18 August 2012

How Lay Men Should Comprehend Danaharta


We were not prepared to sacrifice our country to the bloody economic hitmen, and there was Danaharta

anaharta was born out of our (Malaysians) desperation to save the country without selling our souls to the devils. Many neighbouring countries had to bow to the superpowers that tempted them with financial aids to remedy their greatest recessions that haunted the South East Asian countries back in 1997/1998. Malaysia decided to go against the current. We (Malaysians) said ".... to hell with IMF". We were not prepared to sacrifice our country to the bloody economic hitmen. We deviced our own medicine. We took the responsibility to safeguard our nation...... and there was Danaharta.

Recently, while clearing the cabinet at my office, I found the Final Report for Danaharta that reports its life story from 1998 to 2005. Danaharta's shout of excellence printed in the report gave me the feeling of satisfaction - that we saved the country without taking aids from the financial superpowers of the world. In short, the success story is narrated as follows:

The 1997 economic crisis roiled the country's banking system. Set up to help avert the collapse of the banking system, Danaharta brought relief to beleaguered banks. Danaharta dealt with 2,902 NPL accounts and from an NPL portfolio of RM50 billion, recovered RM30 billion - Recovery Rate of 58% surpassing the typical 20 - 50% experienced internationally.

For most of the citizens, understanding what Danaharta represents may be a bit difficult. Not all of us are bankers. Not all of us are accountants. Some of us who are teachers, shop owners, sales men or any other professions that do not revolve around money management wouldn't have a clue what the above paragraph means from a national pride perspective. They do not (and did not - back in 1998) realise that the country was saved from modern economic slavery. So, how do we ('non-monetary-professioned' citizens) comprehend Danaharta? Let me attempt to explain.

Basically, Malaysian banking system was about to go bankrupt when the recession hit many shores globally, including Malaysia. 1997 was not a good year indeed. Our banks had too many low quality loans, i.e. those with poor payment behaviours. These are called Non-Performing Loans ('NPL'). With almost all Malaysian banks owning high level NPLs in their loan portfolios, they were about to lose it all. Borrowers' businesses got hit by the economic turmoil. Loan repayment obligations were not being honoured.

We could have ended with a puppet government whose balls gripped by the hands of those economic hitmen.

Had these local banks collapse, Malaysia would have been swamped by international banks, such as Bank of America, and many other banks driven by the world superpowers. We would have been back under colonisation - only this time, through economic slavery instead of military. Something had to be done. The only path (other than selling our souls) was to save these banks with internal resources - with tax payers' money - a noble and patriotic decision. So, Danaharta was incorporated in 1998 to acquire all these NPLs at a discounted values from the local banks financed by the country's coffers which adds up to about RM3,000 million. Danaharta was to restructure these NPLs and recover as much as they can allowing the banks to concentrate on their business without the burden of NPLs. But of course, the banks had to take some hit. They took the hair cut of those NPLs being sold at a heavily discounted price to Danaharta.

On the surface, citizens of Malaysia expressed dissatisfaction on Government's exploitation of tax payers' money for this Danaharta venture. This anger was merely driven by political motives. What the citizen failed to understand is the mere fact that we liberalised our country from economic slavery. Had we taken loans from the International Monetary Fund ('IMF'), Malaysia would have been obliged to adhere to the terms and conditions of the financial assistance, which could have included, amongst others, IMF-tailored national policies on many important matters ranging from monetary, banking, development, military or even political agendas. We could have ended up with a puppet government whose balls gripped by the hands of those economic hitmen.

I do not intend to go into detailed banking calculations of bloody Rate of Returns, Recovery Rates, Net Present Values and other similar crappy financial jargons. But what I do want to share with you is the lay man's comprehension of what we, as the citizens of this beloved country, has collectively contributed to this success. To do this, we need 2 sets of data. First, the financial information from Danaharta. Second, a set of assumptions for hypothesis sake. Here goes:

1. Let us assume out of the 30 million population of Malaysia, one third are minors and one third are retired citizens. This assumption may not be correct but hey,... it is believeable though. let's just adopt this assumption anyway.

