Thursday, October 01, 2015

You got it all wrong, GSIAC

Two days ago, I came across headlines that said Malaysia's GDP per capita in 2014 has exceeded world average for the first time.

This little piece of happy news was splashed across all print and digital news agencies, both local and international.

I wasn't too excited about this piece of news because the key focus now should be the compensation of employees as a percentage of GDP.

That matters more to the people. That's income into our pockets and we should speed up the progress.

The contribution of Compensation of Employees to Malaysia’s economy accounted for 34.3 percent only in 2014. Out of a RM1.1 trillion economy, people like me and you received only 34.3 per cent of it.

Anyway, I began to have doubts on the news when I found out that it was the Global Science and Innovation Advisory Council who came up with a statement on the economy.

GSIAC and MiGHT claimed that:
  1. Malaysia's GDP per capita in 2014 exceeded the average of all countries worldwide for the first time

  2. Malaysia's GDP per capita was at US$10,830 in 2014 while the average of all nations worldwide stood at US$10,804.

  3. In 2010 national per capita GDP was US$8,752, some 8% below the then-world average of US$9,513

And apparently the numbers came from World Bank.

Since World Bank data is one of the most easily obtained, I dug up the spreadsheet and cross checked the numbers in less than 5 minutes.

I was shocked when I saw the numbers. The following table is an extract from World Bank's GDP per capita spreadsheet.

GDP per capita (USD current prices)

So here are the facts:
  1. Malaysia's GDP per capita exceeded world average in 2012, not 2014 as claimed by GSIAC and MiGHT.

  2. Malaysia's GDP per capita in 2014 was US$10,933 and not US$10,830 while World average of GDP per capita in 2014 was US$10,725 and not US$10,804 as claimed by GSIAC and MiGHT.

  3. Malaysia's GDP per capita In 2010 was US$8,803 and not US$8,752 while the then-world average was USD9,458 and not US$9,513 as claimed by GSIAC and MiGHT.

Now, where did you get your numbers from, GSIAC and MiGHT? Who did the research?

Surely your numbers can't be from the World Bank, I am looking at the latest official spreadsheet that was downloaded from 

If you don't already know this, Wrong decisions can be made with imperfect or misrepresented information.

Numbers can affect investment decisions and in your case, strategic planning or at the micro level the scientific conclusion.

As a responsible council and Government agency, we must always be careful when we go public with numbers. You lose credibility easily unless you can defend them.

This celebrations and news on 'first time ever in 2014' should end now.

Monday, August 31, 2015

What's next, BERSIH?

The weekend’s yellow themed rally is over now. It was a very peaceful, disciplined rally I must say.

People expected tear gas and water cannons to be used on the BERSIH participants but none of that happened.

In fact, the police were there to ensure everyone's safety - divert traffic, gave advice to organisers and participants etc.

This, we should look at positively. Thumbs up to the police!

But there is a bigger picture to this that we must not miss.

Now that the 2-day BERSIH rally is over, to those who wore yellow shirts in KL and other cities, those who changed their Facebook profiles to yellow, those who stayed at home, we as Malaysians must all ask the hard questions now.

Where do we go from here? What's next? What do we want to achieve by the next General Elections?

We must not forget that BERSIH is about clean and fair elections. It is about reforms to the system.

One of the primary reasons people marched over the weekend was because of the USD680 million 'political donation' which went into Najib's account.

People demand transparency, people want him to resign because of it.

No one knows from whom it came from and people demand a tell-all answer from Najib despite MACC's statement that it wasn't from 1MDB but from the Middle East.

No one knows how it was spent on elections and let’s not beat around the bush, the people want answers. The full version.

But we can prevent all these from happening again and secure the better, brighter and transparent future that we all want, if BERSIH is willing to return to the objective of the movement and stay true to it.

A few weeks back, on 14 August, the Government announced the establishment of the National Consultative Committee on Political Funding.

The members of the committee include Akhbar Satar who is the President of Transparency International Malaysia, Wan Saiful from IDEAS, as well as activist Richard Yeoh.

This committee was set up to examine and evaluate legal mechanisms and rules used in other countries to curb and prevent corruption in political funding.

They will also be drafting the legal and regulatory requirements to facilitate the monitoring, transparency and accountability in political parties funding.

They have a year to complete this task, way before the 14th General Election is due. Whether anything will come out of it, I don’t know.

There’s always the ballot box where we can exercise our right to vote if we are disappointed with the outcome.

But before it even kicked off, Opposition leaders like Nurul Izzah were quick to throw in conditions and said "we cannot and should not proceed with such discussions".

Why not?

Let’s face it. Elected reps earn between RM5,000 – RM15,000 depending on whether you are an MP or ADUN and which state, plus the annual allocation of RM200,000 or more for the constituency.

Do you think that’s enough to feed a family, send kids to school, pay for political operations, contribute to local community, donate a token back to your party, fund programmes and the politician’s election campaign and at the end of the day, still have some savings for retirement?

Political parties receive political donations to fund programmes, operations and elections.

No politician or political party will unconditionally deny that they received donation from any individual or company.

Nothing is free and funds must come from somewhere.

Do we not want to know who or which company donated to UMNO, BN, DAP, PKR, PAS and the politicians, if any?

