For my son, when he grows up, this site will be my legacy for him. The decisions his mother and I made for him, to understand them, to learn from them and to lead a life without prejudice and to succeed in it on his own merit.

Wednesday, November 17, 2010

New Zealand boleh!

Although I had a very short stint in New Zealand a couple of years back, my exposure there was sufficient to allowed me a perceived accurate view of the environment and atmosphere of the culture embedded into the citizen from a tender age. Values are taught about corruptions from pre-school onwards. These very same values, thru educations and interactive classes, are emphasized in their entire schooling days.

Enforcement alone and probably the last bastion of fulfilment, cannot eradicate this short fall to tackle and overcome corruption completely. It has to start from young. And to succeed, it have to be instilled into the minds of every citizen the day they start to expose themselves into society, and generations will take root and embrace this concept as they move on in life. NZ did not achieve this overnight.

Below is a caption from the NZ's SFO (Serious Fraud Office) aka Anti Corruption Agency website

New Zealand Anti-Corruption Agencies

New Zealand does not have any one single agency tasked with fighting corruption. Unlike many other countries it has not seen the need to create an Independent Commission Against Corruption. Rather it has a number of agencies that focus on the different elements in the fight against corruption. Some of these agencies have their focus on the more positive task of reinforcing values to ensure that New Zealand maintains a corruption free environment; others focus on the enforcement of the laws and the rules. The two main law enforcement agencies responsible for anti-corruption investigations and prosecutions are the New Zealand Serious Fraud Office (SFO) and the New Zealand Police.

The New Zealand Serious Fraud Office

Established in 1990, the SFO focuses on serious or complex fraud. The legislation governing the SFO does not attempt to define serious or complex fraud beyond saying that it includes a series of connected incidents of fraud which, if taken together, amount to serious or complex fraud. Rather the Act provides guidance to the Director as to the facts that the Director should have regard to in determining which cases to investigate.

Those factors are:

the suspected nature and consequences of the fraud;

the suspected scale of the fraud;

the legal, factual, and evidential complexity of any matter;

any relevant public interest considerations.

Most instances of bribery, corruption and secret commissions would fall within this descriptive section. The SFO is particularly well placed to conduct or assist with any investigation which requires an analysis of financial transactions. Instances of bribery or corruption will often only be established after a careful analysis of financial transactions and money flows.

All investigations undertaken by the SFO are conducted by a multi disciplinary team comprising an experienced investigator, a forensic accountant and a prosecutor. That team is supervised by a very experienced senior investigator or forensic accountant.

Economic crime or corruption is always clandestine and usually extremely well planned. The people involved are often well-educated and may occupy relatively senior positions in the community. The only evidence may be a complex set of arrangements understood only by those involved in the scheme. It was against that background that the New Zealand Parliament legislated special powers for the SFO.

The powers of the Director of the SFO go beyond those of the Police in New Zealand. The Director is able to issue a Notice requiring the production of any information or documents that the Director feels may assist the investigation. Furthermore, the Director, by Notice, is able to require any person to appear before the Director to answer questions. At such a compulsory interview the person must answer all questions irrespective of whether those answers will incriminate that person. However, under the legislation, the Director is not able to use any such incriminating answers in evidence against that person unless the person gives evidence inconsistent with their responses in any subsequent prosecution. All duties of confidentiality with the exception of legal professional privilege are set aside by the SFO Act 1990.

Saturday, November 13, 2010

Equal no more

Singapore Seen Overtaking Malaysia 45 Years After Lee’s Tears
Nov 11, 2010
By Shamim Adam

Forty-five years after Singapore’s expulsion from a union with Malaysia left Lee Kuan Yew in tears on national television, the economy of the city-state he led to independence is poised to overtake its neighbor. Singapore’s gross domestic product will cap its fastest annual growth this year since independence, rising as much as 15 percent to about $210 billion, while the economy of Malaysia, a country 478 times its size, will expand 7 percent to $205 billion, government forecasts show. The nations are scheduled to release their 2010 data by February.

The island that former economic adviser Albert Winsemius once said was considered a “poor little market in a dark corner of Asia” is now ranked by the World Bank as the easiest place to do business, has the world’s second-busiest container port, and boasts the highest proportion of millionaire households, according to the Boston Consulting Group.

