7 Ideas to Get Your Creative Juices to Flow Even if You are the CEO

www.kopihangtuah.blogspot.com

YOUTH needs inspiration. They need examples that they can follow. They need to learn from others who have made it. They need to learn from you - those were the words of an event organiser persuading me to give a talk to young Malaysians about how I managed to pursue my passion to be an artist despite my hectic life as a CEO in the corporate world. I took the challenge. All I had in my mind was the urge to use both the left and the right brain as the means to pursue my creative arts undertaking. After much thought, it involves a lot more than that. It involves the following 7 that I have unintentionally undertook in pursuit of my passion:

1. Find the time. If you have the time to bitch about others in the social media, then you shouldn't say you do not have the time. Block your diary as if it is part of your work commitment.

2. Don't be calculative. Go buy those canvases and paints like how you would buy pirated dvds or cigarettes or vapes and do not say you do not have the money.

3. Get your family and friends to join you. That way you simultaneously cover both hobby as well as quality time with your family and friends. I try to get my son to follow me to the studio for painting or even jamming. Recently a brother as well as a friend of mine joined me. Now my studio has 3 artists.

4. Let go of all worries. The human mind becomes very rigid if you put too much rules and regulations. Break free from the norm. Do things abnormally. You will realise how liberating it can be and that is a conducive state of mind to be creative. For example, why paint a scenery of Sawah Padi? Why not paint a scenary of Ultraman fighting Godzilla in a Sawah Padi?

5. Let others see your work. Social Media is good for this. But be open to criticisms. Some will like your work. Some will say it is crappy. Ask them why. You are then able to continue doing what is good and improve on what is bad.

6. For every work that you do, find a message that you want to deliver. That message is normally very simple but it will subconciously flow into your thought process and will manifest itself in many aspects such as the colours that you use, the objects that you choose to paint, the brush strokes and the like.

7. Don't take things for granted. Beauty is all around you. You need to pause and acknowledge the beauty and cherish it. Enjoy it. Only when you can appreciate it will it be able to work through you and be reproduced in your creative undertaking. For example, going to art shows or art museums will open your mind to the wide spectrum of art, creativity and beauty. Appreciating God and the life that He has given you is the ultimate source of inspiration.

I think 7 is enough :)




* kopihangtuah

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2016 Malaysian Budget: As Jotted on a White Board

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BUDGET has always been an interesting topic for me when it comes to blogging. Over the past years I have blogged about it in a comprehensive manner detailing as much information as I can and in the context that is relevant for the comprehension of the Malaysian society at the time those budgets were tabled in the Parliament. 

This year, 2016, I am taking a different approach. The Malaysian society seems to only digest information that only requires them 10 seconds to read particularly on controversial matters on the social media. Therefore, I shall not bore readers with my long winded narration (.... like what I am doing now). I shall use a photo of bullet points jotted on a white board.

Dato' Sri Najib Razak tabled the 2016 Malaysian Budget today, 23 October 2015, at 4.00pm. His (budget) is a very tight one given the significant fall in the Government revenues following the depression in oil price that fell from RM100 per barrel to RM50 per barrel. Despite the sluggish revenues, he has somewhat articulated a fair and appropriate budget. 

If asked, "What is the 1 crucial point that the budget has uncovered?", I should appropriately say, "We are lucky that we have implemented the GST!" In fact, Dato' Sri Najib did say in his budget speech, "Even the oppositions (Pakatan Harapan) have included GST into their shadow budget paper.... thank you for agreeing with GST.... finally.... "

Here is the promised snapshot of the bullet points on 2016 Malaysian Budget as jotted down on the white board:

* kopihangtuah

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Khazanah Megatrends Forum 2015 Talks About Creative Disruption

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We need to address social and economic disparities. Malaysia has always ensured that its policies are formulated to address such disparities. Even when Government's intervention is minimal, the Government must ensure that the market does not produce such disparities. This is congruent with an old quotation by an ancient Oriental philosopher that says, "Governments do nothing but leave nothing undone." - Tan Sri Dato' Seri Utama Nor Mohamed Yakcop

KHAZANAH MEGATRENDS FORUM (KMF) has once again attracted over 1,000 attendees. For the 2015 chapter (KMF2015), it was done at the Mandarin Oriental Kuala Lumpur earlier today and is expected to end with a speech by Y.A.B. Dato' Sri Najib Razak, the Prime Minister of Malaysia, tomorrow evening. The seminar is co-organised by Khazanah Nasional Berhad and Khazanah Research Institute and for this year, the organisers have chosen "Harnessing Creative Disruption : Unlocking the Power of Inclusive Innovation" as the subject of the forum. Like many other corporate players, I too did not miss the opportunity to jot down notes for my takeaways from the forum. They are as follows:

KMF2015  had an opening address from the Deputy Chairman of Khazanah Nasional Berhad and the Chairman of Khazanah Research Institute, Tan Sri Dato' Seri Utama Nor Mohamed Yakcop. His address was a short and impactful one, as he usually does it. Tan Sri Nor gave the impression that whilst we should embrace Creative Disruption, we must not lose focus of the overall picture. For example, the United States of America (USA) has the top 10 riches man in the world such as the founders of big names like Apple, Google, Facebook and the like but at the same time, it has 15% of its population as homeless with that statistic rising from year to year. We need to address social and economic disparities. Malaysia has always ensured that its policies are formulated to address such disparities. Even when Government's intervention is minimal, the Government must ensure that the market do not produce such disparities. This is congruent with an old quotation by an ancient Oriental philosopher that says, "Governments do nothing but leave nothing undone."

