4 Expert Predictions for the Global Economy in 2015

James McBride and Jeanne Park

The Atlantic

Dec 26 2014

From GDP growth in China to consumer debt in the U.S., the stories to watch next year.

As 2015 dawns, instability in Russia, stagnation in Europe, and uncertainty in China are being offset by a sharp drop in oil prices that the International Monetary Fund says could boost global economic growth by as much as 0.8 percent above the expected 3.8 percent.

The United States “faces a debt reckoning,” writes Guardian finance and economics editor Heidi Moore. U.S. consumer debt worth $3.2 trillion and the resurgence of subprime lending are both danger signs for an economy that otherwise appears to be on the mend.

Europe too could face trouble in 2015 without major structural reform, argues the Council on Foreign Relations’ Robert Kahn. Growth and investment remain low, unemployment is “sky-high,” and early elections could once again put Greece “on a collision course with the rest of Europe.”

China, which is in the midst of a delicate rebalancing act, will de-emphasize GDP growth in favor of structural, financial, and energy reform, writes the Paulson Institute’s Damien Ma.

Finally, CFR’s Edward Alden foresees that 2015 could see “breakthroughs in global trade liberalization.” U.S.-led trade agreements with both Asia and Europe promise to boost growth, although they face significant obstacles at home and abroad.

Robert Kahn, Council on Foreign Relations:
 The European Central Bank (ECB) has wielded a monetary-policy bazooka—always on the table, but never fired—that has at times been the only thing standing between Europe and the abyss since the beginning of the financial crisis. ECB President Mario Draghi’s 2012 promise to “do whatever it takes” has restored calm and brought down spreads.

Yet growth remains inadequate to address large output gaps and sky-high youth unemployment. The outlook for next year is an uneven recovery with growth averaging just over 1 percent. Low inflation, large amounts of debt, and persistent financial fragmentation provide additional headwinds to growth.

Entering 2015, Europe faces a number of new challenges from both within and abroad. Popular discontent with austerity is growing and fueling rejectionist political movements, and with a number of elections on the calendar—including in Greece, Spain, Portugal, and the U.K.—there will be ample opportunity for voters to express their displeasure.

In this regard, Greece is once again in the vanguard. The odds are rising that early elections could bring to power the opposition Syriza party, whose platform—a comprehensive debt restructuring, a reversal of structural reforms, and fiscal expansion—would put Greece on a collision course with the rest of Europe. Less commented upon is a European Court of Justice report, expected as early as the spring of 2014, which could challenge the firefighting capabilities of the ECB to purchase sovereign debt. Such a ruling would risk sidelining the bank at a critical time.

At the same time, the standoff with Russia, combined with soft growth in much of the rest of world, means that external demand cannot be counted on to drive growth, which in turn limits the benefits from a weaker euro. A sharp decline in Russian GDP—by at least 5 percent—and reduced investment and trade flows have clearly affected sentiment in the region. Receding hopes for a trade agreement with the United States (the proposed U.S.-EU Transatlantic Trade and Investment Partnership, or TTIP) could further dampen optimism.

To restart growth, Europe needs an all-of-the-above approach, including easier monetary policy, fiscal and structural reforms, and continued efforts to strengthen bank balance sheets. For its part, the ECB looks to be moving slowly toward adopting a program of sovereign-bond purchases (like the U.S. Fed’s quantitative easing) that would boost its balance sheet by $1 billion in order to stimulate demand.

Finally, countries must implement long-overdue fiscal and structural reforms in the tax and labor realms. Without more assertive action in 2015, Europe will continue to disappoint its citizens—and the crisis could return.

Heidi Moore, The Guardian
: Does anyone feel comfortable with the rise in debt over the past few years? It’s an overleveraged world, a fact which low interest rates and U.S. economic growth have papered over. But after the 2007–2009 financial crisis, we always look for weaknesses, and 2015 may be the year we have to confront debt again: first by refinancing or negotiating and then, if not, by revisiting the same lack of caution that led to the 2008 crash.

The reckoning will be tough for countries, companies, and consumers.

Economic growth is now slowing in Europe and China, and the receding tide is revealing some structural deficiencies. There are several major risks already emerging: A jolt to the system in the form of falling oil prices at the end of 2014 has exposed weaknesses in sovereign debt, like that of Venezuela, as well as the enormous number of energy companies that have relied heavily on the lowest-rated junk bonds, which make up 22 percent of the market for subprime corporate lending. Standard & Poor’s analyst Diane Vazza noted that the large debts held by oil and gas companies mean defaults are likely to increase in the coming year. This spells trouble for the banks lending to those companies, as well as for the rest of the economy, since data from Deutsche Bank show that the energy sector accounts for one-third of all capital expenditures in the S&P 500.

There are other weaknesses lurking as well. Vazza’s research, which focuses on potential corporate defaults, found that potential downgrades to corporate bonds far outnumbered potential upgrades in a key sector: finance. Banks are hungry for profits, and Congress has passed a budget that would once again allow banks to use the savings of ordinary Americans to back swaps and derivatives trading. The result will likely be more risk-taking from banks. If they have learned to manage that risk, then we have nothing to worry about. But unfortunately, fallibility is the general rule. The challenge will be making sure that this extra risk does not blow up for the second time in a decade.

It’s an overleveraged world, and 2015 may be the year we confront debt again.

Consumers, too, are facing a debt reckoning. Even though U.S. households have been paying down debt—and now actually owe less than they’re earning—there is still $3.2 trillion of consumer debt outstanding. And much of that debt is student loans (more than $1.2 trillion), which have a particularly high default rate of 14 percent. At for-profit colleges, the rate is even higher, with one in five student loans in default. Subprime auto loans, too, have followed the same pattern as home mortgages did in 2005 and 2006: Lax borrowing standards have created a great big engine of securitization. The result is that one-third of all auto loans are now subprime. In the past year, securities backed by auto loans came within reach of their 2005 peak value of $108 billion.

In other words, we’ve seen this movie before—but it doesn’t have to have the same ending. Excessive debt remains a challenge, but with care and forethought it can be prevented from shutting down the world economy once more.

Damien Ma, The Paulson Institute:
 As China hops into the Year of the Goat in 2015, it is shaping up to be a year of transitions. Once a high-octane growth machine, China is now shifting into the so-called “new normal” gear of development, in which topline GDP will be de-emphasized. In addition, 2015 marks the end of the twelfth Five-Year Plan (FYP) cycle and the beginning of the thirteenth, which ends in 2020—the year by which the country is supposed to have become a “moderately well-off society.”

These themes were echoed loudly at December’s Central Economic Work Conference, an annual high-level meeting that determines policies for the following year. This year’s conference intended to prepare Chinese policymakers and citizens, as well as markets and investors, for the prioritization of structural reform over growth. To reinforce the new paradigm, Beijing is likely to set a growth target of around 7 percent in 2015, down from 2014’s 7.5 percent, while emphasizing other indicators such as employment and social welfare.

Similarly, macroeconomic policies will favor economic reforms over stimulating growth. Relatively tight, though flexible, monetary policy and an increasingly liberalized exchange-rate regime could mean more fluidity in the yuan’s appreciation and depreciation. In contrast with Tokyo, however, Beijing has little reason to drastically depreciate its currency to support exports. In fact, top leaders are keen to promote imports as well as outbound capital flows. Beijing will preempt a collapse in growth with targeted fiscal policy and restrained liquidity tools rather than extensive stimulus. These policies could support new areas of growth in services and other high-value-added industries.

Once a high-octane growth machine, China is now shifting into the “new normal” gear of development.

Next year will also be crucial for forging ahead with financial reforms announced at the Third Plenum in 2013. For starters, China is likely to implement an explicit deposit insurance. Deepening integration of Chinese stock markets with global markets will continue as well, a process launched in 2014 with the Shanghai-Hong Kong Stock Connect. And more competition will be introduced into the finance sector, with regulators’ December approval of WeBank, a private bank backed by Chinese Internet giant Tencent.

Finally, expect a last-ditch effort to meet China’s energy and carbon targets. The emphasis that the top leadership has placed on meaningfully addressing environmental costs should not be taken lightly, and heavy industry and coal producers will face another tough year. Indeed, as policymakers prepare to unveil the next five-year plan, the new economic blueprint will strongly inform China’s path toward “peak carbon” by 2030. Supporting an energy transition will be crucial for China’s position entering the 2015 climate talks in Paris and beyond.

Edward Alden, Council on Foreign Relations:
 The coming year could see the biggest breakthroughs in global trade liberalization in more than two decades. It could also produce some of the most spectacular failures. After years of modest accomplishments and repeated setbacks, 2015 looks to be a turning point for trade.

The United States is currently engaged in two of the most ambitious trade negotiations in history. The Trans-Pacific Partnership (TPP) would free up trade with 11 Asia-Pacific countries, including Japan, while the Transatlantic Trade and Investment Partnership (TTIP) would eliminate most remaining trade and regulatory barriers with the European Union. Despite the complicated nature of the multilateral talks, the United States is pushing hard—the Obama administration wants TPP completed and ratified by Congress by the end of 2015. The U.S.-EU trade deal is on a slower track, but both sides are seeking a deal before the 2016 U.S. presidential elections.

After years of modest accomplishments and repeated setbacks, 2015 looks to be a turning point for trade.

Skeptics will recall, of course, that the TPP agreement was supposed to be signed in 2014, and that TTIP was scheduled to be in the final negotiating phase by now. But trade negotiating is a lot harder than it used to be. The World Trade Organization’s Doha round of global talks has been in progress since 2001, but only  produced its first agreement, the so-called “Bali package,” in 2013. Meanwhile, big developing countries like China, India, and Brazil have matured into global players in their own right, making it harder to reach deals than it was when the United States and Europe called most of the shots. And among the advanced economies, little low-hanging fruit remains—the trade barriers that persist (in agriculture, for example) are the most fiercely defended by powerful domestic interests.

