Wednesday, December 27, 2006

About A Boat...

Let me be clear about the intention of this blog. It is not just meant to espouse my musings as a Malay Muslim Professional, but intends to take a Tangent on things, with the hope it will engender thinking. With this in mind, let me begin this posting, which is all about how Pak Lah can afford a RM30 Million dollar Turkish built Yatch (~US$8.5 Mill at current exchange rate).

Much has been said about this boat, or yatch, but the key issue here is not whether or not Pak Lah as the PM of Malaysia should or should not buy a yatch, but whether or not he can afford to buy one on his salary. (Side-step: for the life of me, I have no idea what nuances separate a yatch from a sailboat, i.e. boat, so my apologies if in my haste, I trivialise the description)

Someone has bandied about a figure of RM30k per month as the salary of the PM, saying this is too low a salary to support a purchase of a RM30 Million boat. Actually, this is irrelevant. Pak Lah is at the time of writing ~67 years of age. I know of no bank that will give a loan for a period of more than say 5 years to someone of Pak Lah's age, if at all, especially with rumours of his medical procedure recently, even if it was for a nasal condition. No offence, but he's just too old to be bankable.

So, the salary is actually out as a method of payment for him, but for more reasons than one. However, he may well have other means.

Means 1: Civil Service Perks = Past Investments

Let's consider a few things here. The first is that Pak Lah has been a civil servant since 1964, for >40 years; man, he's been a civil servant for longer than most Malaysians have been alive! What does this mean?

No, it does not just mean that he has suffered too poor a salary for >40 years to afford a RM30 Million boat, but it does mean that he has had access to civil service perks for that long! Haaa... no, it doesn't mean he has been able to get corruption and kickbacks for that long... haiya!

What I am getting at is that he has had the opportunity to buy real estate under the government's schemes under SPPK, UDA, etc, when they were still worth something. Lets consider these facts:

  1. A bungalow in Damansara Heights bought for ~RM80k in the 1970's is now worth ~RM3.5 Million
  2. A bungalow in Bangsar bought for ~RM200k in the late 70's is now worth ~RM3 Million
  3. For context, a terrace house bought for ~RM45k in TTDI in the late 70's is now worth ~RM500k

The above is typically how honest Malay civil servants of modest means invested in the 70's and 80's to be able to send their children privately for overseas education in the 90's and this century. Even a low to mid-level civil servant's family, especially if both adults are working, could secure a couple of terrace houses in the 70's and be sitting on ~RM1 Million of real-estate today!

So Pak Lah could well have made money from such investments to buy his boat. One expects with his stature as Finance Minister and his numerous expositions against corruption, he must have had some inkling of the oppotunities to invest and grow his assets in the above honest way.

Means 2: The Traditional Way Of Making Money = Inheritance!

Pak Lah comes from a line of noble UMNO leaders. His grandfather was a leading ulama and I understand both his grandfather and father were founders of UMNO. I can imagine these men would have left him some decent inheritance in the form of land at the very least when they passed on.

And land has appreciated rather dramatically everywhere in Malaysia. And where is Pak Lah from? Penang! Hurrah! Imagine the land prices there now, especially around the new 2nd link!

One must also not discount the fact that Pak Lah has recently lost his wife. It is believed that Pak Lah's late wife's family is quite well to do, being a prestigious civil servant family with links to successful business clans too! Pak Lah's marriage to the late Datin Seri Endon was seen to have set him up for a successful civil service career. It is hence also likely that Pak Lah inherited some from his wife's passing.

Small compensation though I am sure from the loss of such a pillar of strength by his side.

Means 3: The Filial Way Of Making Money - His Rich Kid(s?)!

Pak Lah had admitted in the Bangkok Post that his son Kamaluddin is rich! Surely here is a way for Pak Lah to get a decent loan to buy a boat, not by getting Kamaludding to buy it, but by having his son guarantee the loan for the boat for him, so that it is within his limits to pay with his salary.

