Making an education institution with sole ethnic enrolment does not fit to any kind of reasoning and explanation. Not only the recognition of the institution itself is severely self-degraded, but also the value of the exposure that builds positive character of the student is totally prohibited.
Almost any proposal or remark with regard to Malay/ Bumi ‘right’ is condemn as racist slurs. It does not take a highly intellectual group to rationalize the necessity, enough with just two minutes thinking rather than emotionally driven acts.
Are we so inferior that we are scared of a little competition? Are we insecure for our allocation been taken away?
Let me share my experience for Malay to think about.
My early education school did not even have proper infrastructures. It was a new Felda area, so you could imagine that we were lack of everything. I was the top graduate back then. I was blessed with my parents work as a Felda executive, not settlers. Back then; Felda settlers were having a very rough ride. Not having a proper lighting to read books at night was not a myth but it was an absolute truth. With little competition and benefit from proper lighting, I soared to the top.
Based on my good primary school performance, I got a placement to Felda boarding boarding school program. The idea was to facilitate better environment and promote competitive edge to the students. From top graduate, my rank at this new town school skidded downhill. Ironically, this time I put more effort but the top seems far away. Somehow, the environment pushes me to do better, and I did. Not at the absolute top, but on the right side of the bell curve.
When I began my study in United States, again I was filled with inferiority. But, environment really changes your result. After first year, Malay student rose far above than local American. In fact, it was not a best option for them to be in the same class with a lot of Malay because we would raise the A par.
You see, we Malay are not inferior. We just never made aware of our potential, some of us did.
For the sincerity of our government to help Malay community, I give my full appreciation. Think again, is having UITM for Malay only is really helping? Even with Chinese, Indian and foreign students in the same institution, UMNO could always help Malay student on financial aid, self-confidence development, character building, extra English classes, extra Chinese and Indian dialect classes, and lots of other ways.
10%!. No harm. It is not even a political act to show respect to other ethnic education opportunity, but it is the least that you could do.
Systematic approach need to be in place to accommodate govenrment ‘sincerity’ on helping Malays. All this steps actually driven by the only factor of reducing economic diparities within ethnic especially for Malay as the majority population. The purpose of the act is to prevent any ethnic clash.
Now, to give full pledge of helping hand for a Malay to graduate with Degree in Diploma itself is not near sufficient.
Graduates with low score.
Graduates without job opportunity
Graduates with adequate score but with little recognition of the education instituition does not worth much either
Graduates with jobs but with double standard under-paid salary, not even enough to sustain living requirement and study loan repayment.
Graduates with low self confident?
Graduates with little or no communication skills?
The basis of this ‘aid’ still revert back to reducing ethnic economy diparities. What is the use of the degree when they can’t get a suffient job and make a good living from it? How do we expect Chinese and Indian employer to sincerely employ a Malay knowing Chinese/ Indian graduates had went on much tougher route and still successfully graduated.? Not even all Malay employer willingly employ a Malay. Most of the employment is coupled by lower salary pay.
Think!
Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts
Thursday, 14 August 2008
Monday, 11 August 2008
Corridors development – Are we serious about this?
Whilst WAWASAN 2020 stressing on balance of economic power with cultural preservation, Corridors development focusing on development alone.
Looking at the project criteria, Iskandar Corridor namely, I simply can’t compute the actual benefit of this massive development plan to the local resident and Malaysian.
Understandably, three main government obligations to the public are job opportunity (unemployment prevention), eradicate poverty and provide infrastructure.
Ever since privatization era, our government seems passing all the development cost to the public. The public partially fund the project, a body raised the total financial obligations and the public is forced to be the customer with little or no option to alternative.
Iskandar (or AAB lead government) has taken this step even further. Based on my understanding, this project is self-finance project whereby the ‘sponsor’ or ‘investor’ is not limited to locals or with local partnership but done in more open opportunity to foreign power. The benefits through tax exemption, red tape cutting, expatriation and foreign residency is massive. Without our political turmoil, if I am a foreigner with money to spend, I will not have to evaluate much deeper but to participate in this development.
Back to the three government obligations to the public, yes, this project will benefit Malaysian and local resident on jobs, rising living standards and maybe profited by the infrastructures.
It is not the benefit that I am worried about, but the consequences.
Improved local living standard will be subdued by escalating local inflation with flooded ex-pats that are in spending spree when they are here. Look at Bangsar, Kota Damansara and other semi-flooded ex-pat areas and how much is the cost of foods and goods there.
>Social destruction. Massive count of wealthy foreign man looking for entertainments.
>Lost of land ownership by the locals
>Cheaper foreigners will conquer Job opportunity for lower income segment.
>Double standard on salary pays for middle-income group. Ex-pat will be paid lavishly as always and the balance from the human resource spending budget to be segregated amongst the local employee.
>Local will dismissed themselves from the area due to high cost of living.
>This development will eventually burdened the locals and the area will be capitalized by foreign residence.
On immediate effect the cost of land ownership had increased tremendously throughout Malaysia. As the corridor covers north, south, middle, east and west, there are no escaping from this perpetuate property inflation. Coupled with food supply crisis and rising of rubber and palm oil commodities, the escalation is inescapable. On this aspect, I am particularly disappointed for the chances of people like me to own a piece of land for project or future investment is made impossible.
Looking from a broader aspect, I can’t find a valid reason why our government is very keen on type of development. First of all, the total cost run up to billions ringgit and we have no resource to fund such scale, thus foreign investor is needed. Secondly, we are quite healthy on country revenue growth, why can’t we stick to our finance capability and execute any project with full benefit potential to Malaysian rather than outsiders? Most importantly, where is our so-called wealth disappearing until we are depending so much on foreigners? And why do we want to go to high-risk development plan with uncertainties of world economy performance.
Recap to our economy blooms:
>Light crude oil revenue has quadruple since 5 years ago.
>Fuel subsidy mostly removed creating more revenues to government. More revenue fuel user.
>Oil palm and rubber export revenue has at least tripled. Thousands of poverty bracket group has been removed.
>All agriculture products price has inflated. More poverty bracket group has been eliminated.
>Almost all the new infrastructure is paid by ‘private’ and public is forced to contribute lavishly on usage of the infrastructure and services.
>Vehicle excise duty and sales tax still high.
Come to think of it, I can’t extract of where our nation revenue being utilized?
>Education – we are out-ranked by our neighbouring country.
>Medical – my company have been paying for my medical bills.
>Security – we are far from 1:250 policemen: public ratio. A lot of suburb areas does not even have police/ mini police station. I wonder why crime statistic is high?
>Defence – what do we have? More money been spent on Nuri maintenance and compensation to Nuri’s unfortunate crashed patriots.
>Controlling media?
>‘Dividend’ to MPs, EXCO, etc?
>FRU?
>Tourism campaign?Cleanliness and health? Look at our river quality.
