Pakatan Rakyat Budget 2012 (Part 9 of 10)

8 Public Finance Strategy – the Pakatan Rakyat budgetary framework

8.1 Rationalising Expenditures, Efficiency and Value for Money

The Pakatan Rakyat government will strive to contain expenditures with the ultimate objective of ensuring the long-term sustainability of public expenditures while supporting the continued growth of the economy and the achievement of a high quality of life for all the rakyat.

Rationalising expenditures will restore fiscal space for Malaysia to face future adversities from global perturbations and ameliorate the uncertainties from the accelerating debt burden facing future generations of Malaysians.

In the short-run, while limiting expenditures, Pakatan Rakyat will put in place resolute policies to improve the efficiency of public outlays and simultaneously generate greater value for money. This will bring immediate and direct benefits to the rakyat in the form of better public services (education, health, education and social services), employment prospects, security, and infrastructure.

In the first instance, the misaligned structure of operating outlays of government would be progressively adjusted to secure greater value and efficiency. For example, subsidy rationalisation and civil service effectiveness;

Pakatan Rakyat will work with stakeholders on a variety of expenditure reform measures consistent with international best practices to eliminate wastages as well as improve the efficiency and value added for every Ringgit of public resources expended;

In addition to broadening the transparent procurement policy and procedures already being practiced by several Pakatan Rakyat state governments, the open tender process will be extended to all federal, state, and local level expenditure programs as appropriate. The procurement process will make greater use of on-line procedures and all relevant information on the results of the tender process will be disseminated on a timely basis.

We are confident with the results experienced thus far in States governed by Pakatan Rakyat, that such improved transparency will lead to better price discovery, lower the overall costs for government and deliver the value contracted without delays and undue costs overruns. The open tender process will be accompanied by the mandatory introduction of value management planning for public expenditures above a certain size at all levels of government.

As part of open tenders, value management and improved expenditure controls, Pakatan Rakyat policies would place special attention on performance management, timely completion and limiting costs overrun. Performance bonds of contractors will be strictly enforced and Pakatan Rakyat will make certain that cost-overruns will not be absorbed solely by the government. There will be open dissemination of all pertinent information and stages of completion updates on contracted projects.

Over the medium- to long-term, Pakatan Rakyat will put in place important policy initiatives to strengthen public administration and finances:

Restore the prestige of the civil service:

Human resource practices in the service will be revamped to narrow the gap in salaries, professional challenges and job prospects in order to facilitate themobility of civil service professionals between government and the private sector;

This should be accompanied by reform in the civil service pension to make it fully funded and portable throughout the domestic labour market.

Another significant Pakatan Rakyat initiative will be the introduction of medium- to long-term budgetary frameworks which will give greater credence to and better align the current multi-year planning exercise to the objectives and aspiration to becoming a high-income nation;

To directly support this initiative, there must be greater transparency in the reporting and dissemination of public finance information. At the moment, proper reporting on budgetary outcomes at federal, state and local levels lack details, are inordinately late or nonexistent, and accountability for meeting objectives and outcomes is absent;

Reports of dissemination of public finance information will be extended to include GLCs and GLICs, especially the financial performance of entities such as PETRONAS. Pakatan Rakyat will ensure that Malaysia avails itself of an assessment under the International Report on Observance of Standards and Codes (ROSC) on fiscal transparency;

It will be Pakatan Rakyat’s policy to quantify and disseminate all the contingency liabilities facing the government at the Federal and State level.

This will lead to a better understanding of the potential losses that could arisefrom potential future expenditures not currently captured in the budgetary process of the government such as contingency liabilities from toll concessions, government guarantees provided to GLCs and other entities, for example, deposit insurance.

Thereafter, decisive policies to progressively reduce such identified contingentliabilities should be agreed upon and emergency plans to manage the possibility of the contingent event actually taking place should be developed.

Pakatan Rakyat will also strengthen the framework of accountability that is grosslymissing from the practices of Barisan Nasional.

Strict expenditure monitoring after the national Budget is tabled and approved in Parliament is lacking. This leads to over-spending and the tabling of supplementary budgets to retroactively cover such outlays;

Following a review, the Accountant General must submit to Parliament a comprehensive proposal to improve spending accountability byMinistries and public agencies. This will include improvements in the management reporting and budgetary control systems;

Such an expenditure accountability system will enable Pakatan Rakyat to institute a mandatory 6-month review of government spending. This review must be tabled for discussion in the Dewan Rakyat;

Most importantly, the Auditor General’s annual report must be comprehensively discussed in the Dewan Rakyat so that an action plan for corrective measures can be formulated and agreed upon.

8.2 Making more responsible use of our oil wealth

Oil and gas reserves are finite resources. For the past four decades, our oil and gas riches have cushioned the financial and economic impacts of various global and domestic shocks.

At the current reserve replacement and production rates, it is estimated our oil and gas reserves will last another 20 and 35 years, respectively. The proceeds from our rapidly depleting natural endowment must be better managed and preserved for the benefit of future generations of Malaysians.

Pakatan Rakyat will instill responsible management that adds value to the nation’s oil wealth:

The present massive gas subsidies to the IPPs and other industries which weigh negatively on Petronas’ financial health will be phased outin conjunction with the revamp of subsidy policies to industry;

The Barisan Nasional practice of arbitrarily demanding large dividend payments from Petronas will be immediately discontinued;

Pakatan Rakyat will agree on a formula with Petronas on a reasonable formula for dividends to the federal government. This formula will take into account Petronas short and long-term financial stability including critical reinvestment needs for sustained competitiveness and global presence;

A percentage of this dividend payment will be deposited into a Heritage Fund to be set up. This Fund will be mandated to invest in strategic areas considered vital to the long-term competitiveness of Malaysia. This will include investments in energy efficiency, renewable energy and green technologies

8.3 Making fuller use of our MP’s expertise, skills and talents

In our system of parliamentary democracy, Members of Parliament, or MPs, are required to provide input and exercise supervision over the Executive, or government led by the prime minister.

The role of the MPs has been increasingly marginalised as the Barisan Nasional government concentrates power in the hands of the prime minister and his cabinet. For example, in the case of the Budget, media and public attention focuses on the Minister of Finance’s Budget speech. After the requisite fawning comments and feedback following the speech on Friday, media and public attention wanders elsewhere.

It is conveniently forgotten that the Minister of Finance gives his speech and tables the proposed Budget for a reason. The proposed Budget is tabled for the consideration and approval of Parliament. It should not be a fait accompli nor a set of unfathomable announcements.

The Budget deliberations are considered so important that no fewer than 18 sitting days, equivalent to nearly a calendar month, are devoted to debate in the “Committee” stage.

In the “Committee Stage”, the budget for each Ministry should be discussed and debated in detail. However, this is currently not possible in Malaysia.

In first world parliaments, there are actual committees specialising in particular ministries. These committees are made up of MPs from both Government and Opposition;

In Malaysia, there are no such committees. The entire Dewan Rakyat is the committee. This results in very ineffective debate and absence of effective checks and balances as well and oversight because:

MPs do not have the opportunity to develop specialist skills and knowledge in particular Ministries;

MPs with knowledge and insights to add may be unable to contribute if they are unable to ‘catch the eye’ of the Speaker;

MPs suffer fatigue as Parliament sits until late at night;

There is insufficient time as all 25 federal ministries have to be covered by the same “committee” (the whole Dewan Rakyat) in just 18 days.

Pakatan Rakyat considers the input of MPs as very important. MPs represent the interests of the rakyat. Pakatan Rakyat will implement proper “Committee Stage’ debates:

For a start, 7 Committees will be formed. These Committees will include a mix of Government and Opposition MPs in a similar proportion to Parliament as a whole;

Committee members will be given allocations to employ parliamentary research assistants to improve their effectiveness.

Pakatan Rakyat believes this will result in Budgets that are more effective and reflective of the wishes of the rakyat:

As time goes by, long-serving MPs will develop specialist expertise and experience which will enable them to ask pertinent questions and provide useful input;

As the committees are smaller, MPs can participate meaningfully. Also, Committees facilitate less partisan and more productive interaction, unlike in the full Dewan Rakyat where Government and Opposition are expected to ‘cross swords’ or are prone to ‘show-boating’.