How much was given to them, what was the political donation spent on and why did they contribute to the party?

This is a grey area. An unsupervised, unlegislated space.

Questions like “why don’t you show your accounts first?”, “who donated that RM 1mil and expects nothing in return, seriously?” or “who funds your party? How did you manage to build a new office? Crony gave you money?” will never end.

These sort of quarrel between supporters of both sides will continue for eternity unless the element of transparency, through legislation, kicks in.

Let’s push for reforms, BERSIH. That was what you were meant to do.

The BERSIH rally was a movement, a symbolic action which is over now.

But the actual cause, the true objective, and the real work must go on. Surely, it can’t be just about anger, hatred, vuvuzelas, coloured shirts and placards.

So, let’s pressure our politicians from both sides of the political divide to back the political financing reforms.

Take the first step, support it. Will that be your next move, BERSIH?

Sunday, August 16, 2015

Are you bankrupt of ideas, Chin Tong?

YB Liew Chin Tong's piece - Five ways to save the Malaysian economy – is good but the recommendations are flawed, if not full of rhetoric.

Let's talk about numbers and not play with politics or emotions.

Because when we become emotional, we lose our ability to make rational judgement or decisions.

After my first article - Malaysians are now currency experts? - I have been labelled with all sorts of profanities when in fact the key message was Malaysia is not the only country that weakened against the US Dollars.

There are multiple factors for the weaker Ringgit which I've shown in my 2nd article ( Export-commodity prices and the Ringgit ) and the obvious factor of all is commodities prices - oil, palm oil and rubber - that crashed from their respective highs in 2011.

This is not about Government, Opposition or politics. We talk about facts, policies and numbers, and numbers don't lie.

Now, back to Liew Chin Tong's recipe to save Malaysia.

(1) Get Najib to quit as Prime Minister and (2) Name a new and competent Finance Minister

Let’s evaluate on how the Government handled this ‘crisis’.

Leave 1MDB aside for now, which let me be clear that I have slammed the Government and supporters since May 2015 in blogs and social media and I will continue to do so depending on the Auditor General's Report.

In a letter dated 26 December 2014, the Government ordered all Government departments, statutory bodies, GLCs and GICs to adhere to the following:

".. syarikat milik dan berkaitan Kerajaan serta badan berkanun dan syarikat subsidiarinya perlu memberi keutaman kepada pelaburan domestik serta menangguhkan serta merta pembelian aset di luar negara bagi mengurangkan pengaliran keluar dana"

Here's the letter:

The Government knew what was coming. Indicators were clear especially from the crash in commodity prices.

Three weeks later on 19 January 2015, the Prime Minister, Treasurer General and Governor of the Central Bank addressed the nation, analysts and media.

The Government slashed their operating expenditure and announced new measures to continue to boost the domestic economy.

As a result, look at our Q1 and Q2 GDP figures. Our economy grew at 5.6% in the first quarter, 4.9% in the second quarter.

Malaysia performed better than many other economies and we beat analysts' forecasts.

What would you have done differently, Chin Tong?

But if you ask me, if there’s something I’m unhappy about, it is the fact that some GLCs clearly ignored the Treasury Instruction and are actively scouting for, if not buying, properties and companies to acquire overseas. This puts pressure on the Ringgit, so, where’s the whip? I blame this on the weak leadership.

(3) Set GST at zero rate

GST is expected to contribute RM23.3 bil to Government. But we have abolished Sales and Services Tax that gave us RM17.2 bil last year.

We have also reduced both individual and corporate tax rates which will cost us perhaps RM1 bil - RM 2 bil in revenue.

We can expect lower revenue from the oil and gas sector of approximately RM27 bil.

So, by setting GST to zero, it will cause the Government to be short of close to RM70 bil for Budget 2016 and years to come if commodity prices stay at current levels.

Why make populist but irresponsible recommendations like this, Chin Tong?

(4) Halt big ticket crony projects

I am shocked that you want the Government to halt projects like Malaysia-Singapore High Speed Rail and MRT. We all thought you wanted better public transportation.

Of course, if Government cancels these projects that were meant for the people, it will be additional political capital for you.

You can then accuse the Government of wasting money on compensation and accuse the Government of not doing enough to improve public transportation.

By the way, which crony was awarded or won the contracts unfairly in both the projects - High Speed Rail and MRT?

You say there are other ways to boost the economy. If not infrastructure for the people, what are they?

(5) Halt intake of unskilled foreign labor

I like your recommendation that Malaysia must reduce foreign labour and push for mechanisation and automation.

But 70% of foreign labor work as maids, work in plantations, in constructions, in agriculture and services. Approximately 30% in manufacturing.

Government tried to limit the intake of foreign labour in 2010-2013 period and 'encouraged' automation in both plantations and manufacturing such as rubber gloves.

The Government communicates and work closely with the industries all the time and even gave incentives and organized international competitions just to source for ideas from the best.

But there are multiple factors that put off automation efforts especially terrain and costs.

And, we can't automate and mechanise maids, builders, or farmers, can we?

These are not excuses but innovation, mechanisation and automation are long term policies and they are already on the table, without even you suggesting them.

So, Chin Tong, any better ideas?