Malaysia in the event of regime change

Ong Kian Ming

Malaysiakini

Jun 17, 2012

COMMENT

What happens in the unlikely event that Pakatan Rakyat wins control of the federal government after the 13th general election?

This is a question which few people have tried to address systematically. In this article, I want to highlight what I think will be the five main challenges facing a Pakatan federal government as a way to contextualise the policy options which such a government will have to address.

I have summarised these five main challenges into five ‘P’s:

*Dealing with the ‘Past’.

*Distributing ‘Power’ between the federal and state governments.

*Coming up with a new set of ‘Plans’ in the economic, political and social arenas.

*Focusing on a smaller number of ‘Priorities’ which can be delivered within 100 days and one year.

*Finding a set of ‘Procedures’ to deal with disagreements within the Pakatan coalition.

1. Dealing with the past

Having been in power for 55 years, there are bound to be a whole list of ‘legacy’ issues which a new government has to figure out how to deal with.

It would not be practical for a new federal government to conduct a massive witch-hunt to weed out all those who have paid bribes to the previous government to obtain contracts, to find evidence to convict all BN politicians who have received bribes or have amassed wealth beyond their means or to sack all civil servants who have been complicit in corrupt deals involving the previous government.

But at the same time, it makes sense for a Pakatan government to outline a clear set of rules with regard to how it will, for example, deal with dubious contracts which the government has signed with private companies.

This is important because there is a great temptation for Pakatan to blame the previous BN government for many of the problems that it will face when it is governing. Instead of blaming BN in an ad-hoc manner throughout its first term in government, it would be better for Pakatan to outline a place to clear out the skeletons in the cupboard early in its tenure in power.

Pakatan has already given some indication as to the contracts it will attempt to cancel or renegotiate when it comes to power, namely the contracts with toll operators and independent power producers.

There are bound to be many other smaller contracts which are potentially disadvantageous to the government which could be renegotiated or cancelled. The criteria for contract renegotiation or cancellation need to be spelled out as soon as possible as a way of assuring the markets and the many companies which have large contracts with the government.

Similarly, Pakatan needs to figure out the extent to which it wants to change the government procurement process.

It will be a tricky balancing act since many of the current contractors have well-established relationships with Umno, who are also Malay entrepreneurs who will question Pakatan’s commitment to protecting Malay entrepreneurship if they are cut off from these government contracts.

At the same time, this also presents an opportunity to introduce open-tender processes that could potentially save the government billions of ringgit in expenditure.

More important than mere contracts is the fate of those who wrongly benefitted from the awarding of these contracts and other government-related concessions and favours.

To what extent will a Pakatan government go after the likes of Tajudin Ramli (right), those involved in PKFZ (Port Klang Free Zone), NFC (National Feedlot Corporation) and the Scorpene submarine scandals? Will a Pakatan government try to recover as much revenue as possible and will it try to convict the individuals involved in these scandals as well?

Similar questions surround the fate of BN politicians who may have amassed ill-gotten gains through their government positions. Will Pakatan go after the ill-gotten gains of the individuals in question or will it also go after the individuals in question? Is there a cut-off mark under which some cases may not be investigated?

Here, it may be useful to establish an equivalent of the Truth and Reconciliation Committee established in South Africa after the abolishment of apartheid. In exchange for amnesty, politicians, civil servants and even businessmen who have amassed ill-gotten gains can use this platform to ‘confess’ their past wrongdoing and return a percentage of their wealth to the taxpayers.

Similar actions can be taken by individuals who want to blow the whistle on themselves and admit to past wrongdoing, not just in terms of financial gain but also in terms of other past abuses of power including granting citizenship to foreigners to allow them to vote, wrongfully jailing innocent victims, beating up protestors, just to name a few.

This may be a cathartic experience for the nation for past mistakes to be revealed and for the nation to move on and firmly establish itself as a democratic nation with regular alternations in power.

The question is, will a Pakatan government subject itself to the same levels of scrutiny, including admission of past mistakes among those in Pakatan who were formerly high-ranking politicians in the BN government?

2. Re-distributing power

The second major challenge to a Pakatan government is in the re-allocation of power between the federal government and the states.

Right now, the Pakatan state governments in Kelantan, Kedah, Penang and Selangor say that their hands are tied because of the lack of funding and cooperation from the federal government on key issues including the consolidation of water assets and pricing, the consolidation of wage management, the responsibility for public transportation and road maintenance and the proper allocation of federal funding including the oil royalties paid to Kelantan, Terengganu, Sabah and Sarawak.

With a Pakatan government at the federal level, such excuses will no longer be valid. A Pakatan federal government will have to pick the low-hanging fruit in terms of distributing power and funds back to the states in areas which are clearly defined to be under state jurisdiction.

This may not be as easy as it sounds. Even increasing the oil royalty from 5 percent to 20 percent will entail a redistribution of as much as RM10 billion ringgit from the federal government to the states. Hard decisions will have to be made with regard to where some of these cuts have to be made at the federal level.

Other issues concerning decentralisation of power from the federal to the state governments, a cornerstone of Pakatan’s promises both in the Buku Jingga (Orange Book) and more recently in the Tawaran Jingga (Orange Offer), will require achieving an internal consensus within Pakatan.

DAP will want to push for the restoration of local council elections, something which PAS and PKR seem lukewarm about. PAS will want to push for the implementation of hudud, especially in the states which it controls, especially Kelantan. Needless to say, DAP will object to this vehemently.

A Pakatan federal government would also be under some pressure to apply some of these decentralisation measures consistently among the states, including those governed by the BN.

For example, it would be inconsistent for the BN to give an increased share of oil royalties to Kelantan but not to the BN-governed states of Terengganu, Sarawak and Sabah. Nor would it be consistent for Pakatan to promise to pass this money back to these states on the condition that voters in these states vote in Pakatan state governments.

It actually makes long-term sense for a Pakatan federal government to decentralise as much as is economically and politically plausible as an insurance policy in the likelihood that it loses control of the federal government in the future.

Having greater democracy and decentralised power means that the states and local authorities which Pakatan still controls can have more independence and hopefully, be more effective as well.

3. New set of plans

While one can question their effectiveness, there is less doubt that Prime Minister Najib Razak has put in place a comprehensive transformation plans to address various shortcomings in the political, economic and social arenas.

Most politically aware Malaysians are already familiar with the alphabet soup which is associated with Najib’s transformation programmes – 1Malaysia, ETP, GTP, NEM, PTP – even if they are unsure about the achievements of these programmes.

Pakatan is not likely to follow in Najib’s footsteps in designing a similar ‘transformation’ programme but it will still need to come up with concrete and well-thought-out plans of its own in order to shape the country’s political, economic and social agenda according to the vision and philosophy of Pakatan and its leaders.

Pakatan is better placed in some areas to deliver substantive positive change compared to the BN.

It would be relatively easy for Pakatan to deliver on promises of reform in terms of political rights and civil liberties by abolishing any laws which allow for detention without trial such as the Security Offences Special Measures Act (Sosma), abolish the need to have a permit to print a newspaper and to allow political parties to have a presence in university campuses, just to name a few.

But Pakatan would also have to resist the temptation of using their power in order to intimidate and threaten the mainstream media newspapers and television which are owned or closely associated with BN parties. Similarly, it also needs to resist the temptation of using RTM1 and 2 as a government mouthpiece.

Pakatan can also deliver significant institutional reform such as making the Election Commission (EC) and the Malaysian Anti-Corruption Commission (MACC) independent and allowing them to carry out their jobs without political interference.

It would also have to tackle the tricky task of reforming the police force including finding new roles for existing Special Branch officers, assuming that their services will no longer be needed or needed less often. It is also needs to strengthen the civil service’s resolve to be professional and accountable rather than to force it to change its political allegiance from BN to Pakatan.

In terms of the economy, Pakatan will have to find new sources of economic growth as well as enhancing current sources of growth. Some of this can be realised by the freeing up of certain monopolies so that competitive forces can be released in currently protected sectors.

Other initiatives require a longer time period to come to fruition such as increasing the innovation and R&D (research and development) capacity in the country. One way in which this process can be expedited is to tap on the large Malaysian diaspora, some of whom may be interested to come back and invest their time, expertise and money under a new non-BN federal government.

One of the biggest policy areas for Pakatan to tackle would be in education since this is something which almost all Malaysians care about and where there is a widespread consensus that something drastic needs to be done in order to arrest the decline in the standard of public education in the country.

Pakatan has said that it would respect the rights of vernacular (Mandarin and Tamil) and religious schools to flourish in the country. It will have its hands full in taking on the civil service as well as some within the Pakatan who do not want to strengthen vernacular and religious education, especially in allowing more Chinese primary and independent secondary schools to be established.

These are only a few of the key policy questions which Pakatan has to address if it comes to power at the federal level. The list can easily be longer. Pakatan’s challenge is to design a strategic plan or plans in order to fulfill a set of political, economic and social goals.

