Thursday, January 05, 2017

While blinkered Treasury-General Tan Sri Irwan Serigar continues to praise the Emperor’s new clothes, little hope of seeing meaningful changes to Malaysia’s drifting economy

The dreadful performance of the Malaysian ringgit and a listless economy under-performing its potential are not merely depressing news but have caused Malaysians plenty of pain.

And yet, the most senior civil servant in the Ministry of Finance, arguably a most powerful one, the Treasury-General insisted that all is well, and what is wrong is only “a matter of perception”.

"I go to restaurants and supermarkets, who are there? People are buying and travelling.  Some group of people are making noise as though the whole country is in trouble,” Tan Sri Irwan Serigar quipped at a press conference yesterday.

We are stunned that the Treasury-General thinks that just because there are people in restaurants and people are still visiting the supermarkets for the daily needs, everything’s fine and dandy with the economy.

Does he expect all Malaysians to be jobless and living in the streets begging for food before he would recognise that the economy is in trouble?

According to him, the plummeting of the ringgit was a short-term phenomenon that would recover in the middle-term following the measures taken by Bank Negara Malaysia (BNM).

However, isn’t that exactly what the Ministers and BNM have been telling Malaysians annually over the past 4 years as the ringgit lost more than 40% of its value against the dollar?  How can it still be a short-term problem when we are consistently the worst performer among the major regional currencies for each of the past few years?

Worse, the latest Nikkei Malaysia Purchasing Manager’s Index (PMI) clearly cited that our manufacturing production has been shrinking for 21 consecutive months, with no signs of improvement.

The PMI is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.

How can Tan Sri Irwan continue to insist that all is well when our manufacturing performance is so pathetic despite the fact that our substantially depreciated currency should have made our goods so much cheaper and competitive?

The biggest shocker from the press conference however, is the fact that he believed that all the negative perception arising from the problems with the economy will be righted and vanished immediately once the media publish his “all is well and good” assurance.

He told the media to contribute to the ringgit appreciation through positive reports about the currency and economy.  "Hopefully, when you publish today's briefing, the ringgit will be strengthened," said Tan Sri Irwan.

How we Malaysians can renew our hopes on the economy when we have such a hopeless Treasury-General is beyond me.

Tan Sri Irwan Serigar’s refusal to address and resolve the issues surrounding the tens of billions of ringgit which have been siphoned from the Ministry of Finance subsidiaries, 1MDB and SRC International, which made Malaysia an infamous kleptocratic capital of the world is one thing.  After all, he is not the first person you would accuse of “cari makan”.

However, his woeful attempt to wave away our economic misery with his magic wand without recognising the problems we face and without offering any concrete measures to remedy the situation proved beyond doubt that the Najib administration is completely bankrupt of ideas.

In order to have any chance of reviving our currency and economy, the Najib administration must be replaced and there is no better time than the impending general election.

Wednesday, January 04, 2017

2017 – Relief and recovery for the Ringgit, or more pain and punishment?

While 1MDB and the Prime Minister Dato’ Seri Najib Razak’s kleptocratic scandals were unquestionably the most talked about topic for 2016, it is the Ringgit’s relentless depreciation which would have caused the most pain for ordinary Malaysians.

Over Christmas, I managed to take my family for a week’s holiday in Chiang Mai – our first since I was banned from overseas travel for allegedly taking part in “activities detrimental to parliamentary democracy” in July 2015.

One would have assumed that travelling to the “backwaters” like rural Thailand would have been easy on the pocket.  Well, in the past, trips to Thailand did make me feel “richer”.  When you walked the colourful and rambunctious street markets, you needed to exercise maximum self-restraint to prevent oneself from having to purchase additional luggage space from AirAsia because everything was “cheaper”. 

Not anymore. Now, the Baht-Ringgit exchange rate will automatically keep you disciplined.

As late as August 2014, the currencies were trading at 10 Baht to the Ringgit. Today, it’s 8 to 1. And to rub salt on the wound, the Ringgit ain’t particularly welcomed by our neighbours. 

Needless to say, if a trip to Thailand could make you feel kinda poor, a journey south to Singapore would make you feel like a destitute.  Think about it, a budget Hotel 81 room in the fringe of the city would cost you just about S$100, or RM310 per night.

Ringgit déjà vu?

So, will we get to see some desperately yearned for relief and recovery of the Ringgit this year?

Most pundits are telling us that the Ringgit is undervalued and will recover by the second half of this year.  PublicInvest Research said the Ringgit will recover to average between 4.10 and 4.15 for 2015 against the US Dollar, which is currently trading at 4.48.

Dato’ Seri Najib Razak would similarly like you to believe that the ringgit will recover.

“With the recent changes and developments, we are confident the ringgit will recover.  It is due to speculation by outsiders and the uncertainties in the United States that the ringgit dropped, and not because the ringgit is weak,” he said in December when the Ringgit traded at 4.42 to the Dollar.

But didn’t they all say the same thing last year?  Or for that matter, the year before?

The Prime Minister told us way back in January 2015 that the Ringgit will bounce back from the then five-year low versus the US dollar as “Malaysia's financial market is sufficiently robust”.  Believe it or not, the Ringgit was then trading at 3.60 to the Dollar, which now seemed like a parallel universe away.

If we had all trusted our Ministers and invested based on his financial advice, some of us would be bordering suicidal tendencies today.  2016 was the Ringgit’s 4th consecutive year of decline against the US Dollar.

The thing is, if everyone else had declined at the same rate against the Dollar, it wouldn’t have felt so bad.  What is particularly galling is that the Ringgit performance is the worst among all the major regional currencies.

In 2015, the excuse given was straightforward – the Ringgit suffered more because we were an oil-exporting nation.  As the price of global crude collapsed from US$102.10 in January 2014 to US$60.70 (Dec 2014) to US$36.57 (Dec 2015), it is almost understandable that the Ringgit would be disproportionately pummelled. 

The pundits had predicted that the Ringgit would recover with the recovery of oil prices last year.  They were indeed spot on in their prediction of higher oil prices with the Brent crude trading at US$55 a barrel by December 2016.  Unfortunately, despite the oil price reversal, the Ringgit value worsened significantly.

How was that even possible?

No more an export powerhouse

Back in November 2015, the then Bank Negara Governor, Tan Sri Zeti Aziz told an international audience that the Ringgit was “significantly undervalued” as our “export growth remains fairly strong”.

Except it wasn’t.

Conventional economic theory tells us that as our currency gets depreciated, our goods become cheaper and consequently the demand for them increases.  A robust increase of the export of our goods and services would in turn increase the demand for our currency and hence provide a strong platform for the recovery of our ringgit and economy.

Well, the Ringgit was massacred in 2015 when it depreciated by nearly 20%.  On paper, that makes our exports dirt cheap in 2016.  And given that we have always prided ourselves as an export-oriented economy, our goods should definitely be flying off the shelves as they became extremely competitive.

But the Government’s own statistics tell us that our exports barely eked out a gain.  The 2016/2017 Economic Report published in October 2016 tells us that our Gross Exports for January to August 2016 grew by only 1.1%, compared to 1.6% in 2015.

More specifically, the electrical and electronics exports, the pride of our manufacturing industry, grew by only 2.2%, a substantial decline from 7.4% in 2015.  While 2.2% might have been just about acceptable under normal economic circumstances, the number is pathetic given the depreciation the Ringgit suffered.

Worse news followed since the above report, when the Department of Statistics disclosed last month that our exports declined 3.0% and 8.6% for the months of September and October respectively.

Separately, the latest Nikkei Malaysia Manufacturing Purchasing Managers' Index, or PMI which measures manufacturing activities shows that the sector “in contraction territory for 21 consecutive months”.

The headline PMI posted for December was 47.1 signalling continued deterioration.  A score above 50.0 signals improvement in manufacturing conditions, and Malaysia has not reached a score of 50.0 since early 2015.

