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Sunday, 21 November 2010

Values agenda vs. political agenda.



This PM is pushing for a values agenda. 1 Malaysia with its agenda for inclusiveness and unity is a values agenda. An economy based on merits based affirmative action is another. The weakness I think is in the execution. It's not being explained down through the ranks. That won't do, if the values driven agenda are to become shared ideals.
I wrote of the imperative of having a successful showcase. The fight and commitment to stem corruption for example must involve prosecution of those high level people who are involved. Fair play and transparency are further values that need to be shown to be believed.
For example, how can we justify helping out the financial and management mischiefs of Syabas? The people there made tons of money (I am tired of saying so many millions or billions) which they keep private. Now, because they are unable to increase the already high tariffs they want to default on their IOUs (bonds) and shift the blame onto others. They have already taken all the profits and now, they want to share the liability and losses with the public.
If the government helps out, it must clarify the basis for helping out. I hope it's not because Rozali Ismail is an UMNO member and now heads the NGO BAPAK to handle complaints from Felda settles and compete with ANAK. So Felda's problems are actually anak beranak punyak hal.
Is the federal government planning to provide a RM 1 billion bail out to Syabas or will it take over and assume the RM6 billion liabilities? You ask the consultants and they can come out with 1001 gobbledygook financial instruments to save the culprit- if they want to.
Let us remain true to a values agenda. In this agenda for example, we don't shelter cheats, crooks and the incompetents. Syabas and the water concession players in Selangor are making tons of money. Yet, they cannot stay profitable.
They are all looking at the state to bail them out. My question is why should the government bail them out? If they can't pay, let's do an open tender and see which private companies can offer the government better service and better returns.
The government shouldn't be treated as the savior of last resort. The government is not God and Santa Claus 2 in 1. The water concessionaires in Selangor shouldn't be let go scot free. They must pay for the bonds they have issued. They have made tons of money and they must be made to pay. Let their companies be taken over by other private companies. if the liabilities are be taken over too as is the normal case when another company takes over, these defaulting companies must take a haircut and it must be a crew cut.
In the name of pushing for a values agenda, I think the Najib administration should allow the free play of market forces. The defaulting companies who made tons of money should be punished in accordance to the law. Let them file for bankruptcy if they can't pay. The government should not be forced to use public money to bail out privatized businesses. Let's not see this problem as some sinister conspiracy against the water concessionaires in Selangor.
Consider the financial magnitude. The four water companies have a combined debt of RM 6.4 billion. The federal government has already given Syabas a soft loan of RM 320 million. The total interest on this 20 year loan is RM 250 million, and Syabas will not be required to pay a single sen of this amount. Instead, this cost will be fully borne by Malaysian taxpayers.
Puncak Niaga Sdn Bhd (PNSB)'s net debt is RM1.3 billion, Syabas's is RM2.9 billion, Splash's (Syarikat Pengeluaran Air Sungai Selangor Sdn Bhd) is RM1.6 billion and Konsortium ABASS is RM640 million. The total is RM6.4 billion.
The Syabas people cannot run to the federal government and say they are in this predicament because the state government refuses to allow them to increase the water tariff in the state. On what reasons can they justify the increase?
I think we should learn how a smaller outfit such as Perbadanan Bekalan Air Pulau Pinang can make money on lower rates and on smaller revenue. The Selangor state companies which supply more water and on higher tariffs cannot?
They cannot simply because, the companies may not be run efficiently or that the woes of JBA Selangor before the utility supplier was privatized are not tackled. Leakages and losses and sheer mismanagement. And the list of mismanagement included; - as a matter of public record, an audit report on Syabas which showed more than 72% of contracts, worth RM 600 million in total, was awarded to companies chosen through direct negotiation not by open tender process. Also, RM 325 million was found to be 'missing' in discrepancies between Syabas' public accounts and the records of contracts awarded from 2005 to 2007.
In June 2005, Syabas contravened the terms of their concession when they imported RM 375 million worth of pipes from an Indonesian company instead of sourcing them locally. The Indonesian company was owned by Tan Sri Rozali Ismail, the CEO of Syabas.
In the face of these shenanigans why should we expect any decent government to not allow Syabas from raising water tariffs by 37%?
But at the same time, why should the state itself now endeavoring to reacquire all water concessions from the private water companies?

 

 

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Friday, 19 November 2010

Regaining lost ground

I have read numerous comments saying UMNO is doomed. I too have been criticizing UMNO quite a bit but I have also maintained my faith in UMNO. It's difficult to abandon something you were a part of and indeed got elected on its ticket. So while I criticized and shall continue to do so, I maintain my belief in this party which Malays can identify with.

If so, why did the party lose a lot of Malay support in 2008? It lost a number of states. I have already written two articles on that and shall continue to point out in some follow up articles.

It's easy to criticize a party when they dropped in the polls. And it now seems clear that the polls of 2008, things didn't look rosy for UMNO and BN. from a commanding position of securing 2/3rds majority, it has lost that lead. It now has 140 seats in parliament while the non BN parties have 82. As I said in my two articles the chief cause for the losses are UMNO's arrogance and their trivializing of risks.