Pakatan Rakyat proposes the following 7 Committees and the current Ministries they will oversee:

National & International Affairs

Prime Minister’s Department

Ministry of Foreign Affairs

Ministry of Information, Communication and Culture

Ministry of Federal Territories and Urban Wellbeing

Economics & Finance

Ministry of Finance

Ministry of International Trade and Industry

Ministry of Domestic Trade, Cooperatives and Consumerism

Ministry of Tourism

Security

Ministry of Defence

Ministry of Home Affairs

Education, Talent & Employment

Ministry of Education

Ministry of Higher Education

Ministry of Human Resources

Agriculture and Regional Development

Ministry of Plantation Industries and Commodities

Ministry of Agriculture and Agro-based Industry

Ministry of Rural and Regional Development

Infrastructure, Resource Management & Environment

Ministry of Works

Ministry of Natural Resources and Environment

Ministry of Science, Technology and Innovation

Ministry of Energy, Green Technology and Water

Community Wellbeing

Ministry of Transport

Ministry of Housing and Local Government

Ministry of Health

Ministry of Women, Family and Community Development

Ministry of Youth and Sports

[
Pakatan Rakyat Budget 2012 released by Datuk Seri Anwar Ibrahim on behalf of PR in Kuala Lumpur on 4th October 2011. Part 9 of 10
]

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[Part 10 >>]

                This entry was posted on Wednesday, 5 October 2011, 2:22 pm and is filed under
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Is PSC a one-man show?

Patrick Lee

Free Malaysia Today

October 6, 2011

Pakatan Rakyat members tick off Ongkili for making decisions without consultation and barring Bersih from attending the meetings.

KUALA LUMPUR: Pakatan Rakyat MPs in the Parliamentary Select Committee (PSC) for electoral reforms have rapped its chairman for making decisions without consulting the group first

PAS Kuala Krai MP Hatta Ramli said that PSC chairman Maximus Johnity Ongkili jumped the gun by announcing nationwide public hearings, and also barring Bersih 2.0 from attending the PSC’s meetings.

“This may not be a big issue, but (the fact remains) that the decision was made by him without consultation. The first meeting hasn’t even been held… decisions should have been made then, but he seems to have decided himself.”

“Is this a one-man-show or a committee of nine people?” asked Hatta, when talking to reporters at the Parliament lobby here today.

Last night, Ongkili gave the media an idea of what to expect in the upcoming PSC meetings. He said that at least six public hearings were to take place in both the Peninsula and Sabah and Sarawak.

Bersih, he added, would be barred from attending the PSC meetings.

Who is Ongkili to decide?

However, Ongkili said that Bersih chairperson Ambiga Sreenevasan would be allowed to submit proposals to the PSC as either a member of the Bar Council or as an individual.

But Hatta said that it was ironic for Ongkili to have made this decision (to bar Bersish) when it was Bersih that set about the chain of events leading to the formation of the PSC.

“Who is he to decide on what position Ambiga should come in?… This PSC was agreed upon subsequent to the July 9 Bersih gathering.

“The rally was important as it resulted in the formation of the PSC. By rejecting Bersih, I think Ongkili is trying to show something, and it defeats the whole purpose,” he said.

On July 9, more than 10,000 protesters took part in the Bersih 2.0 rally in Kuala Lumpur.

Fellow PSC member and Rasah MP Anthony Loke (DAP) said that Ongkili should have approached the matter as the PSC chairman rather than as a minister.

“This is a bi-partisan committee… this is not a rubber-stamp committee,” he said.

Fellow Pakatan-PSC member Gombak MP Azmin Ali (PKR) was not able to attend the press conference

                This entry was posted on Thursday, 6 October 2011, 4:41 pm and is filed under
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Nazri says Tajuddin did not disclose interests in MAS deals

By Shannon Teoh

The Malaysian Insider

Oct 06, 2011

KUALA LUMPUR, Oct 6 — The government said today that Tan Sri Tajuddin Ramli had breached the Companies Act by not disclosing his interests when he was chairman of Malaysia Airlines (MAS).

But Minister in the Prime Minister’s Department Datuk Seri Nazri Aziz said that the fine incurred by Tajuddin has been postponed as the case involves a civil suit that has not been resolved.

The de facto law minister said that reports made by the national carrier against its former boss had been referred to the Attorney-General in 2006.

“Based on the investigation, evidence shows that he had breached section 131 of the Companies Act which involves ‘disclosure of interests’.

“As the case involves a civil claim that has not been resolved, he asked the Attorney-General’s Chambers to delay the compound. The A-G’s Chambers has granted the request,” Nasri said in a written reply to Lim Kit Siang (DAP-Ipoh Timor) in Parliament today.

The DAP parliamentary leader had asked if the Attorney-General can absolve the former MAS chairman from criminal liabilities as there has been no prosecution against Tajuddin despite the reports made by the flag carrier to the police and anti-graft authorities.

Putrajaya had directed all government-linked companies (GLCs) in August, including MAS, to cease all civil suits against Tajuddin via a letter sent by Nazri.

Nazri informed them that the Finance Ministry had agreed to settle all claims against Tajuddin, a poster boy of Tun Dr Mahathir Mohamad’s plan to groom Bumiputera entrepreneurs.

Nazri later said that the agreement could save Putrajaya “billions of ringgit” as Tajuddin had also filed counterclaims against the GLCs.

                This entry was posted on Thursday, 6 October 2011, 2:58 pm and is filed under
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No Malaysian university in Times Higher Education (THE) 400 Top World University Ranking 2011/12

The release today of the Times Higher Education (THE) 400 Top World University Ranking 2011/12, where not a single Malaysian university is included, has punctured the elation and euphoria just two months ago over the  QS 200 World University Rankings 2011/12 which saw University of Malaya making to the top 200 Top Universities moving 40 places to 167 compared to 2010.

In the QS World University Rankings 2011/12 released in September, four other Malaysian universities slid down the rankings –University Kebangsaan Malaysia (UKM) ranked 279 this year compared to 263 in 2010; Universiti Sains Malaysia (USM) ranked 335 (309 last year); Universiti Putra Malaysia (UPM) ranked 358 (319 last year) and Universiti Teknologi Malaysia (UTM) at between 401 and 450 (365 last year).

But in the just-released THE 400 Top World University Ranking 2011/12, none of the Malaysian universities made it into the placings.

For the first time, Harvard (with Stanford)  is at number two, failing to take the top spot in the list’s eight-year history when California Institute for Technology is named the best university in the world.

The rest of the Top Ten spots are Oxford (4), Princeton (5), Cambridge (6), Massachusetts Institute of Technology (70, Imperial College London (8), Chicago (9) and California (Berkeley) (10).

The top Asian universities in the THE 400 World University Ranking 2011/12 are:

30 – University of Tokyo (Japan)

34 – University of Hong Kong (HK)

40 – National University of Singapore (Singapore)

49 – Peking University (China)

52 – Kyoto University (Japan)

53 – Pohang University of Science and Technology (S.Korea)

62 – Hong Kong University of Science and Technology (Hong Kong)

71 – Tsinghua University (China)

94 – Korea Advanced Institute of Science and Technology  (South Korea)

108 – Tokyo Institute of Technology (Japan)

119 – Osaka University (Japan)

120 – Tohoku University (Japan)

124 – Seoul National University (South Korea)

151 – Chinese University of Hong Kong (Hong Kong)

154 – National Taiwan University (Taiwan)

169 – Nanyang Technological University (Singapore)

192 – University of Science and Technology of China (China)

193 – City University of Hong Kong (Hong Kong)

Worth noting is that while not a single Malaysian university made it into the Times Higher Education (THE) 400 Top World Universities Ranking, Thailand through Mahidol University is ranked in the final category between 351-400.

                This entry was posted on Thursday, 6 October 2011, 7:23 pm and is filed under
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Pressure on Najib to change or be changed, says Time

By Debra Chong

The Malaysian Insider

Oct 06, 2011

KUALA LUMPUR, Oct 6 — International weekly Time has likened Datuk Seri Najib Razak to other authoritarian leaders in Southeast Asia and foresees sweeping reforms led by a media-savvy youth will shake up the entire region.

But the magazine said the prime minister has taken heed of the need for change and has begun initiating changes that include the repeal of outdated laws covering security and the media.