4. Urgent priorities

Not all of the plans outlined above can be fulfilled in a short period of time. Some may even take more than one term to deliver the desired results. Pakatan does not have the luxury of taking its time to deliver once it is in control of the federal government.

It needs to prioritise its various objectives so that some immediate quick wins can be given the proper focus.

Some of Pakatan’s promises in its first 100 days in government have already been outlined in the Buku Jingga such as providing free Wifi to the rural areas in the country and abolishing certain corporate subsidies such as the gas subsidy to the independent power producers (IPPs).

These deliverables may have to be adjusted if a Pakatan federal government realises that some of the initiatives may take longer than 100 days to fulfill.

It is important for Pakatan to show it can deliver concrete results and initiatives early in its administration so that it can build momentum for other initiatives later on. Without clear, focused priorities, Pakatan may fall into the trap of wanting to do too much but failing to deliver anything significant in a timely manner.

5. Procedures to overcome disagreements

Finally, Pakatan will have to come up with certain procedures, both formal and informal, for dealing with disagreements between the Pakatan component parties on key policy issues. I have already pointed out that local government elections and hudud are two potential flashpoints within the Pakatan.

There is no doubt that other controversial disagreements will emerge from within the Pakatan coalition. Unlike the BN, where Umno can dominate and control major policy directions, the parties within the Pakatan coalition are much more equal in terms of stature and also control of parliament and state seats.

Even though the prime minister from Pakatan, most likely Anwar Ibrahim, will yield considerable power, it would be difficult for him to ride roughshod over his component party members in the same way as for example, Dr Mahathir Mohamad, within the BN context.

The Pakatan supreme council needs to be strengthened and proper procedures identified in order to solve conflicts emerging from within Pakatan on issues of national and sub-national importance.

Just the tip of the iceberg

This article has barely scratched the surface of what a Pakatan government may look like and the main challenges which it will face as a new ruling coalition.

But hopefully, it has been helpful in outlining the major issues of contention and providing some guidelines as to how these challenges may be addresses so that Pakatan can effectively deliver positive change to the country.

ONG KIAN MING holds a PhD in political science from Duke University. He is the project director of the Malaysian Electoral Roll Analysis Project (Merap), political analyst and a lecturer at the University College Sedaya International (UCSI). He can be reached at im.ok.man(at)gmail.com. The above article first appeared in New Mandala.

                This entry was posted on Sunday, 17 June 2012, 10:18 pm and is filed under
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Murky practices in rail tenders deter foreign firms, weekly reports

By Lisa J. Ariffin

The Malaysian Insider

Jun 17, 2012

KUALA LUMPUR, June 17 — International companies are shying away from Malaysia’s rail sector due to less-than-transparent decisions in the tender process, The Edge weekly has reported.

According to an article in the business and investment weekly’s latest edition, “intense lobbying, glitches in the tender process and political favouritism” are among some of the reasons why foreign firms are snubbing rail tenders, a move which could deprive the country of a high-quality rail system.

The Edge writer Lim Ben Shane reported that the response to open tenders has been poor purportedly due to the unfair selection of large contracts, adding that government officials have acknowledged the problem but have defended it as a relatively new phenomenon.

“It is a learning process, but the government is committed to the open tender system,” an unnamed official from a government transport agency that oversees the country’s rail networks was quoted as saying.

However, the weekly reported that international investors are not convinced of this assurance, with a representative of a company in pursuit of engineering contracts in Malaysia saying: “Most tenders start off well. It is in the evaluation process where things get very murky and you are often left feeling that it is not a level playing field”.

Another foreign consultant pointed out: “Not attracting bids only raises more questions about the tender process”.

Lim said that since the late 1980s, Malaysia has preferred direct negotiations in awarding “public works and the construction of infrastructure projects over public tender because the government was keen to speed up the development of the country’s infrastructure”.

“But the practice has long been criticised because the awards have often favoured politically well-connected business groups,” he said.

“Critics also gripe that the negotiated tender practice is littered with failed projects that have resulted in costly government bailouts,” he added.

Lim said that with contracts valued at more than RM1 billion up for grabs in the coming months, the loss of international investors would prove detrimental.

“More than RM70 billion worth of rail projects have been slated for the next decade, including the prized RM50billion Klang Valley MRT project,” he said.

“Industry executives have noted the government needs to quickly deal with the grievances faced by international companies to salvage the open tender system,” he added

                This entry was posted on Sunday, 17 June 2012, 5:36 pm and is filed under
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Is Mahathir trying to make the revival of Mahathirism the secret Barisan Nasional  agenda in next general election?

“Dr M: Najib must be firm”

“Reforms could lead to extremism, Dr M warns Najib”

“Dr M: Reforms could spark unrest”

These are three headlines on online news portals on the latest  interview by former Prime Minister, Tun Dr. Mahathir Mohamad with  foreign news agency, AFP.

Mahathir’s message is very clear.

He is fully opposed to Prime Minister Datuk Seri Najib Razak’s whole spectrum of transformation programmes although these transformation programmes have been mostly talk and no action with even severe cases of backtracking in the past three years of Najib premiership – from 1Malaysia, New Economic Model, Economic Transformation Programme to Political Transformation Programme!

Warning that too much freedom risked stirring an ethnic hornet’s nest, Mahathir said:

“Now that we want to be liberal, what has happened is that now we are more race-conscious than before. Today people are accusing each other of being racist.”

But Mahathir failed to tell the full story – that although he himself coined the concept of Bangsa Malaysia in Vision 2020 21 years ago in 1991, he had right from the beginning rubbished Najib’s 1Malaysia concept with its objective to create a Malaysia where every Malaysian would regard himself or herself as Malaysian first and race second.

Mahathir clearly backed Tan Sri Muhyiddin Yassin when the Deputy Prime Minister declared that he was “Malay first, Malaysian second” when challenged to declare his allegiance to Najib’s 1Malaysia concept.

If an independent and impartial study is made of Najib’s premiership in the past three years to find out who had caused the worst racial polarisation in the country at a time when “1Malaysia policy” was the  signature policy slogan of the Prime Minister of the day, Mahathir and the organisations he gave his patronage like Perkasa will rank as the main causes.

The question Malaysians must ponder is whether Mahathir is  trying to make the revival of Mahathirism the secret Barisan Nasional  agenda in next general election?

                This entry was posted on Monday, 18 June 2012, 4:42 pm and is filed under
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No Sticker Lady Here: Malaysia Welcomes a New Banksy

By
Trinna Leong

Wall Street Journal

When a six-meter-tall graffiti image of an old man’s face appeared on the wall outside an Armenian Street corner shop in George Town, Penang, it had local residents buzzing. Instead of demanding it be removed, however, they asked for more, and starting from today, that’s exactly what they’re getting as part of the annual George Town Festival.

The man behind the image is Lithuanian artist Ernest Zacharevic, 25, who first visited Penang in 2009 after graduating from London’s Middlesex University. Intrigued by Malaysia, he moved there last year and began depicting its people and culture, mainly on canvas and paper. He also opened an art center for children in one of George Town’s old colonial streets.

That might explain why kids feature in his creations for the festival. “When I was looking for ideas, I noticed that paintings with children look livelier,” he said. “Adults tend to be more shy,” he added, noting that he works from his own photographs.

Close to a temple on Muntri Street, where you can still find George Town’s 19th-century shophouses, it’s hard to miss Mr. Zacharevic’s huge, playful painting of one of his eight-year-old students dressed in a Wushu outfit. At ground level on Armenian Street, two life-size siblings ride on the back of a mountain bike (only the bicycle, propped against the wall, is real).

    Ernest Zacharevic

    This work by the artist features a real bicycle.

To date, the artist has completed three of the six works commissioned by the festival and is slated to finish the remainder before the event ends next month. Meanwhile, he has been flooded with new requests. “People just started coming to my office offering their wall[s],” he said.

Mr. Zacharevic isn’t the first person in the city to experiment with street art. In 2010, the government launched a contest that called for creatives to brand the city with their designs in an effort to promote George Town’s status as a Unesco World Heritage site. The winning entry, from Kuala Lumpur firm Sculpture At Work, installed over 200 caricature sculptures across the city’s walls, pavements and phone booths, including a two-dimensional tribute to Penang native son Jimmy Choo, the shoe designer.

It’s no surprise, then, that Mr. Zacharevic’s work has been met with open arms by George Town residents and authorities, though street painting in tropical Malaysia has proved to be a challenge. His Armenian Street image of the old man is already fading due to the heat, rain and humidity, prompting him to experiment with different paints to make his artworks more durable.

As for future projects, the artist remains open-minded. “A Chinese temple wanted me to paint on a building that is in a remote, isolated island, where no one even goes,” he said. “But then I thought that this could be an interesting project, so why not?”

George Town Festival runs through July 15.

Street Arts Paints Penang

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An open letter to Datuk Kayveas

— Tan Zhong Yan

The Malaysian Insider

Jun 18, 2012

JUNE 18 — Dear Datuk Kayveas,

I, as part of a younger generation of Malaysians and a participant of Bersih 3.0, am totally disappointed with your statement which states that 99 per cent of those who went for the sit-in demonstration did not know why they were there and that they were paid. Your statement is not only absurd and irresponsible but also insulting.