The problem for the BN and UMNO is obviously that they're and will be looking at quite a sustained period of bad news. Presumably we're looking at many months of sluggish economic growth, more job losses, and just the general mess that Governments have to put up with.

The PM, UMNO and BN will hope to be able to announce a turnaround in the economy which the public actually notice and feel. For example, they have postponed the introduction of GST- which the public will definitely feel. What's the use of implementing a tax system that actually hurts the lower income group who will be compensated only later in the form of aid package?

But they still need to do something to keep their polling numbers up in the meantime. The government can't expect to do this just by lining up "feel good news" stories - public holidays, minor tax breaks etc.

Instead there seems to me to be two options. The first is deliberately choosing a few very high-profile rows on those issues most important to the public, above all the economy. This would involve the deliberate highlighting (and exacerbating) of major policy disagreements such that the public was forced to choose in their own minds between two competing futures.

For example, the policy makers in the government can put up a spirited case as to why the ETP projects will indeed work. So far the opposing side has shown nothing other than just opposing these plans. Another is to justify the construction of the 100 storey building by PNB when many are questioning the wisdom to do so including this author. employ consultants if you need to put every one of us in our place. You need to show just one success story to silence your critics.

The second model would be to follow the one created by Clinton in the mid-90s - where he announced a series of high profile policies designed to show that he was in touch with the values of Malaysian voters such as serious action against corruption, real reform on the judicial system with the retirement of nonproductive judges, a cleanup of the police force again through retiring the rotten apples in the force, or even retiring some non performing ministers. Also policies on steps to introduce transparency such as mandating open tenders.

Perhaps the two most important issues that are creating public distress are corruption and lack of transparency. In the former, what would immediately earn public respect is action against people who are generally believed to have amassed wealth beyond their means while holding high office.

Najib should find it be possible to create a "values agenda" here, demonstrating that UMNO/BN are in touch with the public, and the PR people with their own internal feuds and squabbles are out of touch. The areas which we outlined above offer an endless supply of policy announcements that should be relatively cheap but high impact. While no one issue will be enough to turn the polls, the public will end up getting the message in the end.

The main objective is using people's concerns with the state of Malaysia to make them think "I'm just glad they're in the charge and not the other lot." If we can instill this kind of thinking in the public, the opposition parties are gone.