There are signs of promise. Prime Minister Shinzo Abe’s resounding victory in Japan’s snap election could give him the political capital to make tough concessions in areas such as agriculture and automotives. Elsewhere, the United States and China have agreed to lower tariffs on technology-intensive goods as part of an effort to update the 1996 Information Technology Agreement (ITA).

But obstacles remain, including U.S. domestic politics. The Obama administration will need congressional support in the form of Trade Promotion Authority (TPA), or “fast-track” legislation. Republican control of Congress starting in 2015 makes TPA passage more likely, but the effort will continue to face strong opposition from Democrats as well as from some within the GOP. Then there are the civil society concerns: U.S. labor unions are unhappy with the administration for failing to address their priorities, such as currency manipulation, in the TPP, while environmentalist and consumer groups on both sides of the Atlantic fear that TTIP will strengthen corporate rights and weaken health, safety, and environmental standards.

With so many moving parts, both domestically and internationally, the outcomes of the TPP and TTIP negotiations are far from certain. But whether in success or failure, trade will be a top foreign-policy issue around the world in 2015.

                This entry was posted on Monday, 29 December 2014, 7:23 am and is filed under
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Call for RCI into Floods Disaster Management Preparedness as Federal government completely overwhelmed by scale and scope of current floods disaster with number of flood victims increasing by over 1,000% to a quarter of a million people in less than ten days

DAP calls for a Royal Commission of Inquiry into the country’s Floods Disaster Management Preparedness as it is very clear that the Federal government had been completely overwhelmed by the scale and scope of the current floods disaster, with the number of flood victims increasing by over 1,000 per cent to almost a quarter of a million people in less than ten days.

Evidence of the Federal Government being overwhelmed by the magnitude of the scale and scope of the current floods disaster is aplenty, as illustrated by the following instances:

1.	Admission by the Deputy Prime Minister, Tan Sri Muhyiddin Yassin that the floods disaster was “worse than anticipated”’;

2.	Admission by Muhyiddin that the flood mitigation standard operating procedure (SOP) must be reviewed in order to be better prepared in the future;

3.	Muhyiddin’s proposal that Malaysia should learn more about disaster management system of other countries, especially Japan and South Korea, as they were known to have the best disaster management system in the world – a belated and very expensive discovery by a coalition which had been in power for 57 years!

4.	The Prime Minister, Datuk Seri Najib Razak  forced to cut short his vacation in Hawaii to take charge of the national floods disaster – although the government had been warning of the worst floods in decades in the days and weeks before the floods disaster.

5.	The Prime Minister’s directive yesterday to recall all Ministers vacationing abroad so as to work immediately to help manage the flood crisis.

6.	The follow-up directive today to all top civil servants and heads of agencies to return from their holidays to assist in flood relief efforts.

As I had mentioned before, my focus until I visited Kota Bahru yesterday to help in the flood relief mission were on achieving  three objectives:

Firstly, to persuade the Prime Minister to cut short his vacation in Hawaii to return to Malaysia to take personal charge of the flood disaster relief operation;

Secondly, to seek a special Cabinet meeting on the floods disaster;

Thirdly, to persuade the Prime Minister to declare a state of emergency to deal with the nation’s worst floods disaster in recent history.

The first of the three objectives had been achieved.

It had been asked whether it was necessary for the Prime Minister to cut short his vacation in Hawaii to take personal charge of the national flood relief operation.

The answer is a loud and categorical positive. One proof is Najib’s announcement of RM500 million as  special aid for flood victims in the states affected by the floods disaster, when two days earlier, the Second Finance Minister Datuk Seri Ahmad Husni Mohamad Hanadzlah could only announce a RM50 million allocation for the states being ravaged by the floods disaster.

This incident alone vindicates the DAP call that Najib should cut short his vacation in Hawaii to take personal charge of the national flood relief operation, for neither Muhiddin nor Husni would have the authority to announce the RM500 million allocation.

The question is whether Najib’s announcement of RM500 million allocation is additional to the RM50 million allocation announced by Husni, or is inclusive of Husni’s RM50 million allocation. Can Husni clarify this or we must seek direct clarification from Najib?

I welcome Najib’s recall of Cabinet Ministers vacationing from abroad when the country and people are facing the worst floods in decades.

It reminds me of the earlier cancellation by the Russian President Vladimir Putin of the holiday vacations for ministers and officials as Russia was currently dealing with the worst economic crisis in more than a decade.

It would not be possible for any special Cabinet meeting on the floods disaster to be held if many Cabinet Ministers are abroad on holiday.

But will Najib be able to convene a special Cabinet meeting on the floods disaster before Wednesday on Dec. 31 or will he have to wait until January 7 as he could not get all the Ministers to return to the country before then?

My third objective was to get the Prime Minister to declare a state of emergency over the floods disaster so as to enable a full and fast mobilisation of flood relief efforts at federal, state and local level with full public support.

However, Najib’s reason for not declaring an emergency is that an emergency would absolve insurance companies from paying compensation arising from damages to property and vehicles.

Najib’s reasoning is not convincing at all and I would urge the Prime Minister to reconsider his decision, or to table the issue as an agenda for a special Cabinet meeting on the floods disaster, as well as to take into account public reactions to date both from the insurance industry as well as the public.

The following view of an insurance agent, which is representative of the general public, should be given serious consideration by the Prime Minister and the Cabinet:

“Saya banyak menerima soalan yang berkaitan isu darurat yang dikatakan tidak dapat diisytiharkan supaya mangsa-mangsa banjir dapat membuat tuntutan insurans.

“Katanya, jika darurat diisytiharkan maka syarikat insurans berhak menolak tuntutan yg dibuat.

“Ini pandangan saya:

+ Betul, memang dalam banyak polisi insurans seperti insurans kenderaan, insurans perniagaan, insurans bangunan, insurans kemalangan meletakkan darurat sebagai salah satu situasi yang dikecualikan untuk dibuat tuntutan.

+ Tapi dalam masa sama, berdasarkan pengalaman saya sebenarnya majoriti pelanggan sangat jarang mengambil coverage tambahan bencana banjir yang membolehkan mereka membuat tuntutan jika kerosakan akibat banjir. Jadi, sama ada isytihar darurat atau pun tidak, majoriti besar pengguna memang tidak dapat membuat tuntutan kerana tidak mengambil insurans yang cover banjir.

+ Banjir sudah masuk hari ke-5 dan sekiranya darurat diisytiharkan hari ini 27/12/2014, mangsa-mangsa banjir masih boleh membuat tuntutan sebab kerosakan berlaku SEBELUM darurat diisytiharkan. Jadi, syarikat insurans / takaful dan ejen serta staff boleh memberi pengetahuan (educate) kpd pelanggan supaya meletakkan tarikh berlaku kerosakan SEBELUM tarikh darurat diisytiharkan.

+ Situasi sekarang sangat genting memandangkan majoriti yang terlibat dari kalangan orang-orang kampung, orang-orang miskin, rakyat marhaen yang melibatkan nyawa. Jadi menjadikan alasan insurans sebagai penghalang darurat diisytiharkan bukanlah tindakan terbaik kerana nyawa majoriti rakyat lebih penting berbanding kerosakan bangunan / kenderaan utk claim insurans.

+ Statistik menunjukkan kadar penembusan insurans takaful hanya sekitar 15% sahaja di kalangan rakyat bumiputera. Dan majoriti penduduk Kelantan adalah Melayu Bumiputera. Maka alasan “insurans tak boleh claim kalau darurat” hanya menjaga kepentingan minoriti berbanding kepentingan majoriti rakyat yang langsung tidak memiliki insurans. Apatah lagi insurans melibatkan coverage banjir.

+ Situasi-situasi di atas hanya melibatkan claim yg berkaitan insurans / takaful am seperti kenderaan, bangunan, isi rumah dan sebagainya. Manakala jika insurans hayat atau takaful keluarga, pemegang polisi tetap boleh claim sekiranya berlaku musibah.

“KESIMPULAN: Menggunakan alasan “insurans tidak boleh claim kalau isytihar darurat”, bukanlah alasan yang kukuh utk tidak mengisytiharkan darurat.”

                This entry was posted on Monday, 29 December 2014, 6:26 pm and is filed under
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Do ministers need to be ordered to handle the floods?

COMMENTARY BY THE MALAYSIAN INSIDER

28 December 2014

How times have changed?

In 1969, Tun Abdul Razak Hussein was diagnosed with cancer and told that he had four years to live. Around the same time, Tun Dr Ismail Abdul Rahman’s neck cancer flared up again and his heart condition worsened.

Hardly anyone knew that Malaysia’s top two leaders were on a death watch. The doctors were sworn to secrecy and they went about governing the country, implementing policies and scouting successors.

It would have been so easy and understandable if both acted in their self-interest and stood down from the 24/7 job of looking after Malaysia.

Malaysians would have understood if they had opted for a less stressful life and put their young families ahead of everyone else.

But they didn’t.

Abdul Razak and Ismail understood better than anyone that it is a privilege and an honour to lead this blessed country. You are entrusted with the position of the Prime Ministership and Deputy Prime Ministership by millions.

It is not a job. It is a calling to serve your citizens. And when it is a calling, fatigue, tedium and apathy have no place. You become the servant of your people.

But times have changed.

Malaysia is in the throes of the worst floods in history with more than 100,000 people being forced to leave their homes. People have lost their homes and even their hope.

But life goes on for PM Datuk Seri Najib Razak and his ministers. Like clockwork, they went on their holidays, seemingly unperturbed by news that this was no ordinary flood.

