Wednesday, February 28, 2007

ACA Zulkipli must establish his integrity or be removed immediately

ACA Zulkipli must establish his integrity or be removed immediately
by Lim Kit Siang

The Anti-Corruption Agency (ACA) director-general, Datuk Zulkipli Mat Noor should appear before the Parliamentary Select Committee on Integrity to clear all doubts that he is qualified to continue to helm the anti-corruption agency.

I will propose at today’s meeting of the Parliamentary Select Committee that Zulkipli be summoned to appear at an emergency meeting to respond to various serious allegations which had been made against him, ranging from corruption to sexual crimes, which must not remain unrebutted so as to salvage the credibility, legitimacy and authority of the ACA.

If Zulkipli is not prepared to appear before the Parliamentary Select Committee to establish his integrity in an emergency meeting, he must be removed as the ACA head. The Cabinet should put this item on the top of its agenda at its meeting tomorrow.

Malaysiakini yesterday reported these allegations which were filed last year by former ACA officer Mohamad Ramli Manan to the then inspector-general of police Mohd Bakri Omar.

In the July 4, 2006 report, Ramli named the ACA chief - who is a former top cop - and referred to him as ‘B1′.

“As you are aware, B1 was a member of your police force and his last appointment there was as Sarawak chief police officer. It has come to the knowledge of the ACA that B1 was a very corrupt senior police officer and had amassed substantial property and assets through corrupt practices,” he told Mohd Bakri in his report.

Ramli claimed that in 1997 - when Zulkipli was Johor police chief - the ACA had then learnt that he was “in possession of properties disproportionate to his known source of income” and had indulged in “immoral and criminal” activities.

Apart from this, Ramli also disclosed that the police had allegedly investigated Zulkipli in connection with a sexual crime following a report filed by a housewife with the Dang Wangi police station in Kuala Lumpur.

Following this report, he said the housewife had also filed additional reports with the police in Negri Sembilan’s Mambau and Kuala Lumpur’s Segambut as well as Dang Wangi for alleged assault and use of criminal force.

“There were also evidence of interference by B1 in the course of the police investigation wherein witnesses were threatened not to cooperate,” said Ramli.

Ramli also claimed that the ACA director-general owned several business interests and properties, including six houses in Pagoh, Johor.

He said the ACA learnt that the police had investigated Zulkipli for allegedly misusing government vehicles to carry out regular checks on these properties and business interests.

According to the report, these allegations were well-known in the police circle and several police officers had also offered evidence of B1’s corrupt activities to the Police Royal Commission two years ago.

“As a senior ACA officer, I have to categorically state that B1’s continued presence in the civil service, notably in ACA, whose main duty is to eradicate corruption, is a security threat to the country,” the report added.

Ramli expressed hope that the police would launch a thorough investigation into the allegations.

In the final paragraph of his report, the former ACA officer stated that it was on record that he had informed the relevant authorities, including the organisation he had worked for, regarding these allegations since 2003. However, these were ignored.

“I have to state that this is my last act of national duty since I am going into compulsory retirement. The ACA being a very important public institution should be supported by all and sundry and see that it discharges its national duty in the best interest of the public and country,” said Ramli, who retired soon after he filed the report.

The ‘first information report’ which was also sent to Prime Minister Abdullah Ahmad Badawi, the attorney-general, the auditor-general and director-general of the civil service, was made public yesterday by the chairperson of Movement for Democracy and Anti-Corruption (Gerak) Ezam Mohd Nor at a press conference yesterday.

Should PAC not be dancing with the wolves?

Should PAC not be dancing with the wolves?
by A Kadir Jasin

EITHER the people at Bernama had misreported or the people at the Public Accounts Committee (PAC) of the Parliament had fallen off their rockers.

The national news agency, on Feb. 26, reported that the PAC had called on the government “to set up a Cabinet committee to monitor decisions taken by government-linked companies (GLCs), including Khazanah Nasional.”

This would enable the government to "oversee" the running of these firms, said committee chairman Datuk Shahrir Abdul Samad.The Johor Baru Barisan Nasaional MP said there was now a dire need for setting up such a committee as it could not only monitor the performance of these GLCs, but also define their role in nation building.

My question to the multi-party PAC is: Isn’t monitoring the decisions taken by government-linked companies (GLCs), including Khazanah Nasional, part and parcel of the responsibility of the Cabinet?

Is PAC saying that the Cabinet, which is the highest executive body in the land, has not been monitoring the decisions of the GLCs?

If the latter is the case, does it not amount to the Cabinet failing in its responsibility to the people?

Isn’t the GLCs decisions in their finality are also the decisions of the Cabinet? More so when they are major decisions like the sale of government assets.

Is Shahrir suggesting that in the specific case of the merger between the privately-owned ECM Libra Berhad and the government-owned Avenue Capital Resources Berhad the Cabinet was not involved?

Why is the usually outspoken Shahrir so coy when explaining the controversial merger or has Bernama misrepresented facts.

According to the national news agency, the following is Shahrir’s explanation of the issue, which was supposed to be the key item on the committee’s agenda:

He said on the merger between ECM Libra and Avenue Capital, the Finance Minister had explained that there was nothing unusual about the deal since it had obtained clearance from the Securities Commission (SC).

"To say we are satisfied (with the explanation given) is not right since the PAC consists of representatives of various political parties. We all have a different degree of satisfaction. The government feels that since the SC had no objection and the majority of shareholders of the two companies wanted to merge, then the merger should take place without any interference," Shahrir added.