“Southeast Asians… know what it’s like to live under authoritarian regimes and rulers. The latter range from brutal autocrats (Burma’s recently-retired General Than Shwe) to self-styled strongmen (Cambodia’s Hun Sen) to leaders who benefit from repressive laws that safeguard the predominance of a single party (Malaysia’s Najib Razak),” the influential news magazine said in its latest issue dated October 1.

It observed too there is a rising number of youths who are social-media-savvy who are is fed up with authoritarian rule and have grown bolder in saying so.

Time’s Andrew Marshall highlighted the 50,000-strong Bersih 2.0 march for free and fair elections last July 9 that saw police arrest almost 1,700 people hit with tear gas and chemical-laced water, resulting in scores hurt and an ex-soldier’s death when the authorities clamped down on the capital city.

“Protesters used Twitter and YouTube to organise the rally and, later, undermine claims that the police acted with restraint,” he wrote in his story headlined “The fire next time”.

“Prime Minister Najib, who casts himself as a moderate, seems to realise this. His party, the United Malays National Organisation, leads the National Front coalition, whose decades-old grip on power has sparked protests for electoral reform,” he said.

He noted too Najib has moved to reclaim his shredded reformist credentials following heavy fire from the global media during his European tour by announcing he was scrapping the Internal Security Act (ISA) and other security laws that allow a person to be detained indefinitely on suspected terrorism claims.

The country’s sixth prime minister has also announced sweeping changes to security and press laws, to increase civil liberties in the country.

Marshall said there was widespread doubt Najib will fulfil his promises, but added the awakened public now held the bargaining chip to determine the next person to sit in Putrajaya.

“But emboldened Malaysians will hold him to them, either at the polls — an election must be held by 2013 — or on the streets,” he concluded.

Najib, who is also finance minister, is due to table the national budget for 2012 tomorrow that is expected to include incentives and allocations to retain and regain support for the next general election widely expected by early next year.

He has said the ruling Barisan Nasional (BN) needs to put winnable candidates to keep and win back federal and state seats lost in Election 2008 where the coalition lost its customary two-thirds majority in Parliament and four state governments.

                This entry was posted on Thursday, 6 October 2011, 9:09 am and is filed under
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Remembering 500 years of colonialism

— Tommy Thomas

The Malaysian Insider

Oct 05, 2011

OCT 5 — The Malay Peninsula was colonised 500 years ago this year, and its significance in our history should be marked in some way by universities and scholars. We should be having public seminars and academic conferences to remember and discuss this aspect of our history in its 500th anniversary. I am surprised that nearly half a year has passed, and no university has publicly announced any such initiative.

Remembering that the Malay Peninsula was colonised half a millennium ago is one way to remind the post-independence generation of Malaysians to be grateful for Merdeka. It is critical to teach the present generation about the dangers of empire and colonialism so that we can celebrate what independence means and pay tribute to the people who fought for it. Parts of the Malay Peninsula have only experienced 54 years of self-governance since 1511 when the Portuguese invaded and colonised Malacca. Soon after the founding of Malacca by Parameswara in 1403, it rapidly developed into a major entrepot in Southeast Asia, with traders from the Indonesian archipelago, China, India and Arabia crowding its marketplace. Admiral Cheng Ho led the then greatest naval expedition to Malacca and could have easily taken Malacca by force. The Chinese did not do that; instead, they were content to allow Malacca to govern itself through the Malacca Sultanate. Hence, throughout the 15th century, no foreign power colonised Malacca.

Four different colonial powers

Vasco da Gama’s arrival in Calcutta in 1498 after discovering the Cape of Good Hope route saw the first European presence in India, from which the Portuguese launched their violent takeover of Malacca in 1511. The Portuguese were not content to trade in the markets of Malacca like all the other traders. The urge to dominate, combined with their sense of racial superiority, led the Portuguese to use force to conquer Malacca. Control and monopoly of the lucrative spice traded in the markets of Malacca were primary objectives of the Portuguese.

In the 446 years between 1511 and 1957, Malaya was colonised by three European powers and one Asian. The Portuguese colonised Malacca from 1511 to 1641 and the Dutch from 1641 to 1824. The British were in Malaya from 1786 to 1941 when the Japanese invaded and took over until 1945. The British then returned to continue their rule over Malaya until 1957, when the country gained independence. Additionally, for a period of 38 years between 1786 and 1824, two European powers ruled parts of Malaya — the British over Penang and the Dutch over Malacca.

Malaysia’s colonial history was probably unique in the annals of imperialism in that we were colonised by four different foreign powers. Does this suggest that we were a valuable colony? Being wary of different forms of colonialism and standing united against foreign occupation, rather than jingoism that pits the different races against each other in our plural society, is true nationalism. However critical we may be of our government and institutions, at the end of the day, we must be grateful that Malaysia is an independent, sovereign nation which justly has a place in the world community.

Likewise, however critical one is of colonial rule, it must be conceded that colonialism had some redeeming factors. Thus, Malaysia benefited from some colonial legacies such as the civil service and the educational, transportation and legal systems, parliamentary democracy and the English language. How enduring the effect of empire is, is difficult to measure because Malaysians were resilient to foreign influence, having retained our religions, culture, food, dress and other aspects of our identity, despite the presence of various colonial powers and the duration of colonialism.

New forms of imperialism

Since Merdeka, Malaysia enjoys the best of relations with the four colonial powers. Should we seek reparations from each of them or at least a public apology are matters worthy of public debate. There is no threat of Malaysia being colonised again through brutal invasion by any of its four former colonisers. However, it is a terrible regret that colonialism of this nature still exists in the 21st century. The US is the most dangerous colonial power in the 21st century. Since September 11, 2001 the US has invaded and occupied two sovereign states — Iraq and Afghanistan — in the old-fashioned way. Both countries remain colonised, even though Osama bin Laden has been executed and the public justification for invading Afghanistan has disappeared. There was none for Iraq.

Malaysia is fortunate in that we are not deemed to be of strategic importance to the policy-makers in Washington and hence, Malaysia is not likely to be occupied by the US. Malaysians must count their blessings that in the geo-strategic plans of the Pentagon and the CIA, we are low on the radar, particularly since neighbours like Singapore, the Philippines and Thailand are more supportive of US interests.

Over time, new forms of imperialism have developed. Thus, financial, economic and cultural imperialism have emerged. Hollywood films and an obsession with English football are subtle types of contemporary cultural imperialism which Malaysians are addicted to.

It is vital for public discussion to take place on the effects of empire and imperialism. It is not healthy to pretend that we were never under colonial yoke, and that our history only began with Merdeka in 1957. Can the debate begin? — aliran.com

                This entry was posted on Thursday, 6 October 2011, 9:01 am and is filed under
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Steve Jobs – Stay Hungry. Stay Foolish.

Steve Jobs

1955-2011

Stanford Commencement address delivered by Steve Jobs
, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.

It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something — your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky — I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation — the Macintosh — a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn’t know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down – that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me — I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple’s current renaissance. And Laurene and I have a wonderful family together.

I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

My third story is about death.

When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.

This was the closest I’ve been to facing death, and I hope it’s the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960’s, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.

                This entry was posted on Thursday, 6 October 2011, 4:21 pm and is filed under
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My dream Malaysia Part 1 – Home Front

by Richard Loh

October 5, 2011

My dream comes true in a dream within a dream. I woke up to find a total different Malaysia that most Malaysians have been waiting for even though we have yet to attain the developed status. But, is being a developed nation that important when the rakyat are just as happy and living a peaceful and prosperous life with a matured democracy?

Home Front

My daily routine after waking up is to stand at the balcony of my 900 SF apartment, breathing some fresh air generated from the greenery’s not far away. This apartment was bought by my daughter who can afford to do so because it was reasonably priced and an income that allows her to do so.

On my breakfast table there were three newspapers, Utusan, NST and The Star. I read through them one at a time and feel happy reading them. Utusan headlines “Timbalan Perdana Mentri, XYZ, di- arah ka MACC untuk siasatan korupsi”, The Star front page news ‘A top NGO leader was sentenced to five years imprisonment for calling other ethnic groups ‘pendatang’ while NST reported that an opposition MP was disqualified after he was declared a bankrupt. All the papers were reporting exactly what is happening around us and I could not find a report about religion or racial conflict.

