed Bonus

Table 6: Malaysia Reversed Bonus for different Income Tiers

Estimated Monthly Income
(RM)

Estimated Number of
Workers

Malaysia Reversed Bonus
(RM)

Bonus Distributed
(RM)

Working Rakyat:

<RM2,000

6,319,152

900

5,687,236,800

<RM4,000, but >RM2,000

2,492,703

600

1,495,621,800

>RM4,000

2,358,945

300

707,683,500

Total

11,170,800

7,890,542,100

Homemaker:

<RM2,000

3,814,552

900

3,433,096,586

Grand Total

14,985,352

11,323,638,686

Average (RM)

756

This financial assistance will be distributed under the Malaysia Reversed Bonus Scheme. Every working Rakyat and homemaker in Malaysia will be entitled to the Bonus varied according to their monthly income level on a progressive basis. The Bonus for different tiers of income is detailed in the Table 6 above. The Bonus will be available for immediate withdrawal among all working Rakyat and homemakers when GDP growth is below 2%.

Under the Malaysia Reversed Bonus scheme, approximately
RM11 billion
 will be distributed to the Rakyat in combating economic downtimes. The Rakyat will receive an average bonus of RM756. The Bonus distributed directly to the Rakyat via their EPF accounts to enable them to make sensible spending in easing their financial predicament with immediate effect, while spurring our economy out from the gloom at a greater pace.

Special Risk-sharing Initiative (SRI)

To fully achieve the stimulus impact of our Fund, a Special Risk-sharing Initiative (SRI) similar to that proposed by Singapore in its 2009 budget will be launched in conjunction with the Malaysia Reversed Bonus. It is undeniable that banks tend to cut credit lines during a crisis, exacerbating the downturn as even good businesses have to curtail activities due to lack of financing.

To address this issue, our Government will share the risk of loans to SMEs should they turn sour. Under this SRI, banks will still be responsible for assessing credit and sourcing the customers, but our Government will share 50% of the risk of these loans. This initiative will improve banks’ willingness to grant credit and hence alleviate the credit crunch faced by Malaysian SMEs. Assuming SMEs account for 25% of the total loans valued at RM130 billion and the unlikely event they all go sour, the total exposure of our Government will reach an estimated
RM16 billion
 (RM130 x 25% x 50%).

Assuming the GDP of Malaysia is to grow at 3.8% in 2010 as projected, which is higher than the 2% proposed threshold that defines economic downtime, the Malaysia Reversed Bonus and SRI schemes will not be implemented for 2010 Budget. In fact, the 20% legislated surplus payment from PETRONAS that amount to RM4 billion for 2010 will be deposited directly into the National Stimulus Fund to be saved and invested for future disbursement. The new direct payment from PETRONAS, together with the estimated RM3.8 billion existing saving in the KWAN, will boost the reservoir of our National Stimulus Fund to at least RM8 billion.

9.2.5 Human Capacity Development

As revenue from oil and gas constitutes more than 40% of the overall Government budget, there is a serious challenge in sourcing alternative sources of revenue to sustain our Government expenditure at current levels. The most promising alternative source of revenue is encapsulated in building a strong base of human capital for our country. With the right quality of human capital, many countries around the world, which are deprived of natural resources, have recorded significant growth above and beyond what we have achieved.

In light of this, the DAP will legislate that at least 20% of the surplus payment from PETRONAS shall be allocated to enhancing human capacity, particularly in Education and Training, on top of their normal budget allocation. This will ensure that our windfall revenues will be productively invested in our most important assets, especially the young Malaysians. Based on the estimates of revenue from PETRONAS for 2010, at least
RM4 billion
 will be additionally allocated towards projects involving human capital development.

The allocation will be spent to accelerate the process of revamping our educational system and elevating the quality of our Education and Training. We can model this spending after the Education Investment Fund of Australia, which provides significant capital investment in Australian higher education as well as vocational education and training. This Education Fund selectively finances innovative and transformative projects proposed by eligible education providers and research institutions that could help equip Australians with the high-level skills and knowledge necessary in an increasingly competitive global economy. Through proper implementation and execution of a similar programme, the declining quality of our education system can certainly be reversed.