To be specific, it was not the Finance Minister who appeared before the committee to explain the merger but the Second Finance Minister, Tan Sri Nor Mohamed Yakcop.

Has Shahrir changed? Is he, like the majority of elected representatives these days, is dancing around the mulberry bush and leading us up the garden path instead of seeking the truth?

Has the case of the smaller privately-owned ECM Libra buying the larger Government-owned Avenue Capital “cheaply” ceased to be a questionable deal because “the Finance Minister had explained that there was nothing unusual about the deal since it had obtained clearance from the Securities Commission (SC)?”

Does it mean that everything is fine or should be fine about the deal simply because the SC has no objection? Could it not have erred in its decision to allow the merger to go through?

It had erred. And in the case of the sale of Pantai Holdings Berhad to Singapore-based Parkway Holdings Limited in 2005 it erred badly.

That oversight forced Khazanah Nasional to fork out RM394 million to re-acquire the Pantai Holdings’ privatized assets (Fomema and Pantai Medivest) when Parkway paid only RM312 million to become controlling shareholder of the hospital company.

And is Shahrir and his PAC colleagues aware that on Jan. 17 the SC had also stated that it had no objection to the plan by Kuok Group to transfer the domicile of its plantation company, PPB Group Berhad, from Malaysia to Singapore?

The question is do we need another Cabinet committee? Is it not the duty of the Cabinet, and more specifically the Ministry of Finance, to scrutinize such a matter as the ECM-Avenue merger since it involved government assets?

What about Bank Negara? What was its opinion on the merger? Or is Bank Negara so free and its leadership so independent that no mention was made of its role in the merger?

Or is Shahrir, like a lot of pembesar (dignitaries) these days, has to thread carefully when dealing with matters that affect the favoured and the powerful like those involved in the ECM-Avenue merger?

It is disappointing that Shahrir and his committee should divert public attention away from the core issue by telling the Cabinet what it should and should not do.

What Shahrir’s audience would like to hear is not his lecturing of the Cabinet. What they want to hear is the PAC ruling on the merger between ECM and Avenue.

Could it be that Shahrir and his PAC colleagues have not been keeping pace with Cabinet affairs?

Are they not aware that there are today more than 30 Cabinet Committees? How many more such committees do we need?

What are our 30-odd ministers doing that so many committees have to be set up?

Could this administration by committees be the real reason for the deterioration of the public delivery system? Too much bureaucracy and passing the buck. So in the ECM-Avenue case, blame it on the SC.

With vast parliamentary powers given to them, Shahrir and his PAC colleagues should be dancing with the wolves instead of dancing around the mulberry bush and leading the people up the garden path.

The people want answers and not more excuses.


Following are members of PAC and their party affiliation

Chairman: Dato' Shahrir bin Abdul Samad (BN)
Vice-Chairman: Dr. Tan Seng Giaw (DAP)
Tan Sri K.S Nijhar (BN)
Dato' Hj. Mohd. Sarit bin Yusoh (BN)
Dato' Dr. Tan Kee Kwong (BN)
Datuk Wilfred Madius Tangau (BN)
Jimmy Donald (BN)
Dato' Lim Bee Kau (BN)
Datuk Ir. Hasni bin Haji Mohammad (BN)
Dato' Ismail Sabri bin Yaakob (BN)
Wong Nai Chee (BN)
M. Kula Segaran (DAP)
Dato' Kamarudin bin Jaffar (PAS)
Datin Seri Dr. Wan Azizah binti Wan Ismail (PKR)

Monday, February 26, 2007

ECM Libra merger: Dissatisfaction lingers in PAC

ECM Libra merger: Dissatisfaction lingers in PAC
Feb 26, 07 5:20pm

Second Finance Minister Mohamed Nor Yaacop’s explanation has failed to satisfy all the members of the Public Accounts Committee (PAC) on the merger between ECM Libra and government-owned Avenue Capital.PAC chairperson Shahrir Abdul Samad said the minister, during a briefing this morning, said there was nothing unusual about the deal since it obtained clearance from the Securities Commission (SC).”To say we are satisfied (of the explanation given) is not right since the PAC consists of representatives of various political parties. We all have a different degree of satisfaction.

“The government feels that since the SC had no objection and the majority shareholders of the two companies want to merge, then the merger should take place without any interference,” he was quoted as saying by Bernama.

The PAC, which has 14 members, is tasked to ensure government funds are well spent.

The ECM Libra-Avenue merger had raised eyebrows since when the deal was approved shortly after Prime Minister Abdullah Ahmad Badawi’s son-in-law Khairy Jamaluddin bought a RM9.2 million worth of direct stake in ECM Libra.

This led to wide criticisms as Abdullah was overseeing government-linked companies (GLCs) in his capacity as finance minister.

Subsequently, Khairy was forced by public pressure to sell off his shares in ECM Libra last August.

Cabinet committee

Meanwhile, Shahrir said the PAC has called on the government to set up a cabinet committee to monitor decisions taken by GLCs, including Khazanah Nasional.

This would enable the government to have a “political oversight” over the running of these firms, he added.

Shahrir said there was now a dire need for setting up of such a committee as it could not only monitor performances of these GLCs, but also define their role in nation building.

