Undur Lah, Pak Lah! Readers’ Responses
Undur lah, Pak Lah! Readers’ Responses
My essay last month, Undur lah, Pak Lah (Step Down, Pak Lah! September 3, 2006), stirred quite a response both in this website and elsewhere. The issues I raised must have struck a chord with Malaysians.
To those who agree with me either in total or partially on Abdullah Badawi’s lack of leadership, I urge you not to resign to that fact. There is much that we can do; we must continually put our leaders’ feet to the fire. We should demand high standards and expectations of them, and if they do not perform, we must not shy from asking them to leave. Eventually even the densest among them will get the message. Formidable leaders like Tony Blair succumb to grassroots pressures. Abdullah is even denser and not as smart as Blair, so we have to hammer the message even harder and more often.
To those of my generation, we owe it to younger Malaysians not to accept or tolerate mediocrity in our leaders and those aspiring for leadership. Now that Abdullah has postponed UMNO’s leadership conference originally scheduled for next year, all the more we must let him know that his brand of leadership is severely wanting.
Those who disagree with me fall under three categories. There are those who dispute the facts I cited and/or their interpretations. Then there are those who disagree because they have misread my essay and misattributed certain assumptions on my part. The last are those who question my standing to comment, on account of my residing outside of Malaysia.
As this last group is the easiest to dispose off, I will attend to it first. As one of my readers succinctly put it, who cares where I live. We should address the issues. Would those who currently disagree with me react favorably if I were to inform them that I live in Ulu Kelantan? Their reactions then would undoubtedly be: what would a villager know!
I am contemptuous of and do not wish to engage those who view ideas first and foremost on the pedigree of their bearers instead of addressing the merit of those ideas.
Yearning for Mahathir?
There are those who believe that my criticizing Abdullah was nothing more than my yearning to have Mahathir back. Yes, Mahathir was the best leader Malaysia ever had; he transformed the nation. Having stated that, I am also on record as being among his severest critics. I believe the man was sincere when he said that he was not interested in being prime minister again. He is a man of his word; the same cannot be said of Abdullah.
Abdullah’s frequent utterances for transparency and welcoming criticisms are nothing more than, to put in the local colloquial, “cock talk.”
Reflecting back on my criticisms of Mahathir, even when I was severely knocking him down during the terribly trying times following the 1997 economic crisis, I never felt at any time threatened. I felt free to critique him. In the last couple of years under Abdullah Badawi however, I have heard from several reliable sources that I am now on the Special Branch’s radar screen!
Not that it would bother me, but that more than anything else is the key difference between the administration of Abdullah and Mahathir, which in turn reflects the key difference between the two leaders.
As for Mahathir’s many Johnny-come-lately critics, I remember receiving a long and unsolicited e-mail from one Kalimullah Hassan back in the early 1990s chiding me for daring to criticize Mahathir! Of course that was the time when Kali was enjoying plump positions in the many GLCs. Today Kali has nothing good to say about Mahathir I am sure that if Abdullah Badawi were out of power, Kali would be praising Abdullah’s successor sky high and at the same time unhesitatingly condemning Abdullah. Such are the true nature of such characters.
I do not pretend to know what Mahathir’s motives are for criticizing Abdullah, but many Malaysians share his concerns about Abdullah’s competence to lead. The significant difference between Mahathir and me is this: I predicted Abdullah’s mediocre potential way back in 1998 when Mahathir appointed him, while Mahathir discovered the man’s hollowness only recently.
Najib Not Much Better
Many assumed that my calling for Abdullah to withdraw meant that I was favoring Najib. Far from it! With Abdullah’s withdrawal, all the top slots in UMNO would be open, and Najib would have to fight to be the number one.
I do not know who would be the best candidate. If we open up the nominating process so that anyone could contest without first getting the division’s nomination, you would likely get more and better choices.
If we remove the current blight of money politics, we would ensure that the wisdom of the crowd would get expressed. By Abdullah withdrawing now, the upcoming General Assembly next month would then become a leadership convention. Since the campaign period would be short and sudden, that would negate (but not wipe out completely) some of the corrupting influences. It takes time to raise the cash and to corrupt people, as well as to engage in intrigue and backstabbing.
I agree that the current senior leaders in UMNO are a bunch of losers, and that includes Najib Razak. He reached the top simply because Malays felt a deep sense of gratitude to his legendary father. My simple answer to that would be to pick any of the other sons of the late Tun. Najib may be the eldest, but he did not inherit any of his father’s smartness; that went to the late Tun’s other sons.
Judging Abdullah, Not Mahathir
Many are unhappy because by my focusing on Abdullah’s evident weaknesses, I am conveniently overlooking Mahathir’s. Mahahtir’s presumed sins are irrelevant; he is no longer leader. Precisely because I do not want Abdullah to repeat Mahathir’s mistakes, I am relentless in criticizing Abdullah. Mahathir may have had many negatives, but he also had many compensating achievements. Besides, I have no interest now in criticizing Mahathir as he is retired. I have done my part, and more, when he was in power.
If Abdullah would recognize his glaring weaknesses and not be taken in by the soothing praises from his courtiers and step down now, that would ensure UMNO, Malays, and Malaysia would have the opportunity to be led by more enlightened leaders. That would be one enduring legacy worth striving for, and one that sadly eluded Mahathir.
Still, it is only an opportunity, whether it would be realized with his stepping down remains to be seen. He could do much to enhance the possibility of UMNO selecting competent and honest leaders by ensuring the election process be as open as possible. As matters now stand, there is only one certainty: Abdullah staying on would be a disaster for Malaysia, and at a time when it could least afford it.
Many of Abdullah’s earlier moves were promising but he failed miserably in the subsequent follow through or execution. His reform of the Police Force is well intentioned, but is bogged down. His cutting of the oil subsidy too was wise, as that benefited the rich disproportionately, but he did not make the necessary contingency plans ahead of time to ameliorate its impact on the poor.
Consider Abdullah reducing the federal budget deficit, which his spin-doctors proudly proclaim to be their master’s best stroke. There are good deficits and there are bad ones. Having a deficit to finance schools, universities and the infrastructures is good; creating another monster money-losing GLC is not. In failing to differentiate between the two, Abdullah and his advisors are exposing their lack of leadership skills and financial finesse.