Looking at the project criteria, Iskandar Corridor namely, I simply can’t compute the actual benefit of this massive development plan to the local resident and Malaysian.
Understandably, three main government obligations to the public are job opportunity (unemployment prevention), eradicate poverty and provide infrastructure.
Ever since privatization era, our government seems passing all the development cost to the public. The public partially fund the project, a body raised the total financial obligations and the public is forced to be the customer with little or no option to alternative.
Iskandar (or AAB lead government) has taken this step even further. Based on my understanding, this project is self-finance project whereby the ‘sponsor’ or ‘investor’ is not limited to locals or with local partnership but done in more open opportunity to foreign power. The benefits through tax exemption, red tape cutting, expatriation and foreign residency is massive. Without our political turmoil, if I am a foreigner with money to spend, I will not have to evaluate much deeper but to participate in this development.
Back to the three government obligations to the public, yes, this project will benefit Malaysian and local resident on jobs, rising living standards and maybe profited by the infrastructures.
It is not the benefit that I am worried about, but the consequences.
Improved local living standard will be subdued by escalating local inflation with flooded ex-pats that are in spending spree when they are here. Look at Bangsar, Kota Damansara and other semi-flooded ex-pat areas and how much is the cost of foods and goods there.
>Social destruction. Massive count of wealthy foreign man looking for entertainments.
>Lost of land ownership by the locals
>Cheaper foreigners will conquer Job opportunity for lower income segment.
>Double standard on salary pays for middle-income group. Ex-pat will be paid lavishly as always and the balance from the human resource spending budget to be segregated amongst the local employee.
>Local will dismissed themselves from the area due to high cost of living.
>This development will eventually burdened the locals and the area will be capitalized by foreign residence.
On immediate effect the cost of land ownership had increased tremendously throughout Malaysia. As the corridor covers north, south, middle, east and west, there are no escaping from this perpetuate property inflation. Coupled with food supply crisis and rising of rubber and palm oil commodities, the escalation is inescapable. On this aspect, I am particularly disappointed for the chances of people like me to own a piece of land for project or future investment is made impossible.
Looking from a broader aspect, I can’t find a valid reason why our government is very keen on type of development. First of all, the total cost run up to billions ringgit and we have no resource to fund such scale, thus foreign investor is needed. Secondly, we are quite healthy on country revenue growth, why can’t we stick to our finance capability and execute any project with full benefit potential to Malaysian rather than outsiders? Most importantly, where is our so-called wealth disappearing until we are depending so much on foreigners? And why do we want to go to high-risk development plan with uncertainties of world economy performance.
Recap to our economy blooms:
>Light crude oil revenue has quadruple since 5 years ago.
>Fuel subsidy mostly removed creating more revenues to government. More revenue fuel user.
>Oil palm and rubber export revenue has at least tripled. Thousands of poverty bracket group has been removed.
>All agriculture products price has inflated. More poverty bracket group has been eliminated.
>Almost all the new infrastructure is paid by ‘private’ and public is forced to contribute lavishly on usage of the infrastructure and services.
>Vehicle excise duty and sales tax still high.
Come to think of it, I can’t extract of where our nation revenue being utilized?
>Education – we are out-ranked by our neighbouring country.
>Medical – my company have been paying for my medical bills.
>Security – we are far from 1:250 policemen: public ratio. A lot of suburb areas does not even have police/ mini police station. I wonder why crime statistic is high?
>Defence – what do we have? More money been spent on Nuri maintenance and compensation to Nuri’s unfortunate crashed patriots.
>Controlling media?
>‘Dividend’ to MPs, EXCO, etc?
>FRU?
>Tourism campaign?Cleanliness and health? Look at our river quality.
Thursday, 17 July 2008
Malaysian development in the hand of foreign labour - Part 2
To have more local force and depleting foreign labour count need a serious consideration from both potential employer and employee.
Employer will face the most difficulties on undermining the fact that more effort needed to attract local labours. Needless to say, there are also financial obligations on proper wages and associated benefits. Furthermore, the employer will also face operation inconsistency risk with staff absents.
On the other hand, potential local employee having issues on the wages earning. Since the locals need the money here and make a permanent living here, similar salary standard for foreign workers deemed unfit to sustain living requirement. If the basic remuneration offered at RM700 a month, even poverty line set at RM1000 a month has not been exceeded.
By this simple fact, we know that our country is facing a serious problem, employment taken by cheaper foreigners, there are local unemployment rate to be resolve and employed local workers still within poverty bracket.
This is when government intervention is highly needed. We can’t afford to allow our job allocation taken by foreigners, huge cash outflow from country and high numbers of local in poverty bracket and unemployed.
The big question raised, is our economy be able to be sustained without this foreigners? To answer this, we can’t singularize all the sectors as one. One sector behave differently that the others.
Manufacturing sector have the severest impact. Since we are exporting lots of goods and up against other competitive exporter such Thailand, China, Taiwan and India, the survival key is to keep the cost at minimum. Still, with the foreign labour, we are barely competing with them. Tun Mahathir had commented on this, and I truly agree that we need to come up with other selling point to foreign investors to invest in our manufacturing sector such integrity and quality. Integrity prevent fund leakage and quality spells premium. Higher branding premium made sellable price higher and the gap would be able to compensate higher cost of labour.
Construction sector would also be affected. However, the effect is much reduced. Malaysian construction sectors offer a very good profit margin. To attract locals means more pay and these companies should be able to live with smaller margin.
If the government could protect a lot of concessionaire, national car, national airline, and other corporate bodies, I don’t see any reason why the government can’t impose something to protect the local job. We are very good at subsidies, incentive and exemptions; this is one of the aspects that those words can be put to good use
Employer will face the most difficulties on undermining the fact that more effort needed to attract local labours. Needless to say, there are also financial obligations on proper wages and associated benefits. Furthermore, the employer will also face operation inconsistency risk with staff absents.
On the other hand, potential local employee having issues on the wages earning. Since the locals need the money here and make a permanent living here, similar salary standard for foreign workers deemed unfit to sustain living requirement. If the basic remuneration offered at RM700 a month, even poverty line set at RM1000 a month has not been exceeded.
By this simple fact, we know that our country is facing a serious problem, employment taken by cheaper foreigners, there are local unemployment rate to be resolve and employed local workers still within poverty bracket.
This is when government intervention is highly needed. We can’t afford to allow our job allocation taken by foreigners, huge cash outflow from country and high numbers of local in poverty bracket and unemployed.
The big question raised, is our economy be able to be sustained without this foreigners? To answer this, we can’t singularize all the sectors as one. One sector behave differently that the others.
Manufacturing sector have the severest impact. Since we are exporting lots of goods and up against other competitive exporter such Thailand, China, Taiwan and India, the survival key is to keep the cost at minimum. Still, with the foreign labour, we are barely competing with them. Tun Mahathir had commented on this, and I truly agree that we need to come up with other selling point to foreign investors to invest in our manufacturing sector such integrity and quality. Integrity prevent fund leakage and quality spells premium. Higher branding premium made sellable price higher and the gap would be able to compensate higher cost of labour.
