Posted tagged ‘corruption’

Blind bureaucratic loyalty takes the edge out of 1MDB probe

July 28, 2015

The silence and apparent collusion of law enforcement agencies like Bank Negara Malaysia, the Attorney Generals chambers, the police and the Malaysian Anti-corruption Commission in the inreasing number of criminal breach of trust episodes, while whistleblowers get reprimnded, shows the lack of governance and a culture of blind obedience prevalent in the civil service. The unaccounted flow of funds by the MOF owned GLCs are frightening and worrying.

When billions of ringgit vanished, there was no red flag raised by any of the law enforcement agencies. If not for the independent business news paper, The Edge, opposition lawmakers and civil rights groups who acted as whistleblowers, the RM42 billion debt incurred by 1MDB would not have been detected and publicly exposed. The Malaysian law enforcement agencies, instead of protecting and complimenting the whistleblowers, are instead arresting and reprimanding them for their patriotic and brave acts.

The bureaucracy and law enforcement agencies as professional bodies are committed to deliver high quality services and display cost effectiveness and high integrity in the management of public funds. The civil service displays a culture of obedience and blind loyalty to the extent that they have become ineffective and inefficient. The question foremost is “can the bureaucrats be trusted to safeguard the national coffers and arr tax collections well managed?”

The evidence revealed in social and print media are beyond reasonable doubt that there is a prima facie case for law enforcement agencies to initiate an investigation. But the culture of obedience and blind loyalty to their political masters make them ineffective and lame ducks. The order of the day seems to be corruption and sweeping wrong doings under the proverbial carpet. The recent arrest and ban on opposition MPs, corporate executives and prominent leaders of civil rights groups from leaving the country imply that whatever wrong doing or laundering Umno does, it can do no wrong.

Instead of responding to the issues raised, the law enforcement agencies are arresting and shutting the whistleblowers down. All the information of the alleged wrong doings is out for all sundry to see. What is the point of closing them down now? But even in doing this, the enforcement agencies seem inefficient and the closure of such media seems profoudly late in the day…after the horses have galloped away. This has become the hallmark of our bloated bureaucracy.

This prolonged inaction by the Malaysian law enforcement agencies and the attempt to silence the critics and cover up a serious fiduciary crime has engendered a general lack of onfidence in the governance or its ability to prudently manage financial resources. Of late rentiers, cronies and criminals have become chummy enough to walk and even seemingly own the corridors of power.


Honest, competent and dedicated people may never survive in the current culture prevalent in the Malaysian civil service. Whetever edge we had over our neighbours in the past, is now all gone. Where do we go from here?


With proper management Malaysia does not need GST

April 8, 2015

The much-despised and repressive consumption tax GST is finally here to drain our pockets further. Despite the appeal from many quarters to postpone it, the government went on and implemented the GST collection as per schedule. After deliberating for 23 years, the Ministry of Finance(MOF) has finally implemented GST at 6% at every stage of the supply chain. In 2014, the MOF had scrapped subsidies for fuel, electricity and sugar. Then, in 2015, the GST was implemented to increase revenue so that the high fiscal deficit incurred continuously for the past 16 years would be narrowed and to reduce the high public debt to gross domestic product or face the risk of lowering sovereign ratings by rating agencies.

Unlike Malaysia, Singapore and many other countries introduced the GST as part of a larger tax restructuring exercise to shift their reliance on direct taxes to indirect taxes. Singapore’s GST was introduced on April 1 1994 at 3%. It was increased to 4% on January 1 2003, then to 5% on January 1 2004 and finally to its current rate of 7% on July 1 2007. In Singapore, the threshold was set at an annual turnover of S$1 million (RM2.6 million) while the threshold in Malaysia is RM500,000, to be GST-compliant.

The lower threshold for GST compliance in Malaysia means an increase in the number of businesses collecting the GST. The option to increase the GST rate is left to the minister of finance. There are suspicions whether traders are raising prices arbitrarily and taking advantage of the initial uncertain period. It will take a while before clarity and confidence set in. Consumers across the board feel the pinch when they eat out or when they make purchases. The working class are unhappy and are complaining of price increases.