Abdullah Badawi is bad news for UMNO, Malays, and Malaysia. I knew this man was kosong (empty) a long time ago. Mahathir is only now discovering this. I hope the rest of Malaysia does not take as long to discover the vacuity of Abdullah Badawi.
Abdullah must step down, and do so now!
October 15th, 2006 at 5:50 pm
The biggest beneficiary in the event of your suggestion is : The UMNO!
We Malaysian only agree and support to one and only reason that is, the Rakyat of All Malaysian must be the final beneficiary!
British Prime Minister in his speech (Labour Party Conference) had pointed out our core problem, this is what he said,
“… We abandoned the ridiculous, self-imposed dilemma between principle and power.
We went back to first principles, to our values, our real values, those that are timeless, and separated them from doctrine and dogma that had been ravaged by time.
In doing so, we freed Britain at long last from the reactionary choice that dominated British politics for so long: between individual prosperity and a caring society.
We proved that economic efficiency and social justice are not opposites but partners in progress.
We defied conventional political wisdom and so changed it.
Around that we built a new political coalition……”
This story starts due to our ever shrinking economic pie in this ever changing globalised world.
October 15th, 2006 at 6:45 pm
Well said, Dr Bakri.
We must never give up when we are championing the cause of change. The quality of leaders at the political level and in our public and private sector institutions leaves much to be desired.
It is going to be a long and drawn out struggle to be “cemerlang, gemilang dan terbilang”. A start has to be made now by us as citizens. We must hold our leaders to high standards of ethical behaviour and performance.
We must have leaders who are not scared of their own shadows. Such leaders lead by example and allow talent to germinate, flower and bloom. They put a huge premium on knowledge and scholarly research. They create what is known in management as an “enabling environment”. They do not seek to dominate. In stead they liberate, not suppress.
Confident leaders respect the rights of man (Thomas Paine) to be the best that he or she can be. There should be free men and women everywhere because freedom to think, write and debate without fear or favour is such a precious thing. It is the essence of a dynamic and thriving democracy, and the best antidote against the tyranny against the human mind and spirit.
Our country is suffering due to a serious lack of leadership. Only my fellow Kedahan is worthy of being called a leader. His name is Tun Dr. Mahathir Mohamad. I would go to the extent of saying that in the absence of a decisive leader of Tun Dr. Mahathir’s calibre, our country is tending towards being a “semi-anarchic state”.
I do not know where Malaysia is heading (do you?), but all indicators are disturbingly negative. The eminent sociologist, Professor Syed Hussein Alatas has a term he coined to describe the state of mind of our leaders. He calls it “bebalisma” (a derivative of the Malay word is “bebal”).
That is why we must be relentless in our pursuit of systemic change. Our leaders are a bunch of “bebalists”. As a result, we must use the power drill with a diamond tip to penetrate their hubristic skulls.
Look at my own University, now called UM. Nearly 50 years ago, MU had a great reputation with foreign students and Malaysians rushing to get in. Today, even if we provide scholarships, foreign students would not come.
In the 50s and 60’s, only 25% get their degrees. Others have to repeat their courses or are told that they cannot continue. Today, we produce uneducated and unemployable graduates. The success rate is now 100%, that is, you are “guaranteed” a degree once you are admitted.
Yet some of our journalists and feature writers say that there is nothing for UM to worry about because the THES ranking is flawed. On the other hand, we have the new Vice Chancellor of UKM saying that she wants to be No.1, beating Harvard, Oxford and Cambridge. Not in a 100 years at the rate we are doing things.
Bangladesh has a Nobel Laureate in Professor Dr. Muhammad Yunus of the famed Grameen Bank, without having seminars on how to produce Nobel Prize winners. The United States has the biggest share of Nobel Laureates year in year out. Why?
Thanks.
October 15th, 2006 at 8:09 pm
Freeman Kedah, I think you are being very inconsistent and illogical. You bemoaned the fact that Malaysia currently lacks leadership and that only Dr M is worthy of being called a leader.
/// Our country is suffering due to a serious lack of leadership. Only my fellow Kedahan is worthy of being called a leader. His name is Tun Dr. Mahathir Mohamad. ///
Yet, 3 paragraphs down your letter, you said this:
/// Look at my own University, now called UM. Nearly 50 years ago, MU had a great reputation with foreign students and Malaysians rushing to get in. Today, even if we provide scholarships, foreign students would not come. ///
Of the nearly 50 years you talked about, one man was in absolute charge during half that period. And during and prior to those 22 years that he was in charge, he was also the Education Minister. Who made the switch from English to Bahasa? Who lowered the entry standards to schools and universities so that more unqualified Malays can be admitted?
The pathetic and precipitous fall in MU’s global ranking did not happen over night or during the past 3 years. It coincided with the tenure of your so-called true leader.
October 15th, 2006 at 8:48 pm
I come to this site because I had hoped that a well educated and successful Malay would be confident and colour blind. But sadly, like many Malay leaders, Dr Bakri view Malaysia with skewed and racist eyes. It’s always UMNO, Malays and then Malaysia.
How sad that even the most exposed and successful Malays cannot be confident enough to realise that Malaysia must be for all Malaysians. We must start to view success as for Malaysian first before we can expect to see MU, MAS or Proton to ever do well.
October 15th, 2006 at 10:41 pm
The lure to power is something no one could comprehend. AAB has been playing second fiddle to TM as a yesman without yielding any real power.
Once he (AAB) is up there, he couldn’t handle the responsibility of power he inherited, having ambitious plans and making promises, which I think during that time was ernest as he could be.
Reality struck and he was playing with something unknown to him when he was a deputy. Now realizing that he couldn’t live without the other idiots around, him and he trying to save his own skin, goes back on his word and promises.
As a person, he is a fine gentleman but as the office, he is seriously lacking. I sympathize with him as a person but I question his abilities? Or shall we atribute it to external factors? I don’t know.
Looking at the situation, who among the people in UMNO is capable of the office of PM? I am still looking but I don’t see anyone yonder.