If the people do not know the purpose of the sit-in demonstration, why would they want to waste their time? Were they there to get a taste of the tear gas, water cannons and how it feels to be beaten up by the police?

I would like to tell you that I was there; neither because my parents asked me to (in fact, I am the one who asked my dad to tag along) nor because I was paid. I was there because I was aware of the fact that elections in Malaysia are not clean, free or fair. I was there because I fully understand that we need clean, free and fair elections. Only clean, free and fair elections will guarantee a better future. Only clean, free and fair elections will make Malaysia a true democracy.

And if I, as a youth with normal intelligence, am able to understand this, I truly believe that at least 99 per cent of all Malaysians will be able to understand this as well. Therefore, I believe at least 99 per cent of those who went to the rally do understand the purpose of the demonstration.

You say that 99 per cent of those tens of thousands who went to the rally do not understand why they were there and they were there because of money, and if what you say were true, then perhaps we should blame the government and the Malaysian education system for producing such a stupid and ignorant bunch of citizens.

Therefore, I, as a Malaysian, would like to demand that you apologise sincerely to all Malaysians, specifically to the participants of Bersih 3.0 for your absurd, irresponsible and insulting statement.

You have insulted the intelligence of the people for saying that they did not know what they were doing. You have insulted the people for saying that they were there because they were paid. I would like to tell you that we, the ordinary citizens of Malaysia, are not like those kataks in politics who can be bought with money nor are we prostitutes who will betray ourselves just for money.

So, please stop insulting us!

Tan Zhong Yan

                This entry was posted on Tuesday, 19 June 2012, 1:24 am and is filed under
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Do you trust them?

— Ali Kadir

The Malaysian Insider

June 19, 2012

JUNE 19 — Everything begins and ends with this question: Do you trust them?

Do you trust Khaled Nordin to look after the interest of Malaysians or do you believe that the Parliamentary Select Committee was set up to regurgitate information provided by Lynas and merely rubber stamp an investment already banked in by the Barisan Nasional government?

Please bear in mind that Khaled is also the minister who believed he was doing the right thing when he froze federal loans to students at Unisel in a show a political gamesmanship that he lost.

Do you trust Rais Yatim when he tells all and sundry that only 22,000 Malaysians attended Bersih 3.0?

Do you trust M. Kayveas when he says that urban Malaysians are navel-gazers and an ungrateful bunch who only know how to whine?

Do you trust Muhyiddin Yassin when he says that the BN government has forged national unity in Malaysia?

This coming from the man who is the darling of the party’s right-wing movement, the politician ensconced with Perkasa and Pekida, and the man who really believes that Malay unity is the same as national unity.

Do you trust Idris Jala when he talks about statistics, whether it is crime stats or a prosperity index?

Should you trust anyone who supposedly transformed Malaysia Airlines and basked in the glory of “success”, only for Malaysians to be told now that the national icon is on the verge of collapse?

Trust. This is what it boils down to. I dare say that no one in the Malaysian Cabinet can command that important ingredient today when their lips move

                This entry was posted on Tuesday, 19 June 2012, 10:52 pm and is filed under
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Malaysia’s next general election shaping up to be a battle of the coalitions

— Greg Lopez

The Malaysian Insider

Jun 19, 2012

JUNE 19 — Malaysia’s 13th general election, which must be held by April 2013, has been the most anticipated in Malaysian history, given the megatrends that are occurring in the country and the ability of the two main contenders to manage them.

Barisan Nasional (BN) and Pakatan Rakyat (PR) are the main contestants. BN — currently the longest-ruling coalition in the world — is a 13-party coalition based mainly around ethnic and regional interests. Umno is the single most important political party in the ruling coalition, dominating not only the coalition, but all major institutions in Malaysia except in the state of Sarawak. Najib Razak, son of Malaysia’s second prime minister, has led the coalition since becoming Umno president through an interparty compromise.

PR, in turn, is a new and informal coalition, set up in the euphoria of the opposition’s historical performance at the March 2008 12th general election. None of its three component parties has a clear majority, and all understand that their success is predicated on their ability to work together. PKR’s unelected leader Anwar Ibrahim leads the coalition by virtue of his ability to hold together three disparate groups — the Chinese-dominated DAP, the Islamists party PAS and his own band of largely ex-BN/Umno members.

Five critical megatrends face the contenders at the national level: economic performance, demographic changes, urbanisation, Islamisation and an island/peninsula divide.

The middle-income trap: The popular diagnosis for Malaysia’s stagnating economic performance is that Malaysia is caught in a middle-income trap, where it is unable to compete with low-cost producers on cost, but also by not having the institutions, human resources and technological capabilities to compete with advanced economies in innovative products and processes.

A young nation: 71 per cent of Malaysians are under the age of 40, with 34 per cent aged between 20 and 40.

An urban nation: 71 per cent of Malaysia is now urban, with only Kelantan, Pahang, Perlis, Sabah and Sarawak still being largely rural. Urbanisation rates are below 55 per cent.

An Islamic nation: The pervasiveness of Islam as a political tool and the increasing piety among Muslims have reached unprecedented levels.

Two nations: The politics of Peninsular Malaysia starkly differ from that of the island of Borneo. Political leaders and citizens in Sabah and Sarawak continue to distrust peninsula politicians, and all politics in these two states is local.

These trends translate into electoral issues in the following ways. Most critically for BN, its successful economic strategy is now being questioned on several counts. First, Malaysia’s low-cost, export-oriented economic model has seen wages for 80 per cent of Malaysian households stagnate for the past three decades. These households earn less than RM3 000 a month, in a country where the average monthly income is RM4,025. More critically, the bottom 40 per cent of Malaysian households earn RM1,440 a month. Seventy-one per cent of this bottom 40 per cent are Bumiputeras — a Malay term translated literally as “prince of the land”. The average monthly income of the top 20 per cent of households is RM10,000.

Second, in politicising education, BN has sacrificed quality for quantity. International benchmarks and surveys consistently show that the quality of education in Malaysia, at all levels, cannot match the successful East Asian economies. Eighty per cent of Malaysia’s labour force has no more than the Sijil Pelajaran Malaysia (SPM) qualification (SPM is equivalent to Year 10), and the 57 universities and the more than 500 colleges are producing large numbers of poorly equipped graduates. This has led to a poorly skilled labour force and unemployed graduates, with the economy facing severe skills shortages in a tight labour market.

This has had a significant impact on Malaysia’s young voters. The majority of local graduates utilise a government loan scheme. With limited employability and mediocre wages, they end up saddled with enormous debts. The problem is exacerbated by high unemployment. Graduates accounted for more than a quarter of those unemployed in 2007, while unemployment among new graduates was 24.1 per cent in 2008.

The public sector, at the federal and state level, and government-linked corporations (GLCs) have long been used to mop up Bumiputera graduates as part of an implicit contract between Umno and the Malays. With the country experiencing economic stagnation, rising public debt, depleting natural resource rents from fossil fuels, the bloated civil service and GLCs are now a severe drag on the Malaysian economy and can no longer function as a source of employment opportunity for the thousands of Bumiputera graduates. Many non-Bumiputera graduates also suffer the same predicament, as they are locked out of the public sector and the GLCs. Many are also ill-equipped to meet the demands of the private sector, especially in businesses exposed to international competition.

Increasing urbanisation has led to a greater interaction between Malaysians of different races and also between Malaysians and the outside world. Although there is still significant segmentation among the races and social classes in urban areas, this has meant greater interaction at work and global development that have produced varied results. Most importantly, the interactions have has forced Malaysians to focus more on the issues that affect their daily lives, such as the quality of life, the cost of living, or global events such as the Arab Spring.

Urbanisation also challenges the BN’s monopoly on information. In 2010, 65 per cent of Malaysians were using the internet. Cyberspace has been a boon for the opposition and civil society, and is an arena the BN has yet to effectively control. High urbanisation rates, which are driven primarily through rural–urban migration, also connect rural areas and urban centres more strongly through social networks. Families and individuals returning to their rural homes for festivities bring with them the latest political developments, made more accessible by the internet. This is further challenging the BN’s control in rural areas.

Islamisation of the public sphere — despite Malaysia’s secular constitution — has taken a concrete foothold in Malaysian society, due mainly to the contest between Umno and PAS for the Malay votes. Global developments have also influenced this trend. Islamic fundamentalism now pervades all aspects of Malaysian life, both public and private. While Islam had always mattered in the political and social sphere as an ideology, it is now also encroaching into the economic sphere.

Politics on the island of Borneo is based on local issues and mistrust of the federal government. The 2008 general election established the importance of Sabah and Sarawak in forming federal government. Sabah and Sarawak have become increasingly assertive since. As all politics on the island is local, and as a result of their strengthened bargaining position, Sabah and Sarawak — long considered fixed deposits for BN — are no longer a foregone conclusion.

The response from the contenders is influenced primarily by their incumbency — or lack of it.