The Malaysian corporate tax will be reduced from 25% to 24% and from 20% to 19% for medium- sized enterprises from 2016. In comparison, Thailand has brought down its corporate tax rate to 20% while Vietnam is also scaling back to a 20% corporate tax rate from 25% by 2016. Singapore’s corporate tax has been fixed at 17% since 2010.

The successful implementation of Malaysia’s GST depends on neutral, fair and corruption-free enforcement. The GST is expected to bring in 24 billion in revenue, replacing the current 13 billion from SST from which RM3.8 billion is for exempted goods and RM4.9 billion is to be paid as BRIM, leaving behind about RM700 million in the government’s coffers. More GST revenue is expected to flow from next year onwards.

In many countries, people do not grumble about or grudge contributing to the GST because of the efficient usage of GST collections to subsidise medical care, senior citizen care, efficient government delivery systems and affordable high-quality education systems for their citizens. Malaysia too has to rise up to its people’s expectation for more social safety nets and better delivery systems.

The annual Auditor-General’s report on government usage of public funds shows no improvement all these years. Public funds are simply wasted and squandered. The prime minister’s 1Malaysia initiative to transform the government delivery system has come to naught. How then will people pay the GST without any reservation? Given the recent 1MDB fiasco and the history of imprudent and unaccountable spending by the government which has landed it with high debts, the public is sceptical about how the GST revenue will be spent.

The indiscriminate undertaking of loans by GLCs with government guarantees does not instil confidence in the government. Recently, the social media exposed another MOF GLC Pembinaan PFI debacle, with RM47 billion in loans apart from the RM42 billion 1MDB loan. High house prices and car prices, poor public transport, high cost of living coupled with low and stagnant wages have made Malaysians poorer and more indebted. On top of that, we have to pay the GST.

That’s why the opposition maintains that with proper management of our public funds, Malaysia doesn’t need the GST. Can the government improve public transport, reduce house prices, improve medical care and reduce prices to justify the implementation of the GST? Malaysians are getting impatient and want improvement without excuses straight away. The GST can be a double-edged sword for the government.

Double whammy of GST, fuel hike

October 7, 2014

The timing of the 20-sen increase in price of RON 95  just before Budget 2015 seems to be an ‘inducement’ to the stream of goodies the Finance Minister is planning to hand out to appease the BN’s vote bank.

The sudden increase in price of RON 95 has created a real fear of multiple price increases across the board, which are already visible. The GST implementation on 1/4/2015 would be a double whammy for people.

Media reports point to Finance Minister and Prime Minister Datuk Seri Najib Razak announcing goodies and handouts in the coming Budget 2015 such as the increase in BRIM payments and lower income tax rates.

And it is estimated that up to 80% of Malaysian households are already receiving the BRIM.

The reduction of the 20-sen subsidy is aimed at the eventual elimination of fuel subsidies to reduce Malaysia’s fiscal deficits.

But subsidies were first introduced to reduce the financial burden of workers, whose salaries were suppressed and have stagnated to attract foreign companies.

The Malaysian government curbed workers’ rights and their wages to induce MNCs and FDIs to invest locally.

Low wages became more prominent in Malaysia. This has led to low productivity, poor economic structure and increased addiction to employing foreign workers.

The steps taken have displaced local workers and blocked the move to go into automation and up the production supply chain.

With an incomplete minimum-wage implementation and with about 4 million legal and illegal foreign workers depressing wages, the subsidy rationalization and GST implementation will increase the cost of living and cause people to feel the pinch.

Increasing fuel prices without any increase in wages and without proper effort to automate manufacturing, will worsen the already high income inequality.

It is public knowledge that the top 1% of Malaysians are worth more than the bottom 40% of our population.

The Malaysian household debt to GDP is now at a staggering 86.8% compared with others around us like Thailand – 30%, Indonesia – 15.8%, Hong Kong – 58%, Taiwan – 82%, Japan – 75% and Singapore – 67%.

Any increase in the cost of living will hurt Malaysians most.

Malaysians are already burdened with high house and car prices and now, with a higher petrol price, they will feel the squeeze on spending.

The lower-income households and even middle-income earners are now more vulnerable to multiple prices increases and income shocks.

It’s unfortunate that the government has not improved public transport even though complaints have been there for a long time.