“Singapore kept on moving to the next level as the world economy evolved and adjusted to market demands and investors’ interests,” said Lee Hock Guan, senior fellow at the Singapore- based Institute of Southeast Asian Studies. “Malaysia was struck by the curse of resource-rich countries: It didn’t optimize its human capital.”

From a low-cost manufacturing center for companies such as Texas Instruments Inc. in the 1960s, Singapore has become the world’s fourth-largest foreign-exchange center with a S$1.2 trillion ($932 billion) asset-management industry.

Rising Wealth

Smaller than New York City and the only Southeast Asian nation without natural resources, Singapore has grown 189-fold since independence in 1965, helping boost GDP per capita to $36,537 last year from $512. Malaysia’s economy expanded at one- third the pace during the same period and had a GDP per capita of $6,975 in 2009, up from $335 in 1965.

Malaysia’s growth fell to an average 4.7 percent a year in the past decade, from 7.2 percent in the 1990s, when former prime minister Mahathir Mohamad wooed overseas manufacturers, built highways and erected the world’s tallest twin towers.

“Development is like a marathon and all policies geared toward it must be sustainable and continuous,” said Thomas Lam, chief economist at OSK-DMG, a venture between Malaysian securities firm OSK Holdings Bhd. and Deutsche Bank AG. “Malaysia runs the marathon like a 100 meter event, so you see the initial spurt but not continuous progress in the race.”

Lam, 35, is one of 386,000 Malaysians who have become permanent residents or citizens of Singapore, a list that includes Health Minister Khaw Boon Wan and Oversea-Chinese Banking Corp. Chairman Cheong Choong Kong.

‘Greater’ Opportunity

“Singapore seems to offer greater career opportunity and mobility in my field,” said Lam, the second-most-accurate U.S. economic forecaster for 2008 to 2009 in Bloomberg surveys.
After more than 140 years under British rule, Singapore joined the Federation of Malaysia in September 1963 as Lee and his colleagues sought a bigger common market to cut unemployment and curb communism. The merger survived less than two years amid ideological differences and worsening relations between the United Malays National Organisation, which dominated the ruling Barisan Nasional coalition, and Lee’s People’s Action Party.

“For me, it is a moment of anguish,” Lee said on Aug. 9, 1965, the day Singapore became a sovereign state. “My whole adult life, I believed in Malaysian merger and unity of the two territories.” Lee, 87, was Singapore’s prime minister from 1959 to 1990.

‘Loss of Time’

Winsemius, the country’s economic adviser from 1961 to 1984, said he thought the merger was a “loss of time.” Credited with helping formulate Singapore’s industrial strategy, Winsemius, who died in 1996, said the general opinion of Singapore in the early 1960s was a country “going down the drain.”

The government acted by investing in export-based industries. It built new container terminals for Singapore’s port, the genesis of the country’s development; reclaimed land offshore to attract companies such as Exxon Mobil Corp. and Royal Dutch/Shell Group for a S$30 billion oil refining complex; and moved into high-tech industries like electronics and drugs.

“Economic development does not occur naturally,” said Ravi Menon, a senior official at Singapore’s Ministry of Trade and Industry. “This is where free marketers are disenchanted with Singapore. The government has never hesitated from guiding the development process or intervening in markets where it believes such intervention will lead to superior outcomes.”

Biomedical Research

The government invested about S$500 million in its Biopolis biomedical research hub after attracting drugmakers including Pfizer Inc. and Novartis AG. It cut corporate tax rates by nine percentage points since 2000 to 17 percent, compared with 25 percent in Malaysia.

BNP Paribas has a “buy” recommendation on Keppel Corp. and SembCorp Marine Ltd., the world’s biggest builders of oil rigs and two of the companies the government backed to propagate its industrial policy. Singapore Technologies Engineering Ltd., Asia’s biggest aircraft-maintenance company, was rated a “buy” by Deutsche Bank AG.

Singapore was kicked out of the union partly because Lee opposed Malaysia’s affirmative-action policy, which provides special rights to the ethnic Malay majority. While Malaysian Prime Minister Najib Razak has pledged to roll back key policies of ethnic favoritism, he told UMNO’s 61st General Assembly last month that the “social contract” that gives benefits to the Malays cannot be repealed.