October 15th, 2006 at 10:49 pm
“Abdullah Badawi is bad news for UMNO, Malays, and Malaysia. I knew this man was kosong (empty) a long time ago. Mahathir is only now discovering this. I hope the rest of Malaysia does not take as long to discover the vacuity of Abdullah Badawi. ”
Mahathir tolerates no ’smart ass’, he needs none around him and definitely loves it when his Ahli Bodeks recite daily mantra … ba ba black sheep …”yes sir, yes sir, we are fools” . Here we have Abdullah.
October 15th, 2006 at 11:02 pm
/// Abdullah Badawi is bad news for UMNO, Malays, and Malaysia. ///
Dr Bakri - what about the Chinese, Indians and other Malaysians?
What is bad news for UMNO may be good for Malays.
What is bad news for Malays may be good for Malaysia.
What is bad news for UMNO may be good for Malaysia.
And what is bad news for UMNO and Malays may be the best news for Malaysia yet.
October 16th, 2006 at 12:10 am
A week after Abdullah Badawi took office, he made a surprise visit to the Immigration dept, and I was one of those who praised him for his dynamism and willingness to have his hands soiled by going to the ground and see for himself.
Since then, I have not heard of any similar visits, except for the overseas trips that he is making, with increasing frequency.
Now we have the new IGP who is also starting off with surprise visits. I dread that he may go the same way.
LJ
October 16th, 2006 at 1:27 am
Dear Dr Bakri,
Your assessment,
“I agree that the current senior leaders in UMNO are a bunch of losers, and that includes Najib Razak.”
If Pak Lah undur lah, we are no better again. Any solution for the present dilemna the Malaysians face ?
October 16th, 2006 at 1:28 am
Dear Dr Bakri,
Your assessment,
“I agree that the current senior leaders in UMNO are a bunch of losers, and that includes Najib Razak.”
If Pak Lah undur lah, we are no better again. Any solution for the present dilemna the Malaysians face ?
October 16th, 2006 at 1:37 am
“If Pak Lah undur lah, we are no better again. Any solution for the present dilemna the Malaysians face ?”
Oh don’t worry Peter. Many Malaysians believe that the absence of a better alternative is not a problem at all. That’s why some us vote for the Opposition, not that they are a viable alternative.
It is like spite, you see?
October 16th, 2006 at 2:11 am
Dear WofGrapes,
I never said that TDM was a perfect leader. He was strong leader who could have his way by sheer force of his personality, and the power he had as Prime Minister. He made things happen and never waivered.
I happen to have worked for him in the mid-1970s, and I knew that he did not like to be contradicted. I stood on my grounds whenever I felt that I had strong reasons for doing so. I did not get very far with him for that, of course. But he knew that I was self respecting human being and did not have to “bodek” him to survive, and I did survive over all these years. At the same time, I was never disrespectful of him.
We often blame the leader for our own failings. It is the way we cope with our own weaknesses and problems. Although TDM might have the ultimate responsibility for the country, we as professionals, workers and as parents too are to blame. We could have voted him and the BN out of office whenever we collectively felt that his policies and politics were misguided or wrong. Did we? No, we didn’t. We stayed with him.
The problem was that most bureaucrats were sycophants and because of that, they dared not to challenge him (and often they never understood what he wanted and why).
We as citzens are culpable for allowing our public institutions to degenerate because we did not care. As far as UM was concerned, the VCs and Members of the University Council and Senate who were appointed by TDM on the recommendations of the Minister of Education, faculty members and administrators, and the alumini were mea culpa.
Now the time has come for us to show that we can stop the rot and make the Government, the VC and his UM team more accountable for their policies and actions. Exercise our right to vote with prudence.
Thanks.
October 16th, 2006 at 5:32 pm
” ..I knew this man was kosong (empty) a long time ago. Mahathir is only now discovering this…” Meaning u are better than TDM … all the more reason for u to come back and lead the country !
October 16th, 2006 at 6:13 pm
The man went on an umrah. Finally he got the message from above:
“To survive, go back and act tough, divide and rule, try racial politics just as what Mahathir did the 22 yrs he was in power. You have no other choice and not much time longer. ”
Special Branch, what special branch? I don’t know what they are doing, maybe they set their own rules, I don’t know. I am only the PM.
October 16th, 2006 at 6:35 pm
I share with you (Bakri Musa) that Badawi has failed as the PM of Malaysia. He reminds me of a book “Peter’s Principles” I read 20 years ago. In the book the writer expounded several management theories. One of his best theory is “A person is normally promoted to his level of incompetence” For example, you do not promote a super salesman to become sales director becos he doesn’t know about planning, people management and financial budgeting. Likewise, Badawi has now been promoted to his level of incompetence and it shows very clearly.
Ronald Reagen is not that smart but he is smart enough to get good men to work for him. Badawi surrounded himself with spin doctors and Oxbridge graduates to compensate for his lack of intelligence. Badawi must learn “not only to do the right thing but do it right”
He said the right thing, ” don’t work for me; work with me” but his intolerance on Article 11, ASLI’s Dr Lim’s NEP figures discussion and lack of action on Police Commission, corruption, speaks volume of his lack of leadership.
His leadership shortcomings stems from his own lack of education (degree in Islamic studies) and hence ability to grasp complex matters; government servant background hence lack of business and enterpreneurship skills. Lastly, he does not have self -confidence. It shows when he was interviewed on TV. Imagine he cannot perform infront of CNN what more in the BBC Hard Talk. Blimey!
Who’s next after Badawi? Definitely not the present “wannabes” God bless us with a new leader with wisdom to rule wisely and fairly.
October 16th, 2006 at 7:18 pm
Also, it was hosted by a junior new comer in CNN - Anjali Rao who migrated from Starnews Asia. It was good for both anyway.
October 16th, 2006 at 7:32 pm
Reality check 1… AAB is replaceable ..just like Thaksin, Suharto, Clinton or even TDM.
Reality check 2… Malaysian PM .. mesti ..Melayu, Islam, Presiden UMNO.
October 16th, 2006 at 8:13 pm
I saw the following from another site. If the accountant quoted is correct, may God Almighty save Malaysia.
“I’m an accountant by profession and I would just want to highlight the serious flaws in the EPU methodology. I know the DPM has announced that they will reveal the methodologies. Whatever they announce, par value accounting is still par value accounting and it has very serious weakness.
