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Sakmongkol ak 47

ariff.sabri@gmail.com

Monday, 1 June 2009

Re-Pricing of the workforce.

A friend of mine, a young penghulu is an avid footballer. He has his own team that plays in the local league. His team is on top of group A of several groups. His next opponents will be the team from UIA in Kuantan. The team is made up of mostly medical students studying here at the UIA Kuantan campus.

That would be a cinch, said I. Not so, said the penghulu. How come, I countered? These med students are all nerds and won't have the energy to play you people. Maybe ramai kaki bangku je.

Yes, said the penghulu. But what they lacked in physique and stamina is amply compensated by what they have between their ears. I am sure he meant their brains and not their noses. We always have a tough time playing a team comprising of intelligent people. They play a game that's not easily overcome. We are the ones at the end of the game, gasping for breadth.

So how do you lick them? We use scare and intimidating tactics. Early in the game, we will take out one or two of their players. So as the game goes on, the UIA boys are scared to come into contact with the ball.

Interesting, I observed. A team comprising of intelligent people can win over brawny people. What if, the team with intelligent players are superbly trained in physical prowess; they can be a winnable team all the time.

How do you do that? By re-pricing players. This means, you attach a higher premium to players with better skills and better intelligence. As the game evolves to higher standards, we need more quality players.

It's the same with the game of economics. What are the policies this administration has to enhance the capabilities of our workforce? They can do this, by re-pricing the workforce. They do this by attaching higher premiums to those workers with better and higher valued added skills. They do this by adopting policies that turn our workforce into a winning team. They must, in order to turn Malaysia into a winnable economy.

What kind of team you want to play at the economic game? If you prefer to have a team that relies mainly on brawn, you will be out competed with a team consisting of brawns with brains. It will depend on your vested interests and the policies you apply to operate the vested interests.

A country's output depends among others, on the quality of the workforce. To ensure you have a workforce that can produce efficiently when combined with other economic resources, you will require workforce with enhancing capacities. You put a dud to work with a state of the art contraption, that million Ringgit machinery is wasted.

This means, workers will have to be invested with skills. The workforce will have to be trained, re-trained. More progressive elements of the workforce will make the necessary positioning of themselves. The whole idea is to make themselves relevant to the emerging needs of the market.

Those accustomed with the business as usual approach, ensconced in their own comfort zones are likely to be placed outside of the economic game. If they are trapped in their own myopic obstinacy, they will be reduced to the workforce capable of handling only the low value added economic activities. In the long run, this short-sighted attitude will create social upheavals because the stubborn workforce will be earning less that those who make the transition.

This is where the policies of the government will be tested. How will they cope with the demands of the economy for changing workforce profiles? Those with better skills will replace those who refuse to re-skill themselves. In our country, the problem is made even more complicated when those ill equipped and under skilled belong to a particular ethnic group.

The pants off the seat approach are likely to put in place policies that protect the job market. The sad part is, the protection comes in the form of legislation, fiat, decree that say, the workforce in any industry must be made of a certain legally sanctioned number. In the longer run, the adoption of these protectionist policies will have deleterious effects on the economy as a whole.

How to address the issue? In particular, the Malay workforce must re-tune themselves- acquire skills and new knowledge, position themselves as relevant inputs into the economy. Take note that if globalisation in effect turns the market for human labour into one gigantic market place, where movements in and out of countries will be a thing of the past, local job market too, will be similarly affected. Globalisation of the world workforce market makes security of jobs fragile. For example, those engineers and scientists who once thought their jobs are secure now face competition from newly minted scientists and engineers graduating from China and India in large numbers.

Chinese and Indian scientists and engineers willing to take lower pay will be knocking at the gates of the American economy. If the Americans refuse to re-price themselves not only in terms of willing to accept rationalised pay packets, but also refuse to upgrade themselves, they will be replaced.

There are lessons that can be learnt from globalisation of world workforce. In Malaysia, colleges and universities are producing more capable non-Malay workforce in larger number than Malay workforce. If the quality of the Malay workforce is less amenable to demands of the market, they will be sidelined. That will happen not because they are not graduates but are graduates in disciplines which are les marketable.

Will the Malaysian government, under the administration of Dato Sri Najib who is desirous of making his mark as quickly as he can, liberalise the workforce market as he did the service and finance industries? That will mean, that jobs held by those who refuse to upgrade or who think they are employable by taking any disciplines will be threatened.

Once threatened and those adversely affected will apply intense political pressures on Dato Najib's administration. This will force the government to try to protect jobs often at long-term cost to their economies.

The Najib administration will have to re look at the workforce policies. Perhaps it was with this view, that Dato Najib has reworked the 30% requirement in equity holdings and with that, the unavoidable re-profiling of the workforce.