9.2.6 Delivering State Oil Royalties as Legislated

To prevent any unlawful dismissal of state governments’ claims on oil royalties and to protect the right of the Rakyat of the state, the state oil royalties will be paid directly to respective states based on the vesting deed agreement signed by the former PETRONAS chairman Tengku Razaleigh Hamzah, which “entitles the state to five per cent of any revenue derived from hydrocarbon deposits found on or offshore of the state.” Therefore, the state of Kelantan will receive its royalty as per the agreement signed on May 9, 1975 which amounts to approximately
RM250 million
 per annum.

                This entry was posted on Thursday, 8 October 2009, 12:10 pm and is filed under
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Malaysian Economic Democratisation – Extract 6

(Extracts from
DAP Alternative Budget 2010
 launched on 7th October 2009)

9. Thrust II: Rakyat First – Restructuring and Reallocation

9.3 Unfair Public Contracts

The Malaysian economic landscape is littered with many one-sided contracts and concessions under which private entrepreneurs reap supernormal profits while the government or government-linked companies continue to bear considerable business risk. Major privatisation exercises were conducted and concessions granted in manners that were not open, accountable and transparent through public tenders.

An Unfair Public Contracts Act will be enacted and an independent public commission to be known as the Public Contracts Commission will be formed to review such lopsided concessions that are deemed to be against the public interest.

Constitutional and corporate lawyer Tommy Thomas if of the view that such an act will be constitutional as it will be similar in nature to the Land Acquisition Act 1960 which allows the government to take over any private land for public purpose, provided adequate compensation is paid.

Such legislation is not unique to Malaysia. Eminent domain (United of States of America), compulsory purchase (United Kingdom, New Zealand, Ireland), resumption/compulsory acquisition (Australia) and expropriation (South Africa and Canada’s common law system) are examples of the inherent power of the state to seize or expropriate private property without the owners’s consent provided, of course,
 that due monetary compensation is paid. Eminent domain is not confined to real property. It also extends to franchises, copyrights, contract rights, trade secrets and patents. Thomas argues that if private ownership of land is not sacrosanct, then neither should be highway and utility concessions.

The DAP, after examining the declassified highway toll concessions, concurs that many concessions are unduly lucrative at the public’s expense. Also, the power purchase agreements (PPAs) the independent power producers (IPPs) have with TNB place undue financial and risk burdens on TNB. High transport and power costs are a burden and drag to economic growth. It is imperative that such inefficiencies be addressed for the good of the nation. The restructuring of these contracts are part of the overall economic reform needed for Malaysia to return to an equitable positon for all Malaysians, and forms a critical element in the 2010 budget theme of “economic democratisation”.

9.3.1 Independent Power Producers (IPPs)

The first IPP licences were granted following a nationwide blackout in 1992. Today, IPPs reap the lion’s share of power sector profits while taking very little risks. Fuel costs are passed-through to Tenaga Nasional Berhad (TNB), the national power company.

In addition, TNB also takes on the demand risk. IPP profits are substantially unaffected by actual power demand due to the lop-sided nature of their power purchase agreements (PPAs) with TNB. In situations where power demand falls below expectations, or declines, TNB is still required to pay fixed capacity charges to IPPs and comply with ‘take-or-pay’ clauses in the contracts.

Former TNB chairman Tan Sri Ani Arope characterised the terms of the PPAs as ‘grossly unfair’, in an interview with Starbiz:

“At 16 sen per unit (kWh) and with the take or pay situation, actually it was 23 sen per unit. With 23 sen, plus transmission and distribution costs, TNB would have had to charge the consumer no less than 30 sen per unit. If mixed with TNB’s cost, the cost would come down but that was at our expense because we were producing electricity at 8sen a unit. We can deliver electricity at 17 sen.”

There was undue government intervention in the PPA negotiations between TNB and the IPPs. As Tan Sri Ani said in the interview,
“There was no negotiation. Absolutely none. Instead of talking directly with the IPPs, TNB was sitting down with the EPU. And we were harassed, humiliated and talked down every time we went there.”

It was well-known that when discussions between TNB and the IPPs reached an impasse over the allocation of risk, discussions would go offline to another level after which the parties involved would return to the table as if nothing had happened. Arope refused to sign the contracts and left TNB in 1996. Indeed, some IPP plants were even built on sites that TNB had identified and laid the ground work for, “but for mysterious reasons they were offered to IPPs”.

The first 5 IPPs were guaranteed returns of 20% a year even though actual returns were much higher.69 The DAP recognizes that in some cases, the original sponsors and owners of the IPPs had sold their plants and concessions at handsome profits to buyers who based their purchase prices on the basis that the lucrative PPAs would be honoured.