If par value accounting is used in the private sector, it’ll be very close to a scam – i.e. you can NEVER reach 30% bumi equity for your generations and generations to come. We have been duped for a long time.
The accountant has brought his arguments together in one powerful debunking of the EPF’s methodology as follows:
EPU’s Methodology is seriously flawed!
It’s very normal for a company to start with a paid up capital based on par value and remains so for a long time. It doesn’t need to increase the paid capital (as long as the company is not short of new capital injection) because the accounting and business fraternities value the shares on market value. Par value of shares have little significance except for a archaic company law disclosure requirement.
For example, a company starts with a paid up (par value) capital of $1 million in 2006, and is awarded a 10 years contract to build a bridge. Say, it makes a profit of $10 million for the duration of 10 years and keeps the profits intact. The market value of the company in 2016 is $11 million but its par value still remains intact at $1 million. The shareholders of the company can extract the profits through directors’ emoluments, dividends, management services, etc
EPU’s methodology of calculation of bumi equity is shrouded in secrecy. From what has been disclosed in the press, it is gathered that the methodology uses the par value of shares and exclusion of GLC companies.
Until things can be clarified, basing on generally accepted accounting principles and present accounting norms, EPU’s methodology is seriously flawed as demonstrated below.
Example 1 :
Ali owns 100 Tenaga shares. Par value $100 ($1 per share). Market value $1,000 ($10 per share).
Ah Chong owns 1,000 Farlim shares. Par value $1,000 ($1 per share). Market value $430 ($0.43 per share).
EPU Methodology :
Ah Chong is 10 times richer than Ali. Therefore, Ali needs help to be on par with Ah Chong.
Flaw:
Par value has no relation to the actual value of shares. In fact, Ali’s is richer than Ah Chong. If EPU does not take relative wealth into the equation, how does it know who to help to redress the equal distribution of wealth? Obviously, as this case shows, EPU may be helping the wrong guy!
Example 2 :
Ali owns 100% of Ali Berhad. 5 years ago, he sold off 90% of Ali Berhad at $100 million. He bought a property in London for $30 million and a property in Malaysia at $10 million after 7% discount; Invested in shares in Africa $20 million ; Spent son’s wedding $10 million; Gave his first wife alimony $30 million after marrying his 2nd wife. Nobody knows anything about his foreign assets although his personal marital affairs became hot news in Utusan Malaysia.
EPU Methodology :
Ali is holding only 10% share in Ali Berhad now. Ali is marginalized because other races have 90% share. He should be given an additional 20% to make 30%.
Flaws :
1.It only takes Malaysian shares into account and omits other important assets such as properties, bank savings, foreign share investments, etc and profits extraction (spendings). Ali was originally given 100% share but he divested his shares and converted his proceeds into foreign and other assets. If Ali were to invest 100% of his proceeds into shares of a Malaysian company, only then the actual bumi % can be correctly reflected.
2.It only captures the data at one point of time. If you look at the statistics now, it will show that he only owns 10% share and not 100% as he was originally given.
Example 3 :
Ali owns 100% of Ali Berhad. He sells off 90% of Ali Berhad to a GLC controlled by UMNO
EPU Methodology :
Ali Berhad is no longer a Bumi company since GLC is not counted as a Bumi company. Ali share is 10%. Since the GLC doesn’t want to sell down its shares, Ali should be given another 20% in another company, Ah Chong Berhad to make 30%.
Flaws :
1.Notice how this caused the overall bumi equity to drop by 90% viz-a-viz increasing the non-bumi equity % immediately upon the sale to the GLC even though nothing has been changed.
2.To alleviate this, there must be some bumi value ascribed to the GLC shareholding and not 0% as is presently the case. For guidance, The ASLI methodology of accounting 70% as bumi equity is fair as GLC’s employees and contracts awarded are mostly opened to bumis. This also roughly reflects the bumi population as the Government argues that it benefits all races. Use 68%, 65% or even 60% maybe, but to treat GLC’s bumi share as 0% is even furthest away from justice and fairness than ASLI’s methodology.
Example 4 :
Ali is given 30% share (30 million shares) in Muthu Berhad at an IPO price of $1.50 per share for a total sum of $45 million. After 1 year Ali sold off all his shares in Muthu Berhad at $10 per share for $300 million. He made a cool profit of 255 million which he keeps in the bank.
EPU Methodology :
Since he does not now own any share, he is entitled to another bumi portion (30%) of IPO in Ah Chong Berhad at $1.50 in the 2nd year. Ali proceeded to buy Peter Berhad, Ranjit Berhad, Sayonara Berhad, etc, …. in the 3rd, 4th, 5th year…..using the same modulus operandi. All these years the bumi equity had never exceeded 30%!
Flaw :
It doesn’t take into account how many times Ali applies for an IPO as long as he had sold off his shares before applying for another IPO or if he had used the name of his nominees. This obviously results in double (triple, quadruple…etc) handouts as long as he keeps his money out of the system of calculation (e.g. in the bank, purchased properties, foreign investments, etc).
As you can see in this example, there are ample opportunities for leakages (triple, quadruple, etc, handouts) without even disturbing the 30% equity barometer.
Example 5 :
Ali forms a $2 company called Ali Sdn. Bhd. in year 1. He found an ingenious way to sell a piece of paper for an enormous amount of money and made $200 million a year. In the 5th year his $2 company company is worth $1 Billion (in cash).
Ahmad forms a $2 company called Ahmad Sdn. Bhd. in year 1. He has been given a huge number of taxi permits and made a reasonable profit of $10 million a year which he drew out as salary each year. In year 5 his company is still $2 but he had earned $50 million in salaries.
Aziz is a rich man but involved in a risky business where he feared creditors going after him. On the advice of his accounting firm, he transfered all his assets worth $500 million into an Investment holding company called Aziz & Sons Sdn. Bhd. controlled by his nominee for $250 Ordinary shares and the rest in Preference Shares in year 1. His investment company earns $20 million a year in rental and dividends but in year 5 his company’s share is still $250.
Muthusamy forms a company called Muthusamy Sdn. Bhd. In year 1, he borrowed $1,000 from his relative, put this money into his company as capital and started a business selling “kacang putih” peddling his wares around Chow Kit road on a motorbike which his company bought on hire purchase. He made $1,000 a year and re-invest $100 a year into his company as capital. In year five his capital has risen to $1,400.