If Dato Najib plays ball with pressures to lock up the workforce, the ultimate victim will be our productivity. Let me hasten to add quickly to state that the lowered productivity is not caused by the participation of the Malay workforce. It becomes slowed because the Malays have not, to use a term gaining fast currency, undertaken a re-pricing of their employability. Refusal to cultivate oneself with more marketable skills and knowledge will place them outside the economic game. Forcing the government lock up the workforce market will blunt our competitiveness and in the end, the country's productivity.

26 comments:

nightcaller 1 June 2009 at 13:25  

Yes, remember those times when we have friendly football games. We will make sure the out of towners are well fed before the match. And for good measure, we also "incidentally" put xtra spice and chillipaste in their curries. Things we do, to win :)

On their side, they are no better. They will make sure that their cheerleaders wore "xtra" revealing dresses that keeps my players off the ball at critical times.

Anonymous,  1 June 2009 at 15:12  

I don't understand all this talk of upgrading the workfotce..Nor Mohd also said the same thing i.e, those retrenched should avail themselves to the govt sponsored training to upgrade their skills.

So,Dato Sak can u pls be more specific please?How do I go about transforming myself into this "high value"worker?Lets start with a few base workers profile

1> SPM grade 3/2 years as despatch
2>SPM Grade 1/3 years as clerk in transport company
3>Graduate Islamic degree/3 years part time tutor
4>Graduate Marketting Monash/2 years part time waiter
5>Grad Biz or sumting/32 years politics

Anyone have profiled the demand for knowledge workers?Do you realise that for same number of work experience..an accountant earns 33% more than an Engineer?>

Tok Senek 1 June 2009 at 18:30  

does this explains why sedc's and other similar bodies never make profit despite all the oppurtunity and support from the govt? does the fact that politician and govt servants being in control is the cause of such predicament? one sedc even took on board a university lecturer with string of paper qualifications with the hope of turning around their fortunes, to no avail of course. all the uni lect did was theorise and explain this and analyse that.

some say business has to be run by business people. football club runs by politicians? and they wonder why our state of football is as such. even if prof khoo kay kin is to be in charge of our football team, will it be any better?

'serahkan sesuatu urusan itu kepada ahli nya'. it has been said long time ago.

Nik 1 June 2009 at 18:54  

Dato'

You have taken the issue of Human Capital and Highlighted how Human Capital can be enhanced to uplift the standard of Malays...

Development of Human Capital is the Bane of Malaysia and unless this obstruction to development is not remedied, no way can Malaysia move forward..

When Badawi was PM he did call for the Emphasis on uplifting the value of Malaysia's Human Capital... Unfortunately this was not followed up with any Action Whatsoever...

We must remember that whatever we intend to do to develop our human capital...We cannot rely on our Civil Service or any Government Department to carry out or even support the Task..There has to be a Quasi Government Body which comprise of Private Sector/Non Government Reps and Activists to make sure it will work..

What about developing the Trades Works Sector? This will not only uplift standards but also reduce our reliance on imported labour.
Latest events - Demolition Disaster in PJ is proof of this...There are no Specified Regulations on demolition works nor Specialist Requirements on demolition works of beyond a certain size...

What about the Agricultural Sector? Our Previous PM announced measures on improving Agriculture but never implemented Anything serious. I believe the DPM was the former Agriculture Minister.
After his stint in Agriculture, is he not interested in improving Agriculture for those unable to Reprice themselves?

Anonymous,  1 June 2009 at 19:30  

Dato,

The GLCs head honchos and the senior mgmt have successfully "repriced"themselves.My guess is they have quadrupled their earnings.So Mr Badawi have succeeded in enhancing human capital.A post that was once valued at 300k per annum is now enhanced to 1200k.
Brilliant and sorry Dato..your suggestion came a bit late cos they have 20/20 vision when it involves them.

walla 1 June 2009 at 21:07  

A: 'You look worried, B.'

B: 'Remember the recent event when petrol subsidy was reduced because oil price had gone up?'

A: 'Yes, the price of everything else went up for no linear reason.'

B: 'But when the oil price went down, the prices of other things just stayed where they were. Well, maybe biscuits and roti canai went down a bit. Basically other things just stayed stuck where they were. That only shows people weren't confident the market would improve enough for them to return their prices to reclaim lost markets. That's a key factor. People just weren't confident things were going to be improved. And now all the official statements merely confirmed what they had known all along but distorted by the official organs almost in pompous style.'

A: 'So how long can the cost of living be magnified when the economy is reeling? This is odd because when demand is lowered, one expects price thresholds to be lowered. I know how some have used different packaging to hide higher prices. Just compare tissue paper for instance, two-ply versus three-ply, or even liquid detergent, biscuits, substandard duty-free tobacco at airport terminals.'