KMF2015 also had a special address by the delightful author and independent strategic advisor, Charles Leadbeater. Charles was a relieve to the audience as he sets the tone of the forum to be a relaxed one given the stressful high expectation vibe the title of the forum has. Charles came out with a formula, "Rising Aspirations + Tight Constraints X Limitless Collaborations = Creative Disruption". His idea was a survival story. With the rising expectations, human beings struggle to achieve such expectations with the scarce resources surrounding them. In the end, they are forced to think out side the box to bridge the gaps they encounter and to work around the issues arising. This is, in his opinion, Creative Disruption. What are the ingredients of obtaining that 'out side the box' inputs? He is certain that there are four: Lean, Simple, Social and Clean. Many companies work on lean basis with no Human Resources Department or minimal overheads. They aim to achieve their intended offerings as simple as possible without having their customers to think much about it. Often this involves actions that are pervasively spread across the population requiring some degree of trust, shared costs and reuse of resources. And of course clean is the new thing - many companies are health conscious, they go green and avoid pollution and such. A very good example would be Uber, although many would object.

In the first session we saw a debate on Macroeconomics and Markets entitled "From Mountain High to River Deep: Will Emerging Markets Become Submerging Markets?" On the Bull team we had Stephen Hagger, Managing Director and Head of Equities at Credit Suisse Securities (Malaysia) Sdn Bhd; PK Basu, Head of Malaysia Research and Head of ASEAN Economics at Macquarie Capital Securities (Malaysia) Sdn Bhd; and Ms Sharifah Laila Syed Ali, Group CEO of ValueCAP. On the Bear team we had Dr Arup Raha, Chief Economist at CIMB Group; Dr Don Hanna, Managing Director and Head of Research at Roubini Global Economics; and the legendary Tan Sri Dato' Dr Lin See Yan, an economist and former banker.

The Bull team has Mr PK Basu presenting his optimistic future on Emerging Markets (EM). EM such as South East Asia (SEA) will see a bright 35 years to come as they reduce dependencies on concentrated sources of economy. The market is seeing China slowing down. That is merely readjustment by the Chinese given its overwhelming foreign investments relative to its Gross Domestic Product (GDP) in the past years. Once this adjustment takes place, China is sought to regain its momentum for consumption growth. Ms Sharifah Laila capitalised on this point by saying that there is too much pessimistic psychological fear in the market over uncertainties that causes panic. Once such fear is filtered, it is really about the underlying data that provides meaningful observation for investors. Stephen Hagger reinforced the point of China regaining its growth but offering a contradictory observation. His was the idea that Chinese growth will come from domestic market leaving global involvement at a low end. For the absence of China globally, all eyes will turn to EM, such as SEA.

The legendary Tan Sri Dr Lin See Yan argues from the Bear's perception quite intensely. Tan Sri believes that the currencies, particularly the Malaysian Ringgit, are cheapening too fast. As a result, productivity is affected as many manufacturers close shop. He also suggested that the Malaysian market needs to recognise market players based on merits and not politically. He gave Silicon Valley as a good example where the Americans are accepting Indian citizens as the main economic drivers (from Silicon Valley perspective). He believes that the Government should reduce its role and let the private sector play a more significant role. At the moment they (the Government) are crowding out the private initiatives. Dr Arup Raha further emphasised that the EM are indeed experiencing an export slump predominantly because China has slowed down its imports. Dr Don Hanna further provides some key parameters where if not addressed, will cause EM to contract. Hanna believes that the EM will experience a reducing productivity in its economies as birth rates fall and mortality decreases. In the end, EM will have an aged workforce with low productivity. In addition, he also predicts that the world capital resources will flow back into USA as USA increases its rates. This would only mean the opposite to the EM.

Escaping from the stressfull debate, Sabastian Thrun, the Founder and Chief Executive Officer of Udacity and the Founder of Google [x] enlightened the audiences of KMF2015 with his success story. Sabastian was inspired by South Korea where they had achieved a 10% contribution to the enrollment of engineering students in global universities. This is a remarkable achievement given its low population of only 30 million as opposed to China (more than 1 billion population) and India (1 billion population) where those 2 countries had recorded 20% and 50% enrollments respectively. Over the years, South Korea has managed to increase its knowledge based population that is now enjoying an  income per capita of USD30,000, well above most of the countries in Europe. He believes that improved education will improve the economy. 

On the back of such realisation, he (Thrun) embarked on a Massive Open Online Course (MOOC) at Stanford College offering the subject "Introduction to Artificial Intelligence". The course was offered for free over the internet. The result was a remarkable observation: Top 412 rankings of those who passed the exams were from MOOC and the in-house fee paying lecture attending students could only get 413 as their highest ranking. There were 23,000 graduates from the MOOC programme and when calculated, it only costs the college USD0.60 per student. These graduates now work in the IT industry as programmers. The whole success led to the emergence of nanodegrees that span over 4 to 10 months at USD200 fee per month with the chance of a refund of 50% if exams are passed. This caused massive enrollment. Hence, Udacity was born. Sabastian also believes that Malaysia is the perfect economy to apply the Udacity concept. Why? Because Malaysians are at the world number 1 ranking for smart phone users. 87% of its (Malaysia) population are aged lower than 25 and it has good educational institutions such as Universiti Malaya that is ranked at number 146 in the world. Nanodegree is a formula that will work as it has been tested. Imagine that the world's smart phone users of 2 billion people means that there are more smart phone users than there are toothbrush users. This means technology can be easily embraced.

The next session was Firms and Transformation on the topic "Learning to Fish: How do Firms Harness Creative Disruption?".  Christopher Mueller, the Group Chief Executive Officer (CEO) of Malaysian Airlines Berhad, has a lot to tell about transformation given his recent appointment as a CEO of a sick airline company. He confessed that the airline industry is the worst when it comes to Creative Disruption. The industry is full of competition but yet everyone trades airline tickets like a commodity. It is highly regulated and its propensity to innovate products and offerings is low given the high Research and Development costs. With all these, no wonder the airline industry suffers from a very high inertia when it comes to change. For example, to get a newly designed airplane seat to be approved, it needed 5 years of bureaucracy. Therefore, efforts must be put to embrace Creative Disruption in the airline industry.