“This cabinet committee could also monitor the concession given by the government to some companies and the performance of GLCs which had been privatised…we need to ensure that the government’s investments are handled properly,” he told reporters after the briefing.

Overall, he said, GLCs and Khazanah Nasional accounted for about RM114 billion in government funds, and since this was a huge figure it was only right that a cabinet committee be formed to monitor their progress.

“We already have a cabinet committee for high impact investment. But this committee only handles certain industries. We need a committee to ensure GLCs are on the right track,” he added.

Advisory role

He said the PAC could not monitor GLCs because it had an advisory role and not a decision making one.

“We have a role to ask but not to decide…we do not execute decisions taken by the cabinet but look at the effects of the decision taken. If they slack (in the decisions) then we can advise them,” he said.

He said the proposal for the formation of a cabinet committee to monitor GLCs was because the PAC wanted the government to be more vigilant in tracking the performance of these companies.

Admitting that there were weaknesses in the present system of keeping GLCs in check, Shahrir said the drawbacks needed to be rectified as they involved public funds.

Commenting further on the briefing, he said various issues were discussed including the implementation of the New Economic Policy and employment for non-bumiputeras at GLCs.

“We also raised the issue of government companies which had been privatised but failed in their ventures…reviving these companies had required the government to fork out more money.

“We also enquired about government concessions given to private companies, which had been listed and since they are listed, foreigners can buy into these companies, gaining advantage of the government concession,” he added.

Sunday, February 25, 2007

Ripening Durian

Ripening durian
by Sim Kwang Yang
Feb 24, 07

DESPITE the PM’s often repeated statement that the next general election is not likely to be held soon, the vote is obviously very much on the mind of politicians, journalists, and political pundits throughout our land.

Obviously, the PM must have received worrisome reports from intelligence agencies about how people feel generally on the ground. In the last twelve months at least, the natives have been restive, and the Chinese and Indians have been seething with discontent.

You can analyse until the cow come home why suddenly Malaysians of all races begin to harbour doubts about the credibility of the ruling parties in delivering the good life, but surely, like most modern democracy, the economy must sit very much at the centre of this tornado of resentment.

In the last month or so, there has been an apparent attempt to change this public perception that we are now better off than before. The shares market is finally climbing towards the level similar to that before the 1997 disaster. All sorts of statistics about our booming economy dominate the front pages of our newspapers. Ambitious projects to revive the economy and huge government expenditure under the 9th Malaysian Plan are touted weekly.

Apparently, our trade figure has surpassed the one trillion mark for the first time. Our unemployment rate is low, and so is our consumer price index. Our GDP growth rate continues to hold at between 5 to 6 %. All these numbers indicate a prosperous booming economy. The people should be enjoying a high standard of living, and happily support the government during the pending general election.

Unfortunately, in this country, we do not have credible professional public opinion poll, like the Gallup Poll in the US. Most first world nations have regular opinion polls to gauge the mood of the people on any subject at any one time. That we have yet to see such professional poling is an indication that we are very far from being a first-world nation.

Grey area

We can only speculate as to the reason why we do not have such polls in Malaysia.

We do know that both the ruling parties and the opposition have their own solid support base, consisting of die-hard supporters who will vote for the object of their loyalty, no matter what. Generally speaking, the support base for the ruling parties will be far larger and more solid than that for the opposition. The ruling parties do have the advantage of incumbency, and possess such resources and political largess as to consolidate their power base with ease.

Between the die-hard support bases for the BN and the opposition, there exists a grey area of undecided voters, ranging from very intelligent voters who will weigh and compare the two contending sides, to voters who simply do not have a clue about politics. Their size in any constituency varies, but small they may be in numbers, their polling trend may and often does change the outcome of any keenly contested election. One could say that these “fence-sitters” are actually the king-makers in any general election.

Seasoned campaigners know well that no effort and expense should be spared in wooing these “fence-sitters”. Loyalty to their race and religion often works, and so does intimidation and fear. In Sarawak and Sabah, cash usually speaks louder than words.

Everybody loves a winner. Strange as it may sound, there are actually many fence-sitting voters who will vote where the wind blows. Somehow, if they get an inkling that in any one constituency, the opposition is enjoying strong support, they will be better fortified against bribe and intimation to vote for the opposition as well. There is always this group psychology of strength in number at work. This trend seems to apply to both informed and uninformed voters.

Therefore, it is not to the interest of the ruling parties to allow professional credible public opinion polls. For one thing, if the government is getting unpopular, a transparent poll showing it to be so may trigger off and create a chain-reaction of discontent, encouraging more support for the opposition. For another, without independent objective polls, it is far easier for the BN controlled media to manufacture the public perception that all things are rosy and well.

Public perception may not be the end all and be all in a democracy, but it is nearly that. Take the American Presidential election for instance. There, the presidential election is now shut off to all except those who are very wealthy themselves, or who can raise billions of campaign funds, much of which will go to TV advertising. In this age of media illusion being mistaken for reality, Abraham Lincoln would never be elected because of his less-than-handsome feature.

Trickle down effect

The latest round of spin about how well our economy is doing is an indication that the next general election is near at hand. At the same time, the PM may also wish for the massive injection of public investment into the national economy to bear fruit. That means allowing the 9th Malaysian Plan to gestate. The trickle down effect will have to take some time.