B: 'Don't you realize what is the big problem, A? In the past, problems came in single-line procession, one after another. And then situations changed and somehow we coasted through. But this time, they all come at the same time. Convergence.'

A: 'What makes you think of it like that, B?'

B: 'Only so late did the government admit we are in recession. The economic indicators are all not good, A. My bone of contention is this. If we are down in growth rate by say 5-7%, and even if the world economy picks up end of next year, we will only be going up then to where we are now. Because the dependencies will have increased, and the number of competitors in the world for the investments that are needed to add value will also be increasing, that's not going to be growth at all. It'll be just coming back to the same place.'

A: 'Isn't that good, still, B?'

walla 1 June 2009 at 21:08  

B: 'No, A. Because even if we come up in say two years time to where we were a few years ago, the people won't be making enough to sustain their families owing to the fact that in order for us in the future to come up to where we were before in terms of economic performance, it will mean we will have to be cost-effective. Which means keeping wages low. But in two years time, we will become a net oil importer. Now i ask you, A. If the last oil hike had caused mayhem on the cost of everything, what do you think will happen when we become a net oil importer in two years time? The price of everything will go up even more but salaries, wages and the like will remain at present levels because only by sustaining them at present levels can we go up economically. And that's because when we cannot afford to subsidize oil and natural gas, the utility bills will also hit the roof.'

A: 'All that sound sinister, B. I hope someone will crunch the numbers to prove you're being just too lugubrious.'

B: 'I am surprised no one has released any scenario which paints what will happen to all of us when we turn net oil importer at incipient time of regaining present economic level.'

A: 'Come to think of it, maybe they already have but are too scared to release it.'

B: 'Your sentiments show, A, but let me ask you another question. Let's say we want to reprice our workforce. That means the present pricing of our manpower is not right. But there's another factor. A lot of our production, whether of goods or services, is based on cheap foreign workers. That's how you can get bedsheets and t-shirts, furniture and frozen food, high-rise construction, even waitering and municipal services. My question is this - are our enterprises at this critical moment of economic downturn in any position to add value into their production by using automation, injecting more intelligent design and functions, building global networks or carving brand mind-share? Do we innovate with any unique ideas of our own?'

A: 'I have to admit those are challenges, B.'

walla 1 June 2009 at 21:08  

B: 'So i ask you, why hasn't that been seen since, let's be generous, the time when the foreign investors had come in waves so long ago? It cannot be that for forty years of traveling and comparing notes, observing and sending our brains out to overseas institutions that we didn't have people in planning who would have seen seen all this clearly long ago, would we?'

A: 'So you're saying this convergence of negative factors where we are too late to prime ourselves has put us in a precarious situation today, B?'

B: 'I think so, A. And by 'priming', i don't think you mean prime-pumping the economy which is basically a short-term injection of funds we don't really have versus what is needed which is a massive overhaul by challenging all the assumptions we have held dear for so long.

Look, A, if we want to maintain status quo and the present way of doing things because we think we will still coast by, then i think it's a big risk that cannot be decided by a few on behalf of all. Everyone must get the chance to know the real situation so that we can all put our heads together.

As it is, someone has written that our manufacturing has hollowed out, we have neglected our plantations, and our mining will surely go down soon.'

A: 'But our people are still active looking for mining prospects overseas, B.'

B: 'Sure they are but they will receive no better treatment than prospectors who angle for similar contracts when they come into our fields. To a large extent, it's a diminishing resource in a crowded industry of bigger players.

And trees take time to grow. And you can only get so much acreage yield or try and squeeze some more value out of what's basically commodities. Even eco-fuels are not what they have been paraded out to be.

So too with manufacturing. If the economy is booming, then there should be no excuse for manufacturers to do all those things i have said but right now they're just finding it hard to keep their staff, let alone find buyers.'

walla 1 June 2009 at 21:08  

A: 'That seems to leave us with services, B.'

B: 'What services, A? Higher education? Are you wearing your kevlar now? Healthcare services? I repeat, can you take my comment on that? Tourism? With the world economy in such strait jackets, where will the tourists be coming from that they will spend more than two nights at each of fifteen places so that our hotel industry can achieve at least seventy percent occupancy?'

A: 'We also export construction and banking services, B.'

B: 'To countries which are also affected by oil prices gone down which have created credit crunch on their own development plans, A.'

A: 'So if oil prices are down, we should be spared from inflationary pressures, shouldn't we, B?'

B: 'Only if there are growing markets for our goods and services, and only if we can continue to scale upwards in value which can command better prices, A.'

