Monday, June 14, 2010

A High Income Society? Or Low Outcome Society?

Malaysians are so easily fooled by promises, especially when it comes to money. Read the papers to find professionals being duped by get-rich schemes and then have the face to admit their avarice. Late last year, in an attempt to win public confidence, PM Najib in his maiden budget speech promised Malaysians that he will make our nation one with HIGH INCOME. You have to love that man, who wouldn't? Like a Pied Piper who plays a sweet tune we would all follow him to wherever he leads us but beware of the truth: That nothing comes without serious efforts to improve, and nothing good will come overnight.

Out of curiosity I googled 'High Income Society' and just as my luck would have it the first article that spring up was this one. Looks like this term is very much in use by us Malaysians that Google singled us out. Let me reproduce the entire article since it wasn't very long. It was written on October 28, 2009 by a SinChew news editor.

The 2010 Budget has made it very clear that the country aspires to be a high-income country. Perhaps, Malaysians can look forward to more comfortable life henceforth. But to live comfortably in Malaysia is by no means easy.

Things are expensive; salaries are low. Plenty of work to do, and too little entertainment. Long hours of traffic jams, and much longer terms of car mortgages. No one can tell when the high-income era will eventually arrive. But if it doesn't, no one can seize the arms of our PM cum finance minister and hold him responsible for what he has said.

Take a look at the multitude of foreign workers that roam our streets, and civil servants that can't do things any faster; you don't need to look elsewhere for any clue of a high-income society!
Basically, a country that speaks not of meritocracy, and where the majority are still awaiting government handouts, should not talk of high income.

A bureaucratic system with tonnes of potholes, where a piece of RM900 worth of equipment will require RM30,000 public fund to procure, will only render a handful of people high-income, leaving the bulk low-income.

For a government that relies on petroleum for 40% of its revenue, yet having its oil reserves touching the bottom anytime soon, any high-income talk is more of a luxury than anything else. To really shed the low-income predestination, we need more than just plain talks.

Developing knowledge economy, altering corporate structure, promoting growth centres, etc. are but old topics that have been fried over and again, yet remaining largely empty talks to this day. A set of strategies to fight poverty must be mapped out if we really aspire to advance into the high-income league.
Economy needs to be fully liberalised; talents must be non-exclusively absorbed; policies must be transparent and crystal clear.

The government wants to overhaul the investment environment to retain the confidence of foreign investors. But it must also come up with a more substantial vision that will put everyone in a fighting spirit.

I recently read some books on competitiveness of nations, and found that many high-income countries indeed have their unique conditions and fundamentals to succeed.

Scandinavian countries not only lead the world in incomes, they also excel in health, politics, job assurance, sex equality, freedom, family and community living as well as a host of other indicators.

Efficiency has been the cornerstone of high income generation for Scandinavian countries. In order to boost their work efficiency, Scandinavians have cracked their heads and conceived ways of improving their technology, from large equipment to tiny buttons on any electronic device.
They always think of ways to make their machines work in their stead.

Innovation is yet another intrinsic strength of Scandinavians. From Finland's Nokia to Sweden's Ikea, simple designs could be highly innovative and marvellous income generators.

Compared to Scandinavian states, Malaysia is so generously endowed with natural resources. All we need is improve our human qualities and government competency. (By TAY TIAN YAN/Translated by DOMINIC LOH/Sin Chew Daily)

This morning theStar headlines 'Families Feeling the Pinch due to Higher Costs' Looks like Malaysians, especially those who provide services and goods, learn fast. They decide to reward themselves with high income first and trigger the rush towards inflation BEFORE salary earners can enjoy higher income to be able to afford paying for them.

The tagline 'People First, Performance Now' of the Najib administration is going to mock him and draw anger and frustrations. Over promising the people with high income without a reliable means to realise this policy will eventually backlash. You just cannot create something out of nothing, or rob Peter to pay Paul. Like maybe removing subsidies to raise salaries? And Najib better learn that to help Malaysians increase their average income to over RM36,000 p.a. by 2015 is easier said than done. Most Malaysians today can't even earn RM24,000 p.a.

I have a low expectation of the Najib's promise. I'd rather live within my means than spend like money falling from the skies. Read HERE and HERE to understand what I mean.

