Archive for December 2013

Tolls and hikes short-circuiting Malaysia future

December 27, 2013

The simultaneous increase in fuel and sugar prices, electricity tariff and toll hikes have got Malaysians worried and bewildered as to how they will manage their household expenses. Compounding matters will be the GST that will kick in and the rakyat in 2015. The already weakened ringgit and the sudden withdrawal of subsidies on essential goods will hit hard where it hurts most – the pocket.

Not unlike Marie Antoinette, the prime minister is obstinately insisting that the people can afford these massive hikes. Talk about telling the masses to eat cake, he adds insult to injury by saying these increase not be a burden!

Waking up to reality

The entire Cabinet and prime minister suddenly woke up from their slumber. It dawned on them that the budget deficit, huge public and household debt have to be narrowed. What is shocking is that for 16 continuous years, the deficit and the mounting debt did not raise any alarm bells.

In fact the pro government economists and main stream media stoically  reminded the rakyat that economic fundamentals were positive and our country is on track to become a developed nation by 2020. But all that propaganda did not convince the world. Fitch Rating Agency, in a startling report, downgraded Malaysia from stable to negative. And the game was up.

The media propaganda failed and the even more frightening –instead of being developed Malaysia by 2020, may be a bankrupt nation!

The acrimonious Fitch report had a jolting effect that aroused Malaysian government from its deep slumber and self-delusion. It suddenly dawned upon the Cabinet that the lies they had believed to be the truth, were, in fact, lies.

Shocking tolls tax rakyat to brim

The 16 consecutive budget deficits and the huge debt suddenly had to be addressed, checked and reversed immediately. To appease the fund managers and rating agencies, the government is hurriedly moving, albeit, rather clumsily to make band-aid changes to gapping wounds. Wounds that needs massive surgery. In good times when the government privatized essential services like electricity and water supply, highways telecommunications to name a few, it  was concerned about assuring the service provider’s future profits and not the people’s welfare.

The government created monopolies’ that were provided with easy loans to be written off later. UMNO cronies and new government linked companies were created into being to acquire lucrative under-valued privatized monopolies. And government was on hand to absolve their losses and ensuring future profits.

Toll concessionaires and independent power producers signed shock-proof contracts that not only guarantee future returns, but included provisions to extend and raise duration and tariffs. They are already earning billions if not hundreds of millions and yet the government continues to raise toll rates.

PLUS HIGHWAY BHD owned by EPF and KHAZANAH earns the following:

                                               2009         2010        2011 

Revenue (billion)                      3.179        3.352       4.098

Profit before tax (billion)           1.624        1.777        2.515

It is said that the cost to maintain road is only about 6% of revenue. Such a cash-generating concessionaire’s do not need any subsidy or toll hike. Yet PLUS has the right to collect toll till 2038 with right to hike toll rate every 3 to 5 years.

TNB’s 2012 YE profit is RM4.6 billion and 2011 YE profit is RM4.2 billion. Yet effective 1st January 2014, all consumers have to pay higher rates which will bring another one billion into TNB coffers. The 38.53 cent per kWh hike will add 1 billion ringgit to TNB coffers. Consumer’s subsidy approximately 5 billion to be stopped but IPPs subsidy about 19 billion continues.

Feeding bloated uncivil service

Having an over bloated civil service, which constitutes 4.68% of the population is rather unimaginable given the massive inefficiencies at all levels. Compare this figure to Indonesia that has only 1.79%, Philippines 1.81%, S Korea 1.85% and Thailand 2.06%. If anything, it is a tremendous drain on the budget. Civil servants emoluments will make up RM63.6 (30%) billion out of RM217.7 billion the country’s operating expenditures in 2014. Having such a huge civil service, the Malaysian government still paid RM7.2 billion to private consultants since 2009.

Race to the finish…

Malaysians are carrying the burden of paying for their bloated civil servant’s incompetence, bailing UMNO cronies and funding the raising BN election campaigns funds. Winning elections has become very costly for BN. Since Datuk Seri Najib Tun Razak took over as finance minister in 2009, the debt to GDP ratio grew from 38% to present 54%.

Is Malaysia racing to become a developed nation or is it heading towards a catastrophically bankrupt nation come 2020. Unfortunately, the rhetoric is about being a developed nation. But the actual statistics tell another tale.

With huge civil service which is unproductive and high debts resulting in heavy debt servicing cost, Malaysia government will resort to privatize more essential services without subsidies. And these will add more financial burden on the people. And the vicious cycle becomes even more frequent, and faster, strangling the rakyat further. Indeed, let them eat cake…with less sugar.





Three years on, is it an Arab Spring or Islamist Fall? – Veeramalla Anjaiah

December 20, 2013

December 20, 2013

Three years ago, a policewoman insulted a small Tunisian vegetable seller, Mohamed Bouazizi, by slapping him in public and seizing his vegetable cart in the town of Sidi Bouzid.