The component parties of the BN, until the 2008 general election, had long-serving leaders, which impacted severely on inter and intraparty dynamism. The incumbency of these leaders and the BN resulted in a disconnect between entrenched party leaders and grassroots leaders, as well as members and supporters. Interparty competition for resource rents and for patronage has also resulted in leaders leaving the party or being put away in “cold storage”. The incumbency of these leaders has also limited the ability of the parties to attract new members and develop new and dynamic second-echelon leaders. Most damaging has been Umno’s increased strength: this has relegated other coalition partners to minions, effectively making elite bargaining redundant — the hallmark of the BN.

In contrast, PR, despite strong leadership, has marginally more democratic processes, due mainly to limited opportunities to access and distribute resource rents. The Reformasi, Bersih and Hindraf movements, Anwar Ibrahim’s charisma, and most importantly, the government’s inability to manage the megatrends, have seen young people flocking to the PR.

The two main contenders have framed their arguments for support in a contrasting manner. Umno, through the BN, has argued that social stability delivers economic growth and that only a strong Umno can guarantee social stability.

At the 13th general election, Umno will be arguing that it has the track record in delivering social stability and economic growth. PR, instead, is arguing that good governance and social justice are critical to Malaysia’s continued economic growth and social stability. PR argues that the persistent weakening of the Malaysian economy, and social unrest, are due to BN’s mismanagement of the economy, its divisive racial and religious politics, and the abuse of the rule of law.

The 2008 general election solidified the two-coalition system, and this is unlikely to be reversed. The surprising aspect of this development is that it took opposition parties 50-odd years to co-operate effectively, considering that Malaysians never given BN, on average, more than 57 per cent of the popular votes — with its best-ever result of 65 per cent achieved only in the booming ‘90s, at the 1995 general election.

Malaysians have demonstrated time and again that, despite its hegemony, the BN is not an overwhelmingly popular coalition. While the results of the 13th general election will depend mainly on the leadership abilities of Najib Razak and Anwar Ibrahim to manage their coalitions in addressing issues, neither coalition will remain in power for long—even with the support of a rigged electoral system—if it fails to address these megatrends effectively.
— Asia Currents

* Greg Lopez is the editor of New Mandala’s Malaysia section, an academic blog hosted by the College of Asia Pacific, the Australian National University, and a PhD candidate at the ANU’s Crawford School of Public Policy.

                This entry was posted on Tuesday, 19 June 2012, 6:35 pm and is filed under
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The Dark Passage to Lynas

Charles Santiago

MP for Klang

We welcome the report of the Parliamentary Select Committee which has produced its recommendations, including the upgrading of the standards used by the AELB. But while we appreciate the effort, this is clearly a document which has only looked at ways to keep the Lynas Advance Material Plant (LAMP) in operation.

The key area – returning the radioactive waste to Western Australia – has not been looked at although it was one of the earliest pre-conditions to the government granting Lynas a Temporary Operating License.

Violating pre-requisite to the Temporary Operating License (TOL)

Over a ten-year period of the plant’s operation, the total volume of wastes will amount to 2,766,600 cubic metro. Over a 20-year period, as Lynas continues to enjoy its tax break, the waste would presumably have doubled. And it is highly inconceivable that there will be enough soil and technology available to “dilute” the wastes and remove its radiation level to natural ground level radiation. This is especially crucial as Lynas plans to store the wastes onside in the Residue Storage Facility (RSF).

The PSC recommendation has noted that some of the regulations imposed by the Malaysian government are better than international standards. But according to the Lynas document which is under review, the management of radioactive residue generated from the decommissioning activities of LAMP upon cessation of operations after 20 years are not within the scope of the Lynas Radioactive Waste Management Plan or RWMP but presented in a separate document titled “Decommissioning Plan (Environ 2011b). This is certainly not in tandem with international standards.

Malaysia is still in the midst of cleaning up after the Asian Rare Earth factory was decommissioned at the cost of USD100 million, the largest in the rare earth industry. The rare earth factory was set-up 30 years ago and we are yet to wipe out all traces of residue. Lynas will produce 20,000 tonne of radioactive material, ten times more than the Asian Rare earth.

It is not clear if a Permanent Disposal Facility (PDF) has been identified. But the managing director for Lynas Datuk Mashal Ahamd has said that a PDF will be needed in a worst case scenario where it is unable to reprocess the waste into a commercial product. He also said – “we have 17 years before we even need to identify where is the PDF…we are working on commercial applications. Once we find all this, we can even forget a Residue Storage Facility.”

May be Datuk Mashal must be reminded that we are not working on hypothesis or possibilities here because it involves the lives of tens of thousands of people.

And if by commercial product, he is alluding to the testimony of Prof Dr Abdul Rahman Omar, then he better think again. Nuclear radiologist Peter Karamoskos of the International Campaign to Abolish Nuclear Weapons said that without exception, thorium reactors have never been commercially viable, nor do any of the intended new designs even remotely seem to be viable, Like all nuclear power production, they rely on extensive taxpayer subsidies. This was reported in The Guardian last June.

But again why are we talking about a storage facility in Malaysia when it was made clear that one of the prerequisite to the Temporary Operating License or TOL is that the waste be shipped back to Western Australia.

The Australian government reiterated that it will not accept responsibility for any waste material produced by Lynas, although one of the five conditions attached to the recent approval of its temporary operating license is that it must take full responsibility for waste management from its plant including returning the waste to the source, if necessary.

In an official statement to Free Malaysia Today, the Western Australian Minister for Mines and Petroleum, Norman Moore, asserted that “Australia does not support the importation and storage of other countries’ radioactive waste”. But in a media briefing, AELB director-general, Raja Abdul Aziz Raja Adnan, gave his assurance that the board would insist on a letter of undertaking from Lynas Australia that it would adhere to this condition.

So where is the consistency in the approach the government has taken in relations to Lynas? It is clear the UMNO-led government is doing everything possible to allow Lynas to start its operations.

Malaysia’s minister of innovation, science and technology rejected an appeal by local residents against Lynas’s temporary operating permit on June 15, while imposing extra conditions on the plant. The permit granted in February, subject to conditions, has been held up due to appeals by protesters to government and in court. Lynas Executive Chairman Nicholas Curtis said the plant has passed every review it had been  subjected to and looks forward to the issuance of the Temporary Operating License.

Without Lynas sending back its waste to be managed in Western Australia, these recommendations are null and void. If its not so, then clearly the government is facilitating the operations of Lynas, despite strong protests and going back on its own guidelines.

While I have repeatedly said this, let me say it again:

Why didn’t Lynas set-up the rare earth plant near its source of extraction in Western Australia as it would have saved a huge amount of money in shipping costs?

Why didn’t Lynas obtain an approval from the authorities in Western Australia to set-up the plant?

Could the authorities in Western Australia be concerned about the possible radiation leaks, health hazards, birth defects, lead poisoning and other complications?

Shouldn’t this in itself raise a red flag with the Malaysian authorities?

Is the RM700 million in foreign investment more important to the Malaysian government than the lives of its citizens?

Health over investment?

The PSC has outlined a guideline to look into health measures for the people, wording it to say that this was undertaken to arrest the fears of the public. Severe birth defects, eight leukemia cases over five years in a community of 11,000, tears and anguish of the poor people from a largely shoe-making community – these are not news headlines. Neither is it the plot of a movie.

These are the consequences of carelessly allowing the Asian Rare Earth factory to be built in Bukit Merah, Perak in 1982. When Mitsubishi Chemical started operating its rare earth factory, the villagers complained of choking sensation, pungent smell, coughs and colds.

The community also saw a sharp rise in the cases of infant deaths, congenital disease, leukemia and lead poisoning. Thirty years later, it has not wiped out the memories and heartache of the villagers who lost their children and loved ones. Only the government is feigning ignorance.

According to the Consumer Association of Penang (CAP), the arbitrary classification of radioactive wastes radically differs from the latest International Atomic Energy Agency’s (IAEA) classification of radioactive wastes. It further says the Atomic Energy Licensing Board (AELB) has arbitrarily set its own safety standards for radiation exposure, which is not in accordance with international standards. The AELB standards would be used to exempt and clear Lynas’ radioactive wastes for reuse and recycle. The exposure to radioactive waste was one of the causes that led to high levels of lead poisoning and other severe health complications of the people in Bukit Merah.

The severe illnesses were detected years after the Asian Rare Earth factory had started its operations. Are we going to repeat this? And what does the panel propose in terms of monitoring the health of the people, screening for potential exposure to radiation, follow-ups, the team of experts who would be at the disposal of the public and also determine who gets screened and tested? The crushing of ore also releases Radon, which can travel thousands of miles according to wind direction. Does this mean special arrangements would be put in place to monitor all Malaysians?

Without giving much thought to the process of monitoring the health of the people, ruling politicians have jumped on the bandwagon to parrot prime minister Najib Tun Razak’s assurance that the factory is safe. International Trade and Industry minister Mustapa Mohamed said its policy would be based on laws, policies and the decision of the Atomic Energy Licensing Board (AELB). Its about time the learned minister acknowledges that the lives of millions of people cannot be based on procedures.