The critical date to watch would be our nation’s 50th Independence Day this year. With the usual outbursts of euphoria and hysterical patriotism usually associated with such an event, the national mood would be favourable to the ruling partiers. Then again, somewhere down the line in October perhaps, the Budget Session of Parliament is another occasion for the government to shower the nations with a whole host of goodies.

Without access to privileged information, and wild-guessing entirely from my comfortable armchair, I would predict that the next general election could possibly fall sometime after October this year, and more likely to happen at the beginning of next year.

The next 12 moths are crucial for all parties eyeing the next general election with great interest.

It will be even more crucial for the PM. Obviously, his honeymoon with the Malaysian electorate is over. There were great expectations of what he could deliver when he led the BN to a landslide victory in 2004. That kind of expectations will now return to haunt him.

His baggage will now wear on him like the Himalaya mountains. His own party and the parties within the ruling coalition are cracking at the seams. Having been liberated from the iron claws of the previous PM, the media have uncovered many huge hornet’s nests and giant skeletons in the BN closet. The nation is awash with a plethora of highly inflammable issues.

Above all, the people are hard up, no matter what the official statistics say about our booming economy.

A recent poll conducted by an independent body has shown that as of now, if an election were held today, two-third of the Chinese would vote for the opposition, while one-third of the Indians and the Malays would do likewise.

The PM may not be all that worried about a swing of Chinese votes to the opposition, as long as he holds on to the Malay base in rural and semi-rural constituencies, especially those in Sarawak and Sabah. Given the decades of electoral gerrymandering, the proportion of Chinese majority seats in the country has declined with each delineation. Even if no Chinese votes for the BN, the ruling parties may still be in power.

Anwar’s biggest challenge

This time around, however, there is a difference. There are many seats where no single ethnic community enjoys a simple majority. There are many seats where the Chinese votes count from between 5 to 15% of the total votes within the constituency. If there is a keen contest between two equally powerful candidates, the Chinese voters may find themselves playing role of king-makers. Extrapolate this situation to the whole country, and the Chinese votes would suddenly become crucial in deciding the national balance of power – if only they know it, and know how to make use of this fact to their advantage.

The racially mixed seats ought to be fertile hunting ground for Parti Keadilan Rakyat (PKR). This young party has been in a political doldrums, even after the release of Anwar Ibrahim. The next election is certainly the do-or-die battle for them. It may also be Anwar Ibrahim’s severest test in his entire political career.

No single opposition party can ever dream of threatening the BN grip on power naturally. Our nation’s politics is condemned to be one of alliance. So far, no meaningful alliance of opposition parties has ever appeared on our nation’s political stage.

Whatever his political baggage may be, Anwar Ibrahim is the X factor in opposition politics. He is still the only one who can work as both a pivot and a catalyst in forging a rainbow coalition of opposition forces and making a significant dent in fortress BN. That makes the next general election more interesting to watch.

During fruiting season, the durians that are almost ripe will fall of their own accord. The same phenomenon applies to politics as well. What kind of durian will we get after the next election is anybody’s guess.

About the Author

SIM KWANG YANG was DAP MP for Bandar Kuching in Sarawak 1982-1995. Since retiring in 1995, he has become a freelance writer in the Chinese-language press, and taught philosophy in a local college for three years.He is now working with an NGO in Kuala Lumpur, the Omnicron Learning Circle, which is aimed at continuing learning for working adults and college students. Suggestions and feedback can reach him at:

‘An Examined Life’ appears in Malaysiakini every Saturday.

Remember the ECM Libra-Avenue Capital debacle?

Remember the ECM Libra-Avenue Capital debacle?
by Ibnu Hakeem

Government sources who are fed up with the Government cover-ups say that the Public Accounts Committee (PAC) will be revisiting the controversial ECM Libra Bhd-Avenue Capital merger which came to the fore in August last year. The PAC will be reconvening at 9:30 am on Monday, 26th February 2007 at Parliament House.

This time around, Second Finance Minister Nor Mohamed Yakcop will be called to give testimony over this controversial merger. Sources expect a choreographed performance. Nor Mohamed Yakcop is expected to speak in general terms about the Government’s investment and divestment policies over its own assets, hence diluting attention from the more pressing questions regarding the controversial merger which have not yet satisfied public opinion.

The PAC last spoke on the matter in August 2006 but without any satisfactory conclusion. The controversy over this merger arose after it became known that the relatively unknown - up to that time - ECM Libra had swallowed up the gargantuan taxpayer-owned company, Avenue Capital, which had a cash hoard of RM3 billion in its reserves.

The shareholders of ECM Libra include Kalimullah Maseerul Hassan, who hails from the riverbank at Maslampatti, Azamgard in Uttar Pradesh, India, who is the Prime Minister’s chief ‘cheerleader’ and also Khairy Jamaluddin - the Prime Minister cum Finance Minister’s son-in-law. It is widely believed that the merger was brought to a super quick conclusion without approval from the Cabinet or even from any Minister.

Speaking on the controversy in August last year, PAC Chairman Shahrir Samad was quoted in the media as saying the merger between ECM Libra and Avenue raised troubling questions. Shahrir had said, “In principle, there is a conflict of interest if the minister’s family member is involved. But here, maybe there was no minister’s consent because the matter was not brought to the cabinet - it was decided between the ministry’s officials and the party which made the offer.”

Even more perplexing were the media reports that ECM Libra took over Avenue Capital without any cash outlay. To sweeten the merger further there was also a valuation of ‘goodwill’ to the amount of RM360 million. The danger in valuing ‘goodwill’ is that it is an intangible asset which can be hyped up to be worth more than its inherent value.