After breakfast I took a drive to the market,(usually I would take the MRT, which is nearby and directly stop at destinations where I wanted to go) about 10km away to test my new 1.6 Protonsia. This Protonsia is 100% Malaysian make, body and engine designed by local engineers and safety test approved by the international automobile association. This car model was even exported to the United States with the same price tag as other imported cars like Toyota, Nissan or Mazda of the same engine capacity.

Traffic was smooth, not many cars on the road as most people took the MRT to work. Finding a car park was not a problem at all. This market was huge which cater for the local population of over 100,000 and of three levels. The ground level for the wet market produce, 2nd level for groceries and dry products while the 3rd floor is the hawker center where you can find all kinds of food prepared by the locals from all races. Here you can see how the people of all races mingled together, sitting at the same table having their food while some older folks playing chess at another table.

As I drove out from the car park, a policeman stopped me. He spoke to me in English and Malay. “sir, please drive carefully, today jumaat, many people going to pray at a mosque nearby. Kalau Enche ada senang, Enche boleh pergi ka mosque selepas sembayang, sana ada jamuan untuk semua orang. This Sunday ada pun satu jamuan di church, panggil lah kawan kawan ramai datang.” He then handed me a leaflet, highlighting all my constituency communities events and functions for the month.

Before driving home I have to make a stop at the gas station. At RM1.20 per litre, our gas is the cheapest compared to most countries. Petronas dealings are no longer held in secrecy but in the open, managed by a team of qualified Malaysians selected and endorsed by parliament from both sides of the divide. Needless to say, food prices are also cheaper with the chain reaction originated from cheap gas.

Upon arriving home I saw my grandchildren playing with their schoolmates comprising of Malays and Indians at the apartment playground. I told all of them to come back to my apartment for some light snacks and clean up before they go home.

This is the Home Front that I am dreaming of, all communities of different races and religions living together, helping each other and leave religion and race on the back burner, only to be discussed and talked about as and when necessary only.

                This entry was posted on Friday, 7 October 2011, 11:38 am and is filed under
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Budget 2012 fails to live up to the Prime Minister’s reform pledges in NEM, GTP and ETP

Media Statement by Tony Pua, DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara in Kuala Lumpur

The expectations were high for a pre-election budget where Datuk Seri Najib Abdul Razak will stamp his “reformist” credentials.  It is for the Prime Minister to put into action the various reform pledges made in his cornerstone policy blueprints – the New Economic Model (NEM), Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP).

However, the announcement of the budget left much to be desired as little has changed beyond tweaking the budget of the previous financial year.  Instead what is perhaps the most worrying is that Malaysians are like the proverbial frog in the hot soup – where the frog does not realise the soup is slowly but surely reaching the boiling point.

We may not yet be facing the crisis of Greek proportions, but Budget 2012 is doing very little to avert such eventuality, leaving the Malaysian economy nakedly exposed to the inevitability.

Federal Government Debt

Our Federal Government debt has increased rapidly from RM242 billion in 2004 to RM363 billion in 2009 and RM456 billion in 2011.  That represents a marked 88.4% increase in debt over the past 7 years.  It is also an increase of 25.6% or nearly RM100 billion over 2 years.

The increase in debt has increased the pressure on reigning in our budget deficit as our annual debt service commitments have increased to RM20.5 billion next year from only half the amount 5 years ago in 2007.

While our federal government debt to GDP ratio is still at a moderate 53.8%, a far cry from Greece’s 117%, we are not far from Spain’s 64% or Ireland’s 67%, both of whom are facing economic turbulence of their own.

Our debt levels will only worsen in the next few years as we embark on record levels of infrastructure spending such as the RM53 billion Klang Valley MRT project which is expected to be funded entirely on debt.

Wages and Pensions

At the same time, our public sector expenditure is increasingly mirroring that of the European countries with ballooning civil service obligations. The budgeted expenditure for wages and pensions for 2012 is a whopping RM64.1 billion, an increase of RM6.2 billion or 10.8% budgeted for 2011. The increase is even more worrying when contrasted against the budgeted RM36.9 billion 2007, a 73.7% increase in just 5 years.

The GTP had promised a more efficient and cost effective government and civil service.  What we are seeing from the Budget is only on which is indebting our children, entrenching our structural problems and very weak expenditure controls.

Economic Growth

Despite the Governments efforts in the ETP, our manufacturing and export statistics paint a starkly different picture.

Our export sector grew a miserly 2.7% in 2011 against 13.2% in 2010. However, we should be further alarmed by the fact that the growth was a result of increased contributions from exports of rubber, paper, textiles, clothes and shoes which grew in excess of 15%, and the petroleum products by 9.3%. Our electrical and electronics sector, which constitutes 26.4% of our total exports industry shrunk by 4.9% in 2011.

From the above indicators, there appears to be a shift away from higher value-added export sectors to the primary products industry such as rubber, wood, textiles and crude oil. This is the exact reverse of what we are trying to achieve via the ETP.

Budget deficit

Based on the Economic Report, we are expected to meet our deficit target of 5.4% for this year only because our revenues had grown beyond the expected in the 2010 budget due to very strong commodity prices. The Government has managed to collect RM21.1 billion of extra revenue on top of the originally budget RM165.8 billion. If not for the unexpected increase in government revenue, our budget deficit would have been a shocking 7.9%.

The Government is planning a 4.7% deficit for 2012, a figure which doesn’t give hope that the 2.5% deficit target promised by Najib can be met by 2015. Even then, based on poor expenditure controls and the habitual ad hoc expenditure patterns of past BN governments, even meeting the 4.7% target will be a challenge, especially if commodity prices were to fall below expectations next year.

Optimistic projections

Finally, despite having achieved on 4.2% growth in the first half of 2011, and a slowing global economy in the face of another potential economic crisis, the Government has retained its unrealistic growth assumptions of 5.0 to 5.5%. To meet the target, Malaysia’s economy will have to grow by at least 5.7% in the 2nd half of the year, which is highly optimistic to say the least.

The Federal Government’s unrealistic expectations coupled with a budget which failed to demonstrate substantive reforms and political will for change makes the 2012 budget a highly disappointing and puts in serious doubt our ability to become a high income nation as aspired in Najib’s New Economic Model.

                This entry was posted on Friday, 7 October 2011, 6:35 pm and is filed under
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Tax reliefs: Hidden subsidies that favour the rich

— Subramaniam Pillay

The Malaysian Insider

Oct 07, 2011

OCT 7 — In the past couple of years, there has been a lot of talk on subsidy rationalisation i.e. the removal of subsidies for basic items like cooking oil, sugar, flour and petrol. The argument is that it subsidises the poor as well as the rich; it is unfair to provide subsidies for the rich, so we must eliminate the subsidies and let market forces work.

Many of these subsidies help the poor and the rich equally. For example, if a family consumes 5kg of cooking oil per month, they get the same subsidy regardless of their wealth and income. Usually, consumption of basic food items does not increase with increasing wealth and income.

However, there is a large hidden subsidy which favours the rich over the poor that has been conveniently forgotten. And this comes in the form of the various tax reliefs offered to taxpayers. In this week, before the 2012 Budget is announced, there have been numerous calls to increase the tax relief for various items including premiums for medical insurance, educational insurance and life insurance.

Tax reliefs are is a very regressive form of government subsidies to the taxpayers. The richer the taxpayer, the more subsidy she gets from the government. Thus it is unfair and inequitable.

Tax relief for purchase of books

Let us illustrate this with an example. Currently, there is a tax relief of RM1,000 for the purchase of books and magazines that is available to all taxpayers. Ostensibly, this is to encourage the reading habit among Malaysians.

A high-income earner who is at the top tax bracket will pay a marginal tax rate of 26 per cent i.e. for every extra ringgit she earns, she will pay 26 sen income tax.

On the flip side, every ringgit of tax relief that she claims will reduce her income tax by 26 sen. If she now buys books and magazines worth RM1,000 for herself or her children, she can claim the full relief and lower her tax bill by RM260.

In other words, this high-income person is getting a government subsidy of RM260 to purchase books.

Now let us take the case of Mr X, the average citizen of Malaysia whose income is so low that he does not pay taxes.

(It has been reported that only 1.7m residents have tax files with IRB which means the remaining 12m-15m working adults are either earning too little to pay income tax or evading paying income tax!)