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Thursday, 18 November 2010

Let’s KPI Khazanah

Was Asas serba's offer to take over the 23 toll road concessions for RM 50 billion rejected because Nor Mohamad Yaakob wanted it that way?
For that matter, had the offer been made by any other entity for RM 50 billion, would such an offer be cavalierly rejected?
I say cavalier because the boss at Khazanah, Azman Mokhtar made just a cursory mention that it had received an offer from Asas Serba. RM 50 billion and yet no considered evaluation? 50 billion isn't exactly small change is it?
He went on to say, PLUS highways are generating cash and profit and the highways belonged to the people. But we are never told the basis for rejecting offers to buy the PLUS highways. Surely the reasons to divest are there because Khazanah and EPF formed a SPV to take over the business.
My point is, if there are reasons justifying the eventual takeover of PLUS highways by the Khazanah-EPF JV, then the same reasons must have existed at the time when Asas Serba or MMC made their offers. Or the people from MMC and Asas Serba didn't think about these reasons?
We the 'people' who own the PLUS highways don't know what is happening.
Asas Serba offered to buy at RM 50 billion. That would make the owners RM 50 billion richer. RM 50 billion would go into the system and would probably increase liquidity. The government would probably save money by not having to pay compensation in the form of subsidies.
There was also an offer made by MMC group led by Syed Mokhtar alBukhari. It was also rejected. The offer was said to be somewhere in the region of RM 15-16 billion.
I always thought, the basic role of Khazanah, at least before being headed by Azman Mokhtar is to function something like Warren Buffet's Berkshire Hathaway. Basically it invests in sound companies and let those who are cleverer and better than them, manage and operate the businesses. It's a sovereign fund anyway.
In that way, it ensures the best returns to it as a stakeholder. It now seems Khazanah wants to micromanage everything which means it is running the business. It is now in business with the luxury of using money belonging to us the people.
Now, as we read the many public statements by Azman Mokhtar, the principle which he uses to reject or spurn an offer is to say it won't sell a profitable business. The other excuse he uses is to say a particular business belongs to the people. I like these two principles by which he swears because; we are going to take him on that.
Why did it reject a RM 50 billion offer without explaining? It gives rise to suspicions that a reasonably good business offer is rejected on some non-objective reasons. Why is Khazanah still being controlled by Nor Mohamad Yaakob when it is the finance Minister who should be in charge of it? Hasn't Husni Hanazlah got the steely determination in his constitution to counter Nor Mohamad Yaakob?
Has khazanah got a big war chest? Has it got money to spend around? Has Khazanah veered from its original objectives on which it was established?
A look at the management structure of Khazanah gives the impression it's a club for the alumnus of consultant companies. Mckinsey, Ethos and Bina Fikir. The 'best brains' said Nor Mohamed Yaakob at one UMNO General Assembly. These people would live and breathe by the code of KPI.
That's a lot of bull crap. Anyone who attended the fanfare-ish ETP presentation by Idris Jala would be immediately aware of the emptiness in that claim when the young cikus (a large number from McKinsey) manning the many booths were often hung out to dry.
We need to examine the incestuous practice of seconding or hiring consultants in charge of Khazanah and then having the same people consulting out their work to their previous companies. Do we need consultants to hire consultants?
I am still trying to make business sense from the purchase of PLUS highways by the SPV belonging to EPF and Khazanah. By doing so, it's tantamount to taking PLUS highways private in the same manner what Ananda Krishnan did to his company.
These two already owned chunks of PLUS highways. EPF already owns a 12.3 per cent stake and Khazanah holds 55.2 per cent of the firm that operates the lucrative North-South highway running from the northwestern tip of Malaysia to Singapore. The Employees Provident Fund (EPF) and state investment arm Khazanah Nasional formed a special purpose vehicle (SPV) to take over the assets and liabilities of PLUS at RM4.60 per share.
Why the takeover and how can it be justified?
The target became the subject of public interest when an unknown company called Asas Serba submitted a proposal to take over PLUS highways and the other 19 highway concessions from the respective owners for RM 50 billion. The offer included a reduction of toll rates by 20%. It sounded good. But the offer was received in a lukewarm manner and by Nor Mohamad Yaakob in an openly hostile manner. He went on to say, it cost the government over RM 200 billion to build the highways. In other words he was saying, over his dead body.
Was the offer rejected on sound business reasons? The SPV is taking over the 4 toll concessions held by PLUS for RM 23 billion, now RM 26 billion? The share was valued at RM 4.60 each. Asas Serba's offer of RM 50 billion was for all 23 toll road concessions. The rest are loss making entities. It didn't separate what it would have paid for the PLUS toll concessions. Was it a wrong strategy to lump its offer altogether giving anyone the lame excuse, it's difficult to know what the offer would be just for the PLUS assets.
So we have no way to ascertain whether had AS lodged an offer for PLUS, could Asas Serba financially manage to keep to its earlier promise of not only cutting toll rates by 20% but also keeping them flat until the end of the current concession agreement. Keeping it flat or reducing the tools rates is not a major issue, because the government compensates the toll operators anyway. The offer would be superior if in addition to offering that price, reducing the toll rates and keeping them flat over the entire tenure, it can say the government doesn't have to make any compensation. Did the government get this?
But Asas Serba's offer was already doomed from the start. First the group is said to be associated with Halim Saad or Daim Zainudin. Halim's Saad UEM group was taken over on the excuse that Halim could not exercise his put option. This is an old story which I am hoping to retell. The company he headed wasn't even bankrupt which would have really necessitated the government taking over his business empire. His greatest sin it seems to me, looking as an outsider was his inability to exercise his put option within the time limit and the general impression that he was linked to Daim Zainudin.
If the government then had wanted to help out, they could. Because it helped out other distressed companies such as Lion Group and Azman Hashim's Ambank. But the other two were not linked to Daim.
Then of course, you have the sage-like evaluations by analysts. One typical evaluation goes like this:- suppose AS buys PLUS in a leveraged buyout deal in excess of RM23bil, we wonder just how much financial wriggle room would Asas Serba have if much of PLUS' cash flow be used to service the debt taken on to fund any takeover. So? You have cash flow- do you just ogle over it? After it takes over, its cash flow belong to them and they will manage it in the best way they could.
Then, in a I-told-you-so very facile aside, a wry comment would go like "If something goes wrong with PLUS after a takeover by Asas Serba, would it then lead to another bailout?"
Others noted that the issue on who would eventually gain control of PLUS and its highways went beyond pricing concerns.
This is purely a private sector business proposal. If Asas serba should fail, the government can always sell it to the next buyer. Others will offer to buy them out. The mischievous question as to who would gain control over PLUS beyond pricing questions is just that- mischievous. They have got to be controlled by somebody in the end. Does it matter whether it's Z or Y.
The better question would have been, is Z better than Y.
Asas serba would certainly employ its cash reserves for some specific objectives. We haven't been told how they would raise their finance fully. PLUS's cash flow is an obvious candidate but we cannot discount the possibility of other sources. Now that the offer by Asas serba has been rejected, we don't have the chance to see the details of their offer.
My question is, have the offers from both Asas Serba and later Syed Mokhtar's MMC been scrutinized carefully and if they have, by whom? You can't expect Khazanah and EPF, to offer an objective evaluation.
Asas Serba said it planned to issue bonds with a dividend component to pay for the estimated RM50bil it would cost to complete the transaction. The bonds, which will be issued by the new concession company set up by Asas Serba and other new shareholders, would carry an annual coupon rate of 7% PLUS a share of profits that is equivalent to a 2.5% to 5% effective yield. The bonds with the dividend sweetener will be issued with tenures to be fixed based on the projected cashflow statements of the toll-road companies.
Asas Serba said the share of profits would give bondholders the benefit of sharing the upside of the returns to the new concession company. Its proposal contains a number of options for current shareholders and lenders. The lenders can cash out of their investment, invest in the bonds that the new concession company will issue or stay on as creditors. Shareholders too can choose to cash out, invest in the bonds or invest as shareholders in the new company.
The company believes that its plan would work as it centers on making the operations of the highways more efficient by reducing costs. The company feels it can cut costs by 15% in a short time and implement programs to raise non-toll revenue.
Now that the Khazanah-EPF SPV has taken over the PLUS highways, perhaps the best option available to Asas Serba is to take over the remaining 19 tolled highways and show they can make profit from there. Or as defined by Azman Mokhtar, because highways are the people's assets, then maybe Khazanah and EPF should plan to take over the remaining highways.
It would be interesting to speculate on who will get to buy the Plus highway should one day, Khazanah and EPF chooses to divest this business just as Azman Mokhtar's contract is not extended?