To date, the PAC has refrained from making any public statement about this RM360 million goodwill. The result of this transaction is that the minnow, ECM Libra, has ended up swallowing a whale, Avenue Capital. The greatest mystery is who exactly approved this sale of a prized taxpayer-owned asset to a company that is owned by the Prime Minister’s chief ‘cheerleader’ as well as his son-in-law? Till today, this question remains strangely unanswered - even by the PAC.

Civil Servants do not and cannot make decisions to sell companies with RM3 billion in cash assets all by themselves. Even a KSU (Ketua Setiausaha) will not make a decision to sell Avenue Capital to a private company unless he has received specific approvals from the Minister of Finance. Since the Minister of Finance is Abdullah Badawi, there is a clear cut conflict of interest if he approved the sale. The approvals should also not come from the Second Finance Minister because he has little or no authority to approve such transactions either.

Therefore the PAC should make public just who exactly approved for the sale of a government prized asset with RM3 billion in cash reserves to a private company owned at that time by Kalimullah and Khairy? Just how did it happen? If the Cabinet, the Minister of Finance, the Second Finance Minister, or the KSU, did not approve the sale then was it approved by a Chief Clerk? The public wants to know and the Public Accounts Committee is obligated to tell.

At that time, Khairy Jamaludin, who is also Umno Youth deputy chief, clarified that he borrowed money to buy a substantial stake in the ‘fledging’ (at that time only) financial advisory company ECM-Libra. This was before the merger with Avenue Capital. According to Bernama, Khairy had said, “I borrowed the money ... everything is loaned, not my own money. Luckily, there are people who want to give loans (to me). I took a loan from them (ECM-Libra) who sold their shares to me.”

Exchange filings showed that Khairy bought 13 million shares in ECM Libra at 71 cents per share in three separate transactions from acquaintance and ECM-Libra’s chairman, Kalimullah Masheerul Hassan, chief executive officer, Lim Kian Onn, and chief operating officer, Chua Ming Huat. Khairy was made a director of ECM-Libra in July 2004, not long after his father-in-law, Abdullah Ahmad Badawi, became Prime Minister. Later, after the controversy broke, Khairy sold some of his shares in ECM Libra.

ECM Libra is also a Financial Institution (a so-called investment bank), which means it is also under the purview of the BAFIA (Banking and Financial Institutions Act). Since Khairy Jamaluddin has publicly admitted to taking a loan from ECM Libra to buy its own shares, the PAC should assure the public about this aspect of the transaction too.

Like all good UMNO members, PAC Chairman Datuk Shahrir Samad is a staunch supporter of Abdullah Badawi. Said Shahrir’s brother, Khalid, there is no other man Shahrir hates more than Mahathir and he would do anything to oppose Mahathir, even supporting those Mahathir do not like just out of spite. No wonder then that Abdullah Badawi would get the PAC’s backing on this matter if it serves to upset Mahathir. Kalimullah Maseerul Hassan, on the other hand, owns a house in London and has already sent his children to school in Britain. Abdullah Badawi has been told by the security chief that Kalimullah is bad news and has failed the security agency’s security clearance but the Prime Minister just brushed it off and said, “He is my friend.”

How, in light of all this, will Shahrir and the PAC come in with an untainted verdict?

Future shock: Asia is running out of gas

Future shock: Asia is running out of gas
By Alan Boyd

[...] From the global perspective, the US Department of Energy has calculated that oil demand will grow by 35% between 2004 and 2025 - from 82 million barrels per day to 111 million - largely because of the voracious appetite of newly industrializing countries such as China and India.

Output would need to rise by a similar amount. However, this assumes that the major producers, including Saudi Arabia and Nigeria, will double or even triple their production; few independent analysts now believe this will be possible. A greater likelihood is that crude-oil supplies to Asia will begin to dry up within two decades.

"Today there is a growing recognition that no single energy technology can replace fossil fuels, but there is still no recipe that tells us how to combine energy technologies into a healthful brew that can save our planet and our civilization."

Biofuels, like other alternative forms of energy, will become competitive once the petroleum begins to run out. But the ethanol mix isn't the only blend economic planners will have to get right before that unnerving day dawns. [...] Full article, click here

The Racial Divide Widens In Malaysia

The racial divide widens in Malaysia
By Ioannis Gatsiounis

[...] The push for more democracy in authoritarian Malaysia leaves its ethnic Chinese and Indian minority groups particularly vulnerable - a fact reflected in the racial bashing at this year's UMNO assembly. At the same time, UMNO's preoccupation with racial politics raises growing doubts about its ability to lead the country forward faced with the challenge of China's economic emergence. The party leadership has openly acknowledged the need for Malaysia to change course if it is to remain competitive with its fast-rising neighbors.

Economic growth slowed from 7.2% in 2004 to 5.2% last year, while foreign investment dropped 15% to $3.9 billion. Prime Minister Abdullah Badawi has promoted his concept of Islam Hadhari, or Civilizational Islam, a modernist interpretation of the faith that stresses moderation and technological and economic competitiveness. In that direction, his party has also introduced plans to transform Malaysia into a regional information technology, agricultural and biotech hub.