If Mr X now buys RM1,000 worth of books to improve his and his children’s knowledge to enable them to have a better life in the future, he receives no subsidy as he is not entitled to any tax relief.

If Ms Y, a middle income Malaysian has a marginal tax rate of 12 per cent, she will get a subsidy of only RM120 for the RM1,000 worth of books she buys. The irony is that it is the families in the lower-income group who need the books more as it will enable them to earn a better income in the future.

They need the book subsidy more than the rich. But our tax relief system rewards the rich more than the poor thus widening the income and wealth disparity in this country.

Tax relief for medical insurance premiums

An even more unfair tax relief is the one offered for purchase of medical insurance. Using the same reasoning as above, the government is subsidising the rich with 26 per cent of the cost of the medical insurance premium while the poor will be unable to even think of buying medical insurance as they cannot afford it.

This subsidy should rightly be diverted to the health care budget so that the public sector health care system can do a better job in terms of delivering quality health care on a consistent basis.

The beneficiaries of this medical insurance tax relief (or subsidy as it should be correctly labelled) are not only the high-income taxpayers but also the private medical insurance companies and the profit-seeking private hospital sector.

Why are tax reliefs popular?

Given this glaring inequity and unfairness of the tax relief system, why is it popular in many countries? The beneficiaries are well-educated and vocal enough to influence politicians to give these reliefs. Industry groups which benefit from these reliefs (e.g. insurance companies, private hospitals, and private education providers) are also powerful lobbies in many countries.

The poor on the other hand are voiceless and their welfare is usually neglected. For example, few top leaders in all segments of our society use public hospitals; in fact many go abroad for medical treatment, so they don’t see the need for consistently high quality health care from government hospitals which most Malaysians have no choice but to use.

Another reason is that the subsidy in the form of tax relief is revenue foregone and not visible directly; it is not recorded anywhere in the government’s income and expenditure accounts. On the other hand, a subsidy for cooking oil turns up as an expenditure item in the accounts.

So when the government thinks of tightening its belt, it tends to focus on how to cut spending and not how to enhance revenue by removing all these indirect subsidies which favour the rich more than the poor. It is also easier to quantify direct subsidies whereas revenue foregone through tax reliefs is more difficult to estimate and is thus less visible.

Given these reasons, it is not going to be easy to get rid of the unjust and massive inequitable subsidy that occurs through tax reliefs in our government budgets. — aliran.com

* Dr Subramaniam Pillay is an economist who has just retired from academia. He is also a member of the executive committee of Aliran.

                This entry was posted on Friday, 7 October 2011, 9:44 am and is filed under
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Barisan Nasional’s Budget 2012 is like a sugar-coated placebo – makes you feel good after taking it, only to tax you more later

by
Tony Pua

8 Oct 2011

It is difficult not to “feel good” after a record-breaking pre-election budget where goodies big and small, were liberally handed out to practically all segments of society.  The question is, beneath the sweeteners, are there substantive reforms proposed in the Budget 2012 to make “transformative” changes to our economy to achieve the goal of becoming a “high-income nation” by 2020.

The answer, when compared side by side with Pakatan Rakyat (PR) Alternative Budget is obvious.  There is little in the Barisan Nasional (BN) federal government’s budget that indicates a determination to slaughter sacred cows and take the Malaysian economy to the next level.

Both the PR and BN’s budgets had proposed cash grants to various deserving segments of society in order to help alleviate their increasingly heavy burdens.  However, PR matched its welfare benefits with policies to rectify the distortions created by the current government to reduce inflationary pressures and the cost of living over the longer term.

PR has called for the abolition of artificial monopolies licensed by the Government such as Bernas which monopolises the sale and distribution of local and imported rice.  In addition, predatory market strategies by Telekom Malaysia to stifle competition will be made illegal while the monopoly of satellite and cable television will be abolished.

On top of that we will dismantle cartels in the telecommunication, media, airline, oil and gas as well as other industries to ensure a genuine competitive market which will benefit the man on the street with lower prices.

What’s more, we have promised drastic changes to the current privatisation policies which are opaque, uncompetitive and clearly benefit the concessionaires at the expense of the Government and the rakyat.  The 2-prong strategy demands the renegotiation or expropriation of current concession assets such as independent power producers, highway and water companies, while putting in place an open, transparent and competitive framework to ensure only the parties with the best services at the lowest price will be awarded the relevant contracts in the future.

Under PR for example, all Approved Permits to import cars will be auctioned not only to increase government revenue, but also to ensure only genuine businessmen and not rent-seeking middle-men secure the rights.

PR has also committed to transform our labour market in the interest those who are paid suppressed wages by instituting a minimum wage of RM1,100 per month.  This will ensure that all workers will receive a humane subsistence wage.  The measure will not only stimulate domestic demand in our economy, it will also increase the attractiveness of hiring local workers as opposed to foreign workers while phasing out low value-added industries.

It is only with these institutional and structural changes, can we be assured of lower cost of living in the middle and longer term.  The budget announced by the Prime Minister has instead chosen to prescribe pain-killers which will ease the rakyat’s suffering in the short term, without the medication to cure the actual illness.

In fact when comparing the two budgets, had PR used the more optimistic BN revenue assumptions of RM186.9 billion and our planned expenditure of RM220 billion, the projected deficit of PR’s budget would further decline to 3.8%, significantly lower and healthier than BN’s 4.7%.  This proves that PR can provide not just the “pain-killers” with welfare grants and “cure” the economy by removing artificial barriers to lower cost of living; we can do it all by spending less, and incurring lower debts than BN.

The above also shows that with good governance and the necessary political will to reform and restructure our economy, there will be no need for the Government to further tax the rakyat via BN’s proposed Goods and Services Tax (GST).  Therein lies the fundamental difference between BN and PR’s budget – the former prescribes a sugar-coated placebo that makes you feel good in the short term only to tax you more later, while the latter seek to ease the pain and cure the illness at the lowest possible cost.

(Tony Pua is DAP National Publicity Secretary and Member of Parliament for Petaling Jaya Utara)

                This entry was posted on Saturday, 8 October 2011, 10:55 am and is filed under
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2012 budget – cornucopia of goodies for votes

Prime Minister cum Finance Minister Datuk Seri Najib Razak’s 2012 Budget on Friday was a veritable cornucopia of goodies  for votes in the 13th general elections  –  the most brazen and cynical budget exercise in the nation’s history  to reach out for voter support from a whole swathe of targetted groups comprising important vote-banks.

But the inequitable and corrupt system which bred decades of injustice, inequality and exploitation remains completely untouched.

The 2012 Budget is designed to win  the  next general elections for Najib and not to reform and transform the country’s system, structures and institutions to end the rot which has seen Malaysia losing out in international competitiveness and being overtaken by more and more countries in national, economic and human resource development including in South East Asia.

It is no surprise that reactions to Najib’s “election budget” apart from the Barisan Nasional bandwagon had not been so ecstatic, with Transparency International lamenting that the 2012 Budget “fails to inch the country towards any form of transparency and accountability” while economic analysts describing it as a “non-event for the market” because of its over-rosy projections whether revised economic growth target of 5 to 5.5 per cent of GDP for 2011 and from five to six per cent next year or the projected budget deficit of 4.7 per cent next year.

The question all are asking about the 2012 Budget is not whether Malaysia will become more competitive and better positioned to achieve the goal of a developed and high-income nation but whether it will fortify UMNO and Barisan Nasional’s position in the next general election and save Najib’s premiership.

This in a nutshell is what is wrong about Najib’s 2012 Budget.

At RM230 billion, an increase from RM213 billion in 2011, government spending has continued to soar without taking into consideration the long term effect for the nation. Moreover, much of the increment goes to the operating expenditure which rises from RM162 billion in 2011 to RM181 billion, while the development budget increased marginally to RM51.25 billion from RM51.18 billion in 2011.

In order to fulfill his promise to help the people to curb rising cost of living, it is not sufficient for Najib to give cash handout to certain groups as the government has ignored the welfare of the average man and woman who face the same cost-of-living pressures.

A more stringent targeted subsidy for the poor should be put in place instead of goodies according to occupational category to ensure that those who are really needy are being looked after.

                This entry was posted on Sunday, 9 October 2011, 7:09 am and is filed under
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Adopt Zakat, Not Hudud

By
M. Bakri Musa

Malay politicians fall all over themselves in advocating hudud, the Islamic penal laws.  That is less an expression of their commitment to Islam, more blatant pandering to Muslim voters.