A: 'Somehow we'll make it, B.'

walla 1 June 2009 at 21:08  

B: 'Look, A. If you have some asset and a secure job, you will make by. But i am concerned about the millions who don't. I am concerned about people who live on wages, now not only buying less but also as reduced take-home. I am concerned about the young who come out from colleges and universities who will definitely not have a job and their numbers will add on to those thousands who still have not got a job. And i am worried about the thousands who have been laid off from the factories who are now on the last leg of their savings. As are the pensioners and those in the private sector who will be finishing their savings before they hit 58. And i am worried about the small business operators who will face cash-flow problems and may not be able to service their loans which means a lot of bad debts and massive depreciation of assets.'

A: 'You forgot to mention political uncertainties.'

B: 'No, i didn't, A. I just don't want to talk about it because people will still think that politics is the only weapon to fight social dilemmas forgetting that without the right economics you can have one hundred percent but if it's one hundred percent of zero, you will still get an elephant egg.'

A: 'Elephant egg?'

B: 'Short, rosy-cheeked, lecturer. Dewan Kuliah 2. 1979.'

A: 'Yikes, you have the memory of an elephant.'

B: 'I only remember the lab assistant and Miss Kedah, A.'

A: 'You're so sneaky, B. You have gotten me worried so that you can be flippant.'

walla 1 June 2009 at 21:09  

B: 'Ok, let me throw you a simple question. Look me in the eye, don't flinch and try your best to answer it.'

A: 'Shoot.'

B: 'I'm not the one with the kalashnikov, A. Anyway this is my question - why is it that the british soccer teams cannot connect their winning style when they step onto the continent?'

A: 'Because their playing styles are unique to their own home turf?'

B: 'So too the way we have been thinking about how to build Mr Malaysia, A.

We have become so insularised in the way we look at development that we have fallen into our own silo pit. We only engineer our development for our own home turf.'

A: 'But we are a major trading nation, B, so that should mean something.'

B: 'My friend, most of the trades are in lumpy items. Oil, electronics, timber and so on. Check the data. Take electronics, for instance. The net value earned locally is cost of export minus cost of semi-finished components. We only earn the assembly work. That's basically low-cost, and hard to re-price any further. Sure, there are some design works. But it's not much. Even that basic assembly work is now dwindling so what is going to happen next, not just to the workers but to the down-line sub-support industries?'

A: 'Don't you have a single nice thing to say, B? A silver lining somewhere that will perk everyone up for once?'

B: 'My friend, only the elites still get perks. The rest will have to fend for themselves.'

A: 'But that's how all markets work, B. You can't try to insert social charities into solely-profit capitalism. As you may also think, that's our big problem. We try to do that without the right method, scale and governance. In fact some will say our playing the zero-sum game has finished off all that this country can be for everyone.'

B: 'Something just occurred to me, A. Do you suspect that what our workers and professionals earn nowadays are, adjusted for various factors, effectively even less than what their predecessors had earned years back? In other words, we are much worse off in terms of relative earning power today than years ago in our own country, and even worse when compared with other countries?'

A: 'There are some third world countries we can pip, B. Look, you're not going to escape so easily. What solutions do you have for our national predicament, B?'

B: 'I am too hungry to answer you, A. And that's also why i look so worried.'

sakmongkol AK47 1 June 2009 at 21:17  

walla my friend,

as usual you never cease to amaze me with your rapier sharp elaboration. i hope the others can appreciate what you have just said.
thank you my friend.

walla 1 June 2009 at 21:22  

i am very proud of you, Datuk.

Suci Dalam Debu 1 June 2009 at 21:25  

Dato,

Something just doesn't add up and I am scratching my head trying to figure it out.

I don't know you but your writings are truly a class above what comes out of our present leaders, MSM editors and political secs etc.

It baffles me that you are not playing a more important role in government. Are you just good at writing/talking but not good at delivering? I don't know why you are not tapped for higher things.

Are you like one of the royal who give excellent speeches but when it comes to delivering, fails miserably in meeting the rakyat's wishes?

Maybe you had your chance but you cakap tak serupa bikin........I sincerely hope not.

Why? Why? Why?

Why are you not a minister? If I were somebody big, I would definitely take you into my cabinet.

It may sound like I am doubting you but sincerely I am not. I TABIK you.