Construction sector would also be affected. However, the effect is much reduced. Malaysian construction sectors offer a very good profit margin. To attract locals means more pay and these companies should be able to live with smaller margin.
If the government could protect a lot of concessionaire, national car, national airline, and other corporate bodies, I don’t see any reason why the government can’t impose something to protect the local job. We are very good at subsidies, incentive and exemptions; this is one of the aspects that those words can be put to good use
Wednesday, 16 July 2008
TNB - Power generation and tariff
Quoted:
Why tariff review is NECESSARY?
Basically, TNB have to supply more power based on demand expansion from industrialization. TNB also have to curb or control domestic demand to overcome demand variable, which led to further infrastructure expansion requirement.
TNB have to generate electricity based on highest expected demand. Failure to do so will led to power overload and tripped the system. Power production is the key running cost and excess power supplied is deemed inefficient, as the power can’t be stored at high scale.
Domestically, TNB should first evaluate multi usage tariff systems. 200kWh usage that consumer enjoys lower tariff is not sufficient to cater daily basic requirement. TNB is saying otherwise as air conditioning is considered luxury even in a nation with over 30 degrees Celsius ambient temperature climate. This is absurd.
To move forward and benefit both party (TNB (Government) and domestic consumer), serious consideration of expanding the lower tariff usage quota is needed. Basic requirement list require expansion and ‘home business’ element need to be considered at our cost of living increase situation.
Secondly, TNB need to consider alternate charging. In industrial rate, there are peak and off-peak rate applies. Such application needs to be expanded for domestic consumers to benefit both parties. To have off peak rate will promote usage during off-peak and reduce excess electricity loss for TNB. Consumer will eventually limit A/C usage to off-peak period and so are other domestic electrical appliances such washing machine, rice cooker, kettle, iron and the list would go on.
Consumer shall not be burden of the requirement expansion from industrial and business requirement that give government direct benefits from tax revenues. Instead, a smarter system needs to be in place for the public to enjoy benefits from government enrichment.
Dam approach for electricity generation however should be less sensitive of variable output rate. Dam generate electricity from water flow that directly revolute the turbine and generate electricity. There are long start up procedure and cost for typical oil, gas or coal power plant that involve hours heating and priming before electricity to be generated. With vast rainfall per year in Malaysia, it would be the best long-term sustainable approach for electricity generation with lowest possible operational cost.
There is also other alternative worth pursuing such wind turbine. Detail study required on the wind pattern to see if the location fit for the application requirement. To have wind turbine on inshore area would benefit not only sustainable energy production but also provide a protective habitat for marine life thus boost marine output yield.
Even nuclear reactor seems reasonable to move forward to with quite substantial savings on the long term, the active material cost would escalate through time due to limited supply with expansion demand world wide. It would potentially be similar to NGV application now which is fairly cost effective to have NGV vehicle but eventually the NGV cost will go up and cost advantage would become insufficient.
Since TNB profitability is very biased to shareholders benefit only while losses are a subject for government protection, we as the aware public must look into curbing TNB wastage for our benefits.
Why tariff review is NECESSARY?
Cost of supplying electricity has increased since the last tariff review. Most of the cost of supplying electricity has increased beyond TNB’s control. To ensure sustainable electricity supply reliability:
-
Large capital expenditure is required to maintain and enhance electricity supply infrastructure - Benefits from operational efficiency alone is insufficient to support the demand growth for electricity
- A reliable electricity supply system is a prerequisite for the nation’s economic growth.
- Low tariff leads to inefficient use of electricity and national resources.
Basically, TNB have to supply more power based on demand expansion from industrialization. TNB also have to curb or control domestic demand to overcome demand variable, which led to further infrastructure expansion requirement.
TNB have to generate electricity based on highest expected demand. Failure to do so will led to power overload and tripped the system. Power production is the key running cost and excess power supplied is deemed inefficient, as the power can’t be stored at high scale.
Domestically, TNB should first evaluate multi usage tariff systems. 200kWh usage that consumer enjoys lower tariff is not sufficient to cater daily basic requirement. TNB is saying otherwise as air conditioning is considered luxury even in a nation with over 30 degrees Celsius ambient temperature climate. This is absurd.
To move forward and benefit both party (TNB (Government) and domestic consumer), serious consideration of expanding the lower tariff usage quota is needed. Basic requirement list require expansion and ‘home business’ element need to be considered at our cost of living increase situation.
Secondly, TNB need to consider alternate charging. In industrial rate, there are peak and off-peak rate applies. Such application needs to be expanded for domestic consumers to benefit both parties. To have off peak rate will promote usage during off-peak and reduce excess electricity loss for TNB. Consumer will eventually limit A/C usage to off-peak period and so are other domestic electrical appliances such washing machine, rice cooker, kettle, iron and the list would go on.
Consumer shall not be burden of the requirement expansion from industrial and business requirement that give government direct benefits from tax revenues. Instead, a smarter system needs to be in place for the public to enjoy benefits from government enrichment.
Dam approach for electricity generation however should be less sensitive of variable output rate. Dam generate electricity from water flow that directly revolute the turbine and generate electricity. There are long start up procedure and cost for typical oil, gas or coal power plant that involve hours heating and priming before electricity to be generated. With vast rainfall per year in Malaysia, it would be the best long-term sustainable approach for electricity generation with lowest possible operational cost.
There is also other alternative worth pursuing such wind turbine. Detail study required on the wind pattern to see if the location fit for the application requirement. To have wind turbine on inshore area would benefit not only sustainable energy production but also provide a protective habitat for marine life thus boost marine output yield.
Even nuclear reactor seems reasonable to move forward to with quite substantial savings on the long term, the active material cost would escalate through time due to limited supply with expansion demand world wide. It would potentially be similar to NGV application now which is fairly cost effective to have NGV vehicle but eventually the NGV cost will go up and cost advantage would become insufficient.
Since TNB profitability is very biased to shareholders benefit only while losses are a subject for government protection, we as the aware public must look into curbing TNB wastage for our benefits.
Malaysian development in the hand of foreign labour - Part 1
I actually find this quite disturbing. We have poverty at one hand and not enough local labour on the other. As such we imported lots of foreigners (Indonesians, Bangladeshi, Nepalese, etc) to fill in the labour requirement gap. We have excess engineers and still we are importing ex-pat from Japan, German, United Kingdom, United States, etc.
Foreign labour considered cheap. They are. They can work long hours, expandable, dependable and replaceable in term of numbers. Locals however is more difficult to manage, more expensive and perhaps a bit more nuisance to the employer.
We are seeing foreign labours being utilized in almost all sectors, manufacturing, construction, agricultures and fisheries. The idea of employing these foreign labours is to minimize cost and maximize profits. The necessity of cost minimization is most important when we are dealing with goods (manufacturing) to be exported and we have to be up against the other bigger player such China, India, and Taiwan.
