Chow Kon Yeow: 曹观友

Abdullah Relaxes Race-Based Rules to Spur Malaysian Development

By Angus Whitley and Stephanie Phang

Sept. 26 (Bloomberg) — In the southwest corner of Malaysia, on a stretch of land between a mangrove swamp and a forest of dark green oil palms, groaning bulldozers are carving out a new city from red clay soil.

“This will be downtown Nusajaya,'’ says Zamry Ibrahim, 39, a marketing manager for state-controlled developer UEM Land Sdn. who sells the site to foreign investors. “In five to 10 years, the place will be totally different.'’

Prime Minister Abdullah Ahmad Badawi has eased 36-year-old rules favoring the ethnic Malay majority to help woo 382 billion ringgit ($111 billion) in investments aimed at transforming the economy of the southern state of Johor. Investors say his decision demonstrates that the race-based program is outdated and needs to be scrapped as the Southeast Asian nation loses investment to faster-growing neighbors.

“It’s an impediment,'’ said Ian Beattie, who oversees $1.5 billion in Asian stocks at London-based New Star Asset Management Ltd. “You’re stopping the market from operating at its optimum level.'’

Malaysia’s system of racial preferences, originally called the New Economic Policy, was introduced after bloody clashes in 1969 between ethnic Chinese and Malays. The policy, which aimed to increase the wealth of Malays, gives them privileged access to government contracts, jobs and discounts on homes. Of the nation’s 27 million people, about 60 percent are ethnic Malays. (more…)

What is the impact of the recent hike in government employee salaries on the country’s fiscal position?

Standard & Poor’s Ratings Services said it is evaluating the impact.

Malaysia’s foreign currency is rated ‘A-/stable/A-2′ and local currency is rated ‘A+/stable/A-1′.

S&P said that Malaysia’s fiscal position is the weak element of its credit profile. It added that although the general government deficit has declined steadily, the ratio remains above the median for ‘A’ rated countries.

Good growth prospects, a strong external position and a healthy financial sector balance its credit weakness, the ratings agency added.

S&P said the outlook on Malaysia could be revised to positive if it feels that the government’s deficit targets can be met with recurring revenues or sustainable expenditure cuts.

I think with general election looming, it is likely that PM Abdullah Ahmad Badawi will continue to drain the coffer to create good feelings for the electorates.

Umno deputy chief Khairy has asked Tony Pua to apologise for the latter remark that the government sector is a dumping ground for bumiputera graduates.

Pua told Malaysiakini that his statement was “taken out of context” by Khairy.

He explained that he was merely “questioning the government’s policies” and that his statements “were not meant to insult civil servants”.

It is a fact that Malaysia has the largest civil service in Asean. Although in term of population size, we are in the middle range but we beat Indonesia and Philippines in term of the percentage of civil servants to population.

We have a bigger service compared to Singapore, Hong Kong and Taiwan.

Malaysia has 1.2 million civil servants and this represents 4.6% of our 26 million populations. Singapore has 61,000 civil servants out of the 4 million populations. (1.5%) Hong Kong has 160,000 out of a population of 7 million. (2.3%)

Taiwan which has a population size of 23 million, (about the same size as Malaysia) is only served by 528,000. That is 2.3% of their population.

We should be asking why we still have such a big civil service, especially after embracing the privatization programme. Instead of a smaller civil service, the contrary is true.

Tony Pua may have a valid point.

As least, we know Khairy is among the 20,000 (Zam’s figure) who read political blog and internet news. For a quick view of Tony Pua’s response, Khairy may have to read Tony’s blog.

Malaysiakini finally broke the news today with the headline “Up to 35% pay hike”.

This means general election cannot be very far away.

The pay hike is long overdue, maybe the civil servants could no longer endure the higher cost of living. The petrol price has brought about a greater impact than we think so. Some civil servants even have to take on another job to supplement their salary.

With the increase, the general public would expect the civil service and specially the police force to perform up to the mark.

Prove to all other Malaysians that we have a First World Civil Service and Police Force.

We expect better performance, delivery system, transparency and accountability. And no more leaking roof.

We expect to get better community policing, better and safer environment in our neighbourhood and to prevent and solve crime quickly.

We also hope corruption will be combated.

Lastly, some feel the civil service is already oversized. And no more iron rice bowl that cannot be broken even if you do not perform up to the mark.