This country would be a much better place with more people like you.

de minimis 1 June 2009 at 21:43  

Sak and walla

May I commend you each and, both, for excellent insights, metaphors and analysis. I do hope the subtleties are not lost on whoever from the powers that be that trawls the blogosphere for Malaysian economic inputs.

flyer168 2 June 2009 at 05:29  

Dato Sak,

Maybe I should highlight the

Cambridge Lecture "The Great Repricing"

SPEECH BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO AT THE DISTINGUISHED LECTURE AT THE UNIVERSITY OF CAMBRIDGE ON 27 MARCH 2009 IN CONJUNCTION WITH THE UNIVERSITY OF CAMBRIDGE’S 800TH ANNIVERSARY

http://beyondsg.typepad.com/beyondsg/2009/03/speech-by-minister-for-foreign-affairs-george-yeo-at-the-distinguished-lecture-at-the-university-of-cambridge-on-27-march-200.html

March 30, 2009
Cambridge Lecture "The Great Repricing"
SPEECH BY MINISTER FOR FOREIGN AFFAIRS GEORGE YEO AT THE DISTINGUISHED LECTURE AT THE UNIVERSITY OF CAMBRIDGE ON 27 MARCH 2009 IN CONJUNCTION WITH THE UNIVERSITY OF CAMBRIDGE’S 800TH ANNIVERSARY

THE GREAT REPRICING

What The Current Crisis Represents

Madam Pro-Vice Chancellor, Kate Pretty, my old tutor, Professor Navaratnam, dear friends, ladies and gentlemen, it may seem inauspicious that Cambridge should be celebrating its 800th Anniversary at a time when the world is heading into a deep recession the likes of which have not been seen for a long time. From the perspective of Cambridge's long history, however, this sharp economic downturn is but another discontinuity in the affairs of man of which the University has seen many and participated in not a few. Whether this crisis marks a major break in world history we don’t know yet. Turning points are only seen for what they are in hindsight.

What is becoming clearer is the severity of the crisis. No one is sure where the bottom is or how long this crisis will last. In the meantime, tens of thousands of companies will go bankrupt and tens of millions of people will lose their jobs ─ at least. What started as a financial crisis has become a full-blown economic crisis. For many countries, worsening economic conditions will lead to political crisis. In some, governments acting hastily in response to short-term political pressure will do further harm to the economy.

In an editorial last December, the Financial Times commented that the US Federal Reserve was flying blind. But, in fact, all governments are flying with poor vision. Markets are volatile precisely because no one knows for sure which policy responses will work.

I remember an old family doctor once explaining how every disease must run its course. In treating an illness, he said, one works with its progression. Attempting to short-cut the process may worsen the underlying condition. While emergency action may be needed and symptoms can be ameliorated, the body must be healed from within after which its immunological status changes.

Contd....2

flyer168 2 June 2009 at 05:32  

Contd....2

Dato' Sak,

The Austrian economist Joseph Schumpeter understood the importance of creative destruction. The end of an economic cycle does not return the economy to where it was at the beginning. During the downturn, firms go bankrupt, people lose jobs, institutions are revamped, governments may be changed. And in the process, resources are reallocated and the old gives way to the new.

Charles Darwin, whose 200th birth anniversary we mark this year, understood all that. Life is a struggle with old forms giving way to new forms. And human society is part of this struggle.

The question we ask ourselves is, what is the new reality that is struggling to emerge from the old? History is not pre-determined. There is, at any point in time, a number of possible futures, each, as it were, a state of partial equilibrium. And every crisis is a discontinuity from one partial equilibrium state to another within what scenario analysts call a cone of possibilities.

Well, whatever trajectory history takes within that cone of possibilities in the coming years, there will be a great repricing of assets, of factors of production, of countries, of ideas.

Economic Repricing

Let me first talk about economic repricing. Many bubbles have burst in the current crisis starting with sub-prime properties in the US. All over the world, asset prices are plummeting. In the last one year, tens of trillions of dollars have been wiped out. How much further this painful process will continue, no one can be sure. Many months ago, Alan Greenspan, in his usual measured way, peering into the hole said he saw a bottom forming in the fall of asset prices; it turned out to be the darkness of an abyss very few knew existed. That bottom is only reached when assets are sufficiently repriced downwards. Public policies can help or hinder this process. Unfortunately, many stimulus packages being proposed will make the adjustment more difficult. For example, bailing out inefficient automobile companies may end up prolonging the pain of restructuring at tremendous public expense.

The repricing of human beings will be even more traumatic. With globalisation, we have in effect one marketplace for human labour in the world. Directly or indirectly, the wages and salaries of Americans, Europeans and Japanese are being held down by billions of Asians and Africans prepared to work for much less. China and India alone are graduating more scientists and engineers every year than all the developed countries combined. Now, while it is true that trade is a positive sum game, the benefits of trade are never equally distributed. We can therefore expect protectionist pressures to grow in many countries.

Governments will try to protect jobs often at long-term cost to their economies. It is wrong to think that we can force our way out of a recession. Beyond a point, the stress will be taken on exchange rates. If governments try to prevent the repricing of assets and human beings, international markets will force the adjustment on us. A country that is over-leveraged living beyond its means will itself be repriced through its currency. Its currency will be devalued, forcing lower living standards on all its citizens.