David Frigstad, the Chairman of Frost and Sullivan, has interesting points to share about how Kodak went bankrupt. He believes that Kodak could not change its culture because it could not cope with the changing environment. Kodak was an analogue company trying to grow in a digital environment. Even though they invented the digital camera, they did not believe in it. As a result, they were protecting their traditional film cameras. This so called "arrogance" cost them the entire company. And so it happened, Kodak went bankrupt in 2010. The key point to be taken as the lesson here is that we must always be sensitive to the surroundings. If the company is changing slower than the changes in the markets surrounding it, that means the end (for the company) is near. Richa Kar, the Founder and CEO of Zivame, a female innovative e-commerce consultant web service for female apparel, believes the same. Richa manages the company based on what the customers are pursuing. They react to the market to ensure that they are changing in tandem with the market.

From the venture capital front, both Mohd Khairil Abdullah, the CEO of Axiata Digital Services Sdn Bhd (that has a venture capital fund called Axiata Digital Innovative Fund), and Sumant Mandal, Co-founder of March Capital Partners and Managing Director of Clearstone Venture Partners; believe that entrepreneurs are our best hope for the future. They will be the main drivers of innovation. However, the environment needs to be conducive to them just like how Silicon Valley is to many of the start ups in USA. Asians tend to look at failures as negative milestones in entrepreneurs' lives. In the USA, it is pretty much the opposite. Failure means education. The more failures an entrepreneur faces, the more educated he/she will be. It (failure) is the most effective way to chart for future success as the entrepreneurs become more robust over time. It is this positive vibe that the society needs to give to the entrepreneurs in the EM. Innovation requires many trial and errors. Appetite for failure should be increased for greater good. As they say, "Lose the battle but win the war".

I (unfortunately) ended my KMF2015 listening at Khairil as I needed to attend to a business meeting. I will be attending the 2nd day tomorrow and if worthy, I shall blog another post - we shall see. However, I must share with my readers the key takeaway points from Dato' Sri Nazir Tun Abdul Razak, the Chairman of CIMB Group and a Board member of Khazanah Nasional Berhad, who is also the Prime Minister's younger brother, who gave a luncheon address while I was eating a contemporarised Eastern-Western fusion Nasi Ulam at the Mandarin Oriental. His key messages were: Malaysia needs to restructure its Constitution, political structure, economic policies, social structure and Government enforcement based on merit, transparency as well as inclusiveness that can achieve a well balanced society and wealth distribution. For this, perhaps it is wise to have a 2nd National Consultative Council (NCC) as how Tun Razak had done in 1969. I wonder whether Dato' Sri Nazir will tell these points to the Prime Minister (his brother) himself tomorrow when both will be in attendance at the KMF2015 closing.

Malaysia needs to restructure its Constitution, political structure, economic policies, social structure and Government enforcement based on merit, transparency as well as inclusiveness that can achieve a well balanced society and wealth distribution. For this, perhaps it is wise to have a 2nd National Consultative Council (NCC) as how Tun Razak had once done in 1969 - Dato' Sri Nazir Tun Abdul Razak

* kopihangtuah

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Lim Chee Sing, an Economic Expert, Comments about Malaysia

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TODAY, well, yesterday, since it has past midnight, I watched the 11pm Nightline on TV3 presented in its special format, Ringgit Sense. To my delight, it was Mr Lim Chee Sing's turn to be interviewed. I have very high regards of this dude. He had once given me and my team a lecture on Malaysian economic update back in 2013. He is the Group Head Economist for the RHB Group. A prominent guy in that field.

Lim is vey fair and unbiased. He had these comments to offer us, laymen, to understand Malaysian economics rather than listening to the propaganda infected news and bloggers out there especially the internet and social media:

Malaysian economy continues to grow despite all the other negative indicators. This is evident from its first half year Gross Domestic Product growth of 5.3% for 2015. It is expected that the whole 2015 will close at 5% and even if is to be lower, it would be close to 5%, making it one of the best performers in the region. 

The strong performance is because Malaysia has a very good economic fundamental substance. For example, its fiscal policies included a more efficient broadbase consumption tax, Goods and Services Tax, that not only helped improve Government revenues, but also reduces reliance on other sources of revenues. This is a courageous move given its unpopular reaction from the public politically.

Then there is the issue of CDS marking Malaysia as junk. Clearly this lacks fairness because it was concluded on the back of a very risk adverse mindset of short term investors. As mentioned earlier, it is not a fair conclusion. This conclusion was merely arrived at by virtue of them grouping Malaysia in the same group as Brazil. Brazil was earlier rated as junk by S&P. However, Malaysia got a good rating of A - by S&P. How can Malaysia be grouped together with Brazil? 

It must be comprehended that the Malaysian economic problem's main culprit is the oil price. Malaysian has been over dependent on oil revenues. As a result of Global economic's influence over oil price, i.e. dampening, Malaysian has seen a fall in its oil export revenues. Lesser Ringgit demand for oil exports has caused the Ringgit to fall. That is the main cause of the Ringgit depreciation.

Many parties blamed the domestic political turmoil on governance matters had caused the fall in Ringgit. Of course, political landscape has its impact on the confidence investors have for our economy, and hence affecting the Ringgit. However, this is not the main contributor to the fall in Ringgit. I must remind that oil price was and is the biggest contributor to Ringgit depreciation.