Only after a barrage of criticism over news that he was in Hawaii playing golf with US President Barack Obama, did Najib cut short his holiday. He has since gone to ground zero of the disaster – Kelantan – and ordered disbursement of more funds.

Today, the PM ordered all his ministers to cancel their holidays and return to work.

In this age of smartphones and instant communications, did these ministers need to be told how bad the flood situation is and be told to come back to work?

The PM has also defended his golf jaunt. He misses the point of public service as do his ministers who have to be recalled to work.

If you have to be nudged to feel empathy and to be reminded that yours is a calling and not a job, then God help Malaysia.

Some opposition politicians and government critics are drawing parallels between the government’s lacklustre response to the floods and the Bush administration’s limp performance in the aftermath of Hurricane Katrina.

That discussion is for another time.

We are just mourning the dearth of Malaysian leaders who understand what a privilege it is to lead this country.

How times have changed. – December 28, 2014.

                This entry was posted on Monday, 29 December 2014, 9:23 am and is filed under
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Flood victims live off rainwater-soaked noodles

By Nazri Abdullah

Malaysiakini

Dec 29, 2014

Deprived of proper food, victims stranded in the country’s worst flood in decades have resorted to desperate measures to fill their growling stomachs.

 Even those politically connected are not spared from the national disaster, which has displaced more than 225,000 people, as Annual Bakri Harun can testify.

 Annual, a former political secretary to ex-Kelantan menteri besar Nik Abdul Aziz Nik Mat, said he was forced to soak instant noodles in rain water for food.

“I have lived in the dark for the last five days and have only been eating biscuits.

“There are instant noodles, but no electricity to boil water and the stove is not working.

“Out of hunger, I was forced to collect rain water with my bare hands and pour them into the instant noodle cup.

“Imagine cooking instant noodles with cold rain water,” Annual told Malaysiakini when met at his residence in Kampung Wakaf Zain, Bachok.

 Annual’s house was inundated with water, 60cm deep, last Wednesday and has remained flooded for five days now.

‘Fruitless hunt for rice’

In the five days, he said, he has only eaten rice once after his neighbour generously shared some with him.

 Annual said he had braved strong currents, with water up to his waist, several times to search for rice but to no avail.

 The loss of property has also been significant for Annual, as his Mercedes and Perodua Viva vehicles sit in the muddy water.

 He said the water had risen rapidly, giving his family little time to save anything.

 Annual has since sent off his wife and children to his parents’ home where they would be safe, but is worried about leaving his house.

For now, he is keeping watch over the house alone, with only his pets for company.

 A frustrated Annual said the slow pace of aid from the authorities to reach flood victims was disappointing.

“Before this, I had to eat stale biscuits, which are shared with my cat, chicken and bird,” he said.

 However, there was a glimmer of hope for Annual and his fellow villagers yesterday as a volunteer NGO, Darul Hijrah, arrived to distribute food and supplies.

                This entry was posted on Monday, 29 December 2014, 10:39 pm and is filed under
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In Kuala Krai floods, humanity at its best and worst

by Pathma Subramaniam

The Malay Mail Online

December 29, 2014

KUALA LUMPUR, Dec 29 ― For the past 20 years at least, residents in hilly Kuala Krai have led a carefree life whenever the annual northeast monsoon blew into Kelantan and turned large areas of the state the colour of the frothy, milky beverage beloved of Malaysians called teh tarik.

Local lore has it that “if it floods in Kuala Krai, the whole of Kelantan will be underwater”, Ryonn Leong, a native, told Malay Mail Online.

But the speed and fierceness that saw the waters of Sungai Kelantan burst its banks last week caught its long-time residents off-guard; there had never been a need for a flood safety plan as the water levels in the river had not risen past the danger mark in 20 years.

“I would scoff it off when any of our friends asked about the flooding in my hometown… who would have thought, one day it would become a reality?” the 34-year-old business development manager said.

While Ryonn now lives in Kuala Lumpur, the torrential rains that lashed Kelantan has been a “nightmare” as his family ― his elderly parents, his siblings and their young children ― were marooned in Kuala Krai by the floodwaters of near biblical proportions.

The water had almost covered the first floor of the Leongs’ two-storey shophouse along Jalan Chin Hwa has since receded.

And after nearly four days of squeezing in friends who live on higher ground in Taman Krai, approximately 6km from their home, Ryonn’s 67-year-old father and 56-year-old mother, are getting restless pondering on the state of their business goods, he told Malay Mail Online.

Ryonn’s father runs a service and distribution centre for engineering products in Kuala Krai and is helped by Ryonn’s younger brother, Kelvin, 28.

“My parents are eager to return home, but it is not the same,” Ryonn said, after viewing photographs of the damage to their family shophouse that Kelvin had shared with him yesterday morning.

“The entire ground floor needs to be cleaned up, but there is no electricity or running water… and it is more dangerous for them to be there as of now as this is when illnesses tend to spread,” he related to Malay Mail Online.

The extend of the damage to the property and the hardware in his father’s service centre has also not been accounted for yet, said Ryonn.

But now that the floodwaters have receded in the area, Ryonn is hoping to rent a four-wheeled car to enter Kuala Krai via Kuala Lipis by Tuesday to reunite with his parents, his brother, his pregnant sister-in-law and two-year-old niece and to bring them and their neighbours much-needed supplies.

“It is not safe for them there, until everything is over and until the area is given the all clear,” he said, his voice tinged with worry.

But Ryonn was far from composed when first contacted by Malay Mail Online three days ago.

His hometown was completely cut off from land, he had no chance of going in to get his family of seven out.

Ryonn had also momentarily lost all communication with his brother, Kelvin, with whom he had been relying for information on their elderly parents’ safety.

He had been frantic, fearing for their welfare as well as the difficulties faced by Kelvin’s pregnant wife and toddler who like the tens of thousands of flood victims nationwide had been displaced and left alone in the dark for days after the power lines went down and with a fast depleting stock of food and drinking water.

“They managed to charge the phones from the cars, but the fear did not go away knowing that they could run out of fuel soon,” said Ryonn.

Out of desperation, some people resorted to ransacking the abandoned homes for food though there were others, he said who took advantage of the situation by looting the houses for valuable and electronics.

“This is humanity at its best and its worst,” Ryonn said.

Many were still going about with their daily routine when reports began to flood in that the level of the river at the Krai Steps was 33.58m, almost 10m above the danger mark on the eve of Christmas, News Straits Times reported.

The magnitude of the disaster was unexpected. As at 8pm yesterday, 105,876 people have been evacuated from their homes in Terengganu, Kelantan, Pahang, Perak, Johor, Perlis, Selangor, and Kedah.

Although floodwaters are gradually receding in Kuala Krai and Kota Baru, meteorologists have warned that the worst is not yet over in Kelantan, Pahang and Terengganu.

Reports continue to pour in on overcrowded shelters; intermittent communications services;  shortage of food and water supply; rescue efforts hampered by power outages; and roads that have been washed away by the floods.

A total of five deaths were recorded in Kelantan, three in Pahang and two in Terengganu to date, according to data from the National Security Council published on its website.

The extent of the worst flooding in decades has been such that Deputy Prime Minister Tan Sri Muhyiddin Yassin, who is overseeing the government’s flood relief efforts, has warned that floods are worse than anticipated, saying that assets currently deployed were inadequate to face the floods of such proportions.

                This entry was posted on Monday, 29 December 2014, 9:57 am and is filed under
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Lack of leadership in dealing with floods

By Jeswan Kaur

The Heat Online

12/29/2014

GOING BY Putrajaya’s scramble to deal with the seasonal floods assailing the country, a quote from Abraham Lincoln comes to mind – “nearly all men can stand adversity but if you want to test a man’s character, give him power”.

For Malaysia, the true test of its leaders’ character has been revealed one too many a times and that too in the most unflattering of ways.

The classic case in point was Putrajaya’s fumbling over the March 8, 2014 disappearance of the Malaysia Airlines flight MH370 which exposed the government’s weaknesses the world over.

However, the embarrassment that Putrajaya brought upon Malaysia with its apathy vis-à-vis the missing MH370 flight has not taught the government the much needed lesson in “thinking before speaking”.

Now, as the country battles the never-like-before floods, Deputy Prime Minister Tan Sri Muhyiddin Yassin has proved that old habits just refuse to die. When reacting to pressure to declare a state of emergency to deal with the floods, he said Putrajaya would only do so when power and water supplies were completely cut off and flood victims numbered “hundreds of thousands”.

So once again Putrajaya’s character leaves much to be desired.

From the callous remark by Muhyiddin to the fact that he was forced to turun padang or get his feet dirty and look at the flood situation in Kelantan – the worst-hit state – only after much flak from DAP supremo Lim Kit Siang, the handling of the flood problem by Putrajaya has been a let-down.

More than 160,000 Malaysians, so far, have been displaced by floods in nine states, the highest in the nation’s history.

Najib deserted the rakyat for leisure

Najib cut short his holiday in Hawaii to return home and take charge of flood relief efforts.

As for Prime Minister Datuk Seri Najib Razak who left Malaysians to their own devices to deal with the ravaging floods, he finally got the message when netizens lampooned him for opting to go off on his golfing holiday in Hawaii and deserting the rakyat at a time of crisis.

Najib wisely decided to cut short his break and return to a very wet Malaysian soil. He has also since ordered all his cabinet ministers to return home from their various jaunts to handle the flood situation.

Still, the lethargic attitude displayed by both the premier and his deputy in addressing the flood problem speaks volumes about Putrajaya’s ill-preparedness in dealing with such disasters, despite floods not being uncommon in Malaysia.

When International Trade and Industry Minister Datuk Seri Mustapa Mohamed spent 10 hours by boat to travel to Kuala Krai, an area deeply affected by the floods, it was then that he admitted to weaknesses in managing and rescuing flood victims in Kelantan.