The world is in profound imbalance today. All the G7 countries are in recession. The West is consuming too much and saving too little while the East is saving too much and consuming too little. China, India and others need to consume much more of what they produce but they are unable to take up the present slack in global demand because their GDPs are still too small. In 10-20 years, they may be able to but certainly not in the next few years. In the meantime, the global economy may suffer a prolonged recession, a global Keynesian paradox of thrift

Contd....3

flyer168 2 June 2009 at 05:34  

Contd....3

Dato' Sak,

Political Repricing

When this crisis is finally over, which may take some years, out of it will emerge a multi-polar world with clearer contours. Although the US will remain the pre-eminent pole for a long time to come, it will no longer be the hyperpower and power will have to be shared. The Western-dominated developed world will have to share significant power with China, India, Russia, Brazil and other countries. Thus, accompanying the economic repricing will be political repricing.

Following the spectacular opening of the Olympic Games in Beijing, Tony Blair wrote in the Wall Street Journal of August 26 last year: "This is a historic moment of change. Fast forward 10 years and everyone will know it. For centuries, the power has resided in the West, with various European powers including the British Empire and then, in the 20th century, the US. Now we will have to come to terms with a world in which the power is shared with the Far East. I wonder if we quite understand what that means, we whose culture (not just our politics and economies) has dominated for so long. It will be a rather strange, possibly unnerving experience."

Those words were said by Tony Blair in August last year before the financial meltdown. How much more they ring true today. Sharing power is however easier said than done. But without a major restructuring of international institutions, including the Bretton Woods institutions, many problems in global governance cannot be properly managed. The meeting of G20 leaders started by President George Bush in November last year is a necessary new beginning. But it is a process. Prime Minister Gordon Brown is hoping that the next meeting on 2 April in London will sketch out the main elements of a global bargain. To be sure, the reform of global institutions is a process that will take years to achieve. During the transition, many things can go wrong. In his analysis of the Great Depression in the last century, the economic historian Charles Kindleberger identified a major cause in the absence of global leadership during a critical period when power was shifting across the Atlantic. Great Britain could not exercise leadership while the US would not. In between, the global economy fell.

In the coming decades, the key relationship in the world will be that between the US and China. Putting it starkly, the US is China's most important export market while China is the most important buyer of US Treasuries. The core challenge is the peaceful incorporation of China into the global system of governance, which in turn will change the global system itself. This was probably what led Secretary Hillary Clinton to make her first overseas visit to East Asia.....more

Cheers.

flyer168 2 June 2009 at 05:46  

Dato' Sak,

With all the rhetorics, ideas, proposals, etc....one question remains....

Malaysia badly needs “Role Model” established Leaders & Politicians of HONOUR with Calibre, Maturity & Tolerance without FEAR or FAVOUR on Both sides of the Political Divide.

Further, this nation Desperately needs Intelligent, Time Proven Pragmatic Successful modelled, Financial & Politiical “SOLUTIONS” on Both sides of the Political Divide NOW , to mitigate the IMPENDING Political & Financial fallout.

Let us ALL also learn that Tunku & his Malaysian cabinet of HONOURABLE, ESTABLISHED TRUE TUANS, EARNED the RESPECT, TRUST & SUPPORT of ALL the Malayan citizens.

Do we have that someone to LEAD this great nation & its reyaat by EXAMPLE....

A frank discourse by a bumiputra of Malaysia.

LEE KUAN YEW : AT 85 , THE FIRE STILL BURNS

BY *AHMAD MUSTAPHA

*The writer is a nephew of Dr Mahathir.

Singapore's Minister Mentor, Lee Kuan Yew, who was Singapore 's founding father, has always been very direct in his comments.

This was the man who outsmarted the communists in Singapore (with the innocent help of Malaya then and the willing help of the British) and who later outwitted the British and outpaced Malaysia in all spheres.

Singapore practices corrupt-free meritocracy and Malaysia affirmative action. The former attracted all the best brains and the latter chased out all the brains.

The Singapore cabinet consists of dedicated and intelligent technocrats whereas Malaysia has one of the most unwieldy cabinets. Not only that, brain wise it was below par not even good for the kampong.

With that kind of composition, one that is very brainy, naturally Singapore , with no natural resources could outstrip Malaysia in every aspect of development.

Malaysia , on the other hand, was too much preoccupied with its Malayness and the illusory 'Ketuanan Melayu' and was also more interested in useless mega iconic development rather than real social and economic development.

Whenever Kuan Yew utters anything that deemed to be a slight on Malaysia , voices were raised admonishing him. Malaysia would never dare to face reality.

That Singapore had shown that it could survive was a slap on those who believed that Singapore would fold up once it left Malaysia.