Employees in the private sector will now be waiting for their bosses to do likewise.

The Penang Master Builders and Building Materials Dealers Association are crying for help.

It said that giving contracts for small and medium scale government projects to only “specific groups” will drive contractors in Penang out of business.

Its president Finn Choong (son of All-England champion Eddy Choong) said many contractors would be forced to call it quits if project were continuously given to specific groups.

This is not the Association’s first call for attention. They have been making the call at their AGM every year for the past five years.

Their plea is still unattended by the government. The Association has close working rapport with the State government and CM Dr Koh Tsu Koon.

Blame it on the government bumiputra policy, there is no job for other contractors.

Next, Penang contractors also have to face competition from out- of- state companies. Even Penang Malay Contractors Association chairman Mohamed Fadzill Hassan has alleged that the local government was awarding contracts to outsiders.

Why is there no more open tender? It would help cut project costs, improve workmanship and encourage healthy competition.

Look at the recent spate of shoddy workmanship, poor maintenance and higher costing in government projects and buildings.

This is only the tip of an iceberg. There must be a total shakeup in the construction industry. As there are billions to be made, crony-linked companies would lobby their political masters to resist any revamp in the management of government projects. Too much is at stake for them.

Contractors are also forced out of business by the ever increasing prices of essential building materials like steel and cement. Some have to abandon their projects and preferred their performance bond be forfeited than to continue at a bigger loss.

The contractors have spoken; it will be good if PM Abdullah Ahmad Badawi listen to these truths.

Signs of stress behind Malaysia’s rosy growth
Wed Jul 5, 2006 4:04am ET

KUALA LUMPUR (Reuters) - Malaysia’s economy is growing at around 5 percent a year and exports are strong, but trouble is brewing for the government as consumers are squeezed and firms grumble about infrastructure spending cuts.

“I hear about how well the economy is doing but I don’t feel it,” said Choo Chin Teck, a 43-year-old lawyer who also runs a printing firm.

“Turnover in my printing business has fallen 20 percent from last year and legal work for property transactions has slowed down. I have to watch my spending these days.”

Choo’s experience seems widespread. As a result, confidence is flagging and cracks are appearing in the economy, breeding discontent with Prime Minister Abdullah Ahmad Badawi’s two-year-old government.

“It’s obvious that the economy is slowing down,” said Mohamed Ariff, executive director of the Malaysian Institute of Economic Research (MIER), an independent think tank.

“Consumer sentiment has been on the decline for some time and private investments are also down.”

Costlier petrol and electricity and rising credit costs are hurting consumers at a time when the economy is struggling to adjust to a cut in public spending on big infrastructure projects, an engine of growth under Mahathir Mohamad, who was prime minister for 22 years until late 2003.

One sign of softening consumer spending: total vehicle sales in car-mad Malaysia fell in May for the fourth straight month. (more…)

Malaysia’s `Obsolete’ Race Quotas are Paring Growth, Anwar Says
July 4 (Bloomberg) — Malaysia should stop giving preferential treatment to its ethnic Malay majority, former deputy prime minister Anwar Ibrahim said, arguing the affirmative action policy deters foreign and local investors.

Ethnic Malays, or Bumiputras, which literally means “sons of the soil,'’ get easier access to housing, education and government jobs under the 35-year-old New Economic Policy, aimed at protecting their interests relative to the Chinese and Indian minorities.

“We must be prepared to shift from this obsolete thinking,'’ Anwar, 58, an opposition leader who was fired as deputy prime minister in 1998, said in a June 29 interview in Kuala Lumpur. “It is important for us to think anew, discard the discriminatory practices of this new economic policy and use this to propel growth for all Malaysians.'’

Affirmative action has lifted wealth among Bumiputras, who account for 65 percent of the population, and diffused tensions between them and the 25 percent of Malaysians who are ethnic Chinese and comprise the wealthiest segment of the population. Still, critics say the system discriminates against minorities and even hampers progress by creating a sense of entitlement that stifles initiative among ethnic Malays.

“If somebody has to park foreign direct investment, this sort of policy would clearly be viewed as a negative rather than a positive factor in helping to make that decision,'’ said Joseph Tan, an economist at Standard Chartered Plc in Singapore. “What they are hoping to see, moving forward, is a liberalization of such policies.'’ (more…)