Why has it only now dawned on Mustapa, who is also the MP for Jeli, that there are shortcomings that need to be addressed? Was he not aware of it in the many years he has been the parliamentary representative for Jeli and whenever Kelantan was inundated by floods?

Mustapa described this year’s floods as “big” to Astro Awani and said this resulted in the government’s weakness in coordinating aid.

How ironic that in times of adversity many an unpleasant truth surfaces. But then no excuse can compensate for Putrajaya’s lackadaisical attitude in reacting to the floods problems in the country.

While Najib got excited teeing away with US President Barack Obama in Hawaii, back home the National Security Council (NSC) failed to rise to the occasion by showing no sense of urgency in tackling the worsening floods.

Get rid of archaic thinking

To DAP’s Lim, Putrajaya’s frustratingly slow reaction to the flood conditions especially in the worse hit East Coast was unacceptable.

In a statement, Lim lashed out at Putrajaya saying “Surely Muhyiddin, the Cabinet and the NSC are not expecting for fatalities to pile up to tens or hundreds accompanying the number of flood victims reaching the scale of hundreds of thousands before a state of emergency as a result of a flood disaster is declared!”

Lim went on to show proof that other countries were fast to react and had in place centralised flood-relief operations before the tragedies got out of hand, much unlike what was happening in Malaysia.

The MP for Gelang Patah cited the Nov 28 flooding along the Gaza Strip that affected hundreds; the flooding on Dec 24 in Central Java, West Java and Aceh where 6,000 people were evacuated; the flooding in Vancouver on De 9 caused by a sub-tropical storm and the Dec 16 floods in the Bay Area of San Francisco.

Explaining that the governments of these countries did not wait for “hundreds of thousands of flood victims before an emergency was declared”, Lim said: “There is an urgent need for the immediate review of such outmoded, archaic and obsolete rules” such as was put forth by Muhyiddin.

Putrajaya and NSC need to buck up

DAP lawmaker Tony Pua urged the NSC to demonstrate leadership to tackle the worst floods in Malaysia’s history.

In a statement, he said: “There has been almost no demonstration of urgency from the NSC. All we have heard two days ago was NSC secretary Datuk Mohamed Thajudeen Abdul Wahab warning people against spreading rumours regarding the flood situation.

“Thajudeen was only interested in the formalities of the process of calling for a state of emergency by claiming that it could only be declared by Najib.

“Worse, instead of informing the public what are the proactive and concrete efforts Putrajaya will undertake to manage the disaster, he was more concerned with going after those responsible for starting the rumours once the flood in the east coast had abated.”

Lim and Pua are not the only ones frustrated with Putrajaya’s nonchalant attitude towards the critical flood situation. The rakyat, post-March 8 have learned that the government is simply too stubborn in wanting to do the right thing at the right time.

                This entry was posted on Monday, 29 December 2014, 11:28 pm and is filed under
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Transport woes hamper aid, supplies to nearly 200,000 flood victims

The Malaysian Insider

29 December 2014

The good news: Flood waters are receding and it was not raining in Kelantan yesterday although the number of evacuees there have risen to 134,139 last night.

The bad news: Many villagers are stranded without supplies, electricity or cash to buy basics such as candles or canned food as roads remain cut off to all land transport in most parts of the state.

“It’s chaos here,” one aid worker told The Malaysian Insider as he waited to get boats to distribute drinking water, biscuits and canned food in state capital Kota Baru yesterday.

He noted that some evacuation centres there were also flooded and unable to provide food for the flood victims while others came back empty handed from evacuation centres that had run out of supplies. “No co-ordination whatsoever. No proper governance of this disaster.

“One thing I can say from ground zero, our authorities are not prepared for a national disaster. Will we ever will?” the aid worker said.

Tonnes of food and water supplies have been flown to Kota Baru by commercial and military flights while Malaysians from other parts of the country have also contributed supplies via lorries to the flood-hit east coast states.

But aid workers say a lack of boats is hampering distribution to many villages cut off from Kota Baru.

It is understood that electricity cuts and flooded roads have also stopped banks from replenishing automatic teller machines and petrol companies from supplying fuel to the flood-hit villages.

The flood situation in Kelantan remained critical with more than 130,000 evacuees at relief centres. – The Malaysian Insider pic by Hasnoor Hussain, December 29, 2014.

“Many people are helpless. They don’t have light, food and even access to money to buy candles for the night,” another aid worker told The Malaysian Insider.

State news agency Bernama reported the flood situation in Kelantan remained critical with the number of evacuees rising to 134,139 at the relief centres last night against the 124,966 yesterday afternoon.

According to Kelantan Social Welfare Department director Nik Omar Nik Abdul Rahman, Kota Baru still recorded the highest number of flood victims with 42,469 followed by Pasir Mas (23,568), Kuala Krai (23,169), Tumpat (30,569), Gua Musang (7,529), Tanah Merah (3,546), Machang (3,097) and Pasir Putih (192).

Not much changed in the situation in Terengganu (24,097), Pahang (31669), Perak (7,539) and Johor (332).

In Terengganu, Bernama reported that piles of timber that blocked the main roads and exit of Kampung Rantau Panjang to Bukit Besi had left more than 1,000 residents stranded in a number of villages for the past three days.

The logs were strewn along the road for about 100m, cutting off the exit road and trapping people in their villages until a Royal Malaysian Air Force (RMAF) helicopter brought food supplies.

“Due to continuous heavy rain for almost a week, logs stored up the hill had drifted downhill and littered the main road,” villager Nik Mohd Faizal Nik Mohd Fikri was quoted as saying by Bernama.

He said the logs from a nearby hill had blocked the road, cutting of access to the village and stopping them from going to work.

“Not only are our villages flooded, we are also facing the danger posed by huge logs that may continue to drift down from the hill and crash into our houses,” he said. – December 29, 2014.

                This entry was posted on Monday, 29 December 2014, 7:52 am and is filed under
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1MDB’s Lodin answers nothing

P. Gunasegaram

KiniBiz

TigerTalk |  DECEMBER 29, 2014

Tiger is appalled at the misinformation that 1Malaysia Development Bhd (1MDB) chairman Lodin Wok Kamaruddin has dished out, claiming he is answering questions posed by the press. Its just a masquerade – as Tiger will show, he answers nothing.

Just before Christmas, the 1MDB chairman responded to recent press outbursts over 1MDB’s activities, expressing surprise over suggestions that the strategic development company has not responded to questions.

In a lengthy 2,500-word statement (reproduced in full at the end of this TigerTalk for those who would like to hear it from the horse’s mouth) he proceeded to give 1MDB’s version of unfolding events. It was a crafty piece of work, using half-truths to mask the shenanigans taking place at 1MDB, wholly owned by the Minister of Finance Inc to bring strategic investments into the country.

Let Tiger demolish some of Lodin’s arguments by simply extracting the relevant paragraphs and giving his own take on what the chairman says. The reader can judge for himself and if he wants context he can refer to Lodin’s statement reproduced in full without any alteration.

Lodin:
 In fact, in terms of actual funding, the company has only ever received RM1 million in equity, which was provided by the Ministry of Finance at the time of its inception. Given that 1MDB does not receiving any funding from the Government, it is therefore simply not true to claim that the company is investing or worse, wasting, the state’s – or the people’s – money.

Tiger:
 How Lodin forgets! Remember, the government injected two prime parcels of land cheaply into 1MDB – the air force base in Sungei Besi and other land between the air force base and the KLCC twin towers where the Tun Razak Exchange or TRX will be put up. 1MDB has since revalued the parcels upwards by nearly RM4 billion in its accounts. Without these revaluations, 1MDB would have made losses since its inception in 2009.

As Lodin himself admits, 1MDB’s assets are built on an edifice of debt – about RM37 billion. Almost all of these are guaranteed by explicit government letters of support. If 1MDB goes under, then the government will be left holding the baby – it is the government’s money which is at risk. Remember, 1MDB has no money save for the RM1 million the government originally injected. The rest is debt for which the government and the taxpayer is eventually responsible for.

Lodin:
 As 1MDB funds its own operations, it should not be surprising that, from time to time, the company raises capital on the international debt markets in order to finance some of its projects. However, all of this debt is backed by solid assets.

Tiger:
 Solid assets? Initially some RM 7 billion were put into Petro Saudi for some Caspian Sea investment and then taken out, and then put into vague investments in Cayman Islands. Most of the money is overseas in indeterminate investments. What kind of strategic investing is that? And then it used over RM11 billion to buy power assets, all of them from Malaysian companies with some of the power asset concessions to expire not long from the time of purchase. It overpaid for these assets giving the  sellers massive extraordinary gains. And out of total debt of some RM37 billion, some RM23 billion are in cash or near cash items. Why borrow and then keep over half of your assets in cash? Most are in liquid assets. Why? These are just some of the questions Lodin has yet to answer.

Lodin:
 To the best of our knowledge, the only Petronas-related bond issued in 2009 that carried a coupon rate of 3.6% was for a RM100 million bond with the tenure of only 3 years, whereas the 1MDB bond (RM5 billion) had a tenure of 30 years. As such, given the significant difference between the maturity periods, it should not be surprising that the bond issued by 1MDB had a higher interest rate (5.75%).

Tiger:
 The government has long-term bonds for 20-year maturities which carry an interest rate of about 4.8%. Given government guarantees, 1MDB bonds for a similar period should be perhaps 30 basis points higher at 5.1%. Adding on a further 30 basis points for a longer maturity, would bring a fair interest rate of perhaps 5.4% for 30 years. But what Lodin fails to mention (see our article here for details) is that the debt was issued at 88 sen to the ringgit, raising the effective yield to 6.71%. The effective mispricing could have lost 1MDB and the country RM1 billion for the RM5 billion loan, according to KiniBiz calculations with the help of bond specialists. For RM20 billion, that could have amounted to RM4 billion and for RM37 billion, as much as RM7.4 billion.