Besides, Pak Lah is PM, so his housing, transport, medical bills, food and drink, even his holidays are at public expense! So with a guarantor, all RM30K or whatever pay could go to paying for the boat for an extended loan period of say 50 years?

I say kids as I understand Nori is doing some business as well. However, we should probably exclude Khairy here as his rice bowl has been broken by some old man.

I suppose Pak Lah also has siblings and siblings-in-laws that can afford to help him with collateral for the boat, if not secure all of the loan as his far richer son can.

Conclusion - enuff said on the matter!

So, to conclude, lets not waste any more of our time talking about this boat, yatch or whatever. A physicist is said to be able to prove an elephant can be balanced off the side of a cliff with a daisy. In Malaysia, our politicians and their cohorts have been seen to prove even more amazing feats, like how selling a valuable world-renown motorcycle company for a dollar is 'good business'...

... whilst recording the resultant few hundred Million RM loss as 'acceptable', endorsed by the Securities Commission no less!

Lets focus on more important things than the rumoured opaque private financial dealings of a man who just happens to be the PM... like his running(?) of the country for instance... now that's an issue!

Monday, December 18, 2006

What Could A Real More Islamic Policy Revamp Look Like: Ideas On Taxes

We have been a little trapped I feel by the trend of having the powers that be in Malaysia, or those linked to them, establishing the agenda for debate on policies to be implemented in the country. I suppose in some ways this is the fault of our earlier leaders who for the most part, either had good ideas, or had ideas of such grand scheme, not too many of us had the capacity to suitably react!

Unfortunately, the ideas being kicked around these days are pretty run-of-the-mill, or a little too obvious. On top of that, their implementation appear to be a little unsuccessful.

e.g. We will Eliminate Corruption! Really... what a novel idea! I would ever thought of that (LOL). By the way, I thought we were eliminating this corruption thing since 3 years ago now, but why do international monitors now see the country as suffering more corruption?

Well, if we are not happy with this state of affairs, we would be at fault if we didn't try to put some of our own ideas across. If anything, this may lead to gaining credence and refinement for the better of our ideas, with the hope of implementation of the deserving perhaps?

I'm keen on giving this a whirl. Lets begin with something like say... taxes! What changes to the tax code may be interesting to explore in Malaysia? And to add some dimension to it, let's link this policy revamp to a moral code, which to me would be Islam.

OK, in the early days of Islam, 'tax' took very specific forms. One form of tax, called 'Jizyah', began as a tax applied to non-Muslims to provide them parity of treatment as citizens whilst they were exempt of duties defending the nation, which is an obligation according to Islam. In fact, some non-Muslims were exempt from Jizyah due to their taking up the duties of defending the nation side-by-side with Muslims.

So, if this was the case, shouldn't we move to have the salaries of our armed forces as well as probably our civil defence personnel tax exempt? One may even be able to make the argument for civil servant salaries to be tax exempt, but lets start with the armed forces, the police and the fire department, as I doubt there would be much argument that this is in line the principles of Jizyah and its exemption in the past.

(Besides, I've always found it a silly exercise to have our civil servants' pay, which comes from our taxes, being taxed themselves! Seems easier to make the recipient of tax monies as pay to have a reduced pay that's tax free in the first place.)

This may not be earth-shatering as ideas go, but can you imagine the power of extending the theory behind Jizyah. So, what constitutes a warrior in the current world? Would a trade negotiator for FTA's etc. for instance be a warrior worthy of tax exemption? What about athletes at international meets? Do their efforts as warriors for the pride of the nation make them deserving of tax exemptions?

We can even ask what dimensions tax exemption can take. For instance, rather than have all civil servants salary tax exempt, can we consider the idea of having civil servants exempted from any property related taxes other than capital gains? This may not be as lucrative as an annual tax exemption, but it would help remove a hurdle to home-ownership.

Note that civil servants are typically not paid so high as to have much cash in hand for the ancillary cost of purchasing new homes, costs which are normally not covered by a bank loan. Tax exemptions such as this one will help reward their daily warrior-like sacrifice for the nation in the spirit of Jizyah.