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Monday, 15 November 2010

The post UMNO Malaysia-Part 2


 

Because Hillary Clinton had just visited Malaysia last few weeks, let me compare UMNO in an analogy with America. I was listening to the BBC program Hard Talk- in which the interviewer asked the guest speaker what he thought about America. Without hesitation, the guest answered- America will remain as the preeminent power.

That is the observation and prognosis despite America having suffered much battering at its image. This despite America suffering economic problems such as subprime debacles, increasing unemployment, gargantuan deficits as Obama thinks about all kinds of stimulus spending, its growing indebtedness to China etc. this is despite America being led by not always competent presidents.

Now why is that? Because it's basic values and motivations are still shared by the majority of nations on this earth. America stands for freedom, rule of law, good governance, democracy and such things valued by freemen all over. It stands for modernity and practical solution to life's problems. Despite many shortcomings, America remains as the primus inter pares.

Iranians and Iraqis and many of those who hate America want to send their students to study in America. The most strident of voices arguing for a return to puritanical Islam originate also in America. That's because, the American setting or to use a more fancy word, the American ecosystem allows that kind of outpouring of zany ideas however incredulous and outrageous they seemed.

Why, because America represents the dream of the majority. People subscribe easily to egalitarian ideals. People want to demolish all vestiges of privileges. If we are moving towards these ideals, UMNO cannot extend its relevance if it hinders these trends. It must adapt.

What UMNO must do is to go back to its fundamentals. The old UMNO was a tolerant UMNO cognizant of the interests and rights of others. It knew the way forward is to give sufficient space for other stakeholders. In return, it secured the understanding of the other stakeholders of the dominant presence of Malays in this country. Perhaps the mutual understanding was interpreted as the social contract although no such agreement formally exists. Mutual respect and the realization of sharing the same destiny bind people together. This lost idealism must be recovered.

Over the years, UMNO has lost it sense of balance. The reasons are many. The chief is inability to deal with success which resulted in arrogance and the trivialization of risks. When those in power think their actions are riskless, they act with wanton abandon. UMNO didn't do well in coping with success.

What do people point out as proofs that UMNO cannot and will not change? They will point out that UMNO has violated the constitution by selecting parts of the Constitution that suit them, they point out to the corruption, bad governance, lack of transparency, they point out to the violation on the justice system. They will point out to the corruption and subversion of UMNO's struggles and point out to the pervasive culture of seeking personal interests and wealth. They will point out to UMNO's clever machinations of racial sentiment and constant malicious tinkering with the fragility of inter-racial relationships.

Clearly, these are attacks from people moved by libertarian ideals. However, they do not stop there. The assaults on UMNO also come from its supporters. They point out to UMNO's negligence in uplifting the Malays. They openly censor UMNO's leadership double-faced dealings. UMNO as the vanguard of Malay interests stands accused as over compromising.

Can we say the UMNO leadership insulates itself from these afflictions? Of course they don't but it would be stupid for UMNO to advertise to the world what it is doing to address the situation. Certainly it won't broadcast the measures it's taking to the opposition parties. So, the opposition people (not necessary party people) infer UMNO hasn't change. What UMNO does to its own body politic is UMNO's business. It will carry on regardless.

How was the response from the UMNO leadership? The spokesman for the UMNO response is Najib Tun Razak. He came out with a slew of grand designs, visions if you may. The New Economic Model, the Economic Transformation Plan, Government Transformation Plan, New Political Model etc.

Obviously, these are not churned out as badges of self-glorification. Najib can't be seeking immortality through these initiatives that needed to be worked on and whose success depends on a host of other factors. They can't, because self-glorification is too quirky a justification for coming out with such elaborate plans. If Najib had wanted that, he would do a better job by erecting statues of him or producing busts of him and placing them at strategic places.

He has to reconfigure UMNO from a party that is inward looking to a party that is forward looking. He needs to recapture the original spirit of UMNO. First, he has to make UMNO people relearn its own idealism and history. He has to recast UMNO into a party willing to give space to other stakeholders. His problem? Finding a balance with demands from his own ward with those of others.