Najib’s Plan

“Singapore will overtake Malaysia because its focus is just on economic growth,” Mahathir, Malaysia’s prime minister from 1981 to 2003, said in an e-mailed response to questions. “There is no social restructuring goal such as fair distribution of wealth between races as we have in Malaysia.”

Najib is trying to return the Malaysian economy to the levels of growth that boosted stock prices almost fivefold in the decade through 1996. He set a goal of tripling gross national income to 1.7 trillion ringgit ($550 billion) in 2020, from 600 billion ringgit in 2009 and creating 3.3 million jobs.

His government unveiled an economic transformation program in September aimed at attracting investment, including $444 billion of programs this decade ranging from mass rail to nuclear power, led by private and government-linked companies. Najib is also taking steps to bolster the talent base, including plans for a teaching hospital with courses by Baltimore-based Johns Hopkins University and a new corporation tasked with luring back skilled Malaysians from overseas.

About 350,000 to 400,000 Malaysian citizens work in Singapore, including 150,000 who commute daily via buses and motorcycles to jobs in the city-state’s factories, kitchens and offices.
Export Model

“Singapore followed the export-led industrialization model to become a base for foreign manufacturers,” said Lee of the Institute of Southeast Asian Studies. “The main model for Malaysia for a number of years was import-substitution where it protected certain industries. That created inertia.”

Lee, a 52-year-old Malaysian who studied and lived overseas for more than 30 years, said he plans to return to live in Malaysia only when he retires.

Singapore beat 182 economies to take first place in the World Bank’s annual ranking of business conditions, which looks at property rights, taxes, access to credit, labor laws and regulations on customs and licenses. Malaysia climbed two steps to 21st, according to the Nov. 4 report.

Mercer Consulting ranked Singapore as Asia’s most livable city in May, even as it lags behind Hong Kong on measurements of personal freedom and media censorship. The government says restrictions on public assembly and speeches are necessary to maintain social and religious harmony among its 5 million people. The city was wracked by violence between ethnic Malays and Chinese in the 1960s.

The country must keep innovating to stay ahead, said Tomo Kinoshita, deputy head of Asia economics research at Nomura Holdings Inc. in Hong Kong.

“Singapore must keep searching for new markets,” Kinoshita said. “Less developed Asian countries are all growing quickly and trying to catch up.”

Thursday, November 11, 2010

1 civil servant = 20 rakyat's

Best Bloated Bureaucracy to Bleed Bolehland to Bankruptcy!
by Martin Jalleh
9 Nov. 2010

Deputy PM Muhyiddin Yassin believes that the BN is "back in business". The buoyant “Malaysian-second” in Bolehland, said that BN’s future is bright and the Opposition better not underestimate them! Bolstered by two big by-election victories he even boldly declares that the bureaucrats in Bolehland are “the best civil servants in the world”! The civil servant “have done a lot, but the people want better”. The Deputy PM was at his ironic best: "The people do not want rhetoric. The era for rhetoric has long gone. The era where the government knows all, like what the prime minister has said, has long gone.”

Strange, but it is APCO (the international communications firm which Najib is paying a bomb to spruce up his image and lobby for support in Washington) which feels that Malaysia is just another backward hole where Government knows best and press freedom is a figment of the imagination (Malaysian Chronicle)!

Yes, the rakyat knows best Muhyiddin and we fully agree with you that the civil service in Bolehland is the “best in the world” in the following ways:

Best Bloated Civil Service

With 1.3 million civil servants to a population of 26 million, Malaysia has one of the highest civil servants-to-population ratio in the world by the Organisation for Economic Cooperation and Development standards.

In 2009, Malaysia’s civil servants-to-population ratio was highest in Asia Pacific. Her ratio was 4.68%, compared to Indonesia’s 1.79%, Korea’s 1.85% and Thailand’s 2.06% all of which have less than half our ratio.

In 2009, Singapore had a total of 60,000 civil servants, i.e., 1.5% of the total population. Hong Kong had 160,000 out of a population of 7 million (2.3%). Taiwan (population of 23 million) was served by only 528,000 (2.3%).

Best way to bleed a budget dry“…much of the budget (2011) continues to go into operating a bloated civil service. As much as three quarters of the national budget is spent on paying salaries and other benefits to over 1.3 million civil servants. “This means that of every dollar spent in the budget, 75 sen goes towards manning the civil service, leaving little left to carry out development work that can benefit the country’s population.