2. So, we have 10 million of the population earning income from their employment. Now, let's assume only one third have to pay taxes. So, we are down to 3 million. However, many of us, dishonestly and irresponsibly avoid taxes. So, let's say out of the 3 million, only 1 million actually pay taxes.

3. As extracted from Danaharta Final Report 1998 - 2005, the shareholders' funds stood at RM1,864 million. For those who are financial illiterate, shareholders' funds represent the money Danaharta has at the end of its lifespan in 2005. What this means is that, out of the RM3,000 million funds injected by the Government, from the country's coffers, we have lost RM1,135 million.

4. Simply take the RM1,135 million and divide by the 1 million tax payers. Each tax payer contributed RM1,135 over the lifespan of Danaharta of 8 years. This means that the contribution averages at about RM142 per year = RM12 per month.

Wow! that is simply magnificent! Imagine that! What we, tax payers, had to do was just pay RM12 per month for 8 years to save the country from being dragged into economic slavery that could have deprived us freedom forever. How's that compared to taking financial aids from superpowers such as IMF? Sure we suffered loss given that NPL recovery was not 100% and that our banks still had to take haircuts. However, on a bigger picture, that loss only represents RM12 per month for us who pays taxes. We get to keep our country away from economic colonial masters. What is RM12 really? If everyone of us stop buying pirated DVDs for 8 years, it would have meant nothing to us really! In fact, even if we did spend that RM12 elsewhere, an additional RM12 still means nothing... 6 cups of coffee per month... no big deal.

What we, tax payers, had to do was just pay RM12 per month for 8 years to save the country from being dragged into economic slavery that could have deprived us freedom forever... RM12 means nothing... 6 cups of coffee per month... no big deal!

* kopihangtuah

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17 August 2012

Dawn of Syawal


I would like to take this opportunity to seek forgiveness from all regardless of your age, religion or ethnic origin. I am sure I am not spared from the imperfection of committing sins, even as small as atoms. We must not forget that we are humans. For that, we err. For that, we are humbled by the mere acknowledgement of our weaknesses, as humans. With humility, comes realisation. With realisation, comes gratitude. With gratitude, comes love. Therefore, at the dawn of Syawal, it is only appropriate that such love is epitomised through forgiveness. Let's forgive each other. Happy Syawal.

* kopihangtuah

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05 August 2012

10 Things Malaysians Should Improve, Seriously!


LIFTS have often caused frustration amongst Malaysians particularly those who push baby prams. Seriously, why do most Malaysians insist using the lifts at the shopping malls when there are escalators? We really should save the lifts for those with prams, old folks, pregnant women, maintenance guys and most importantly, disabled people. Not only that, some of us are quite rude when using the lifts - just bloody let the people out first before you storm in!

QUEUES needs to be respected. Why cut queues? It is simply plain rude to do so. In fact, you should allow others to cut queue if they are those with prams, old folks, pregnant women or disabled people. The concept of queue is simply "First There First To Get" - which is a fair idea. But no,... we Malaysian (or most of us) loves to ignore such courtesy and selfishness rules. You'll find rude Malaysians cut queues everywhere: At the lifts, on the roads, at the bus stops, KFC, McDonalds and what not. This has to change.

TOILETS at the public areas are just disgusting. They are really horrible. Toilets would be the ultimate indicator of our hygenic awareness. If we cannot clean our own shit at the toilet, we might as well live in shit. Seriously, are we dirty people? I don't think so. It does not take much to wipe the toilets with tissues and press the bloody flush levers. Building maintenance should do their jobs of repairing broken toilets and keep them clean all the time... and for heaven's sake, we Malaysians need water! Do away with the Western culture of wiping ass with just tissues and no water. Gimme my water! Please!