EPU Methodology :
1. Year 1
Since the methodology counts only ordinary shares at its par value, the bumi equity is only 20% (254/(254 + 1000) x 100 = 20%) while Muthusamy has 80%. Therefore Ali, Ahmad and Aziz all need help and should be continued to be given assistance until the equity reaches 30%.
2. Year 5
Since the methodology counts only ordinary shares at its par value, the bumi equity is reduced from 20% to 15% (254/(254 + 1400) x 100 = 15%) compared to Muthusamy equity of 85%. Ali, Ahmad and Aziz performances have deteriorated. Muthusamy’s equity has increased at the expense of Ali, Ahmad and Aziz. Muthusamy must share his knowledge with Ali, Ahmad and Aziz. In the meantime, Ali Ahmad and Aziz needs help badly and must be continued with assistance indefinitely until the equity reaches 30%.
Flaws :
Now, notice the biggest flaws of using par value to account for % equity:
1.Ali, Ahmad and Aziz are way, way richer than Muthusamy in wealth but using the par value methodology shows that Muthusamy is way ahead of them by 80:20.
2.Ali, Ahmad and Aziz Sdn Bhds. could continue to receive enormous contracts without even increasing 0.01 % of their equity.
3.Ali, Ahmad and Aziz could increase their personal wealth (through market value of shares and profits extractions by way of dividends, salaries, management fees, etc) without increasing even 0.01% of their equity.
4.It’s even mind bogging that Ali, Ahmad and Aziz Sdn Bhds. can even continued to receive enormous contracts and increased their wealth beyond their wildest dreams and yet register a drop in their % equity, in this case, a drop from 20% to 15%!
This could be one of the reasons why the use of a flawed methodology, the actual bumi equity has dropped from 25% to 18.9% apart from the reason that some bumis have sold off their shares.
Comments :
I deliberately put the names as they were in the examples to elicit attention. People tends to view such sensitive matters with a racial slant – that it’s all about malay and non-malays. That’s when prejudice sets in and people clam up and start to defend their positions rather than seeing the need for and the good points of a possible restructure. What I want to stress to the readers is that it’s not about malays and non-malays!
The Muthusamay in the EXAMPLE 5 above could well be Pak Dollah the fisherman from Kelantan, or Aminah selling tradisional kuihs in the KL central market, or Ah Swee selling popiahs in Penang or even the aborigine rattan gatherer in the outskirt of Sarawak! Ali, Ahmad and Aziz could well be the elite, affluent and polically well connected Ah Chong, Vincent, Gonzales, Puspha or even Shahabbudin !
Try to substitute the names and you will see that it affects you in one way or another!
Conclusion :
1.Until and unless EPU is more transparent in their methodologies to rebuke the flaws, applying normal accounting principles and the knowledgeable public’s perception, the methodologies used by EPU are seriously flawed! Serious, in the sense that the interpretation of the results derived from the methodologies used (as shown in the examples) can be disastrously wrong!
2.Par value accounting does not change whereas market value changes according to the performance and wealth of a company. It does not take a genius to figure out that if the par value of Ali Sdn. Bhd. is $2 in 2006 it will still be $2 in 2020 even though you award 10 billions in contracts for this duration of time unless Ali wants to change it! Par value has no significance in accounting at all but I wonder whether the authority has an agenda in using par value accounting.
3.The figure of 18.9% could well be derived from a flawed methodology used. We all can see with our eyes everyday that elite bumis are already much more affluent than a decade ago (although the average bumis have not achieved the same measure of success) but statistics show that there is a shrinkage from 25% to 18.9%? How could this be? More importantly, the present EPU methodologies have proven that it has failed miserably to redress the equal distribution of wealth among the ordinary Malaysians.
4.In fact, on the contrary, par value methodology does the opposite! Taking Example 5 – Ali, Ahmad and Aziz are way, way richer than Muthusamy but the par value methodology in fact showed the reverse – that Muthusamy is way ahead of them. By not taking wealth into the equation helps to conceal the spoils of the elite group like Ali, Ahmad and Aziz (remember, who could well be the politically connected Ah Chongs, Vincents, Gonzales, Pusphas or Shahabbudins) comprising of both elite bumis and elite non-bumis! Instead of helping politically connected people like Ali, Ahmad and Aziz, the governing authority should be helping ordinary people like Pak Dollahs, Aminahs, the aboriginal rattan gatherers, Ah Swees and even Muthusamys.
5.The present EPU’s methodology of evaluating % equity based on par value of shares cannot achieve the objective of equal wealth distribution simply because “wealth” is not used in the methodology at all! If wealth (market value of shares) is not used in the formula then how can the answers lead you to equal wealth distribution? Because the methodology is tilted to elite group, I cannot but feel that the implementers of par value methodology are less than honest with all those hardworking non-politically connected, average Malaysians irrespective of race.
The EPU’s findings are used in the formulation of the NEPs and in many other areas including in planning and charting of the Nation’s growth, investments and important policies making. Its impacts are so immense, far reaching and fundamental, not only to the daily lives of 26 million Malaysians, but also to the bilateral relations between countries across the world. Countries, and recently Singapore (who is accused of marginalizing its minority population), are already moving away from using the par value of shares in their system.
And yet Malaysia is still using par value (and possibly, far into the future, until the 30% equity is reached) which is so fundamentally flawed in charting the direction of the country!
How can a methodology so seriously flawed be used in making such important decisions for the country?”
October 16th, 2006 at 8:31 pm
We do not need convincing TrueMalaysian. No one need be a rocket scientist to figure that out. Positions in the EPU which is part of the PM’s Department are filled by career professionals who are government servants and are supposed to be politically neutral but civil service neutrality has never been more than a dream since the Mahathir era.
What we need to know is what to do with the NEP. Malays need to be weaned off the addition and it will take time and stages. Perhaps it is time to formulate a new version of the NEP without abandoning it completely - a true affirmative action program to benefit the poor and the needy.
October 16th, 2006 at 8:38 pm
“How can a methodology so seriously flawed be used in making such important decisions for the country?”
Judges do the same i.e. decide on the outcome of the case and then find the reasoning to arrive at the judgment - which is a lot easier than reasoning to arrive at the judgment.