The remaining sectors however have higher returned margin and less bounded to this competitive environment.
Giving the options, it is natural for the employer to go for the cheaper and easier option, thus the foreign. This foreigner however is not cheap forever. Lots of them had realized their role and importance of the participation in our local development and started demanding for more. Simplest example is out maid sectors whereby it is harder to source for Indonesian maid and cost to have a maid kept escalating each year.
Prolonged dependency to the foreign labour will eventually led us to long-term negative impacts. Even if we look at ‘now’ scenario, we already seeing the following:
Depletion of local skilled labour
Huge amount of money transferred to foreigner country of origin – in exchange rate strength, this action is weakening our currency
Less cash being re-circulated back within the country – affecting local economic growth
Crime rate, tuberculosis back into the picture, gang, social value destruction, etc
The key principal to move forward to have more numbers for local labour and lessen the number of foreigners.
*** to be continue…
Foreign labour considered cheap. They are. They can work long hours, expandable, dependable and replaceable in term of numbers. Locals however is more difficult to manage, more expensive and perhaps a bit more nuisance to the employer.
We are seeing foreign labours being utilized in almost all sectors, manufacturing, construction, agricultures and fisheries. The idea of employing these foreign labours is to minimize cost and maximize profits. The necessity of cost minimization is most important when we are dealing with goods (manufacturing) to be exported and we have to be up against the other bigger player such China, India, and Taiwan.
The remaining sectors however have higher returned margin and less bounded to this competitive environment.
Giving the options, it is natural for the employer to go for the cheaper and easier option, thus the foreign. This foreigner however is not cheap forever. Lots of them had realized their role and importance of the participation in our local development and started demanding for more. Simplest example is out maid sectors whereby it is harder to source for Indonesian maid and cost to have a maid kept escalating each year.
Prolonged dependency to the foreign labour will eventually led us to long-term negative impacts. Even if we look at ‘now’ scenario, we already seeing the following:
Depletion of local skilled labour
Huge amount of money transferred to foreigner country of origin – in exchange rate strength, this action is weakening our currency
Less cash being re-circulated back within the country – affecting local economic growth
Crime rate, tuberculosis back into the picture, gang, social value destruction, etc
The key principal to move forward to have more numbers for local labour and lessen the number of foreigners.
*** to be continue…
Friday, 11 July 2008
A bit of facts on PLUS
Amongst the biggest shareholders for PLUS:
UEM (indirectly, Khazanah): 40%
Khazanah: 24%
EPF: 10%
ASB: 4%
As it stand on 2007 financial report:
Toll collection: RM 1.82 billions
Profit before tax: RM 1.31 billions (72% of toll revenue)
Liabilities: RM 10 billions
Asset: RM 15.9 billions
Tax exemption: RM 400 millions
PLUS have to publish this because they are a public listed company. The numbers speak for themselves.
Agreement between PLUS and G’ment is G’ment to G’ment.
Toll charges is ridiculously high
EPF only gave out 5% dividend.
We been forced to feed Khazanah, EPF,… but return to us is insignificant
Further tax exemption on highly profitable organization taking out further public money to enrich government and their high pays corporate figures.
PLUS do not have nett liabilities instead nett asset worth 5 billions.
….
There will be talk about reviewing concession clauses and reducing toll price for consumers. Will there be further compensation from public fund to PLUS for profit loss? Will the charge truly reduced to benefit the public and country economic growth (imagine small business can emerge on substantial reduce on transportation cost).
We can’t help to ponder if the toll still necessary. Are we seeing Khazanah to collapse without toll collection and eventually crippled economy growth? Or will be seeing more economic growth since transportation is amongst the biggest private and SMI spent? What is the effect of charging RM 0.01 or less per km compare to RM 0.14 per km to PLUS, Khazanah, Malaysia, SMI, and public?
I am stating again and again about wealth distribution. Last year we are seeing 5% EPF dividend, 7% ASB, low increment for GLC and yet we are the main contributors to this organization profitability. This organization (government) in no loss business and making tonnes of money directly from our pocket. The money does not circulated back to our wealth growth but disappear elsewhere.
We are paying a lot to own a car because of Proton (GLC), pay high fuel price because of Petronas want to export domestic output (GLC), high toll because of PLUS (Khazanah, GLC),….. The minute I buy a car, I would pay about 10,000 on excise duty and tax go to government, pay 100 on a full tank that bulk of it go to Petronas profitability and government tax, pay RM 100 to make a visit to my parents to PLUS that is own by GLC, barely left with anything by month end and still have to pay yearly income tax, road tax, licence renewal, …
Who is helping whom??
UEM (indirectly, Khazanah): 40%
Khazanah: 24%
EPF: 10%
ASB: 4%
As it stand on 2007 financial report:
Toll collection: RM 1.82 billions
Profit before tax: RM 1.31 billions (72% of toll revenue)
Liabilities: RM 10 billions
Asset: RM 15.9 billions
Tax exemption: RM 400 millions
PLUS have to publish this because they are a public listed company. The numbers speak for themselves.
Agreement between PLUS and G’ment is G’ment to G’ment.
Toll charges is ridiculously high
EPF only gave out 5% dividend.
We been forced to feed Khazanah, EPF,… but return to us is insignificant
Further tax exemption on highly profitable organization taking out further public money to enrich government and their high pays corporate figures.
PLUS do not have nett liabilities instead nett asset worth 5 billions.
….
There will be talk about reviewing concession clauses and reducing toll price for consumers. Will there be further compensation from public fund to PLUS for profit loss? Will the charge truly reduced to benefit the public and country economic growth (imagine small business can emerge on substantial reduce on transportation cost).
We can’t help to ponder if the toll still necessary. Are we seeing Khazanah to collapse without toll collection and eventually crippled economy growth? Or will be seeing more economic growth since transportation is amongst the biggest private and SMI spent? What is the effect of charging RM 0.01 or less per km compare to RM 0.14 per km to PLUS, Khazanah, Malaysia, SMI, and public?
I am stating again and again about wealth distribution. Last year we are seeing 5% EPF dividend, 7% ASB, low increment for GLC and yet we are the main contributors to this organization profitability. This organization (government) in no loss business and making tonnes of money directly from our pocket. The money does not circulated back to our wealth growth but disappear elsewhere.
We are paying a lot to own a car because of Proton (GLC), pay high fuel price because of Petronas want to export domestic output (GLC), high toll because of PLUS (Khazanah, GLC),….. The minute I buy a car, I would pay about 10,000 on excise duty and tax go to government, pay 100 on a full tank that bulk of it go to Petronas profitability and government tax, pay RM 100 to make a visit to my parents to PLUS that is own by GLC, barely left with anything by month end and still have to pay yearly income tax, road tax, licence renewal, …
Who is helping whom??