I challenge the panel to answer this question – Can everyone of you say, without any doubt, that the Lynas plant poses no health threat to the people? Can you vouch that we would not see another repeat of the health disaster which happened in Bukit Merah?

The dangers of Thorium

Rocks and soil contain natural radioactivity, which also dissolves into ground water. The occurrence of these ‘naturally occurring radioactive materials’ (NORM) varies throughout the world, and may be more or less likely given the types of rocks and minerals in a particular area. NORM contributes a part of the natural ‘background’ exposure from radiation.

When resources are extracted from the earth, the natural radioactive material comes with those resources. In processing the desired resource, the radioactive material is removed and becomes a waste. The radioactive wastes from extraction and processing are called ‘Technologically Enhanced Naturally Occurring Radioactive Material’ (TENORM) because human activity has concentrated the radioactivity or increased the likelihood of exposure by making the radioactive material more accessible to human contact.

In other words, this natural radioactive material has been made dangerous because it was removed from the ground and concentrated by mechanical and chemical processes.

We need to be concerned about TENORM because:

*It has the potential to cause elevated exposure to radiation.

*People may not be aware of TENORM materials and need information about them.

*Industries that generate these materials may need additional guidance to help manage and dispose of them in ways that protect people and the environment and are economically sound.

The most common naturally radioactive elements are uranium, thorium, and radium. Common sources of TENORM waste are mining and mineral processing, oil and gas production, and drinking water and wastewater treatment. The PSC report points out that Lynas is not a nuclear plant or a mining site. However, Lynas is going to extract rare earth from ore. The process of crushing the ore releases Throrium, which is radioactive. But adding a mechanical and chemical process to an existing radioactive material increases the potential risk of exposure.

AELB vs IAEA

According to the IAEA General Safety Guide on the category Exempt Waste -“The primary radiological basis for establishing values of activity concentration for the exemption of bulk amounts of material and for clearance is that the effective doses to individuals should be of the order of 10 microsieverts (uSv) or less in a year. To take account of the occurrence of low probability events leading to higher radiation exposure, an additional criterion was used, namely the effective does due to such low probability events should not exceed 1mSv in a year…

This is in sharp contrast to the figure stated by Lynas in its Radiological Impact Assessment (RIA) report which states the highest possible does to be received by workers resulting from operation of the plant for the first 10 years are below 13mSv per year. If this is not an admission that the risk of exposure is 10 times more than that permitted under the IAEA regulation, I do not know what is.

Furthermore Radiology and environmental expert Prof Dr Ahmad TermiziRamli said the general perception was that the high levels of radioactive waste would result in deaths.”TheLynas plant will only produce one millisieverts (mSv) per year as required by law compared with the existing 2.4mSv background radiation already present in the air. Why did the learned Prof not take into account the exposure to the workers in the Lynas plant?

Nuclear physicist Dr Abdul Rahman Omar said the thorium waste which will be produced by Lynas can be used as fuel to generate between RM2 trillion to RM4 trillion worth of electricity a year.

“One tonne of thorium can produce the same amount of energy of 10 million tonnes of coal; imagine the energy that can be harnessed from this,” he is reported to have told the PSC committee.

In a world increasingly aware of and affected by global warming, the news that 2010 was a record year for greenhouse gases levels was something of a blow. And although China, Japan, US and India are pursuing it, the concept of thorium as a source for green energy remains inconclusive. The National Nuclear Laboratory said that the claims for thorium are overstated. Oliver Tickell, author of Kyoto2, says the fission materials produced from thorium are of a different spectrum to those from uranium-235, but ‘include many dangerous-to-health alpha and beta emitters’.

The final smirk from Lynas

Its rather strange that Lynas enjoyed operating from its premises – getting its structures concretised and putting together its logistics – while the Parliamentary Select Committee was plugging away at its report. It really does not make any sense but rather gave an impression that the recommendations of the committee would have no bearings whatsoever to the plant. Lynas, it seems, almost knew it would not be shut down however damning is the information unearthed by the committee. This is precisely why the opposition felt it was a total waste of time to sit on the panel.

When Malaysia, disregarding once again the strong protests registered by the people, rejected a bid to cancel the Temporary Operating License for Lynas, its share advanced as much as 15 cents (Australian) to A$1.01, the biggest gain since May 28 this year.

But in doing so and allowing Lynas to start its operations, the government has nonchalantly dismissed the value of peoples’ lives which are at stake.

[Basis of speech in Parliament on 19th June 2012 in the debate on Report of  Parliamentary Select Committee on Lynas Advanced Materials Plant (Lamp)]

                This entry was posted on Tuesday, 19 June 2012, 7:36 pm and is filed under
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1 Malaysia, 2 BNs, 3 agendas

by Zairil Khir Johari

The Malaysian Insider

Jun 20, 2012

JUNE 20 — As Malaysians begin to grow weary of the guessing game that is the election date, a more amusing charade is beginning to develop in the northern corner of our country. Of late, one particular state — in fact the second smallest one — seems to be grabbing the lion’s share of media attention.

The sudden obsession with Penang, as evidenced by the unrelenting headlines and the constant barrage of political proclamations on a multitude of Penang-related issues, would appear to speak of a concerted attempt to consolidate the entire federal machinery towards the goal of dismantling the current state government.

Yet interestingly enough, if one were to scrutinise between the lines of the numerous statements made by various Barisan Nasional (BN) leaders regarding Penang, one would begin to wonder whether the blue orchestra was performing in single harmony, or whether they were in fact being directed by numerous conductors playing to different beats.

It all started two months ago with the appointment of Teng Chang Yeow as the new Penang BN chairman. Touted as a strong, credible figure who is able to galvanise a dispirited Penang BN into shape and to captain them to a comeback following their worst-ever defeat, expectations ran high.

Soon after his appointment, Teng opened the offensive by announcing the BN’s grand blueprint to recapture Penang. This plan involved a slew of fanciful ideas such as establishing an international financial centre, an innovation park, an aquaculture hub as well as an international tourism hub. Capping off this litany of promises was a golden carrot in the form of a promise to return “free port” status to the island.

However, even before Teng’s free port idea had the chance to sink in, the BN hull began to crack.

Barely two weeks after Teng’s tour de force, a press conference was called under the BN banner featuring Penang Gerakan chief Datuk Dr Teng Hock Nan and Penang Umno bigwig cum Penang Port chairman Datuk Seri Hilmi Yahaya to announce that a free port may not be the best idea, after all.

Instead, it was proposed that a designated duty-free CIQ (customs, immigration and quarantine) zone be built on the mainland. In fact, Hilmi, a former deputy chief minister of Penang, even went so far as to downplay the idea of a free port by stating that, “… it cannot be like before where the whole island would be duty-free.”

At a time when the BN badly needs to consolidate its machinery ahead of a crucial general election, the appearance of this purported “Team B” only serves to confuse the public. Two BN camps saying two different things? Who’s right and who’s wrong? That’s where Big Brother comes in.

Assuming we live in a world of logic, then it must follow that since Teng Chang Yeow is the anointed BN chief, his view would represent the official party position. This is especially so when, at his own earlier press conference, Teng had himself confidently stressed: “When I raised the matter with the PM, he did say he will look into it positively.”

It would appear, however, that either Teng or the prime minister had suffered a bout of miscommunication. In the latest development, the prime minister had, through a parliamentary reply last week, stated that “bearing in mind that Penang has five free trade zones and that the free port concept is now non-existent, the issue of granting free port status to Penang no longer arises.”

It is not enough that Teng’s own colleagues disagree with him; it now appears that his own boss does not support him as well. But wait, it gets better. After all, no good drama is complete without a third party joining the fray.

As if the divergent stances on the free port agenda weren’t enough, the MCA — feeling a bit left out — has now thrown its hat into the crowded ring by supporting a plan to privatise the Penang Port to Umno-linked tycoon Tan Sri Syed Mokhtar Al-Bukhary.

Flexing his muscles as the chairman of the Penang Port commission, Datuk Seri Dr Chua Soi Lek recently issued a derisive warning to the Penang state government. According to the MCA president, any attempt to derail or refusal to co-operate with the federal government’s plan to privatise the Penang Port would only be “sabotaging” what he asserts to be a move that would “improve the efficiency of the port.”

Of course, no decision in this country has weight unless the prime minister himself has backed it. Thus, Dr Chua was quick to drop his name by claiming that it was a decision agreed to by the prime minister after he had “looked at the effect on the entire state before making a decision on the privatisation of Penang Port.”

Teng, however, does not appear to be convinced. Breaking ranks from the federal leadership, the Penang BN chief has instead chosen to echo the DAP leaders in the Penang state government by opposing the Penang Port privatisation plan. In his latest statement, Teng insists that he and his colleagues would urge the prime minister to reconsider.