October 16th, 2006 at 8:59 pm
What has happened to WofGrapes?. No reaction from him on my comments re TDM.
Yes, Mers:
Badawi cannot survive the rigors and the intellectualism of a HardTalk Stephen Zacker interview. Even a smooth talker-agitator, and astute politician like Anwar Ibrahim was cornered by Zacker. You have to know your subject and the issues, and must be able to “give ” Zacker his due in equal measure during the exchange. Here no spin doctor can help.
To me, Anjali Row is too much of a novice compared to her predecessor Lorraine Hahn or the ebullient Richard Quest. I agree, Badawi came out well this time on TalkAsia this time. Let’s also give Anjali a break.
But is Badawi’s, “Malaysia is for all Malaysians”, credible? He has allowed his UMNO barons, for example, Malay nationalists like Muhyiddin Yassin and Zainuddin Maidin, a free hand to comment on the contentious ASLI report. They have created a ruckus, and now he says “Cool It”. ( Read NST Front Page, October 17,2006)
I regard all these tough statements as political gerrymandering or wayang kulit ahead of the forthcoming UMNO General Assemby.But it is neither helpful nor reassuring to external observers, investors, and other concerned Malaysians when politicians play around with real bread and butter issues, and embedded negative racial sentiments.
Fortunately, we have sensible Dato Shahrir Samad and Tun Musa Hitam and an academic like Prof. Dato Dr. Mohd Salleh Ismail to moderate the angst with very good suggestions.
Amazing isn’t? Firebrand son-in-law Khairy Jamalludin (KJ the stormtrouper ) and his friends in NST, Kalimullah Hassan and Brendan Pereira, have yet to enter the debate. Hey, I could be talking too soon here.
What is worse is that the MCA and the leaders in Chinese Chamber of Coomerce like Dato David Chua chose to keep stay out of the current fray. At least, Dr. Lim Kheng Yaik of Gerakan has the courage to speak his mind. The doctor-politician is now the target of UMNO “mini-hegemons”.
Thanks.
October 16th, 2006 at 11:54 pm
do u think people should give PM more time to turn it around?..afterall he inherit the mess from former admininstration.
coming back to equity calculation, some dispute and talk about share of ownership,i think a simple perception will be like one owner own one BMW and one owner own 3 protons and yet one ‘equity’ has worth-value more than the one that have 3 ‘equity’.
October 17th, 2006 at 2:52 am
/// What has happened to WofGrapes?. No reaction from him on my comments re TDM. ///
I didn’t think we have to respond point for point. Some parts I agree with you, some I disagree, but we can let it rest and let the rest make their own judgement and comment.
Freeman - just to oblige you.
/// I never said that TDM was a perfect leader. He was strong leader who could have his way by sheer force of his personality, and the power he had as Prime Minister. He made things happen and never waivered. ///
I also never said that you said TDM was a perfect leader. I said you were illogical. You craved for TDM’s leadership style and yet in the same breath you bemoaned the drastic drop in UM’s standing.
Yes, agreed, TDM is very forceful and made things happened. But that is precisely the problem. If you are forceful and must have things your way, you better make sure that you are correct in your thinking and implementation. I appreciate that you stood your ground. But very few people under him are able to defy him like you did.
Take the policy of replacing English with Malay for teaching. TDM’ss will is your command. It will be done. He made things happened. And that’s why UM has fallen off the academic radar screen.
He want’s his Putrajaya and Cyberjaya - who dares to contradict him? Is this really the best way to spend the country’s precious reserves?
He wants to have Proton at all course despite Malaysia having no competitive advantages in the car industry. He wanted Perwaja Steel. He wanted the MM chip (this one didn’t happen despite huge investment). Yes, he made all these happened, but at what cost?
Freeman - you know the answer to what ails Malaysia in the previous administration as shown by this quote: /// The problem was that most bureaucrats were sycophants and because of that, they dared not to challenge him (and often they never understood what he wanted and why). ///
Again, not all staff are like you able to talk back to him. Why are they sycophants? To save their rice bowls perhaps. To partake in the gravy trains perhaps. Some times, just some time, what he wanted and why may not be for the good of the country and may never be publicly known.
Nice to be able to talk civilly with you (unlike many sites where vulgarities are hurled at each other and all kinds of shouting taking place).
Cheers
October 17th, 2006 at 5:08 am
“The problem was that most bureaucrats were sycophants and because of that, they dared not to challenge him (and often they never understood what he wanted and why)”
This is an interesting quote. One which we can all argue till the cows come home. I wish to proffer an theory and I belive I can’t be far wrong.
Saving one’s skin or hide is too harsh a word It has to do with the mindset and the mentality - the all too encompassing Malay pysche. It’s “taat setia kepada raja dan pemerintah” all the way.
In the eyes of the subordinates, leaders can do no wrong. Even if they commit treachry, they are still held in esteem.
It’s a question of saving face. “Jaga maruah” or dignity. One simply cannot tell off a leader “dihadapan halayak ramai.” It’s most uncouth and uncivilised.
TDM punished his subordinates with impunity because he knew his subjects would not question his wisdom or his actions. He derailed the Judisciary, sacked the CJ and his cohorts. Nobody dared tell him off. He sacked his deputies and imprisioned one. Only subdued whispers from his subjects. He imprisioned his opponents and curtailed civil liberty. Still nobody dared questioned why. Much needed funds were whittled away on spurious projects of little or no benefit to the rakyat. Nobody complained.
When he got away with murder, he began to feel invicible. He soon assumed a figure of demonic proportions. Those who benefitted from his largesse would be around to applaud him. They had nothing to lose but plenty to gain in terms of contracts and kickbacks, all in the name of NEP and affirmative actions. As long as the strongman was in power, they had nothing to fear - not even God.
There was one army general who behaved and acted in similar fashion. He would summon his subordinates for “coffee break” in his office. If you were that someone be prepared for the worst. He would pick on anything tangible and intangible, at his whims.
Driving without a valid licence or an expired licence was his pet hate. One day his own son was involved in a motor accident. The Police found out that his son had no driving licence. When the news leaked out he pretended as if nothing had happened.