For example, Malakoff Berhad bought the license for the Tanjong Bin power station from a company linked toTan Sri Syed Mokhtar for nearly RM1bn. It is Syed Mokhtar who reaped the supernormal profit from the IPP license. Most analysts estimate Malakoff’s returns on this investment in the low teens, after paying the premium to Syed Mokhtar.

There is no easy solution to this issue. On one hand, there is the principle of sanctity of contract, which the DAP fully supports. On the other hand, allowing the contract to perpetuate would inflict unfairly high costs on millions of Malaysians.

In this case, the DAP’s stance is that this injustice cannot be allowed to continue. The buyers must have realised how one-sided the contracts were and must have been aware of the risk that they may be renegotiated. As early as 1997-98 the government had sought to renegotiate the PPAs, less than 3 years after the very first IPPs came into operation.

Via the newly set up Public Contracts Commission, the DAP in the 2010 budget seeks to review the terms and conditions of all existing IPPs. Where the IPPs which are not amenable towards both reducing the electricity rates specified in the PPAs, and unwilling to share the risk of fuel price fluctuation, we will seek to expropriate these IPPs as per the terms specified in the concession agreements.

Gas subsidies

All PPAs have a fuel pass through clause in that hikes in oil prices are passed on to TNB. When these contracts were initially signed, the Electricity Tariff Control mechanism price formula = CPI – M + Y (Fuel Pass-Through = Y). However, in 1997, this mechanism was withdrawn and the price of gas supply was fixed at RM6.40 mmBTU. Of course, this amount is much lower than gas prices in the global market. Subsidies were absorbed by PETRONAS.

Over the years, IPPs have gained tremendously from the subsidies on top of the outrageous profits the already make. As a matter of fact, IPPs have received more gas subsidies than even TNB, RM35.7 million since 1997. That means almost 60% of all gas subsidies to the power sector have gone to IPPs.

Table 7: Gas subsidy allocation

Gas subsidy
Increasing subsidy due to higher volume and price

Gas subsidy

In RM bil

FY2008

%change

FY2007

Cumulative subsidy since 1997

POWER SECTOR

13.8

17.9%

11.7

62.6

 TNB

5.7

5.0

26.9

 Independent Power Producers (IPPS)

8.1

6.7

35.7

NON POWER SECTOR
 – including small industrial, commercial, residential users and NGV

5.9

51.3%

3.9

15.3

TOTAL GAS SUBSIDY

19.7

26.3%

15.6

77.9

Additionally, approximately 87% of our electricity is generated from nonrenewable sources contributing to volatility in costs and tariff rates. Unlike IPPs who can pass on the increase in fuel costs when selling to TNB, tariff rates, the prices at which TNB sells to consumers are pre-determined by the cabinet.

The IPPs claim that they do not make any profit from increase in fuel costs since they retain the same margins. Nonetheless, despite being a business enterprise, IPPs do not take on little if none of the risk from oil price volatility. Instead, it is TNB’s profits that are squeezed every time fuel prices skyrocket while IPPs get a free ride.

Very little investments have been made for the research and development (R&D) of renewable energies. And while this is usually a course of action pursued by the private sector as seen by the diversification efforts of most oil majors, Malaysian IPPs have absolutely no incentive to pursue the development of green technology.

As such, EPU Director of Infrastructure, Dato Dr Gan Kuan Poh had argued that “privatisation and liberalisation in the power generation sub-sector did not progress towards market driven efficiency gains in operations and investment or the efficient and effective allocation of resources”.

Excess capacity

Malaysia currently has a reserve margin of about 47%. This means that we currently have a capacity 47% in excess of normal peak demand levels. Indeed, this is not only wasteful but costs of maintaining the additional capacity is ultimately passed on to consumers. Reserve margins usually need only be between 15 – 20%.

Table 8: Malaysia reserve margins

2005

2006

2007

2008

2010(F)

TNB capacity

6,346

6,346

6,346

0

0

IPP installed capacity

11,277

11,977

13,377

0

0

Total capacity

17,623

18,323

19,723

21,652

23,802

Maximum Demand

12,493

12,990

13,620

14,007

15,602

Excess capacity

41.1%

41.1%

44.8%

54.6%

52.6%

Hence, not only are Malaysians paying a premium for energy from IPPs but we are paying a premium for energy that we do not need! Hence the political will to renegotiate these highly lobsided contracts are imperative, and where renegotiation fails, the IPPs must be expropriated.