TRAFFIC jams are enough to make you lose your sanity and temper. Let alone stupid drivers on the roads. Don't they teach you the 2 indicator lights at the driving schools? Use them idiots! There is only 1 Sunday in a week... not 7 Sundays! So don't be a tortoise on the road especially on the fast lane. What's with the high beam? You want to make a statement is it? You are the King of the road and you want everyone to know is it? Blimmey,... I can write till the cows come home on this topic. Be generous to allow cars from incoming roads - use the alternate rotations for cars from 2 merging roads will yer! And of course, make sure your Smart Tag batteries are charged up!

PARKING is a scarce space. It is unfortunate that developers fail to provide adequate parking spaces for apartments, shopping malls and office buildings. I don't know whether to blame the authorities who approved the plans or the developers who are trying to save money. Either or, both contributed negatively to this problem. But the citizens must also behave appropriately. Do not double park. If you really must because of emergency, then don't pull up your hand brakes. If you see a car waiting for a parking spot of another car that is leaving, don't steal that spot!

TIME is precious. But many of us chose to not respect time. I may also be guilty because sometimes, the traffic jams are just unpredictable. However, in many cases, many of us just simply do not care whether we are late for a meeting. We do not care that others have their own schedules to run for. I find it very frustrating that such behaviour is most apparent with public services especially when dealing with Government officers. Perhaps the new Chief Secretary (Ketua Setiausaha Negara ('KSN')), Dato' Ali Hamsa, will start to address this?

RELIGION AND ETHNIC ORIGIN is something that is quite significant in Malaysia because we are multicultural, multiracial and multireligion society. We have co-existed (the various races) since the Melaka Sultanate era in the 1500's. I would have imagined that we understand each other's requirements. Surprisingly, many of us, especially youth, are still ignorant. Why invite Muslims when you have pork? Why must Muslims forget to provide mutton or vegetarian food for the Hindus when they invite their Hindu friends? Why must you eat at a hotel Ramadhan buffet at 7:15pm when you can wait for 7:30pm to eat together with the Muslims sitting around you? Why some Muslims send white coloured greeting cards to Chinese when White denotes Death? Why must you speak Cantonese or Hokkien in a team of people that also includes those who can only understand Bahasa Malaysia and English? The most common disrespect I have encountered would be people calling my handphone during Friday prayers.

RUBBISH management is pathetic. I wonder how the local councils work. Sometimes it takes days before my bins are cleared. At a more personal level, many Malaysians litter. They simply throw their rubbish anywhere they like. This is common amongst smokers. Maybe cigarette butts are small. How about drink cans? The most shocking experience I had was on the highway - the car in front of me simply threw out drink cans onto the road. Idiots! Sometimes I snap a photo of the car registration number to disclose it on the social network - just to satisfy my anger.

MOBILE TELEPHONES seem to ring whenever and wherever without any regard to its appropriateness of not being put to silence mode or switched off. Ringing phones at meetings reflect the low level of courtesy we have. In fact, it is rude. Not only meetings, how about in the cinemas? Lecture halls? at weddings? in the Court? The worst ones are those who do not switch off their phones during prayers at the mosque.

PIRACY is a big offense. The most common amongst Malaysians are movie DVDs, downloads of music and video games and software copies. This culture is probably very difficult to be addressed. We are surrounded by countries that produce various imitation products. I think this is largely an Asian problem. However, Malaysians can make a difference, at least in supporting the local industry. Buy original DVDs for local movies and CDs for local music. Many local artists cannot make a decent living because of piracy. The Government may put in a lot of efforts to elevate the local creative industry but if our own people do not support the local industry, then we are doomed in that arena. I used to collect music cassetes and CDs for my favourite artists (both local and foreign) and I still do. The youth of today do not own any CDs. They have it all in their thumbdrive. If it is iTunes, than it is fine. If not, high chance that piracy is at work.

* kopihangtuah

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