Here are some more questions for Lodin: Why was it necessary to issue debt with a maturity period of 30 years, even longer than the concession period for power assets? Was that to ensure substantial mispricing which can be realised by those who flip the bonds for a gain from the market price of the bonds? Is it not a fact that 1MDB’s bonds increased substantially in price after issue? Why borrow far beyond your capacity to use the funds? Was that to cream off front-end gains through bond mispricing?

Lodin:
 Repatriating these funds (some RM7 billion in Cayman Islands) to Malaysia would have exposed them to fluctuations on the foreign exchange market, as being witnessed at the moment. In order to ensure that 1MDB maintained a strong liquidity position with a truly diversified global portfolio, these funds were invested in a 1MDB subsidiary that was registered in the Cayman Islands.

Tiger:
 Come, come now, are you taking us for fools? You can invest your portfolio funds from anywhere and you can hedge these funds (at a price of course) to avoid foreign exchange risks. You don’t have to be in Cayman Islands to have a truly diversified global portfolio of funds. You can be in Kuala Lumpur. More questions: What benefit comes to Malaysia from making portfolio investments overseas with borrowed funds for which you are already paying 6.71% in interest costs? Should this not be done by sovereign funds? At your admission you are not a sovereign fund, you are a strategic company. So why are you doing this?

Lodin:
 This portfolio (power) provides the business with healthy cash flows and enables 1MDB to participate in bids for coal and gas fired plants, the two primary fuel source for power generation assets in the markets that the company operates in, allowing it to create further value and drive future growth. As such, the economic benefit gained from these assets means that the company has recuperated any excess value it may have paid at the time of the acquisitions.

Tiger:
 Let’s face it – 1MDB bought these power assets from Malaysian companies which were spawned by the expensive privatisation ( to the government and the people) of power assets in Malaysia and some of which had acquired international capabilities. All 1MDB did was to re-nationalise some of these power companies but by paying an exorbitant price to take them back into government hands. Better that Tenaga Nasional Bhd had never given over power production to independent power producers in the first place instead of the government privatising assets expensively and buying them back at prices even more expensive than that!

And now that 1MDB has overpaid for these assets, the only way it can recover from this is to inject value into the portfolio. This was done by an award of a slew of power contracts to 1MDB which will increase the value of the portfolio and thereby mask the overpayment of the earlier assets.  More questions: Is that not true? By listing the power assets and realising its value, don’t you hope to mitigate the losses at 1MDB and cover them up?

Well, that covers some of the key points Lodin makes in his statement. If he wants more questions, then here are 10 more groups of questions he should answer. Until he gives comprehensive and clear answers to these and the other questions posed here, Lodin answers nothing in his statement.

GRRRR!!!!

Full text of statement by Lodin Wok Kamaruddin, chairman of the board of directors, 1Malaysia Development Bhd dated Dec 23, 2014:

As the Chairman of the Board of Directors of 1MDB, I have viewed with surprise recent statements, both in the media and by certain individuals, suggesting that the company has failed to respond to various questions that have been directed at it over the past months.

As a Board of Directors, we welcome debate, and as a company that is wholly owned by the Ministry of Finance – and by extension the people – we believe that public scrutiny of 1MDB is a good thing, and will only serve to strengthen the company and its governance.

In the interests of increasing the company’s transparency, I have held meetings with members of the media where I listened to and responded to their concerns. Furthermore, the company has taken various other measures such as issuing multiple statements responding to allegations directed at the company, publishing a detailed document answering frequently asked questions, and releasing a public statement outlining key highlights from 1MDB’s last financial results – the first time 1MDB has done so since the company’s inception in 2009.

All of this information is freely available on 1MDB’s website, and we believe that these actions reflect our efforts to engage in a more open and constructive dialogue than has perhaps been the case in the past. Despite this, issues that have previously been raised and subsequently addressed by the company continue to be regurgitated by certain individuals. In the interests of providing clarity, we would once again like to respond to the various concerns.

1MDB’s funding and debt levels

Contrary to claims, 1MDB is not a sovereign wealth fund but rather a strategic development company. In practice, this translates into a company that is independently run and funded, but one whose investment decisions are driven by the interests of the national economy.

Whilst a sovereign wealth fund and a strategic development company may not sound very different, there is an important distinction between the two: whereas a sovereign wealth fund is directly funded by the government and invests on its behalf, 1MDB raises and invest its own capital. In fact, in terms of actual funding, the company has only ever received RM1 million in equity, which was provided by the Ministry of Finance at the time of its inception. Given that 1MDB does not receiving any funding from the Government, it is therefore simply not true to claim that the company is investing or worse, wasting, the state’s – or the people’s – money.

As 1MDB funds its own operations, it should not be surprising that, from time to time, the company raises capital on the international debt markets in order to finance some of its projects. However, all of this debt is backed by solid assets.

At present, this includes the 15 power and desalination plants in five countries that comprise our energy business, as well as our extensive property portfolio which includes 70 acres of prime real estate currently being developed as TRX – Kuala Lumpur’s first dedicated financial district, 495 acres of land on the site of the old airport in Sungai Besi earmarked for Bandar Malaysia – a mixed-use urban development, and 234 acres of land in the centre of Air Itam, Penang.

Furthermore, all of this does not take into account the expected benefit to be realised from the initial public offering of the group’s energy portfolio, which will help deleverage the group and contribute towards reducing its debt profile.

Finance costs & interest rates paid by 1MDB

Like any business, 1MDB attempts to secure the lowest rate of interest and finance costs when taking out a loan or conducting a bond issue. However, in certain instances, these interest rates and finance costs have been towards the higher end of the market rate.

It has to be understood that, when it comes to raising debt on the financial markets, there is no one size fits all solution. A number of factors determine the finance costs and the interest rate applied to a loan or bond issuance. These include the length of maturity, whether the loans are underwritten or guaranteed, macro-economic factors, and many more.

To take one example, we are aware that concerns have been raised about the 5.75% interest rate assigned to a RM5.0 billion Islamic bond that was issued by 1MDB in 2009. As a comparison, it has been noted that another government-linked company Petronas paid an interest rate of 3.60% on a bond at the same time.

This is an unfair comparison that does not take into account a number of important factors. To highlight just one: when subscribing to a bond, lenders take on a certain degree of risk and the longer the tenure, the higher the risk for the bondholder. Therefore, bonds that have a longer maturity period typically have a higher interest rate.

To the best of our knowledge, the only Petronas-related bond issued in 2009 that carried a coupon rate of 3.6% was for a RM100 million bond with the tenure of only 3 years, whereas the 1MDB bond had a tenure of 30 years. As such, given the significant difference between the maturity periods, it should not be surprising that the bond issued by 1MDB had a higher interest rate.

More broadly, it is important to note that the bond issued by 1MDB in 2009 was the first Malaysian bond with a 30-year tenure, and the first Islamic bond to be issued with a maturity period of that length. Given the economic climate at the time, the fact that 1MDB successfully managed to raise this amount of capital reflects the support, goodwill and confidence placed in the company.

Funds regulated by the Cayman Monetary Authority

There has also been substantial debate about funds invested by the company regulated by the Cayman Monetary Authority. However, anyone familiar with the financial world should be able to confirm that there is nothing unusual about companies of this size investing their funds in the Cayman Islands, which is one of the largest registered fund jurisdictions internationally, with the Cayman Monetary Authority recognised as one of the leading fund regulators in the world. Thousands of international blue-chip companies have funds regulated by the Cayman Monetary Authority, including over 200 Malaysian companies, many of which are household names.

To provide some background with respect to 1MDB’s investment: In 2009, 1MDB and a Saudi Arabian company entered into a joint venture to facilitate long-term economic cooperation between Malaysia and Saudi Arabia. As part of this, a joint-venture fund was set up to undertake investments on projects which would generate financial and strategic benefits to both countries. However, due to various factors, both parties eventually decided not to proceed with these plans.

As a consequence, 1MDB’s investment in the company was converted into a fixed income instrument in the form of Murahaba notes, essentially a loan, with an annual interest rate of 8.75%. This loan was paid back in full, for US$2.318 billion with a profit of US$488 million, in 2013.

Repatriating these funds to Malaysia would have exposed them to fluctuations on the foreign exchange market, as being witnessed at the moment. In order to ensure that 1MDB maintained a strong liquidity position with a truly diversified global portfolio, these funds were invested in a 1MDB subsidiary that was registered in the Cayman Islands. However, the company has already redeemed a significant portion, US$1.4 billion, of the fund and expects to redeem the remaining amount in the coming months.

Overpaying for power assets

In line with the Government’s strategic aim of ensuring Malaysia’s energy security, 1MDB has acquired a number of energy assets since 2012. These acquisitions have allowed the company to diversify its fuel mix and country risks, as well as benefit from healthy cash flows and the expertise of their excellent management teams.

The claims relating to the amounts 1MDB paid for its energy assets revolve around values that were attributed to the assets at the time they were acquired and on the basis of certain assumptions made by external parties. However, the company takes a long term view and consider broader synergies for the group, as well as the social and economic impact on the country, when we evaluate assets and forecast economic returns. As such, it is the management team’s strong belief that the value paid for these assets, which may have involved a premium in certain instances – as is common when acquiring another business, is commensurate with their existing and future potential.

This portfolio provides the business with healthy cash flows and enables 1MDB to participate in bids for coal and gas fired plants, the two primary fuel source for power generation assets in the markets that the company operates in, allowing it to create further value and drive future growth. As such, the economic benefit gained from these assets means that the company has recuperated any excess value it may have paid at the time of the acquisitions.