Living and La-La Land

There is no question that our economy is suffering from something chronic which needs immediate treatment.  Alarm bells should have been blaring deafeningly in Putrajaya but all we get is Ministers with their heads in the sand. 

Prime Minister Najib Razak welcomed 2017 by boasting that Malaysia has achieved a growth rate the Western world can only “dream of”.

“Our estimated growth rate of 4.3 to 4.5 percent for this year is one that developed countries in Europe and North America can only dream of.  Malaysians should be proud of the growth we are achieving.”

A statement from the Barisan Nasional strategic communications team earlier in December also boasted that “Malaysia’s economic growth is less volatile and more robust than Singapore’s as a result of the Najib administration’s shift towards the domestic economy.”

Of course the fact that developed countries have a different growth trajectory compared to developing ones was irrelevant.  What was more important to the ruling leadership was the continued thumping of the chest to praise and glorify the Emperor in the eyes of seemingly gullible Malaysians, even if the Emperor is really naked.

So what’s really happening?

A loss of confidence

The anticipated explosive growth in exports and manufacturing activity as a result of persistent depreciation of the Ringgit never materialised. Either no one wants to buy more Malaysian products even though they are significantly cheaper or more plausibly, businesses and investors are not investing in additional production capacity in Malaysia.

They are at best adopting the “wait and see” strategy or at worst, have decided in investing their money in other countries.  There could be many reasons for this, including perhaps a increasingly limited supply of skilled and quality labour, a weakening education system or the bureaucratic and corruption cost of doing business. 

However, anecdotal evidence would tell you that one of the key factors is the fact that they have lost confidence in the country.  A country led by a Prime Minister who has been indicted as one of the worlds biggest kleptocrat would and could never inspire confidence in genuine investors.

The complete failure of the institutional authorities to take enforcement actions against blatant and brazen corruption has destroyed whatever that’s left of Malaysia’s long-standing reputation as a country they could do business in.

Bank Negara saves the day?

Bank Negara Malaysia is now forced to implement increasingly desperate measures to stem to tide against the Ringgit.  They now include the restricting the off-shore trade of the Ringgit via non-deliverable forward contracts, and more controversially, the move to compel exporters to convert 75% of their proceeds into Ringgit.

The Central Bank is claiming success for its policies, stating that the measures are starting to bear fruit, following lower volatility in the ringgit.  Sure, such short term measures will provide immediate support for the Ringgit as it mops up whatever excess liquidity existing today. 

However, as explained earlier, Malaysia being an “export-oriented country” is heavily dependent on continued investments in our export sectors, manufacturing or otherwise.  If the use of your future export proceeds are restricted and the hidden cost of doing business in Malaysia increases, then who would want to invest in new or additional production capacity in the country?

Current exporters would not have a choice in the repatriation of export proceeds as demanded the authorities.  But they and future investors – both local or foreign – have a choice in where they choose to invest in the future.  With alternative competing investment destinations aplenty today, such short-term Bank Negara measures will only further dampen the medium and longer term demand for the Ringgit, jeopardising any eventual recovery.

A new normal

We used to pride ourselves as an export and manufacturing powerhouse.  We are used to being described as an “economically resilient” country, even if it was somewhat a function of striking oil lottery, especially during the decade of high oil prices.

Unfortunately, the hard statistics are becoming hard to refute.

I would be foolish to give a specific prediction of how the Ringgit will perform over the next 3, 6 or 12 months even as it hit 4.50 to the Dollar yesterday, a new record low since the Asian Financial Crisis.  However, it would be more than fair to say that the downside risks significantly outweigh the upside prospects given the reasons explained above.

For Malaysians, perhaps its time to accept the new normal.  We have lost more than 40% of our wealth in US Dollar terms over the past 3 years. The lost of wealth will be reflected in higher prices of goods and services – including the higher price of petrol as oil is traded internationally in Dollars.

Although it is not impossible, this new normal will be extremely difficult to reverse.  In fact, it more than likely to get worse given the utter inability by the Najib administration to rectify the failures of the economy.

I would be foolish to give a specific prediction of how the Ringgit will perform over the next 3, 6 or 12 months.  However, it would be more than fair to say that the downside risks significantly outweigh the upside prospects given the reasons explained above.

The only way Malaysians can hope for “the good old days” to return is to see a change of regime.  The new regime needs to cleanse the country of its kleptocratic reputation and wipe out the scourge of grand corruption from the Government.  It needs a new, intelligent economic team which isn’t encumbered by sacred cows decreed by those who are desperate to stay in power at all costs.  It really isn’t rocket science.

Then perhaps, we will see a meaningful, significant and sustained recovery of the Ringgit, and our wealth over the longer term.

Thursday, December 22, 2016

The Second Finance Minister should stop crying wolf and start addressing the ultimate cause of the loss of confidence in the Malaysian economy

Two days ago, the Second Finance Minister, Datuk Johari Abdul Ghani told Malaysians there is no need to panic about the weakening ringgit, stating that the nation has in place an ecosystem that encourages investment and an open economy.

“Don’t panic, we shouldn’t panic,” Johari said.  The ringgit, which has weakened along with other emerging market currencies against the US dollar, has all the strength to bounce back, he added.

"We have the ecosystem to make it right, ensure political stability is intact and (continuously) apply the right policies to facilitate investors," he said when asked on the ringgit's decline to 4.4805 per US dollar.

The Second Finance Minister’s attempt to assure the Malaysian public has zero credibility and if that’s his only answer to the depreciated ringgit, then 2017 will only see further pains for our currency and economy.

Perhaps, Datuk Johari has forgotten that this is the first year we have hit bottom. In fact, even I myself was a little surprised to discover that his is not the second, but the third consecutive year where the ringgit has become the worst performing currency in Asia.

In 2014, the ringgit slumped 6.3% from 3.281 on 1 January to 3.502 a dollar on 31 December.

Last year in 2015, the ringgit collapsed 18.5% in 2015 from 3.505 on 1 January to 4.303 a dollar on 31 December.

Despite repeated assurances from the Government and Bank Negara that our currency was undervalued and unjustifiably depreciated for the past 2 years, the ringgit tanked a further 9.6% this year.

As the saying goes, once is an accident, twice a coincidence and three times a pattern.  Hence the Second Finance Minister sounds exactly like the boy who has cried wolf too many times.  No Malaysian with any sense left believes or is assured by what he is saying.  In fact, his open call “not to panic” is likely to have had the opposite effect as it showed that the Government is completely clueless and incapable of stemming the disastrous decline of the ringgit.

Worse, even the oft-repeated excuse that the ringgit’s ignominy as Asia’s worst performing major currency was a result of the drastic decline in global crude oil prices is no longer tenable.  Malaysia is a major oil producer in Asia (excluding the Middle East).

The Brent Crude price per barrel has indeed declined from US$102.10 in January 2014 to US$60.70 (Dec 2014) to US$36.57 (Dec 2015).  However, for the month of December 2016, the Brent Crude has been trading 50% higher at around US$55 per barrel compared to a year earlier.

If the global oil price drop had been the reason why we were the worst performing currency in 2014 and 2015, there is certainly no reason why we should remain the worst performing currency in 2016 with the substantially higher oil prices.

It appears that everyone knows the real cause of the ringgit’s terrible performance except our clueless or pretend-to-be-clueless Ministers. The fundamental cause is because of the complete collapse in confidence in our currency and economy ever since we have been outed as a major global kleptocracy and the failure of the Malaysian authorities and Government to take any action against those responsible.

In a country where the Prime Minister, Dato’ Seri Najib Razak who has been referred to as the Malaysian Official One by the US Department of Justice as having misappropriated US$731 million into his personal bank account in Malaysia can get away scot-free while all attempts to bring him to justice, including cartoonists, are met with oppression and intimidation by the police, there can be little surprise that Malaysia has lost the confidence of both local and foreign businesses and investors.