There are many destinations in Malaysia that have no public transport at all.

Bekok town in the Labis district has no public transport.

Residents are mostly oil palm and rubber smallholders and the prices of these commodities are down now.

These small town residents will be affected by any petrol price increase and the GST that will be levied on all goods and services for private transport.

The price of oil has fallen to its lowest level in the last 6 years in the international market.

Therefore, the subsidy rationalization could have been delayed until oil prices firmed up later.


High level of bribery, corruption

The government could have avoided the spiralling effects of petrol on other goods.

Instead, the government chose to act hastily to please fund managers and international rating agencies.

“Malaysia ranks the highest in the levels of bribery and corruption anywhere in the world,” said the Asia Risk report.

About 39% of respondents said that bribery or corrupt practices take place widely in Malaysia, a figure which is nearly double the Asia-Pacific average of 21.

But the government has not announced any measures to rein in bribery and corruption.

No high-profile Umno politician or crony has been charged for bribery or corruption.

On the other hand, the police and the Attorney-General’s office are busy invoking the archaic Sedition Act to silence critics, student activists and opposition leaders.

To save government finances, grants and support for 1MDB and subsidies for toll concessionaries must be stopped.

All government support for private projects, GLCs, government-owned corporations must have transparent accounts. Purchasing expired IPPs at exorbitant prices contravenes all good practices. It looks like Umno’s cronies are, in reality, managing this country. Do we have any hope left?


Dial 999 and get fleeced

July 18, 2013

Most of my friends have encountered house break-in, robbery, road side mugging or snatch-thieves once and sometimes more than once. Public insecurity is the constant source of worries for most families except the law enforcement agencies who think it is perception and not real. People especially ladies dare not walk out to bus stops or shops fearing when they will be mugged by any motorcyclist passing by. Certainly crime has escalated whether police think it is a mere perception and not real. A friend recently narrated to me how his car windowed was smashed with hammer just about 100 meters before a police stop and the thieves escaped with his wife’s handbag. This happened in section 16, PJ one evening. It all happens within split seconds, our police have no chance.

He was told to make a report at the Damansara police station. When he went there he met 2 other couples also robbed in the same vicinity around the same time. After exchanging notes with each other, they feel the same motorcyclist could have done the theft. In the station police personals took the report and the usual questioning but his car was not inspected for any finger print. I suppose the police had no intention investigating looking at the rate crime is committed.

About 2 weeks later his wife received a phone call in the office line which was not given to the police when they made the report. The caller identified as an officer from ex-police association and offered some products for sale. She told the caller to call her husband and gave his phone number. The caller called her husband and identified as ex-police officer wanting to sell police badge and vest for protection from future robbery. My friend not knowing the real identity of the caller, asked him to come to the police station to meet and discuss. But the caller did not turn up. But after a few days another person from the ex-police association called for the same reason. And the calls continue to come till these days.

My friend was saying that rarely calls come in office line and the office number was in the stolen handbag. That’s what puzzles him. How this so called ex-police personal got the office number? This episode shows the depth of fraud and crime intertwined around the police department. To police it is business as usual and whatever happened to anyone they will collect their monthly pay and their comfortable life goes on. They will still get promoted and their bosses will defend them for their callousness and inefficiencies.

Another friend shared his experience to me when his house was burgled. After he made the police report at the nearest police station, one police personal who was observing all the conversations and questioning, approached him and offered police regular checks for a monthly fees of RM300. The police personal said that since there are few VIPs in the same areas, police can offer a few more police check post in the nearby houses. Therefore it is not an issues offering a police check post at your house. Extortions and petty corruption are rampant within the law enforcement agencies. How will crime be reduced under such corruption prone policing department?

I overheard one pawnshop owner saying that even in Hadyai, the border Thailand cowboy town, there are no security guarding pawnshops. But in KL with security guards standing with guns pawnshops are still robbed.

Under these circumstances will additional legislation improve public security? Today’s SUN newspaper reported IGP proposing for new preventive detention laws to be legislated. Home affairs minister supports the police call for more preventive and detention legislation. PR parties are clamoring for more policing and immediate setting up of Independent Police Complaints and Misconduct Commission (IPCMC). The police are strongly against the formation of IPCMC thinking that IPCMC will weaken the force.