"We need an economic transformation," Abdullah said in his opening address at the UMNO assembly. Yet tight curbs on personal freedoms, implemented to curb racial tensions, have hindered the open inquiry and innovative spirit necessary to achieve Abdullah's vision. The next phase of economic development will require coincident social transformation, reforms the current race-obsessed political leadership is reluctant to implement.

At the annual assembly, meanwhile, UMNO youth chief Hishammudin Hussein urged the government to reject proposals for an inter-faith commission intended to foster better understanding among Malaysia's various religious groups.

He brandished a Malay dagger, known locally as a keris, when speaking. Some delegates, it seemed, urged him to go further. "Datuk Hisham has unsheathed his keris, waved his keris, kissed his keris. We want to ask Datuk Hisham, when is he going to use it?" said UMNO Perlis delegate Hashim Suboh. [...]

Access full article here

Saturday, February 24, 2007

Why the difference of RM6.4 billion or RM9.85 billion in MITI and UNCTAD figures for 2006 FDIs

Saturday, February 24th, 2007
Lim Kit Siang

For the past two weeks, Malaysians had been fed with the news that good economic times are back, with the country drawing a record RM20.2 billion in foreign investment in manufacturing, a record 2006 trade volume breaching RM1 trillion, rocketing share prices, a strong ringgit and rising foreign reserves.

The Prime Minister Datuk Seri Abdullah Ahmad Badawi had denied that an imminent general election is on the cards because of the slew of good economic news to generate a “feed good euphoria” reminiscent of the period before the 2004 general election.

Although the next general election will not be held in the next few months, everyone would expect the holding of early general elections in the next eight to 14 months before April 2008, when Datuk Seri Anwar Ibrahim would regain his civil liberties including the right to stand for elections at the end of his five-year disqualification from the date of his prison release.

But are the good economic times back for the people of Malaysia? If so, a little-noticed announcement on Chinese New Year’s Day has sent out a very different message.

On February 18, 2007, Bernama reported that the government had scrapped its earlier plan to extend the textbook loan scheme to all school students, both at primary and secondary level, from next year. Deputy Education Minister, Datuk Noh Omar was quoted as saying that the move was scrapped as the ministry would incur an extra sum of over RM100 million yearly.

When the government has to cancel the textbook loan scheme for all students because it cannot afford the additional expenditure of RM100 million, it strains credibility to believe that the government and the country is aflush with funds.

Malaysians have been told in the past fortnight that the country is back on the global investment map, in reversal of the gloomy news in the past few months that Malaysia is in danger of dropping out from the radar of foreign investors because of increasing lack of international competitiveness, whether in efficiency of public service, quality of education, good governance, transparency and integrity.

The United Nations Conference Trade and Development (Unctad) World Investment Report 2006 last October revealed unflattering figures about Malaysia for the year 2005, viz:

• Foreign direct investment (FDI) in Malaysia dipped to US$3.97 billion in 2005 from US$4.62 billion in 2004;

• For the first time since 1990, Indonesia managed to overtake Malaysia in drawing FDIs. Inflows to Indonesia surged by 177% to US$5.26 billion in 2005. Indonesia registered a 177 per cent hike in FDI from US$1.89 billion in 2004 to US$5.26 billion in 2005, while Malaysia suffered a 14.3 per cent shrinkage of FDI.

• As a whole, FDIs to South, East and South-East Asia reached a new high of US$165 billion in 2005, a 19% increase over 2004, with China (US$72 billion), Hong Kong (US$36 billion) and Singapore (US$20 billion) as the biggest receipients of FDIs in 2005.

Ten days ago, the Minister for International Trade and Industry, Datuk Seri Rafidah Aziz gave a glowing picture of foreign investments for last year, with one mainstream newspaper declaring: “Malaysia is back on the global investment map”.

She announced a record RM46 billion achieved last year – RM20.2 billion of approved foreign investments in manufacturing as compared with RM17.9 billion in 2005 and RM25.8 billion in domestic investments compared with RM13.1 billion in 2005.

Rafidah’s FDI figures however do not tally with the latest Unctad figures released in its “Number 1, 2007 Unctad Investment Brief” which has given an even lower estimate for FDI for Malaysia for 2006 as compared to 2005.

In its preliminary estimates of FDI inflows in 2006, Unctad figures for Malaysia see a shrinkage of 1.6 per cent to US$3.9 billion from US$4.0 the previous year, while FDIs for the whole region of “South, East and South-east Asia” register an increase of 13.1 per cent from US$165.1 billion in 2005 to US$186.7 billion, with Thailand recording a 114.7 per cent increase from US$3.7 billion in 2005 to US$7.9 billion and Singapore a 58% increase from US$20.1 billion in 2005 to US$31.9 billion.

The Prime Minister should explain the RM6.4 billion difference in MITI’s FDI figure of RM20.2 billion (or US$5.7 billion) for 2006 and UNCTAD’s preliminary estimates of US$3.9 billion (RM13.8 billion) for the same year.

This difference would increase to RM9.85 billion if we take into consideration two qualifications to the MITI figures released by Rafidah:

Firstly, the figures are for approved FDI figures for the year which are very different from actual FDI inflows for the year. For instance, for 2005, approved FDIs in manufacturing was RM17.9 billion (US$4.71), but actual FDI inflow into the country was US$3.97 (RM15.1 billion) – a shortfall of RM2.8 billion.

Secondly, the FDIs in manufacturing represents only 75% of total FDIs, which will bring the difference between FDIs for manufacturing as approved and actual inflows for 2005 to RM6.6 billion.