Unless and until there exist Ministers and a Government in Malaysia who is willing to call a spade a spade, and is willing to take concrete actions to redeem ourselves from the kleptocratic bottom, Malaysia’s economy will only continue to struggle to stay afloat and its currency continuing to significantly under-perform relative to its peers.

Sunday, December 11, 2016

The Ministry of Education officials who attempted to cheat in the PISA assessments must be sacked

The Programme for International Students Assessment (PISA) conducted by the Organisation of Economic Cooperation and Development (OECD) is a triennial international survey which aims to evaluate education systems worldwide by testing the skills and knowledge of 15-year-old students.

In 2015 over half a million students, representing 28 million 15-year-old's in 72 countries and economies, took the internationally agreed two-hour test. Students were assessed in science, mathematics, reading, collaborative problem solving and financial literacy.

When the PISA 2015 results were released on Dec 6, officials from the Education Ministry (MOE) were quoted in a news report as taking pride that Malaysia’s PISA’s scores for Mathematics, Reading and Science had improved from 421, 398 and 420 respectively in 2012 to 446, 431 and 443 respectively in 2015.

However, Malaysians have been stunned to discover the next day that Malaysia is one of 2 countries who took part in PISA 2015 which were left out of the overall rankings entirely.

The official reason given was “in Malaysia, the Pisa assessment was conducted in accordance with the operational standards and guidelines of the OECD. However, the weighted response rate among the initially sample Malaysian schools (51 percent) falls well short of the standard Pisa response rate of 85 percent. Therefore, the results may not be comparable to those of other countries or to results for Malaysia from previous years.”

In simple terms, this means that the MOE officials had attempted to manipulate the results of the Malaysian students by using a biased sample of schools which will not present a fair and accurate reflection of students’ performance in Malaysia.

My colleague, Dr Ong Kian Ming has already shown in his statement on 8 December that the MOE over-represents data from High Performing Schools (HPS) and Fully Residential Schools.  For example, even though the number of Fully Residential School students comprise only less than 3% of all students in Malaysia, they were over-represented for the PISA tests at a whopping 30%.

There cannot be a bigger irony when our own Ministry of Education tries to cheat in its examinations, and actually expects to get away with it.

The disgraceful attempt to cheat the system underlies a bigger problem in the administration of our education system.  It shows that those in-charge of the education of our children are more interested in form over substance.  They are only interested in meeting statistical benchmarks – by hook or by crook so that they could crow about it, and are not interested in the real substantive quality and performance of our students.

This is consistent with the fact that the MOE (and its counterpart Higher Education Ministry) have been attempting to manipulate the rankings of our Malaysians universities by adjusting foreign student intakes to meet the criteria for the more dubious global university ranking matrix by QS World University Rankings.  Other university ranking systems by the Times Higher Education and Shanghai Jiao Tong clearly require more qualitative academic performance input from our universities which were harder to manipulate.

Similarly, it has been an open secret that the annual increases in the number of “As” obtained by our students in examinations such as the SPM were a result of reducing marks required to achieve the relevant grades, and not a result of improving student quality.

Without a real transformation in the mindset of our officials in-charge of our education system, the quality of our schools will continue continue to deteriorate and we can only expect our students to be even worse off over time.  As long as these officials who are only interested in artificial forms to pat themselves on the back and suck up to their superiors, no amount of beautifully crafted transformation blueprints will be able to “transform” the system for the better.

We call upon the Minister of Education, Dato' Seri Mahdzir Khalid to take stern action against all senior officials who were complicit in the attempts to cheat PISA.  This will send a strong message to the entire Ministry that the Government is only interested in substantive quality of our students and not fake performance outcomes.  The continued failure to let substance precede form is a certain formula to ensure a worsened outcome for our future Malaysian students.

Saturday, December 03, 2016

The Inspector-General of Police, Tan Sri Khalid Abu Bakar should stick to catching criminals who rob the country instead of telling artists what they should and should not draw

Yesterday, Inspector-General of Police (IGP), Tan Sri Khalid Abu Bakar has advised political cartoonist Zunar to channel his creative juices towards drawing "nice cartoons" if he wanted to exhibit his work.

"He can draw McDonald's or Donald Duck, " he quipped when asked if Zunar would be allowed to showcase his cartoons in a public exhibition.

Perhaps Tan Sri Khalid Abu Bakar has failed to read and/or understand that we have a Federal Constitution which guarantees “Fundamental Liberties” including the “Freedom of speech, assembly and association”. 

While such liberties are not absolute, we are supposed to be far from a totalitarian or police state to the extent where the IGP tells an artist to draw “nice cartoons”.

Certainly, just because Zunar’s criticism of the ruling kleptocratic elite who are mired with rampant corruption, abuse of power and incitement of racial flames are portray in a manner which is unpalatable for those who are in power, that certainly do not mean that they are illegal in anyway. 

In fact, Tan Sri IGP, you are not required to like Zunar’s art!

Tan Sri Khalid Abu Bakar tried to justify his repeated arrest of Zunar by claiming that the artist had “insulted the country’s leaders”.

He asked what if the tables were turned when someone draws cartoons which insulted opposition leaders?  "If tomorrow such cartoons targeted Penang Chief Minister (Lim Guan Eng), would he like it if we just ignored them?”

Firstly, a hopefully not too profound question for our Inspector-General of Police:

If a thief were to be insulted by a caricature him or her as a “despicable thief”, would you arrest the thief or the artist?  Is the alleged “insult” which has hurt the feelings of the thief wrong in the eyes of the law, or is should the thief who have stolen billions of dollars from the people of Malaysia be arrested, investigated and charged instead?

After all, as far as we are aware, no leader of this country is legislated to be above the law.

Secondly, Tan Sri Khalid raised the most ironic of examples – with regards to purported insults against opposition leaders like the Penang Chief Minister.

In fact, DAP and other opposition leaders have been regularly demonised via caricatures appearing in Utusan Malaysia for the past decades, their posters and pictures torn and burnt by UMNO demonstrators – what exactly has the Police done against these parties?

We are not asking for the Police to take action against these people.  However, the fact that the IGP only takes action against those who criticise UMNO leaders and close one eye to those who viciously attacked those in the Opposition clearly demonstrates his bias and hypocrisy in the reasons provided for the persecution of Zunar.

We call upon Tan Sri Khalid Abu Bakar to stop making Malaysia and its police force the butt of international jokes by stopping all actions against artists, civil society members and political dissidents.  Instead, he should regain the respectability of the force by initiating urgent arrests and investigations against all parties cited by the United States, Switzerland and Singapore investigators who have stolen and misappropriated billions of dollars from 1MDB and SRC International, including but not limited to Jho Low and his father, Riza Aziz, Eric Tan Kim Loong, 1MDB and SRC officials as well as the shameless “Malaysian Official 1”.

Friday, December 02, 2016

Presiden UMNO Dato’ Seri Najib Razak telah mengeluarkan fitnah berbau perkauman yang melampau terhadap DAP untuk menakutkan orang Melayu dan mengalihkan kemarahan rakyat terhadap skandal 1MDB, SRC International dan MO1

Presiden UMNO, Dato’ Seri Najib Razak telah melontarkan pelbagai fitnah dan dusta terhadap parti DAP dan pemimpin-pemimpinnya dalam ucaptama Perhimpunan Agung UMNO semalam.

Beliau berkata bahawa “sekiranya negara ini jatuh ke tangan DAP yang memperjuangkan liberalisme melampau dan fahaman sekular berbahaya, pastinya, hak dan keistimewaan yang diperjuang serta dipertahankan oleh UMNO selama ini, termasuk Institusi-institusi Bumiputera antaranya MARA, FELDA, RISDA, FELCRA dan TERAJU akan pupus dan lenyap.”