Therefore it was natural that these doomsayers would try to rationalise their utterances to be in their favour to combat on whatever Kuan Yew commented. Its political jealousy.

Singapore achieved its development status without any fanfare. But here in Malaysia , a development that was deceptive was proclaimed as having achieved development status. It was trumpeted as an achievement that befits first world status. This was self delusion.

Malaysians are led to believe into a make believe world, a dream world. The leaders who themselves tend to believe in their own fabricated world did not realise the people were not taken in by this kind of illusion.

Lee Kuan Yew believed in calling a spade a spade. I was there in Singapore when the People's Action Party won the elections in 1959. He was forthright in his briefing to party members as to what was expected of them and what Singapore would face in the future. Ideologically, I did not agree with him.

We in the University of Malaya Socialist Club had a different interpretation of socialist reconstruction. But he was a pragmatist and wanted to bring development and welfare to the Singaporeans. Well! He succeeded.

Contd....2

flyer168 2 June 2009 at 05:49  

Contd....2

Dato' Sak,

Malaysia was so much embroiled in racial politics and due to the fear of losing political power, all actions taken by the main party in power was never targeted towards bringing wealth to all. Wealth was distributed to the chosen few only. They were the cronies and the backers of the party leadership to perpetuate their own selfish ends.

Seeing the efficiency and the progress achieved by Singapore caused the Malaysian leadership to suffer from an inferiority complex. That Malaysia should suffer from this complex was of its own making.

In a recent interview, Kuan Yew said that Malaysia could have done better if only it treated its minority Chinese and Indian population fairly.

Instead they were completely marginalised and many of the best brains left the country in drove.

He added that Singapore was a standing indictment to what Malaysia could have done differently. He just hit the nail right there on the head.

Malaysia recently celebrated its 50th year of independence with a bagful of uncertainties. The racial divide has become more acute. The number of Malay graduates unemployed is on the increase. And this aspect can be very explosive. But sad to see that no positive actions have been taken to address these social ills.

Various excuses were given by Malaysian leaders why Singapore had far outstripped Malaysia in all aspects of social and economic advancement.

Singapore was small, they nationalised and therefore easy to manage. Singapore was not a state but merely an island.

There was one other aspect that Malaysia practises and that is to politicise all aspects of life. All government organs and machinery were 'UMNO-ised'. This was to ensure that the party will remain in power. Thus there was this misconception by the instruments of government as to what national interest is and what UMNO vested interest is.

UMNO vested interest only benefited a few and not the whole nation. But due to the UMNO-isation of the various instruments of government, the country under the present administration had equated UMNO vested interest as being that of national interest.

Thus development became an avenue of making money and not for the benefit of the people.

The fight against corruption took a back seat. Transparency was put on hold. And the instruments of government took it to be of national interest to cater to the vested interest of UMNO.

Enforcement of various enactments and laws was selective. Thus a 'palace' in Kelang, APs cronies and close-one-eye umno MPs could exist without proper procedure. Corruption infested all govt departments, the worse is the police and lately even in the judiciary.

Singapore did not politicise its instruments of government. If ever politicisation took place, it is guided by national interest. To be efficient and to be the best in the region was of paramount importance.

Thus all the elements like corruption, lackadaisical attitude towards work and other black elements, which would retard such an aim, were eliminated.

Singapore naturally had placed the right priority in it's pursuit to achieve what is best for its people. This is the major difference between these two independent countries.

Malaysia in its various attempts to cover up its failures embarked on several diversions. It wanted its citizens to be proud that the country had the tallest twin- tower in the world, although the structure was designed and built by foreigners.

Its now a white-elephant wasting away. It achieved in sending a man into space at an exorbitant price. For what purpose? These are what the Malays of old would say "menang sorak" (hollow victories).

It should be realised that administering a country can be likened to managing a corporate entity.

If the management is efficient and dedicated and know what they are doing, the company will prosper...

The reverse will be if the management is poor and bad. The company will go bust.

Contd....3

flyer168 2 June 2009 at 05:50  

Contd....3

Dato' Sak,

There are five countries around this region. There is Malaysia , and then Indonesia . To the east there is the Philippines and then there is that small enclave called the Sultanate of Brunei.

All these four countries have abundance of natural resources but none can lay claim to have used all these resources to benefit the people.

Poverty was rampant and independence had not brought in any significant benefits to the people.

But tiny Singapore without any resources at all managed to bring development to its citizens.

It had one of the best public MRT transport systems and airlines in the world and it is a very clean city state.

Their universities, health care, ports are among the best in the world.

It is impossible to compare what Singapore has achieved to what all these four countries had so far achieved.

It was actually poor management and corruption, and nothing more. Everything is done for the vested interest of the few.

Malaysia, Indonesia and the Philippines and the Sultanate of Brunei need good management teams. They would not be able to do this on their own steam.