            If these leaders are truly committed to advancing the cause of Islam, there is a more productive strategy:  make zakat mandatory.  Being one of the pillars of our faith, zakat is more defining of Islam.  It is even ahead of performing the Hajj.  Adopting zakat would bring the country closer to an Islamic state symbolically and operationally, certainly much more so than implementing hudud.

            Creatively managed, zakat could be a formidable force for economic and social development; it would also highlight what is right about Islam.  Currently in Malaysia and in many Muslim countries, mobilizing zakat remains only a potential.  As the Halal Journal noted, “…[I]n the context of the Malaysian economy, zakat has not played a significant role ….”  There is also a dearth of economic research on zakat.  The recently convened United Malay Economic Action Council, presumably comprising luminaries in commerce and economics, has not even explored the issue.

            Zakat is positive, charitable and “do good” aimed at alleviating human suffering; hudud is punitive, barbaric, and vengeful, aimed at maiming the human body and spirit.  Zakat expresses the merciful and benevolent aspects of Islam; hudud conjures nothing but sadistic and repulsive images.

            The most frequently invoked phrase in Islam is, Bis Millah Hir Rahman Nir Rahim (In the name of Allah, Most Beneficent, Most Merciful!).  Zakat resonates more with these two pristine qualities of Allah (beneficent and merciful); hudud is the antithesis.

Practical Reasons for Mandating Zakat

A more pragmatic reason for mandating zakat is that as Islam is under state jurisdiction, the revenue would accrue to the state, in effect be a new tax thus enhancing states’ authority.  A jurisdiction with no authority to tax has little power.  With our federal system, states have little taxation power except for land tax and a few miscellaneous small-ticket items.  States are thus dependent on the central government.  Where the federal and state governments are from different parties as with Kelantan, the state would be at the mercy of the federal government.  Zakat would change the fiscal and thus political dynamics in favor of the state.

            One snag is that states are ill equipped to collect taxes.  This could be solved by contracting with the federal Inland Revenue Service to collect zakat.  That should pose minimal extra administrative costs as the IRS is already collecting income and other taxes.  Many Canadian provinces have such an agreement with their central government.  Such a scheme would also coordinate the two systems especially considering that zakat is treated as a tax credit.  Even in secular America zakat is tax deductible when given to a registered charitable entity.

Zakat Disbursement

States would have to enact legislations consonant with the Koran and hadith on the disbursement of those funds, as well as the penalties for failure to pay.  The penalties should be on par with failing to pay income tax.  At the very least those in arrears should be denied a Hajj and umrah visa.

            Zakat cannot go into the general fund, but of the eight categories of distribution proscribed in the Koran, five would be considered charity; the remaining could be considered as investment in people.

            One, riqab, securing the freedom of slaves, can be interpreted metaphorically as emancipating the people.  Thus zakat funds have traditionally been used for religious schools; I see no reason why that cannot be broadened to other schools as with building laboratories and libraries.

            Providing job opportunities is also a form of emancipation.  The prophet used to build bazaars so traders would have a place to conduct commerce, thus providing employment opportunities as well as service and merchandise for the community.

            Our pasar minggu (farmers’ market) where most of the traders are Malays lack even the basic amenities.  Provide water supply, and that would greatly enhance their hygienic practices, to the benefit of their customers.  With power those hawkers could refrigerate their perishables, thus enhancing food safety and reducing wastage.  Why not use zakat to build these clean, well-equipped bazaars as with the prophet’s time?  The area outside the Kaaba was the scene of intense commercial activity during his time.  It still is, especially during the pilgrimage season, providing precedence in combining pious pursuits with economic ones.

            Zakat could be combined with the “one village, one industry” initiative by funding these enterprises, thus providing jobs for the villagers.  That would be more dignified than simply giving the poor handouts.

            The building of public infrastructures as marketplaces and funding village enterprises can be viewed as freeing our people from enslavement, the enslavement of having no jobs, no income, and most of all, no hope.

            Zakat could also be used to build hostels on mosque properties.  Besides being a source of revenue, it would also fulfill zakat’s mandate of helping travelers (Ibnus sabil).  Such hostels would be especially useful for villagers and others not comfortable with commercial hotels.

            The other legitimate use of zakat is for fisabillillah, jihad in the ways of Allah.  That too is a broad mandate.  Creatively interpreted, those fighting corruption, injustices, and poverty could be said to be engaging in fisabillillah and thus deserving zakat support.

Showcasing Zakat Versus Income Tax

Having income tax side by side with zakat would be an excellent field experiment to compare the two systems.  There are definite philosophical and practical differences between the two.

            Zakat meets the economist’s criteria of an efficient tax system.  Its flat rate means the redistribution aspect is minimal, very unlike the “progressive” income tax.  By casting the net wide and shallow instead of narrow and deep as with income tax, zakat maximizes revenue.  Zakat’s simplicity, low rate and minimal deductions discourage cheating by underestimating asset value.  It also spares the need for expensive tax accountants and attorneys.

            In terms of equity, consider that half of Americans do not pay any income tax; the figure is even lower in Malaysia.  With zakat, the figure should be considerably higher.  After all you are liable for zakat if your personal asset exceeds nisab, the value of three ounces of gold. You have to be destitute to avoid zakat.

            As for equity, at present sultans do not pay any income tax; with zakat they have to.  I wonder how much zakat that dentist-cum-politician pays for his mega mansion or Rosmah for her ring!  With our secular income tax they owe nothing.  That is the best demonstration of the justness of Islam.

            Zakat is incumbent only upon individuals, not corporations; there is no provision for that in the Koran and hadith.  That is not surprising as the concept of the corporation is recent.  I do not see why corporations should not be subjected to zakat.  However, considerable intellectual work needs to be done with respect to valuation of assets, in particular “goodwill” and intellectual properties.

            Adopting zakat would give so many opportunities to effect good, reason enough for our leaders to focus on it rather than on hudud.  Obsession with hudud only distracts them from facing the real challenges facing our people.

                This entry was posted on Monday, 10 October 2011, 10:14 am and is filed under
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Economists uneasy over sugary Budget

By Lee Wei Lian

The Malaysian Insider

Oct 10, 2011

KUALA LUMPUR, Oct 10 — Economists said today that the 2012 Budget risks committing Malaysia to the path of unsustainable spending at a time when the global economic outlook remains uncertain.

Bank of America director of global research Chua Hak Bin noted that both Malaysia’s public and household debt levels were at worrying levels, and said the government appeared to be kicking the debt can further down the road by not addressing it in the Budget.

“Will debt dynamics increase and will Malaysia face a year of reckoning?” he asked at the post-Budget dialogue organised by the Malaysian Economic Association and University of Malaya here.

Chua said there was a chance government revenues would be hit by a recession, which would make it harder to meet the commitment to trim the deficit to 4.7 per cent next year from 5.4 per cent now.

“The deficit is extremely sensitive to the state of the economy,” he pointed out.

The economist also said that despite plans by the Najib administration for the private sector to drive the economy, his analysis showed that the bulk of investment so far has been from the government, government-linked corporations (GLCs) and Petronas.

“The private sector has not kicked in [meaningfully],” he said.

Marie-Aimee Tourres, a senior research fellow at the faculty of economics and administration at the University of Malaya, said that the Budget’s “goodie strategy” was not linked to any productivity commitment.

“A lot of tax collection (projections) is based on optimistic growth, which may not have taken into account the deteriorating global situation,” she said.

Tourres said that the Budget was good in a way that it was a “socialist type budget” where “a lot is given but little is asked”, but added that the sustainability of such an approach was a concern.

“I can only worry about the end cost,” she said. “It is common that what is supposed to be a one-off (handout) becomes permanent and long term.”

She added that the allocation of RM2.1 billion by Amanah Ikhtiar Malaysia according to race appeared to contradict the 1 Malaysia concept.

The 2012 Budget was supposedly formulated to address rising cost of living, with salary hikes for civil servants and cash grants to select groups, including RM500 payments to those earning below RM3,000, as well as billions in blanket subsidies.

The structural issue of distortions and inefficiencies in the economy that result in lack of competition and subsequently high prices was left largely unaddressed.