Tambahan lagi, Dato’ Seri Najib juga menuduh bahawa “Perlembagaan parti DAP, tiada langsung menyebut Islam sebagai agama Persekutuan, tidak dinyatakan untuk menjunjung institusi Raja-Raja Melayu dan tidak tertulis satu ayat pun, tentang usaha untuk melindungi hak dan keistimewaan Orang-Orang Melayu serta Bumiputera.”

Kami ingin bertanya kepada Dato’ Seri Najib Razak -  parti yang mana yang meletakkan keseluruhan Perlembagaan Persekutuan ke dalam Perlembagaan Parti?  Adakah MCA, MIC, Gerakan, parti-parti Barisan Nasional di Sabah dan Sarawak menyenaraikan setiap fasal perlembagaan persekutuan ke dalam perlembagaan parti mereka?

Jelasnya tidak. Hakikatnya, Presiden UMNO hanya ingin menipu dan mengelirukan orang ramai terhadap perlembagaan parti DAP.

Adalah tertulis dalam perlembagaan DAP bahawa maksud dan semangat Perlembagaan Persekutuan seperti yang dihasratkan oleh pengasas penubuhan dan kemerdekaan Malaysia merupakan perjuangan DAP.  Setahu kami, fasal-fasal yang disebut oleh Dato’ Seri Najib Razak – Islam sebagai agama Persekutuan, institusi Raja-Raja Melayu dan hak keistimewaan bumiputera adalah terkandung di dalam Perlembagaan Persekutuan yang sama dipertahankan oleh DAP.

Apatah lagi, untuk menafikan pembohongan-pembohongan UMNO selama ini, semasa Persidangan Parti DAP di Shah Alam pada 8 Jan 2012[1], DAP telah mengeluarkan dan meluluskan Deklarasi Shah Alam yang antaranya menegaskan bahawa:
Kita menghasratkan Impian Bangsa Malaysia, dan dalam usaha untuk mengecapi impian ini, kita mengulangi komitmen untuk:

Mempertahankan sistem Demokrasi Berparlimen dan Raja Berperlembagaan dengan Seri Paduka Baginda Yang di-Pertuan Agong sebagai Ketua Negara. DAP komited untuk menjunjung Perlembagaan Persekutuan Malaysia sebagai undang-undang yang paling agung negara dan meluhurkannya dalam semangat Merdeka 1957 dan Perjanjian Malaysia 1963.

Memelihara kedudukan istimewa orang Melayu dan Bumiputra serta hak-hak kaum-kaum lain, seperti yang termaktub dalam Artikel 153 Perlembagaan Persekutuan.

Memastikan kedudukan Islam sebagai agama Persekutuan serta kebebasan untuk mengamalkan agama-agama lain dengan aman dan damai, seperti yang termaktub dalam Artikel 3 dan 11 Perlembagaan Persekutuan.

Memartabatkan Bahasa Melayu sebagai Bahasa Kebangsaan seperti yang termaktub dalam Artikel 152 Perlembagaan Persekutuan, serta menggalakkan penggunaan dan pengajian bahasa-bahasa ibunda lain untuk membentukkan masyarakat yang cemerlang dan berbilang bahasa.

Memperjuangkan kebebasan rakyat yang terjamin dalam Artikel 10 Perlembagaan Persekutuan, iaitu kebebasan untuk bersuara, berhimpun dan menubuh persatuan.

Menghormati Perjanjian Malaysia 1963 serta hak-hak yang dimiliki oleh rakyat Sabah dan Sarawak.

Adakah Dato’ Seri Najib Razak buta huruf sehingga sehingga beliau tidak faham apa yang tertulis dan diterbitkan oleh DAP sebelum ini?

Atau Dato’ Seri Najib Razak sengaja berfitnah untuk mengapi-apikan kebencian perkauman di kalangan orang Melayu supaya segala skandal-skandal pimpinan beliau, termasuk penyelewengan berbilion-bilion dolar daripada syarikat kerajaan 1MDB dan SRC International ke dalam akaun peribadi beliau, akan dilupakan?

Timbalan Perdana Menteri, Dato’ Seri Zahid Hamidi dalam ucapan beliau dua hari dahulu menuduh pihak pembangkang mempergunakan strategi Nazi, iaitu “jika anda ingin berbohong, biarlah ia besar dan jika kamu katakannya berulang kali, orang akan mula mempercayainya.”

Apa yang dikemukakan oleh pihak pembangkang, terutamanya mengenai penyelewengan kewangan 1MDB dan SRC oleh Presiden UMNO, yang juga merupakan Perdana Menteri dan Menteri Kewangan telah terbukti benar dan tidak dinafikan oleh Dato’ Seri Najib Razak.  Walhal, yang benar-benar mempergunakan strategi pembohong besar Nazi adalah Dato’ Seri Najib Razak sendiri, seperti yang telah dibuktikan di atas.

Tuesday, November 22, 2016

Will Khairy demand for Maria Chin’s release since he mocked the opposition’s fear that SOSMA would be abused against peaceful assemblies when the Act was passed in April 2012?

The Securities Offences (Special Measures) Act (SOSMA) was passed in Dewan Rakyat on 17 April 2012.  The controversial new law intended to fight and counter terrorism was hotly debated by both sides of the House.

Among the issue which was most fiercely discussed was the fact that provisions of SOSMA could be used against individuals deemed to be “carrying out activities detrimental to parliamentary democracy”.

The members of the opposition led by the then Opposition Leader, Datuk Seri Anwar Ibrahim had argued furiously that such a clause of involving “activities detrimental to parliamentary democracy” was too broad and will be subject to abuse by the authorities.

However, the Member of Parliament for Rembau, Khairy Jamaluddin, and a Minister in Najib’s Cabinet today, had mocked the opposition’s fear, claiming that they were not only unfounded, the letter of the proposed law was extremely clear and had no room for the purported abuse.

Instead, in his speech on the 16th April 2012, he praised the SOSMA Bill which was tabled by the Prime Minister, Dato’ Seri Najib Razak himself, was “on the side of civil liberties”[1].
                                                                                       
He criticised the Opposition Leader for not understanding that activities detrimental to parliamentary democracy means, “an activity carried out by a person or group of persons designed to overthrow or undermine Parliamentary Democracy by violence or unconstitutional means”.[2]

Subsequently, during his speech on the Amendments to the Penal Code (2012) the next day, Khairy further criticised the opposition’s position as “misleading” and reiterated that legitimate political dissent including peaceful assemblies or even, Bersih “is not detrimental to Parliamentary Democracy”.

“Saya dapati bahawa perbahasan daripada pihak pembangkang bukan mengelirukan tetapi amat lemah sekali sebab tidak mengkaji ataupun sengaja tidak mengakui bahawa sebenarnya apa yang dipinda ini tidaklah terlalu umum, tidaklah terlalu general, tidaklah terlalu longgar dan tidaklah satu peruntukan yang boleh ditafsirkan mengikut sesuka hati siapa-siapa pun.”

“…Kalau nak buat perhimpunan aman atau bersih pun, itu tidak detrimental to Parliamentary Democracy. Itu yang mereka [pembangkang] tak faham. Sudah cukup khusus daripada segi definisi yang diberi.”[3]

However, Bersih chairpeson, Maria Chin’s arrest under SOSMA three days ago has materialised all the fears expressed by the opposition MPs when the law was passed 4 years ago.  Despite only organising a peaceful assembly to seek free and fair elections to ensure a clean government, the Police are investigating her for “activities detrimental to parliamentary democracy” and detained her under SOSMA.

The question now for the Youth and Sports Minister is, will he now accept that he was over-zealous in his defence of the SOSMA and Penal Code Amendment Bills and his confidence with the authorities’ interpretation of the Acts in the spirit that they were intended was badly misplaced?