Thursday, 10 July 2008
How competitive is our national automotive industry
The fact is we are paying a lot for our cars relative to our generated income. It is also a fact that we are bounded to 5 to 9 years high liability on hire purchase, which 9 years is most likely suited our affordability for the reasonable car.
Having our own car manufacturing plants and labels had put this fact into disgust prospective. Nowadays we are hearing those company was making losses instead of profit and sustainability of this local industries is in doubt.
What makes our car prices is so expensive locally? Are we victimized by the government policy that supporting this industry at our expenses? Is our car competitive elsewhere whereby the local excise duty protection eliminated? Numerical data on export success of our proven poor thus conclude that we either does not met up the consumer expectation or that we are less competitive elsewhere too.
To build a car not only involves assembly plant. To have a successful automotive industry require a total industrialization from developing the car, developing the components, manufacturing those components, process raw materials to make those components, logistic and human resources.
Typical and most sensible starting point to develop a local automotive industry is to have our own label and a donor car. This stage usually recognized as re-badge, which make the cars ours. This can be done with taking the car as it is or with minimal alteration (example 206, RIA,..) or critical components such platform and engine (example: Proton Wira, Saga, Perdana). This stage involve minor development which mainly consist the part to be changed, badge and certain validation requirement. Few suppliers were born on this stage.
Second stage is localization. Localization can be very beneficial for the manufacturer and local suppliers. Manufacturer acquires good level of cost benefits and the supplier would enjoy good margin. This resulted from imported component cost to locally manufactured cost. With local low cost labour in various government incentives on infrastructure, the suppliers’ manufacturing cost is relatively low.
Government plays a major role on this stage. It includes machinery and technology incentives, tax exemption and local industry protection. The mission is to accelerate the industry growth, expanding infrastructure and developing local experts.
From my observation, we did quite well on this stage. To date, we are capable of processing plastic, sheet metal, tooling fabrication, material compounding, glass manufacturing and lots more. The industry provides thousands job opportunities and raised hundreds if not thousands corporate figures.
We however failed miserably on the later phase. Our automotive industry always at threat of elimination and worse of all, our brands is the least appreciated by public.
One of the major sources of this failure is our dependency to global commodities and incapability of producing key high tech or safety components. With our relatively weak currency and have to import most of the material required prior to process them here make the cost relatively high and putting us out of competitive prospective.
In general, following are some of key ingredients requirement and its local availability:
Plastic
1. Polypropylene – Commonly used for common plastic part. Cheapest material. Widely used. Locally produced by Titan Chemical. Automotive usage usually requires compounding with additional substance.
2. Polyethylene – also produced by Titan
3. ABS (sheet or grain) – imported
4. PC (high clarity, usually used for headlight) – imported
5. Glass fibre – imported
6. Isocyanate/ polyol (to make foam) - imported
Sheet metal – Imported
Metal – Imported
Some of essential process requirement of components making:
Injection moulding – widely available
Thermoforming – widely available
Stamping – widely available
Casting (gravity/ pressure) – widely available
Forging (essential for transmission and high power engine component) – not available
Rubber extrusion – widely available
Just by looking at some of the core process and material, we know that our automotive industry is still lacking on the competitiveness. The idea of competitiveness is to be as close as possible to the source of the cost. This would mean getting the raw material at cheapest possible cost and cheapest possible process cost.
Plastic material derived from petroleum. We are petroleum producer country. We should be able to fully exploit these raw plastic material sectors. I don’t think that we done enough. Selling price of this material however in different scenario. Again global commodity price is the factors. This will eventually lead us to ‘subsidizing’ kind of solution to keep the cost down and stimulate local plastic industry growth.
Metal sheet that is the basis of stamped parts that makes the car structure, body panel, brackets and others is not available locally. We imported in roll form which put us in quite a distance to the its natural source states. We had Perwaja once that should drive itself to produce sheet metal, but the industry was loss without even started to this stage of application.
Machineries and facilities required to process these material was given significant advantages by our government before. There were grant system enable the supplier to have the machineries almost free. Thus, depreciation/ recovery element is almost insignificant and gave them the manufacturing cost advantage edge. Labour acquired overseas and cheap. Utilities especially electricity is abundance in Malaysia with IPP existence. Still manufacturer have to pay high cost on energy requirement. Having said that, I am sure we still have to competitive edge on this element is we want to.
What actually happened within this industry in Malaysia is greediness. There is also another element of import tax exemption. We need to understand the criteria to know the snowball effect to our industry.
No tax for component/ material that is not available locally. Imported goods but option available locally is exposed to tax.
There are two thing happened from the above criteria:
Locally produced goods can be more expensive relative to global price due to import tax imposed will usually make imported goods more expensive
Continuous trading for non-available local goods is more profitable and manageable compare to locally developed and produced.
Both of these effects have negative impact to our automotive industry. We tend to develop more traders rather than producers. Traders is just an extended middle man and we are not sure how many layers of middle man is there before we get the goods here. Each stop point will have its own management cost and profit taking.
Back to the greedy factor, this industry were started by giving out opportunities to ‘nobody’ and corporate figure for high prospect business, high-level assistance from government and strong profit margin. The industry did not evolve fast enough and the authority gave more incentive and protection. This resulted on easy-profit low risk taking by the suppliers. To leave this industry and loss its competitive momentum through protection had proven unwise. This sector grows with business opportunity but lack of technology acquisition and ownership. We develop bunch of profit lover kind of businessman with dollar sign on the forehead. We rarely saw automotive enthusiast figures, which prolonged the negative consequences of this effect.
So we had lots of money loving company owner with pocket full of money. Instead of re-investing to the industry on technology acquisition and continuous improvement, lots had diversified the business. Some turn out good and some turnout bad. Important thing is that the money had been driven away from the total industry development.
In conclusion, our automotive industry as it is now is not competitive. We are lacking of core infrastructure especially on raw material production. We are lack of technology availability that limited us from producing certain vital component on our own. We are not technology driven but profit oriented.
Cheap or expensive of a car is not actually the tag price itself, but affordability. Affordability is our purchasing power and for most of us we do not have the purchasing power. There were a few thing that the industry could do differently especially in wealth distribution. Should the wealth distributed more fairly and these corporate figures could live with less number that would give us more purchasing power. More buying will accelerate economic growth. Bear in mind that this industry provides thousands of jobs. These thousands income-earner also helping the parents. The parents will have better purchasing power and further economic growth. It could make a huge different and the chain effect would be outstanding.
I think I will stop here. I was just analyzing our situation now. Knowing that we could design a good way to move forward. I shall discuss about that in my next posting.
Having our own car manufacturing plants and labels had put this fact into disgust prospective. Nowadays we are hearing those company was making losses instead of profit and sustainability of this local industries is in doubt.
What makes our car prices is so expensive locally? Are we victimized by the government policy that supporting this industry at our expenses? Is our car competitive elsewhere whereby the local excise duty protection eliminated? Numerical data on export success of our proven poor thus conclude that we either does not met up the consumer expectation or that we are less competitive elsewhere too.