At present when there is any police abuse or corruption, the only recourse one person has is to make a police report. In most cases there is no follow up or action. Therefore the present situation provides shelter and protection for the corrupted. With the formation of IPCMC, public can lodge complaint to them and they can commence investigation on police personal. The police force is more use to being unaccountable for their action dont want to be investigated by an independent body. Enough is enough. It’s time for police to be more responsible and accountable for their action. IPCMC is the way forward.

Political patronage will protect the trans-border haze pollutants

June 24, 2013

Minister of Environment Datuk G.Palanivel has finally named the culprit companies that are causing haze pollution from Riau and Jambi, Sumatra. Singaporeans and Malaysians are caught red handed under the hazy cloud hopeless waiting for rain. Indonesia the culprit causing haze for the past 20 years, seem to be in no hurry and expediency to reduce the smog.  Since the air pollutant Index (API) has crossed 750, health minister say that health risk has increased and need urgent action to combat the hazy problem. Yesterday Datuk Palanivel said the highest API ever recorded in Malaysia was in Sarawak in 1997 with a reading of 860. Hope the Malaysian government is not waiting to reach the worse yet before initiating serious action. But are the 3 countries flaking crocodile tears and faking their people?

The countries worst affected by the haze are neighboring Malaysia and Singapore. Malaysian and Singaporean investors control more than two-thirds of the Indonesian oil palm plantation sector and they have been implicated in the fires alongside local plantations. These are GLCs and listed companies who continue to slash and burn despite the dire consequences of the haze. These companies are rich and huge and therefore enjoy the protection of their Indonesian patrons from any legal action during their operations and inaction from political patrons from their country of origin. This explains why Malaysian and Singaporean investors continue to clear land by fire in the interests of cost-efficiency, despite their home countries suffering the worst effects of haze. It won’t be surprising if superannuation funds of Malaysia like EPF, Tabung Haji and LTAT heavily invested in these pollutant companies.

Greenpeace said on Thursday (20/6/2013) that half the fires hotspots that are causing the severe haze are in areas that should be protected by Indonesia’s forest moratorium. Indonesia, Southeast Asia’s largest economy, has vastly expanded its palm oil plantations in the past decade, overtaking Malaysia to become the world’s biggest supplier. In doing so it has cleared huge swathes of forest and peat-land areas. Authorities who are familiar with haze problem say that political patronage and Indonesian local government officer’s collusion with private companies are hindering efforts to stem the haze problem.

Sources familiar with the problem say that based on satellite data, it is estimated that 80% of the fires were set by plantation companies or their sub-contractors for land clearing purposes, while the remaining 20% were set by swidden (‘slash-and-burn’) farmers. The smoke from these fires accumulates and travels across international boundaries, resulting in what is known as trans-boundary haze pollution. The annual haze phenomenon affects the health of some 75 million people and the economies of six Southeast Asian nations, with the worst affected being Malaysia and Singapore. With Malaysian and Singaporean-owned plantations implicated in causing fires alongside with local Indonesian plantations, the involvement of Malaysian and Singaporean firms in this sector, especially since their home countries suffer the worst effects of their practices, becomes of great concern.

Research shows that up to 25% of concessionaires, including local and foreign companies, ignore the rule restricting the planting of oil palm on peat more than 3 meter deep. All plantation lands and future plantations on peat are essentially illegal because they contravene national laws. But over 50% of new oil palm plantation areas are planned in peat-lands.  (Greenpeace) Major plantation companies including many Malaysian oil palm companies have been found to have obtained licenses for peat-lands in Riau. Many Indonesian, Malaysian and Singaporean firms have been able to evade official investigation by the Indonesian Government despite repeated indicators of open burning. The widespread practice of patronage politics in this sector has enabled these local, Malaysian and Singaporean companies to act with impunity, even in the face of open burning allegations by civil society.

Since many of these Malaysian and Singaporean companies are GLCs or otherwise linked to powerful political elites back home, it can be inferred that these political elites are more motivated by material gain than protecting the interests of the society suffering from haze. There is little hope to address trans-boundary haze effectively unless the root cause of the system, patronage politics is conclusively addressed.