9.3.2 Highway Toll Concessions

Highway toll concession contracts will similarly be reviewed and scrutinised by the Public Contracts Commission. For many of these concession contracts however, there already exist expropriation clauses which can be exercised, in the event that a fairer deal for Malaysians cannot be negotiated with the toll concessionaires.

As an example, assuming that toll rates are capped at RM1.60 and no traffic increase for the Lebuhraya Damansara-Puchong (LDP), it’ll cost the Government an estimated RM1.54 billion in compensation alone between now and the end of the concession in 2029. This figure does not yet include the toll fees which are bourne by the motorists which currently amounts to nearly RM300 million per annum, or RM6 billion for the next 20 years. In fact based on the operator for LDP, Litrak’s public listing prospectus, they have anticipated to make RM18.7 billion in net profits after tax over the entire concession period, which is an exhorbitant amount relative to the cost of capital including interest cost of only RM1.327 billion.

However, should the expropriation clause within the LDP agreement be exercised, it is estimated that the Government will only need to pay RM1.4 billion to buy back the LDP. Hence for the LDP after expropriation, toll rates can immediately be reduced to RM1.00 without incurring any further compensation by the government, and the toll collection period can be halved from 20 years remaining to only 10 years. After 10 years, toll may be abolished altogether or toll which is collected shall be channelled towards the National Public Transportation Fund to upgrade and promote the use of our public transport system. Besides the lower toll rates which will immediately benefit the motorists, the savings will also increase Malaysian’s disposable income of up to RM4.5 billion over 20 years which will serve as a natural domestic spending stimulus for the Malaysian economy.

For the purposes of expropriating highway concessions which are generating extraordinary profits at the expense of the commuters, the DAP proposed Budget 2010 will allocate
RM10 billion
 for the exercises. However, the fund shall be raised via Report of Performance and Statistical Information 2006 & 2007 & Tenaga Quarterly Analyst Briefing Presentations government bonds pledged against the cashflow from the highways which have been expropriated and hence it will not add any further stress on the Government’s budget deficit.

North-South Expressway (PLUS)

However, not all toll concessions will have to be scrutinised by the Public Contracts Commission and be expropriated. For PLUS Expressways, which holds the most extensive network of toll highways, which is publicly listed on Bursa Malaysia, can be taken private.

This privatisation exercise will be at zero additional cost to the taxpayer. Currently the Government already owns approximatley 63% of the shares of PLUS. The DAP budget proposes that the Government makes a General offer for PLUS for the remaining shares which it does not already own. It is budgeted that this will cost
RM15 billion
, including retiring outstanding loans amounting to RM8.5 billion which are taken by PLUS.

As per the LDP expropriation example above, the cost of this buy back can be covered via continuing toll collections at the present rates for another seven years. For example, a return KL-Penang journey will remain at RM86.60 today instead of RM115.30 in 2015 and RM168.80 by 2030. This move in itself will create up to RM14 billion toll expense savings for Malaysians from 2009-2015, thereby increasing consumer disposable income which will act as a stimulus for the domestic economy. This will be the amount saved either (i) by Malaysians using the highway because of no further toll rate increases or (ii) in terms of compensation which would have to be paid by the Government to PLUS Expressways. In fact, should the Government decide to freeze the toll rates for PLUS today, but continue with the concession til 2038 when it expires, the Government will actually have to pay approximately RM68.3 billion in compensation to the concessionaire! Hence it is imperative that the Government exercise this buy back at the earliest possible time to ensure more effective use of Government taxes, greater equity and economic justice for Malaysians.

After 7 years, the Government can choose to abolish toll altogether, or collect only a nominal toll will be collected to finance maintenance and upgrading with excess collections contributed to the National Public Transport Fund. The reduced toll rates and its subsequent abolition will substantially reduce the cost of doing business in Malaysia, increase logistical efficiencies and ultimately make Malaysian companies more globally competitive. Best of all, the plan will stimulate demand and make available substantial funds for public infrastructure development without the Government having to increase the precarious budget deficit further.

                This entry was posted on Thursday, 8 October 2009, 1:02 pm and is filed under
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Pakatan Rakyat will seek registration as a coalition under the Societies Act

Pakatan Rakyat will seek registration as a coalition under the Societies Act 1966 with the
stand
taken by the Registrar of Societies Datuk Md Alias Kalil that the law requiring at least seven political parties to register as a society does not apply.