With the Government's objective policy settings, particularly for the 2017 National Budget as well as the roll out of Rancangan Malaysia ke-11 (11th Malaysia Plan), We have good chance of emerging out of this economic downturn.

~~~~~

* kopihangtuah

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Malaysia in an Economic Equation

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ECONOMICS was my favourite subject when I was in Uni. It may well still be my favourite subject given my interest in the Malaysian Socio-Political-Economic dynamics. On my first day at school in Year 13 of Uni Foundation, I was taught to understand this equation, if I remember it right - pls correct me if wrong :

GDP = Aggregate Demand = (c - t) + I + G + (x - i)

GDP is Gross Domestic Product, an aggregate measurement of the total production by a particular economy that is assumed to reflect the demand for that production. In economics, an equilibrium of Aggregate Demand equals Aggregate Supply will always be met as and when market forces react against or with each other to arrive at that equilibrium. In laymen's term, 'you produce what people want to consume' versus 'you consume what is produced by the market' will strike a balance resulting in price determination. What are the variables of the market forces? Well, here they are, based on the above economic equation:

(c - t) is Consumption Expenditure less Taxes. The inflation rate is now at 3% to 4% - still not too bad to ensure prices of a basket of consumer items are affordable save for oil and gas product that is haywired at the moment. Taxes dampen disposable income and thus, reduce propensity to consume. However, if Taxes are reinjected back in the equation via G, which I will explain later, will have positive impact to the economy. Another indicator to gauge whether we have enough stamina to ensure sustainable consumption expenditure is the unemployment rate. Currently it is low at 3% implying that there would be plenty of disposable income across the population.

I is Investment. Currently foreign investments are at RM22 billion. Although a lot has been pulled out over the past month, RM22 billion is still higher than RM18 billion registered in 1998. Our political turmoil had dampened foreign investors' confidence but many are still maintaining their investments in Malaysia. So, we are still not in dire straits position (never I hope).

G is Government spending. As evident in Rancangan Malaysia ke-11, a lot will be allocated for the nation's development well in excess of RM200 billion with maximum 4% budget deficit projected. This commitment from Government will make the country even more conducive for economic growth as it will address matters such as infrastructure, redistribution of wealth, entrepreneurship catalysts, education, new sources of economy for diversification to rely less on oil and gas as well as enhancement of various economic corridors.

(x - i) would be Net Exports, i.e. Exports less Imports. We are a net export country. However we rely too much on oil revenues. Recent fall in Ringgit affects us negatively because of this over reliance. However, Ringgit will be cheap now pushing exports back up again given 76% of our exports come from manufacturing. Imports are important for our consumption. We are still under control for the retaining of imports to meet demands as our foreign reserve at USD96 billion is enough to support 7 months of retained imports, which is well above Global standard of 6 months.

* kopihangtuah

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Malaysia's Stable Outlook Despite Political Turmoil

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It is quite amusing that Malaysians themselves are very negative of their own economy when foreign rating agencies like Standard and Poor's and Fitch Ratings are very optimistic. This shows that the agencies are objective in their assessment of the fundamentals of economics rather than be biased by political propaganda.

STANDARD AND POOR'S (SnP) has affirmed Malaysia's "stable" outlook with an "A-" rating for long term and "A-2" rating for short term foreign currency sovereign credit ratings as reported by the New Straits Times recently on 28 July 2015. This outlook was concluded despite the political turmoil that is haunting the Najib administration particularly on issues surrounding 1MDB. One would conclude, prima facie, that the political turmoil is so pervasive that the overall confidence of Malaysia would have impair the ratings by SnP or even any other rating agencies. It appears that not only SnP, even Fitch Rating has concluded favourable a few weeks ago as confirmed by the Secretary General of the Ministry of Finance, Tan Sri Irwan Serigar. So, why would the outlook still be positive? It is because of the fundamentals of the economy.

Considerable monetary flexibility as weighted against moderate fiscal deficits of 3.9% and manageable Government debt burden is one of the factors. The policies that supported this are not impeded by the corruption allegations involving 1MDB. In fact, it will help Malaysia to withstand a slowdown in the oil and gas sector in years to come. To complement this, there is a need to boost the exports, for which, quite conveniently, the Ringgit has indeed weakened to help realise this. A weak Ringgit is not necessarily bad. A weak Ringgit is what we need. When Malaysian exports are cheaper (as a result of weak Ringgit), demand will grow to expand exports further especially for manufactured goods (that will partly offset the fall in revenues from oil). This is what it means by good fundamentals. One should realise that in any economic cycle, there must be a balancing act. This is the balancing act.

Bank Negara Malaysia has also operated effectively in controlling inflation that is now at 3% to 4%. Reliance on external debts have also been reduced given the active domestic bond market particularly the Sukuk market. General Government debt of 2.9% of Gross Domestic Product ("GDP") expected for 2015-2018 is a significant improvement from the 6% for the past period of 2009-2012. On the flip side, Malaysia is exposed to contingent risks associated with guarantees on debts and letters of support particularly the ones related to 1MDB for a total amount of RM11.4 billion. However, given the strong asset backing of RM52 billion covering power and realty assets, over the RM42 billion debts on the balance sheet of 1MDB, such contingent risk is remote from being materialised. 

Malaysian public enterprises have diverse financial profiles with strong cash flows and considerable portion of liquid assets. To demonstrate confidence, the non-resident holders of Ringgit-denominated Malaysian Government Securities has risen sharply to 28%. With sound policy making, floating exchange rate and high foreign exchange reserves, SnP is confident that the foreign investors will maintain their investments in Malaysia. So far, the policies as presented in the Parliament for the 2016 Budget as well as the 11th Malaysia Plan has been favourable towards developmental expenditure. Ringgit is still floating albeit continuous weakening but a blessing in disguise to boost the export market. Foreign exchange reserves stood at 7.6 months of retained imports which is well above the global standard of 6 months. All these, coupled with strong large domestic institutional investors and local capital market, will drive Malaysia to better growth expected to be at 5.5% for the GDP for 2015.