We can extend this everywhere, from direct taxes for civil servants being at a lower rate geared to criticality of service to the nation - like a big exemption to teachers say, through to the indirect by say making gains from insurance payouts AND INVESTMENTS, tax-exempt for civil servants, encouraging them to take up private insurance to allow then some access to private hospitals, rather than having to rely on public hospitals and clinics only.

Please note that I'm not a tax-cut advocate by any means. However, I tend to think there are a mechanisms to make such mechanisms tax-revenue neutral to the government. OK, the tax exemptions linked to industries like that on home purchases or insurance benefits may be neutral from engendering greater economic activity anyway, but additionally, the government can consider applying taxes to those committed to avoiding public service? I'll leave this open...

Maybe the over-reaching idea here is for some tax experts in government to sit down and study the Islamic morals driven tax laws of old to discover some underlying logic, hence seeing its applicability for the current world. Any finance guys and gals out there even thinking of a Masters or PhD study on these matters perhaps? Would be cool if TAXES of all things could be made so interesting a matter of study given the right dimensions... and ideas...

Thursday, December 14, 2006

Singapore's Johor Economic Rape

I was shocked to notice that I hadn't posted in this blog for almost 1.5 months, but maybe it was because I wanted to 'give peace a chance', what with Pak Lah and Dr M meeting and then the UMNO AGM. I should have known better... anyway, let's start again with a bang!

I actually believe SJER stands for Singapore's Johor Economic Rape. Unfortunately, I think Pak Lah was fooled by someone into believing this was a 'quick-win' he could claim to be his own when:
  1. Danga Bay was practically built before his announcement of the SJER. Was it to be enhanced?
  2. Nusajaya was more a mimic of Putrajaya from Dr M's time which had ground to a halt due to Pak Lah's earlier austerity measures. Rumours abound that the main companies (GLC's?) involved in building Nusajaya sold the SJER as a gimic to get Pak Lah to complete it!
  3. This whole integration plan between the 2 ports in Johor and Senai began some time ago, with TS Syed Mokhtar Al-Bukhary taking controlling of all 3 over the years. In fact, the 'crooked bridge' was supposedly to open a new artery IN ADDITION to the so called 'new' land-bridge.

So, so much for 'My Idea'. The question is, besides the rumoured tricksters behind point 2, could Pak Lah be additionally fooled by the oft-mentioned Singapore-philes influencing or infesting the '4th floor'? My feeling is that the real risk of Singapore's Johor Economic Rape lies in its open borders concept giving birth to such undesirable offspring as:

  1. Allowing Singapore to channel the more negative elements of their 2 Casino projects (otherwise known as IR's), like prostitution and drugs, away from Singapore into Johor. (Imagine Nusajaya turning not simply into a satellite, but more a trans-national slum of Singapore! Sort of like Batam now!)
  2. Allowing Singapore access to resources that are restricting its already un-natural growth (un-natural as built on cheap Malaysian water, gas and labour, etc.); as it gives access to land of which Singapore is in severely short supply, especially after efforts to sell them sand for reclamation by individuals 'cabled' to the present Malaysian government failed.
  3. Giving Singapore unfettered access (and the excuse) to participate in projects which Malaysian businesses could do just as well, at lower cost, and retaining the wealth in country, in an area that is naturally growing into a rival to Singapore, even without the so called SJER (remember, its Singapore's Johor Economic Rape).

The sad thing is, Singapore's Johor Economic Rape may not even be Singapore's fault at all at this stage. We may just have some clever people advising and in Pak Lah's circle that are going around asking Singapore to Rape Johor Economically!!

Btw, I do not dare refer to Singapore's Johor Economic Rape by its new 'formal' name as I understood HRH Sultan Iskandar of Johor did not give his approval to what I assume was the 4th Floor's 'clever surprise' idea and HRH would certainly be 'murka' at being associated to any kind of Rape of his own state!

Sorry if the above seems a little aggressive. Just following Pak Lah's example in his interview with the Bangkok Post - gloves off and 'old men' are fair game in the new Islam Hadhari culture eh?

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