More importantly, will Khairy Jamaluddin do the honourable thing now to demand that Maria Chin be immediately released because she has been wrongfully arrested?

Or will he, more likely, keep his mouth shut and pretend that he had never said in Parliament that the SOSMA and Penal Code Amendment Bills will not be used on peaceful assemblies or Bersih?

[1] Hansard 16/4/2012 p18
[2] Hansard 16/4/2012 p24
[3] Hansard 17/4/2012 p73

Friday, November 18, 2016

New exposés during Singapore trial revealed how SRC International had similarly misappropriated funds using the same dubious investment funds as 1MDB

Malaysians are now thoroughly familiar with how 1MDB has misappropriated some US$7 billion of investment funds, of which approximately US$731 million has ended up in the Prime Minister’s personal bank account at Ambank, as exposed by the US Department of Justice (DOJ).

One of the key modus operandi which was used by 1MDB to launder the funds was to first move the money into seemingly legitimate investment funds. Subsequently, these funds will then pass through the money to special purpose vehicles created by Jho Low and his associates to be utilised or further disbursed to third parties.

For example, the 2013 and 2014 financial statements of 1MDB which were previously audited by Deloitte Malaysia, showed that nearly US$1.6 billion were invested in overseas funds without the provision of any details.

From the US DOJ filings, we now know that 1MDB, via its subsidiary, 1MDB Global Investment Limited, had in 2013 invested the funds with Devonshire Growth Fund (US$646 mil), Enterprise Emerging Markets Fund (US$415 mil) and Cistenique Investment Fund (US$531 mil).  From these funds, a total of US$1.265 mil was transferred to two British Virgin Islands incorporated companies, Tanore Finance Corporation and Granton Property Holdings, owned by Eric Tan Kim Loong, an associate of Jho Low.  From Tanore, US$681 million was transferred to Dato’ Seri Najib Razak.

For SRC International which was funded with RM4 billion from Kumpulan Wang Amanah Persaraan (KWAP), the March 2014 financial statements audited by Deloitte Malaysia had disclosed a whopping sum of RM3.81 billion categorised as “investment portfolio outside Malaysia”.

Other than a US$60 million failed investment in Mongolia’s Gobi Coal and Energy Ltd which we have discovered via past parliamentary replies, Malaysians have been left in the dark as to where and what exactly these funds have been invested in.


Malaysians’ worst fears were realised when the Switzerland Attorney-General issued a public statement on 5 October 2016 that “the sum of US$800 million appears to have been misappropriated from investments in natural resources made by the SRC sovereign fund.”

“Secondly, it is suspected that a ‘Ponzi’ scheme fraud (i.e. paying the returns on initial investments from funds obtained from subsequent investors rather than from legitimate revenue from the investments) was committed to conceal the misappropriations from both the SRC fund and from 1MDB,” he further disclosed.

Last week, we have received confirmation from the Singapore courts where the trial of former BSI banker, Yeo Jiawei was being held, the money from SRC International have been launder throught the same vehicles used to mask the transfer of the 1MDB investment funds above.

Testifying at his own trial, Yeo said the scheme devised was for SRC International, to invest in a fiduciary fund called Enterprise Emerging Market Fund (EEMF) in 2011.  This is the same exact fund which was used by 1MDB to misappropriate US$415 million as mentioned above.

He explained that a fiduciary fund was one where the client, in this case SRC, will direct the manager of the fund on what to do with the money invested.

He also informed the court that SRC asked that EEMF extend a loan of US$100 million to a company called Blackstone Asia Real Estate Partners whose beneficiary owner is Eric Tan Kim Loong, like Tanore and Granton.  He further disclosed SRC then gave an indemnity that shielded BSI from responsibility should all the money be lost.

The revelations at the Singapore courts are explosive.  They not only lend credence to the suspicions and allegations that the RM3.81 billion “investments in overseas portfolios” in SRC International have effectively all been siphoned away, just like what has happened in 1MDB; they exposed the fact that these “investment funds” like EEMF received direct instructions from SRC as to how the funds are used and provided an indemnity to the relevant parties.

It above has proven firstly that EEMF, Devonshire and Cistenique investment funds are sham investments which 1MDB and SRC has participated in, secondly and more damagingly, that SRC directly given instructions for the funds to be siphoned to vehicles such as Blackstone.

We call on the Minister of Finance to come clean with the transactions which have taken place in SRC International.  We also call upon the authorities – the Police, the MACC and Bank Negara Malaysia to carry out full investigations, particularly on the Directors an Management of the company for the crimes of theft, criminal breach of trust and money-laundering.

Wednesday, November 16, 2016

Transport Minister Datuk Seri Liow Tiong Lai’s attempts to justify increase in ECRL price from RM29 bil. to RM55 bil. raises many more questions than answers

Finally, after more than a week of denying that the proposed East Coast Rail Link (ECRL) would cost a whopping RM55 billion, the hapless Transport Minister, Datuk Seri Liow Tiong Lai finally conceded that the project would indeed cost RM55 billion or RM91.7 million per kilometer.

This admission came after slamming me on 8 November last week in The Star that I was making assumptions of the cost of the ECRL when it was still not finalised yet.  “We have to go into negotiation on every kilometre so where did he get the cost?” he had then asked.

The Transport Minister’s admission in Parliament yesterday came after the Pakatan Harapan law-makers exposed the existence of an extensive feasibility study by HSS Engineers Bhd which had estimated that the cost of the 545km project to be only RM29 billion or RM53.2 million per kilometer.

He then tried to defend the staggering increase in cost by arguing that:

The project has been extended from 545km to 600km to include the Gombak-Port Klang link – a fact which we have never disputed.

The HSS feasibility study is based on RM3.2 to the US Dollar in 2009-2010.
There is a new alignment resulting in an increase in tunnel length from 30km to 50km, which also results in additional viaducts.

Datuk Seri Liow Tiong Lai’s appears to be desperately making up responses to questions as they arise, as his answers raises far too many more questions on the highly questionable RM55 billion project.

The HSS feasibility study which cost the Government RM8.7 million was carried out over a 6-year period, starting in December 2009 and completing only in December 2015 before concluding on the cost of RM29 billion.

Is the Transport Minister telling us that HSS consultants, who have completed many mega-infrastructure projects in the country, are so stupid as to use the 2009-2010 exchange rates to calculate the cost of the project, even though they finalised the report only in December 2015 when the exchange rate was already RM4 to the Dollar by then?

Since the comprehensive HSS report had to take 6 years to complete and was finalised only in December 2015, how did the Government decide to suddenly alter the alignment within 6 months or so?  Was a new engineering consultant actually appointed to carry out a new study which could be completed in such a time-frame?

I would agree with Dato’ Seri Liow that if there is an increase in tunnel length through the Titiwangsa range from 30km to 50km, it would certainly increase the cost of construction.  However, it begs the question, why take a 50km tunnel route across Titiwangsa range if indeed HSS recommended the much shorter 30km route?

The Transport Minister had told the Parliament that “we have nothing to hide. We are a responsible, accountable and transparent government.”

If he really has nothing to hide, Datuk Seri Liow should immediately order that both the HSS feasibility study and the subsequent study which changed the scope of the HSS study be released to the public.

That way, if what Datuk Seri Liow said is right, then the Pakatan Harapan critics would have no choice but to shut up immediately.  Otherwise, the Transport Minister, who is also the MCA President has no right to accuse us of trying to “gain political mileage” when what we clearly want to ensure is not another project where tens of billions of ringgit are embezzled by the powers that be.  Instead it would be Datuk Seri Liow who is playing politics to cover up for another multi-billion ringgit mega-scandal.