It is quite amusing that Malaysians themselves are very negative of their own economy when foreign rating agencies like SnP and Fitch Ratings are very optimistic. This shows that the agencies are objective in their assessment of the fundamentals of economics rather than be biased by political propaganda. They acknowledge the strength of the Government policies and are confident with the commitment from the Government to drive macroeconomic reforms as evident by the implementation of non-popular initiatives such as the Goods and Services Tax ("GST") and the subsidy rationalisation.

Malaysia is exposed to contingent risks associated with guarantees on debts and letters of support particularly the ones related to 1MDB for a total amount of RM11.4 billion. However, given the strong asset backing of RM52 billion covering power and realty assets, over the RM42 billion debts on the balance sheet of 1MDB, such contingent risk is remote from being materialised.

* kopihangtuah

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How Worthless Are 1MDB Power Assets?

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With all the information reported by the Edge digital, I guess the big "hoohaa" about 1MDB buying worthless power assets (because PPA expiring soon) is an episode of Benny Hills Show (or, if Malaysians are not familiar with the British comedy, let us use Jangan Ketawa or Scenario)

MALAYSIANS, including me, have been following the 1MDB issue quite closely particularly from the business perspective. The biggest issue is of course the RM42 billion debt that is claimed to be backed by assets worth RM52 billion. There are many components to this RM52 billion but I will need the full Balance Sheet to analyse it, which I do not have. Nevertheless, some qualitative comments can be made and in this case, I would like to refer to the power assets, the power plants. The amount paid for the power plants was alleged to have been overpriced as those are plants with Power Purchase Agreements (PPA) that will expire soon. How true is this?

The Edge digital article for yesterday's edition (1 August 2015) "Can TNB get a good price for 1MDB’s power assets?" reported some delightful information. Why delightful? Well, now I am comforted that many of those power plants do still have significant remaining concession years under each PPA. It should be noted that 1MDB paid RM12 billion and assumed RM6 billion of legacy debt to buy all the power plants. The Edge says "1MDB may be hoping for RM18 billion to RM21 billion in terms of enterprise value, but industry executives estimate that the assets might only be worth around RM14 billion in these fire-sale circumstances." They further said that it is not fire-sale time and there are immense interest from a bunch of people including from Qatar, China, Malaysia, Philippines, Indonesia, Saudi Arabia and others to buy those power assets.

In this case, they might just be able to get the RM18 billion to RM21 billion that they were hoping for. In fact, if not break even to recover acquisition price as well as the assumed debt, they may even get profits out of it. Now, what would be a good indicator for those power assets to be able to meet that value expectation? One of the answer would be the remaining useful lives of those assets as I had mentioned earlier. The Edge digital had listed the power plants in their article (as reprinted in the below table). As mentioned earlier, only small portion of that portfolio will expire soon (or has expired). 

Looks like only Teluk Gong and EPC in Bangladesh is expiring soon or expired recently. The 2 totals to 550MW which is small when compared to the total of 5,594MW that 1MDB owns. The PPA that is expiring in January 2016 could easily be renewed by the Government (Via Tenaga Nasional Berhad). The other one that has expired is a small 110MW power barge moored off Bangladesh that is still running and in negotiations with the Bangadeshi Government for an extension. Even if the extension is not given, the barge can simply sail to another area where power is needed.

With all the information reported by the Edge digital, I guess the big "hoohaa" about 1MDB buying worthless power assets (because PPA expiring soon) is an episode of Benny Hills Show (or, if Malaysians are not familiar with the British comedy, let us use Jangan Ketawa or Scenario). I think 90% of the people have or had this perception (of worthless assets) but we are now revealed, with this enlightening information, that the reality is contrary to the popular believe. My sincere hope is that 1MDB can recover monies (with profits) so that the Rakyat's interest (in our sovereign wealth) can be protected. Amen.

* kopihangtuah

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An Email to a Friend Who Had Migrated to the UK for Not Believing in Malaysia Anymore

www.kopihangtuah.blogspot.com



Dear Friend,

I have no issues if documents from journalists are not false and given to authority straight away. In this case, both Sarawak Report (SR) and the Edge have tampered documents (according to the Thai Police and internet cyber expert from the UK which many have conveniently forgotten to consider whenever debating with me) and that they held information to be released strategically with the intention to tople the Government given their meetings with opposition Member of Parliament - both Tony Pua admitted as well as the Edge owner whatever his name is. 

I cannot accept Tony Pua having secret meetings with Clare Brown of SR while Tony is also on a bi-partisan Public Accounts Committee ("PAC"), a committee appointed by the Parliament. Clearly this lack or absolute non-existence, or disrespect for objectivity, independence and segregation of interest destroys the credibility of the entire package of tampered documents, SR, the Edge, Tony and sadly, the PAC as well. 

Also, do not try to hide behind Whistleblowing Protection Act (711) 2010 (the "Act") because clause 11.1.b of the Act says that if docs are procured illegally and being made exposed when the person exposing it knows very well that it is false, they are not eligible for protection under the Act. In fact, given the scenario we are dealing with, the authorities have fair ground to charge them under other statutes or common law for treason! Yes I will wait with patience for the results of the investigations by the Malaysian Royal Police, the Malaysian Anti-Corruption Commission, Bank Negara Malaysia, the Auditor General, thr Attorney General and, sadly, the PAC, assuming Tony's conflict of interest have been addressed. 

I am not going to disrespect the application of law especially when we are going to charge someone with criminal offence. Hence, law must be followed as stipulated in our Rukun Negara, "Kedaulatan Undang-Undang" (Rule of Law), as well as "Keluhuran Perlembagaan" (Upholding the Constitution) if we are to talk about the treason against a democratically elected leaders. If law is followed and evidence suggest that so and so is guilty, so be it. Until then, I do not intend to behave like the rest of the crowd that jumps to every opportunity to critisize without proper consideration for due diligence. 

You and I know that as much as we are guessing the guilt of some party, the same guess is also made on the innocence of that same party. The difference is, you accuse the notion of Guilt on the basis of journalism that have yet to be verified, whereas, I assume the notion of Innocence in the absence of verified information until proven otherwise. Your approach, if ended up incorrect, demands an apology. My approach, if ended up incorrect, entitles me to change my mind from the notion of Innocence to Guilt. Truly with my concept, I should be awarded with the credibility of being "non-partisan" and "advocate of proper law and order" as opposed to your ways of "anti-ruling Government regardless of the existence of proper evidence" and a non believer of "Kedaulatan Undang-Undang" and "Keluhuran Perlembagaan". 