As a percentage of gross domestic product (GDP), Malaysia’s household debt increased from 66.7 per cent in 2004 to 76 per cent in 2009, which is uncomfortably close to the levels seen in the US prior to the 2008 financial crisis.

It is also the second-highest level of household debt in Asia, after South Korea.

Malaysia’s public debt, meanwhile, stood at about 54 per cent of GDP in 2010.

                This entry was posted on Monday, 10 October 2011, 11:02 pm and is filed under
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The Premier’s Mistake

By Mat Zain bin Ibrahim

We all make mistakes. It’s only natural as human being, that we have our own weaknesses and that we get things wrong from time to time.

Prime Minister Dato Seri Mohd.Najib Tun Razak,like any other ordinary human being, naturally has weaknesses and do get many things wrong from time to time, albeit not ready to own-up to any of them.However, with due respect, I am of the opinion, that one of his greatest misjudgement was retaining Tan Sri Abdul Gani Patail as the Attorney General.

PM Najib knew all along, well before he assume the Premiership, that the AG have been proven to be involved in some criminal wrongdoings. Despite being warned, that retaining the AG would be an added liability to himself and a big risk to his administration, he chose to let the AG not only to remain in office, but gave the latter wider space.

I know for certain, that the PM was fully advised on this matter. The possibility of the PM not being able to fathom the seriousness of the issue should not arise at all.

The Premier’s own remarks on the roles of both Gani Patail and Musa Hassan, during our conversation in October 2008, convinced me that the PM have already been made aware of the background of the case, before our meeting. The follow-up report specially prepared for him, in February 2009, would have cleared any doubts the PM may have.

Anyone would have expected, that once the PM has been made aware, that the administration of justice, has been tainted with frauds and illegalities, especially when the perpetrator is the top most legal officer of the country,it is incumbent upon him, to act on the information, swiftly and decisively. Sadly, after more than three years since the matter was brought to his personal attention,the situation seems to be moving from bad to worse.

This is not about “Black-Eye” as the Cabinet tried to portray.This is not about who assaulted who. This is about cover-ups and abuse of our legal system. This is about those in power knowingly allowing the administration of justice to be filled to the brim with frauds, deceits and illegalities. This is about misleading the citizens and giving them false hopes. This is about whether the people in power are sincere and truthful to their words or otherwise.

I am referring  to the article posted in Malaysian Insider dated 7th October 2011 entitled “Putrajaya stands by refusal to charge AG”. I choose not to split hairs with the Honourable Minister in Prime Minister’s Department who has given the Government’s lengthy reply over this issue on 14.12.2010. I have reasons to believe, the Minister himself has been misled.

For the benefit of all,the facts in issue are summarized  below:

The allegation against Gani Patail, Musa Hassan, Dr.Abdul Rahman Yusof and myself for falsifying evidence was made on 1.7.2008.

The investigation was conducted by the ACA (later MACC). I must say that the investigation was done thoroughly and professionally.

It was at the decision stage by the Legal Division,that the twisting and turning started.

The investigation paper never went to the AG’s Chambers (AGC). I was made to understand that no one at the AGC have sight of the paper. Not even the Solicitor General (SG). The SG was never involved in the investigations. His part was limited to appointing the so called Independent Panel Members (IPM) as Deputy Public Prosecutors (DPPs) only,without having the full facts of the case. How the IPM were chosen,who decided to choose them and the panel’s term of reference, was never made known.

Nonetheless one thing of which I am certain, is that the Investigation paper involving the AG, was not closed by the SG as most people would have thought.

The paper was closed by one Dato Abdul Razak Musa(Razak) of the MACC. Razak have the powers of a DPP no doubt, but considered “junior” in rank within their hierarchy.

The reasons the SG did not close the paper himself, although he was the one who appointed the IPM, but instead allowed Razak who is more junior to him, to do the closure, is for SG or Razak to explain.

As to why the IPM did not close the investigation themselves, since they were all given the powers of a DPP, is for the SG to explain, since he was the one who appointed them.Whether Razak has the power to supersede the SG and has the authority to overturn the findings of at least one member of the IPM, are for them to disclose.

With regard to appointing the IPM, there are no such provisions in the Criminal Procedure Code (CPC) or for appointing any other Panel for that matter. As far as I know there’s no such definition anywhere in the CPC.

There are however provisions for the appointment of DPPs and senior DPPs as stipulated under Seksyen 376 CPC. These appointments can only be made by the Public Prosecutor himself. The law says, that only the PP, and he alone can make such appointment. That powers cannot be exercised by anybody else, under any circumstances, not even by the SG, full stop. Anyone that is unsure about this provisions are free to refer to the CPC which is a public document. If any person says, that the SG has the powers to appoint DPPs, then either that person is wrong or the CPC made a mistake.

On 1.3.2009 the then Chief Commissioner of MACC, Dato Seri Mohd. Said Hamdan, during an elaborate press conference, announced that all the 3 IPM, independently found that the allegation against Gani Patail and the others are baseless. However on 11.3.2009 The Hon. Minister announced in Parliament that one member of the IPM, found that there are indeed evidence to prove Gani Patail’s involvements in the alleged wrongdoing. Both Mohd. Said and the Minister cannot be right at the same time, since both gave contradicting statements on the same matter.

What both of them may not realize was that, I have already informed the PM on the formation and findings of the so called IPM as early as October 2008, five months before their announcements were made public.

Incidentally during his press conference, Mohd. Said did state, which I am quoting here; “We went to the extent of appointing independent persons. But how can we make the public believe the findings? Do you think when we release this information,the public will accept it?” (The Star 1.3.2009). True enough, when the results was made known, the public got more confused and unsure whether to believe Mohd. Said or the Minister.Both maintained they were never wrong. Simply, it goes to show that Mohd. Said knew all along that what they did was not according to the laws and procedures,that he rightly anticipated public backlash.

The powers to conduct an investigation on any person is one thing. Even a Sergeant can do the job. The decision to charge the AG for the crimes he committed, are within the powers of any DPP, but the powers to adjudicate the conduct of an Attorney General is totally another matter. This power is beyond the reach of the SG or the MACC Chief or any Minister.

The provisions in the Constitution are very clear. When the conduct of the Attorney General becomes an issue, only the YDP Agong is empowered to establish a Tribunal upon a representation presented to His Majesty by the PM. There’s no other option.This is a matter strictly between the PM and the Agong.

No public servants can “pakat-pakat” (conspire) among themselves to circumvent the protocol, and coined some new methods, like appointing an IPM in lieu of the Tribunal to clear the AG.Especially so, when those people involved,are directly or indirectly subservient to the AG themselves. I consider this, an act of usurpation.

I must admit there are some pertinent points which I have not covered yet, but I sincerely hope the explanations given thus far, are simple and easy to comprehend. I hope for the moment, they are sufficient for the public to have a better understanding of the issues at hand.

                This entry was posted on Monday, 10 October 2011, 10:46 am and is filed under
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A philosophical comparison of the budgets

By
Zairil Khir Johari
 | October 11, 2011

The Malaysian Insider

OCT 11 — And so it has come to this. The last push. With the general election expected soon, both Pakatan Rakyat and Barisan Nasional are preparing themselves for the final assault. Barricades have been erected, cannons lined up and guns trained on the other side. In the last week, we have witnessed the opening salvos launched by both sides.

First to the tilt was Pakatan Rakyat with a modest offering encapsulated in the title “kesejahteraan untuk semua” or “prosperity for all’. And just as it was about to gain traction the ruling Barisan Nasional descended with a no-holds-barred mega welfare budget, coincidentally called “bajet membela rakyat, mensejahtera negara”, or “defending the people and prosperity for the country”.

Without a doubt, both sides have angled the budget with an election in mind. Thus, there is no escaping the menial comparisons between the two sets of proffered “goodies” — RM500 for lower-income households compared to RM1,000 for lower-income housewives, or cash and book voucher bonuses for students compared to RM700 childcare allowances, or a restructuring of teachers’ salary schemes compared to an outright increase in teachers’ allowances. In short, most comparative discourse has been about whose sack contains bigger and better presents — Santa Najib or Santa.

On the surface, both appear to be quite similar in intent and target, namely, to help alleviate the rising cost of living particularly amongst the lower-income groups. Yet the philosophical formulation of the two documents cannot be more divergent. Breaking through the sheath of populist pronouncements, one would discover a sharp contrast between the underlying ideologies that define the two budgets.

