Archive for May 2015

Policy paralysis renders 11th Malaysia plan nought

May 30, 2015

The 11th Malaysia Plan announced by the prime minister was high in objectives, vision and political rhetoric but low in action plans and implementation strategies. It is common knowledge that the Achilles’ heel of the Umno-led government is implementation. The much promoted and published goal of reaching high-income status has finally reached its final lap. The vision 2020 high-income status goal was envisaged and mooted by Tun Dr Mahathir Mohamad in the early 1990s during the 6th Malaysia Plan. Since then, every Malaysia Plan was implemented to take the country closer to high-income status and finally reach it by 2020. To achieve high-income status, quality education, skills training and entrepreneurial development have to be the cornerstone of the economic policy.

Every year, the Education Ministry is allotted the highest budget (21% in 2015) to enhance education quality, competence and skills. The Education Ministry introduced a number of blueprints to achieve these objectives. But the latest OECD report places Malaysia 52nd out of 76 countries in terms of our students’ ability to grasp basic skills. While our Singapore tops the list on this score. The Program for International Student Assessment (PISA), which evaluates levels of literacy amongst 15-year-olds in mathematics, science and reading skills, as well as critical problem-solving skills—as opposed to memorisation—placed Malaysia 55th out of 74 countries. Despite the high expenditure on education, the achievements are disappointing and a letdown.

Education Minister Tan Sri Muhiddin Yassin himself got a shock at the international achievements of Malaysian students when compared to our neighbouring countries. Education has been deliberately allowed to be hijacked by racists and bigots by the UMNO government far too long. Besides public education institutions are centres of segregation and perverted ideologies. After all the hype about smart and cluster schools, only 6% of non-Malay students are in national schools (sekolah kebangsaan) compared to 12% of non-Chinese students in national-type Chinese schools.

Malaysia was ranked 64th out of 187 countries surveyed under the Human Development Index (HDI) last year, according to the 2013 Human Development Report (HDR) of the United Nations Development Programme (UNDP). All the slogan chanting and politically expedient proclamations of developing human resources have not taken Malaysians to a state of high productivity. Besides 1.5 million Skilled Malaysians who are not appreciated in their own country are developing other countries.

The addiction on cheap legal and illegal foreign workers has made Malaysia the heaven for human trafficking and smuggling. Nepotism and corruption amongst the enforcement agencies have made the country famous worldwide for the wrong reasons worldwide. All effort to upskill and automation are half hearted and ended with failure but money spent. Local university graduates are less employable compared to foreign university graduates.

According to a National Economic Advisory Council survey of household income in 2008, 80% of Malaysian households made below RM2957 a month. Putrajaya has to pay BR1M money of RM950 per year to support this group. Therefore, reaching high- income status within the next five years is uphill task, given the high unskilled foreign workers presence. The increasing economic slowdown internationally and political risk locally does not help either.

Malaysia has to reverse the outflow of skilled labour and halt the inflow of cheap migrant labour if it wants to achieve high-income status and reduce income inequality. Malaysia has to treat its own citizens equally irrespective of their racial background if it were to progress as a high income nation. All the scandals, wastages and abuse of power shows that divide and rule will ruin this country.

Ringgit weakening due to crisis of confidence

May 24, 2015

While the Prime Minister cum finance minister Datuk Seri Najib Tun Razak is struggling to stay in Prime Minister Office, Malaysian ringgit remains the worst performing currency and continues to weaken without any sign of reversal. Consumer sentiments are low after the introduction of GST which has triggered sharp increases in prices of goods and services across the board and Investors are uncertain of increasing political risk. Even Malaysians are wondering what is the direction and future of this country in the aftermath of GST, 1MDB, PFI, poor delivery system, poor quality of education, high corruption and the list goes on. Malaysia seem to be the only country stagnating and unable to move forward in the neighborhood while even the poorer countries stricken with war and corrupted dictatorship are able put the past behind and move forward.

Washington-based financial watchdog Global Financial Integrity (GFI), in its reports which tracks capital flight, says close to RM200 billions of dirty money was siphoned out of Malaysia in 2010. In 2009, GFI put the figure of illicit outflows at RM93 billion and the figure in 2011 is 174 billion. Malaysia lost over RM170.7 billion in illicit outflows in 2012 based on the Washington based financial watchdog GFI. Why the sudden upsurge in money leaving the country. The weakening of ringgit reflects the low level of confidence in the integrity and competence of the financial regulators and authorities.  The large cash outflow of funds is weakening the ringgit further.