So my friend, the next time you want to debate with me, make sure you cover all angles that I have presented to you. I am fair. If your arguements are valid then I will agree with you on some matters but never to accuse without proper due diligence. If we allow chaos for not following the Rule of Law, then we will be destroyed like many nations such as some of the Middle Eastern nations. What is happening now should not be our way. This clearly shows how unprofessional some of our opposition politicians are when they get themselves involved with the likes of SR. You have always make fun of me by saying "Conspiracy Theory from Movies", well joke it may seem (initially), but look at what has been uncovered from this saga? 

Cheers.



* kopihangtuah

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Part 2: Merdeka and Independence Carry Different Meaning

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The non-Malays were allowed to have their share of the prosperity of the country as citizens and they continue to do so as provided under the Federal Constitution. Our Federal Constitution provides for both Malays and non-Malays.

2014 MERDEKA had me thinking about what is the true meaning of Merdeka - hence I wrote in my previous post Part 1: Merdeka and Independence Carry Different Meaning. This year I decided to write a month earlier than 31 August simply because I found more facts and answers to this 50 over years struggle of our multicultural society. Many of my friends, particularly non-Malays, expressed concerns over my article that I posted last year. It seems that my views can be taken as racism. I never intended to portray racism. I was sincere to express that the Malays are a majority lot that needs their position to be safeguarded particularly on economy, land, culture and the right to govern matters. The non-Malays were allowed to have their share of the prosperity of the country as citizens and they continue to do so as provided under the Federal Constitution.

Our Federal Constitution provides for both Malays and non-Malays. The right term to use should be Bumiputeras and non-Bumiputeras. The link above should tell you sufficiently how the Malays struggled to protect their very existence on their own land. I had also written way back in 2010 about how Tunku Abdul Rahman had negotiated with Tun Tan Cheng Lock and Tun Sambanthan in arriving at a win-win "Social Contract" that was to be the prelude to what is now a Federal Constitution that looks after both sides. It is worth while reading it, hence, I present to you the link here - NEM Means?

The so called Social Contract is supported by the Federal Constitution of Malaysia. For reference, Article 153 (1) and (2) of the Federal Constitution in which Sub Article 1 "Special Position of the Malays and the Natives of Sabah and Sarawak, collectively known as Bumiputera" and Sub Article 2 "Legitimate Rights of Other Races (that include the right of citizenship)" were cemented in reciprocal basis (i.e. Jus Soli). Jus soli in Latin means the right of the soil that is the right of anyone born in the territory of a state to nationality or citizenship as an unconditional basis for citizenship. Both were not written in isolation to each other.

This has been agreed upon by our founding fathers in furtherance from the terms originated from the 1948 Federal Agreement that predates the Independence Day and even the formation of what it is now known as Malaysia. Can the Bumiputera status be challenged? Well, if you try, it'll probably fall under Sedition Act. Not only that, even the Bumiputera also find it difficult to challenge the legitimate rights of the non-Bumiputeras as it is equally seditious and a act of crime. This is a demonstration of the reflection of the principle where the two Sub Articles do not stand in isolation.

If someone is to legally revoke this, they'll have to get at least two thirds of the Parliamentary majority and with the Royal consent from the Majlis Raja-Raja (Conference of Rulers). This is why the Malays hold dearly their Kings as they are the guardians of the Federal Constitution that stipulates their rights as Bumiputeras. The non-Bumiputeras should, logically, also have the same view about the Kings from the perspective of protecting their rights under Sub Article 2 as mentioned earlier.

I came across a relevant blog post that actually tells the history of the relationship of the Malays and the non-Malays with the land we now call Malaysia (Credit to Blogger, Seademon, in his post on 23 August 2012 entitled “The Road to Merdeka – Being Malaysian (Part One)). It gives us why our Merdeka carries a different meaning to the concept of Independence of the other nations. The article has been summarised and re-edited as follows:

• The Malays have always been the recognised natives of the land. The Malay Peninsula has always been the home of the Malays. The Malays then lived without boundaries, and flowed between islands in the Malay Archipelago, even with the conquest of Malacca by the Portuguese who were there to seek revenge against Muslims in 1511, and the subsequent colonisation of Malacca by the Dutch in 1641, there was no stop to the flow of Malays between one point to the other until the Anglo-Dutch Treaty of 1824, a treaty that split the Malay Peninsula with Sumatra and the rest of the Malay Archipelago.

• The British were cunning when it comes to acquiring territories. As in the case of Australia, in order to avoid any problems with the native people, they would declare the land as terra nullius (no-man’s land), and this, to a certain extent was applied to the Malay Peninsula. Although in the Federated Malay States the British were employed by the respective Sultans, it is difficult to ignore the fact that the British were here to reap the benefits of this land without wanting to give much back to the native people, but with a degree of subtlety.

• In order to keep the Malays from creating trouble for the British, land reservations were introduced to transform the native Malay population into permanent agriculture peasants. It worked for the British well in 1900 when they introduced the Punjab Alienation of Land Act to control and supervise Punjabs as agricultural tribes. This was done on the basis of protecting and preserving the native people by secluding them from the immigrants who were invited to explore the country. The Malays were asked to grow food for the immigrants.

• The British brought in lots of immigrants directly for their benefit. Undeniably, they were the workforce badly needed to develop the country. The Indians were British subjects (India was a Colony, while Malaya was not). They were made to work in the estates, and as British subjects, were given basic necessities such as very basic accommodation and Tamil schools. The first Tamil school was opened in Penang in 1816. As the number of estates grew, so did the number of Tamil schools. By 1905, there were 13 government and Christian missionary Tamil schools, the latter were set up as a mean to proselytising Christianity.

• The Chinese were brought in to work the tin mines. Most were in Malaya to make money to be brought back to their families left back in the Mainland. As they had an allegiance to none, enriching themselves in order to achieve a good life once they return to China was a dream of virtually all the Chinese immigrants. Unlike the Malays, they were self-sufficient and very hard-working.