Overpaying for land

Any decision the company makes to invest in real estate is reached following an extensive period of due diligence, which includes the appointment of independent appraisers to determine the value of the land at the time of the acquisition, whilst also taking into account the value the company can add to it. All of 1MDB’s investments are undertaken in line with the best interests of the business, and with a view to stimulating economic growth and prosperity in Malaysia.

We understand that there has been some speculation about the value paid by 1MDB for a land parcel in Penang. This land is located in the centre of the town of Air Itam, a much sought after area where property prices have seen a substantial increase in recent years.

This is reflected in the prices that other developers have paid to acquire land in neighbouring areas which, at over RM200 per sq ft, is substantially higher than what 1MDB paid. In fact, in one instance dating back to 2013, approximately 9.8 hectares in Air Itam were purchased for RM267.4 million, about RM251 per sq ft, for a mixed-use development. In another, approximately RM251 per sq ft was paid for a mixed development project near the Kek Lok Si Temple.

Given the general difficulty companies face in finding sizeable plots of land in prime areas of Penang, that are suitable for carrying out large-tier development projects, the amount paid by 1MDB for this land was not only commensurate with its value but highly attractive.

Preferential treatment on power contracts

Any award takes a number of factors into consideration: the technical standards of the bid, the track record of the company, the bidding price, the urgency of the project and the whole systems cost of the bid to name a few. The projects that 1MDB have been awarded, in Malaysia and abroad, have been on this basis.

Earlier this year, a joint consortium consisting of 1MDB and Mitsui & Co, Japan’s second-largest general trading company, participated in an open and competitive tender exercise for a 2,000MW coal-fired power plant known as Project 3B. Following due consideration of the various bids, the Energy Commission announced that the joint 1MDB-Mitsui consortium had been chosen as the preferred bidder.

Subsequently, there have been suggestions that 1MDB received preferential treatment, and the basis of these claims is that the company’s bid was not the lowest offered. This rationale is flawed as it fails to take into account the fact that any award is based on a number of considerations, not just the tariff.

Whilst there was a bid that was slightly lower than the one presented by 1MDB, the fact is that 1MDB’s was the lowest compliant bid, with a proposed levelised tariff of 25.33 sen/kWh. There was a bid that was fractionally lower, of 25.12 sen/kWh, but this proposal did not comply with a number of requirements set out by the Energy Commission, key amongst which was their lack of experience operating a coal plant.

As the Energy Commission announced in a public statement, the 1MDB-Mitsui Consortium won the bidding exercise “in a fair and square manner with a well-proven technology that would enhance security of supply expected of a 2000MW coal-fired power plant operating in a grid system of our size”.

It is also important to note that there are other tenders that 1MDB has participated in where the contract has been awarded to other parties. For example; despite 1MDB offering the lowest bid for a gas-fired plant in Prai, another company was deemed as offering a better over-all package and awarded the contract on that basis.

                This entry was posted on Tuesday, 30 December 2014, 4:41 pm and is filed under
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Court ruling affirms religious authorities are limited by law

COMMENTARY BY THE MALAYSIAN INSIDER

30 December 2014

There is the law and no one, including religious authorities, can overstep the limits of the law even if they invoke religion as a right.

For too long now, some state religious authorities in Malaysia have issued fatwas (opinions) and treated them as immutable regulations that can be imposed at will and without recourse.

Today, the Court of Appeal affirmed that these state religious authorities have no such power when it upheld a lower court’s ruling that the Federal Territory Islamic Religious Department (Jawi) was wrong in raiding and seizing copies of a controversial book from a Borders bookstore in Kuala Lumpur.

The book, “Allah, Liberty and Love” by Irshad Manji, was seized before a fatwa banning it was issued and, as such, Jawi’s actions were deemed illegal and unconstitutional.

A three-man bench led by Datuk Mah Weng Kwai held that Jawi’s action against the Borders store manager, Nik Raina Nik Abdul Aziz, was unconstitutional and illegal and said her arrest and prosecution must be quashed.

“Jawi had acted beyond their powers against Nik Rainah (third respondent) and the bookstore,” Mah said.

Nik Rainah is not the first or the last to face arbitrary action of these religious authorities. There have been many cases and the latest was IDEAS think-tank chief Wan Saiful Wan Jan whose hotel room was raided for suspected khalwat (close proximity) at 3am.

He was with his mother in the room in a Perak this month when religious officers came in without a warrant and left when they found nothing amiss.

Do these officers think Malaysia is a theocracy? Because the country is not. It is a parliamentary democracy with a constitutional monarchy.

There is a supreme law that rules Malaysia and it does not say that religious authorities have more rights than others.

The Court of Appeal ruling today is a strong reminder of that law – that religious authorities should not abuse power and act beyond their authority.

They cannot justify what they do with a fatwa later. And that fatwas are not law. Malaysian laws are approved by lawmakers who are elected to Parliament, not a group of people paid by the state to regulate our lives, our likes and dislikes according to their moral and religious standards.

Because Malaysia is a democracy, not a theocracy, where the rule of law exists. – December 30, 2014.

                This entry was posted on Tuesday, 30 December 2014, 2:08 pm and is filed under
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Declare state of emergency now

– Dr. Tan Eng Bee

The Malaysian Insider

30 December 2014

I agree with the expert opinion that the powers-that-be should have declared a state of emergency for the affected states in the worst floods in history. This flood is unlike previous floods as the damage and destruction affected about a third of the peninsula’s land mass or more in my estimation, and that is cause for concern.

The devastation is so disastrous and serious by all counts. Unless an emergency is declared as soon as possible to allow government agencies and NGOs to work towards bringing reliefs to the people who are already suffering from the wet condition and in dire need of food and water, I am afraid the misery and anguish of the affected masses would intensified and surpassed all previous floods.

Despite the authorities telling the masses not to believe everything in social media, the fact remains the poor coordination of the various agencies bringing humanitarian aid, such as food and water and other supplies, has not reached many affected areas and the cries for help are still being heard far and wide across the nation.

Whether we want to believe it or not, we have reached a critical and dangerous stage where the welfare of the affected people is threatened and every form of humanitarian aid and resources must now be geared towards bringing food and water and other form of relief to  relief centres without delay.

If we cannot reach them by road, then we have no alternative but to reach them by air.

We know that many villages in the affected states have not being reached and relief personnel must work towards reaching them to see what form of help is required. We also do not know how many lives have been were lost the past few days, except what was reported. May they hold on tightly wherever they may be and to stay safe while help is on the way.

I call upon private enterprises which have the means to chip in and help the authorities to see how best they can assist in bringing relief to the affected areas. There is no need to wait for appeal but to act without having to be compelled to do so.

If there is a need to appeal to our friends in Asean, there is no shame asking them to come in to assist as humanitarian efforts know no boundary or barrier. We have done for others in their needs before and this is the time where we would expect them to return the same in our needs.

A great prophet once said, “no one has greater love than to give up one’s life for his friends”. I hope this saying will bring home what we have to do as one to another without having to be compelled or coerced but to do it willingly.

I am happy to note that many NGOs, religious organisations, people and concerned parties across the land are coming in to assist and we should see a much improved situation in the days to come but it would be better if a state of emergency is declared for the sole purpose of speedy and better coordinated effort to bring relief to the affected areas as soon as possible.

As a nation we are standing and coming together regardless of our ethnicity, political differences and religious affiliation to bring our resources together to assist in whatever way we can to the affected.

This is the time where we are coming together as one, united and allied for the sole purpose of helping the unfortunate ones. This is what neighbourliness and comradeship is all about when we offer a cup of water to the needy.

Love knows no boundary and wants to reach and touch others in their needs and predicament. We are full pledged Malaysians ready to help our fellow Malaysians under distress and hardship.

The ball is at the feet of the authorities to do the right thing at a time like this where a state of emergency is just a natural course of action.

Time is not on our side as the unpredictable weather can deteriorate further without warning. We just have to be prepared for any eventuality that warrant strong leadership at the highest level to steer and to see that what needs to be done is done. – December 30, 2014.

                This entry was posted on Tuesday, 30 December 2014, 6:38 pm and is filed under
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Epitomising Dr M’s criticisms of the gov’t

By Ganeshwaran Kana

Malaysiakini

6:43PM Dec 29, 2014

COMMENT
 Dear Dr Mahathir Mohamad. I would consider “vociferous” as the best and most suitable word to epitomise your criticisms against Malaysia’s government of the day in recent times. As a citizen of Malaysia, one has the right to speak of and criticise his or her government.

 Although some of your arguments have gained public support, the current generation of Malaysia has all the rights to question policies and actions of your governance in the past.

 To set the record straight right at the start, I am neither a supporter of Umno nor of  “the other side”.

Nevertheless, being a civic-minded citizen of Malaysia, I would like to request your explanations pertaining to various issues spanning throughout your 22 years in your journey as the prime minister of Malaysia.

 Although I duly recognise your contributions to Malaysia, any flaw and mistakes that took place under your long premiership should be taken as your mishandling. This is what real leaders do.

 And, hopefully, this commentary of mine is not to be seen as seditious.

1. Universities and University Colleges Act 1971

 I, as a current undergraduate in a public university have seen how this Universities and University Colleges Act (UUCA) has actually encroached the freedom of the university students to express themselves on and engage in political activities.

 The students have been barred from partaking in politics (until in October 2011, when the Court of Appeal declared Section 15 of the UUCA as unconstitutional), but even until this very moment, the students are not allowed to engage in political activities within the campus.

 Being an alumnus of Universiti Malaya, you should know that the students union in the past had better opportunities to represent the students. Nowadays, the grandeur is just in the name.

 The real impact of UUCA came when the then Education Minister in 1975 brought amendments by inserting new sections to the Act, especially to Section 15, which prohibits the students from taking part in politics.