Take the position on expenditures. Again, both appear similar on paper — BN’s RM232 billion compared to PR’s RM220 billion, with BN curtailing the long-running national deficit to 4.7 per cent of GDP compared to 4.4 per cent for PR, though the latter is based on a more conservative GDP projection. However, closer inspection would reveal that the essence of PR’s spending policy is necessarily tempered by a commitment to prudence, efficiency and sustainability.

For example, the PR document promises to issue Approved Permits (APs) at market value, thus raising RM1.2 billion in what can only be described as lost revenue. In addition, an open tender system as well as an Unfair Public Contracts Act is promised in order to increase value-for-money and to ensure public interest is protected. More importantly, there is also a commitment to reducing the Petronas dividend to 40 per cent of projected net profits, thus ensuring our national cash cow is able to plough its profits back for reinvestment.

The BN’s spending approach, on the other hand, is really just about spending. In this case, reducing the deficit merely means spending controls and reallocation of resources without necessarily addressing wastefulness, inefficiency and the need for sustainable economics.

Another key difference is the discretionary budget of the Prime Minister’s Department (PMD). The BN’s budget has carved out RM13.5 billion for the prime minister’s use, while PR has pledged to reduce that amount by a third, returning it to the levels of half a decade ago.

Reducing the prime minister’s spending is only half the story — the true intention of this exercise is to take steps towards decentralisation of power. Over the last few years, multiple new agencies have been created and parked under the blossoming aegis of the PMD. This has not only served to consolidate power under the prime minister, it has also emasculated various ministries which have seen their functions replicated and usurped.

Seen in this context, PR’s reduction of PMD expenditure is therefore not only an attempt to return power to its rightful ministries, but more importantly to reduce the arbitrary power of the prime minister. Following this, a promise was also made by the opposition leader, coincidentally also the last finance minister to table a surplus budget nearly 15 years ago, that a PR prime minister would not concurrently sign the treasury cheques — another clear commitment to devolvement and decentralisation of power.

Both budgets also apparently target a very specific group — households with cumulative incomes of below RM3,000 — representing nearly 60 per cent of our population. To assist this group, BN is doling out cash bonuses of RM500 for each family, RM100 for schoolchildren and RM200 for tertiary students as a means of riding out the expected economic storm.

The PR budget, while also promising assistance in the form of a RM1,000 homemaker allowance and a RM1,000 bonus for the elderly, will also grant childcare allowances of RM700 a year in addition to the facilitation and establishment of certified childcare centres. This incentive is designed to encourage female participation in the workforce, thus increasing productivity and income of the targeted households.

In a more direct attempt to address the needs of the downtrodden, the PR budget also crucially commits to a minimum wage of RM1,100, in an attempt to reduce the reliance on cheap unskilled foreign labour as well as to ensure a humane floor wage for entry-level workers.

There are more examples. BN’s approach to education is to build more facilities and renovate school buildings while PR talks about addressing the shortage of qualified teachers. For taxi drivers, BN seeks to lessen their burden with tax exemptions and incentives for vehicular upgrade while the PR budget promises direct permits to individual drivers, thus emancipating them from a monopolistic industry.

As for the sensitive issue of subsidies, BN’s answer is a blind increase while PR pledges to maintain current levels of assistance on the one hand, while also breaking disadvantageous and market-distorting monopolies (like the Bernas stranglehold on rice imports) on the other.

Observing closely, one would find that the fundamental difference between the two budgets lies in their philosophical bases. The BN’s instant remedy to economic malaise is to plaster the wounds with superficial cash assistance. On the flip side, the PR document is clearly informed by an ideological — or perhaps idealistic — commitment to citizen empowerment, increasing productivity and building sustainability.

And so not only is the BN’s social welfare programme an ad hoc and ill-advised response to PR’s alternative budget, it also appears to be a convenient façade to mask the huge infrastructural commitments that have escaped the public’s attention, from hospitals to schools to army camps (read: projects for the boys).

In the other words, while the BN government’s 2012 Budget may appear to be couched in the language of welfare, its ideological bearing appears to be pointing to business as usual — lubrication for the Umno machinery and cash inducements for the rest of the electorate.

                This entry was posted on Tuesday, 11 October 2011, 2:06 pm and is filed under
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Cops fired tear gas directly at demonstrators, witness tells Bersih inquiry

By Shazwan Mustafa Kamal

The Malaysian Insider

Oct 11, 2011

KUALA LUMPUR, Oct 11 — Riot police fired tear gas directly at a crowd of peaceful and “non-hostile” Bersih supporters, a witness told a public inquiry into the July 9 protests today.

Lawyer Nor Syazwani Muharam, a Bar Council representative who had monitored the rally, said that the incident occurred along Jalan Masjid Jamek where the police had told Bersih supporters to disperse and rang a warning bell three times.

“I did not see any violence by the Bersih supporters. There was no hostility from the public, I did not see any provocation from them,” she told the Human Rights Commission (Suhakam) inquiry here.

Nor Syazwani said the crowd was about “one block” away from the riot police before tear gas was fired directly at them.

“Police fired directly towards the crowd,” she said.

The inquiry has set itself three terms of references — to identify human rights violations on or before July 9, to determine how the violations occurred, the process and agency involved and to make recommendations to prevent any recurrence.

The inquiry is led by Suhakam vice-chairman Professor Datuk Dr Khaw Lake Tee, commissioners Datuk Dr Mahmood Zuhdi Abdul Majid and Detta Samen.

The Bar Council is represented by Roger Chan and Richard Wee, while the police are represented by ASP N. Rajagopal and ASP Lim Chee Wah.

Asked by Chan whether there were any human rights violations on that day, Nor Syazwani said “yes.”

“The one that I saw myself, the shooting of tear gas straight into the crowd.”

She also said that there were no other human rights violations, and admitted that she was not familiar with police procedures during a rally as this was the first time she had monitored such an event.

The inquiry resumes on November 15.

                This entry was posted on Tuesday, 11 October 2011, 7:53 pm and is filed under
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Goldman Sachs says Malaysia needs tougher reforms

By Shannon Teoh

The Malaysian Insider

Oct 11, 2011

KUALA LUMPUR, Oct 11 — Global banking giant Goldman Sachs believes Malaysia must push through tougher reforms such as a goods and services tax (GST) and slashing subsidies if it wants to transform into a high-income nation.

Its review of Budget 2012 proposals said the recovery in private investment since the 1997 Asian financial crisis has been held back “by scepticism over the government’s transformation efforts over the years.”

“Pushing through tougher reforms is ultimately what is needed to catalyse the economic transformation process.

“Reforms such as the goods and service tax (GST) and fuel subsidies reforms (likely only post-elections) would be the clearest way to signal to investors the commitment to change,” the bank said in its review dated yesterday.

Datuk Seri Najib Razak’s Economic Transformation Programme (ETP) aims to more than double per capita income by 2020 to RM48,000 a year.

The prime minister wants the private sector to contribute 92 per cent of the RM1.4 trillion investments targeted under the 10-year plan.

But with an election expected soon, he has delayed GST and raised allocations for subsidies to RM33.2 billion.

“The timing and extent to which the government is able to deliver on these key reforms will partly depend on the performance at the upcoming general election, which we think could potentially occur early next year,” said the US bank.

Its Global Economics, Commodities and Strategy Research report also dismissed the “inflationary impact” of the fiscal stimulus in the RM230 billion budget, saying it was “arguably appropriate given the rising threats to external growth.”

But it forecast a 4.2 per cent growth for 2012, “markedly short” of Putrajaya’s target of between 5 and 6 per cent.

“We had recently revised our GDP forecasts for Malaysia mainly on the back of slowing global demand,” the bank said.

It listed some of Malaysia’s main trade partners such as the United States, China and Europe as markets which will see reductions in economic growth.

This would result in potential revenue shortfalls which will make Putrajaya’s plan to trim the budget deficit from 5.4 to 4.7 per cent target tough to achieve, the report said.

“A potentially wider-than-projected fiscal deficit is also plausible… with the external slowdown and upcoming elections, there will be more pressure to deliver on expenditures,” said the bank.

                This entry was posted on Tuesday, 11 October 2011, 11:25 pm and is filed under
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