Tuesday, November 15, 2016

We challenge EPU Minister, Datuk Seri Abdul Rahman Dahlan to make public the feasibility study conducted by HSS Engineering Group which was commissioned by the East Coast Economic Region Development Council (ECERDC)

In our research over the controversy surrounding the 600km East Coast Rail Link (ECRL), we have discovered that the East Coast Economic Region Development Council (ECERDC) has appointed HSS Integrated Sdn Bhd to conduct a feasibility study including engineering studies, ridership studies, systems and rail operation studies, environmental screning, land use and socio-economic impact studies and most importantly, a economic and financial evaluation.

HSS Integrated is part of HSS Engineers Bhd, an engineering company which is listed on Bursa Malaysia who have been involved in some of the biggest engineering projects in Malaysia.  Their rail experience would include the Electrified Double-Tracking from Ipoh to Padang Besar, the Sungai-Buloh to Kajang MRT I Line, the Ampang Line LRT Extension Project and the KLIA Express Rail Link.

They were appointed to carry out the ECRL feasibility study in December 2009 and completed their work in December 2015 and were paid RM8.7 million for their services.  As disclosed in the HSS Group’s Corporate Profile and Capability statement, the proposed route was approximately 545km in length from Kuala Lumpur to Tumpat, passing through Mentakab, Kuantan, Kuala Terengganu and Kota Bahru.

The full HSS Group profile and capability statement can be downloaded here: http://www.hssbim.com/docs/HSS_Company_Profile.pdf

Most importantly, HSS stated that the project value for the project was RM29 billion (pg 21), or approximately RM53.2 million per kilometer.  The study hence supports ECERDC CEO, Datuk Jebasingam Issac John who has previously been quoted by news reports in April 2014 that the ECRL will cost approximately RM30 billion.

Hence Pakatan Harapan elected representatives are absolutely right to heavily criticise the award of the East Coast Rail Link (ECRL) project to China-owned China Communications Construction Company as excessively expensive RM55 billion or RM91.7 million per kilometer.

The Edge Financial Weekly had labelled the project as “the world’s most expensive” when compared to similar railway projects in Bangladesh and Kenya which were also being constructed by CCCC for only RM68.1 million and RM61.4 million respectively.  Another project in Ethiopia of which 40% of the 375km project to be built by a Turkish contractor, Yapi Merkezi on challenging terrain cost only RM18.1 million per kilometer.

The EPU Minister in-charge of the project, Datuk Seri Abdul Rahman Dahlan tried to dismiss the “world’s most expensive” railway allegations by citing the Golthard rail project in Switzerland, the Madrid-Valladoid and the Barcelona lines in Spain costing significantly more per kilometer.

We have since debunked the EPU Minister’s comparison because those were nearly 100% rail tunnel projects and they were all High Speed Rail travelling up to 300km per hour, which we all know, cost substantially higher than conventional rail like the ECRL travelling up to 170km per hour.

In fact, the Golthard rail tunnel had to cut through the Swiss Alps and was as deep as 2.3 kilometers below surface.  As a comparison, even the most expensive tunnelling project in Malaysia to date, carried out for the MRT was only 45 meters at its deepest.

After being caught trying to sell ATP turboprops at Boeing 747 prices, the EPU Minister has changed his argument to insist that “all infrastructure projects cannot be compared directly”.  He is now trying to avoid the now-established claim that the ECRL at RM55 billion will indeed be the world’s most expensive in its class.

Of course it is a given that every rail project will be different.  However, the EPU Minister cannot claim that the ECRL has to pass through the Titiwangsa range which will require numerous tunnels and viaducts – as if it is the only such project in the world facing such “challenges”.

Hence, to end the “world’s most expensive” railway debate once and for all, we call upon Dato’ Seri Rahman Dahlan to make public the feasibility study carried out by HSS which would already have included the cost of having to cut through the Titiwangsa range with tunnels and viaducts.

The EPU Minister will then have to justify to Malaysians why did the Prime Minister award the contract to CCCC at RM91.7 million per kilometer which is 72.4% more expensive than the HSS study of RM53.2 million.

The failure to do so will only confirm Malaysians’ worst fears, that the RM55 billion ECRL over-priced project is an attempt to siphon up to RM25 billion to pay off 1MDB’s debts, to cover up for the tens of billions of ringgit which have been stolen and laundered overseas.

Rafizi Ramli
MP Pandan

Tony Pua
MP Petaling Jaya Utara

Dr Hatta Ramli
MP Kuala Krai

Monday, November 14, 2016

Bank Negara’s inaction and reticence, in stark contrast with Singaporean authorities' actions to protect the integrity of their banking system, abets the indictment of Malaysia as a global kleptocracy

I had on 31 October asked the Minister of Finance to state the actions taken by Bank Negara over the conduct of Ambank bankers, Joanne Yu and Cheah Tek Kuang for covering up money laundering transactions relating to the 1MDB.

The question was raised because The Wall Street Journal (WSJ) had on 6 September 2016 made very specific allegations against Ambank Malaysia and its officials of facilitating and abetting money-laundering when billions of ringgit was transferred into the bank accounts of Dato’ Seri Najib Razak.

In making the allegations, the prestigious financial paper substantiated the claims with private conversations between senior Ambank officials with Low Taek Jho, who was carrying out the transactions on behalf of the Prime Minister.

The Prime Minister had given Low access to his accounts, according to investigative documents sighted by WSJ. His primary contact at AmBank was Joanna Yu, the banker he had warned via BlackBerry to communicate discreetly. Cheah Tek Kuang, a senior AmBank executive and adviser to the bank’s chairman, handled the account personally, the BlackBerry messages indicate.

According to WSJ, Low sent hampers of food to Yu and lunched with her at noodle shops, according to the phone messages. He kept reinforcing the need for secrecy: “v v important no one should know in ambank besides u or cheah or get hold of statement,” one message said. “Cause if it gets on internet where funds were from then headache.”

Yu even made recommendations on which US correspondent bank – Wells Fargo or JP Morgan will raise less questions involving the transfers.

These messages clearly indicated a conspiracy by the above parties to at best, hide the transactions from scrutiny, and at worst, blatant masking of the illicit transactions as legitimate ones.

In his written reply, Dato’ Seri Najib Razak appeared to confirm the above allegations when he said that “Bank Negara has undertaken investigations on financial institutions relating to 1MDB under Financial Services Act 2013, Islamic Financial Services Act 2013, and Anti Money Laundering Act 2001… Based on the investigation results, enforcement actions have been duly executed by Bank Negara with the power provided to it under the law.”

However, we were never informed of what actions have been taken against Ambank or the bankers who have facilitated these illicit transactions.  In fact, as far as we are aware, both Joanne Yu and Cheah Tek Kuang are free men.

Cheah Tek Kuang who was the Group Managing Director of Ambank until his retirement in 2012 remains an advisor to the Chairman’s Office the Bank according to publicly available records.  He is also the Chairman of Berjaya Sports Toto and an Independent Director at IOI Group.

If Bank Negara has indeed taken action against him for abetting money laundering offences, can he still be Chairman and Director of publicly listed companies?

Bank Negara’s absence of any visible actions against Banks and its officers who were complicit in money laundering offences is in stark contrast with the actions taken by the Singapore authorities to defend the integrity of their banking system.

Former private banker Yak Yew Chee, who dealt with Jho Low and 1MDB has been jailed 18 weeks and fined S$24,000 for forging reference letters vouching for the Low family and for failing to report suspicious transactions involving tens of millions of dollars coursing through BSI bank in Singapore.  Yak will also surrender S$7.5 million to the State “to demonstrate his genuine contrition”.

Another former private banker with the Swiss BSI Bank, Yeo Jiawei is currently on trial over four charges for perverting the course of justice and another seven counts for money laundering, cheating and forgery over the same Jho Low and 1MDB-related scandal.

Unfortunately, the new Governor of Bank Negara Malaysia, Datuk Muhammad Ibrahim’s silence and reticence in tackling the above money laundering scandal will only serve to enhance Malaysia’s reputation as global kleptocracy.