 This minister then was none other than you, yourself, Dr Mahathir. Incidents such as the Tasik Utara and Baling Demonstration by your former “favourite”, Anwar Ibrahim, have caused you to stifle the freedom of the students. Ever since 1975 up to now, the students are facing the brunt of your actions. What is your explanation?

2. The Malaysian Judiciary

 Following the crisis between your administration and the judiciary in 1988, you brought “many interesting ways to solve it”.

I guess you had enough when the High Court in 1988 declared that late Karpal Singh should be released from extrajudicial detention and the Supreme Court revoked the work permit of two foreign journalists that your administration froze.

 Maybe, if you still remember, they are both from Asian Wall Street Journal and they wrote about suspicious financial transactions of some civil servants, before you started to take actions against them.

 Seeing the meddling of the judiciary in your path, the Federal Constitution was amended and since the Barisan Nasional had two-thirds majority then, everything was a smooth ride. Article 121 then said, “the judicial power of the Federation shall be vested in” the High Court.

 However, after the amendment, Article 121(1) states “the High Court shall have such jurisdiction and powers as may be conferred by or under federal law”.  The power of the judiciary has been significantly reduced, and parliamentary supremacy amplified.

 The courts are now reduced to adjudicate under the laws as approved by the government. What is your explanation?

3. Virgin forests of Sarawak

 Mahathir, after you becoming prime minister, the records show rampant deforestation in the forests of Sarawak. However, the loggings have long been going on, for years.

 Taib Mahmud himself has made allegations that his uncle, Abdul Rahman Yakub (the previous chief minister of Sarawak,  before you become prime minister) had dished out numerous logging concessions to his family members and cronies. But, as far as I know, no action has been taken, what more to investigate against Abdul Rahman.

 Taib Mahmud, himself has been constantly linked with allegations of dishing out logging concessions to his cronies, squandering millions of ringgit. Many Orang Asal lost their “Native Customary Rights” land due to irresponsible actions of many. Still, no action was taken.

Perhaps, you would still remember Bruno Manser. The man from Switzerland who fought for the rights of the Penan tribe in Sarawak. Manser pressured the Malaysian government to preserve the greeneries in the Penan settlement areas and not sacrifice these to unwarranted development (like the “Monument of Corruption” Bakun Dam ) and unstoppable deforestations.

 Your administration took strict actions against the activists and caused more miseries to the ethnic groups. Mahathir, I don’t know how true this is, but you are even said to have sent a letter warning Manser, saying “it is about time that you stop your arrogance and your intolerable European superiority. You are no better than the Penan”.

If the words did come from you, is this not insulting the Penan, and even the other Orang Asal? What is your explanation?

4. Election for Kota Setar Selatan seat in 1969

 Just a few days before the racial riots of 1969, in your election campaign vying for the Kota Setar Selatan seat, you were reported to say, “I don’t need the Chinese votes to win”, only to end up losing to a PAS candidate.

 Isn’t your statement seditious and racist in nature? Should it be even uttered by a leader? Have you ever apologised to the Chinese community, if you have really said so? What is your explanation?

5. Crony Capitalism

 Your administration was often linked to the debate of “cronies”. Why, even our founding prime minister Tunku Abdul Rahman Putra claimed in his book, in the aftermath of the 1969 riots, that “Saya yakin bahawa kiranya Dr Mahathir menumpukan masa yang lebih kepada kerja-kerja parti dan tidak menghabiskan masanya di dalam perniagaan membuat rumah di Kedah bersama-sama dengan syarikat yang bernama Federal Construction Company, sebuah syarikat yang dipunyai oleh orang-orang Cina dan dalam perniagaan-perniagaan yang lain, maka kemungkinannya untuk menang dalam pilihan raya itu adalah lebih besar.

“Menurut maklumat yang diterima, beliaulah yang telah mengambil peranan yang penting untuk menolong mendapatkan kelulusan Kerajaan supaya tidak kurang daripada 238 lot tanah Simpanan Melayu dikeluarkan dari simpanan itu bagi maksud projek perumahan yang tersebut”.

To translate, Tunku Abdul Rahman alleged that you had relations with the Federal Construction Company owned by the Chinese and you had used your “connections” to convert 238 plots of Malay reserve land for the commercial use of the construction company.

 This allegation was made even before you assumed the premiership. What is you explanation?

6. Suqiu 1999

 Before the general election of 1999, several Chinese associations under the Alliance, called “Suqiu”, produced a memorandum to push for a more equitable and just social and economic policies in Malaysia.

 Your administration, facing severe backlash after the expelling of Anwar Ibrahim, used this memorandum as a springboard for future electoral victory by winning the votes of Chinese and others.

 Although your cabinet agreed and accepted the Suqiu memorandum, as soon as you emerged victorious from the election, you rejected the memorandum by stating that it questions Malay rights and supremacy.

 What boggles me is that, did you not foresee the impacts of the memorandum before accepting it? You are also reported to have said that “we were threatened then, as elections were just round the corner. That’s why they came up with the memorandum, as a threat to the Barisan Nasional, and that if we didn’t entertain their request they would tell the Chinese not to support us.This was deliberate and the timing was well-planned. What could we do then?”

 Isn’t this a betrayal of trust and a Machiavellian tactic? What is your explanation?

7. Other Issues

• After BN losing the states of Terengganu and Kelantan in GE 1999, the petroleum royalty payments used to be paid to the respective states were channelled into Jabatan Pembangunan Persekutuan. This has caused the states to face lack of financial source and seen by the rakyat as incapable of building and developing the states. Perhaps this is what you wanted.

• When the court declared that the election in Likas, Sabah 1999, as null and void due to the existence of phantom voters in the electoral roll, the 1958 Elections Act was amended to not allow the judiciary to scrutinise the voters’ list after it has been certified and re-certified. Is this a way to allow the elections tainted with unscrupulous tactics?

• After the 1988 Umno crisis, after which Umno’s registration was annulled, Parliament decided not to allow the courts to challenge a political party’s decision. I do know that Parliament and your administration (the cabinet) are two distinct entities, but bearing in mind that amendments are proposed by the ministries and with the BN then having two-thirds control in Parliament, your influence in such a decision can never be denied. Through such amendment, the rights of the members of Parliament and the power of the courts have been significantly reduced.

 What are your explanations?

 I believe that all Malaysians would want to listen to your explanations and even better, a statement of apology if the fault lies in your side. Nevertheless, I would like to thank you for the changes you have brought to Malaysia.

 Your effort in opening up Maktab Rendah Sains Mara, albeit with only 10 percent for the non-bumiputera, had enabled me to study in the institution.

 Mahathir, several policies under your administration have also reduced the abject and relative poverty rates in Malaysia, although there are still some debates on the precise poverty rate.

 Thank you, once again, and God bless you.

 GANESHWARAN KANA is a third-year economics undergraduate in University of Malaya and blogs at universaltheboss.blogspot.com

                This entry was posted on Tuesday, 30 December 2014, 6:12 am and is filed under
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Flood evacuees eager to return home

Malaysiakini/Bernama

Dec 30, 2014

FLOODS
The bright, sunny weather and receding flood waters have allowed many evacuees to return to their respective homes after spending six days at the evacuation centre.

 A Bernama survey at Sekolah Kebangsaan Pulai Serai in Dungun, Terengganu, found more than 500 victims housed there already packing and preparing to return home.

 However, the water level at the homes of flood victims in Kampung Alor Mak Bah had still not subsided.

 The victims told Bernama that due to the rapidly rising water, they failed to save any belongings because the flood this time was beyond their expectation.

 A resident, Che Mohd Samat, 57, said he was living with his two sons and had packed some things and placed them in high places.

“This area frequently floods, but the water never reached the waist or this high before,” he told Bernama in Dungun today.

 Normally, the flood will subside within two to three days, but now it’s almost a week since Thursday and the water has not receded.

 Che Mohd said the sunny weather allowed him to return home and see the situation there and if possible, clean the house.

 “I was quite shocked to see the condition the house was in and the water level that had entered the house. All the electrical things and furnishings in the house have been damaged and things had also been swept away by the flood,” he said.

– Bernama

                This entry was posted on Tuesday, 30 December 2014, 6:08 pm and is filed under
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Flood mitigation in Kelantan

 – Koon Yew Yin

The Malaysian Insider

30 December 2014

Like all Malaysians, much of my attention during the past week has centered on the news and scenes of the flood devastation that has occurred in the country, especially in Kelantan.

While I also share the concern of many others as to whether our political leaders and authorities have been on top of their game or have bungled in their disorganized efforts at providing relief, the mainfocus of my scrutiny has been on whether any practical mitigation measure can be undertaken to minimize the impact of this almost annual climatic phenomenon which has caused so much sufferingand socio-economic loss.

In looking for an answer, I believe I am better qualified than most people in the country in view of my long experience as an engineer who has been involved in various major water-related projects such as the Muda Irrigation scheme since the 1960’s.

Of special relevance is that about 30 years ago, my company undertook the contract to fill up the Kelantan Medical University site which is a few kilometres upstream of Kota Buru/Sungei Kelantan. From my working experience in dredging the sand from the river, I noted that the few hundred thousand cubic metres we dredged from the river was soon refilled by the constant new inflow of sand.

From this, It is clear to me that one of the major causes of the annual flooding is the accumulation of sand at the mouth of Sungei Kelantan which is more than 10km from Kota Baru and that an enormous quantity of sand amounting to perhaps several hundred millions of cubic metres, must be taken out to mitigate flooding.

How can this be done in a cost effective way? The answer lies in another project which my company, obtained at the same time to dredge sand from Sungei Tiram in Johor for export to Singapore.

The sand from the river was used to create the beach at Sentosa Resort in Singapore. In the process we not only cleared that particular Malaysian river and solved its flooding problem, but we also generated jobs and income from the revenue received from Singapore.

This was a win-win situation for our two nations.