In that forward looking scenario, he finds these. People want to live in less troubling social, political and economic settings; they want to embrace modernity and practical solutions to life's problems. Not many are seeking immortality through martyrdom. Those who offer extremism either in politics or religious movements do indeed attract people, but they will be small in number, both the sponsors and their adherents.

He sees a society wanting the rule of law, better good governance, more egalitarian ideals and removal of privileges. That's where he finds being sticky on NEPish policies is not defensible.

I accept there will be large number of doubters who dismiss the idea of an UMNO willing to change. The anecdotal and personal musings will turn out to be largely wrong. The anecdotal musings are probably the result of personal rejection of the many abuses in the system, corruption, the abhorrence to the rise of puritanical groups such as Perkasa which is considered an extension of UMNO and so forth.

But what proportion di these groups represent the bad side of UMNO? Very small. The noises created by these disparate groups that may have given birth to the personal musings are just the work of gangs of misfits. The majority want modernity and stability which BN can give. The majority of UMNO people are sensible people.

Meanwhile, while America will remain as the preeminent power, others are asserting their presence on the world stage. France, Germany and even Turkey have played crucial roles in geo political crisis managements. In economics, China and India are emerging as major players. Obama is supporting India be given a seat on the Security Council. Brazil and other countries are also capable of playing center stage in business and economics. America is just ceding some of the areas which it monopolized in the past not because America is declining, but because the rest is moving up.

Something similar to that is happening to UMNO. UMNO may have lost many seats and states, but together with other BN parties retain control over the federal government. It still has 140 seats. UMNO alone still has 79 seats. But the rest have also risen. PR and non BN parties got 82 seats, less now as a result of desertions. The rest are asserting their presence. But whether that rise can be sustained is another matter which the 13 General Elections will reveal later.

Whenever I write something that places UMNO is a good light, there will commentators who will scoff at the idea. The usual flippant are just personal claims backed by mostly anecdotal and personal accounts that UMNO and BN will be kicked out. I have only one term to describe these musings- it's just a cottage industry spewing out invectives mostly personal at UMNO. Its wishful thinking, wishing UMNO will just fade away. It will if ALL its leaders are ignoramuses, an assertion that is supremely difficult to objectively defend.

UMNO still remains (in Malaysia) the political superpower. But like America it is no longer the sole voice narrating the story of Malaysia just as America is not for humankind. Most of the leaders recognized this. That is why they are making adaptation.

Consider the concept of 1 Malaysia. While I may personally not like the term 1 Malaysia, it does represent a step towards adapting to new political realities. Najib recognizes the need to give more space to other stakeholders. The Chinese for example who have so much role to play in Malaysian economics will want a bigger political role. Whether they do this through MCA or other party is irrelevant actually. I have once said that maybe one day, UMNO may have to work together with the DAP which appears to have cornered Chinese loyalties.

In Malaysia UMNO is no longer the only voice telling the Malaysian story. Like America, UMNO no longer dictates a unipolar world. It is now a Malaysia where power is diffused. No longer monopolized by UMNO.

This is the post UMNO Malaysia I am talking about. There is a term to describe this. Samuel Huntington, the person who wrote that famous Clash of civilizations called it a uni-multipolarity world. I prefer the term used by Chinese geo-political thinkers. They called it a world where there is one superpower but many powers.

In our context, UMNO remains the superpower but it lives in a world where there are other alternative power bases who are acting with greater assertiveness and with greater activism and also dynamism. Hence I entitled this article- the post UMNO Malaysia.

The title of this essay may be misleading. No, it's not a Malaysia without UMNO. It will be a Malaysia with a redesigned UMNO. UMNO is not going to be written off just yet. The Pakatan people and others may continue in their wishful thinking. UMNO is not about to wither away. Very sorry people.

It's about a Malaysia where UMNO is pragmatic enough to share the building of this nation with other stakeholders. The strident voices shrieking out narrow patriotism and master race-version of the Malaysian story are voices in the peripheries.

In order to achieve this, UMNO must provide renewed and different kind of leadership. So too must the other stakeholders. The MCA, MIC and others who share the vision of BN.

The sad thing is, the majority of UMNO people (not just the leadership) is in denial. Most are patting themselves in the back while sailing on the Titanic which is heading straight into the iceberg. In the recently concluded UMNO GA, there were hardly any restraining and realistic voices. UMNO people still talked of an old order founded along the lines of NEP, continued dominance of Malay rule, etc.

Could it be possible that only a handful of our leaders most notably Najib Tun Razak see the incompatibility of such a stance against reality?

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Sunday, 14 November 2010

The post UMNO Malaysia-part 1

The post UMNO Malaysia- Part 1.

Readers will be disappointed if they think judging from the title of this article, it's a Malaysia without UMNO. It's a Malaysia with UMNO and the rise of the others. People are busy documenting the rise of others that they forget UMNO is capable of adapting.

By the others I mean non UMNO political parties that are asserting their presence as stakeholders of this country. Correspondingly, it's a Malaysia where UMNO recognizes this fact. It's a Malaysia, where UMNO which will remain as the preeminent political power adapts to a new environment where it has to give space to other stakeholders. But it's also a Malaysia the other stakeholders must know that UMNO and the Malays are not going to disappear just like that. That's the only way to ensure its survival. It's also the only way for the others to survive.