To build a car not only involves assembly plant. To have a successful automotive industry require a total industrialization from developing the car, developing the components, manufacturing those components, process raw materials to make those components, logistic and human resources.
Typical and most sensible starting point to develop a local automotive industry is to have our own label and a donor car. This stage usually recognized as re-badge, which make the cars ours. This can be done with taking the car as it is or with minimal alteration (example 206, RIA,..) or critical components such platform and engine (example: Proton Wira, Saga, Perdana). This stage involve minor development which mainly consist the part to be changed, badge and certain validation requirement. Few suppliers were born on this stage.
Second stage is localization. Localization can be very beneficial for the manufacturer and local suppliers. Manufacturer acquires good level of cost benefits and the supplier would enjoy good margin. This resulted from imported component cost to locally manufactured cost. With local low cost labour in various government incentives on infrastructure, the suppliers’ manufacturing cost is relatively low.
Government plays a major role on this stage. It includes machinery and technology incentives, tax exemption and local industry protection. The mission is to accelerate the industry growth, expanding infrastructure and developing local experts.
From my observation, we did quite well on this stage. To date, we are capable of processing plastic, sheet metal, tooling fabrication, material compounding, glass manufacturing and lots more. The industry provides thousands job opportunities and raised hundreds if not thousands corporate figures.
We however failed miserably on the later phase. Our automotive industry always at threat of elimination and worse of all, our brands is the least appreciated by public.
One of the major sources of this failure is our dependency to global commodities and incapability of producing key high tech or safety components. With our relatively weak currency and have to import most of the material required prior to process them here make the cost relatively high and putting us out of competitive prospective.
In general, following are some of key ingredients requirement and its local availability:
Plastic
1. Polypropylene – Commonly used for common plastic part. Cheapest material. Widely used. Locally produced by Titan Chemical. Automotive usage usually requires compounding with additional substance.
2. Polyethylene – also produced by Titan
3. ABS (sheet or grain) – imported
4. PC (high clarity, usually used for headlight) – imported
5. Glass fibre – imported
6. Isocyanate/ polyol (to make foam) - imported
Sheet metal – Imported
Metal – Imported
Some of essential process requirement of components making:
Injection moulding – widely available
Thermoforming – widely available
Stamping – widely available
Casting (gravity/ pressure) – widely available
Forging (essential for transmission and high power engine component) – not available
Rubber extrusion – widely available
Just by looking at some of the core process and material, we know that our automotive industry is still lacking on the competitiveness. The idea of competitiveness is to be as close as possible to the source of the cost. This would mean getting the raw material at cheapest possible cost and cheapest possible process cost.
Plastic material derived from petroleum. We are petroleum producer country. We should be able to fully exploit these raw plastic material sectors. I don’t think that we done enough. Selling price of this material however in different scenario. Again global commodity price is the factors. This will eventually lead us to ‘subsidizing’ kind of solution to keep the cost down and stimulate local plastic industry growth.
Metal sheet that is the basis of stamped parts that makes the car structure, body panel, brackets and others is not available locally. We imported in roll form which put us in quite a distance to the its natural source states. We had Perwaja once that should drive itself to produce sheet metal, but the industry was loss without even started to this stage of application.
Machineries and facilities required to process these material was given significant advantages by our government before. There were grant system enable the supplier to have the machineries almost free. Thus, depreciation/ recovery element is almost insignificant and gave them the manufacturing cost advantage edge. Labour acquired overseas and cheap. Utilities especially electricity is abundance in Malaysia with IPP existence. Still manufacturer have to pay high cost on energy requirement. Having said that, I am sure we still have to competitive edge on this element is we want to.
What actually happened within this industry in Malaysia is greediness. There is also another element of import tax exemption. We need to understand the criteria to know the snowball effect to our industry.
No tax for component/ material that is not available locally. Imported goods but option available locally is exposed to tax.
There are two thing happened from the above criteria:
Locally produced goods can be more expensive relative to global price due to import tax imposed will usually make imported goods more expensive
Continuous trading for non-available local goods is more profitable and manageable compare to locally developed and produced.
Both of these effects have negative impact to our automotive industry. We tend to develop more traders rather than producers. Traders is just an extended middle man and we are not sure how many layers of middle man is there before we get the goods here. Each stop point will have its own management cost and profit taking.
Back to the greedy factor, this industry were started by giving out opportunities to ‘nobody’ and corporate figure for high prospect business, high-level assistance from government and strong profit margin. The industry did not evolve fast enough and the authority gave more incentive and protection. This resulted on easy-profit low risk taking by the suppliers. To leave this industry and loss its competitive momentum through protection had proven unwise. This sector grows with business opportunity but lack of technology acquisition and ownership. We develop bunch of profit lover kind of businessman with dollar sign on the forehead. We rarely saw automotive enthusiast figures, which prolonged the negative consequences of this effect.
So we had lots of money loving company owner with pocket full of money. Instead of re-investing to the industry on technology acquisition and continuous improvement, lots had diversified the business. Some turn out good and some turnout bad. Important thing is that the money had been driven away from the total industry development.
In conclusion, our automotive industry as it is now is not competitive. We are lacking of core infrastructure especially on raw material production. We are lack of technology availability that limited us from producing certain vital component on our own. We are not technology driven but profit oriented.
Cheap or expensive of a car is not actually the tag price itself, but affordability. Affordability is our purchasing power and for most of us we do not have the purchasing power. There were a few thing that the industry could do differently especially in wealth distribution. Should the wealth distributed more fairly and these corporate figures could live with less number that would give us more purchasing power. More buying will accelerate economic growth. Bear in mind that this industry provides thousands of jobs. These thousands income-earner also helping the parents. The parents will have better purchasing power and further economic growth. It could make a huge different and the chain effect would be outstanding.
I think I will stop here. I was just analyzing our situation now. Knowing that we could design a good way to move forward. I shall discuss about that in my next posting.
Monday, 7 July 2008
Subsidies, economic growth and dependency
Malaysian lifestyle had been blended in with all kind of subsidies enjoyed by all layers. Some get more benefits and some less nevertheless everybody was benefited. Recent fuel charge hike shown the criticality of Malaysian dependency towards the subsidies.
While in the rural, farmers are subsidized with growth substance (baja), chemical control agent, seeds, etc plus exemption of tax, higher layers enjoys permits/rights, tax incentive, etc and all layers enjoys price control subsidies.
The root of this subsidization is to generate economy growth. While keeping the cost low for the public, government would enjoy the end tax return that would be greater relative to subsidy investment. Malaysian government had taken a step further of becoming the trader for most of the subsidized items/ elements. Agriculture product distributed by FAMA, RISDA, FELDA, etc. We see organization such LKIM for marine output. Crude oil by PETRONAS and the list would go on.