Although I was one of the founders of Mudajaya and IJM Corporation, I am now no longer associated with these companies nor have I any business interest in the construction industry.

However, I will support dredging of the sand resources of Sungei Kelantan, subject to various environmental safeguards, to alleviate the flooding.

Shortly after return to Malaysia from his overseas trip, Prime Minister Datuk Seri Najib Tun Razak announced an allocation of RM500 million to help the flood victims cope with the disaster. Kota Baru floods every year and very often the Government allocates hundreds of millions of ringgit to help the flood victims.All this money is not solving the flooding problem. We must find a way to mitigate the flooding.

Various cynics have suggested that the Prime Minister may be playing politics with the funding allocation meant for use in Kelantan. It is said that he may be tempted to gain political capital from it in the hope of using the fund to sway voters towards BN. Although this political angle to flood relief funding cannot be discounted, I do not believe that the Prime Minister will choose to play such crude politics.

Perhaps his subordinates may want to do so. But I think that on this particular crisis, he will know that the eyes of the nation are on him and that he will need to come up with the best programme possible that can not only bring short term relief, but also long term positive impact.

Hence my proposal to the Prime Minister is a simple one which can meet both short and long term goals. If we sell the sand taken out from Sungei Kelantan to Singapore at say RM10 per cubic metre, we would gain several billion of ringgit to make up for the growing shortfall in government coffers arising from low oil prices. At the same time, if properly planned, the dredging will eliminate the flooding problem of the Kota Baru and Kelantan population.

I am aware that for various political reasons, selling sand to Singapore was disallowed by the Mahathir Government. It is time to review this policy. The mitigation measure I have proposed is an easy, practical and common sense solution to Kelantan’s annual flooding. It also provides Singapore with access to cheaper sand (presently Singapore is importing from as far as Cambodia!) and will have the effect of improving Malaysia-Singapore relations.

UMNO hardliners will not agree with what I am proposing, but can the Prime Minister’s Department please also ask the people of Kota Baru and Kelantan what they want. – December 28, 2014.

                This entry was posted on Tuesday, 30 December 2014, 2:44 pm and is filed under
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Questions for 2015

Tan Siok Choo

The Sun Daily

29 December 2014

WITH 2014 drawing to a close, I have several questions about issues that arose this year but could impact Malaysia’s future.

Question 1:
 Why does Putrajaya persist in maintaining Malaysia’s growth in gross domestic product (GDP) in 2015 won’t be affected by plummeting prices of oil, a commodity that contributes significantly to federal government revenue?

Budget 2015 was prepared when Brent oil – the benchmark for Petronas’s Tapis blend – was in triple digits. Analysts estimate federal government revenue next year is based on an oil price of US$105 per barrel.

Last Friday, amid thin trade, Brent oil for February settlement closed at US$59.45 a barrel.

Labelling the World Bank’s revised forecast of 4.7% GDP growth next year as “too conservative”, top Malaysian policymakers announced the 5% to 6% economic growth target for 2015 will be maintained.

Admittedly, plummeting oil prices could be beneficial – it could stimulate global economic growth and reduce fuel costs for motorists and for sectors like airlines and truckers. Even so, shouldn’t Putrajaya prepare for the worst rather than adopt a wait-and-see attitude?

Question 2:
 Will there be an investigation on why and how taxpayer-funded Perwaja Steel’s audited net loss for the 18-month period ending June 30, 2014 ballooned to RM1.217 billion?

Perwaja will soon shut its doors after 32 years of operation, causing some 1,500 employees to lose their jobs while suppliers are also likely to be adversely affected.

Even more worrying, newspapers report legal action is being taken against Perwaja for failing to pay to the Employees Provident Fund contributions totalling RM9.17 million from August 2013 and September 2014.

Shouldn’t EPF have a shorter time frame and a lower threshold of arrears before pursuing errant employers?

Question 3:
 Instead of regarding Indonesia as a purveyor of cheap, low-skill labour, when will Malaysian policymakers realise the archipelago is an excellent role model in several instances?

These include running state-owned enterprises like oil company Pertamina and Garuda airline, fighting corruption as well as heading off religious extremism.

Earlier this month, Pertamina’s entire board of directors was replaced – a move by new President Joko Widodo to reform the graft-tainted oil company and to ensure it has the people skills to meet Indonesia’s changing energy demand.

While Khazanah’s decision to look overseas for a person to helm the problematic Malaysia Airlines – whose losses could double to RM2 billion by end-2014 – is undoubtedly correct, was Emirsyah Satar, the outgoing chief executive officer of Garuda considered?

In 2005, when Emirsyah took over the helm, the Indonesian airline was close to bankruptcy and had a dubious safety record.

Under Emirsyah’s stewardship, Garuda was removed from the EU’s aviation black list in July 2009 and was voted World’s Best Regional Airline 2012 and World’s Best Economy Class 2013.

Recently, Skytrax awarded Garuda five stars, elevating it among an elite group of seven similarly rated airlines that include Singapore Airlines and Cathay Pacific.

While Garuda has returned to profitability, the publicly listed airline has suffered skyrocketing losses totalling US$206.4 million in the first nine months of the year.

One Indonesian exemplar is the Corruption Eradication Commission (KPK). Apart from winning the Magsaysay award for its anti-corruption work, the KPK’s roll-call of political leviathans that it has prosecuted successfully is stunning.

Those jailed include Banten Governor Ratu Atut, Constitutional Court Chief Akil Mochtar, former Sports Minister Andi Mallarangeng and ex-Democratic Party chairman Anas Urbainingrun.

Recently, KPK investigated former energy minister Jero Wacik for alleged abuse of ministerial power – a novel concept across the Straits of Malacca.

Another role model is the Indonesian Ulema Council (MUI). Last week, MUI stated Muslims are allowed to greet their fellow Christians “Merry Christmas”.

“Wishing a greeting as a form of our friendship to other faithfuls won’t damage our faith. Islam is not a narrow-minded religion,” MUI chairman Din Syamsuddin said unequivocally.

Question 4:
 Were architectural firms bidding to design klia2 asked to conceptualise a budget terminal or a shopping mall? As countless letters of complaint to newspapers attest, the needs of travellers appear to have been accorded low priority.

Why weren’t walkators installed from inception instead of being introduced progressively? Three walkators are expected to be in place by year-end and another 16 by 2015.

Furthermore, the profusion of shops and their distracting signage makes it difficult for travellers to find various services. Unlike KLIA1, there isn’t a visible sign in klia2 to indicate the bag strapping kiosk’s location. A foreign friend got lost searching for this outlet.

Question 5:
 Despite unprecedented mudslides and floods in recent months, will Malaysians emulate the psychological resilience of Scarlett O’Hara, a pivotal figure in the film/novel Gone With The Wind?

In the closing scene, after her husband Rhett Butler abandons her, Scarlett memorably said: “After all … tomorrow is another day!”

Opinions expressed in this article are the personal views of the writer and should not be attributed to any organisation she is connected with. She can be contacted at
[email protected]

                This entry was posted on Tuesday, 30 December 2014, 7:06 am and is filed under
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The flood woes in Kelantan

 – Johan James

The Malaysian Insider

28 December 2014

Almost every year, Kelantan and a few other east coast states are flooded due to the heavy monsoon rain towards the end of the year. But this time around, Kelantan and the other east coast states were hit by major floods since year 2004.

Is this a never ending curse for these states, especially Kelantan? Who are supposed to be blamed for this annual mishap suffered by the Kelantanese? Central government? State government? Or the wrongdoings of the locals in Kelantan?

Amid, flood in this state is just another annual affair for the locals except for the heavy flood that occurred several times – 1926, 1967, 2004 and the latest, 2014. In other words, it’s part and parcel of the Kelantanese’s life.

However, the current flood incident and its severity had defied all traditional beliefs. Does the heavy flood, caused by heavy monsoon rain and other factors, still relevant in this modern age with all the technological advancements?

As much as 255 mm (10 inches) of rain fell in 24 hours between December 21 and 22 in the east coast states, according to the Malaysian Meteorological Department. It had further worsened the flood in the states.

On December 23, the Malaysian Meteorological Department issued a high level warning of heavy rain in parts of peninsular Malaysia (source: floodlist.com). Adding to that, the high tide phenomena – which is influenced by the moon were also identified as one of the major contributors for the heavy flood.

This is known as the ‘new moon phenomena’, where the close proximity of the moon from earth results in high tide. This high tide will usually cause the sea level to rise tremendously and eventually hampers the dissipation of flood.

The following are the main factors of the aforementioned phenomena, contributing to heavy flooding :

a. The close proximity of the moon from Perigee

b. The moon in close proximity with the new moon-phase which is in parallel with the sun

c. The occurrence of Perigean spring tide

d. The strong wind from the northeast e. Heavy downpour in the remote areas in the east coast states (Source: falakonline.net)

Apart from the east coasts in Peninsular Malaysia – southern provinces in Thailand, a few islands in Indonesia and five provinces in Sri Lanka were also badly affected.

Although the flood is not something unusual in southeast Asia, the central and state government’s role in solving this ever continuing mishap cannot be discounted at all.

It is also a core responsibility of the state government which is helmed by the opposition for over 20 years. Therefore, the state government has no choice but to take serious measures to overcome the flood woes in the state as soon as possible.

The state government should look into the geographical factors, drainage system and the uncontrolled deforestation in the state in order to overcome the flood woes once and for all. The political differences between the central and state government have to be scrapped and they should work as a team to identify the glitches in all these factors.

The blame game between these two sides has to stop immediately for a flood-free state to materialise. Scant oil royalty should not become the main excuse for the state government’s failure to solve the flood woes. – December 28, 2014.

                This entry was posted on Tuesday, 30 December 2014, 9:54 pm and is filed under
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