I have not been writing for some time. I have gone back to catch up with some reading. Also, a brief interval is necessary to allow me to see things in perspective.

For example I have extensively criticized Najib's big ideas; 1 Malaysia, the ETP, GTP, New Economic Model etc. I am still critical and will continue to examine these ideas. These ideas must be examined on their merits.

On the other hand, looking at these on a wider perspective, there is a rationale behind them. It's a plan for political survival. For UMNO essentially.

How so? Najib knows UMNO must adapt or perish. It can't survive in its present form. His biggest problem? Making the UMNO people understand this. It's troubling to note that most of his big ideas were rejected at the recent UMNO General Assembly. Yet none of the big UMNO leaders addressed this point.

He needs to disseminate his ideas for which he needs champions at various levels. If many in the higher leadership do not share his passion in his big ideas, how can they be the common cause of the masses? Either many of them are indifferent or are too daft or its only Najib that is thinking how UMNO can survive.

What's happening to UMNO can be discerned if we ask why couldn't Japan overtake America as the biggest economy or most powerful nation etc.? In the 1980's many people were forecasting that Japan will overtake USA. That didn't happen because; Japan didn't have the institutions and the values to allow it to overtake USA. In order to move into the next phase, Najib and his government must devise ideas and institutions that support his grand designs.

I take it therefore; the requirement to enable an entity to move to the next phase is that we must have the institutions and practice that support that transition. Its UMNO and the government machinery first.

UMNO couldn't make it to the next phase because the institutions that made it successfully in rural areas, the values that can sustain the transformation are not there. We don't have the same grassroots organizations that operate in villages replicated or transplanted in urban areas where the majority of Malay voters now reside.

In the villages you have institutions such as ketua kampong or village heads, the penghulus, the kumpulan 10, the surau and madrasah committees etc. and many other voluntary social organizations. Through these, the government can disseminate ideas and also receive feedbacks with great immediacy. The same grassroots organizations are not replicated in urban areas.

So how do you ensure longevity and survival? You adapt. It calls for a strategy of adjusting to the process of natural selection, politically speaking that is. Najib has several options; one to submit passively to a process of natural selection letting UMNO to develop traits that can ensure its survival or to carry out artificial selection. The former process may take a longer time and a luxury Najib cannot afford. Also, we are not sure, the cross section of UMNO people want to develop the necessary traits.

The next option is artificial selection, by grafting onto UMNO the desired traits that can ensure its survival. This will demand an iron willed leadership. No flip flopping and no going back.

An organization that fails to adapt to changing environment, will become extinct. So, in a related sense, those big ideas that Najib churned out, are measures thought of and taken to adapt to new demands from the political environment. Failure to do so will cause UMNO to perish.

But I maintain my reservations that his big ideas do not have the soldiers to carry them though. Most were hatched in labs and are clubbish in nature. And I am not sure Najib has the absolute political resolve to see it through. That may be an indication, that his ideas have not been fully accepted by senior UMNO leaders too. He must inspire confidence in us.

He must have that team, a new one if necessary to carry through his ideas. He must have a team that works harder. I was listening to the conversation with Andrew Gould, the CEO of Schlumberger (the French company) talking about leadership. One of the things that he mentioned is team building. The incoming CEO must have a team that shares his passion and ideals. He must first identify members of the outgoing CEO who can make the transition to his team most easily and usually there is only a handful. The rest he must release and take on a new team that is able to more reflect and share his ideas and passion. PM Najib must have a new team. And that must also include members of his staff.

When Voltaire arrived in Portsmouth, he was shocked to see a man being executed with pomp and ceremony. Upon inquiring, he found out the man who was shot is an admiral. His crime? He did not kill as many enemies when in battle against a French navy. But why execute him asked Voltaire. The answer was, the British find it necessary once in a while to execute an admiral so that the others work harder.

So, in forming his team, maybe PM Najib needs to execute one or two admirals so that the others understand he means business. Throw out those dysfunctional ministers.

UMNO must relearn what it means to be Malay.

UMNO considers itself as the only real voice of the Malays. Now it must validate that claim by understanding what it is to be Malay. Understand first and formulate the operating strategies accordingly.

The social outlook of a typical Malay is shaped by the values he lives by which have been drummed into him for generations. He is basically submissive and functions well in an ordered and structured society. By that I mean, the typical Malay operates best when there is a well ordered hierarchy in society. He will follow the leader, out of respect and also out of adherence to the way as it has always been. Malays follow the leaders, elders, the positioned, the uniformed etc. Malays submit to authority and finds nothing demeaning about that. It has always been that way.

Understanding this basic nature will then require us to approach a desire to graft and cultivate desired traits in a certain way. The only way I suppose, given the cultural disposition of the Malays, is to impose a regime of disciplines. This requires an iron willed leadership or some kind of benevolent dictatorship.