Malaysia actually operating like a big manufacturing plant whereby government placement at the top of the organization, not only as tax beneficiaries but the operational benefit itself.
Looking at Malaysia from ‘manufacturing plant’ perspective would reveal a new paradigm. As a ‘company’ called Malaysia, it is important to keep the labour and manufacturing cost low. Higher cost would mean less return for the same price. Having the total control of the ‘industry’ and supply network-making Malaysia as the sole body of local provider and enable itself to sell at premium without disrupting local demand elements.
Direct result from this action is high level of dependency of the public to government incentive. I am not sure whether it is the government failures on increasing the Malaysian living standards or they would like to keep this way to retain control to our dependant mindset.
Should we enjoy better standard of living, we would have greater purchasing power and less affected by rising cost of living. To make that happen, government should have a master plan on doing so. Countries revenues should be re-invested to the betterment of the public and benefit the public economic growth rather than stagnant and deteriorating living standard alone. Nevertheless, similar corporate bodies, individuals and foreigners are the largest beneficiaries of the re-investment.
Take Terengganu as a good example. Government is enjoying the crude oil sales profit, tax and royalties from Petronas. A large sum of the royalties belongs to Terengganu states and its people. Until today, Terengganu still lack of proper infrastructure, poor industrial growth and under-exploited tourism sectors all due to the royalties money did not came through fully as it should. Drive to Tasik Kenyir and you will see the ‘forgotten’ people of the royalties. Go to Kemaman and you will see the ‘great’ Pasar Payang and poor jetties. With the amount of money that should be there to develop Terengganu, I would expect to see full bloom agriculture industries, countless shopping mall with local people ownership/ partnership, free highway access to boom trading and tourism, marina for tourism, hi-tech fisheries jetties and high-tech marine processing industries. All these would create job and local wealth and with tourism sectors would add premium to local product and generate higher living standard throughout the local people.
What we are seeing in Malaysia is pretty much the opposite. Wealth distribution focused on individuals. Mega project benefit individuals and foreign contractors. High rank position monopolized by foreigners. Same group of people becoming directors to most of companies. Whilst actual funding to the public limited to ‘survival’ and further promotes dependency to the government.
Having said that, subsidization in Malaysia is merely to promote public dependency to government, keeping the cost low for the government by limiting public personal economy growth, ensure government role in distribution, and distracting public from government failures of total public economy growth.
To prove and express the level of our dependency to our government is the common phrase that we heard, asked and have to use for our betterment, ‘ada lubang’? Somehow, for whatever small or big scale business that we want to get ourselves into or even trying to get a job, the same question being asked or asked by ourselves of the existence of ‘lubang’. What is that actually tells you? You have to know somebody for you to move forward and most of the time that somebody is government people or linked to government people. No lubang mean 80% failures chances and that shows the level of manipulation that we have undergone to.
To sum up, do we actually require subsidies? The answer is no. But we need a better standard of living, fairness in wealth opportunities, better wealth distribution, better salary for working class, better return for local products to the producers, better infra-structure and low cost, toll free road and better government. Until then, we kind of depend on subsidies.
While in the rural, farmers are subsidized with growth substance (baja), chemical control agent, seeds, etc plus exemption of tax, higher layers enjoys permits/rights, tax incentive, etc and all layers enjoys price control subsidies.
The root of this subsidization is to generate economy growth. While keeping the cost low for the public, government would enjoy the end tax return that would be greater relative to subsidy investment. Malaysian government had taken a step further of becoming the trader for most of the subsidized items/ elements. Agriculture product distributed by FAMA, RISDA, FELDA, etc. We see organization such LKIM for marine output. Crude oil by PETRONAS and the list would go on.
Malaysia actually operating like a big manufacturing plant whereby government placement at the top of the organization, not only as tax beneficiaries but the operational benefit itself.
Looking at Malaysia from ‘manufacturing plant’ perspective would reveal a new paradigm. As a ‘company’ called Malaysia, it is important to keep the labour and manufacturing cost low. Higher cost would mean less return for the same price. Having the total control of the ‘industry’ and supply network-making Malaysia as the sole body of local provider and enable itself to sell at premium without disrupting local demand elements.
Direct result from this action is high level of dependency of the public to government incentive. I am not sure whether it is the government failures on increasing the Malaysian living standards or they would like to keep this way to retain control to our dependant mindset.
Should we enjoy better standard of living, we would have greater purchasing power and less affected by rising cost of living. To make that happen, government should have a master plan on doing so. Countries revenues should be re-invested to the betterment of the public and benefit the public economic growth rather than stagnant and deteriorating living standard alone. Nevertheless, similar corporate bodies, individuals and foreigners are the largest beneficiaries of the re-investment.
Take Terengganu as a good example. Government is enjoying the crude oil sales profit, tax and royalties from Petronas. A large sum of the royalties belongs to Terengganu states and its people. Until today, Terengganu still lack of proper infrastructure, poor industrial growth and under-exploited tourism sectors all due to the royalties money did not came through fully as it should. Drive to Tasik Kenyir and you will see the ‘forgotten’ people of the royalties. Go to Kemaman and you will see the ‘great’ Pasar Payang and poor jetties. With the amount of money that should be there to develop Terengganu, I would expect to see full bloom agriculture industries, countless shopping mall with local people ownership/ partnership, free highway access to boom trading and tourism, marina for tourism, hi-tech fisheries jetties and high-tech marine processing industries. All these would create job and local wealth and with tourism sectors would add premium to local product and generate higher living standard throughout the local people.
What we are seeing in Malaysia is pretty much the opposite. Wealth distribution focused on individuals. Mega project benefit individuals and foreign contractors. High rank position monopolized by foreigners. Same group of people becoming directors to most of companies. Whilst actual funding to the public limited to ‘survival’ and further promotes dependency to the government.
Having said that, subsidization in Malaysia is merely to promote public dependency to government, keeping the cost low for the government by limiting public personal economy growth, ensure government role in distribution, and distracting public from government failures of total public economy growth.
To prove and express the level of our dependency to our government is the common phrase that we heard, asked and have to use for our betterment, ‘ada lubang’? Somehow, for whatever small or big scale business that we want to get ourselves into or even trying to get a job, the same question being asked or asked by ourselves of the existence of ‘lubang’. What is that actually tells you? You have to know somebody for you to move forward and most of the time that somebody is government people or linked to government people. No lubang mean 80% failures chances and that shows the level of manipulation that we have undergone to.
To sum up, do we actually require subsidies? The answer is no. But we need a better standard of living, fairness in wealth opportunities, better wealth distribution, better salary for working class, better return for local products to the producers, better infra-structure and low cost, toll free road and better government. Until then, we kind of depend on subsidies.
Monday, 30 June 2008
Mega project, mega money, mega corruption
Regardless of whatever position we are in any measured Corruption Index, we Malaysian know better the level of corruption in this country. It happen in all levels and most of the time we are seeing things got probed on the lower level at which if we consider index and statistic, it merely involves fraction of percentage of the total corrupted money that goes around.