The general believed in his own invicibility because his loyalists and hangers-on made him feel so. Today, like TDM, he is just an ordinary citizen and like any of us, has to queue at the post office and the bank.
The moral of the story is simple we make our leaders to be what they are. And we can change them as well. But can we change the Malay pysche? I don’t think so.
I rest my case.
October 17th, 2006 at 5:52 am
Didn’t someone say that Mahathir was the umno GOD for 22 years? and his monkeys(ahli bodeks) kept nodding their heads chanting, “yes sir, yes sir we are fools”? That was a good one!
Btw we still have the same monkeys ruling us today. Who to blame?
October 17th, 2006 at 7:45 am
why don’t we just copy Prof Yunus plan and apply in M’sia and scrapped NEP? maybe in 100 yrs
October 17th, 2006 at 10:08 am
“I agree that the current senior leaders in UMNO are a bunch of losers, and that includes Najib Razak.” - Bakri
I respectfully have to disagree. They are all making money and laughing on their way to the bank. We have been screwed. We are the losers!
October 17th, 2006 at 11:02 am
I have never seen Malaysians being so disillusioned so much. There is no trust and there is a very strong perception that anything and everything the govt leaders say and talk is nothing but lies. None of the present leaders are believable and are so crooked politicians.
May be we are approaching dooms day or perhaps people are waking up from their dreams at last
October 17th, 2006 at 11:50 am
Fair Malaysian,
Some weeks back I received this via sms, it went something like this:
“When America sent their men to space, they called them Astronaut
When USSR sent theirs, they named them Cosmonaut
When China sent theirs, they were Taikonaut
Now Malaysia’s, they are Can or Not ”
I really don’t know if we should call it a joke or what but alot of the people’s money has been spent to prepare our two guys for space travel; it just show how much confidence the people have in the bunch of monkeys running the BN Govt, corrupted and directionless with the left not knowing what the right is doing. The PM sits there, nothing seems to be moving the way it should be yet he insists he’s in control, in control of what ?
October 17th, 2006 at 2:49 pm
pak lah should become a full-time ulamak.
since he is more concern of his hadhari than the economy and ordinary rakyat.
from history, before mahathir become PM
- Mahathir stated TunkuAR had given “the Chinese what they demand…you have given them too much face. The responsibility for the deaths of this people, Muslims and infidels, must be shouldered by [you].”
from history before Najib become DPM
- One off-cited instance of this is a rally held by UMNO Youth shortly before Ops Lallang in 1987, where future Deputy Prime Minister and then UMNO Youth Chief Najib Razak threatened to bathe a keris (dagger) with Chinese blood.
few years back, our very own UMNO youth chief
- In 2005, UMNO Youth Chief Hishamuddin Hussein brandished the keris at the UMNO Annual General Meeting (AGM) while decrying critics of Article 153 of the Constitution of Malaysia and the social contract. [53] Both Article 153 and the social contract preserve special privileges for the Malays.
as for me, as long a leader think only of his own kind, i willl never consider him as a true leader. i do admire former PM for his achievement to bring up malaysia to the world and i also agree with NEP. but is way over it. now, most malaysian are suffering, especially the middle and lower income group.
October 17th, 2006 at 6:47 pm
“The basis of growth in any economy is a free and fair treatment of all investors. NEP can never be achieved by robbing …”
Guess who put them there?
October 17th, 2006 at 6:52 pm
If you’re talking about foreign investors as opposed to local Chinese investors, they feel the NEP is a good way to protect their investments and they do not mind giving up 30% to MoF Inc., bumiputra corporations and individuals. It is a small price to have to pay for long term political stability.
The resentment is from local investors. This is perfectly understandable.
I would suggest you stop thinking in terms of a zero sum game for the good of the country as a whole.
October 17th, 2006 at 9:02 pm
Salam,
burn said: pak lah should become a full-time ulamak.
Excuse me, pak lah an ulamak? More like an ular dalam semak to me. Just bcoz he initiated Islam Hadhari and became imam for solat taraweh does not make him an ulamak.
I think the tok guru pondok in Kepala Batas has more religous knowledge than pak lah.
(ulamak…ular dalam semak….I’ll rather choose mee mamak)
Ayub Tulakang
October 17th, 2006 at 10:16 pm
Brader,
Don’t just complaint, give suggestion! If you want to abolish NEP, what’s the alternative you have in mind? Free for all!
October 18th, 2006 at 5:57 am
A two-tiered, two pronged approach to phase out the current NEP and wean the Malays of the government incentives which act as a life-support to most.
UMNO has abused the Federal Constitution by amending it with little regard for the original intentions of the framers of the Constitution. Lately, it’s leaders have acted not so much with Malay interests in mind as their own political survival and survivability - using policies like the NEP as a means to ensure they could plunder the nation’s coffers almost at will, and under the cloak of the NEP escape accountability and the consequences of their actions.
Need I say more??
October 18th, 2006 at 7:40 am
the nep is a racist policy built on values which have long passed their relevance. it is time to take stock of the situation and ask ourselves if they serve their original purpose.
you malays can say to all who disagree to leave malaysia. how do you feel if we ask you to leave the country of your birth?
October 18th, 2006 at 9:42 am
Change the present NEP. Replaced it with a new NEP (afirmative
program) based on income (not just pay, wage or salary)level
for all Malaysians, regardless of race.
There is no need to have NEP for Bumiputras only. Just imagine
how much has been given to the Bumis in the form of the 30% IPO
shares over the past 30 years, and the value of all the APs.
Just these two items alone could be worth more than 30% wealth.
Added to these are the contracts given out to the Bumis by the
federal, state governments and their agencies, etc. All these
wealth, unfortunately, were mainly given to those UMNOputras,
the UMNOputra-linked individuals and companies. Most ordinary \
Bumis, like the non-Bumis, did not really benefit from the NEP.
Malaysia therefore only needs to take affirmative actions to
help those in need of assistance, regardless of race.
October 18th, 2006 at 2:29 pm
Give up NEP??? Never in a million years! Every month I laugh my way to the bank. Why should I give that up? Would you if you were me??
October 19th, 2006 at 6:48 am
I have given the EPU and ASLI claims some thought.