This notion of a will imposed from without, the notion of a regime of a disciplinarian or benevolent dictatorship may be abhorrent to democrats. Personally I feel that too, but I fear our kinship with libertarian ideas can't be the route to change the mindset of the Malays. Not in my generation I think

They need the exhortations from the strong willed leader or leadership. They can't be expected to voluntarily develop the necessary traits to survive farther.

This is my central point as regards UMNO. Like the Malay, it can't be expected to change on its own. We can't expect UMNO people, with their vested interests and their cultural set up like the Malays, to voluntarily develop the traits to ensure its survival in the future. It must be whipped into shape by an iron willed leadership.

So if Najib announces his various initiatives without the discipline, the iron resolve, and without the foot soldiers to carry them through, they cannot transform the Malays and UMNO. He needs good men at every level of leadership to ensure his various initiatives can go through. He must operate via the operations room method of Tun Razak.

Otherwise his big ideas do not become shared ideals and his army of ketua bahagians and other party men are in the dark about his big ideas. He has inadvertently created a vacuum that is filled by gangs of misfits such as Perkasa. While Perkasa may fight for some causes that find ready clientele in the Malay heartland, I think what they are fighting for is superfluous. UMNO is fighting the same causes and is better organized to achieve them.

This theme will be examined in the next few articles.

 

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Monday, 8 November 2010

Trust regained = monumental shift.


 
For UMNO, its Malay trust that is.
First some clarifications are in order. Maybe some people misread my criticisms on my own party. I saw my article being uploaded by Anwar Ibrahim ( Zaman kebangkitan?). Another article was uploaded by Lim Kit Siang. (Momentum yes…). The main purpose of these two articles is to provide a reality check on UMNO's exuberance. They are not written to push forward the agenda of parties opposed to UMNO.
I have said it many times, I believe in UMNO being the safest bet for the Malays and Malaysians in general. Because, the bedrock of UMNO has always been moderation and pragmatism. For example, some people may say cooperation with non-Malays is tantamount to selling out Malay interests. The truer interpretation is that UMNO is pragmatic enough to acknowledge that this country needs the participation of all Malaysians. 1 Malaysia as a concept of inclusiveness is workable provided the big idea percolates down wards. It can become an operational concept provided, I believe, if that idea becomes a shared ideal.
At the same time, the UMNO leadership must be realistic enough to admit it cant shed its ethnicity and the responsibilities entrusted upon it as a result of that identity.
Unfortunately as I see it, the idea is not being sold down the line. It then becomes non-operational and the PM is looked upon as being disconnected. That portion of connectivity and making the concept operational, I have criticized extensively.
I have called it as it is. During the recent UMNO General Assembly, if delegates and UMNO people are honest enough, they will have to come to terms that delegates in general rejected the big ideas of Najib. They didn't want 1 Malaysia- they wanted Malay first. They didn't want the New Economic Model- they insisted on NEP like policies. In the end, Najib has to defend himself by declaring the fact that he is Tun Razak's son.
I bring the same attitude when assessing what happened in the recent by elections. People forget that I was rooting in for an UMNO win in Galas. But then I see something wrong in the extrapolations after Galas.
Some people are irked that I said the wins in Galas and Batu Sapi created a momentum but they haven't reached the level of a monumental shift.
The Batu Sapi's majority is marred by a mathematical error. Indeed, the BN candidate won but not by the majority of 6000 plus. The majority should be the difference between her votes and the combined votes of the opposition. It's not the difference between her and her nearest rival.
When seen in the proper way, she got a marginal increase over that achieved by her late husband. It's a win in any case of course. We must be honest in our analysis if we were to make meaningful responses.
The opposition says BN spent a lot of money. That's not true. The projects brought by BN will be enjoyed by both who voted and those who didn't vote for BN. in any case, haven't we heard the opposition parties saying that politics of selling development don't work anymore?
But in terms of a quantum leap? She only got 620 votes more than her late husband did. This is not a monumental shift.
In Galas, we shouldn't uncork the non-alcoholic sparkling drink yet. UMNO won by a majority of 1190 votes. That's true. But where does the majority come from?
The increase in Malay votes for UMNO was around 4 percentage points. This is hardly a monumental shift. UMNO got more votes from the orang Asli and gained some 200 votes from the Chinese.
The only possible explanation that I could come up with, the bulk of UMNO's support came from 'repenting' UMNO votes. PAS won the last time because a sizeable number of UMNO people voted for them. From those who didn't like the UMNO candidate then- Saufi Deraman. They have now come back.
So in terms of Malay votes, there is only a perceptible change in status quo. I would say, Malay supporters of UMNO and PAS are about even.
The people who hold the balance are the Chinese and the orang Aslis. I am sorry to say, these are fickle minded supporters. They flow with the tide of fortune. They may go the other way around.
So, in order to say that we have created a monumental shift, a lot more work has to be done in the Malay heartland.
So before UMNO people start accusing me of riding rough shod over UMNO's sensitivities, please think again. I believe UMNO is the safest bet for Malays and Malaysians.
But UMNO must first of all recapture that trust among Malays first. In Galas, if it could only take away 4% of Malay votes from PAS, I can't support the opinion that says it's a monumental shift. It's even more ridiculous if I am forced to interpret this marginal shift as indicative of the general acceptance of 1 Malaysia, ETP, GTP etc.
I am not saying I am right, but unless you can come up with a more convincing argument beyond mere invectives saying that I am double faced and serves me right for being dropped as candidate in 2008, I will be inclined to say you are a fool.
I want UMNO to win with substance and secure that victory on conviction.
So think about this. In 2008, UMNO candidates got only about 2 million votes from 5.7 million Malay votes. I will concede, we have made a monumental shift, if we can recapture the bulk of the 5.7 million Malay voters. Now, that is a tectonic shift.
As for me, let's just say I am UMNO's early warning siren. Does not matter if it's self-appointed.

