Monday, August 16, 2010

Open letter to PM from Sabahan Cynthia Ong

Open letter to PM — Cynthia Ong Gaik Suan

Sunday, August 15, 2010

The Chinese Myth-Buster

August 14, 2010
Liew’s firm is behind some of Malaysia’s biggest property developments, including in Putrajaya. — Picture by Jack Ooi
KUALA LUMPUR, Aug 14 – Top property developer Tan Sri Liew Kee Sin today punctured the Chinese community’s complaints that it had been treated unfairly by the government, pointing out that Malaysian-Chinese have fared well under pro-Bumiputera policies.

Liew, whose SP Setia Bhd is behind some of Malaysia’s biggest property developments including in Putrajaya, said statistics show there are more Chinese-controlled firms than Bumiputera companies on the local bourse.

“Statistically, Forbes magazine shows that the Malaysian-Chinese can prosper over the last 30 years,” said the SP Setia president and chief executive.

According to Forbes, Chinese-controlled companies account for 37 per cent of market capitalisation among the top 100 Malaysian listed companies, compared to Bumiputera equity of seven per cent.

Chinese individuals also control 73 per cent of the wealth owned by the top 40 richest Malaysians and make up eight of the top 10 richest Malaysians.

“Have we fared badly?” Liew asked rhetorically.

He pointed out that Chinese small-to-medium enterprises (SMEs) had done very well too, and that their owners could even afford to buy the multi-million ringgit bungalows put up by his company.

“One Chinaman want to build a bungalow of RM40 million!” he said.

“That’s wealth. Where did wealth come from? The wealth came in the last 30 years of so-called NEP (New Economic Policy) policies.”

Liew also argued that the increased presence of government-linked companies (GLCs) in the market meant that Chinese businesses would soon have no choice but to tap into Malay expertise and funds if they wished to increase revenues in the future.

“Today, the government has money through GLCs (government-linked companies)... They can buy buildings off you, they can buy your supermarkets, your hypermarkets, you shopping centres from you. That will give you a big source of income,” he said.

“It’s up to us. Do we want to tap into their expertise, financial abilities? Do you want to tap into their so-called connections?”

However, Liew stressed that such Malay-Chinese cooperation required a spirit of give-and-take.

“Before we start asking them to give us more liberal policies... we must also allow them to come to our sector, things that we are good at. If not, this so-called collaboration will not happen. They will not allow us,” he said.

“If we were to say we want to take a bigger pick from this economic cake from under the NEM (New Economic Policy)... we must also learn to give in.

“We must also learn to take a step back. We must also learn how to live with their culture, their mindset.”

He explained that the Malays still feared that the Chinese would “run over them and kill all of them” if they (the Chinese) were not bound by pro-bumiputera policies.

“That is their mindset. Whether it’s inferiority complex or whether it’s upbringing, whether it’s cultural... it is there,” he said.

Liew reminded delegates that it was only pragmatic for Chinese companies to link up with Malay ones as business was all about profit, not politics.

“We’re in business. Our job is to make money,” he said.

“Are we prepared to be a small fish in big market or the big fish in a small market? It’s up to us"

The Malaysian Insider

Saturday, August 14, 2010

Kelantan's Dinar A Good Investment Alternative?

Hantu Laut

Although, the price of gold fluctuates from time to time it is still the most stable and a good hedge against inflation.Gold is probably the safest investment in time of war and financial crisis.

In times of economic crisis or inflation, recession or worst case scenario, a depression, gold always stands out as a stable value so that, even when you might need wheel barrows of dollars to buy a loaf of bread (like in Zimbabwe), a tiny gold coin would be enough for you to buy a wheel barrow full of bread.

In 2010, Indian converted more gold into investment than into jewelery.

The chart below shows the price of gold the past decade.

10 year gold price per ounce

The Kelantan state government has issued gold dinar and silver dirham as legal tender.Which means you can buy them to use as legal tender in Kelantan only or if you wish keep it as an investment.

The move by Kelantan should not be viewed as an illegal action but more to allow its citizens the opportunity of having a more secured currency, as an investment or as an hedge against inflation and in times of economic crisis.

My grandmother used to hoard gold in the form of jewellery and coins.Your grandmother must have done the same.So, the practice of keeping gold as security for bad times has been around for thousand of years.

It is certainly better than investing in some State government's unit trust that have completely wiped out investors money with some losing their whole lifetime savings to this moronic former Sabah chief minister here.

If your are a CEO of a company or leader of a state who manages the state's finances and something goes wrong you are responsible no matter how much you wish to deny it, be it due to external forces beyond your control or bad decision on your part.

Anyway, which right thinking chief minister would allow a share swap of state owned blue chip shares for crappy junks in shitty companies?


I think Kelantan's gold dinar will not become a bona fide currency even in Kelantan but depending on its par value ( I have no yardstick to assess it at the moment) I believe it will be good investment to buy some for keeps.

Bank Negara should approved the minting, maybe not as currency, but as instrument of investment.

Other states should emulate Kelantan's move to offer its citizens a stable and safe investment alternative.

The World Islamic Mint that issues the gold and silver currency is here.

Friday, August 13, 2010

No School Of Hard Knocks! Why The NEP Failed ?

Hantu Laut

He is as blunt as a kick in the shin.