“There is clearly something fundamentally wrong in the way the country’s budget is being spent when so much of the allocation goes to paying for a sector that is generally regarded as unproductive and standing in the way of efficiency.” – Dr Lim Teck Ghee, Director of the Centre for Public Policy Studies.

A post-2011 Budget dialogue highlighted the massive amount (35% of the total RM162.8 billion operating expenditure) to be spent on emoluments, pensions and gratuities of civil servants. A panelist, Ministry of Finance budget division director Datuk Dr Rahamat Bivi Yusuff admitted that there is a need to trim the civil service to reduce the budget deficit. In a public forum held in Sept this year Umno Youth chief Khairy Jamaluddin admitted that there is an over-inflated civil service and that the government will need to make tough but necessary changes in the next five or 10 years to reduce the numbers. “We are now spending more than RM41 bil a year – that’s a billion more than the market capitalisations of Khazanah Nasional and Telekom Nasional – to upkeep our 1.15 million civil servants. It’s a whopping cost, especially so when juxtaposed against the 1.14mil Malaysians who pay income tax. (There are 10.5 million employed citizens in the country, of whom 6.4 million are registered taxpayers, but actual contributions come from only 1.14 mil). – The Star, 7
May 2009.

Best way to bankrupt this nation

Whilst it is the growing trend of many countries to reduce their civil service, Malaysia, the PM’s Department in particular, has done the opposite. It more than doubled its number of civil servants from 21,000 to 43,554 this year. In stark contrast, the White House employs only 1,888 staff. The White House’s budget is US$394 million for 2011. The PM’s Department has been allocated a whopping RM18.14 billion for the year 2011, almost double the RM10.2 billion this year.

“Pemandu, which stands for Performance, Management and Delivery Unit, was set up last year under the Najib administration as one of the pillars in his Government Transformation Plan… is a massive drain on resources. In a span of two months, just to pay 50 consultants, the government spent RM20 million."

"If the civil service is consuming a big budget under the Prime Minister's Department, it is because the other agencies of the civil service are not functioning. That's why Najib consolidates everything under his department." – Ong Kian Ming, political analyst

Best contradiction of 1Malaysia

As at 31 December 2009, the racial breakdown of the Malaysian civil service comprising 1,247,894 employees was as follows: Malay (78.2%); Other Bumiputras (7.7%); Chinese (5.8%), Indian (4.0%); and Others (4.2%). “This is the worst multi-racial composition of the government service, with the lowest Chinese and Indian representation in the public service in Malaysia’s 53-year history. This is clearly seen from the three sets of comparative figures of the racial breakdown of the civil service before the NEP 1971 and as at December 2009 – Malays (60.80% and 78.2%); Chinese (20.2% and 5.8%); Indians (17.4% and 4.0%); and Others (1.6% and 4.2%). page· “It is clear that the Government is setting the worst example of a 1Malaysia Government.” –Vivian Kuan, in Loyar Burok’s Blog (8 Nov 2010).

Best in corruption

Last year two out of five civil servants were deemed corrupt by Cuepacs. It was described as a worrying trend that needed to be tackled urgently. Cuepacs President Omar Osman revealed that a total of 418,200 or 41% of the 1.2 million civil servants in the country were suspected to be involved in corruption last year (Bernama, 02.06.10). It caused Lim Kit Siang to remark that “the MACC is a big flop as it did not even arrest 0.1% of the corrupt civil servants last year”.

Malaysians generally consider political parties and civil service to be the most corrupt groups, and the government's anti-corruption drive to be ineffective, the 2009 Global Corruption Barometer (GCB) report revealed (The Sun, 03.06.09)

Best “dumping ground”

Finally, Muyhiddin should ponder on the wisdom of Sakmongkol AK47, the pen-name of Mohd Ariff Sabri Abdul Aziz, a former state assemblyman of Pahang who is a member of Umno. “Government service shouldn’t be treated as a dumping ground for academic rejects and mediocre material. Let’s demand a certain high standard and ensure we bring in talent that supports that demand for high standards. “What has the government done to improve the efficiency and competence of government servants?