How does the big shark got away from this stats? The answer is simple; simply by declare it in the open. Put it in the economy plan or declare certain company awarded with the big project and ironically, we are seeing the same link of personalities to most of the awarded bodies.
The major differences but equally similar traits between this regime and before is the cost of the project. This new regime we are seeing and hearing numbers in billions and numerous amount of mega projects. Government increased public cost of livings by subsidy removal claims and at the sake of government revenues. At the same time, government also increase the budget that already in billions by another couple of billions.
This scenario is actually stunts me. It stunts me because at the same time we know for a fact that this regime was always talking about fighting corruption.
The key of why corruption exists is because of the presence abundance money. When the money ‘afloat’ is abundance and one want to have a piece of it, it happened. It is not hard to become a millionaire in Malaysia, you only need to get one project and you are set. The hard part is to get a hand in that project if you are not part of the ‘family’.
Due to amount of cash offered per project making the competition is actually on acquiring the project. There are no worries about the cost, revenue surpass the cost by miles. There are plenty of cash to go around.
The answer of reducing this corruption act is actually by reducing the profitability amount, relatively speaking, the pie. Smaller pie mean less people to share, small enough pie will only fill a few. But why can’t our government apply this simple step at which actually will save them millions if not billions and at the same time reducing the outflows and potentially enable them to have more meaningful development? Negatively speaking, they would like to have a piece of that pie or positively but equally negative is they don’t know. They don’t know how much a project should cost. They don’t know the cost of metal beams, bricks, concrete, workforce, etc.
To move on the right direction, our government institution needs to start establishing a cost study group. This group should consist of professionals (local please) with knowledge of the commodities, process, profit-loss calculation, nationalistic and honest. This group should look in depth of what it takes to build anything and be able to simulate what is the actual cost of delivering such project. Then the tender shall be out accordance to simulation with adequate profit in mind. The tender process need to be done professionally with all cost and profit declared up front.
Only by this we would be able to create a competitive environment. Distribution of wealth will become more meaningful, jobs for local will be created, monopolize and cronyism issue will be reduced (cronies is more interested on easy money, not the money that they have to really work for).
Perhaps the local job creation need a bit more explaining. On my knowledge and experience seeing, analyzing and scrutinizing all kind of cost data, I often encounter similar pattern of cost declaration. Workforce declared as locals and cheap foreign workers hired instead. Hiring cheap foreign workers is merely an act on profit optimization. It is the option that our government should drive to reduce. Our locals are all talented and much needed of income. We work more hours per day for most of other developed country with the lousiest pays in return. Should we be paid fairly, we don’t really need cheap foreigners to fill in the job spot. It does require a bit of enforcement body to make sure that we are fairly treated. More locals and less foreigners on job meaning less money outflow and more domestic purchase power and activities. Most of us is not like the rich in Malaysia that do the shopping overseas and keep their money in offshore account. We shop here, keep the money circulated here are the pillars of the economic growth in Malaysia and frankly need a good level of attention from the government.
Back to the principal of pies, I do believe that we are overspent on our entire projects. The cost and profit elements of this project need to be scrutinized. It is good to have numerous amount of mega project if we know how to balance the cashflow, knows the values for money, not wasting public fund and properly executed in healthy and meaningful manners. All this development is meant for the public and public benefits need to be ensured at all time. It definitely not supposes to be on the interest of certain individuals, shareholders and corporate bodies that are repeatedly gain the most benefit of any development project there.
How does the big shark got away from this stats? The answer is simple; simply by declare it in the open. Put it in the economy plan or declare certain company awarded with the big project and ironically, we are seeing the same link of personalities to most of the awarded bodies.
The major differences but equally similar traits between this regime and before is the cost of the project. This new regime we are seeing and hearing numbers in billions and numerous amount of mega projects. Government increased public cost of livings by subsidy removal claims and at the sake of government revenues. At the same time, government also increase the budget that already in billions by another couple of billions.
This scenario is actually stunts me. It stunts me because at the same time we know for a fact that this regime was always talking about fighting corruption.
The key of why corruption exists is because of the presence abundance money. When the money ‘afloat’ is abundance and one want to have a piece of it, it happened. It is not hard to become a millionaire in Malaysia, you only need to get one project and you are set. The hard part is to get a hand in that project if you are not part of the ‘family’.
Due to amount of cash offered per project making the competition is actually on acquiring the project. There are no worries about the cost, revenue surpass the cost by miles. There are plenty of cash to go around.
The answer of reducing this corruption act is actually by reducing the profitability amount, relatively speaking, the pie. Smaller pie mean less people to share, small enough pie will only fill a few. But why can’t our government apply this simple step at which actually will save them millions if not billions and at the same time reducing the outflows and potentially enable them to have more meaningful development? Negatively speaking, they would like to have a piece of that pie or positively but equally negative is they don’t know. They don’t know how much a project should cost. They don’t know the cost of metal beams, bricks, concrete, workforce, etc.
To move on the right direction, our government institution needs to start establishing a cost study group. This group should consist of professionals (local please) with knowledge of the commodities, process, profit-loss calculation, nationalistic and honest. This group should look in depth of what it takes to build anything and be able to simulate what is the actual cost of delivering such project. Then the tender shall be out accordance to simulation with adequate profit in mind. The tender process need to be done professionally with all cost and profit declared up front.
Only by this we would be able to create a competitive environment. Distribution of wealth will become more meaningful, jobs for local will be created, monopolize and cronyism issue will be reduced (cronies is more interested on easy money, not the money that they have to really work for).
Perhaps the local job creation need a bit more explaining. On my knowledge and experience seeing, analyzing and scrutinizing all kind of cost data, I often encounter similar pattern of cost declaration. Workforce declared as locals and cheap foreign workers hired instead. Hiring cheap foreign workers is merely an act on profit optimization. It is the option that our government should drive to reduce. Our locals are all talented and much needed of income. We work more hours per day for most of other developed country with the lousiest pays in return. Should we be paid fairly, we don’t really need cheap foreigners to fill in the job spot. It does require a bit of enforcement body to make sure that we are fairly treated. More locals and less foreigners on job meaning less money outflow and more domestic purchase power and activities. Most of us is not like the rich in Malaysia that do the shopping overseas and keep their money in offshore account. We shop here, keep the money circulated here are the pillars of the economic growth in Malaysia and frankly need a good level of attention from the government.
Back to the principal of pies, I do believe that we are overspent on our entire projects. The cost and profit elements of this project need to be scrutinized. It is good to have numerous amount of mega project if we know how to balance the cashflow, knows the values for money, not wasting public fund and properly executed in healthy and meaningful manners. All this development is meant for the public and public benefits need to be ensured at all time. It definitely not supposes to be on the interest of certain individuals, shareholders and corporate bodies that are repeatedly gain the most benefit of any development project there.
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