The weakening ringgit is driving business people with cash to convert to other stable currencies. Malaysian ringgit seems to have lost the trust and confidence of Malaysians themselves. Sharp currency depreciation and the introduction of a goods & services tax (GST) are widely expected to drag 2015 gross domestic product (GDP) growth below 5 percent from an estimated 5.8 percent in 2014 reports CNBC. Besides there are about 6.5 million legal and illegal foreign workers remitting about ringgit 20 billion per year. The situation is quite critical that even government has requested GLCs to scale back foreign investments in order to contain the outflows reported a foreign Bank.

As it is, there are already concerns that the high level of indebtedness and the goods and services tax, or GST, could put pressure on growth this year. Malaysia’s household debt-to-GDP ratio at 87.1% at end-September 2014 is already among the highest in Asia, while the government debt-to-GDP ratio may have exceeded the self-imposed ceiling of 55%. The revised budget after the huge drop in oil prices doesn’t seem to have changed the public confidence in government’s ability to reduce the fiscal deficit for the past 17 continuous years.

The years of race based affirmative policies have sneaked in chronic corruption and nepotism into the government delivery system which may take one generation to eradicate. Can Malaysia ride out of the current crisis of confidence? The BN government is too embroiled in internal feuds to bring about real structural and economic reforms. All the hype of transformation programs only incurred cost but did not yield any tangible results. The government has to become realistic and take the bull by the hone. NEP has swallowed trillions of ringgit but Malays other than UMNOPUTRAS are still in the limbo. It created billionaires out of UMNO leaders’ children and their cronies. The kampong Malays and the nation are worse off supporting NEP. UMNO’s long time lying to kampong folks has blurred the truth and made them accept falsehood as real. Their thinking is colored with fear, falsehood and anger as to the 1MDB and other scandals rocking Malaysia. We need a drastic change from the past divide and rule policies to move ahead.

It takes more than Mahathir to overthrow Prime minister

May 15, 2015

UMNO leaders may have never dreamt of a day when their members may turn their back on them. Will that day materialize? Malays including UMNO members are unhappy and feel betrayed at what their top leaders have done with regards to GST, 1MDB, Tabung Haji and now KWAP. Malay community has blindly supported UMNO through thick and thin only to be deceived and made use of. But to keep the UMNO members satisfied goodies and privileges are constantly given out. UMNO has successfully kept the Malay support for the past 58 years simply by instilling fear that the Chinese will take over the country and Malays will lose their political leadership and Islam is under threat. The presences of non-Malays were conveniently used as devils to frighten off the Kampong folks into submission and blind support. UMNO has been using the race, religion and country in such inter-changeably that even educated Malays gets confused and submits into blind loyalty.

This blind and unquestionable support has brought about complacence, arrogance, care a less and grab anything and everything for myself attitude among its leaders. Religion has been recklessly used to instill fear, conformity and a false sense of superiority. Can all these falsehood and superficiality stand the test of time? May not be so. Past UMNO leaders led by none other than Tun Dr Mahathir Mohammad going all out to replace Prime Minister Datuk Seri Najib tun Razak. After 69 years UMNO is in crisis of confidence with it’s leader who is also under pressure from past leaders. Will the current debacle bring about any change in UMNO?

UMNO as a race based party has been rocked by a number of leadership struggles before. UMNO baru itself is a creation out of a bitter leadership struggle between Tun Dr Mahathir and Tengku Razaleigh. After UMNO baru formation Tun Dr Mahathir sacked Datuk Seri Anwar Ibrahim in 1998 and followed by Tun Dr Mahathir forced Abdullah Badawi to step down in 2004. Tun Dr Mahathir who has been successful in all the past leadership struggles has entered into another tussle with his own protégé Datuk Seri Najib Tun Razak. Each struggle had weaken, disintegrate and factionalized the once mighty party.