• While the British set up the Pauper Hospital (now the Kuala Lumpur Hospital), the Chinese united and collected amongst them enough to set up the first Chinese hospital, the Tung Shin Hospital, where it still stands now, to treat Chinese miners who refused to seek treatment at the Pauper Hospital when the number of Chinese miners who died at the latter hospital increased drastically. They thought the British were killing them on purpose. As the Chinese came from different parts of China, tribal and gang wars were rampant. The British allowed Opium in in order to control them.

• This was the way the British divided and ruled. Eventually, swayed by the profit they were earning from the Malay States that they forgot their promise to the Sultans which was to protect the interest and welfare of the Malays. The bulk of the Malays lived in rural areas and they had very minimal contact with the other races, the Chinese were basically in towns and tin mines, while the Indians were in rubber plantations. The effect to this was that the Malays remained backwards and were told to stay as peasants or tillers of the soil, the Chinese inherited all the tradings in the Malay States and became the richest residents, and the Indians remained as rubber-tappers without proper infrastructure.

• As a result, the Malays who were given land to cultivate, forced by economic disadvantages, began charging or creating a lien (collateral) over their land to the Chettiars. The Malays, already in a disadvantaged position, cried foul and started the “Malaya for Malays” movement in the late 1800s. EW Birch, the 8th British Resident of Perak, recognised this dire situation and quickly proposed a policy of preserving the Malay land. The only way to him to preserve the Malay race was to “free them from the clutches of those people who now remit to Indian large sums of money, which they bleed from the (Malay) people.” This later became the Malay Reservation Land Act which spirit is preserved in the Malaysian Federal Constitution.

• For the same reason the British ignored Tan Cheng Lock’s cry of “Malaya for the Malayans.” In the 1930s, Chinese and Indian leaders addressing the Straits Settlements Legislative Council, appealed for some measures of self-government, and to be considered as Malayan Chinese and Indians having a stake in their country of birth and adoption. The non-Malay Malayan Democratic Union and the Java-leaning Persatuan Kebangsaan Melayu Malaya supported the formation of the Malayan Union and had sought for immediate citizenship for the immigrants and a rule other than by the Malay Rulers respectively. It was at this juncture that the British had first offered Malaya its independence, but was rejected by UMNO fearing that the Malays, being minority in his own country, lacking education and economic backbone, might not survive against the other races soon after independence. The Singapore Institute of Management Malay Cultural and Muslim Society noted that the Malay man was an immigrant in his own country; confronted in his own world which he had little control.

• When the Communists ousted the Kuomintang from China in 1949, many overseas Chinese including those in Malaya and Singapore, did not know where to return to; while others sought for the unification of the Chinese in Malaya, with Communist China, through armed struggle. The more broadminded Chinese associations united to form the Malayan Chinese Association (MCA), and together with UMNO, set aside their differences to work together in the Kuala Lumpur Municipal Elections in 1952. It was also in 1952 that the British gave Malayans their term: we can only discuss independence if the people of Malaya are united.

• This happened when the Malayan Indian Congress (MIC), that was previously formed to support the fight for the independence of India from the British, joined the Alliance in 1954. The MIC, under Sardhar Budh Singh, was very critical of the Malayan Union. Together under the Alliance, these parties won the first General Elections in 1955, winning all but one seat. This solid mandate by the people of Malaya, comprising of the Malayan Malays, immigrant Chinese and Indians, paved the way for the road to Merdeka.

• The Reid Commission was formed in 1956, its members, Lord William Reid (Britian – Chair), Hakim Abdul Hamid (Pakistan), Sir Ivor Jennings (Britain), Hakim B Malik (India), and Sir William McKell (Australia) were proposed by the Constitutional Conference (comprised of members of Her Majesty’s Government, the four Malay rulers, and representatives of the Malayan government that had won the elections in 1955) and agreed by the Queen of England, and the four Rulers of the Federated Malay States representing the Malay States in Malaya. The Commission’s duty was to draft a proposal of the Constitution of Malaya that would incorporate the concepts of Federalism and Constitutional Monarchy, special position for the Malays, Islam as the religion of the Federation, and Bahasa Melayu as its official language, although the Chinese and Indians had their right to vernacular schools protected.

• The Reid Commission was not, as portrayed by some quarters, a party to the discussions between the British and Malayan governments, and the Malay Rulers. Their duty was to draft and make recommendations to the Constitution of Malaya. These recommendations were accepted or rejected in agreement by the Constitution Conference – namely the British Government, the four Malay Rulers, and the Government of Malaya that had the mandate of 98 percent of the Malayan people.

• The Malayan (subsequently Malaysian) Federal Constitution became the foundation of this nation, agreed upon by our forefathers who were united in their resolve to build a nation where all three races respect the historical background, rights, and nature of the other races, and to live as one in a country they call their own.

* kopihangtuah

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AWO has spoken, "Is the Malaysian Economy on a Good Track?"

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"Factors such as psychological liberation, democratic maturity and scientific progression are some of the key elements for societal development if we are to achieve Vision 2020" - Datuk Seri Abdul Wahid Omar

ABDUL WAHID OMAR (Datuk Seri), or, also known as AWO, is a figure that I have been closely monitoring since his days as the Chief Financial Officer (CFO) of Telekom Malaysia Berhad. Back then, I was an audit manager who had to present to him the audit findings of Telekom Malaysia Berhad. With sincerity, I must say, AWO is man of integrity. He is a no-nonsense man and keeps a clear mind to focus on issues at hand. He has a very structured thinking process yet approaches matters from out side the box. He is both left brain and right brain. No wonder he is both a Chartered Accountant as well as a bass player when jamming with his fellow CEO-Musician friends such as Izham Omar (TV3/8TV/TV9/ntv7), Dato' Sazalli (Celcom) and Dato' Zamzamzairani (Telekom).

So what is the deal with this man called AWO? From an already dignified position as the CFO of Telekom Malaysia Berhad, he was then entrusted by the Government to take over the management of the Renong/UEM listed group of companies from Tan Sri Halim Saad. Once Renong/UEM was back on its toes, the trust brought him back to Telekom Malaysia Berhad as its Chief Executive Officer (CEO). Whilst it is normal for CEOs of Government Linked Companies (GLC) to move from one GLC to another (as CEO), to move from Renong/UEM to Telekom Malaysia Berhad and then to Malayan Banking Berhad and finally being appointed as a Senator to assume the role of a Special Minister within the Prime Minister's Office, is, in my honest and professional opinion, a damn good CV to be proud of - not so much of the glorious roles but of the trust that AWO has managed to earn.