There isn’t really competition there if the service is dominated by one race. There isn’t sufficient quality if the entry-level qualifications are so-so. “Yet each year, to placate civil servants, the PM will appear on TV to say, we honour our civil servants because they have done a good job, blah blah. Which is not entirely true. The service is slow, the quality of officers is questionable.

“Those people talking about the GTP have not talked openly about the issue of talent in the civil service and in government. If we don’t open up our civil service, it will atrophy. It is a simple observation of experience. If we don’t open up and cultivate competition to get into government service, we get what ails our service now – little Napoleonism – the imposition of pettiness by mediocre talent that fouls up the delivery service.”

So there you have it Muhyiddin -- the world's best bureaucratic behemoth and blunder to burden the people of Bolehland and bleed the country dry! And believe it or not its by a government who boasts about " People First, Performance Now". Little wonder that we are the world's best example of a country with growing similarities with Greece where 10% of its population are government servants and is reputed to be the most corrupt nation in the Eurozone!

But Umno likes Muhyiddin's make-believe. It will guarantee them votes in the next General Elections, which must be close at hand. Civil servants are made to believe that Umno is their (political) paymaster and they owe Umno. The party's leaders would do or say anything to convince the government servant of this, even praising them as "the best civil servants in the world"!

Saturday, November 6, 2010

Smaller in numbers, greater with performance

Social contract and the secret of Chinese 'success'
Written by Helen Ang

Prime Minister Najib Razak on Oct 21 at the Umno general assembly told his party delegates "... kewarganegaraan Malaysia pada dasarnya bukan lagi bersifat sama rata". This country does not have equal citizenship. Despite 1Malaysia (or Malaysian First), this is the core implication of Article 153, the 'special position' of the Malay. NEP is the realpolitik of a race-based system to distribute resources. There has been no negotiation on its implementation: Umno dictates, MCA complies although it gets around the discriminatory policy by 'settling' (read: 'gao dim' or greasing the palm).

The so-called 'social contract' carries a rider; MCA navigates the lopsided terms and conditions using money as the medium. Well-connected wheelers and dealers have obtained a satisfactory outcome for themselves via the Ali Baba arrangement.

Hence the claim by Liew Kee Sin, a Tan Sri and a tycoon, that Chinese had thrived under NEP. But only for a small handful of Chinese. Liew, the SP Setia president-cum-CEO, raised hackles with his statement at the Chinese Economic Congress organized by MCA on Aug 14. His talk was titled 'Malay and Chinese collaboration to achieve NEM'.

Incidentally, Najib delivered the keynote address at the event that included two Tan Sris and five Datuks among its speakers, and three Tan Sris and four Datuks as moderators and discussants.

Giving an example of how Chinese have fared well under NEP, Liew disclosed that SME owners can afford his company's expensive bungalows, exclaiming "One Chinaman want to build a bungalow of RM40 million!"

Zaid Ibrahim commenting on the sidelines was cheeky enough to spill the beans on the secret of Liew's success, i.e. stellar co-operation with the bumiputera shining stars.

Zaid informed us that the Chinese property magnate truly practises what he preaches, i.e. "We [Chinese] must also learn how to live with their [Malay] culture, their mindset." Racial muhibah was achieved long ago in high society.

Theory on the middle tier

The more Chinese are discriminated against in Malaysia, the better the community performs. This is a theory explored by two dons from Yale University and the University of British Columbia. The 30-page paper by Fang Han-ming and Peter Norman titled 'Government-mandated discriminatory policies: Theory and evidence' postulates that the NEP could actually have been the reason for, rather than an obstacle to, the Chinese's economic success.

Their research was published in the International Economic Review, Vol.47, No.2, May 2006, and in also our CPI archives.

They wrote: "Some minorities, notably overseas Chinese in Southeast Asia and Jews in Europe, have performed economically better than the native majorities, despite being subject to government-mandated discriminatory policies."

Nonetheless, Fang and Norman placed a caveat: the extent of the discriminatory policies is crucial. The discriminatory exclusion can only be beneficial if the government-controlled sector is small enough. Aside from the public sector, the other parts of the economy that the government can legislate are in the industries where the authorities have direct ownership or control through professional licensing. Occurring some years after the publication of the above study, the Low Siew Moi (left) episode inserts a more timely perspective. Loh, a long-time civil servant, failed to be confirmed as PKNS general manager by Selangor Menteri Besar Khalid Ibrahim due to the glass ceiling occasioned by her ethnicity. That Ketuanan Melayu objected vehemently to her appointment was a clear display of the minorities' limited access to public sector jobs and positions.