Under the leadership of Dr Mahathir Mohammad, UMNO president’s office was vested with unprecedented power. Datuk Seri Najib has inherited this powerful office. Therefore it takes a huge crisis to bring the UMNO president down. Datuk Seri Najib has rolled over his sleeves for standoff with Tun Dr Mahathir by publicly declaring that he was elected by UMNO members and the people. No UMNO leader has deserted Datuk Seri Najib yet. Under these circumstances, it is impossible for Dr Mahathir to bring down the current president. Datuk Seri Najib may have weakened his moral authority and statue, but as long as UMNO leaders stand by him, it is not possible by Dr Mahathir to bring down the current UMNO president.

UMNO president who is also the prime Minister has huge budget to keep the UMNO leaders on his side. Budget allocation to Prime Minister Office comes to about 50 billion in 2015. Half the amount is special allocations that are decided at the discretion of Prime Minister. Therefore he has enough goodies to offer the UMNO leaders to keep them happy. Corruption, abuse of power and conflict of interest cannot bring down UMNO leadership. So Datuk Seri Najib is here to stay longer. The fact that UMNO still commanded 61% of votes in Rompin and 41% of votes in Permatang Pauh despite GST and 1MDB debacle shows that Prime Minister is firm in

The poor feel cheated by GST

May 15, 2015

Since the GST announcement in the 2014 Budget in 2013, the government has been going around advertising that the 10% SST will be replaced by the 6% GST and, therefore, prices of goods will go down. Ministers and the government-controlled media pooh-poohed the concern expressed by the rakyat that inflation and increase in prices would be inevitable. Instead, they talked confidently and down to the rakyat – saying that essential goods would be exempted, some goods would be zero-rated and only luxury goods would be subject to 6% GST. They even went further and said the GST would benefit the people as it was in the interest of the people. “The new tax system fixes a 6% tax, as compared to the sales and services tax which amounts to 16%,” said the prime minister.

But what has taken place is the complete opposite of what the government advocated. The SST is a single-level 10% tax compared to the GST which is a 6% multi-level supply chain tax. The government concealed the truth and now it is out in the open. Prices of goods and services started increasing well before April 1, in anticipation of the compounding effect of the GST, whether or not the goods and services were to be GST-exempted. The GST is thus added to already increase prices. Peoples’ anger hit the roof when they had to dig deep into their pockets.

BN leaders had been talking about a decrease in prices with the introduction of the GST. Instead, prices went up. Obviously, there was very serious miscalculation between boardroom-planning and implementation on the part of the Customs. Issues like service charges and levying of the GST on goods produced from free trade zones were not considered until after the implementation of the GST. The list of goods and services to be included, exempted or zero-rated was announced on a flip-flop, piecemeal basis. All these contributed to the confusion.

Even the cost of pre-paid mobile phone top-up cards has increased by 6% due to the GST levy. Earlier, these prepaid top-up cards were charged 6% SST (Sales and Services Tax) but this has now been withdrawn and buyers are charged 6% GST. Why should Telcos raise the charges when the rates are the same? Telcos absorbed RM800 million in SST in the past but they are now passing this on to customers, and at a time when prices are going up. Communications Minister Ahmad Shabery Cheek’s inconsiderate and irrelevant assertion is that about two-thirds of the prepaid phone users are foreigners. To appease pre-paid users, latest news is GST will not be charged up-front but deducted as the card is used. Whichever way GST is taxed to the user of pre-paid cards.

The situation today is a far cry from what the government promised. For the first time, poor people are also being taxed on basic necessities like food and medicine. On May 1st about 20,000 or more gathered in the heart of Kuala Lumpur to protest against the GST. Not surprisingly, many kampung folks came from out of town to participate in the anti-GST rally. The GST and consequent inflation have made a big hole in the pockets of low-income earners. Deputy Minister Ahmad Maslan added insult to injury by twitting that traders who support opposition will not lower prices because GST is BN government policy. What transpired after the GST implementation shows that the government don’t have control or knowledge over the pricing mechanism in supply chain management.

The government knows that wages are stagnant and 80% of households earning less than RM3000 per month are eligible for the BR1M programme. No longer are there subsidies for petrol and sugar. The high prices of houses, cars, high cost of privatised medical care and higher education are eating into the pockets of Malaysians. Electricity, water supply and utilities like telephones and highway tolls are privatised and sold for profit. The common man’s hardships are never considered when government policies are being formulated. All that matters to the government is the interest of its rent seekers, cronies and GLCs. Years of ill-conceived policies have taken their toll on this country and public confidence in this UMNO-led government is at an all-time low. Unless it changes, its days are numbered.