Saturday, November 12, 2016

Minister in Prime Minister’s Department, Dato’ Seri Abdul Rahman Dahlan tried to pull a fast one by comparing the exorbitant cost of the East Coast Rail Link with complex High Speed Rail in Europe

Three days ago, Dato’ Seri Abdul Rahman Dahlan, the Minister in-charge of Economic Planning Unit (EPU) responsible for the East Coast Rail Link (ECRL) tried to deflect the allegations that the cost of ECRL was the most expensive in the world.

Unlike his fellow Cabinet Minister, Datuk Seri Liow Tiong Lai who denied that the ECRL was to cost RM55 billion or approximately RM91.7 million per kilometer, the EPU Minister pretty much confirmed the cost of the project.  Instead he argued that it was not the most expensive in the world.

Dato’ Seri Rahman Dahlan gave the examples of a 57km rail project in Switzerland costing US$11.9 billion (RM50bn) or US$209 million (RM860 mil) per km to build; a 177km rail line in Madrid-Valladolid, Spain, costing US$5.48 billion (RM22.46bn) or about US$30 million (RM123 mil) a km; and a 48km rail project in Barcelona costing about US$8.12 billion (RM33.3bn) or US$170 million (RM697 mil) per km.

It is disastrous for Malaysia that the EPU Minister actually cited these projects as comparison to our own proposed ECRL.

Dato’ Seri Rahman Dahlan perhaps didn’t realise that the 57km Swiss Golthard rail project costing a whopping RM50 billion actually involved the building of the world’s longest tunnel as deep as 2.3km below the surface!  The neighbouring 56km Brenner rail project which is currently under construction costing just a shade less than Golthard, will be the second longest tunnel in the world when it’s completed in 2025.

Is the Minister telling us that the 600km ECRL link from Port Klang to Kota Bahru via Kuantan will be, if not completely, substantially underground to compare with the Swiss rail lines underneath the Alps?

Similarly, the Barcelona line costing US$8.12 billion has a length of 47.8 km, of which 43.71 km is underground and 4.9 km is on viaducts.

At the same time, the 177km Madrid-Valladoid line was only the first phase of the two-phase Madrid-Leon 342km rail line costing a total of US$6.34 billion.  That actually works out to only US$18.54 million (RM76 mil) per kilometer which is cheaper than the ECRL’s RM91.7 million per kilometer!

Most of all, all of the examples cited by Dato’ Seri Rahman Dahlan are not only tunnel-intensive, they are all High Speed Rail (HSR) projects which, as we know cost significantly more than conventional rail projects like ECRL.  These European HSRs travels up to a top speed of 300km per hour compared to the ECRL project proposed at 170km per hour.

Hence what the ignorant Dato’ Seri Rahman Dahlan attempted to do, intentionally or otherwise, is to try to sell Malaysians a ATP turboprop at the price of a Boeing 747.  Unfortunately for him, Malaysians are not that stupid.

The EPU Minister shouldn’t have to go around to world to try justifying the exorbitant cost of the ECRL project.  After all, this isn’t our first and only rail project.  He should very well know that the 329km Ipoh-Padang Besar and 179km Gemas-Johor Bahru double-tracking link cost RM44.0 million and RM39.8 million per kilometre respectively.  Amazingly, these projects such as the Ipoh-Padang Besar and Rawang-Ipoh links were all completed by local engineering and construction companies!

We challenge Dato’ Seri Rahman Dahlan to show proof that a conventional railway project would cost anything more than the above or that there are no local companies with the necessary expertise who are able to complete the ECRL project for far less than the RM55 billion awarded to China Communications Construction Company.


Rafizi Ramli
MP Pandan

Tony Pua
MP Petaling Jaya Utara

Dr Hatta Ramli
MP Kuala Krai

Monday, November 07, 2016

Does Transport Minister Datuk Seri Liow Tiong Lai really know what he is talking about when he said the East Coast Rail Link (ECRL) doesn’t cost RM55 billion?

The Edge Financial Weekly quoted an executive from a construction outfit who said that at RM55 billion, the East Coast Rail Link (ECRL) “could be the most expensive rail infrastructure project in the world in its class... it’s a good project but not at this ridiculous price.”

The Edge cited the examples of the 215km Padma rail line in Bangladesh and 120km Mombasa rail link in Kenya which were being constructed by China Rail Construction Corp for RM68.1 million and RM61.4 million per kilometer respectively.

For another project in Ethiopia awarded to Turkish contractor, Yapi Merkezi, the 375km Awash-Weldia railway line of which more than 40% is built on challenging terrain, the cost was only US$1.7 billion or RM18.1 million per kilometer.

The question hence arises as to why is the Malaysian government awarding the 600km ECRL project to China Communications Construction Company (CCCC) at RM55 billion or RM91.7 million per kilometer without any open competitive tender exercise?

The Minister of Transport, Datuk Seri Liow Tiong Lai tried to allay the concerns of the Malaysian public by claiming that the RM55 billion is not the cost of construction.  Instead he claims that it is merely the value of the Financing Framework Agreement.

We have no idea whether the Transport Minister knows what he is talking about or whether he has even seen or read the above agreements given that his Deputy told the Parliament that he could not answer ECRL queries because it was not under the purview of the Transport Ministry but is instead under the Prime Minister’s Department control.

The question hence arises as to whether Datuk Seri Liow, who is also the MCA President is merely shooting off his hip, especially since the Prime Minister himself disclosed during his Budget 2017 address that “the 600-km rail will connect townships such as Port Klang, ITT Gombak, Bentong, Mentakab, Kuantan, Kemaman, Kerteh, Kuala Terengganu, Kota Bharu and ends in Tumpat, with an estimated cost of RM55 billion.”

Datuk Seri Liow even assured Malaysians that the construction cost of the ECRL was “very transparent” and that industry players were well aware of the cost per kilometre of the rail that would be laid.  If so, then why didn’t he reveal the “real” cost of the project then?

Even if Datuk Seri Liow does indeed know better than his Prime Minister, his response further begs the question as to why should Malaysia borrow RM55 billion if the cost of the rail project is significantly less?

Malaysians fear a repeat of the multi-billion dollar 1MDB scandal where the state-owned company borrowed US$3.5 billion and RM6.8 billion, or approximately RM18.3 billion (at the then exchange rate of US$1:RM3.30) to acquire Tanjong Power and Genting Sanyen power plants for RM10.8 billion.

As we know today, the balance of the proceeds from the borrowings, US$1.367 billion were siphoned to a fictitious British Virgin Island incorporated Aabar Investment PJS Limited under the guise of a “collateral” to secure the bond guaranteed by Abu Dhabi’s International Petroleum Investment Corporation (IPIC). Of the misappropriated amount, the United States Department of Justice has alleged that US$30 million was transferred to Dato’ Seri Najib Razak’s personal bank account in Ambank while another US$238 million went to his stepson, Riza Aziz’s company in the United States, Red Granite.

The East Coast Economic Region (ECER) Development Council CEO, Datuk Jebasingam Issac John has previously been quoted by news reports in April 2014 that the ECRL will cost approximately RM30 billion.  If the figure cited is indeed true and is the same figure Datuk Seri Liow is referring to, perhaps the Transport Minister should enlighten Malaysians as to where the balance of RM25 billion to be borrowed from China’s Exim Bank for the ECRL project will go to.

Can Datuk Seri Liow or any other Cabinet Minister guarantee Malaysians that the excess borrowings will not be misappropriated, perhaps even to bailout of 1MDB debts which were stolen?  Is the Malaysian Government digging a bigger hole for itself in order to cover up the previous holes?