The situation within Penang BN is getting more ridiculous by the day. On the one hand, a new state chief was chosen for his purported ability to “rejuvenate” the ailing coalition in order to “regain BN’s pride and dignity.” On the other, a group of renegade state BN leaders have, in their zeal to prove their relevance, ended up undermining the efforts of the former.

And to further complicate matters, you have an even more irrelevant leader trying to promote an idea that is immediately and vehemently opposed not only by the rival state government but also by the state BN chairman. This, of course, wouldn’t be half the problem it is if the prime minister didn’t also support it.

Two months ago, when Teng Chang Yeow boldly announced on his Facebook page that he was prepared to “fight policy to policy”, I think even he had no clue that he would end up battling not only his own colleagues but also his own boss.

Truly, with friends like these, Teng needs no enemies.

                This entry was posted on Wednesday, 20 June 2012, 8:55 am and is filed under
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Is Najib saying he is not prepared to accept the verdict of the electorate or ensure a peaceful transition of government if PR wins the next general election?

Threats! Threats! More Threats!

Is this all that the Prime Minister, Datuk Seri Najib Razak could think of to ensure that UMNO/Barisan Nasional wins the next general election with him firmly in the saddle as the Prime Minister?

Najib’s speech when opening the Associated Chinese Chamber of Commerce and Industry (ACCIM) 66th annual general meeting this morning  reminds Malaysians of his infamous “fire and brimstone”  presidential address at the UMNO General Assembly in October 2010.

When  Najib warned the Chinese business community  this morning that their assets and wealth may “evaporate” unless there is “political certainty and stability”,  Malaysians are immediately reminded of his “crushed bodies, lives lost” speech at the UMNO General Assembly in October 2010 vowing that  Umno would defend power at any cost in Putrajaya.

Let Najib fully explain himself – is he threatening that if UMNO/Barisan Nasional loses Putrajaya in the next general election, the “assets and wealth” of the Chinese business community could “decline and even evaporate” and is this because of his “crushed bodies, lives lost” vow that UMNO would defend power at any cost in Putrajaya?

Recently, Malaysians are beginning to hear statements from UMNO leaders though not from the highest levels like the UMNO President and Deputy President giving assurances that there would be a peaceful transition of government if Pakatan Rakyat wins the next general election as UMNO and BN would respect the wishes of the people expressed through the ballot box in the next general election.

Najib’s return to the language of threats and fear has immediately raised the question as to the real weight and worth of the assurances by these  low-level UMNO leaders that UMNO/BN would ensure a peaceful transition of government if Pakatan Rakyat wins the next general election.

Najib should explain why the defeat of UMNO/BN in the next general election should lead to a situation where the “assets and wealth” of the Chinese business community may “evaporate”, if UMNO/BN are committed to accept the verdict of the electorate in the 13th general election and ensure  a peaceful transition of  government if Pakatan Rakyat wins the next general election?

Or is Najib telling the nation and the world that he would not accept the verdict of the electorate in the 13th general election which is in favour of Pakatan Rakyat and that he is not prepared to make a public commitment on behalf of UMNO/BN to ensure a peaceful transition of government if PR wins the next general election?

                This entry was posted on Wednesday, 20 June 2012, 5:22 pm and is filed under
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WSJ: Malaysia needs China’s help to weather euro storm

The Malaysian Insider

Jun 20, 2012

KUALA LUMPUR, June 20 — Trade-dependent Asian countries including Malaysia will take a major hit if the euro zone economy collapses and will require China’s aid to hobble along, according to the Wall Street Journal (WSJ).

The newspaper highlighted the point that Malaysia has bank loans from Europe equal to 20 per cent of its gross domestic product (GDP), which it said was high for the region, and would be more troubled compared to financial hubs Hong Kong and Singapore, both of which have huge “rainy-day funds” to keep homes and businesses above water.

While China, the world’s biggest economy after the US, would be able to withstand the global slump due to its closed financial system, WSJ said Malaysia’s growth would be lessened.

“If China doesn’t open the stimulus floodgates, that would mean less of a boost for its neighbours, including commodity exporters such as Australia and Malaysia,” the paper said.

China is currently Malaysia biggest trade partner.

Malaysian rubber exports to China, used primarily to make tyres and gloves, totalled 43.2 per cent last year, significantly higher than its 3.6 per cent exported to the US or to the European Union (25.2 per cent).

Malaysia also exports 21.9 per cent of its palm oil to the Asian giant, compared with 5.7 per cent to the US.

Malaysia has reported a 4.7 per cent GDP growth for the first three months of the year, a third consecutive quarterly drop since it posted a 7.2 per cent increase in the second quarter of last year.

The international business paper reported that Asian countries were generally in better shape than in the West to deal with interest-rate cuts and government spending as they have learnt to weather a similar economic crisis in 2008.

But Asian economies stood at varying degrees of preparedness in dealing with a euro zone meltdown, with India, Vietnam and Japan likely to be among the worst hit.

Currencies would drop, shipping lanes would empty, and consumer and business loans would dry up, slowing down economies even further, the paper said.

WSJ predicted that such a scenario is still possible if Greece fails to live up to its commitment and quits the euro, or if Mediterranean neighbours Spain and Italy have to be bailed out, it said in its analysis titled “How Asia will fare if Europe cracks”, published yesterday.

“As we saw with Lehman (Brothers), when you get a seizure in the global financial system, nobody can hide from that in the short run,” the paper quoted Richard Jerram, the chief economist at the Bank of Singapore, as saying.

But he was reported saying that Asia is “well-positioned” to survive the Euro-crisis.

“A moderate recession in Europe doesn’t pose serious hazards here,” WSJ quoted Jerram as adding.

                This entry was posted on Wednesday, 20 June 2012, 6:22 pm and is filed under
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‘Cock and bull’ spins: Voters must decide

Stanley Koh | June 21, 2012

Free Malaysia Today

Barisan Nasional scaremongers will continue to flog Pakatan Rakyat’s ‘inexperience’, but Malaysians must use reason and logic when the time comes to choose.

COMMENT

One of the most common and irritating claims continuously harped on by the Barisan Nasional leaders during their campaign rounds is that the opposition Pakatan Rakyat coalition had no experience in governing a multi-racial nation.

BN scaremongers in their battle cry for political survival would say the most naive and air-headed remarks such as “the nation would ultimately be bankrupt”, “ethnic tensions could flare” leading to pandemonium in the national state of affairs.

Four years have passed since the “308-electoral tsunami” when the Pakatan coalition bagged five states and formed new state governments in Perak, Kelantan, Kedah, Penang and Selangor.

Unfortunately, Perak returned to BN after a coup d’état not long after.

Indeed, “experience” is a hard teacher and even the most hard-headed pupil would not dispute this wisdom.

Those who have gone through extreme hardships, trials and tribulations can testify that experiences often gives the test before the lessons.

In this political odyssey filled with the voices of Malaysians demanding for “change,” the question is, should voters support an inexperienced coalition against an experienced 55-year-old or more ruling regime?

If logic is taken as an ability to “reason” out their decision, then we can see that those claims and accusations made by certain BN leaders against Pakatan are just a fallacy.

BN’s argument that an opposition coalition should not be voted in, because it is “inexperienced”, is nothing more than deception and perverse logic.

Let us glimpse into some observations made by author Tricia Yeoh in her latest publication, titled “States of Reform-Governing Selangor and Penang”.

Pakatan states inherited ‘burdens and baggage’

In it she wrote: “The state governments have not, of course, been altogether perfect in their governing. Initial scepticism arose that the politicians taking over the states did not have the experience of managing governments.

“There are instances in which mistakes were made, many owing to the lack of knowledge in dealing with civil servants, including the state secretary issue in Selangor, and the Kampung Buah Pala issue in Penang.”

According to Tricia, who had served in the Selangor state government as a research officer to the menteri besar in 2008, the new Pakatan state government had to tackle the burdens and baggage of the old BN-led administration.

And this included poorly signed contracts which benefited private companies and cronies of the previous BN state government in Selangor besides inefficient accounting and state corporations being exploited for certain individuals in power.

The state of affairs in Selangor basically reflected the words of America’s founding father Thomas Jefferson: “Experience has shown that even under the best forms of government those entrusted with power have, in time, and by slow operations, perverted into tyranny.”

Hence, voters particularly those in the Pakatan-led states have a choice in the coming 13th general election.

Should they continue to endorse through their ballot box their support for an alternative Pakatan coalition in Selangor and Penang?

Do they want to give more time for this coalition to continue its manifesto to “developing democracy, servicing the public and managing the economy” with greater consistency compared to the previous BN-style of governance?

BN’s ‘top-cock’ syndrome

As for those BN individual leaders who insist that the inexperienced Pakatan is a liability and therefore should not be supported by voters in the coming polls, perhaps, they should heed this fable known as the “Cock Syndrome.”

“Once upon a time there was a young cock. He was the undisputed lord of his flock of chickens on a farm. He spent most of his time preening his beautiful glossy feathers in the sun. This he did so that his flock may be suitably impressed.