Tuesday, June 08, 2010

Calling A Spade by Name

Idris Jala is not a politician. He is a corporate leader and his mission in MAS was to turn around an ailing airline which he did. His sterling performance caught the eye of the Barisan government who was looking for someone to rescue our ailing economy. Perhaps the same prescription which worked for MAS can work for Malaysia, so Idris was promptly placed in charge of revamping the major flaws in our administration, targetting favorite punching bags like security, public transportation and corruption. The mission impossible is to pull back the nation from the precipice of bankruptcy. Idris minced no words when he warned the nation that in 9 years time, on the eve of our target year of achieving a developed status, so passionately called Wawasan 2020, if nothing is done now, we will confront a bankrupt economy. So he proposed cut back of all subsidies. His proposal struck raw nerves because subsidies has become a right and any attempt to take away subsidies is akin to challenging the rights of the Malays. What a revelation and a shock that will be when fossil fuel dried up and we have no more gift from the earth to bless us with natural resource income. Idris found no supporters to his proposals. Who welcome such dismal news anyway?

Today, in THIS news report, the federal treasury bury Idris's prophecy of doom. Remember the tsunami of December 2004? Hundreds of thousands of people perished because either they were unbelievers or they were caught unaware of impending disaster. Are we going to be happily laughing away when the approaching dark clouds signal us to a collapse of our economy unless we begin to strengthen and equip ourselves?

If we distrust career politicians we should at least trust the words of a corporate leader-turned-politician who calls a spade a spade. Be forewarned. 9 years is pretty short, in most of our lifetime anyway.

Has Najib Made a Wrong Gamble?

In all of my life I hardly gamble. OK I did try my luck once in a blue blue moon but those were for the fun of it. I never like gambling anyway. The subject of gambling suddenly became hot because of the World Cup that is going to take place in South Africa next week and taking advantage of the gambling streak of many Malaysians, Tan Sri Vincent Tan decided it is time to help legalise football betting and helping to make money both for himself and for the government. Remember the mantra 'you help me I help you' not too long ago in Sibu, Sarawak? Looks like Vincent learned fast or he thought Najib would be still amenable to this sort of bribery in which he is at the receiving end. Nothing wrong except that plenty of fervent Muslims were adamant this will destroy many families should the principal breadwinners (read Muslims who gamble surreptitiously) gamble away their hard earned salaries and even savings.

As amply explained in THIS report, DAP felt Najib had again make a right about turn over the betting licence soon after he discovered taking the 'help' from Vincent may not be helpful to his political career and want to refer him to the Rights & Privilege Committee for misleading the Parliament. As we are all so used to it now, when the chips are down, use the well applied explanation that the government is 'considering' the application and no decision has been made. The 'UNDO' function is a familiar trick we see nowadays. Such approach is bad for business. Vincent made sure he stands a great chance of getting the licence when he offered to donate RM525 million to charity. Read HERE. But not everyone think he mean well.

Now that Najib has 'withdrawn' the so-called approval given by his Finance Ministry, the Bursa Malaysia quickly came in to absolve Vincent of any wrong doings. Read HERE. Douse the fire before it catch another flame.

What next? Will the licence still be given in a different form? Time is of essence. Will Vincent take this lying down? It has been rumoured in some blogs that he is proxy to UMNO as their trustees. Or he help paid a frog in the Perak takeover in February 2009. If these are true how will this latest development affect his relationship with them? Najib has to balance between appeasing the Muslims (who are not allowed by law to gamble anyway) and Vincent who wants to make money out of the World Cup. To me it makes no difference since I don't gamble. But I will stay on the sideline to watch who will be the winner. Sorry I am not betting on that.

Wednesday, June 02, 2010

An Excellent Opportunity

I was happy reading THIS piece of report. Wouldn't you? With an already bloated civil service, an excellent opportunity now arises to get rid of those found guilty of committing graft. Even if 10% are terminated it will help the government save millions of ringgits of salaries to these corrupt employees. 100,000 x RM1000 salary per month = RM100 million per month or RM1.2 billion annually. The rest of them will have been sufficiently warned to work harder to keep their jobs. The big question is whether the Najib government dares to take this beyond mumbling some warnings and letting it pass? I am sure CUEPACS would not make the allegation unsubstantiated. Coming so soon after Idris Jala's threat that we will become bankrupt in 9 years, improving our civil service efficiency and productivity will surely delay its arrival by a few years.

Update June 3: As typical, when things heated up the author of the above remark says he has been misquoted. Read HERE. I personally believe that the civil service is indeed very corrupt until it is proven otherwise.


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