Halal Biz <-> Pak Lah Family <-> Temasek Nexus; Another Nail In Pak Lah's Political Coffin?

It is not so much a surprise when Rocky broke the story of yet another Government Business <-> Pak Lah & Family <-> Temasek/ Singapore nexus, but a disappointment. This should not be happening still, on the back of:

1. The obvious; the poor PRU-12 results for BN surely was reflective of the people's dissatifaction with the governance of the country and blatant pork-barreling by "the friends and family of Lah" club.
2. Ever increasing food costs brings sensitivity to any issue related to the food and beverage (F&B) business, including the Halal certification. People should be, no, they actually will be asking why Pak Lah and family is making money out of the F&B business via a link to what is a government monopoly of sorts when the people are having to suffer the cost of spending more money just to eat! And Malaysians MUST HAVE OUR FOOD!
3. When there is sensitivity around Islam Hadhari (resulting in the loss of Kedah), Karpal's challenge over the role of the Sultan in Muslim affairs and the challenge on the use of Allah in non-Muslim literature, why is Pak Lah and co. fooling around with another issue sensitive to Muslims in Malaysia?
4. The Pantai Cross-Border Economic Bail-Out and other pro-Singapore initiatives like the SJER have blown up in te government's faces in the past. Surely Pak Lah is not intending to tempt the fate of Thaksin Shinawatra yet again!

One good thing about this news though... at least its another potential nail in Pak Lah's political coffin!

Re-Focussing Angst And Efforts On Foreign Direct Investments (FDIs) - SJER


After my last posting, a fellow Promudan challenged my cynicism towards the IDR, citing the government's intention for IDR to emulate the the Pan-Pearl River Delta Development in China; where Singapore plays the role of Hong Kong and IDR region that of the mainland provinces of South China.

At this stage, allow me to begin referring to the IDR by its old name, the SJER or South Johor Economic Region. The reasons for this I will present later.

I actually do not agree that the SJER emulates the critical elements of Pan-Pearl River Delta Development. Those who equate then have accidentally, or by choice,ignored the following factors:

• LEVEL OF INTEGRATED DEVELOPMENT - Pan Pearl is also called 9+2, where Fujian, Jiangxi, Hunan, Guangdong, Guangxi, Hainan, Sichuan, Guizhou and Yunnan are jointly developed WITH Hong Kong and Macau in one development effort. The effort is integrated for the benefit of the whole or majority of the whole, with the following implications:

1. The focus of development should be equally weighed against the needs of all parties, whereas the government pitch seems to be overly-sensitive of fulfilling Singapore's needs for SJER, specifically, land (low land investment oversight), labour (passport-less region?) and basic resources like water.
2. In reality, for SJER to be equivalent to Pan-Pearl, the SJER region must include Singapore WITHIN SJER, with the SJER management body having a say in directing Singapore's development to support SJER. Can't imagine Harry Lee Kuan Yew agreeing to this though! He would basically be reporting to the state government under the rule of the Sultan of Johor!
   

• RIGHTS OF SOVEREIGNITY - for which the problem seems to be very much our own government's lack of sensitivity of what the inherent rights they should be protecting.
  

1. As mentioned, for SJER to be like Pan-Pearl, Singapore's development must also be driven by needs dictated by SJER development board etc for the sake of SJER as a whole. I see it unlikely for Singapore to agree as it would abrogate their sovereign rights.
   
2. It is hence strange that the Malaysian government does not seem to mind having Singapore government reps give direct input as part of SJER's management core. This must be one of the few instances in the world were even a slice of power is surrendered voluntarily by a government to a foreign power to decide on the fate of some of its citizens on its own sovereign soil!
3. Pan-Pearl does not have this issue of course, as HK and Macau are part of China, avoiding any sovereign issues.
   

• SIZE - The biggest difference between the SJER and Pan-Pearl is by far in size and scale. Pan-Pearl River Delta's 9 Chinese provinces are significantly larger than Malaysia - why then is the focus so South Johor-centric!

1. If the government was right serious and about emulating Pan-Pearl, the region should be LARGER, and even incorporate slices of Indonesia, perhaps also Thailand and Southern Indo-China.
2. The government can then have tried to be clever by positioning South Johor as an alternative secondary (but fast growing to equal) hub to Singapore for the wider Pan-Central ASEAN Development.
   

• REGRESSION TO THE 80's FTZ ERA - The SJER seems to be a regression from the MSC and BioTech corridors we had been moving to as offerings. The MSC, Kulim Hi-Tech Park, etc included a focus on key industry niches that also pushes Malaysia up the FDI value chain. The SJER is just a broad-based resource Free Trade Zone (FTZ) with some glitz, but no apparent value focus.