On the same basis that some 75 per cent of FDI inflows in 2006 was for manufacturing, then the difference between MITI and Unctad figures for FDI inflows for manufacturing would increase further to RM 9.85 billion – which is no small figure.

A full and proper explanation for these different set of FDI figures should be given to the people in keeping with the government’s pledge of accountability, transparency and good governance.

Friday, February 23, 2007


by C. S. Kuppuswamy

“We need to go beyond race-based politics. If you continue to harp and support this racial equation, you will never be able to overcome racial divisions” – Anwar Ibrahim, Former Deputy Prime Minister

“Malaysia’s first serious survey of race relations in more than 50 years indicates that behind the government- promoted fa├žade of unity and peace, racism runs deep in one of Asia’s multi-ethnic melting pots” -Baradan Kuppusamy (AT on line 24 March 2006)


Malaysia is a multi racial country with a population of 26 million comprising Bumiputeras 66 % (consisting of Malays, Orang Asli, Sabahans and Sarawakians), Chinese 26 % and Indians 8 %. Despite the fact that since independence in 1957, the country is being ruled by a coalition of political parties of the three main races, racial politics has prevailed in this country till date. Periodic efforts by the leadership to forge a Malaysian identity has been thwarted by the Malays in UMNO (United Malays National Organisation) – the predominant party in the coalition. In the last UMNO Annual General Assembly meeting held in November 2006, some members by their fiery speeches whipped up the racial sentiments of Malays much to the chagrin of the other races. Prime Minister Abdullah Ahmad Badawi had admitted in a recent meeting that race relations in Malaysia are “fragile” and described the worsening relationship between the Muslim Malays and the minority ethnic Chinese and Indian communities as a “disease” which must be tackled openly (Channelnewsasia report of 07 December 2006).

The Role of Islam

Islam is the official religion of Malaysia, a secular democracy with more than 60 % of the population being ethnic Malays while the rest are Christians, Hindus, Buddhists, etc. According to the Constitution, Malays ought to be Muslims or else they are not legally Malays and they will lose their privileges under the constitution For Malays there is a sharia court which has legal jurisdiction over their religious (Islam) and family (Muslim) issues. This is not applicable to non-Muslims. By law the civil courts have no jurisdiction in respect of “any matter” within the jurisdiction of the sharia courts.

The Islamic Affairs Department of the Government is responsible for administering sharia in the country Passage of new laws by this department with fundamentalistic overtones have come under sharp criticism even by Muslim women and moderate Muslims.

There is freedom of religion for people of other faiths to practice. However there have been quite a few instances of churches and Hindu temples being demolished by the authorities as well as by some fundamental extremist groups with the connivance of the local authorities. The political leaders are trying to play down these instances as stray cases where these places of worship were on illegal constructions. There is also resistance to interfaith meetings and organisations. To quote Fong Po Kuan, an opposition MP “There is a creeping Islamisation in our society and this isn’t appropriate because we are a multi-religious, multi-racial country” (BBC News 16-05-2006).

The Islamisation started in the later years of Dr. Mahathir’s reign, when the ruling coalition wanted to substantiate their Islamic credentials which were being questioned by the fundamental opposition party PAS (The Islamic Party). Since Ahmad Badawi, a devout Muslim, took over as Prime Minister in October 2003, the fundamentalists have been emboldened as he is not as firm as his predecessor in dealing with such sensitive issues pertaining to race and religion He has come up with a new concept known as Islam Hadhari (Civilisational Islam) which has a more moderate approach that emphasizes development consistent with the tenets of Islam. However the majority of the Malays do not seem to be enchanted by this line of thinking.

1969 Racial Riots

The Chinese – Malay race riots in Kuala Lumpur began on 13 May 1969 and is often referred to as the May 13 incident though it lasted for some more days. This was the aftermath of a major defeat of the ruling UMNO at the hands of the Chinese Opposition Parties (Democratic Action Party and the Gerakan) in the general elections held on 10 May 1969. In the riots according to official figures, there were around 200 casualties and approximately 150 wounded. More than 700 cases of arson and destruction or damage to 200 odd vehicles were reported.

This resulted in the declaration of a nationwide state of emergency and imposition of curfew in the affected areas. Parliament was suspended until 1971. The press was gagged and a National Operations Council (NOC) was set up to go into the various theories and reasons attributed to the eruption of the riots. The NOC’s report on the riots stated “The Malays who already felt excluded in the country’s economic life, now began to feel a threat to their place in the public services” which implied that this was a cause of the violence (from Wikipedia – the free encyclopedia).

The New Economic Policy of 1970 came into being as a result of these riots, with a commitment by the new government to bring up the Malays by various affirmative action measures.

The riots led to the expulsion of Dr. Mahathir Mohamad from UMNO and inspired him to write the famous book “The Malay Dilemma”.

The New Economic Policy

This was the policy brought into force in 1970 for introducing measures for affirmative action as a consequence to the 1969 racial riots. To offset the imbalance between the minority Chinese (controlling the economy) and the majority Malays (farmers and fishermen), the policy was introduced with quotas and reservations for Malays in jobs, educational institutions, share holdings in companies, housing, acquisition of commercial property and many more privileges.