Former premier Mahathir Mohammad never munches his words, he does not know how.Those who dislike him called him racist.

No prime minister of this nation can afford to be a racist. Mahathir is just one man who shoot straight from the hip, he has no niceties, no political correctitude.A racist but he is not.

His statement here would be very upsetting to non-Malays particularly the Chinese.Literally, Chinese do not need political power, they were already rich.Certainly, the Chinese per capita is much better than the Malays.It's not a wild guess, it's a statement of fact.The Chinese should be proud of it.

Mahathir himself, while he was in power, did not push the Malay agenda as aggressively as he is doing now.Why? Does he feel the Malays are losing their grips on political power.

Mahathir said the Malays have not attained the desired equity proportion after almost 40 years of NEP and out of which he helmed the nation for 22 years and had the best opportunity to correct the imbalance.

The greatest chance of the NEP being made successful should have been under his regime.UMNO politicians shrivelled in fear at the prospect of falling out with him.He could have hard-nosed the NEP then.Why, didn't he?

Should Mahathir shoulder greater part of the blame for failure of the NEP or are the bumiputras to blame for their indifference and lamentable attitude toward hard work that smothered the government's efforts to turn them into shrewed businessmen and corporate leaders.

We have seen how GLCs handed over to selected bumiputras had gotten into trouble because of bad management.They are not small entities but big corporations, some, have existed since colonial days.Over the years billion of ringgit of taxpayer's money have been lost to corruptions and bad management of such companies led by manufactured entrepreneurs.

GLCs under bumiputra's management have also suffered the same fate.The recent debacles in Sime Darby and Felda are big embarrassment to bumiputras and the government.

The question is why have the Malays not grown better in business? What are they lacking in? Lack of business skill and acumen may be one of them but than skill can be learned. We are either taught or learned it empirically.If Malays can become doctors,engineers, lawyers,architects and many other professions, why can't they be good businessmen?

If I remember well Mahathir was of the view that all he needs to do was to make few Malays rich who in turn will make many more Malays rich.

Obviously, Mahathir's principle of multiplier effect was a failure.There was no quantum jump in bumiputra's equity. His dreams of Malays helping Malays in the business and the corporate world did not happen. The rich Malays stay rich and the poor Malays stay poor.

The nouveu riche Malays become a class of their own, leading flatulent lifestyle with horrid distaste for the proletariat.They ride on their high horses ignoring the fact that the millions they have were not the fruits of hard labour but were the windfalls of political connections.

I have no doubt there are many hard-working honest Malays but they are the forgotten lot.

In this country it is 'who you know not what you know' and a policy with fatal consequence.The good brains left the country where their talents would be better appreciated.

Mahathir's policy of helping only few selected Malays have not brought the desired result and one that led him to coin the phrase "Melayu mudah lupa", a reflection of his frustration with failure of the Malays to achieve higher economic success.

It is simple logic which Mahathir overlooked.

If you have RM100 to distribute and you divided it into RM10 each and give it to 10 people you would have made 10 Malays happy and maybe 5 out of the 10 would have used the money wisely and succeed.If you give the RM100 only to one or two than you only make one or two Malays happy and this one failure mean total failure.

During his time Mahathir did not push the NEP as aggressively because he knew without active participation of the Chinese the country could never attain the higher growth rate that would help push his vision 2020 to reality. The Chinese are the economic engines and their big contribution to the economy is undeniable.They also hold bigger slice of the economic cake due to hard work and business prudence.Mahathir had openly admitted the Chinese larger contribution to the economy by the amount of taxes they pay.

The Chinese are mostly urban and semi-urban dwellers.Most real estates in urban and semi-urban areas are owned by Chinese and over 90 percent of retail trade and most of service industry are done by them. This is one area where the government seems to lack the will to encourage bumiputras to be actively involved in.If there are some, it is negligible.

Most wholesale and retail businesses are dominated by the Chinese. Other than the typical restaurant business that bumiputras seem to prefer they shunned other type of business in this category instead preferring the easier option, chase government contracts where the money is bigger, faster and easier to make.More often than not such contracts go back to the Chinese where Ali sat on his ass and Baba joyfully working hard to make lots more money.

Even in the remotest areas deep in the interior, where I observed during my time as a logger, it is likely to be a Chinese family running the village shop and does everything as seller, buyer and financier.

Other than selling the essential commodities the Chinese towkay would also buy local produces and gives financial aids (advances) to reliable natives to secure the products which he than export to the bigger towns and cities to another Chinese middleman.In another word the Chinese is not just mere shopkeeper but also the banker in the village.

Retail,whole selling and contracting are tedious and competitive business and these are the places where most Chinese business had its early existence before making it big.It does not make your rich overnight but it teaches you hard work and the art of doing business, of being competitive and of being able to survive the cruel business environment.This is the school of hard knocks.

Are the bumiputras willing to take up the challenge or continue to rely on their leaders for government handouts.

It is not that the Malays or bumiputras can't become good business people and are at fault, it is the Malay leaders that spoiled them, Mahathir included, resorting to quick fix solution and politics of political patronage.

As the English say "Take care of the penny and the pound will take care of itself"
A business built purely on political connections would eventually fall.

The next time you hear Ibrahim Ali cry wolf, take it with a pinch of salt.