1. Hence, by ignoring all the above, the government has not offered up a real equivalent to Pan-Pearl with SJER, when comparing FTZ to FTZ! FTZ - this is so 1980's! (Incidentally, when Musa Hitam was last involved actively in development as a cabinet minister)
2. As an FTZ, on size alone, the SJER is hence poor competition to Pan-Pearl, and certainly struggles to provide an ASEAN-wide offering to challenge it. Indeed, this is probably why the SJER is being poorly received by the West (who'd rather invest in China), Japan (prefer Indochina) and even Oil-Rich Arabs (Dubai is still being pumped up). Hence probably the over-focus on one ever interested party - Singapore.
   

But as I said before... Singapore should not matter so much...

As I'm busy with a new baby and now with my sister's coming wedding, I'll keep a running brief on this piece and perhaps update it from this stage onwards as and when info, understanding and opinion gels.

So, why do I wish to still refer to the IDR as the SJER. Well the reasons are:

1. I understand that permission for use of his name for the SJER has not as yet been sought from the Sultan of Johor. The name "IDR" was unveiled as a 'surprise', against all rules of protocol and Malay propriety at the launching of SJER, to the Sultan's chagrin, and it seems he is still waiting for the request from those 'in charge'.
2. SJER is a more appropriate acronym for it, being Singapore's Johor Economic Rape!
   

One last running word on the NEP thing - I don't see why the NEP and its removal or otherwise is such a big deal where attracting FDI is concerned. In truth, EU commissioners like Rommel have something to complain about all ASEAN countries - Indonesian corruption, Thai's military, Philippines' gunpowder democracy, even Singapore's authoritarianism.

In the end, NEP had not been able to deter investment in Malaysia throughout the 70's through to even post 2000. Why should it 'magically' be factor now? The outside investors just don't care about our social-engineering agenda - as long as their investments are not risked by it... Is there anyone out there selling the story that the NEP puts investor's good money at risk...? Who...?

Re-Focussing Angst And Efforts On Foreign Direct Investments (FDIs)?

A discussion on the Promuda Circle on our Foreign Direct Investment (FDI) performance (which can be tracked by even non-members from this link) has such potential that I'm taking a break from my new baby. (Yes, the another son of mine has arrived, Alhamdulillah!)

Of the matters not yet said on the discussion at the Circle, which also explored the issue of Malaysia's competitiveness vs China and Singapore, I put forth the following to be noted in discussions on FDIs:

1. W.r.t. competition for FDI, Malaysia is typically not seen as a competitor to China, but the ASEAN Free Trade Agreement (AFTA) region, i.e. ASEAN, is seen to be so. In fact, outside of the cash-rich aberration that is the gulf states, the demographically attractive regions for FDI now are seen as China, ASEAN and India, in order of 'sexiness'.
2. Malaysia is hence not really competing with China for FTA, but rather with other members of ASEAN for FDI into ASEAN. Of course our own competitiveness may help drive ASEAN competitiveness upwards to help ASEAN compete against China, but in a country perspective, Malaysia competes with say Thailand for ASEAN FDI, much like Jiangsu competes with Shandong for China FDI, or Tamil Naidu with Karnataka for India FDI.
3. Malaysia also does not, or rather should not, compete with Singapore for ASEAN FDI. This is because Singapore's role in ASEAN as a region is much like Hong-Kong's or Shanghai's, that of an enabler of inter and intra regional trade. It also fulfills a role familiar in other regions as a neutral clearing house for finances, like the Swiss performs for Europe and Frankfurt and London from within the EU.
4. Malaysia's competition is really the other 'almost there nations' of Thailand, and if you like, perhaps Jawa and Luzon as high net-worth regions within Indonesia and the Philippines. These countries and regions compete for FDI to fulfill its own development and also when acting as launching pads into higher risk and potential areas of development in Indochina, and the rest of Indonesia and the Philippines.
5. The main reason some ASEAN countries like Malaysia, Indonesia and Thailand, are annoyed with Singapore is because it misbehaves whilst trying to impose a stronger presence in the region (than it deserves?). In the case of Shanghai and HK, this had resulted in swift reprisals (corruption charges on Shanghai Mayor and the general put-down of over-zealous democratic activists in HK by mother China). Hence the Thais are trying to emulate such actions with their treatment of Temasek's Thai holdings post-Thaksin.

Perhaps Singapore behaves this way on behalf of LKY, who's ego likely suffers from the fact that he had never been considered the leader of the ASEAN or South East Asian nations when two of his Malaysian rivals (Malays to boot!) had been seen as such; Tunku Abdul Rahman (with MaPhilIndo and the Konfrantasi) and Tun Dr Mahathir (when he pushed for EAEC which resulted in ASEAN+/EAEG being formed regionally and APEC being formed by the US as a counter).
Please note that from the outset I assume that we are trying to attract the right sort of FDI, the type that will result in Greenfield economic development, not simply selling Malaysian companies to foreigners (individuals and entities) and calling them FDI!

In the end, Malaysians should consider the following 2 approaches to enhancing our attractiveness to the right form of FDI:

1. We should benchmark against and close the gap between us and the competitors that are beating us, and Indonesia (Jawa most likely) and Thailand are beating us to FDIs at the moment.
2. We have to remove the factors that erode our value as an FDI destination, and I'm not talking about the NEP et al, using this as an excuse is simply politicising the issue out of ignorance.
   