With the humiliation and injustice, the helpless Bouazizi on December 17, 2010, set himself on fire in protest. His self-immolation ignited a much bigger fire in North Africa and the Middle-east, which became popularly known as the “Arab Spring”.

In the beginning, many people were stunned by the rapid spread of the Arab Spring from Tunisia to Yemen, which was unprecedented in the recent history of Arab people.

It could be compared only to the great 1916 Arab revolt against the Ottoman rulers. The unrest turned into bloody battles and sounded a death knell for Arab despots like Zine Abidine Ben Ali in Tunisia, Muammar Qaddafi in Libya, Hosni Mubarak in Egypt and Ali Abdullah Saleh in Yemen, who were all overthrown.

The early joy and enthusiasm generated from the fall of these Arab dictators didn’t last long and were replaced by bitterness and a sense of impending apocalypse.

According to various estimates, around 180,000 people were killed in the three years since the beginning of the Arab Spring. The United Nations estimates that more than 120,000 people have been killed in the brutal Syrian civil war alone.

Around 30,000 to 50,000 people were killed in the Libyan revolution. The tumult in the Arab world has displaced more than 6 million people, many of whom have lost everything in the conflict.

According to HSBC bank estimates, more than US$800 billion has been lost in the three years of unrest.

The lackadaisical response from both Western countries and progressive and secular forces in the Arab world provided a golden opportunity for Islamist groups like the Muslim Brotherhood in Egypt, Ennahada (Renaissance Party) in Tunisia and the moderate Islamist Justice and Development Party in Morocco to fill the power vacuum and reap rewards from the Arab Spring. A similar situation has existed in Libya, Yemen and other countries. In many nations, extremist Salafist groups also exploited the situation.

But the outcome has not been uniform. Morocco and Jordan rightly anticipated the power of Arab Spring and acted quickly to fulfill the aspirations of the people by introducing political and economic reforms. Both Moroccan King Mohammed VI and Jordanian  King Abdullah II, who are very popular in their countries and close friends of the US and many European countries, played a key role in creating a model for Arab Spring nations, avoiding bloodshed.

US President Barack Obama praised the Moroccan king for his bold economic and political reforms recently during the latter’s visit to Washington.

The regimes in Algeria, Bahrain, Kuwait, Oman and other Arab states also survived the wrath of the masses by doling out cash handouts or repressive crackdowns. The decades-long state of emergency was lifted in Algeria.

Even after three years, the revolution is not yet finished and has brought more misery, death and destruction to millions of people. The Arab world has now transformed into a troubled region with no immediate modus vivendi in the near future. Women’s rights have been suppressed by Islamist-dominated parliaments and governments. New sharia-hued restrictions on tourism destroyed the livelihoods of many Egyptians, Tunisians and Libyans.

What went wrong with the Arab Spring? For many, it was either an Islamist Fall or a Salafi Winter, as authoritarian regimes were substituted for theocratic regimes.

But the main demands of the masses caught up in the Arab Spring were freedom of expression, human rights, democracy, enhanced inclusion in both economic and political life, jobs for educated youth, social justice, women’s emancipation and good governance.

Apart from the long accumulated suffering under authoritarian regimes, many people saw the Arab Spring as being driven by Al-Jazeera and other Arab channels as well as social media.

The role of electronic media in creating a full-fledged revolution is also an unprecedented trend. Another factor that contributed to the revolution was unemployment among educated youth.

“It is still a major problem in many Arab countries. The unemployment among educated young people is very high and the governments are not in a position to provide suitable jobs for these people,” Yassin Majdi, a Moroccan journalist said recently in Rabat.

In 1998, Indonesia celebrated its own spring called Reformasi (Reformation). There were similarities between the Arab Spring and Reformasi. Both were intended to topple the existing regimes. Despite all its shortcomings, Indonesia emerged as a stable democracy, the third-largest in the world, proving Islam and democracy are compatible.

Economically, it emerged as one of the 20 top economies in the world. Given this success, what lessons can Indonesian Reformasi offer to the Arab Spring?

It is true that the three-year period of the Arab Spring is a short time to assess a transition from authoritarian regimes to democracy. Indonesia saw four presidents from 1998 to 2004. It took the nation six years to become an icon of democracy and stability.

The only difference between Indonesia’s Reformasi and the Arab Spring is that Indonesia chose secular and nationalistic parties rather than Islamist parties in all the democratic elections it has held since 1998. The new leaders promoted democracy, stability, pluralism, economic development and human rights as their top priorities.

The new Arab leaders, whose parties were long suppressed under dictatorial regimes, tried to impose a religious agenda on people who were demanding more freedom, jobs, democracy and economic development.

Late Bouazizi and millions of people who took to the streets never sought an Islamic regime. What they wanted was very simple: freedom, democracy, jobs, reforms and social justice.

Time will tell whether the Arab Spring will transform into an Islamic Fall or Salafist Winter. – The Jakarta Post, December 20, 2013.

* Veeramalla Anjaiah is a staff writer at The Jakarta Post.