Section 2 of the Societies Act 1966 defines “society” as including

“any club, company, partnership, or association of seven or more persons whatever its nature or object, whether temporary or permanent, but does not include—

(a) any company registered under the provisions of any written law relating to companies for the time being in force in Malaysia;

(b) any company or association constituted under any written law;

(c) any trade union registered or required to be registered under the provisions of any written law relating to trade unions for the time being in force in Malaysia;

(d) any company, association or partnership formed for the sole purpose of carrying on any lawful business that has for its object the acquisition of gain by the company, association or partnership, or by the individual members thereof”.

This has been interpreted as requiring any coalition of political parties to have at least seven constituent political parties to be registered under the Societies Act.

However, as the Registrar of Societies has now taken the position that a coalition of political parties does not fall under this provision, Pakatan Rakyat will seek registration as a coalition under the Societies Act to work for the national reforms and  political changes  if Malaysia is to restore her  national unity, sense of purpose and international competitiveness.

                This entry was posted on Friday, 9 October 2009, 8:49 am and is filed under
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“Tipping Point”….DIN

By
Hussein Hamid

“It will have an effect in the sense that the spirit of the machinery is very high and I feel that there will come a time, a tipping point, where you will see the realization of our members that UMNO has to change and will change and is in the process of changing”. DIN

That is what Din said yesterday after the opening of the University Tun Razak campus building at Capital Square. My friends there are two words in the above statement that we must take note of:

“TIPPING POINT” – it means the level of change at which the momentum for change becomes unstoppable.

UMNO is still talking about trying to reach their “tipping point”. We reached ours in the General Election of March 8th 2008. From that day we had the critical mass to ensure that the momentum towards change is self-sustaining and will, by itself, fuels further growth from within.

That is why we have won 7 of the past 8 by- elections. That is why Zaid and Chua Jui Meng are in our midst.

That is why we have the IGP reappointed to a third term. That is why Pak Lah is no longer Prime Minister.

That is why Isa, a convicted corrupt UMNO leader, is UMNO’s representative in Bagan Pinang.

And that is also why an old man in Adelaide started steadyaku47(sorry guys jut had to add that in…)

All this and many many more ‘happenings’ are the manifestation of that “tipping point” that Din talked about. But here again he has got it wrong. While UMNO thinks that Bagan Pinang will be their “tipping point” I know that by choosing Isa UMNO have already lost in Bagan Pinang.

While they have already lost in Bagan Pinang we are already talking about how we should manage our momentum to peak at the next General Election.

Pakatan Rakyat are focused on consolidating their coalition into a potent force that will meet the aspirations and needs of our people.

Pakatan Rakyat are now in the throes of galvanizing DAP, Keadilan and PAS into the realization that practical politics requires ‘delicate’ adjustments and considerations of each other sensibilities for them to move relentlessly forward. Failure is not an option.

Pakatan Rakyat is grappling with the realization that without the 3M’s to win in Bagan Pinang it will be difficult – not impossible – but difficult. What are the 3M’s?

Money : UMNO has that in almost unlimited amounts and they are not shy to throw it around and consider it as one of their “strength”.

Media: The print media, the electronic media and the interpersonal departments such as Jabatan Penerangan – are all control and used by UMNO for UMNO’s own purposes – however self serving it will be.

Machinery: Such as the Election Commission, PDRM, AG’s Department, ACA etc – All these are Rakyat machineries used for UMNO’s purposes.

We have a reigning Government that shamelessly uses all means at their disposal to win. They no longer try to cloak or disguise their misuse of their power to the people. They trumpet Isa’s visit to the Army Camps. They announce a slew of concessions, financial rewards and so called ‘development’ projects for the constituents of Bagan Pinang. All in the name of development and government ‘rewards’ for the people in Bagan Pinang to bribe them into giving their support to Isa. And when they are done with all these announcements they actually pass around envelopes with cash inside them for distribution to the people of Bagan Pinang. But this is par for the course for UMNO.

But as I have said earlier we have reached our “tipping Point” in March 2008. UMNO have not. We have the momentum to move relentless towards the next General elections. UMNO has not. We have the numbers and these numbers will continue to swell IF we do not forget our goal. And our goal is to bring change. Out with the corrupt, the arrogant and the deceitful UMNO and in it’s place we, the people, will chose Pakatan Rakyat.

Do not forget my friends. Not profit not plunder. Not greed not arrogance. We want a government that we can trust and believe in. That government is not UMNO.

                This entry was posted on Saturday, 10 October 2009, 9:37 am and is filed under
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