Although Malaysia is in a denial mode, foreigners like Fang and Norman nonetheless make the comparison with apartheid.

They noted: "As far as we understand, the policies facing Blacks [in South Africa previously] were significantly broader measures than those implemented in Southeast Asia. Moreover, it is necessary that some sector where investments in skills are important is left open for the discriminated group. Again, this seems like a more plausible assumption when considering overseas Chinese."

Their theory posits that exclusion from opportunities provided by the state created better incentives for Chinese to make a costly investment in skills. These skills are assets invaluable and crucial for private sector jobs.

On the flip side, giving a group (read: Malay) preferential access to high-paying public sector jobs may dampen the incentives for skill investment so crucial in the private sector.

Consequences of apartheid

Fang and Norman also tackled the vexing question of why the Malay majority would have implemented a policy that ultimately hurt itself. They believe the "natural answer is that the negative indirect effect of preferential policies in favour of the Malays was quite subtle and difficult to forecast; whereas the direct beneficial effects were obvious."

The direct benefits are that the public sector offers secure employment and generous perks. Government administration jobs ranked among the top five of 100 occupation categories, only slightly lower than architects and engineers. [S. Anand, 'Inequality and Poverty in Malaysia: Measurement and Decomposition' [Oxford University Press,1983].

From the recent budget announced for next year, taxpayers can get a clear idea of the staggering percentage of our national expenditure that goes towards paying the civil service.

Despite the minorities hardly benefitting from state largesse, Najib in his Umno speech on Thursday again made them the bogeyman. He attributed success to "creativity, innovation and the willingness of the individual to work hard and take risks".

Having said that, he added, "For example, the non-bumiputeras, after 39 years of affirmative policies being implemented, are still the race who own the largest share of wealth".

The Chinese indeed possess an unerring ability to cope with the hostile NEP environment. Yet paradoxically, this coping mechanism is a poisoned chalice with the effect of 'damned if you do, damned if you don't'. The insecure, fearful Malay views the trait of competitiveness as being 'ultra kiasu', innovative as 'underhanded'; resilient as 'cold and heartless'.

Essentially what the two Yale and University of Chicago professors have said -- if I may rephrase the idea as social Darwinism -- is that the Chinese survive when they are the fittest. But here, the fitter the Chinese are, the more the Malays feel intimidated.

The Mahathir era was a juggling act and to his credit, the maverick managed to keep all the balls in the air. Tensions aside, the good ship Malaysia Inc. stayed afloat. The Chinese were able to 'cari makan' but soon after Mahathir relaxed his iron grip and the unwritten 'social contract' began unravelling, the vessel started sinking.

A good illustration, even today, of the Mahathir-Machiavellian method is the planned development of Kampung Baru, a Malay reservation where the residents want to retain this prime real estate 100% in bumiputera hands. It was Mahathir who urged that Chinese investment be allowed for the reason of "we want to use the non-Malays as bait to lure more visitors".

Mahathir's callous remark is a backhanded compliment on Chinese capital and business acumen, but galling.

While the Fang and Norman theory may be applicable to its time (the 1980s), and to certain segments of Chinese, it doesn't cover all bases. The working class and wage-earners -- and their children -- have been shut out and victimised by NEP.

Another important factor to be borne in mind is the time frame of the Fang and Norman study. It was premised on population data up till 1988 where Chinese formed 32%. However, Chinese had since declined to 24% of the population in 2007, and further fast decreasing. It is expected that Chinese will only be around 18.6% in another 25 years or likely even lower.

Readjusting the variables to the current Chinese population ratio (and the much, much smaller slice projected in future) will be adversely affect the Fang-Norman theoretical framework. Their theory is that the NEP discriminatory exclusion is an obstacle that can be surmounted if the government-controlled sector does not encroach too much into private enterprise.

However, in the last decade we've seen how the government has grown very big and its finger in every pie. In short, the Fang-Norman model that Chinese are inveterate high performers who run harder and jump higher needs a revisit under prevailing circumstances.