“He treated the older cocks with contempt, for they lacked the physical strength to fight him. He strutted about ignoring the younger cocks, telling that they were too young to know. He had fought off the old and had stunted aside the young. He was the top-cock. He alone ruled his flock on the farm.

“Sometimes, he would hear the faraway crowing of other cocks. But they sounded many farms away. He had little reason to pay much heed to that.

“Soon, he persuaded himself that there was really no other farm. He began to believe that his farm was the only one in the world, and that he himself was the only cock that mattered.

“As the sun rose every morning, its rays shone on his freshly preened colourful feathers, and he felt good. For days every morning unfailingly he crowed, proclaiming to his flock that the sun has arisen.

“Finally he convinced himself, he had firmly planted in his mind that it was his crowing that made the sun rise and that the world could not do without him. Without his crowing, the life-giving sun would not rise.”

The fable of this story tells us that there are many leaders in the ruling regime within the BN who resemble this pitiful cock.

They are so self-opinionated and arrogant with closed minds that they think this nation cannot survive without their leadership roles.

Reject racist, flippant statements

Here comes the surprise. This fable was narrated by a former MCA deputy president Richard Ho Ung Hun.

Ho was also the labour and manpower minister in 1980.

Addressing a gathering of MCA divisional leaders in Kuala Lumpur, Ho warned MCA leaders of the cock syndrome.

Does the MCA leadership under Dr Chua Soi Lek feel that it is only the MCA which can represent the Chinese community and that an inexperienced opposition is incapable of doing so?

What is the choice for voters between an experienced and inexperienced ruling regime?

Will voters prefer harsh realities generated by the “experienced” BN government – the high costs of living, abuse of human rights, draconian laws, corruption, nepotism and so forth?

Or will the awakening voters choose to give Pakatan another chance to consolidate a two-party system to act as a check and balance on the political divide?

Hence, Chua or whoever the BN leaders, should know the difference between a smart and a wise politician.

A smart politician may know what to say but a wise one knows whether or not to say it.

It is time for a reality check among voters. It is also a time when Malaysians should reject emotive, racist, stupid and flippant remarks by politicians.

Vote wisely

The continuous exposure of murky practices in an experienced 55-year-old government is sufficient to show Malaysian voters that the BN has hardly changed or cured itself from the diseases of “delusion, inertia, amnesia and arrogance”.

The puzzling question remains: Is experience a liability and inexperience, an asset?

The voting preference of Malaysians should be wisely based on logic, truth and principles of good governance.

Malaysian voters have changed and their mindsets have shifted with the rise in literacy. Some 90% of Malaysia’s 28.3 million population are literate and they know that whatever party they choose will change and reshape their destiny.

The majority of the voters are tired and fed up of the cock syndrome within the BN leadership hierarchy and the populist banner is “for change”.

Stanley Koh is the former head of MCA’s research unit. He is now a FMT columnist.

                This entry was posted on Thursday, 21 June 2012, 9:07 am and is filed under
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Dissecting the ETP Annual Report (Part 3): It was only RM12.9 billion of actual investments

By
Ong Kian Ming and Teh Chi-Chang
 | June 21, 2012

JUNE 21 — It’s a long way from “committed” to “actual”. PEMANDU trumpets in its Annual Report that the ETP has brought in RM179 billion of investments. What is downplayed is that the RM179 billion is for committed investments. Actual investments under the ETP were just RM12.9 billion — a mere 7 per cent of the RM179 billion committed.

The committed investments figure is also doubtful. We found at least five projects worth RM17 billion where the ultimate investments may be less than promised. For example, PEMANDU took “110 per cent” credit for villa pre-bookings at the RM9.6 billion Karambunai Integrated Resort. But the project developer is being sued for defaulting on RM18 million of rental payments.  Does it have the financial capability to deliver the new villas?

PEMANDU is stealing credit again. It said that the RM94 billion worth of private investments in Malaysia last year was “some 113 per cent above our target”. That seriously overstates PEMANDU’s performance given that PEMANDU brought in only RM12.9 billion, and that RM12.9 billion includes both private and government investments.

Private enterprises are rejecting the ETP. The private sector is targeted to account for 60 per cent of ETP investments, but so far is contributing only 37 per cent of the total. PEMANDU should explain the issues and the remedial measures being taken instead of trotting out misleading statistics and comparisons that pretend that all is well.

Actual ETP investments totalled just RM12.9 billion — a mere 7 per cent of the RM179 billion committed investments that PEMANDU prefers to highlight.

Even the committed figure can be questioned. Some EPP project owners are being sued for paltry amounts, leading to doubts about their financial capability.

Private investments account for just 37 per cent of ETP investments so far, well below the 60 per cent targeted by the ETP.

PEMANDU should explain the issues and remedial measures taken instead of pretending that all is well.

For those who have come in late …

The story so far in our dissection of the 2011 Annual Report  of the Economic Transformation Program (ETP):

1. In Part 1 (The “D”ata in our DEEDS framework) we gave PEMANDU an A+ for obfuscation. Its talents include the very adroit masking of the fact that real national income growth last year was below par;

2. Part 2 (The “E”xecution in DEEDS) unearthed the shocking case of PEMANDU taking “100 per cent” credit in its Annual Report for a RM1.9 billion wafer fab plant that was never actually built.

Enterprise — the ETP has failed to attract private investments

Part 3 (The “E”nterprise in DEEDS) today highlights:

1. That actual investments under the ETP totalled just RM12.9 billion last year, a mere 7 per cent of the RM179 billion committed investments that PEMANDU prefers to emphasise;

2. Yet another example of PEMANDU stealing credit and obfuscating data. This time, the result is to overstate PEMANDU’s contribution in increasing private investments in Malaysia; and

3. Doubts about the committed investments figure. At least two big ticket private sector EPPs — Karambunai Integrated Resort and Tanjong Agas Oil & Gas Hub — may not deliver as much economic transformation or investments as PEMANDU would like us to believe.

It’s a long way from “committed” to “actual”

PEMANDU makes much of the investments brought in by the ETP. The figure stands at RM179 billion as at end 2011, according to PEMANDU. What is downplayed is that the RM179 billion figure represents “committed”, not actual investments.

The gap between actual and committed investments is huge. A Maybank report in April 2012 states that only RM12.9 billion of investments had been realised in 2011. RM12.9 billion is just 7 per cent of the headline RM179 billion “committed” investments.

Which means PEMANDU is stealing credit again

PEMANDU in the ETP Annual Report says “private investment in 2011 amounted to RM94 billion, some 113 per cent above our target”. There are two major issues here:

1. Firstly, actual investments under the ETP were only RM12.9 billion in 2011, and that amount encompasses private and government-linked investments. So PEMANDU deserves very little credit for the RM94 billion private investments actually achieved across the whole country;

2. Secondly, PEMANDU’s claimed RM83 billion target in private investments is very low and easily achieved, very much like its claimed GNI “target” that we demolished in Part 1 of this series.

The Ministry of Finance as far back as October 2010 had already projected private investment of RM86 billion in 2011. Why is PEMANDU, which is supposed to be adding value and transforming the economy, targeting a level lower than that anticipated by the Ministry of Finance? In fact, PEMANDU’s professed RM83 billion target is equivalent to a paltry 2.7 per cent growth in real private investment.

PEMANDU is also conveniently confusing real and nominal numbers

By this time, we should not be surprised that PEMANDU misuses figures and targets in order to embellish the “achievements” of the ETP. But what did capture our attention was the creative use of real versus nominal figures to boost the appearance of “overachievement”.

On page 7 of the ETP Annual Report, PEMANDU states that:

“… the 19.4 per cent private sector investment growth was well above the 6.7 per cent average growth between 2000 and 2010 and ahead of the 12.8 per cent average growth targeted under the 10th Malaysia Plan. This development validated our push to make the private sector the engine of economic growth.”

What PEMANDU conveniently left out is the fact that the 19.4 per cent private investment growth last year is a NOMINAL figure while the 12.8 per cent target under the 10th Malaysia Plan is a REAL target. Nominal figures include inflation, while real figures strip out inflation to see how much growth there really is. For example, if your salary goes up by 5 per cent, but inflation has increased by 10 per cent, you are really worse off even though your nominal salary has gone up. Your real salary has in fact gone down by 5 per cent (5 per cent salary increase minus 10 per cent inflation).

The 10th Malaysia Plan clearly shows that 12.8 per cent is the real investment target. By choosing to contrast the REAL target of 12.8 per cent against the NOMINAL achievement of 19.4 per cent, PEMANDU is once again obfuscating the facts to create the illusion of massive outperformance.

Defenders of PEMANDU might point out that the 19.4 per cent nominal private investment growth achieved in 2011 is still higher than the nominal 10th Malaysia Plan target of 16.2 per cent. That might well be the case. But do remember — 19.4 per cent was actual investment growth across the whole economy, and amounted to RM94 billion in total private investments.

As we mentioned earlier, PEMANDU and the ETP actually delivered only RM12.9 billion of investments of the RM179 billion committed. This RM12.9 billion would come from both government and private sectors. So PEMANDU can take very little credit for the actual private investments achieved in Malaysia last year.