The policy which was for a period of 20 years till 1990 did achieve the aim of bringing up the Malays in the professional and business class. Even after 1990, the policy was extended under the new name “National Development Policy”

There is a general feeling with most of the Chinese and Indians and some of the Malays as well that the policy has outlived its utility and is negating the very aim. There is a clamour for abolition of the policy for reasons such as; Malays have developed a culture of dependency, non-Malays have become more enterprising and better educated because of the heavy odds and competition. However Malays especially in UMNO want the affirmative action to continue for some more years as the targets set in the policy have still not been met. In pursuing this policy, selective patronage by the leaders has resulted in persistent allegations of corruption and mistrust in the party and has created differences even within the Malays.

The Asian Strategy and Leadership Institute (ASLI), a leading Malaysian think tank, released a report in October 2006 which indicated that the Malay ownership of private equity is as much as 45% as against the official figures of about 19%. The report questioned the need to continue the affirmative action programme. Under pressure from different sources ASLI withdrew the report for the reason that the author had erred in his research. However a debate on the continuance of the affirmative action policy had flared up in the political circles for which the Prime Minister had to assure the opposition that Government is transparent in its policies favouring the Malays (AP-17 October 2006).

Edmund Terrence Gomez in his article “The Perils of Pro-Malay Policies” (FEER –September 2005) analyses this issue in great detail. He writes that “for affirmative action adopted 35 years ago, the heavy price paid in terms of economic inefficiency and lost growth suggests Malaysia should continue progressing toward a more meritocratic society”.

“The Malay Dilemma”

The book with this title was written by Dr. Mahathir Mohamad, in 1970 when he was expelled from UMNO. He was readmitted to UMNO in 1972 and rose to become the Prime Minister of Malaysia for a tenure of over two decades.

The book deals at length on the characteristics of the Malay race, the Malay language, and the necessity for affirmative action in order to relieve the Malays from the economic subjugation of the Chinese. The dilemma was whether the Malays should seek and accept such measures or not, though Dr. Mahathir advocated such affirmative action.

After nearly 30 years, Dr. Mahathir spoke on the same subject in July 2002 (at the Harvard Club of Malaysia) and came up with The New Malay Dilemma. In this speech he dealt on the progress of the Malays in these three decades in various fields. However he lamented that the Malay race has not culturally changed nor have they changed their attitudes. According to him the New Malay Dilemma is whether they should or should not do away the crutches that they have got used to, which in fact they have become proud of.

Taking this idea, there have been frequent debates on whether to do away with this affirmative action or not and if so, in what time frame or through which methodology.

The Survey

A telephonic survey was conducted in March 2006 by the Merdeka Centre for Opinion Research. The survey was commissioned by the New Straits Times and supported by the Friedrich Naumann Foundation. 1200 Malaysians of various hues participated in the survey. Some of the salient findings extracted from a media report are:
  • The majority of the races find comfort and security in their respective ethnicity.

  • In general, Malays are lazy, Chinese greedy and most Indians cannot be trusted.

  • Few of the respondents said they had eaten often with friends from other races in the last three months while more than 30 % said that they have never had a meal with people of other races.

  • More than 40 % of participants did not consider themselves Malaysians first.

  • More than 45 % of the participants consider that voting has always been on racial lines

  • More than 50% of the participants blamed politicians for racial problems

  • Around 70% said that they would help their own ethnic group first.

  • The majority of three main races had little knowledge of the culture and traditions of the other races.

  • There have been mixed responses for this survey. The findings have been disputed on the plea that it does not represent a true picture of the ground situation. The social organizations wanted all political parties that restrict membership on racial or religious grounds to be outlawed. “What the survey clearly shows is that the various races live peacefully but separately’ said Sivanesan, a leader of the Opposition Democratic Action Party.

    Efforts by the Government

    In the first half of the over two decade reign of Dr. Mahathir Mohamad, the country was seen as a progressive secular democracy with a strong economic growth and hence foreign investments were flowing in. He had firmly dealt with issues connected with the rising Islamisation and racial disparities. However the situation had progressively changed in his later years.

    Measures were taken to popularize English education both from the economic point of view as well as a means for bringing in racial unity.

    The concept of “vision schools” was brought in where students had to mingle with the other races in the sports, assembly halls and eating places while they had classes in their own respective languages.

    A National Service Programme was launched in 2004 where youths of different races were nominated to undergo a camp for about three months for a training programme, during which they would come to know the culture and traditions of the other races.

    These small measures neither had the desired impact nor had the support of the general public.


    The government deserves praise for the fact that no major racial riots have taken place since 1969.

    Because of the domination of the race-based political parties (both in the ruling front and the opposition) since independence, political activity continues to be on racial lines. The few multi-racial parties have not made any headway and hence coalition rule of the major race based parties has become the order of the day.

    The rise in fundamental or extremist overtones of Islam is creating a feeling of insecurity among the Chinese and the Indians. This trend in conjunction with racial polarization is affecting the flow of the FDI and in turn the economy of the nation.

    Efforts by the government to forge a Malaysian identity have been half-hearted, ill planned or implemented in haste. The support from the races for such efforts is also lacking.

    The continuance of the affirmative action policies without a time frame has also been a bone of contention for the Chinese and the Indians, besides encouraging corruption and patronage politics which has been creating rifts among the Malays as well.

    The country will be celebrating 50 years of independence in 2007. The Prime Minister and the rest of the leadership are aware of the fragile racial relations in the country. This awareness has to be translated into some definitive measures for harmonious coexistence of the races and for a more successful Malaysia.