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Sunday, 7 November 2010

A momentum yes, monumental shift not yet.


 

We need to distinguish between a crass propagandist and a sober politician. Ahmad Maslan fits into the former category it seems.

Ahmad Maslan, the UMNO information chief cited 4 reasons for the victory in Galas. The acceptance by the people, of the national leadership of Najib and Muhyidin. The influence of Tengku Razaleigh Hamzah and Mustapha Mohamad, the acceptance of the people of the various initiatives thought of by our great leader which will be implemented by the ruling government and so on. He was referring to such initiatives like 1 Malaysia, ETP and so forth. Finally, and here is the earth shattering observation- people are fed up of the politics of the opposition to the ruling BN. It's a triumph of moderation over extremism. One writer puts as the alarm bell for the 13th GE.

For whom does the bells toll?

People in Gua Musang and Galas in particular must be the most intelligent people in Malaysia. There must be something in the pristine air and the physical terrain of the area. Or maybe something in the diet of Gua Musangians. The nasi kerabu and berlauk at Restoren Kak Zah or the stalls near Fully Inn?

They understood the concept of 1 Malaysia when the same concept baffled Tun Mahathir and misunderstood by other Malaysians. The people eating at Restoren Kak Zah in Bandar Lama Gua Musang talking politics and cock understand and embrace the various initiatives by the national government. The people in Sungai Terah and Batu Papan are waiting for their ETP, GTP and whatever P's we can think of.

Gua Musang should be made the administrative capital of Kelantan then or perhaps be made a federal territory and developed into the east coast Putrajaya. There is so much good talent here.

In Galas, the people are roughly divided between Pas and UMN. The UMNO candidate secured some 54% of the vote while Pas commanded the balance. I can't read this as a monumental shift in preference. Pas lost 265 votes from what they got through the late Che Hashim. UMNO gained 1571. UMNO was able to capitalize on the larger turnout of voters.

In order to wipe out the 646 vote deficit, UMNO had to effectively secure 1800 votes. I had predicted UMNO to win by around 2300 to 2500 votes. My detractors were jubilant I was wrong here but curiously silent on my prediction that UMNO will win. The effective 1800 vote is close enough to 2300. Indeed UMNO could have garnered more than that, had the meddling by outsiders and internal sabotaging were minimized.

So to come back to what Ahmad Maslan said. I see no evidence of the validity in these assertions. What was at work in Galas last week was pure retail politics not wholesale politics. When Muhyidin came the first time around, he was astonished at the muted and subdued air about the election.

Retail politics involve the articulation and championing of purely local issues. This is opposite to wholesale politics where, national issues not directly related to local situations are aired. Perhaps Ahmad Maslan should direct his mind to these concepts.

The Chinese in Desa Pulai were not more motivated by people distributing leaflets on the circumstances leading to the death of Teoh Beng Hock. I suspect they were remotely interested in the issue surrounding the shooting of the late Amirul in Shah Alam. Of course, these are indeed important issues to those immediately concerned but hardly in resonance with people in Galas. The loss of loved ones is not light matter.

Chinese in Desa Pulai were more interested in the security of their land tenure. They were more concerned about the affairs and future of their Chinese school. The Chinese and homeless people in Gua Musang are more interested in getting housing faculties. The fence sitters in Gua Musang are more interested in seeing KESEDAR managed more efficiently and corruption weeded out.

If PAS and the other opposition parties to UMNO rule had been more vigilant and had paid keener attention to local issues, they could have made a big impact. Like raising the issues on the management and abuses of Kesedar. But they didn't. Gua Musangians are interested in this issue.

People in Gua Musang were more amused and probably entertained by the sight of Theresa Kok and her coworkers carrying DAP flags and banners around Bandar Lama Gua Musang.

My point is this. If we can and are eager to dismiss these attempts to foist national issues into ones of concern to local voters as useless irrelevance, the same ruling should be applied to the big idea, that this win in Galas is an endorsement of national leadership. No such thing.

This Galas by election is won on the influence of Tengku Razaleigh simpliciter and we are thankful he is an UMNO man. The majority of UMNO members in Gua Musang understood this and gave their all out. The people in Gua Musang in general understood the strategic advantage of giving a win to UMNO this time. Gua Musang is the only election area in Kelantan to have 100% UMNO/BN representation. PAS may grumble for a few days, but in the end sobriety will take over. Only permanent interests matter.

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