Moving on, even PEMANDU’s claim of RM179 billion of committed investments is questionable. Last week, we revealed that PEMANDU took 100 per cent credit for the construction of a wafer fab plant even though the RM1.9 billion plant was never actually built. This week, we highlight doubts over two mega-projects — Karambunai Integrated Resort City and Tanjong Agas Oil & Gas Hub.

Karambunai IR — selling new villas while in default

The RM9.6 billion Karambunai Integrated Resort City (Karambunai IR), Entry Point Project in Sabah under the Tourism NKEA, was the largest private sector EPP at the time the ETP Annual Report was published.

In the ETP Annual Report, PEMANDU scored itself 110 per cent under Method 1 of its KPI measurement. It disclosed that 43.9 per cent of the beachfront and golf course villas had been pre-booked, exceeding its 40 per cent target.

We shall not dwell on why the target was set at 40 per cent, and not, say, 45 per cent or 50 per cent, in which case PEMANDU would have underperformed and deserved less than full marks. The 40 per cent target had never been disclosed prior to the claim of overachievement, let alone adequately explained. It is a case very much like the dodgy GNI (Gross National Income) “target” we exposed in Part 1 of this series and the RM83 billion private investment “target” we covered earlier.

All might indeed be well, or, this might be another example of PEMANDU’s tunnel vision where a focus on “ticking the boxes” replaces common sense. We had earlier raised concerns about Karambunai IR, which included:

1. The ballooning taxpayer support — which had soared six-fold from RM100 million to at least RM600 million in a few months;

2. Its viability — without a casino, it would need more visitors than all those arriving at Kota Kinabalu airport to break-even; and

3. The capability of the project developer, Karambunai Corp Berhad.

PEMANDU’s response to our concerns alluded to processes including “multiple safeguards and filters” but failed to include key data that would incontrovertibly rebut our worries.

Now, in this case, while pre-bookings are apparently on-track at Karamabunai IR, its developer, Karambunai Corp, is being sued by some 100 investors in its Nexus Residence development in Kota Kinabalu. These investors, who had bought luxury beachfront properties which were completed in 2009, claim the company is nearly one year in arrears on rental payments due to them.

The annual rental on the 243 luxury beachfront villas amounts to some RM18 million only. If Karambunai Corp has difficulty paying this small amount, does it have the financial capability to deliver on the new villas, pre-booking notwithstanding? Recall that as far back as October 2010, the Star reported:

Still, scepticism abounds on Karambunai’s ability to execute this grand plan, not least because of its weak financial status. The company has been in the red for the past three financial years…. In addition, it has piled on huge debts with short-term borrowings of RM192.07mil and long-term borrowings of RM283.77mil.

PEMANDU might well maintain that its “safeguards and filters” are in place. We do hope that the PEMANDU positive sign-off on this project is indeed reassurance that the RM600 million taxpayer-funded infrastructure development for this project will not be in vain.

Tanjong Agas — RM3 billion > RM30 billion > 0?

The Tanjong Agas Oil and Gas and Logistics Industrial Park in Pekan, Pahang is part of EPP 4 under the Oil, Gas and Energy NKEA. PEMANDU in November 2010 said that RM3 billion of investments was expected in Tanjong Agas between 2011 and 2012. The ETP Annual Report in April 2012 went on to proclaim that a total investment of RM30 billion is expected in the next 10 years.

The validity of this assertion is questionable, given that the very same Annual Report says little about progress so far. Two other projects under this EPP with foreign partners — in Pengerang, Johor and Pulau Daat , Labuan — were cited as achievements. But nothing was said about the RM620 investment commitment into Tanjong Agas by the Dubai-based Oilfield Supply Center (OSC) announced in October 2010.

REFSA had raised red flags on this project in its earlier series:

1. Firstly, the concessionaire to develop the park, Tanjong Agas Supply Base and Marine Services Sdn Bhd (TASBMS), is financially weak. As at September 30, 2010, its RM38.9 million liabilities outweighed its RM2.6 million of assets; it made a RM12.2 million loss and earned just RM92,000 of revenue in that financial year;

2. Secondly, it is very hard to see the economic logic of this project. The government’s own Eastern Corridor Economic Region plan identifies Kerteh and Gebeng as the focus areas for oil and gas clusters, and Petronas is now developing the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor, which is also an EPP.

It has also been reported that the infrastructure development — proper access roads, sewerage and drainage — is far from complete, almost three years after this project was first launched in 2009.

These five EPPs comprise 25 per cent of total committed private investments under the ETP

The five projects named here and in Part 2 in this series — Karambunai IR, Tanjong Agas, L Foundry, Damansara City 2 and Pangkor Island Marina Extension — make up RM17 billion or 25 per cent of the total RM67 billion worth of private investments named thus far under the ETP.

At this point, astute readers will ask, how does this RM67 billion total relate to the RM94 billion of private investments in Malaysia last year? We apologise if all these numbers are confusing. Even we find it difficult unravelling the morass of PEMANDU’s obfuscation. The short answer is:

1. We calculated the RM67 billion total from the various ETP updates which involved non-government and non-GLC stakeholders;

Note also that the technical term for the RM94 billion in private investments is Gross Fixed Capital Formation (GFCF). Simply put, this is new machinery and buildings and other improvements to fixed assets. It also includes replacement capital expenditure, which would have been made by private entrepreneurs as part of their business-as-usual plans regardless of the ETP.

2. Bear in mind, the RM67 billion is for committed private investments under the ETP, whereas the RM94 billion represents actual total private investment in Malaysia, that is, including investments which are not under the ETP. Actual ETP total (private and government) investments were just RM12.9 billion;

3. PEMANDU proudly proclaims that the ETP has RM179 billion of committed total investments. Based on our calculations, this means that RM112 billion or 63 per cent of the total committed ETP investments is from government-linked corporations (GLCs) and the government. If the investment figures for the five private sector projects we mention here are revised down, the share of government and GLCs will be even higher.

The ETP has failed to attract private investment

Yet another PEMANDU misstatement is now exposed. PEMANDU claims that private investment in Malaysia in 2011 exceeded its targets and that “This development validated our push to make the private sector the engine of economic growth.”

Sadly, the truth is the ETP actually delivered just RM12.9 billion of total investments in 2011, from private, government-linked and government sources. This is a small fraction of the total RM94 billion of private and RM171 billion of total investments achieved in Malaysia in 2011.

Furthermore, the veracity of PEMANDU’s claim of RM179 billion of total committed private and government investments as at end 2011 is doubtful. We have so far highlighted just five entry point projects that collectively account for 25 per cent of total private investments under the ETP whose financial sustainability may be in doubt. Excluding these would significantly affect the investments, incremental GNI and jobs created that PEMANDU claims the ETP has achieved.

What should PEMANDU do?

A crucial thrust of the ETP is to restore the private sector as the driver of economic growth. To this end, the ETP targets 8:32:60 ratio of investments from government, GLCs and the private sector. However, as it stands, government and GLCs already account for 63-65 per cent of the committed investments so far.

We reiterate our call: PEMANDU must take the bull by the horns and address the root causes of why the private sector has little confidence in the long-term potential of the country to invest capital in the so-called “shovel-ready projects” under the ETP. To do this, PEMANDU should:

1. Stop obfuscating by cherry-picking and trotting out misleading statistics and comparisons. This is unproductive and intellectually dishonest; and

2. Explain the issues and the remedial measures being taken where there are deviations from the targets.

If private sector investment is lagging, hiding behind different sets of data will not take us to high-income status. PEMANDU must demonstrate that it is able to mobilise the private sector to drive economic growth through the EPPs.

About DEEDS

Earlier this year, we published a series assessing PEMANDU and the ETP on the goals, plans and targets stated in the ETP Roadmap document. To facilitate constructive discourse and in keeping with the spirit of the alphabet soup of NKEAs, NKRAs, SRIs, EPPs, and GNI surrounding the entire GTP, we evaluated PEMANDU and the ETP on its DEEDS — Data transparency, Execution, Enterprise, Diversity and Socio-Economic Impact. The 8 Focus Papers in this Critique of the ETP Series, together with related infographics and a powerpoint presentation can be found at
www.refsa.org
. — REFSA (Research for Social Advancement)

___

* Dr Ong Kian Ming holds a PhD in Political Science from Duke University and Economics degrees from the University of Cambridge and the London School of Economics. He is attached to UCSI University, which has been named as the project owner of two entry point projects (EPPs). To avoid any potential conflict of interest, he will not make references to or analyse these two EPPs. He can be reached at
[email protected]
.

* REFSA (Research for Social Advancement) executive director Teh Chi-Chang holds a first-class degree in Accounting & Financial Analysis from the University of Warwick, an MBA from the University of Cambridge and the CFA (Chartered Financial Analyst) charter. Prior to joining REFSA, he headed highly-regarded investment research teams covering Malaysia, and was himself highly-ranked as an analyst. He can be reached at
[email protected]
.

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