Friday, November 04, 2016

Ministerial replies in Parliament over the multi-billion dollar 1MDB scandal, when there were replies, has made a mockery of our august institution

When travelling overseas, Malaysians are now inundated with questions as to how Dato’ Seri Najib Razak remains firmly in power as the Prime Minister of Malaysia despite a few billion ringgit of funds which were misappropriated from a state owned investment firm finding its way into his personal account.

Foreigners are bewildered as to how our so-called democratic system could tolerate such unprecedented excesses.

The reason is simple.  Our parliamentary institution is a mere facade whose sole existence is to lend legitimacy to those who wield the ultimate power.  It is a pesky inconvenience which Dato’ Seri Najib Razak needs to tolerate to continue to present a semblance of a modern progressive nation.

When asked of the Prime Minister’s near total absence from Parliamentary sittings, the Honourable Speaker defended Dato’ Seri Najib Razak, claiming that the Prime Minister would have more important things to do than “to sit here and see the same face and then they (MPs) ask irrelevant questions”.

If even the Speaker of the House treats the elected Members of Parliaments with such contempt, little could be expected of the Ministers and Deputy Ministers who are left to respond to the obviously “irrelevant questions” from MPs.

Questions were asked about the actions taken by the Malaysian Anti-Corruption Commission pursuant the charges laid out by the United States Department of Justice (DOJ) to seize more than US$1 billion of assets laundered by Low Taek Jho and the Prime Minister’s stepson, Riza Aziz with funds misappropriated from 1MDB.

Deputy Minister in the Prime Minister’s Department, Datuk Razali Ibrahim responded that there is no need for the Malaysian Anti-Corruption Commission (MACC) to question Riza Aziz, the stepson of Prime Minister Najib Abdul Razak, as he is not being probed for graft..

"For the MACC, Riza is not under a corruption probe so there is no need for the MACC to summon him (for questioning)", he said.

And when MP for Bayan Baru, Sim Tze Tzin asked about DOJ’s allegations that Riza had bought luxury properties overseas with 1MDB funds, Razali audaciously replied, "what's wrong if people with lots of money buy things?"

Obviously the point that these funds were stolen from funds managed by the Government did not matter to the Minister.

Separately the MP for Puchong, Gobind Singh asked about the need to re-open MACC’s investigations into the billions of ringgit found in the Prime Minister’s personal bank account in the light of the DOJ filings. Datuk Razali Ibrahim astonishingly responded that the concluded MACC probe on Dato’ Seri Najib Abdul Razak's RM2.6 billion ‘donation’ did not look into the origins of the money.

"We (the MACC) were only looking into corruption, not where the money came from,” he said.

"We can't make assumptions about 1MDB, because of things in the US and Switzerland… They may be looking at the money trail, we only look at the question of corruption," he added while wrapping up his part of the Budget 2017 debate speech, focusing on the MACC and Felda.

The answer is as bizarre as it is dumbfounding.  How can you rule out corruption if you fail to investigate the money trail?  In fact, the admission by the Minister that MACC did not bother investigating the money trail to trace the origins of the funds which ended up in the Prime Minister’s accounts only goes to justify the call for MACC to re-open investigations because they have failed to perform their duties thoroughly and competently.

However, the fact that the Ministers can get away with such nonchalant and nonsensical replies in the highest legislative body of the land epitomises the collapse of Malaysia’s democratic institutions.

With a cabinet full of Ministers that know no shame, it explains why despite the severity and credibility of the corruption and embezzlement allegations against the Prime Minister, Dato’ Seri Najib Razak remains firmly in grip of power.

The only way to remove Dato’ Seri Najib Razak and the ruling Barisan Nasional, is via the ballot box, even if Malaysians have to overcome the unfair electoral system.

Thursday, November 03, 2016

Has Malaysia become the new rogue nation of this world?

Malaysia has always prided itself to be a progressive nation which built its foundations the principles of justice and moderation.  Even before our own independence, we have always been on the on the right side of history, fighting the Axis powers during the World War II and was part of the coalition to halt the rise of communism in Southeast Asia.

Even during the worst of times during the Mahathir’s era of an authoritarian regime, we have never been regarded as a basket case like Cambodia, Burma, Iraq or God-forbid, North Korea.

Our leaders have been reasonably well-educated and speak with the right tones to ingratiate ourselves well in a world led by the United States, Europe and Japan.  Even our current Prime Minister, Dato’ Seri Najib Razak had tried extremely hard to be part of international elite fraternity with his constant, albeit rhetorical preaching of the “global movement of moderates”.

Who can forget, how hard our Prime Minister tried to be buddies with President Obama and how proud he was when he had the rare opportunity to have a round of golf with the American President in Hawaii not too long ago in December 2014?

How quickly things have changed in less than 2 years.

In July this year, the United States Department of Justice (DOJ) has labelled Malaysia a kleptocracy, with the single largest seizure of assets purchased with funds laundered in the United States which were misappropriated from 1MDB.  While Dato’ Seri Najib Razak was not an owner of the assets to be seized, the DOJ explicitly disclosed that he received US$731 million of these misappropriated funds in his personal bank account in Malaysia.

Despite the severity of the accusation by the US Attorney-General, Dato' Seri Najib has refused to deny the allegations and has chosen to remain silent.

Instead today, Dato’ Seri Najib Razak has decided that it is now in his best interest to pucker up to mighty China.  After all, China doesn’t pass judgement on who they deal with, regardless of whether it’s a rogue nation like North Korea or a Western counterpart like United States.  China’s investments for influence policy reaches out far and wide to third world countries all around the world, especially in Africa like, Nigeria, Sudan and Angola.

After the much-hyped promise of Middle-Eastern petrodollars-led investment boom in Malaysia failed to materialise, the Prime Minister is turning to Beijing to not only jumpstart our economy, but also to help him clean up his multi-billion dollar 1MDB mess.

It is one thing eschewing open tenders for mega-projects in the past to local Malaysian cronies of the ruling parties.  Now, the Prime Minister has decided that we should eschew open tenders and award mega-projects at inflated prices like the RM55 billion East Coast Rail Link to Chinese state-owned companies without any tender, or even the pretence of one.

Dato’ Seri Najib has decided to award of the above project to China Communications Construction Company Limited at a price more than double the price per kilometer of rail ever awarded in Malaysia with borrowings from China’s Export-Import Bank.  It is a clear attempt to siphon cash to payoff 1MDB’s outstanding debts, especially those embroiled with Abu Dhabi’s International Petroleum Investment Corporation.

In exchange, Dato’ Seri Najib yields to Chinese geo-political and economic supremacy.  When the United Nations Arbitral Tribunal ruled that “there was no legal basis for China to claim historic rights to resources within the sea areas falling within the ‘nine-dash line” in South China Sea, Malaysia has strangely refused to endorse the ruling despite the fact that we are ourselves laying claims on parts of the Spratlys archipelago in the area.

Worse, Malaysia together with Cambodia, has frustrated the attempts by ASEAN nations to recognise the ruling which had resulted in a meaningless water-down statement with regards to the disputes in South China Sea.

Yesterday, as if to hammer the nail into the coffin, the Prime Minister wrote in his special column in China Daily chastising the West including the “former colonial powers”, that “it is not for them to lecture countries they once exploited on how to conduct their own internal affairs today.”

It is a not so subtle statement to tell these Western powers that how Malaysia is a kleptocracy today isn’t any of their business.  If they are not happy with him, he is more than happy to embrace China, who couldn’t care less about how the Malaysian government leaders plunder the nation.

Dato’ Seri Najib Razak’s stand has much bigger implications to Malaysia than merely an attempt to play off one Superpower against another.  The Prime Minister’s brazen foreign policy switch will lead Malaysia, intentionally or inadvertently, down the road of becoming a rogue nation, globally snubbed and internationally derided.

As basket cases like Burma, Vietnam or even Iran redeems themselves with greater rapprochement with the international communities, it is frightening that a Prime Minister, consumed with the need to save himself is taking actions which will lead us down the slippery slope.