However, before that, lets just get the following out of the way:
1. The percentages in dispute is one of the goals outlined in the NEP.
2. Why 30%? You decide whether it is an arbitary figure or if it makes any sense, but that’s for another day.
3. The government, while it might be made up of an overwhelming Malay majority, is not Malay. The US government is no more Caucasian than the Australian government. Do not confuse ethnicity with the Government (a State authority). The entire government of China might be made up of the Chinese, but its government owned corporations cannot be used to indicate communal wealth - it belongs to the public of all denominations.
I am not here to defend the EPU’s methodology. Weaknesses in the ASLI research doesn’t automatically render EPU’s more correct. What I am interested in is the overwhelming claims that the ASLI figures are gospel and correct and borne of good research.
I wish to point the readers’ to an opinion piece by Nol carried by Malaysiakini.
http://www.malaysiakini.com/letters/58260
Without repeating the essense of what the author in the link above stated, I must remind everyone that the issue of par value and market value hinges on the addition of the GLCs.
If we look at the gap between the par value and market value held by the different major ethnic groups in Malaysia (without the GLCs), we will probably have an even better case of demonstrating how the wealth is distributed (note: there have always been methodological issues with linking public and private companies to a particular race). Many of us don’t really need more statistics to convince the masses that the distribution of wealth, whether along ethnic or education or occupation, is uneven. Perhaps a better tuned progressive tax could be an answer, but sales tax such as the VAT can really be bad news.
Anyhow, the anonymous accountant that adviced Uncle Lim pointed out that the pre-condition for listing on Bursa Malaysia requires a 30% share to Bumiputeras. Maybe I am wrong, but as far as I can remember, share percentage fluctuations AFTER the listing is not regulated by ethnicity. If that’s the gripe, then the assault is on whether shares is a useful barometer for equity at all. Interestingly, the same accountant noted that ownership and control is an important dimension. Unless all the Bumiputeras and Bumiputra controlled entities exercise their ownership as a 30% block, this argument is irrelevant.
http://blog.limkitsiang.com/?p=771
I concur that it is a difficult exercise to point out exactly where we are really at after so many years of the wealth redistribution programme that makes up the NEP. What we all do agree is that the way to go about NEP’s goals have resulted in gross corruption, deception and plundering by a chosen few. These are popular general sentiments.
In the name of precision, we must not be too quick to embrace any findings just because it happens to fall in line with our suspicions and biasness. The inclusion of the GLC at 70% to represent Bumiputera wealth is a huge issue for me because it was a singularly defining variable that shook up the results more than par value vs. market value. Perhaps there is more that we do not understand or appreciate, as I myself am not an economist. However, as a researcher in training, we are taught that any variables introduced that resulted in major shift to an equation must be checked carefully over its underlying assumptions. Indeed, every variable we throw into an equation must have been based on some prior logic and thinking. If ASLI’s researchers felt that GLCs can be considered 70% Bumiputera, it is a decision with pretty severe ramifications in how we view government owned enterprises as a Malay and not a Malaysian entity. It really goes back to how one decides if a company is Bumiputera or non-Bumiputera and the tipping percentages that separates the two, or to just throw in more questions, the definition of foreign as well.
I look forward to better proper analysis and discussion, preferably academic expositions, by the more learned on the matter to help shed more light on the matter. I personally believe that it is a tragedy that ASLI’s findings were not accorded the fair and just treatment as an original scientific research endeavor. Politicians, as usual, jumped the gun and silenced the academicians and researchers before any meaningful and proper discourse could take place. Pre-conceptions set in and it became a divisive matter due to the posturing of the politicians and ignorant masses. Suddenly we have all kinds of instant experts capable of discerning good and bad research, with many haven’t even read or understood the report in detail or based on repeated hearsay.
Blogs frame issues and this affects what gets discussed. If our readers are not able to rise beyond the context set out to them, they will forever be going at it in circles without stepping out to think things through.
October 20th, 2006 at 8:07 pm
I do not disagree with you on Pak Lah’s poor leadership but as you point out the answer does not lies with the past (Dr. M) nor the current second-generation leaders. To me the biggest reason why Pak lah should be forced out is his son-in-law and the perpetuation of the past that he is using to gain power. However the biggest reason why Pak Lah should stay is also because he may be also the best chance that the likes of his son-in-law may not reach the pinacle of power.
Despite the obvious weakness of our PM, the likes of Zaid Ibrahim, Sharir-Samad, Mustapha Mohmmad, Zainah Anwar and others are gaining voice and some power. The PM real job is to make sure the likes of these gain power. In fact, its imperative that he makes sure they form the next generation of leaders after him not Najib, Hissamuddin or even his son-in-law.
October 26th, 2006 at 12:52 pm
At last, Malaysians hv a worthy leader, indeed a DIVINE leader.
Sure enough, all Malaysians who are so used to crutches(economic/ spiritual or intellectual) are crying for leadership, for vision, for solutions, for whatever.
HARD LUCK!, time to face reality. Divine Leadership is one that is characterized by non intervention, non visible, silent yet infinitely secure n serene(laidback). It is one that require the citizens to think, formulate his/her own vision n strive hard for it.
It is almost impossible to comprehend, for Malaysians, who had left this thinking process to MM, as he thought he knew, but he knew not! The result of which is plain to all, 1998; with one stroke, a reduction of Malaysia’s nett worth by 40% n the wiping out of US$ 150 bil fr the KLSE. In fact, it became poorer than before MM’s era begun.
It hurts, more so now, as Divine Leadership is not going to think for U.
Be appreciative that AAB does not have the capacity to think beyond Islam Hadhari.
Any ’state’ executed grandeur schemes, the likes of MM faulty Vision, wud be the final nail on the coffin for Malaysia.AND to ask for a AAB to move aside is but the HAMMER that will drive that nail.
With AAB’s Divine Leadership of not doing anything, it is enough!, for it will create a level playing field for all, choke the money supply chain to the unworthy n corrupt. Give it 1-2 more years n when the going gets tough, the tough n hardy gets going.
Rejoice Malaysians! The time for U to stand on your own two feet has come. The SPOON IS GONE. Fifty years of Independence is but next year. Finally a leader so inept, a characteristic far more noble! than that of TYRANNY,BIGOTRY & GREEDY
May he remain as President until 2020, AMEEN!