The factors that erode our value as an FDI destination include:

• inefficiencies in actions and infirmities in government policies.
• the continued perception of indecisiveness and lackadaisical attitude of our nation's current leaders.
• being trapped in the old models for development, like free trade zones/special development regions (the IDR being a case in point)
• in our insecurity, forgetting to nurture our real strengths as a nation, such as our creativity, openness and appreciation of diversity.
• being over-respectful of the ideas and initiatives of others whilst neglecting to value local talent, achievements and initiatives
  

The Singapore factor is only a factor as long as we allow it to be a factor. In the end, Singapore should not matter. Else, Tunku Abdul Rahman would not have thought its 'value' to be insufficient to compensate for its bothersome leaders, leading him to expel Singapore from the Federation for the greater good of Malaysia!

It hence continues to puzzle me why the Lah-ist regime is so hard-up for Singapore to participate in the IDR? In fact, why have an IDR at all? I would have thought North Perak or the Malaysia-Thai Border or perhaps Sarawak from Sibu to the interior deserves more development focus than the IDR. Could it be because Singapore sees no benefit from developing these other regions? Why should it matter what Singapore thinks about Malaysia's priorities?

Crunch Points Of 2007, With Q1 Leading To Initial Conclusions

I had a gathering with a few friends on New Year's Day to discuss the potential crunch areas facing the nation this year, 2007. It was partly in reaction to the on-going number of issues, many unresolved till today, and many more arising continuously, almost swamping us to the point where many have stopped caring. We thought it was important to focus on the key issues that may place the nation in danger, in the eve of our 50th Merdeka celebrations.

By far the most critical item was agreed as being the impending USFTA. The group believed this was the biggest issue, though surprisingly the issue the rakyat were least aware of, as:

1. If miss-handled, it had the potential of being the most damaging agreement the country has ever agreed upon since independence, to the risk of even sacrificing out sovereign rights to the US, a power that has shown itself to be selfish and unsympathetic to other, closer, past partners.
2. The recent JapanFTA with Malaysia has indicated a degree of incompetence of the current government in concluding such agreements, resulting in an agreement clearly NOT in Malaysia's favour, when a better agreement would have been easy as Japan is a country that has a long-standing, cooperative and benign relationship with us.
3. Worryingly, there has recently been anecdotal evidence from the behaviour of MITI, especially the long serving minister, that the Japan FTA was not signed with the ministry's full endorsement, but an agreement was forced by 'other forces', much as being seen recently for the USFTA.

Compared to the USFTA, the other 2 'crunch' events seen then are more benign, but are themselves major events were it not for the presence of the USFTA. The second highest ranked issue for my part was Proton, or rather what the government was going to do about it.

The Proton issue is a long-standing one, but is critical in demonstrating the seriousness of this administration in establishing good corporate governance and the building of a progressive Malaysia. Continued misshandling of Proton, by rewarding its ownership to the wrong parties, or denying its success by turning it into a second-rate subsidiary of a foreign rival, would be seen as confirming that corporate corruption and the culture of mediocrity is alive an well in Malaysia.

As mentioned on occassion by this blogger, my book of writings on Proton is coming along nicely, with materiel from former leaders and internal sources from bidding companies, hopefully, shedding more light to the whole mess so far, though we hope (naively?) nevertheless leading to a good outcome.

Finally, the issue we thought would be of interest moving later into the year was Synergy Drive and the amalgamation, and re-allocation (as there must be), of the assets of the major Plantation GLCs in the country. Synergy Drive is seen as a larger and potentially bigger test case of the extent of corporate corruption and mismanagement has progressed than Proton.

Of particular additional interest also is the way the merger will change the power-structure in Malaysia's corporate landscape, with the plantation companies wielding so much power even whilst apart, second only to Petronas in the GLC ranks. Will our plantations continue to be steered by Nationalists like those in PNB, with Nation-Building agendas, or new-age Economic Hit-men like many in Khazanah, with KPI's and 'loose change' on their minds... and little else?

We are coming into the end of Q1 2007, and I believe the above to still be pertinent, so many may ask, where is the 9MP and Singapore's Johor Economic Rape (SJER), now better known as the IDR (Iskandar Duped Repeatedly). Well, I believe the 9MP to be nothing more than a poor man's PR trick (I mean really, do you remember the 8th, 7th, 6th... MPs?). And the IDP, the biggest real-estate auction in history, deserves a separate category altogether...

As for the coming elections... well, I think the handling of USFTA, Proton and Synergy Drive should probably be guiding lights for Young Professional voters in Malaysia on how they cast their votes in any case. On these issues we can decide if the government is guiding us and our country where we think we deserve to be driven, in a decent Proton running along in 'synergy' with our nature and desires, and without some obnoxious American as a backseat driver!