I would advise that they call on Kuan Yew to show them what good governance is.

Why look East to Japan when it is just next door across the causeway. Unquote.

I hope this explains it all.

Cheers.

Nik 2 June 2009 at 09:12  

Dato',

Walla,

Most entertaining. One may find it even more amusing reading from bottom up!

Flyer 168

You highlighted to us Singapore's achievements to be emulated by our administration....Careefullllll mannn.
Our PM's adviser may agree with you and follow them into the Hole known as Bank of America and Citibank.
But it's only next door!You mean we don't need to Visit Japan and US Disneyland to learn? Citizen Nades would have happily agreed with you.

For Suchi dalam Debu,

The reality is, most of us are not born 'IN THE CIRCLE' or with a Silver Spoon in our mouths...

Friends,

All and Sundry in Authority in Malaysian is adamant that the Recovery will be a Sharp V...So sharp that the V is barely legible...
Read Matthias Chang though, as he thinks its going to be a U shaped recovery where he claimed to be able to only see the light somewhere around 2011...

Suci Dalam Debu 2 June 2009 at 09:27  

Dato,

This article and the follow-up comments should be made COMPULSORY reading for all Politicians, Government Servants and ALL institutions of higher learning.

After the reading, they must be made to understand and then take concrete steps to put it into practice.

The time has come to put an end to all the rhetoric. Otherwise, this nation will continue its downward slide even when the world economy is on the rebound.

The current generation has failed its future generations.

Sad but true. Now the rakyat must have the courage to do the right thing, i.e. use their ballots wisely.

Anonymous,  2 June 2009 at 10:52  

How can one earn more?

A1) sell at higher price
A2) lower one's cost of production

How can one achieve higher prices?

B1) truly unique product
B2) perceived as unique product

A1 + B2 = Destructive and typical of GLCs and cronyism mentality.

A2+B1= the real Deal.

But in searching for the real deal we cannot escape from the fact that we have our dependents who can't go hungry waiting for the transformation to "higher value" lifestyle.
Thus,immediate focus on A2 should be the first step whilst our boffins are bz concocting the new recipes.And A2 should begin with fundamentals and not high faluting lyricism.
1)Logistics cost too high cos of regulations not in tune with current needs
2)Pemudah not making mudah for industries cos focussing on low hanging fruits
3)Replicating Fortune 500 practises on our SMEs and suffocation by documentation.
4)Costs of funds padded due to excessive margins to sustain bloated banking system overheads
5)Too much investments to gloss GLCs,government profile and pipedreams.
6)too many rentseeking practises that collectively adds to cost (work permits,taxi licenses..)

And the biggest culprit is the bloated government overheads which grew at incredible rates in Badawi's time.And the inefficient govt procurement processes (intentionally or not?) have diverted essential funds to a select few.

Sort that out and the boffins will have more time conjuring truly unique products without the rakyat having to starve in the mean time.
Then,we can create really long term restructuring of our resources.

Anonymous,  2 June 2009 at 11:20  

Walla,

Try this from the S’pore minister for foreign affairs GEORGE YEO;

‘The question we ask ourselves is, what is the new reality that is struggling to emerge from the old? History is not pre-determined. There is, at any point in time, a number of possible futures, each, as it were, a state of partial equilibrium. And every crisis is a discontinuity from one partial equilibrium state to another within what scenario analysts call a cone of possibilities.

Well, whatever trajectory history takes within that cone of possibilities in the coming years, there will be a great repricing of assets, of factors of production, of countries, of ideas.’

More like a quote for temporal dilation in quantum dynamics! Is this really a talk in economies?

Thanks flyer168 for this gem find.

So red dot’s ministerial quality is indeed way above Bolihland! Just wonder, how many within the M’sia cabinet, can even understand the difference between spacetime & space & time?

anomie

Anonymous,  2 June 2009 at 21:01  

Why is it everyone assumes that Malays are incapable of doing anything right cos we have been on crutches too long and forgotten how to walk?

80% of Malays sweat as hard,work as hard and have as much grey matter as most non Malays.Given the same circumstances the 80% Malays will not be too inadequate to compete with the Non Malays i.e note "same circumstances."And these 80 % Bumis are not beneficiaries of any affirmative policies nor from any upper middle class/rich families who can give them the kickstart.

The Malays that are stinking the whole picture are the minority who are always harping on hand outs and enjoying the spoils destructively within their small select tribe excluding both other Malays as well as the Non Malays.

Its the 20:80 rule?whereby 20 % is enjoying 80% of the wealth.Its not repricing,its not upgrading>>>its about paying real talents to unleash their potential to create real productive growth.

You want examples?Just walk to the nearest Malay guy in your office and ask him,

Thanks

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