As you can see, my first two paragraphs are meant to build up his reputation so that readers can have the comfort of a trusted person managing the affairs of the country. Hence, I must declare that he (AWO) has my utmost trust (as a Rakyat). Although his appointment is somewhat political, I find his ways to be very much non-partisan with the sincerity to serve the nation. For these, I recommend that you too (the Rakyat) to also trust him. Nevermind the political roller-coaster that is on air at the moment. What is important is that the country's economy is being looked after while we, as a nation, sort out the political drama. To enlighten us (of the state of our economy), AWO has spoken, "Is the Malaysian economy on a good track?" (As summarised from the New Sunday Times, page 8 - 9, 3 May 2015). AWO had these to share:

HOW ARE WE DOING IN ACHIEVING VISION 2020

AWO believes that Malaysia is on track to achieve its aspiration of becoming a high-income nation with Gross National Income (GNI) per capita of above USD15,000 (RM53,900) by 2020. In 1990, the gap of our income benchmarked to the World Bank high income nation was at 66%. Today it is at 22%. AWO is confident that by 2020, the gap will be nil. Income alone is not a good indicator. Factors such as psychological liberation, democratic maturity and scientific progression are some of the key elements for societal development if we are to achieve Vision 2020. This, he intends to address.   

DEPRESSION IN OIL PRICES IMPACT ON THE ECONOMY

The recent plunge in the oil prices has negatively impacted the economy. This will reduce tax revenue collection, investment and export earnings.However, via various aspects of fiscal policies, the Government has managed to handle the situation as evident by the country's growth of 6% for 2014 and an expected 5.5% for 2015. Malaysia is kept on a balanced exposure so that it is not over-exposed in any one industry or commodity. For example, whilst commodities make up 23% of Malaysia's total exports, more than three-quarters of that comprise manufactured exports that are diverse in terms of product and market. Such diversity can cushion any significant fall in any one of the commodities. 

Basic economics need to be harvested. The country (he believes) should take advantage of the excess disposable income whenever oil prices are low. The extra disposable income should boost consumption expenditure and that will in turn restart the economic growth. Like wise, investments in non-oil related industry should now experience a boost. Although commodity exports are negatively affected, manufactured exports should experience positive growth on the back improving global economy.

SUBSIDIES RATIONALISATION IS FOR A GREATER GOOD

Subsidy cuts are not popular moves, but it works (for the sake of the economy). Since 2013 the Government has been reducing the petroleum subsidies echoing the declining prices of the crude oil prices. As a result, the country has extra funds that came from 1.3% subsidy reduction in 2013 and 6.4% subsidy reduction in 2014. This led to a lower budget deficit. The extra income also made it possible for BR1M that helped increase the disposable income of the low income earners. As mentioned earlier, increase in disposable income can only lead to increase in consumption expenditure that boosts the economy. 

DIVESTMENT OF GOVERNMENT ASSETS

The Economic Transformation Programme, or the ETP, is not just another abbreviation. People need to know that it carries substance that is essential to the economy. The ETP was formulated to achieve three main objectives: (i) avoid crowding out the private sector, (ii) increase the liquidity of the capital market; and (iii) improve the country's fiscal position. The Government will move away from the role of an investor to facilitator. The Government will systematically reduce ownership and control in selected services and assets particularly in some of the GLCs via outsourcing, privatisation and divestments. This will improve quality, promote flexibility, reduce costs and improve Government's fiscal position whilst creating greater opportunities for the private sector participation.

GOODS AND SERVICES TAX (GST) IMPLEMENTATION

GST implementation was tabled in the 2014 Budget together with an "offset" package such as a lower tax rate and longer list of zero-rated and exempt items. This is to ensure that the Rakyat is not over burdened by GST. GST is also one of the tools to battle with the reduced oil related tax revenues. GST itself is an efficient way of taxation. As of mid April 2015 alone we have more than 350,000 companies registered for GST. This higher-than-expected volume is expected to give us extra RM1 billion revenue. Had we not done this, we would have depressed ourselves with the reduced oil related tax revenue. In other words, we must not let ourselves be exposed to a concentration of source of revenue.

SINGAPORE AS LOGISTICAL OUTLET?

Key Malaysian ports such as Port Klang and Port Tanjung Pelepas, are ranked as top 20 busiest ports in the world. Penang Port is popular among ships from Thailand for rubber exports to Japan and China. Those from Iskandar region who uses air freight prefers Changi Airport as it offers better air network. Of course, we should use our own ports as much as possible. However, if better services can be procured from Singapore, then it makes sense to use Singapore. The Government (via Economic Planning Unit - EPU) has, however, recently released five strategies and 21 action items to position Malaysia as the preferred logistics gateway. Cargo exports via Kuala Lumpur International Airport (KLIA) will be boosted and infrastructure at Port Klang will be upgraded. Cargo clearance process will also be simplified to minimise throughput time.

INCOME DISPARITY AND POOR WAGE LEVELS

The growth of mean income for the Malaysian household in the Bottom 40% of income earners (B40) grew by 9.9%, lower than the Middle 40% (M40) growth of 8% and Top 40% (T40) that grew at 7.4%, from 2009 to 2014. This is a positive sign that wage levels are catching up with the rising cost of living and at the same time reducing the disparity between the income groups. It is difficult to compare to Singapore and Korea (as many have voiced out) because those countries have high income earners driving the economy. Malaysia is primarily driven by middle-income earners. This is why we need to structure our economy to be high knowledge-based where we could have more high income paying jobs. 

For this, various initiatives will be implemented to create high-skilled jobs with high pay. This will be a conscious effort from the Government's side when making investments. The focus will be on knowledge-intensive and innovation-based workforce. Existing industries will be pushed to contribute more to the Gross Domestic Product from 33.6% in 2013 to 40% in 2020. This is partly done via minimum wage policy but productivity must be increased. Both Government and the citizens must work together. The Government will facilitate in the quest to produce more technical knowledge based workforce via its Malaysia Board of Technologies. In addition, performance-related pay schemes need wider implementation and upskilling and reskilling of the existing workforce is something very crucial for  a total workforce shift (upwards).

I must declare that he (AWO) has my utmost trust (as a Rakyat). Although his appointment is somewhat political, I find his ways to be very much non-partisan with the sincerity to serve the nation. For these, I recommend that you too (the Rakyat) to also trust him. Nevermind the political roller-coaster that is on air at the moment. What is important is that the country's economy is being looked after.

* kopihangtuah

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